FI N A N C I A L A N D S U S TA I N A B L E D E V E LO P M E N T R E P O R T
2022 Universal
Registration Document
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Digital and Electric:
for a sustainable and resilient future
The Universal Registration Document was filed on March 28, 2023 with the Autorité des Marchés Financiers (AMF), as the
competent authority under Commission regulation (EU) 1129/2017, 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, 2022 and is available on the AMF’s website (www.amf-france.org) and on
the Company’s website (www.se.com).
S T R A T E G I C R E P O R T
Integrated Report
S T R A T E G I C R E P O R T
F I N A N C I A L S T A T E M E N T S
Integrated report
Our purpose
About Schneider
Statement from the Chairman & CEO, Jean-Pascal Tricoire
An interview with Chief Financial Officer, Hilary Maxson
Financial Performance Highlights
Accelerating our digital journey
Key Achievements of 2022
Business: Market trends – All Digital, All Electric
What we do
Sustainability strategy: A changemaker for sustainability
Proud of 2022’s sustainability achievements
2023 outlook and target
2022–2024 targets and long-term ambitions
as announced in 2021 Capital Markets Day
Governance
Our Stakeholders
Chapter 1 – Group strategy and
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 End-customer focus
Chapter 2 – Sustainable development
An introduction by Chief Strategy & Sustainability Officer,
Gwenaelle Avice-Huet
2.1 Sustainability for all
2.2 Driving responsible business with Trust
2.3 Leading on decarbonization
2.4 Being efficient with resources
2.5 Great people make 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 RFA
An introduction by Chief Governance Officer & Secretary General,
Hervé Coureil
3.1 Risk management scope
3.2 Organization and management
3.3 Risk management mechanisms
3.4 Key risks and opportunities
3.5 Insurance
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C O R P O R A T E G O V E R N A N C E R E P O R T
Chapter 4 – Corporate governance report RFA
322
Vice-Chairman & Lead Independent Director’s introduction
4.1 Governance Report
4.2 Compensation Report
324
376
Chapter 5 – Consolidated financial
statements at December 31, 2022 RFA
5.1 Consolidated statement of income
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
5.6 Statutory Auditors’ report on the consolidated financial statements
5.7 Extract of the management report for the
year ended December 31, 2022
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, 2022
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, 2022
S H A R E H O L D E R I N F O R M A T I O N
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
7.6 Investor relations
Chapter 8 – Annual Shareholders’
Meeting RFA
8.1 Explanatory comments & draft resolutions submitted
to the Annual Shareholders’ Meeting
8.2 Statutory Auditors’ special reports
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
Glossary
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519
522
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527
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531
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RFA Annual Financial Report elements are clearly identified in this table of contents with the sign RFA.
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Integrated Report
S T R A T E G I C R E P O R T
Our purpose
To empower all to
make the most of our
energy and resources
bridging progress and
sustainability for all.
Our performance
2022 was a year of strong performance against a complex economic and
geopolitical backdrop. We navigated the challenges faced with agility,
taking the next step on our sustainable growth journey.
Financial KPIs
Revenues
€34.2B
+12.2% organic
Free Cash Flow
€3.3B
96% conversion rate
Adjusted EBITA margin
Adjusted Earnings per Share
17.6%
+40bps organic
€7.11
+16%
Net Income (Group share)
Proposed Dividend per Share
€3.5B
+9%
2
€3.15
+9%
Schneider Electric Universal Registration Document 2022 | www.se.com S T R A T E G I C R E P O R T
Integrated Report
At Schneider
we call this
Our Impact
72%
Impact Revenues (+1pt vs 2021)
4.91/10
Schneider Sustainability Impact
score, outperforming 2022 4.70/10
target
440M
Tonnes of saved and avoided CO2
emissions to our customers since
2018
9.7%
Reduction in suppliers CO2
emissions
+9.7M
People have access to green
electricity since 2020
397,864
People trained in energy
management since 2009
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S T R A T E G I C R E P O R T
About Schneider
Our mission is to be
your digital partner for
Sustainability and Efficiency.
What we offer
Why we do it
We drive digital transformation by
integrating world-leading process and
energy technologies, end-point to cloud
connecting products, controls, software
and services, across the entire lifecycle,
enabling integrated company
management, for homes, buildings, data
centers, infrastructure and industries.
See page 24 to find out more
about what we offer.
Our four hubs
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
catalysed by a more electric world. 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.
E U R O P E
I N D I A
C H I N A
N O R T H A M E R I C A
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S T R A T E G I C R E P O R T
Integrated Report
135,000+
employees
100+
countries
Where we operate
We are one integrated company. We are
the most local of global companies.
Our multi-hub approach is a key element
to offer improved resiliency, agility and
proximity to our customers and
suppliers.
We are an impact
company
This means sustainability is at the core
of everything we do, in line with our
purpose.
IMPACT
Company
See page 54 to find out more
about our quintuple integration.
See page 30 to find out more
about our Sustainability strategy.
Our business
Revenue
32%
25%
30%
13%
North America
Western Europe
Asia Pacific
Rest of the World
Employees
26%
27%
34%
13%
€34.2B
Revenue by
geography in 2022
135K
Total employees by
geography in 2022
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Integrated Report
About Schneider
S T R A T E G I C R E P O R T
A future worth investing in
Our position in accelerating markets
Schneider Electric’s positioning for a sustainable future focuses on an All-Digital,
All-Electric world, deploying its technologies into accelerating markets, to answer
customer needs of sustainability and resiliency. The world is at an inflection point.
Supported by all stakeholders, including governments, businesses, investors,
customers and civil society, we are opening the way to a radically different future.
DIGITAL
for efficiency
Eliminate waste, drive
efficiency and optimize
from plant to plug
+
ELECTRIFICATION
for decarbonization
Most efficient energy and the
best vector of decarbonization
=
SUSTAINABLE
WORLD
greener and smarter
Our unique operating model
We 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.
Multi-hub
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.
Open
We are advocates of
open standards and
partnership
ecosystems.
Harnessing one data
platform for the next
level of EcoStruxure
openness.
Read more about our operating model
in Chapter 1 on page 54.
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S T R A T E G I C R E P O R T
Integrated Report
Our growth drivers
Our strategic focus on More Products, More Software, More Services and
More Sustainability is set to drive incremental growth in the coming years
as we continue our transition to a hybrid digital company.
More Sustainable Products
More Software
80% of product sales in 2022
are with Green Premium™ label.
Complete lifecycle solutions for efficiency
and sustainability, through open and agnostic
software solutions leveraging one data hub.
A fast track to the enterprise metaverse.
More Services
More Sustainability
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 and
Digital Services
L3
L1
Connectable
Products
Ambition for Software,
Sustainability and Services
revenues to increase towards 23% of
Group revenues by 2025
FS
Field
Services
Moving towards
60% of Group
revenues by 2025
Leveraging installed base, servicing
of Assets under Management
Edge Control
L2
Growing proportion of natively
connected products through R&D,
replacing non-digital offers
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Integrated Report
About Schneider
Our business model
Our advantages
and resources
We are advocates of open
standards and partnership
ecosystems that are passionate
about our shared Meaningful
Purpose, Inclusive and
Empowered values.
S T R A T E G I C R E P O R T
Our expertise
Our integrated approach allows
us to provide our customers
with a complete plug and play
integrated solution.
People
Innovation
135k+
employees worldwide, in
100+ countries
1,000+
patent applications filed
globally in 2022
77
Environment
Number of zero-CO2
sites
Partners and
suppliers
650k+
service provider and
partner ecosystem
Financial
strength
A-/A3
strong investment grade
credit rating
Energy
Management
Energy Transition
End markets
8
Buildings
Data Centers
Schneider Electric Universal Registration Document 2022 | www.se.com S T R A T E G I C R E P O R T
Integrated Report
Creating value
Creating value for
all our stakeholders.
Industrial
Automation
Industry 4.0
Infrastructure
Industry
440M
tonnes of CO2 saved
and avoided since 2018
10%
performance of the Zero
Carbon Project
39.6M
people provided
access to green
electricity since 2009
62%
of eligible employees
benefitting from 2022
share plan
+54%
3-year Total
Shareholder Return
For our customers
For our partners
and suppliers
For the planet &
local communities
For our employees
For our
shareholders
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S T R A T E G I C R E P O R T
Statement from the Chairman & CEO, Jean-Pascal Tricoire
“
We develop solutions for a world that is
more digital, more electric, and more
sustainable.”
We have the opportunity, today, to create a more energy-efficient
world by combining:
1. Digitization that can save energy in homes, commercial and
other buildings, infrastructure, data centers, and industry.
2. Greater electrification, on both the production and the
consumption side. Electricity is much more efficient than the
combustion of fossil fuels. Electric cars and heat pumps are
clear examples of this. We don’t appreciate enough that 60% of
fossil fuels today are wasted in the process of conversion.
3. Decentralization of some of our energy production, via
microgrids using on-site renewables.
4. Flexibility of energy supply and demand, via smart grids that
allow us to optimize how we use or store energy.
At Schneider Electric we’ve spent the last 20 years building our
expertise and portfolio in exactly those areas. We develop solutions
for a world that is more digital, more electric, and more sustainable,
helping our customers at every stage of their journey towards
greater efficiency and resilience, wherever they are.
EcoStruxure, our full IoT, plug-and-play, open, interoperable
architecture and platform, covers everything from Connected
Products to Edge Control, and Apps, Analytics and Services to
meet the needs of customers.
Our agnostic software and data portfolio provides the toolbox for
customers to digitize their enterprise. By bringing together all of
their data into an industrial format, we can build a full digital twin of
their operations. This enables them to immerse their people in a
comprehensive metaverse of their enterprise, deliver greater
efficiency and costs savings, and increase safety, resilience and
circularity. The recent acquisition of AVEVA allows us to bring these
possibilities to our customers faster.
Our services offer supports our customers across the lifecycle of
their assets, from initial consultation to end-of-life and circularity.
Our sustainability business supports customers with a full-
service consultancy offering, from strategy right through to
digitization and decarbonization. It starts with measuring their
carbon and energy footprint, then helping to reduce this footprint
and bolster their energy resilience, including through sourcing the
cheapest and greenest energy for their use.
While the majority of our activity is focused on the demand side, we
also provide solutions to decarbonize and improve the safety of the
fossil fuel industry. Realistically, fossil fuels will remain a significant
part of the energy mix for many years. At Schneider Electric, we
therefore assist this industry in their journey to minimizing their
carbon and methane footprint, and the impact on environment
and society.
Jean-Pascal Tricoire, Chairman and CEO
It goes without saying: 2022 was another hugely challenging year
for the world. On top of the lingering effects of the pandemic,
supply chain disruptions, and electronic and resource shortages of
the preceding years, 2022 brought war, sanctions, soaring interest
rates, inflation, and an energy and cost-of-living crisis that caused
hardship for millions of people and weighed on economies around
the world. And not to forget some of the worst climate-related
events on record.
Against this backdrop, we, at Schneider Electric, deployed our
people and resources across our geographic footprint to make a
meaningful impact – both supporting the communities impacted by
the immediate crises, and helping all our stakeholders to improve
their efficiency, reach for their sustainability goals, digitize to be fit
for the future and bolster their long-term resilience against future
economic and environmental shocks.
It was another year in which we were true to our purpose: to
empower all to make the most of our energy and resources,
bridging progress and sustainability for all.
The inflection point: the new energy future is about
to materialize
While there’s a lot to reflect on, it’s best to focus on what this means
for the future.
The root cause of both the climate crisis and the energy crisis is the
same: an unsustainable energy model that relies heavily on carbon-
dense energy sources like gas, coal and oil. In 2022, we saw the
consequences of having put insufficient investment towards
remodeling our energy system. Energy prices, aggravated by the
war in Ukraine, soared to a point that choked the economy.
What all this means is that we’re at an inflection point. The twin
crises of climate and energy has created a potential turning point in
the way we generate, manage, and consume energy.
The medium-term aspiration of reaching carbon neutrality to fight
climate change now fully aligns with the short-term objective of
ensuring energy security and shielding economies from the
volatility and pressure of energy prices.
Accelerating the energy transition has never made more sense.
A year that reinforced our focus on digitization,
electrification, and sustainability
The best way to make the energy transition a reality is to
decarbonize the demand side of the energy equation – how we use
and consume energy. Think about it: Net-zero buildings, homes or
cities, cars powered by electricity, ultra-efficient industries. All these
are less severely impacted by rising energy costs and energy
supply constraints. And they contribute less to climate change.
Too often, the debate focuses purely on how to shift energy supply
away from fossil fuels and towards renewables. This is forgetting
the most important part: energy transitions happen when we
transition the demand side. So we must transition demand for
technologies that benefit users, and the supply will follow.
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S T R A T E G I C R E P O R T
Integrated Report
A year that reinforced our strategy of having ESG
at the core of everything we do
Business drivers and performance are one side of the story. The
other is non-financial performance: we don’t see positive
environmental, social and governance (ESG) performance as
something that comes at the price of business performance.
Since the early 2000s, we’ve put ESG principles at the heart of
everything we do. Back then, we set ourselves ambitious goals
around decarbonization, diversity and inclusion, social
responsibility, among others. Since then, we’ve consistently dialed
up those goals and commitments. They’ve helped us to expand into
promising new markets, to innovate, to reduce waste and costs,
recycle and save resources, and to attract and retain talent.
Today, we are an “Impact Company”, striving to make a long-term
positive impact across multiple dimensions on the planet and
societies around us. The logic is simple: if you want to do well as a
company, you must also do good – and vice versa. And we must
bring everyone along on this journey.
Over the course of 2022, we delivered some great achievements
and received numerous awards and recognitions that attest to our
performance on these fronts.
For more detail on all this, please read the overview that Gwenaelle
Avice-Huet, our Chief Strategy and Sustainability Officer, provides
later on in this report.
A year that underlined the value of our unique
multi-hub model and culture
Throughout the turmoil of the past few years – and in 2022 in
particular – our multi-hub set-up has stood us in good stead.
Having four regional hubs -- in North America, Europe, China and
India – has provided us with greater resilience amid constant
change.
Our teams are empowered to make decisions in light of the local
situation, adapting and responding quickly to market opportunities
and local circumstances. They do this while staying close to our
customers, business partners and other stakeholders, and locating
our factories and warehouses close to the points of sale, thus
limiting the carbon footprint of our supply chains.
A year that highlighted that Great People really
make Schneider a Great Company
Crises or not, our colleagues in more than 100 countries around the
world work with purpose, passion and commitment to support our
customers, our communities, our business, and each other.
I’m proud to say that’s long been the case, as the numerous awards
and recognitions we receive every year confirm. But 2022 truly
highlighted this dedication.
Our supply chain, sales and customer service teams navigated
difficulties and worked hard to try to find solutions to the resource
and delivery challenges that still haunted the world for much of
2022. Our factory workers in some countries volunteered to spend
weeks inside their sites to ensure that mission-critical operations
continued throughout the local lockdowns. And together, our
people and company raised over €2 million for the Tomorrow Rising
Ukraine Fund, which we set up to support Ukrainians at this very
difficult time, and donated a range of electrical equipment, to help
restore energy in the country.
A year of challenges – and of opportunity
Yes, 2022 was another year full of challenges for economies,
companies and households the world over. But those very
challenges are now coalescing to accelerate the transition we so
urgently need.
We have the opportunity to create a new energy landscape -- one
that is connected, smart, efficient, clean, sustainable, and more
resilient to external shocks. And one that makes access to safe and
reliable energy a reality for everyone.
Schneider Electric is positioned right at the heart of these changes:
our products, systems, services and software; our portfolio,
people, and multi-hub set-up; and our commitments to making a
positive impact on the planet and society. All these combine to
make us a trusted partner and advisor for our customers as they
navigate this journey towards the new energy future.
At our 2022 Fiscal results, I made the announcement that as of May
4 2023, Peter Herweck will become Chief Executive Officer of
Schneider Electric and I will continue on as Chairman of the Board.
After thirty-six years at Schneider, of which twenty were spent as
Chief Executive or Operating Officer, I leave the role of CEO just as
passionate about the business, people and customers as when I
first began my career at this company.
Under Peter’s leadership, a new chapter of Schneider Electric
begins, building on the solid foundation that many have contributed
to and created together these past two decades.
I look forward to continuing this journey with Schneider as
Chairman.
Jean-Pascal Tricoire,
Chairman and CEO
Read more about
our strategy
on page 22.
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S T R A T E G I C R E P O R T
An interview with Chief Financial Officer, Hilary Maxson
“
A record year, positioning us well for
ongoing sustainable growth.”
What were the highlights of Schneider Electric’s
2022 financial performance?
We delivered a strong operational performance in 2022 with a
focus on execution, enabling us to reach record levels of revenues,
adjusted EBITA and net income. We made good progress on our
strategic initiatives of more products, more software and services
and more sustainability which contributed to us recording +12.2%
organic growth and reaching an all-time high EUR 34.2 billion in
revenue. We improved our adjusted EBITA margin by +40 bps
organic, reaching 17.6%, another record and representing more
than EUR 6 billion in value. Net Income of EUR 3.5 billion increased
by +9% from 2021 and was also an all-time high, despite losses of
~300M associated with our exit from Russia.
The Group saw good volume expansion year-on-year, with price
actions also contributing strongly to growth. Supply chain
pressures were evident throughout the year, with progressive
easing through the second half, though some tightness related to
the supply of electronic components remains. We faced significant
inflationary headwinds in the year, from raw materials, freight and
electronics, and labor costs, which we were able to offset through
strong pricing. We continued to deliver on our structural savings
and cost efficiency plan with savings of €203 million in 2022, taking
us to a cumulative EUR 1 billion over a three-year period. We also
prepared for the future, with an additional €547 million invested on
our strategic priorities in 2022.
We delivered Free Cash Flow of EUR 3.3 billion, reflecting record
operational cash flow EUR 5.3 billion, but working capital
requirements continued to impact the free cash flow for the year,
despite strong recovery in the second half, as the Group prioritized
securing supply and delivery to customers in an overall strong
demand environment.
In 2022, we also made good progress on our digital journey, with
our Digital Flywheel now representing 53% of Group revenue,
showing good progress towards a target of around 60% by 2025.
Software & Services represented 18% of Group revenues in 2022,
impacted by our transition to subscription at AVEVA and supply
constraints in Services, but with acceleration expected in the next
years as we drive our transformation to a hybrid-digital company.
Within Software & Services, around 36% of related revenues were
classed as recurring, showing strong progress towards a target of
around 45% by 2025.
2022 was a year of portfolio change, tell us more
about it?
We are happy to have completed the transaction to acquire the
entire share capital of AVEVA this year, which will allow us to
accelerate on our software strategy and towards our ambition of a
consistent “Company of 25”(1). We also completed our portfolio
optimization program, disposing €1.7 billion of revenues since the
start of the program, in 2019. Over the past four years we’ve made
good progress on our portfolio evolution and are well positioned for
the future.
What is the outlook for Schneider Electric in 2023?
Our priority for 2023 is to continue to deliver sustainable growth,
targeting organic growth in our adjusted EBITA within the range of
between +12% to +16%.
To deliver this strong performance, the Group will use two levers:
firstly, organic topline growth where the Group targets between
+9% and +11% and, secondly, organic adjusted EBITA margin
expansion of +50bps to +80bps.
How do you intend to drive shareholder returns in
the next years?
The themes set out in our 2021 CMD are today more relevant than
ever, and we are well positioned to benefit in the coming years from
long-term secular trends set to drive growth across the end-
markets we serve. Our objective is to continue to generate strong
earnings growth through a combination of top line growth and
margin expansion supported by these long-term secular trends
and accelerated by our strategy of more products, more software
and services and more sustainability.
We retain a strong focus on shareholder returns, and we continue
our track-record of proposing a progressive dividend for a 13th
consecutive year, increasing our proposed dividend by +9% to
EUR 3.15 per share.
I am confident, as CFO, that we have the portfolio, the technologies
and the great people required to enable sustainable growth for
years to come, elements which combine to allow us to offer
attractive returns to our shareholders.
Hilary Maxson,
Chief Financial Officer
(1) sum of organic revenue growth % and adj. EBITA margin %.
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S T R A T E G I C R E P O R T
Financial Performance Highlights
Integrated Report
2022 was a year of strong performance against a complex economic and
geopolitical backdrop. We navigated the challenges faced with agility, taking
the next step on our sustainable growth journey. Strong and dynamic market
demand across most end-markets and segments enabled the Group set new
record highs in Revenues, Adjusted EBITA and Net Income, while there was
a strong recovery on Free Cash Flow in the second half of the year, supported
by progressive easing in global supply chains.
Revenue Performance
Consolidated revenue totaled EUR 34,176 million for the period
ended December 31, 2022, up +12.2% organic and up +18.2% on
a reported basis. Organic growth was driven by a continuation of
strong and dynamic market demand in the majority of end-markets
and segments served by the Group, supported by accelerating
energy transition trends and recovery in late-cycle segments.
Consumer-linked segments saw softness in some geographies in
the second half of the year. The Group saw good volume expansion
year-on-year, with price actions also contributing strongly to
growth. Supply chain pressures were evident throughout the year,
with progressive easing through the second half, though some
tightness related to the supply of electronic components remains.
Growth was impacted by the Group’s withdrawal from Russia and
the effects of COVID-19 infections and related lockdowns in China.
FX impact was +5.7% primarily due to the strengthening of the USD
against the EUR, while there was a net negative impact of -0.2%
from acquisitions and disposals.
Energy Management generated revenues of EUR 26,442 million,
equivalent to 77% of the Group’s revenues and was up +12.9%
organically. North America grew +18% organic with strong demand
across all end-markets, including residential buildings. Western
Europe was up +13% organic with double-digit growth in each of
the five main economies of the region with continued good traction
in Data Center & non-residential Buildings, though residential
markets were impacted by pressures on consumer-spending.
Asia-Pacific grew +9% organic impacted by the resurgence of
COVID-19 and softer residential markets in China, but with strong
growth across the rest of the region, notably in India. Rest of the
World was up +10% organic with strong project execution in
resource driven economies and despite headwinds from Russia
prior to the Group’s exit.
Industrial Automation generated revenues of EUR 7,734 million,
equivalent to 23% of the Group’s revenues and was up +9.5%
organically. Growth was led by Discrete automation markets while
sales into Process & Hybrid markets grew strongly, benefiting from
recovery in resource driven economies. North America grew +10%
organic led by performance in Discrete automation markets, while
strong growth in Process & Hybrid markets was supported by
execution on a project in Mexico. Western Europe was up +14%
organic, with strong growth in Discrete automation markets,
particularly in Italy, Spain and France. Asia Pacific was up +7%
organic, impacted by the resurgence of COVID-19 in China, but
with strong growth across the rest of the region, including in India
and Japan. Rest of the World was up +8% organic despite
headwinds from Russia prior to the Group’s exit.
Revenue (€ billions)
€34.2B
.
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2019
2020
2021
2022
Energy Management
13%
34%
29%
24%
Industrial Automation
14%
26%
33%
27%
North America
8,994 M€ (+17.8% org.)
Western Europe
6,223 M€ (+13.1% org.)
Asia Pacific
7,773 M€ (+9.0% org.)
Rest of the World
3,452 M€ (+10.0% org.)
North America
1,992 M€ (+10.5% org.)
Western Europe
2,081 M€ (+13.6% org.)
Asia Pacific
2,568 M€ (+6.5% org.)
Rest of the World
1,093 M€ (+7.7% org.)
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Integrated Report
Financial Performance Highlights
S T R A T E G I C R E P O R T
Summarised Financial Results
2021 FY
28,905
11,843
41.0%
(6,856)
23.7%
4,987
17.3%
(225)
(21)
4,741
(410)
3,204
3,409
6.13
2,799
2022 FY Reported change
Organic change
34,176
13,876
40.6%
(7,859)
23.0%
6,017
17.6%
(227)
(433)
5,357
(424)
3,477
3,968
7.11
3,330
+18.2%
+17.2%
-40bps
+14.6%
+70bps
+20.7%
+30bps
+13%
+9%
+16%
+16%
+19%
+12.2%
+10.8%
-50bps
+8.2%
+90bps
+14.4%
+40bps
+13.5%
+13.1%
• The net price2 impact was positive at +€1,348 million in 2022.
Gross pricing on products was positive at +€1,818 million due to
pricing actions taken throughout the year. In total, RMI was a
headwind at -€470 million. Net price after taking into account
freight, electronic components and other inflationary items in the
supply chain was +€743 million.
• Cost of Goods Sold inflation was -€197 million in 2022, of which
the production labor cost and other cost inflation was -€123
million, and an increase in R&D in Cost of Goods Sold was -€74
million. The overall investment in R&D, including in support
function costs continued to increase as expected and
represented ~5% of 2022 revenue.
• Support function costs increased organically by -€581 million, or
+8.2% organic in 2022 but the Group was able to reduce the
overall SFC to Sales ratio from 23.7% to 23.0%, improving by
90bps organic.
The Group continued to deliver on its structural savings and
cost efficiency plan with savings of €203 million in 2022. The
Group invested an additional €547 million on its strategic
priorities in 2022 including R&D, digital and commercial
footprint to support future growth. Additionally, the Group faced
a significant headwind from inflation, which totaled €254 million
in 2022.
Cumulatively in the period 2020-2022, the Group met its
objective in delivering €1 billion of structural savings.
• The impact of foreign currency increased the adjusted EBITA by
+€333 million in 2022, including an IFRS technical adjustment
for hyperinflation impact in Turkey and Argentina.
• 2022 performance resulted in a favorable mix effect of +€49
million due to a strong improvement of Gross Margin in the
Systems business (mainly coming from pricing) more than
offsetting impacts from the relatively faster growth of Systems
volumes compared to Products and lower growth at AVEVA.
• The impact from scope & others was -€226 million in 2022, with
net Scope impacts representing a small negative amount mainly
associated with Russia, which is treated as a scope item in Q4.
€ million
Revenues
Gross Profit
Gross profit margin
Support Function Costs
SFC ratio (% of revenues)
Adjusted EBITA
Adjusted EBITA margin
Restructuring costs
Other operating income & expenses
EBITA
Amortization & impairment of purchase accounting intangibles
Net Income (Group share)
Adjusted Net Income (Group share)1
Adjusted EPS1 (€)
Free Cash Flow
Adjusted EBITA margin
17.6%
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2019
2020
2021
2022
Adjusted EBITA margin at 17.6%, up +40 bps organic due to
better volumes, pricing actions and delivery of the Group’s
cost savings program.
Gross profit was up +10.8% organic with Gross margin down
-50bps organic, reaching 40.6% in 2022. The decline in margin
was mainly driven by lower productivity due to inflationary
pressures in the supply chain.
2022 Adjusted EBITA reached €6,017 million, increasing organically
by +14.4% and the Adjusted EBITA margin expanded by +40bps
organic to 17.6% as a consequence of strong pricing, good cost
control and improving SFC/Sales ratio.
The key drivers contributing to the earnings change were the
following:
• Volume impact was positive, +€761 million.
• The Group’s industrial productivity level was -€457 million.
Underlying industrial productivity was +€148 million, before the
headwind from higher costs of freight, electronic components
and other inflationary items in the supply chain which totaled
-€605 million. Over a three-year period (2020-2022) the Group
has delivered underlying industrial productivity in excess of €700
million (before the impacts of freight and electronics) with 2022 in
particular impacted by tightness in global supply chains.
(1) Organic change of adj. Net Income and adj. EPS is calculated after removal of impacts from Russia operations in both 2021 and 2022.
(2) Price on products and raw material impact.
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S T R A T E G I C R E P O R T
Integrated Report
Net income up +9%
Restructuring charges were -€227 million in 2022, €2 million
higher than last year as the Group continued to implement its
operational efficiency program to generate c.€1 billion of structural
cost savings in the period 2020-2022. Cumulative restructuring
charges over the same three-year period totaled €873 million.
Other operating income and expenses had an impact of -€433
million, consisting of -€287 million losses in relation to the exit from
Russia (mostly write-off of net book value), -€180 million of M&A
and integration costs, -€75 million impairment associated with the
disposal of Transformer Plants in Poland and Turkey, partly offset
by gains on other disposals made in the year. In 2021, other
operating income and expenses had a small negative impact of
-€21 million as gains on disposals mostly offset the costs of M&A
and integration.
The amortization and impairment of intangibles linked to
acquisitions was -€424 million compared to -€410 million last year.
The increase was mostly due to OSIsoft with a full year of
amortization in 2022, compared to 9 months in 2021.
Net financial expenses were -€215 million, €39 million higher than
in 2021. The cost of debt was up slightly year-on-year, and
additionally there was a negative FX impact on currencies where
hedging is not possible.
Income tax amounted to -€1,211 million, higher than last year by
€245 million as a function of the higher profit. The effective tax rate
was 25.7%, higher due to the impact of the Russia disposal (ETR of
24.6% excluding Russia, in the expected range of 23%-25% and
compared to 23.2% in 2021).
Share of profit on associates decreased to +€29 million, down
-€55 million compared to last year. Net Income from Delixi was
down -€29 million year-on-year, impacted by COVID-19 lockdowns
in China and some softness in Residential buildings markets. The
net result generated by Uplight was also down year-on-year.
As a result, Net Income (Group share) was €3,477 million in 2022,
up +9% from 2021. The Adjusted Net Income was €3,968 million in
2022, up +16% vs. 2021.
Net Income (Group share) (€ millions)
€3,477m
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2020
2021
2022
Adjusted Earnings
Per Share (€)
€7.11
Dividend
Per Share (€)
€3.15
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2021
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2018
2019
2020
2021
2022
Energy Management
20.4%
Industrial Automation
18.9%
Adjusted EBITA margin, up +40 bps organic.
Adjusted EBITA margin, up +30 bps organic.
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Integrated Report
Financial Performance Highlights
Free Cash Flow reached €3.3 billion
The Group delivered Free Cash Flow of €3,330 million, primarily
due to the P&L performance driving record operating cash flow of
€5,393 million.
Trade working capital requirements continued to impact the free
cash flow for the year, as the Group prioritized securing supply and
delivery to customers in an overall strong demand environment.
The trade working capital dynamic turned positive in H2 as
expected, with easing of supply chain constraints supporting
backlog execution and therefore a reduction in the inventory levels
held.
Net capital expenditure of €1,024 million remained stable at ~3% of
revenue, while R&D cash costs of €1,845 million represented 5.4%
of 2022 revenue.
S T R A T E G I C R E P O R T
Free Cash Flow (€ millions)
€3,330m
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2019
2020
2021
2022
Balance Sheet Remains Strong
millions of euros
Total current and non-current financial liabilities
- of which Bonds
Cash and cash equivalents
Net financial debt excluding purchase commitments over non-controlling interests
Purchase commitments over non-controlling interests
Net financial debt including purchase commitments over non-controlling interests
Dec. 31, 2022
Dec. 31, 2021
10,463
8,627
-3,986
6,477
4,748
11,225
9,749
8,234
-2,622
7,127
176
7,303
Schneider Electric SE issued bonds totaling €1,100 million during
2022.
Schneider Electric’s net debt at December 31, 2022 amounted to
€11,225 million after payment of €1.8 billion to fulfill the 2021
dividend, net acquisitions of €0.3 billion, offset by the good Free
Cash Flow performance of €3.3 billion.
The net debt was also impacted by a technical adjustment of €4.6
billion to reflect the commitment to purchase the minority shares in
AVEVA, a transaction which closed on January 18, 2023. Adjusting
to exclude the impact of such purchase commitments would result
in a net debt of €6,477 million, comparable to the €7,127 million of
the previous year end.
The Group remains committed to retaining its strong investment
grade credit rating.
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Financial Strength
A-
Standard & Poor’s
A3
Moody’s
S T R A T E G I C R E P O R T
Integrated Report
Making strong progress on our digital journey
Schneider Electric continues to make progress on its ‘Digital Transformation @ Scale’ to create
unified software, user experience, data federation and AI as set out in the 2021 Capital Markets Day.
This includes tracking the evolution of its digital flywheel where strong progress has been made
against the targets set out in 2021. Schneider Electric is focused on growing recurring revenues
which serve to deepen the relationship with customers across the lifecycle of their assets and installations, for
the benefit of both parties over time.
Flywheel up +15% org. in 2022
Full year 2022
Edge
Control
+13%
org. growth
10%**
Software*
+9%
org. growth
8%**
53%
of 2022 Group
revenues
25%**
Connectable Products
+20%
org. growth
10%**
Field
Services
+8%
org. growth
*Including Digital Services **% of 2022 revenues
2021
2022
Digital flywheel as % of Group revenues
c.50%
53%
Software & Services as % of Group revenues
c.18%
18%
Recurring revenue as % of Software & Services revenues
c.30%
36%
Key achievements
of the year
• Digital innovation driving strong
growth in connectable products
• Good growth in Software and
Digital Services despite transition to
subscription at AVEVA
• Strong traction for efforts to make
software and services revenues
more recurring
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Integrated Report
S T R A T E G I C R E P O R T
Accelerating our digital journey
Schneider Electric has built the toolbox for customers to digitize their enterprise and build its full digital twin,
allowing them to harness insights through data to deliver greater efficiency and savings. This is achieved
through EcoStruxure, our IoT enabled, plug-and-play open architecture and platform.
Unparalleled portfolio
On top of EcoStruxure, we have built an agnostic software portfolio, meaning software that is not tied to any particular hardware device or
technology platform, with offers across both Industrial Automation and Energy Management.
EcoStruxure for IoT, Data and Software for a complete Digital Twin
&
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Agnostic Software and Data
Edge Control
Connected Products
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End-markets:
Building
Data Center
Industry
Infrastructure
Holistic efficency
In the current context, with priority on energy
security and the resultant rise in energy costs,
there is a clear need for greater energy efficiency.
Schneider Electric’s portfolio of software will allow
customers to converge their enterprise data,
across domains of process, power and build,
and provide contextualized data-driven insights
across the lifecycle of their assets.
Industrial
Software
Energy
Software
Process Efficiency + Energy Efficiency
Convergence
between Power and
Process Data
One Data Hub for
Operations, Assets,
Energy & Carbon
Tracking
Contextualized
insights for Safety,
Resiliency,
Efficiency &
Sustainability
Digital Twins
of all critical
elements of the
enterprise
One Data Hub and a fast track to the Enterprise Metaverse
An increased focus on climate change,
coupled with the recent energy crisis, has
forced governments and corporations to
re-think their energy consumption with a
renewed and urgent need for energy
efficiency and electrification. Schneider
Electric believes that the path to energy
efficiency lies in the ability to digitize
existing installations across industries with
a particular focus on mission-critical and
energy-intensive applications.
For our customers there is a clear need
for digital solutions across the lifecycle
covering both the industry twin and the
energy twin across the enterprise. We
aspire to be the reference in the industrial
world for contextualized asset data. We
believe that customers can benefit when
data from their enterprise installations
feeds into a single data hub, accessible
by specialized software applications for
tangible efficiency gains and
sustainability advancements.
18
Digital Twin
Across the lifecycle
Industry Twin
Data Hub
One singular source
for Enterprise Software
Energy Twin
IoT
Plug & Play Architecture
Schneider Electric Universal Registration Document 2022 | www.se.com
S T R A T E G I C R E P O R T
Integrated Report
In 2022, Schneider Electric took the next step in the evolution of its strategy, and the acceleration of its digital
journey, through the acquisition of the entire share capital of AVEVA.
Transaction timeline
March 1, 2018
Schneider Electric acquires
a c.60% share in AVEVA
November 11, 2022
Schneider Electric reaches
agreement on the terms of an
increased and final cash offer
of £32.25 per share
January 18, 2023
Schneider Electric announces
completion of the transaction,
with shares in AVEVA to be
de-listed the following morning
Mar. 18
Sep. 22
Nov. 22
Dec. 22
Jan. 23
September 21, 2022
Schneider Electric
announces its intention to
acquire the remaining
c.40% of shares in AVEVA
that it does not already
own, by way of a scheme
of arrangement*.
November 25, 2022
AVEVA announces that
the requisite majority of
eligible AVEVA
shareholders have voted
to approve the offer and to
pass a special resolution
to implement the Scheme
December 14, 2022
AVEVA announces that
all of the regulatory
conditions have now
been satisfied
*The cash offer of £31 per share is recommended by the AVEVA Independent Committee and is
subject to the approval of the minority shareholders and certain regulatory conditions.
Implications for our customers
The combination of AVEVA and Schneider Electric agnostic
software provides customers with one data hub, and a fast track to
the Enterprise Metaverse. Doing so will drive benefits for
customers, creating value through:
• Acceleration of the transition to a subscription model and
Software as a Service (SaaS)
• Creating one data hub, converging customers process and
energy data
• Bringing combined process and energy efficiency to industrial
and infrastructure customers
• Providing one set of applications for the complete Enterprise
Metaverse
• Leading to a frictionless customer experience
Our three principles of Software
governance
Schneider Electric intends to apply its fundamental principles of
business autonomy and technological agnosticity to the
governance of AVEVA by ensuring three “software governance
principles”, which are:
1. First, to maintain AVEVA’s software as fully agnostic. This means
that AVEVA will continue to rely on open architectures and
interoperable standards providing the equal ability to work with
or without Schneider Electric hardware.
2. Second, to preserve AVEVA’s business autonomy. This means
that the AVEVA name and brand will continue and AVEVA will
have its own, dedicated go-to-market, marketing and R&D
capabilities, as well as its own P&L.
Implications for Schneider Electric
The transaction will serve to accelerate Schneider Electric’s
software strategy, driving growth through:
3. Third, to keep AVEVA’s specific culture as a software company.
This means that the AVEVA teams will not be merged or
integrated with existing Schneider Electric hardware
businesses, or country operations.
• A simplified and co-ordinated agnostic software offering
• Operational flexibility and simplification
• Further convergence of technology through closer co-operation
on R&D
• A co-ordinated go-to-market and greater customer coverage
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Integrated Report
S T R A T E G I C R E P O R T
Key achievements of 2022
January
Schneider Electric achieves outstanding performance in four
corporate sustainability ratings underlining its long-standing
sustainability leadership.
• 11th consecutive year on CDP’s Climate Change A list
• 11th consecutive year on the Dow Jones Sustainability
World Index
• Top rating from EcoVadis: in the top 1% of 85,000
corporates assessed and received the Platinum medal
• #1 in the Electronic Components & Equipment sector in
Europe on the Vigeo Eiris index
In addition, Schneider Electric was recognized for the 11th
time in Corporate Knights’ Global 100 list of the most
sustainable corporations, ranking fourth in 2022.
March
Schneider Electric’s Le Vaudreuil factory has been
recognized by the World Economic Forum as a Sustainability
Lighthouse, one of only six worldwide and the second for
Schneider Electric. The World Economic Forum also
recognized the Company’s Smart Factory in Hyderabad,
India as an Advanced Lighthouse — the fifth Schneider
Electric factory to receive this distinction to date
February
Schneider Electric lands on Fortune’s 2022 World’s Most
Admired Companies list for the fifth year in a row. This year,
Schneider Electric ranks third in the electronics industry,
signifying its continuing commitment toward building a more
digital, electric, and decarbonized world. This accolade is a
testament to the Company’s ongoing commitments toward
innovation, sustainability, diversity, and inclusion.
April
Schneider Electric donated equipment worth €4 million to
help restore essential energy supplies in Ukraine. The
donation was facilitated by the World Economic Forum as part
of ongoing efforts to identify steps its members can take to
support humanitarian needs in Ukraine. In addition, the
Schneider Electric Foundation supported NGO partner “SOS
Attitude” in running a refugee camp in Moldavia.
June
Schneider Electric won the 2022 Microsoft Energy &
Sustainability Partner of the Year award. Schneider was
honored among a global field of top Microsoft partners for its
innovative EcoStruxure™ software solutions provided to
customers that were powered by Microsoft technology.
May
Schneider Electric launched EcoStruxure™ Machine Expert
Twin, a scalable digital twin software solution to manage the
entire machine lifecycle. Using EcoStruxure™ Machine Expert
Twin our customers can expect 60% savings in
commissioning time and up to 50% faster time-to-market by
revolutionizing the design and build processes.
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S T R A T E G I C R E P O R T
Integrated Report
July
Schneider Electric signed a binding agreement regarding the
sale of Schneider Electric Russia to the local leadership team.
The transaction was completed at the end of September, with
Schneider Electric Russia deconsolidated effective from the
start of Q4 2022.
September
Schneider Electric confirmed its firm intention to acquire the
share capital of AVEVA that it does not already own. The
transaction will create customer value through bringing
together energy and process data, creating an unparalleled
enterprise data hub augmented by a suite of specialized
software offers. The minority shareholders of AVEVA voted in
November 2022 to approve the transaction, which closed in
January 2023 following satisfaction of all regulatory
conditions.
November
Schneider Electric is triply recognized by the Financial Times,
Refinitiv and Forbes as a global leader in workplace diversity,
equity and inclusion (DEI). These separate endorsements
reflect both the depth of the company’s long-standing
commitment to creating a fairer and more equitable society,
as well as the tangible, practical impact of the measures it has
implemented to progress that ambition within its workforce.
August
Schneider Electric ranked first in the Gartner Supply Chain
Top 25: Europe Top 15, retaining its position for the third
consecutive year. This recognition followed the
announcement in May that the company ranked second in the
Gartner global ranking.
October
Schneider Electric introduces advanced energy management
solutions at its Innovation Summit World Tour expanding the
AirSeT range with the launch of new SF6-free MV switchgear
for primary distribution (GM AirSet), the EcoStruxure™ Energy
Hub IoT SaaS solution for visibility into energy and emission
profiles and Schneider Electric EcoCare, a unified IoT-
enabled bundle of 24/7 expert support, that delivers deep
insights on asset conditions, and expertise to unlock safety,
efficiency, and sustainability improvements.
December
Schneider Electric’s Wiser Home Energy Management App
received special honors at this year’s Consumer Electronic
Show (CES) being named a 2023 Innovation Award Honoree
in the Smart Home category. The award recognizes
outstanding design and engineering in technology products,
focusing on sophisticated monitoring and control solutions.
The Wiser App simplifies home energy measurement &
control to increase efficiency, saves on energy bills and
allows homeowners to live more sustainably.
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21
Integrated Report
S T R A T E G I C R E P O R T
Business
Market trends – All Digital, All Electric
At Schneider Electric, we believe an All Digital, All Electric world is key to limiting the global temperature
increase to the 1.5°C trajectory needed to slow climate change and enable a resilient future. The energy crisis
in Europe shows that decarbonization is a strategic imperative to ensuring stability today and not limited to
ensuring a resilient world in the far future. In fact, the medium-term objective of reaching carbon neutrality to
fight climate change fully aligns with the short-term objective of energy security.
We are at an inflection point. We need to build a more sustainable and resilient world.
We need to save 3x more and 3x faster CO2 emissions by 2030
4 Gt*
CO2 saved per year
10-15 Gt*
CO2 saved per year
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
* Gigatonne
Solutions to increase sustainability and resilience exist and are available today.
Schneider’s positioning for a sustainable future focuses on an All Digital, All Electric world. It’s what we call “Electricity 4.0”:
• Digitization creates resilience and builds a smart future: Data analytics and insights enable more agile, efficient operations and
continuity, making the invisible visible.
• Electricity makes greener energy possible: Green energy production offers the best path for decarbonization.
DIGITAL
+ ELECTRIC
= SUSTAINABLE
For Efficiency
For Decarbonization
Smart & Green
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S T R A T E G I C R E P O R T
Integrated Report
Megatrends highlight the shift to a world becoming All Digital, All Electric.
All Digital
All Electric
Growing need to aggregate exponential amounts of data.
Expansion of Internet of Things (IoT) in industrial processes
driving more and more data. By 2030, the number of IoT
devices will be six times that of 2020 growing from eight
billion to 50 billion, resulting in an eight times increase in
compute workloads(1).
New business models possible with new technologies like
artificial intelligence (AI), algorithms, and digital platforms.
More renewables, with a variable capacity mix anticipated to
reach up to 50% by 2040, make power generation greener.
More electric vehicles (EVs) drive changes to the electrical
grid and increase the level of electrification.
More energy efficiency from better products and smarter use.
What net zero looks like in 2050
Grids of the Future
~100% reduction in CO2 emissions
Data Centers of the Future
CO2 emissions stable during
exponential data growth1
Industries of the Future
84% reduction in CO2 emissions
Buildings of the Future
93% reduction in CO2 emissions
Infrastructure of the Future
83% reduction in CO2 emissions
Partnerships of the Future
80%2 invested in more sustainable
business practices
Solar energy captured
on every suitable rooftop
70% heat
pump usage
70% of cars are EVs
70% recycling rates
~90% of power
from renewables
167 million
households go solar3
10x faster
renovation rates3
1 CO2 emissions from Schneider Electric’s data center and edge
global energy forecast and BNEF Carbon Intensity Projection.
Data growth from worldwide IDC Global DataSphere forecast
applying exponential growth projection.
All other statistics: Schneider Electric™ Sustainability
Research Institute (2021): “Back to 2050” decarbonization
scenarios. CO2 emission reduction projections are based
on the differences between 2050 and baseline year 2020.
2 IDC Services
3 BNEF
2x more rail
(1) Schneider Electric Sustainability Research Institute.
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40 – 65% of energy
delivered as electricity
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Integrated Report
What we do
Industries of
the Future
S T R A T E G I C R E P O R T
We are on a mission to make the industries of the future sustainable and resilient through open,
software-centric automation.
We help our customers integrate sustainability, efficiency, and
responsible profitability into every step of their decision making
— and lead by example in our own Smart Factories.
Our unrivaled EcoStruxure™ solutions and services, built from the
legacy of award-winning brands such as Modicon, Foxboro,
Triconex, TeSys, Altivar, and Harmony, are complimented by
AVEVA software and strategic partnerships with world-leading
companies to provide end-to-end, integrated solutions from the
shop floor to the top floor and into the cloud.
Innovations introduced in 2022 include:
• Lexium Cobot: An advanced robotic system that increases
workforce empowerment and safety by performing heavy,
repetitive, and complex tasks.
• EcoStruxure™ Automation Expert 22.1: The world’s first
universal automation solution now reduces engineering by
almost 50% through AVEVA System Platform integration, and
provides a cost-effective, high-computing-power controller with
Modicon M262d integration.
• EcoStruxure™ Machine Expert Twin: A scalable digital twin of
real machines allowing manufacturers to design, commission,
and manage their lifecycle in the virtual world before impacting
the real world.
• Motor Management: Decreases motor energy consumption
and deterioration without compromising safety and reliability.
EcoStruxure™ Motor Management Design web app easily
performs energy savings analysis, and Altivar™ Soft Starter
ATS480 reduces engineering time and costs.
• EcoStruxure™ Power and Process: Increases efficiency and
sustainability by digitally unifying automation and electrical
systems.
Padania Acque
Schneider Electric worked with Italian water services provider
Padania Acque, to integrate and modernize its operations,
resulting in:
reduced energy consumption by at least 5%,
reduced water loss by up to 10%,
•
•
• 22% increase in EBITDA over three years.
for Water & Wastewater
Apps, Analytics, & Services
EcoStruxture Water
Cycle Advisor – Water
Loss & Water Simulation
AVEVA
Work Tasks
Edge Control
EcoStruxture GEO
SCADA Expert
Modicon™ PACs:
M340/M580/M221
Connected Products
LV smart panels
Altivar drives
SCADAPack
RTU
96%
50%
25%
less energy and 95%
less material needed for
testing (Euro Machinery).
faster changeover time
and up to 40% cost
savings (Livetech).
less downtime and 40%
less labor costs (Wilo
Pumps Indonesia).
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S T R A T E G I C R E P O R T
Integrated Report
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: designed and retrofitted for net-zero. With our
3-step framework – Strategize, Digitize, and Decarbonize—we
bridge ambition and action for decarbonization of buildings,
new and existing.
• Resilient: avoids downtime and recovers quickly. Our power
digitalization and microgrid solutions enable business uptime
through reliable power, predictive analytics, and conditions-
based maintenance.
• Hyper-efficient: gathers real-time data for visualization and
identification of efficiency opportunities. Through room-level
monitoring, occupancy sensors, and building management
software, businesses can better manage energy and space
utilzation.
• People-centric: puts people first in the design and operation of
the building for improved health, safety, comfort, and
productivity. Our building management and security solutions
provide an optimal environment for occupants at all times.
Innovations introduced in 2022 include:
EcoStruxure™ Building Operation 2022
An open, scalable next-generation building management solution
that provides a single control center for facility professionals to
monitor, manage, and optimize the efficiency of systems that have
been traditionally siloed. Now providing simple integration, visibility
and actionable data from solar panels, EV charging stations, and
renewable energy sources, as well as previously integrated HVAC,
power, lighting, security, fire systems, and more to create
sustainable and energy-efficient buildings.
SpaceLogic™ Insight-Sensor
Anonymous, real-time people-counting technology and integration
with EcoStruxure™ Building Operation building management system
(BMS) responds dynamically to changes in room conditions and
occupancy to reduce energy waste, enhancing occupant comfort.
Additional sound, light, temperature, and humidity sensing delivers
data required for green and WELL building standards and
certifications.
EcoStruxure™ Building Advisor
Monitor your building management system and heating, ventilation,
and air conditioning (HVAC) assets while automatically detecting and
diagnosing faults leading to energy waste. Dedicated dashboards
indicate tailored recommendations to help prioritize maintenance
tasks, based on carbon emission scores. Facility professionals can
view the carbon impact of every single building, and also report on
carbon footprint reduction across the whole enterprise.
EcoStruxure™ Energy Hub
Citycon Lippulaiva
– Helsinki, Finland
Citycon a leading owner, manager, and developer of mixed-
use urban centers commissioned Europe’s first energy
self-sufficient, sustainable, and carbon-neutral urban center.
With EcoStruxure™ solutions, including an advanced microgrid
system, Citycon became a prosumer – both a producer and
consumer – of energy. The goals included to achieve high
sustainability through net-zero emissions, improve energy
management, lower energy consumption, and generate
revenues by selling energy back to the local utility, and were
achieved with EcoStruxure™ solutions. Results of this
installation and strategy include:
• 335 tCO2/year (direct energy savings) emissions reduction.
• 14% reduction in energy costs.
• €3 million investment payback within five years.
for buildings
Apps, Analytics, & Services
EcoStruxure
Building Advisor
EcoStruxure
Microgrid Advisor
Edge Control
EcoStruxure
Building Operation
EcoStruxure
Power Operation
Connected Products
MasterPactMTZ
PowerLogic Metering
50%
37%
Cloud-based energy management system designed for small and
medium-sized commercial and industrial buildings that simplifies
energy management and achieving sustainability goals, without the
IT headaches. Simply connect your smart energy infrastructure for
a single building or multiple sites to automatically collect, store,
visualize, and report on energy data.
Approximately 50% of
today’s buildings will still
be in use in 2050(1).
Buildings account for
37% of the world’s
annual CO2 emissions(1).
(1) https://www.iea.org/reports/energy-technology-perspectives-2020
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Integrated Report
What we do
Homes of
the Future
S T R A T E G I C R E P O R T
At Schneider Electric, our aim is to make homes more efficient and sustainable, leveraging our future-proof
and scalable home energy solutions. Our cutting-edge technologies help monitor, control, automate, and save
on energy consumption, while also reducing carbon emissions at home without compromising on comfort and
convenience. We design solutions to:
Make homes more sustainable
Innovations introduced in 2022 include:
• Wiser app Home Energy Management System: The Wiser
App from Schneider Electric makes it simple for homeowners to
manage their energy use, reduce bills, and prepare for a more
sustainable future, all in just a handful of taps. Users can monitor
power consumption in real-time, understand their spending, and
set budgets with ease. Plus, Wiser now creates the most efficient
schedule for charging an EV, choosing when to start charge based
on the cheapest electric tariff.
• Merten System-M Pure Ocean: The plates of this series of
switches and sockets are made from used fishing nets.
• Odace Sustainable: One of the best seller series of switches and
sockets, produced in a net-zero factory in Spain, is now available in
a recycled material option, which would be 80% post-industrial
frames.
• Resi9 Green: Introducing recycled content into an electrical
component is not an easy task, as the new material needs to
comply with high standards in terms of safety and performance,
such as resisting temperatures up to 950 degrees. Our teams have
been able to make it happen for our Resi9 breakers series.
• Resi9 Connect: Resi9 Connect ensures that all home occupants
have strong internet connection, using a wired for wireless
architecture – wired for performance and wireless for convenience.
The solution provides internet access throughout the home via wall
hotspots, providing router-quality WiFi in every room.
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. The energy crisis and climate change is putting
increased pressure on our home’s electrical installation. Our next
generation of intelligent electrical switchboards, combined with
battery back-ups, ensures critical appliances remain powered even
during outages.
Make homes more efficient
Heating accounts for about 60% of the energy bill. Added to this,
EV charging will increase electricity consumption by up to 40% in
homes(1). To mitigate increased energy bills, our Home Energy
Management solutions enable consumers to decrease energy
consumption, without compromising on comfort. Through real-time
monitoring and control of major energy guzzlers in homes, we
empower homeowners to make their home more energy efficient.
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.
KB Homes customer testimony
“ We are excited to partner with industry and academic leaders to bring advanced technologies and energy solutions to our
homeowners. The new KB homes at Oak Shade and Durango at Shadow Mountain will be the first in California to be equipped with
smart technologies, a backup battery, and microgrid connectivity. These will provide a self-supporting energy system with a
community battery that powers the neighborhood,” said Dan Bridleman, Senior Vice-President of Sustainability, Technology and
Strategic Sourcing for KB Home. “We look forward to conducting research to measure the energy efficiency and resiliency of our
all-new energy-smart connected communities.”
x2
20%
54%
Electricity consumption
in residential buildings is
expected to double by
2050(2).
Homes contribute up to
20% of CO2 emissions(3).
Consider smart
technologies like home
energy management
solutions as a way to
reduce energy bills(4).
(1) ChargeGuru study of 100 EV
installations in France.
(2) International Energy Outlook 2019
(EIA).
(3) UN Environmental Program 2020.
(4) Schneider Electric consumer
survey conducted across six
markets – 8,019 respondents – in
July 2021 (performed by
OPINIUM).
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Integrated Report
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 Group 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.
Innovations introduced in 2022 include:
• SM AirSeT and RM AirSeT are digital MV switchgear ranges
using pure air technology, eliminating the need for the SF6 GHG.
• EcoStruxure™ Grid Operation is a scalable, future-proof
software solution offering outage management and SCADA
modules specifically tailored for small to medium-sized utilities.
This modern technology that helps maximize reliability,
resilience, and operational efficiency is easy to deploy and
maintain while also serving as a foundation for a stepwise
journey to Advanced Distribution Management Systems.
• AVEVA™ Unified Operations Center for Renewables is an
enterprise visualization for creating intelligent operations centers
based upon a system of systems approach.
• ETAP Grid Code is an end-to-end solution for the design,
analysis, protection, optimization, operation, and maintenance
of renewable energy systems.
• 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).
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Brookville Smart
Energy 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 a 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.
for eMobility
Apps, Analytics, & Services
EcoStruxure
Microgrid Advisor
EcoStruxure
Power Advisor
Edge Control
EcoStruxure
Microgrid Operation
EcoStruxure
Power Operation
Connected Products
PowerLogic
MasterPactMTZ
Energy Control
Center
(1) OECD/IEA (2020), World Energy Outlook, Climate Watch (2020), Historical
GHG emissions, Schneider Electric Research.
(2) Planete Energies.
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Integrated Report
What we do
S T R A T E G I C R E P O R T
Data Centers of
the Future
Data centers are the lifeblood for the digital world, from large cloud centers to small micro ones. They must be
sustainable, resilient, efficient, and adaptive to meet the changing demands of technology.
EcoDataCenter
EcoDataCenter believes it has a responsibility to be socially
and environmentally accountable when it comes to new data
centers – which drives its very mission statement. Located in
Falun, Sweden, they operate with an emphasis on climate-
positive solutions for clients, communities, and the
environment.
• Four GalaxyTM VX UPS’s operating at 99% efficiency can
support 3,750kW of customer load in the data center.
• Connected sensor and meter monitoring allows greater
facility temperature control.
• The data center achieves new levels of efficiency,
with an EER of 132 and a PUE of 1.15 by reusing
low-grade waste heat.
for IT
Apps, Analytics, & Services
EcoStruxure
IT Advisor
EcoCare
Edge Control
EcoStruxure
IT Expert
Connected Products
Row Data Center
GalaxyTM
UniflairTM
Modular Data
Center APC
SmartUPSTM
Critical attributes of evolving data centers:
Sustainable – Sustainability in data centers involves creating direct
customer benefits and accounting for emissions from the entire
supply chain. Robust data is crucial for a sustainable solution for
both the organization and its customers.
Resilient – By reducing exposure to hazards and risks to minimize
unplanned downtime. Monitoring and data analysis helps data
center teams proactively avoid uptime threats and maintain
business continuity.
Efficient – More and more data centers are incorporating human
resources and cost aspects such as CapEx in total cost of
ownership (TCO). Intelligent sensors and digital services will drive
more efficient operations.
Adaptive – Speed and precision in delivering goods and services
is a new business success threshold. Data centers must adjust to
changing customer demands. Agile designs enable data centers to
pivot and scale quickly. Meeting these demands is crucial for
business success.
Innovations introduced in 2022 include:
• EcoStruxure™ IT: Schneider Electric’s comprehensive data
center infrastructure management (DCIM) software solution that
ensures business continuity by enabling secure monitoring,
management, and planning for IT infrastructure, from a single
rack to hyper-scale, on-premises, in the cloud, and at the edge.
• APC SmartUPS Modular Ultra: The most sustainable modular
UPS for distributed IT and edge computing allows for scaling
power protection from 5-20 kW to meet business needs.
Lithium-ion technology eliminates the need for battery
replacement, allowing for more power, IT, and edge computing.
• APC SmartUPS Ultra: The first of its kind single-phase UPS
that has a lighter and more powerful design. It uses lithium-ion
technology to power distributed IT and edge computing sites to
ensure uptime and resilience.
Maintaining uptime means happy customers
“The biggest win using EcoStruxure™ IT Advisor is that we’re now in
a position where we’re reacting to situations before they actually
become situations visible to anybody else. We’re doing our best
work when nobody really knows that we exist.”
Christopher Perez, Advisor for Enterprise Technology, Puget
Sound Energy
Up to
Around
20%
15%
reduction in energy
usage(1).
reduction in
maintenance costs(1).
(1) https://www.se.com/ww/en/work/campaign/life-is-on/case-study/tanishq.jsp
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S T R A T E G I C R E P O R T
Integrated Report
Partnerships of
the Future
Climate change is the defining issue of our time. We must limit the planet’s warming to 1.5º Celsius, which
means collectively eliminating three times more carbon emissions by 2030. The good news is, we have tools
available to make the world less carbon intensive and more energy efficient. But no one can complete the
decarbonization journey alone. Only by teaming together can we accelerate progress on the world’s path to
net zero. And that’s what Partnering for Sustainability is all about.
Building a sustainable future together
Sustainability is more than a corporate social responsibility; it’s
also, a business imperative. Companies everywhere are concerned
about climate change as they feel pressure to address the issue for
shareholders, customers, employees, and the younger generation.
At Schneider Electric, we’re responding by enabling sustainable
practices with solutions that are simplified, open, and digital. And
we’re providing these solutions for, with, and through our partners
worldwide.
• Sustainability For Partners: We support our partners in
assessing their own carbon footprint and building a trackable
and traceable plan of action.
• Sustainability With Partners: We certify our partners’ ability to
assess the sustainability of their supplier and customer
ecosystem with automated and easy-to-scale SaaS solutions.
• Sustainability Through Partners: We assess and market the
impact of our solutions on carbon, total cost of ownership, and
ability to secure certifications and subsidies to increase our
competitive advantage and benefit our partners.
Melbourne Cricket
Ground
The 100,000-seat sports stadium, considered the home of
Australian sport, is a prime example of the convergence of
building technology and IoT applications and advanced data
to ensure power quality for fans and stakeholders; track
consumption of energy, water and gas; and reduce energy
costs and usage to minimize environmental impact. Thanks
to Critical Power EcoXpert, AZZO and EcoStruxure Power.
First-ever Sustainability Impact Awards
Innovations introduced in 2022 include:
Schneider Electric launched the Sustainability Impact Awards in
2022 and, in the program’s inaugural year, focused on partners
who share our passion for decarbonization and are taking action to
make the most of their energy and resources. It is altogether fitting
that our inaugural global awards program recognizes our partners
for their sustainability efforts in their own operations and on behalf
of their customers.
Overall, we had participation from 37 countries, 11 channel
partners type joined the partner award program, such as
contractors, design firm, system integrators or IT solutions provider
and 6 global winners will be announced in Q1 2023. In 2023, the
awards program will expand to recognize suppliers and end users
for their sustainability impact, as well.
• PrismaSeT Active is the newest generation of low-voltage
switchboards, natively cloud connected helping boost reliability
& efficiency. Maximizing people safety with heat tag.
Commissioning is made faster, before smart alarms help
optimize maintenance and improve uptime.
• TransferPacT is the new generation transfer switch that
provides best-in-class reliability with ultra-fast transfer
performance. This natively connected switch can be monitored
24/7 and thanks to the modular design, it’s easy to upgrade with
30% space saving.
• TeSys Series: The new generation of TeSys motor starters -
Deca and Giga series are designed to serve the needs of the
process machinery, water and wastewater, metals, minerals,
and mining as well as various manufacturing and processing
industries. The new generation TeSys series reduce engineering
time and complexity, whilst improving machine reliability and
driving down maintenance costs help provide consistent
performance, enhanced safety and uptime, cost savings, and
great functionality.
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650k
Partners and Service
Providers Co-innovate
and exchange.
10+
mySchneider Partner
Programs Curated
content, tools and
training.
3.5k+
EcoXpert partners to
implement solutions
worldwide.
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Integrated Report
Sustainability strategy
S T R A T E G I C R E P O R T
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 critical partner to our customers, suppliers,
investors, NGOs and other stakeholders using our services and products to accelerate their own energy
efficiency and sustainability transition. Our purpose drives us in “empowering all to make the most of our
energy and resources, bridging progress and sustainability for all”. Schneider Electric is an Impact Company.
IMPACT
Company
At Schneider Electric, we pride ourselves in being an Impact
Company because sustainability does not only inform what we do,
it drives corporate decision making. This entails a responsibility to
share learnings and keep raising the bar.
We are an Impact Company convinced that to do good, we need to
do well, and vice-versa. To deliver sustainability impact, we must
combine solid profitability with leading practice on all
environmental, social, and governance (ESG) dimensions. At the
same time, this positive impact supports the long-term resilience of
the Company as we attract new customers, investors, and talents.
Our sustainability and business impacts converge to act for a
climate positive and socially equitable world, while delivering
solutions to our customers for sustainability and efficiency.
We bring everyone along in our ecosystem, from employees to
supply chain partners, customers, as well as local communities and
institutions. Building on a foundation of trust, our unique operating
model with a multi-hub approach is set up to impact at both global
and local levels. From a meaningful purpose, our culture builds on
strong people and leadership values empowering all Schneider
Electric people to make a great company.
1. Do well to do good
2. Bring everyone along
and vice versa
Performance
The foundation for doing good
Model & culture
Set up for global and local impact
Business
Part of the solution
All ESG
Dimensions
All stakeholders
in your ecosystem
An Impact model recognized in external ratings
A LIST
2022
CLIMATE
Platinum medal
recognizing top 1%
performance among
100,000+ companies.
The only company in its
sector listed as A List 12
years in a row.
Schneider has been
featured on Corporate
Knights’ Global 100 list of
sustainability leaders
every year since 2012,
ranking #4 in 2022.
Terra Carta Seal
obtained in 2022, the
guiding mandate for the
Sustainable Markets
Initiative.
#1 among industry
peers, scoring 90 out of
100 in the latest S&P
Global Corporate
Sustainability
Assessment.
See our recognitions on the
Awards page at www.se.com
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S T R A T E G I C R E P O R T
Integrated Report
Our 2025 sustainability
commitments
Our unique
transformation tool
With less than 10 years left to reach the 17 United Nations
Sustainable Development Goals (SDGs), Schneider Electric has
accelerated its impact and is making new, bold commitments to
drive meaningful impact within the framework of its business
activity. Schneider Electric’s 6 long-term commitments are to:
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.
Be efficient with resources
by behaving responsibly and making the most of digital
technology to preserve our planet.
Live up to our principles of trust
by upholding ourselves and all around us to high social,
governance, and ethical standards.
Create equal opportunities
by ensuring all employees are uniquely valued in an inclusive
environment to develop and contribute their best
Harness the power of all generations
by fostering learning, upskilling, and development for each
generation, paving the way for the next.
Empower local communities
by promoting local initiatives and enabling individuals and
partners to make sustainability a reality for all.
Since 2005, Schneider Electric measures and demonstrates its
progress against sustainability goals with a unique transformation
dashboard called Schneider Sustainability Impact (SSI).
The SSI is the translation of our six long-term commitments into a
selection of 11 highly transformative and innovative programs
executing our 2021 – 2025 sustainability strategy. It has been
designed to focus on the most material issues, leveraging internal
and external stakeholders feedback.
Every quarter, the SSI provides, on a scoring scale of 10, an overall
measure of all the programs’ progress, which is shared with all our
stakeholders together with financial results.
At the end of the year, 64,000 employees of the Group are
rewarded for the progress achieved as the SSI constitutes 20% of
their short-term incentive plans’ collective share (STIP).
To ensure robustness, the SSI’s performance and monitoring
systems are audited annually by an independent third party and
obtain a “moderate” assurance, in accordance with ISAE 3000
assurance standard, except for SSI #+1. In 2022, the Group
obtained a “reasonable” assurance for SSI #8 and will
progressively cover all externally assured KPIs with this new level
of assurance.
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
Read more about Schneider Sustainability
Impact and Schneider Sustainability Essentials
in chapter 2 page 78 to 81.
Read more about our contributions the United
Nations Sustainable Development Goals on
pages 82 and 83.
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Integrated Report
S T R A T E G I C R E P O R T
Proud of 2022’s sustainability achievements
The Schneider Sustainability Impact is a scorecard demonstrating that rapid and 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 SDGs, and measuring our impact with transparency.
In 2022, the SSI achieved a great score of 4.91/10, exceeding its 4.70/10 target for the year, and is on track to achieve its 2025 ambition.
This result represents the average progress of 10 SSI programs, ie excluding SSI #+1 and exceptionnaly SSI #6 as 2022 is the baseline for
this program.
Significant progress was notably achieved for SSI #9 with 5.5 million people provided with access to green electricity in 2022 alone (vs 4.2 in
2021). The Group also achieved the rapid transition of 45% of its packaging to plastic-free and recycled carboard (SSI #5), compared to 21%
one year before. The Decent Work program (SSI #6) was launched for the first year, with more than 500 suppliers committing to join the program
and some 1.5% already meeting the expectations set by Schneider Electric. Lastly, progress against the nearly 200 local commitments taken in
all markets where Schneider operates under SSI #+1 can be consulted online, some examples are provided in the opposite page.
4.91/10
vs 3.92 in 2021 and outperforming 4.70/10
target for 2022
Schneider Sustainability Impact
6 Long-term Commitments
11+1 targets for 2021-2025
Baseline(1)
2022 Progress(2)
2025 Target
Climate
1. Grow Schneider Impact revenues(3)
2019: 70%
72%
2.
3.
4.
5.
6.
7.
8.
Resources
Trust
Equal
Help our customers save and avoid millions of tonnes
of CO2 emissions
Reduce CO2 emissions from top 1,000 suppliers’
operations
Increase green material content in
our products
2020: 263M
440M
2020: 0%
10%
2020: 7%
18%
Primary and secondary packaging free from single-
use plastic, using recycled cardboard
2020: 13%
45%
100%
Strategic suppliers who provide decent work to their
employees
2022: 1%
1%
Level of confidence of our employees to report
unethical conduct
2021: 81%
+1pt
100%
+10pts
Increase gender diversity in hiring (50%), front-line
management (40%) and leadership teams (30%)(4)
2020: 41/23/24(4)
41/27/28
50/40/30
9.
Provide access to green electricity to 50M people
2020: 30M
+9.7M
50M
Generations
10. Double hiring opportunities for interns, apprentices
2019: 4,939
x1.33
and fresh graduates
11. Train people in energy management
2020: 281,737
397,864
x2.00
1M
Local
+1. Country and Zone Presidents with local commitments
2020: 0%
100%
100%
that impact their communities
(1) The baseline year is indicated in front of each SSI baseline performance.
(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 #+1 and SSE #12 in 2022), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 270). In addition, SSI
#8 received a “reasonable” assurance level in 2022. Please refer to page 242 for the methodological presentation of each indicator. The 2022 performance is also
discussed in more details in each section of this report.
(3) Per Schneider Electric definition and methodology. Note that for the reporting requirements under the European Taxonomy Regulation, please refer to pages 253 to 263.
(4) Calculation methodology for SSI #8 has been expanded in Q2 2022 to include blue collar managers in the scope of front line managers. Due to this methodological
change, the 2020 baseline for front line managers has been recalculated to 23% instead of 25%.
80%
800M
50%
50%
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S T R A T E G I C R E P O R T
Integrated Report
Climate
New Net-Zero target validated by SBTi
Becoming one of the first companies in the world to have its
Net-Zero commitment roadmap validated by the Science
Based Targets initiative (SBTi) in line with the new Corporate
Net-Zero Standard.
Resources
100% sustainable packaging for our Wiser range
Packaging transformation is making great progress with
100% recycled cardboard already used in our distribution
centers in India, China, and Europe. Our Wiser range is free
from single use plastics and using only recycled cardboard.
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Launch of the Decent Work program
The Decent Work Program focuses on engaging suppliers to
protect worker rights, going beyond the regulatory
requirements and prevailing normative practices. The
initiative is aimed at implementing preventive controls that act
as an additional buffer against any potential violations and
reduce the likelihood of any malpractices.
Equal
Clean electricity for essential facilities in India
We helped install clean energy solutions for health clinics and
government schools in rural villages in India with Clean
Energy Entrepreneur Tushar. 525 students across three
schools in India are benefiting from Schneider’s Solar Power
Backup solutions installed by Clean Energy Entrepreneur
Tushar Mahajan.
Generations
Go Green Winners
Celebrating Team GreenOverMorrow from Morocco for their
automated greenhouse solution in our student competition.
“GreenOverMorrow is our smart energy management system
controlled through the internet of things and artificial
intelligence to digitally transform power grids and set in
motion the energy transition of modern agriculture.”
Local
Supporting Schneider Electric employees in Ukraine
Schneider Electric, with the support of its Foundation and the
individual contributions of thousands of employees, raised
over €2 million in donations to directly support Ukrainian
colleagues and their families affected by the crisis. Schneider
Electric also donated equipment worth €4 million to help
restore essential energy supplies in Ukraine, while the
Schneider Electric Foundation continues to work with local
NGOs in support of the local community.
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Integrated Report
S T R A T E G I C R E P O R T
2023 outlook and target
Expected trends in 2023
2023 Target
• A continuation of strong and dynamic market demand,
The Group sets its 2023 financial target as follows:
supported by secular trends of electrification, digitization and
sustainability
• Demand in consumer-linked segments (Residential buildings,
Distributed IT) to continue deceleration from highs, particularly
in mature markets
• Government incentives across the world centered around
energy transition, decarbonization and improved energy
efficiency to further support growth
• Backlog execution to support growth
• Supply constraints expected to progressively ease; improving
supply environment should support stronger underlying
industrial productivity
• Some deceleration of inflationary pressure, though pockets of
inflation expected to remain
2023 Adjusted EBITA growth of between +12% and
+16% organic.
The target would be achieved through a combination of organic
revenue growth and margin improvement, currently expected to be:
• Revenue growth of +9% to +11% organic
• Adjusted EBITA margin up +50bps to +80bps organic
This implies Adjusted EBITA margin of around 17.4% to 17.7%
(including scope based on transactions completed to-date and FX
based on current estimation).
2022–2024 targets and long-term
ambitions as announced in 2021
Capital Markets Day
2022–2024 Targets:
Longer-term ambitions:
• Organic revenue growth of between +5% to +8%, on average
• A yearly organic improvement of between +30 bps to +70 bps in
• Organic revenue growth of 5%+ on average across the
economic cycle
adjusted EBITA margin
• c.€4 billion Free Cash Flow by 2024
• 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 28, 2023, the Board of Directors consisted of 14 Directors and 2 Observers. The appointment as Directors of Mr. Abhay
Parasnis and Mrs. Giulia Chierchia, who joined the Board as Observers respectively on July 27, 2022 and February 15, 2023, will be
submitted to shareholders at the Annual Shareholders’ Meeting to be held on May 4, 2023.
Jean-Pascal Tricoire
Chairman & Chief Executive Officer
59 years, French
• 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.
Fred Kindle
Vice-Chairman & Lead
Independent Director
64 years, Swiss
• Ensures proper governance.
• Sets the agendas for Board
meetings with the Chairman.
• Meets with shareholders.
• Chairs the Governance &
Remunerations Committee.
• Chairs the executive sessions.
Board expertise
• 3 Employee Directors
• 82% Independent
Directors*
• 45% women
Directors*
• 79% non-French
Directors
• 10 nationalities from
3 continents
International markets (14)
Corporate finance (12)
Public company management (13)
Industry knowledge (8)
Accounting, audit & risk (5)
Sustainability (5)
Law, governance, ethics
& compliance (4)
Digital & Technology (6)
Employee perspective and
knowledge of the Group (4)
*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.
Léo Apotheker
Director
69 years, French & German
Nive Bhagat
Independent Director
51 years, British
Cécile Cabanis
Independent Director
51 years, French
Rita Felix
Employee Director
40 years, Portuguese
Linda Knoll
Independent Director
62 years, American
Jill Lee
Independent Director
59 years, Singaporean
Xiaoyun Ma
Employee Shareholders Director
59 years, Chinese
Anna Ohlsson-Leijon
Independent Director
54 years, Swedish
Anders Runevad
Independent Director
63 years, Swedish
Gregory Spierkel
Independent Director
66 years, Canadian
Lip-Bu Tan
Independent Director
63 years, American
Bruno Turchet
Employee Director
49 years, French
Abhay Parasnis
Observer
48 years, American
Giulia Chierchia
Observer
44 years, Belgian & Italian
Activities of the Board in 2022
There were nine meetings (including a Strategy session of three days) with 97% average attendance.
Business and
financial results
Ongoing business, financial
statements and information
delivered to the market, and
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 and compliance
Risk mapping, business
continuity plan, and 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.
Board
committees
Governance &
Remunerations
Committee
Audit & Risks
Committee
Investment
Committee
Digital
Committee
Human
Resources &
CSR Committee
Committee Chair
Board committees
Governance &
Remunerations
Committee
9 meetings**
5 members
80% independent
93% average attendance
Audit & Risks
Committee
6 meetings**
4 members
100% independent
100% average attendance
Investment
Committee
2 meetings
5 members
75% independent*
100% average attendance
Digital
Committee
5 meetings**
5 members
75% independent*
83% average attendance
Human Resources
& CSR Committee
6 meetings**
4 members
100% independent*
100% average attendance
* Excluding the Director representing the employee shareholders and Directors representing the employees.
** Including joint meeting with other committee.
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Integrated Report
Governance
S T R A T E G I C R E P O R T
A new governance effective on May 4, 2023
In accordance with the intention of the Board of Directors announced
in 2021 to separate the functions of Chairman and Chief Executive
Officer, the Board, at its meeting of February 15, 2023, has decided to
implement a new governance structure that splits the office of
Chairman from that of Chief Executive Officer as of May 4, 2023:
• Mr. Peter Herweck who was Chief Executive Officer of AVEVA, will
succeed Mr. Jean-Pascal Tricoire as Chief Executive Officer of
Schneider Electric, becoming responsible for the general
management of the Company, as the sole executive corporate
officer;
• Mr. Jean-Pascal Tricoire will remain as Chairman, at the unanimous
request of the Board of Directors who wants to retain the benefit of
his experience in significantly and successfully transforming the
company over the past 20 years.
“The Governance & Remunerations Committee,
under the guidance of the Board of Directors, has
conducted over the last four years a
comprehensive robust process to propose a
succession plan for the role of CEO. Several
high-quality candidates were considered. Peter’s
level of global operational experience, technology
and software acumen, skills and personal qualities
were assessed by the Board as being particularly
in line with the Group’s strategy. His appointment
was unanimously approved by the Board of
Directors with Jean-Pascal Tricoire’s full support”.
Fred Kindle, Vice-Chairman & Lead Independent Director
Roles and Responsibilities
Chairman
• Organizes and directs work of Board,
presides over AGMs
• Supports the Company in its high-level
relations with select stakeholders
(notably in Asia), in coordination with
CEO
• Promotes Company’s values and culture
in particular in relation to Environmental,
Social and Governance
• Advises CEO, notably on strategic,
human capital and leadership
development matters
Vice-Chairman &
Lead Independent Director
Chief Executive Officer
• Consulted by the Chairman on
agenda and sequence of events for
Board meetings
• Has the ability to require that the
Chairman convene a Board meeting
• Deals with any possible conflicts of
interest
• Carries out annual assessments of
the Board
• Has sole authority to bind the company
toward third parties
• Defines and proposes the Strategy
• Manages the Company
• Runs the Business
• Develops human capital and
leadership
Mr. Peter Herweck, incoming Chief Executive Officer
Biography
Timeline
Mr. Peter Herweck joined Schneider Electric,
where he successfully led the global
Industrial Automation Business, in 2016
before being appointed as Chief Executive
Officer of AVEVA. Mr. Peter Herweck
started his career as software
development engineer with Mitsubishi in
Japan, later joining Siemens, where he
held several executive positions in
Automation, Power Distribution and
Building Technologies, before becoming
Chief Strategy Officer. Mr. Peter Herweck
has a diverse, cross-cultural mindset,
derived from leading teams in both mature
and emerging markets. His passion for
technology driving positive progress in term
of energy efficiency for the world makes
him a great candidate for the role of Chief
Executive Officer of Schneider Electric.
2021
AVEVA
2016-
2021
1993-
2015
1991-
1993
1987-
1991
1982-
1987
Chief Executive Officer, Switzerland & UK
Schneider Electric
Executive Vice President,
Industrial Automation, Switzerland
Siemens
Executive Positions in Automation, Power
Distribution and Building Technologies &
Chief Strategy Officer, China, USA,
Germany
Mitsubishi Electric Corp
Software Development Engineer, Japan
Electrical Engineering
Metz University, France
& Fachhochschule des Saarlandes, Germany
Electrician
Stadtwerke Saarbrücken, Germany
1966
Born in Germany
“Passionate about technology
driving efficiency and
sustainability, allowing both
progress and
decarbonization.”
• Multi-decade industry
experience in Energy
Management and Industrial
Automation
• Technology focus – digital
and software
• Diverse, cross-cultural
mindset derived from
leading teams in both
mature and emerging
markets
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S T R A T E G I C R E P O R T
Integrated Report
Our Executive Committee
As of December 31, 2022, the Executive Committee was chaired by the Chairman & 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.
Jean-Pascal Tricoire
Chairman &
Chief Executive Officer
59 years, French
Hilary Maxson
Chief Financial Officer
44 years, American
Charise Le
Chief Human Resources Officer
50 years, Chinese
Chris Leong
Executive Vice-President
Chief Marketing Officer
55 years, Malaysian
Hervé Coureil
Chief Governance Officer
& Secretary General
52 years, French
Mourad Tamoud
Executive Vice-President
Global Supply Chain
51 years, French
Nadège Petit
Executive Vice-President
Innovation
42 years, French
Gwenaelle Avice-Huet
Chief Strategy
& Sustainability Officer
43 years, French
Peter Weckesser
Chief Digital Officer
54 years, German
Annette Clayton
Chief Executive Officer
North America
59 years, American
Philippe Delorme
Executive Vice-President
Europe Operations
51 years, French
Laurent Bataille
Executive Vice-President
France Operations
44 years, French
Manish Pant
Executive Vice-President
International Operations
53 years, Indian
Aamir Paul
Executive Vice-President
North America Operations
45 years, American
Zheng Yin
Executive Vice-President
China & East Asia Operations
51 years, Chinese
Key
Global functions
Operations
Business
• 41% women
• 53% non-French members
• 7 different nationalities from
3 different continents
Barbara Frei
Executive Vice-President
Industrial Automation
52 years, Swiss
Olivier Blum
Executive Vice-President
Energy Management
52 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
59 years, French
Bertrand Piccard
Chairman of Solar
Impulse Foundation
64 years, Swiss
Lan Xue (Dr.)
Cheung Kong Chair Distinguished
Professor and Dean of Schwarzman
College in Tsinghua University
63 years, Chinese
Amani Abou-Zeid (Dr.)
African Union Commissioner in charge of
Infrastructure, Energy, ICT and Tourism
61 years, Egyptian
Linda Knoll
Director of Schneider
Electric SE, Human Resources
& CSR Committee Chair
62 years, American
Rita Felix
Employee Director
of Schneider Electric SE
39 years, Portuguese
Salvo Lombardo
Former Chief of Staff, UNHCR
63 years, Italian
Emily Reichert (Dr.)
CEO, Greentown Labs
48 years, American
Michela Conterno
CEO, LATI
47 years, Italian
Our Shareholders
7.3%
6.8%
3.8%
2.1%
80.0%
BlackRock, Inc.
Sun Life Finacial Inc.
Employees
Treasury shares
Public
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Integrated Report
Governance
Our Executive compensation
S T R A T E G I C R E P O R T
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
4. Significant proportion of the total
6. To benchmark the Corporate
components: circa 80% for CEO
(at target).
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.
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.
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.
(1) LTIP granted during 2023 fiscal year valued in accordance with IFRS standards.
(2) Between 0% and 200%.
Balance between compensation elements
27%
Not linked to
performance
54%
Paid in cash
54%
Short-term
27%
Fixed
compensation
27%
Target annual
variable
compensation
100% of fixed(2)
46%
LTIP(1)
73%
Linked to
performance
46%
Paid in shares
46%
Long-term
(minimum
3 years +
presence
condition)
Group’s strategic priorities
How the strategy links to the corporate officers’ variable compensation
Organic growth
Delivering strong execution and creating value for customers and shareholders every
year to contribute to Schneider Electric’s long-term success
Annual incentive plan
Value for customers
Sustainability
Continuous efficiency
Value & returns to
shareholders
Group organic
sales growth
Group
Adjusted
EBITA margin
improvement
Group cash
conversion
rate
Net
Satisfaction
score
Schneider
Sustainability
Impact
35% 25% 10% 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
External & Relative Index
40%
35%
25%
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S T R A T E G I C R E P O R T
Integrated Report
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.
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
1
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
2
Board of Directors
Accountable for organizational oversight (informed about efficiency of the internal control
and risk management systems)
Senior Management
Responsible for designing and leading the overall
internal control system including the oversight,
identification and assessment, and mitigation of risk
at (i) Group level, (ii) Business Unit level and (iii)
across key Group functional areas
Audit & Risks
Committee
Follows-up on the efficiency
of internal control and risk
management systems
1st line of defense
2nd line of defense
3rd line of defense
Take ownership of how the
risks are controlled on the
ground, following the risk
management procedures set
by the 2nd line of defense.
Set risk management
mechanisms, advise and
monitor the 1st line of defense,
assist it in building action
plans to improve response,
control and monitoring of risks.
Assess if the 1st line of defense
is managing risks properly and
if the 2nd line of defense is
supporting the 1st line in the
right way.
Operating
Divisions and
business units
(Risk Owners)
Group Risk
Management
Internal Control
Global
Functions and
Risk Overseers
Internal Audit
Categories and Risks
Event triggered risks
Risk of cybersecurity on the Schneider Electric infrastructure and its digital ecosystem
(including connected products used as a gateway to attack Group’s customers and
partners)
Potential
net impact
Export controls
Product quality
Competition laws
Corruption linked to B2B and project business
Human rights, environmental, and safety issues through the value chain
Counterparty risk
Currency exchange risk
Trend driven risks
2.1 Operational disruption due to global political and economical disruptions
2.2 New competitive landscape on energy, technologies, and business models
2.3
2.4
2.5
2.6
2.7
3
3.1
3.2
3.3
Supply chain resilience
Evolution of software and digital services offers
Attracting and developing talent with a focus on critical skills
Risk related to the environmental performance of the Group
Natural resoucre crises: Shortage of resources used in Schneider Electric’s
products or in manufacturing
Management practice risks
Data residency
IT systems management
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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Integrated Report
Our Stakeholders
S T R A T E G I C R E P O R T
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
Schneider Electric Trust Charter acts as the Group’s Code of
Conduct and demonstrates 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. It is implemented via the Ethics & Compliance program with
responsibilities at Board, executive, corporate, and operational levels.
Cybersecurity
C ustomersan
C ustomersan
d
d
Ethics
ams
e
T
TRUST
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Sustaina b i
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Read our Trust Charter on se.com
and on page 110 of this report.
Access our Trust Line
on www.se.com
Our Speak Up Mindset
Schneider Electric employees must feel free and psychologically
safe to share their ideas, opinions, and concerns, without fear of
retaliation, this is the base of our Speak Up mindset. All
stakeholders may report concerns either by contacting an
appropriate person internally or by using the Trust Line, our
whistleblowing system, which is available online globally, at all
times, and protects the anonymity of the whistleblower.
To ensure the effectiveness of that Speak Up mindset and related
whistleblowing system, the Group created two specific committees:
the Group Operational Compliance Committee (GOCC) which
detects and manages cases of non-compliance and reviews
monthly the effectiveness of the system, and the Group Disciplinary
Committee which levies sanctions and remediation actions on
serious non-compliance cases to guarantee a fair and transparent
disciplinary policy.
All employees are invited to express whether they are comfortable
to “report an instance of unethical conduct without fear” each year.
In 2022, 82% of employees surveyed answered “yes”, a 1 pt
progress vs 2021, on track with the group’s 2025 ambition to raise
its employee’s confidence by 10 points (SSI #7).
Training and empowering all employees
Every year, a global campaign of mandatory trainings is run for all
employees, called Schneider Essentials, and is available in 18
languages. In 2022, Schneider Essentials trainings were: Trust at
Schneider Electric, Cybersecurity, We All Have Mental Health and
The Schneider Electric Story. Other trainings are provided to
specific businesses or service teams according to their roles and
positions, such as anti-corruption.
In June 2022, a Trust Month was launched to further raise
awareness among employees. This internal communication
campaign has been a great medium to draw together all the pillars
of Trust into a single event, which consisted of 15 keynotes, 70
webinars and gathered more than 15,000 webinar attendees.
2022 achievements
15,000+
97.5%
2
employees participated
in the first Trust Month
event.
of all employees
completed the Schneider
Essentials trainings.
New policies have been
published: the Decent
Work and Philanthropy
policies.
Ethisphere Institute – One
of the 2022 World’s Most
Ethical Companies for the
12th year.
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S T R A T E G I C R E P O R T
Integrated Report
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 in order to prevent negative impacts on people or the planet within
its value chain. Since then, this vigilance plan has been continuously reinforced, aiming to expand further
towards communities.
An end-to-end, risk-based mitigation plan
The Group’s vigilance plan complies with the provisions of the 2017 French law on corporate duty of vigilance and includes:
• A risk analysis specific to risks that Schneider Electric poses or may pose on its ecosystem and environment;
• A review of the key actions implemented to remediate or mitigate these risks;
• An alert system (Trust Line);
• Governance specific to vigilance.
In this Registration document, Schneider Electric presents the results of the risk assessment, and the subsequent mitigation actions.
A synthesis of key risks and actions is presented below.
The plan is governed by the Duty of Vigilance Committee, set up in 2017. The committee meets twice a year, and has met 15 times since its
inception.
Risk areas
Main risk identified
Main mitigation actions
Risk level
Schneider
Electric sites
•
Cybersecurity: only high risk for the
Group’s sites, as Schneider Electric is a
supplier of connected and digital solutions,
thus a potential target for cyberattacks
aimed at its customers’ systems
Training sessions
Cybersecurity Leaders
Incentive for plant managers
Annual review of policies
Cyber Badges
Suppliers
Contractors
Local
communities
•
•
•
•
•
•
Human rights: most frequent issues
concern decent working hours, paid leave,
and proper resting time.
CO2 emissions: notably coming from the
transformation and transportation of raw
materials.
Pollution: for some categories of
substances purchased, such as solvents
Health and safety: physical injuries that
can happen during construction, or when
doing services and maintenance operations
Business ethics: mostly related to potential
corruption, conflict of interest, and integrity
due to the contractual nature of this activity.
Communities living around Schneider
Electric sites (factories, offices, etc.) have a
limited risk exposure because operations
are usually located in large, well-structured
urban areas.
Risk level: Low to Medium
Medium to high
High
Read more about our Vigilance Plan on page 130.
Read more on cybersecurity
page 122
Supplier Code of Conduct
Supplier Vigilance Plan (SSE #17)
ISO 26000 assessments
The Zero Carbon Project (SSI #3)
Green materials (SSI #4)
Decent Work program (SSI #6)
Sustainable Packaging (SSI #5)
Read more on suppliers programs
page 136
On-site audits
Training on anti-corruption and Business Agent Policies
Project follow-up
Selection process adapted to our Vigilance Plan
Read more on contractors
page 135
Vigilance risks assessments
Project reviewed according to involvement and
mitigation capabilities
Read more on communities
page 146
2022 achievements
Top 25%
in external ratings for
Cybersecurity performance.
250,000
2,000+
employees’ working conditions
improved thanks to the ‘Vigilance
Program’ for suppliers since 2017.
suppliers assessed under our
vigilance plan since 2018.
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Integrated Report
Our Stakeholders
S T R A T E G I C R E P O R T
Sharing sustainable value
with our stakeholders
Schneider Electric is committed to open communication with its ecosystem and uses the feedback to analyze
its market and define areas of progress. 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 stakeholders.
Stakeholders in our ecosystem
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.
Suppliers
The Group established an ambitious
sustainable procurement strategy
providing guidelines to its 53,000
suppliers to ensure that all contribute to
the Group’s ambitions to build an
inclusive and carbon neutral world, where
ecosystems and resources are
preserved, and people get access to
economic opportunities and decent lives.
Distributors and
end-customers
We provide our customers with efficient,
safe and decarbonized solutions through
digitalization, and electrification,
providing them with high environmental
performance products and full
transparency on environmental impact
with Green Premium™ offers. The Group
insists on high quality and cybersecurity
to build strong customer experience.
Employees and
social partners
The Group is committed to offer equal
opportunities to all its 135,000 employees
around the world and works to empower
all across every generation and region.
The Group motivates its employees and
involves them in its missions by making
the most of diversity, supporting
professional development, and ensuring
safe, healthy working conditions.
Communities
and civil society
Schneider Electric promotes local
initiatives and enabling individuals and
partners to make sustainability a reality
for all, everywhere. Through education in
energy management and investment
supporting high social impact, the Group
hopes to have a positive and sustainable
impact on its ecosystem. Its offers
provide access to energy to more than
five million people each year.
Schneider Electric
Financial partners
Our business model delivers consistent,
sustainable, and strong financial
performance providing our financial
partners attractive returns. The Group
actively participates in innovative
sustainable finance initiatives, such as
Sustainability-linked bonds in 2020 or
Sustainability-linked Revolving Credit
Facilities in 2022.
Institutions and
technical bodies
The Group is involved in various local and
international associations and
organizations supporting sustainability,
working with key actors from all level of
society. Schneider Electric maintains a
constructive dialogue with policymakers
and regulators so that its views are
represented on issues affecting its
industry.
Stakeholders’ top four expectations
In its latest survey, Schneider’s stakeholders expressed their main concerns and expectations, which have been used by the Group to build
its 2021-2025 sustainability objectives.
1.
2.
Leading climate action in our
ecosystem with our partners.
Pioneering circular economy
and being efficient with
resources.
3.
Ensuring a fair transition and
guaranteeing high ethical,
social and environmental
standards along our value
chains.
4.
Leveraging digital in
cybersecure solutions to boost
positive impact.
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Committed with our partners
Schneider Electric has been
an active member of
Business for Inclusive
Growth (B4IG) since its
inception in 2019.
Schneider’s Social
Innovation to Tackle Energy
Poverty joined B4IG’s
incubator as an innovative,
creative and systems-
changing solutions to tackle
energy poverty and
promote energy
sustainability.
Schneider Electric joined
the Global Compact in
2002, and our CEO was
appointed to the worldwide
Board in 2018. The Group
aligns its sustainability
strategy with the UN 10
principles on human rights,
labour, environment and
anti-corruption. As a
signatory, Schneider
Electric upholds its
responsibility to act and
aims to contribute to all 17
UN Sustainable
Development Goals.
The Group has made a
four-year commitment to the
Solar Impulse Foundation
which selects 1,000
solutions contributing to the
achievement of at least five
SDGs, and which are
promoted to corporate and
political leaders worldwide.
Solutions are selected
based on their technical
feasibility, environmental
benefits, and economic
viability.
Since 2017, Schneider
Electric is a Strategic
Partner of the World
Economic Forum, where our
CEO is a member of the
International Business
Council, the CEO Alliance of
Climate Leaders, and
co-chairs the Net Zero
Carbon City program. The
Group engages with a wide
range of partners to
progress on common world
challenges, by joining
public-private dialogues
and peer-to-peer
workgroups, sharing
insights and use-cases
leading to new frameworks
and toolboxes.
Read more on our dialogue with
stakeholders on page 84 and 95.
Revenue breakdown by stakeholder
Every year for the last 17 years, Schneider Electric has published a diagram showing its revenue distribution and financial flow for its various
stakeholders.
2022 total revenue: €34,176 million
Employees:
Wages
€9,010 million
States:
Income taxes
€1,211 million
Non-governmental
organisations:
Donations
€24 million
Shareholders:
Dividends
€1,618 million
Bank:
Net bank fees
€106 million
Procurement
and other
€20,289 million
Investment capabilities
Net external financing* including capital change
€165 million
Operating Cash Flow after dividend payment
€2,736 million
Investments and
development
€1,024 million(1)
Net financial
investments
€387 million(2)
Change in cash
€1,400 million
R&D: €1,845 million
* Borrowings, capital increases and treasury stock disposals.
(1) Of which €357m in R&D.
(2) Of which €130m for long-term pension assets.
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Integrated Report
Our Stakeholders
S T R A T E G I C R E P O R T
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 and sustainable growth. Schneider Electric is a people company
where employees come to work for a meaningful purpose and feel empowered to have an impact.
People Strategy in the next normal
Committed to Schneider Great People
The world is moving fast and is at an inflection point: the desire for
climate neutrality and energy transition are driving our business
strategy and pushing the Group towards sustainable growth. At the
same time, digital transformation and changing social needs are
demanding greater inclusion. The post-pandemic world followed by
ever growing supply chain constraints due to geopolitical issues
are creating more opportunities for Schneider Electric to be the
most local of global companies.
Schneider Electric’s great people are passionate about our
meaningful purpose. The Group motivates its employees and
promotes their involvement by making the most of its diversity,
supporting professional development, and ensuring safe, healthy
working conditions. Its ultimate ambition is to deliver higher
performance and greater employee engagement, through
world-class people practices that are supported by a multi-hub
model.
Schneider’s People Strategy supports its business growth as well
as its culture and leadership transformation. To shape the
workforce of the future in the “next normal”, the strategy is
articulated around 3 pillars:
• Organizational agility – a growth and innovation culture,
enabled by a leaner, agile 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
a personalized experience to realize their potential.
• Leadership Impact – leaders deliver impact on results and
transformation through disruption, collaboration and inclusion.
They build great teams, coach and care to achieve together.
By 2025, Schneider Electric has committed to creating equal
opportunities and harnessing the power of all generations. It will
achieve this by ensuring all employees are uniquely valued in an
inclusive work environment and by fostering learning, upskilling and
development for each generation. In regards to this commitment,
the Group launched in 2021 the senior talent program to
accompany employees in the later stages of their career which
accelerates the transfer of knowledge and skills across all
generations, and serves as a great enabler to a just transition.
Our Employee Value Proposition is our commitment to engage
existing and future talent. It is the reason why people join, stay, and
remain engaged and shows how we differentiate ourselves as an
employer.
Our Employee Value Proposition
MEANINGFUL
INCLUSIVE
EMPOWERED
Our mission is to be your digital partner
for Sustainability and Efficiency.
We want to be the most diverse, inclusive,
and equitable company, globally.
Freedom breeds innovation.
We empower all to make the most of their
energy and resources, ensuring Life Is
On everywhere, for everyone, at every
moment.
We adhere to the highest standards of
governance and ethics.
We value differences, and welcome
people from all walks of life.
We believe in equal opportunities for
everyone, everywhere.
Read more about our people programs on page 198.
2022 achievements
We believe that empowerment generates
high performance, personal fulfillment,
and fun.
We empower our people to use their
judgment, do the best for our customers,
and make the most of their energy.
81%
x1.33
77%
62%
of employees feel they
have the flexibility to
modify their work
arrangements as needed
(vs 80% in 2021).
hiring opportunities for
interns, apprentices, and
fresh graduates.
employees’ received
digital upskilling thanks
to the Digital citizenship
program (+2.9 pts vs
2021).
subscription in our yearly
Worldwide Employee
Share Ownership Plan
(WESOP) (vs 59% in
2021).
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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 since 2021; here are a few examples of initiatives being implemented
to drive quick and disruptive changes.
USA
Schneider Electric is accelerating
its efforts of inclusion, notably by
increasing the representation of
black professionals at all levels
of the organization.
France
To promote change we drive our
employees to become ambassadors
of our offers and efforts on
sustainability. Schneider Electric
France has given them access to
2,700 circular product references.
We are also growing our channels to
deliver circular products to our
clients.
China
Through the Schneider Learning
Institute, 22,000+ business partners,
customers and students have been
trained. These courses provide better
energy-efficiency skills on energy
management products, solutions, and
services. We have certified training
courses and a tailored program for
VIP partners and customers.
North East Africa
In 7 rural areas, Schneider Electric gave
80,000 people access to 90kW of
green energy through holistic
solutions. For instance, solar
greenhouses with wastewater feeds
fishponds & solar chicken incubators,
creating jobs for women.
India
Since 2009, 150,000+ youths in
India have been trained as Energy
professionals to help them gain access
to employment opportunities or start
their own business through a scalable,
sustainable model with high-quality
standards.
Brazil
60% of our employees in Brazil are
committed to becoming “Net Zero
Corporate Citizens” by reducing their
own carbon footprint with a home kit for
efficient household management, such
as solar panels, EV chargers, and more.
Check our local commitments
on www.se.com
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Our Stakeholders
S T R A T E G I C R E P O R T
Acting for a climate-positive world
and preserving resources
Climate change and nature loss are two of the greatest global challenges of the 21st century. They are inextricably
linked and require joint efforts and solutions to tackle them. Schneider Electric’s climate and resources strategies
converge to minimize its environmental footprint and to maximize the environmental benefits its offers bring.
Climate & Resources strategy
Urgent action and a system-wide transformation are needed to
deliver the enormous emissions cuts necessary to limit greenhouse
gas (GHG) emissions. With its climate programs, the Group aims to
limit its carbon emissions by implementing its own Energy
Management and Industrial Automation solutions and develop
offers that will help its customers do the same.
Schneider Electric was one of the first companies to have its
Net-Zero targets validated by the most recent SBTi “Corporate
Net-Zero Standard” in August 2022. The Group is committed to be
“Net-Zero Ready” in its operations and to reduce by 25% its scope
3 emissions by 2030, and to be Net-Zero across its full value chain
by 2050. In addition, as an intermediary milestone, by 2040, the
Group will be carbon neutral along its full value chain. With its
resource programs, the Group aims to minimize the volume of
resources it needs and optimize the use of these resources. The
current linear systems and existing infrastructure are not adequate
to maintain, collect, and redistribute materials effectively for a
global circular economy. As a result, waste, including plastics and
e-waste pollutes our land, and the world continues to deplete the
limited natural resources. Schneider Electric embraces circular
economy principles all along the lifecycle of products and offers.
The keystone of Schneider’s circularity approach is EcoDesign
Way™, a process that is applied to the development of all new
products. EcoDesign Way™ enables the right trade-offs between
the environmental impact along the lifecycle of products, allowing
to co-ordinate the efforts over the whole value chain.
Carbon neutral in
our operations
25% absolute reduction
across our entire value
chain and “Net-zero
ready” in our operations
Carbon neutral across
our entire value chain
Net-zero CO2 emissions
across our entire
value chain
2025
2030
2040
2050
2021 – 2025 initiatives to act for climate & preserve resources
Suppliers
Operations
Customers/Society
SSI #3 Reduce CO2 from suppliers
operations
SSE #4
Improve CO2 efficiency in
transportation
SSE #1 Transition to Zero-CO2 sites
SSE #3 Source renewable electricity
SSE #5
Improve energy efficiency
SSE #7 Switch to electrical vehicles
SSI #1 Grow our impact revenues
SSI #2 Save and avoid CO2 emissions
for customers
SSE #2 Substitute products using SF6
SSI #4 Use green materials in our product
SSE #8 Deploy local biodiversity programs
SSE #6 Product revenues covered by
SSI #5 Switch to sustainable packaging
SSE #9 Make waste a resource
SSE #10 Avoid primary resource use
SSE #11 Deploy water conservation
action plans
Green Premium™ eco-label
2022 achievements
72%
of our revenues are
impact revenues
(vs 71% in 2021).
45%
Climate A
77
of our primary and
secondary packaging
is free from single-use
plastic and use
recycled cardboard
(vs 21% in 2021).
Part of CDP Climate
A List for the 12th
year in a row.
Zero-CO2 sites
helping us decarbonize
our operations.
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Delivering social impact for
a just transition
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 fair future for individuals and families worldwide.
Bringing access to green electricity
Today, more than two billion people have little or no access to
electricity, representing one in four of the world’s population. At
Schneider Electric, we believe that access to energy is both a
fundamental right and a means for social and economic
development. Specifically, access to green electricity offers a
chance to live a better life, because 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.
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.
“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, In fact, farms, schools, or health centers in
rural areas, depend on an intermittent grid and need quality energy
with back-up solutions based on solar energy.
Schneider’s Access to Energy solutions already benefited close to
40 million people between 2009 and 2022. Our ambition is to
support a cumulative total of 50 million people by 2025, and 100
million by 2030.
Empowering youth by education and
entrepreneurship
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. The Group’s ambition is to train
one million people by 2025 for energy-related professions. The
Youth Education & Entrepreneurship program aims to give all
young people the means to build solutions for a better life,
contribute to a fairer, low carbon society, and transform the world.
By providing funding, our expertise, volunteering our time and
collaborating with our partners on the ground, we are empowering
younger generations and the broader community to achieve a
better future through sustainable development.
Our work is divided into three main areas:
1. Support access to qualitative jobs through vocational and
entrepreneurship training in the energy field.
2. Learn new skills for the future, technical and soft, giving younger
generations the boost they need to succeed and build the world
of tomorrow.
3. Create the right ecosystem to spread entrepreneurial spirit and
encourage innovation, enhancing younger generations to define
their future and take part in social and environmental
challenges.
To do this, the Schneider Electric Foundation draws on a network of
around 85 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 local actors and ambassadors of the Group’s
societal commitments.
Read more about our social impact on
page 224.
2022 achievements
41,000+
397,000+
40M
€1.9M
volunteering days since
2017 (+13,112 vs 2021).
young people trained in
energy related
professions since 2009
(+ 69,505 vs 2021).
people connected to
green electricity since
2009 (+5.5M in 2022).
raised for the Tomorrow
Rising Fund to support
employees and their
families in Ukraine.
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Our Stakeholders
S T R A T E G I C R E P O R T
Sustainable relations with suppliers
With a network of more than 53,000 suppliers around the world, Schneider Electric is committed to developing
lasting relationships, while at the same time helping them introduce more sustainable practices.
Supply chain and procurement visions
Our world-class supply chain is driven by the following principles
and objectives:
• Customer satisfaction and quality is our number one priority, our
supply chain is market driven and tailored to the customer.
• Sustainability is at the core of procurement actions with the
focus on the impact that operations of our supplier generate on
the environment and society.
• 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.
Building a Sustainable Procurement
Strategy
Schneider Electric aims to collaborate with its 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. To achieve this, the
Group:
• Provides a Supplier Code of Conduct with fundamental
•
requirements that all suppliers delivering goods or services to
Schneider Electric are expected to adhere to.
Integrates 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.
• Has begun in 2021 a new five-year engagement with ambitious
targets for each of the thematic areas:
− Climate action, addressed by The Zero Carbon Project (SSI
#3), aiming to reduce operational emissions from 1,000
suppliers.
− Enhance Circular Supply Chain by increasing the use of
Green Materials (SSI #4) and Sustainable Packaging (SSI #5)
− Uphold social commitment related to Conflict Minerals and
Extended Minerals (cobalt and mica)
− Uphold human rights and inclusive workplaces by
implementing best-in-class practices through the Decent
Work program (SSI #6).
Holistic monitoring approach
To complete the Group’s commitment to environmental and social
topics, it established a transversal governance mechanism to
proactively screen, identify and mitigate sustainability risk from
suppliers and embed preventive controls into the procurement
processes and integrate in the day-to-day operations.
Read more about our sustainable relations with
suppliers on page 136.
On the one hand, strategic suppliers are subject to the Group’s
ambition to promote continuous improvement based on the ISO
26000 standard evaluation.
On the other hand, our Vigilance program aims at auditing 4,000
suppliers by 2025, identified as high risk suppliers.
Suppliers can also report any corporate misconducts through the
Trust Line, which will be thoroughly and confidentially investigated.
2022 achievements
10%
+1.6pts
500+
performance of the
Zero Carbon Project
(vs 1% in 2021).
increase of suppliers’
ISO 26000 score vs 2021
(+9.2 pts since 2017).
strategic suppliers
commited to provide
Decent Work to their
employees.
Best value chain
engagement award
from Ecovadis.
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Sustainability and efficiency for Customers
As the digital partner of its customers for Sustainability and Efficiency, Schneider Electric delivers products
and services empowering them to make the most of their energy and resources. To do so, the Group relies on
the highest standards of product quality and safety, as well as digital trust and security.
Green PremiumTM offers
In 2008, Schneider Electric developed Green PremiumTM, its
product sustainability program, to provide transparent information
on hazardous substances, environmental impact, and end-of-life
instructions.
The new Green PremiumTM is an expression of our innate belief that
ambitious environmental considerations must be embedded in all
our value propositions. It is also what customers and business
partners have been increasingly asking for, in multiple
geographies, across multiple market segments.
The new label encompasses three pillars: Trust, Transparency, and
Performance. Trust means Schneider continuing to be transparent
with customers, and going beyond regulations by applying the
same rules regardless of the geographies. 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 meaningful environment-related attribute for customers.
Finally, performance is Schneider’s commitment to deliver products
with reduced environmental impact.
From 2022 we have introduced a Customer First Performance
Criteria in the incentive goals for Group executives, measured with
our Net Customer Satisfaction through real-time digital customer
surveys covering six critical touchpoints as part of our customer
operational interactions. All the results are available in the
Customer Feedback Management Platform where all the
employees are engaged to act on the Customer Experience.
Strive for Resiliency
Resiliency is the capacity to quickly recover from difficulty. We use
a risk centric framework to reduce our exposure to technological,
environmental, process, geopolitical, and health risks that might
disrupt our business. Schneider Electric has standardized
issue-escalation processes in place, as well as risk assessment
and business impact analysis, and is prepared to manage any
crisis with disaster recovery and business continuity plans, if
needed. The Group’s local leaders are empowered to assess risks,
increase their preparedness and handle all types of crises with a
rapid and effective response, thanks to processes and tools in
place to support them.
Today, more than 80% of Schneider’s product sales originate from
Green PremiumTM offers.
Strive for trust in Cybersecurity, Data
Privacy and Protection
Strive for Premium Quality
Schneider Electric’s priority is to delight customers with an
outstanding end-to-end experience. It is our ambition to earn the
reputation as the safest supplier in our industry. This vision is built
on trust: we are committed to ensuring the safest experiences for
our customers and we believe it is the personal responsibility of
every employee at Schneider. Safety is at the heart of innovation at
Schneider. At Schneider, industry standards are not the goal – they
are the baseline. We innovate beyond standards and believe that
technology helps people work safer. Safety demands active
engagement of all, without exception. We rise to new challenges.
Moreover, to better fulfill customers’ needs and improve their
satisfaction, Schneider Electric relies increasingly on data
analytics, and digital interlocks to secure a zero defect mindset at
the core of our processes from design, to execution and services.
The Group’s commitment to quality and customer satisfaction is
illustrated in its ambition to have zero product recalled from
customers, by 2025.
Schneider Electric’s cybersecurity strategy encompasses people,
processes, and technology across the operational lifecycle. By
following globally recognized standards and complying with
certified ‘secure by design’ development processes, the Group
safeguards digital ecosystem and delivers secure offers, systems,
solutions and services. The right to privacy and protection of
personal information is a fundamental human right. Schneider
considers fairness, transparency, data integrity, quality, security,
and trust as core principles of how the way it handles data and
uses it in the products, systems and services they deliver. In 2022,
the Group was awarded Gold Medal for its first participation to the
CyberVadis’ assessment, underlining its commitment for
cybersecurity. By leveraging digital technologies based on human
centered design with a ‘do no harm’ oversight, solutions benefit
customers’ sustainable future.
2022 achievements
440M
tonnes of CO2 saved
and avoided for
customers since 2018
(+93M vs 2021).
911/1000
MATURE
byybybb
Rated
2022
80.2%
24
Gold medalist during the
first participation to
CyberVadis.
of our product revenue
covered by Green
PremiumTM.
recalled products from
our customers.
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Chapter 1 – Group strategy and sustainability
Group strategy
and sustainability
1
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
1.2.5 Moving from opportunistic to integrated supply
52
54
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55
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57
58
1.3 Schneider Electric’s priorities
for sustainable growth
59
1.3.1 2022 innovation highlights
1.3.2 Digital Flywheel
1.3.3 More services: Lifelong partner to
decarbonize and electrify faster
1.3.4 Software and data: enabling the enterprise
metaverse for sustainability and efficiency
1.3.5 Sustainability Business
1.3.6 Global supply chain
1.3.7 SE Ventures
1.4 End-customer focus
60
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64
66
67
68
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Chapter 1 – Group strategy and sustainability
S T R A T E G I C R E P O R T
1.1 Trends and opportunities
The medium-term objective of reaching carbon
neutrality to fight climate change fully aligns with the
short-term objective of energy security
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”. Critical
decarbonization measures are required to stay within
a global warming trajectory of 1.5°C.
The year 2022 will go down in the history books as one of the most
turbulent in decades. Against the backdrop of some of the worst
climate-related events on record – extreme heatwaves across
Europe, a dried-up Yangtze River in China, catastrophic flooding in
Pakistan – economies and societies around the world also faced
painful geopolitical turmoil, and an energy crisis that caused prices
to soar and exposed dependencies on supply.
These events brought untold pain for millions around the world. But
they also generated an opportunity we cannot afford to miss: to
tackle the energy and the climate crises, hand-in-hand.
Because the root cause of these multiple crises – notably climate
and energy – is the same, the solution is also the same: diversifying
and decarbonizing energy sources and empowering all of us to
better produce and manage the energy we need. The medium-
term objective of reaching carbon neutrality to fight climate change
fully aligns with the short-term objective of energy security.
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.
We are at an inflection point.
Being part of the solution
Technologies already exist to make our companies energy resilient and net-zero.
70% CO2 emissions can be
removed using existing
technologies.
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.
Efforts must be done on both the demand and the supply side. And we need a major acceleration on the demand side of the
energy equation.
Impact of key transformations on decarbonisation (in %)
25% 30%
Save
• Digitization as disrupter
• Energy Efficiency
• Process Efficiency
• Circularity
• Digital Twin & Metaverse
Electrify
IT
•
• EVs
• Heat Pumps
45%
Decarbonize supply
• Smart Grid
• Microgrid
• Renewables
• Storage
• VPP, aggregation, contract & demand management
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Chapter 1 – Group strategy and sustainability
The equation for the future: Digital and electric is the recipe for a more sustainable and
resilient world
Schneider’s positioning for a sustainable future focuses on an All Digital, All Electric world. It’s what we call “Electricity 4.0”:
• Digitization creates resilience and builds a smart future: Data analytics and insights enable more agile, efficient operations and
continuity, making the invisible visible. Digital Intelligence makes massive amounts of invisible energy waste visible
• Electricity makes greener energy possible: Green energy production offers the best path for decarbonization
DIGITAL
+
ELECTRIC
=
SUSTAINABLE
For Efficiency
For Decarbonization
Smart & Green
1. All Digital
2. All Electric
Digital defines new levels of efficiency. Today’s digital economy is
driving disruption across every sector, defining new levels of
efficiency. While life is returning to pre-pandemic levels in places,
many newly formed behaviors will not change (remote work, remote
operations).
• Expansion of Internet of Things (IoT) in industrial
processes, driving an abundance of data: By 2030, the
number of IoT devices will be six times that of 2020 growing
from eight billion to 50 billion, resulting in an eight times increase
in compute workloads(1).
• 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(2).
• 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(3).
On the second part of the equation, we have electrification, a key
factor in accelerating towards decarbonization.
• Climate change is an energy challenge:
− >80% of the world’s CO2 emissions are linked to the
production of energy.
− >80% of energy demand is still delivered by fossil fuels.
− Fossil fuels have high efficiency losses, with almost two-
thirds of primary energy being lost during use, while
renewable energy sources have much lower losses, only
around 5% in transmission and distribution.
• Regardless of source – electrification is going to profoundly
change energy on both sides (usage and supply):
− Electrification of usage: Energy batteries are expected to
provide up to five times more energy density by 2030(4).
− Electrification of supply: More renewables, with a variable
capacity mix anticipated to reach up to 50% by 2040(5).
In reality, the equation of the future needs to be an equation for today.
The journey to net-zero is also a journey to energy security. Priorities are:
• Efficiency through digitalization.
• Decarbonization of all sources, with electrification/green electrification at the core.
• Flexibility through grid stability.
We are running out of time, but it is not too late – we need the demand side to take charge.
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 digital
automation 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) Schneider Electric Sustainability Research Institute.
(2) International Energy Agency.
(3) World Economic Forum: Shaping the Future of Digital Economy and New Value Creation, 2019.
(4) Rocky Mountain Institute.
(5) Includes Onshore Wind, Offshore Wind, Utility-scale PV, Small-scale PV, and Solar thermal. Source: Bloomberg New Energy Finance.
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Chapter 1 – Group strategy and sustainability
S T R A T E G I C R E P O R T
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.
Sales
Marketing
ONE
Digital
Benefits for
Customer
Company
Customer experience
Digital journey
Data for digitization
Supply Chain
Associated Software
Attractiveness for talents
Scale for deployment and strategic positioning
Simplicity and cost efficiency
Next level efficiency to our customers enabled via five integrations:
Schneider Electric’s EcoStruxure™ architecture delivers five integrations to enable next level efficiency,
providing our customers with a complete plug and play and seamlessly integrated solution.
Quintuple integration
1
Energy
+
Automation
Schneider Electric brings together energy and automation to achieve power and process efficiency.
2
End Point
Cloud
Schneider Electric products are connected from every end point – on the shop floor, in the infrastructure, in the cloud. Our connectable
products collect data, which are processed at edge or in the cloud, through the EcoStruxure™ offering from Schneider.
3
Design & Build
Operate & Maintain
With offers from software companies such as AVEVA, ETAP, ALPI, IGE+XAO, RIB, and Planon, and EcoStruxure™ software, we can cover
the entire lifecycle of our customers buildings and power assets. At the core of this offer is a powerful data hub that can converge
process and energy data across the lifecycle stages – from design and build to operate and maintain.
4
Site-by-Site
Unified Operations Center
Our offerings enable factory floor data access anytime and anywhere around the world, by connecting all assets and sites information in
one repository.
5
Opportunistic Supply
Sustainable & Integrated Supply
Schneider Electric helps customers meet their risk and sourcing challenges through a holistic and strategic approach.
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Chapter 1 – Group strategy and sustainability
1.2.2 The multi-hub company
The multi-hub approach enables improved resiliency, agility, and proximity with our customers and suppliers.
We are one of the most local of the global companies. Our people are in the regions where we operate, close to our customers.
Our multi-hub approach continues to be key in Schneider Electric’s strategy. It enables improved resiliency, agility, and proximity with our
customers and our network of suppliers.
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.
E U R O P E
N O R T H A M E R I C A
I N D I A
C H I N A
Products
R&D
Supply
Chain
Sales
Suppliers
Four hubs serve the Group’s different markets (Europe, North America, China and 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 2021, 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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S T R A T E G I C R E P O R T
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.
Open ecosystem
Schneider Electric works closely with its worldwide network of partners to unleash the infinite possibilities of an open community, offering
collaboration opportunities and innovation across market segments. With dedicated partner programs such as EcoXpert, an industrial
services partner program, the Technology Partner program, and more, the Group has:
60%
4.5k+
20k+
650k+
of revenues through
partners.
EcoXpert program
partners.
suppliers in production/
direct procurement.
service providers and
partners.
45k+
184
system integrators and
developers.
technology partner
offers.
Major technology partners
Platform openness
One of the key outcomes of the 2025 digital vision for Schneider Electric is to drive further openness of our EcoStruxure™ platform and
provide direct access to data and capabilities of the offer, allowing customers and partners to tap into EcoStruxure’s™ full potential and to
position it as the reference platform-as-a-service (PaaS) for the industry, enabling new ways of capturing value such as data-as-a-service
and API usage billing.
Bigger opportunities from
EcoStruxure™ openness
EcoStruxure™-compatible solutions and services expand our
portfolio, enabling access to EcoStruxure™ data and creation
of use case-specific joint solutions:
Providing data to customer applications with
a seamless integration
Embedding data and capabilities in partner
applications
Integrating third-party solutions into EcoStruxure™
via external data interfaces
To drive collaborative innovation, interoperability, and
seamless interfaces, Schneider Electric is working with and
promoting open standards across industries.
In 2022, Schneider Electric joined the Metaverse Standards Forum as a principal
member. This multidisciplinary, self-governing body aims to promote alignment on
priorities and requirements for metaverse interoperability standards. Through this
initiative, Schneider Electric is acting on its accelerated development of
interoperability standards for an open and inclusive metaverse.
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Chapter 1 – Group strategy and sustainability
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.
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”.
The Group’s strategy is driven by the conviction that robust
financial performance is a prerequisite to delivering positive
sustainability impact. At the same time, this positive impact
supports the long-term resilience of the Company as we attract
new customers, investors, and talents. We pride ourselves in being
an Impact Company and we strive to address the biggest
challenges of our time, climate change and social inequality, at
global and local levels.
Today, Schneider Electric is a recognized worldwide sustainability
leader, notably ranked #1 in the industry sector by the S&P
Corporate Sustainability Assessment in 2022, 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.
1. Does well to do good
and vice versa
Performance
The foundation for doing good
Business
Part of the solutions
All ESG
Dimensions
2. Brings everyone along
Model & culture
Set up for global and local impact
All stakeholders
in your ecosystem
Measuring progress with Schneider Sustainability Impact, a unique transformation tool
For over 15 years, Schneider Electric has measured its holistic
sustainability performance through a dashboard called Schneider
Sustainability Impact (SSI) and has set up 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.
The SSI is a transformation scorecard demonstrating that rapid and
disruptive changes for a more sustainable world are possible across
many complex topics. Its scoring scale of 10 provides an overall
measure of the Group’s progress on sustainability objectives.
By tracking our performance and publishing quarterly results, we
uphold our commitments to the SDGs and industry leadership in
corporate social responsibility. The five-year SSI for 2021 – 2025
features 11 global impacts plus one local impact linked to six
long- term commitments. Beyond our SSI, we also instill a global
and local culture with a meaningful purpose around sustainability
through trainings and performance incentives for employees and
leadership teams.
Read more about Schneider Sustainability
Impact in Chapter 2, on page 80.
Our six sustainability pillars
Act for a
climate-positive world
Be efficient with
resources
Live up to our
principles of trust
Create equal
opportunities
Harness the power
of all generations
Empower local
communities
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S T R A T E G I C R E P O R T
1.2 Schneider Electric’s unique operating model
1.2.5 Moving from opportunistic to integrated supply
The onset of unprecedented market volatility has reinforced the need for proactive strategies to source energy
from providers in a holistic fashion according to organizational demands.
Further, over the past decade, energy sourcing has grown increasingly complicated and nuanced. Today’s market-leading approaches
require adaptive, integrated sourcing to help organizations respond strategically to risk, build resilience, and decarbonize their assets/
portfolios.
Market disruption and volatility are material risks for most
businesses. The current energy crisis in Europe is a clear case.
Unprecedented short-supply conditions have caused energy
prices to hit historic levels, jeopardizing not only business
profitability, but business viability as operations, budgets, and
ancillary priorities, such as decarbonization goals, suffer.
In a recent study conducted by Schneider Electric, only about 50%
of the corporate respondents felt they were “considerably” or
“extremely” effective in managing energy commodity risk due to
volatility.
Rate your organization’s ability to manage energy price and
energy supply volatility:
35%
31%
This is surprising as companies that do proactively manage
volatility often realize measurable benefits across numerous
departments within their organizations.
13%
3%
18%
Not at all effective
Slightly effective
Moderately effective
Considerably effective
Extremely effective
Integrated energy commodity risk management and sourcing at Schneider
Schneider Electric’s Sustainability Business helps our customers to meet their risk and sourcing challenges through a holistic and strategic
approach which:
• Addresses the risks associated with energy complexity,
• Maximizes energy flexibility in the form of connected, optimized
including resilience and reliability, geopolitical uncertainties,
geographic/market barriers, and resource or capital constraints.
distributed energy resources and other cleaner, greener
technologies.
• Leverages artificial intelligence (AI) technology combined with
our industry-leading market expertise to approach sourcing
solutions using a mind+machine strategy.
• Harnesses the strength of Schneider’s global risk & analytics,
commodity management, and renewables teams to develop
and deliver risk profiling, cost analysis, and strategic
procurement recommendations.
• Advances budget management, cost forecasting, and risk
preparedness through EcoStruxure™ Resource Advisor, giving
customers greater insight and access to strategic sourcing
recommendations.
Read more about how Schneider Electric is switching to
100% renewable energy on page 161.
An Adaptive Sourcing strategy evolves with disruptors to minimize complexity.
Increasing threats to
Resilience +
Reliability
Increasing nuances in
Geography +
Geopolitics
Increasing instability among
Markets +
Suppliers
Increasing constraints in
Capital +
Resources
Resilience Options
Energy Data
Market Intelligence
Regulatory Review
Risk Profile
Resilience Options
Energy Data
Risk Profile
Energy Procurement
Energy Procurement
Regulatory Review
Market Intelligence
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Chapter 1 – Group strategy and sustainability
1.3 Schneider Electric’s priorities
for sustainable growth
Against a backdrop of market uncertainty, the Group continues to achieve sustainable growth through five
priorities.
More Products
As customer operations are increasingly digitized, our products are becoming natively
connected. Coupled with Schneider Electric’s EcoStruxure™ advisors, they deliver
incremental value and support our customers in their everyday operations. Additionally,
Schneider Electric strives to continuously increase the quality of its products and offer the
highest levels of safety and reliability.
Better Systems
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
Services are an incremental growth engine for the Group, delivering peace of mind to our
customers along their lifecycle with safety, resilience, efficiency, and sustainability. We
continue to accelerate and support our customers, expanding our portfolio each year. We
see this in 2022 via the additions of EcoConsult, EcoCare, and ECOFIT™ within our
portfolio, all of which have been built to support customers in their journey to strategize,
digitize, and decarbonize.
More Software
Schneider Electric customers are looking for integration across phases from Design and
Build to Operate and Maintain. With our software portfolio across EcoStruxure™, AVEVA,
OSIsoft, RIB Software, ETAP, Planon, IGE+XAO, and ALPI, and our partnerships, we can
cover the entire lifecycle of our customers’ buildings and power assets. We also
understand our customers’ need for a unified, simple way of managing and acting on
complex data. That is why with our evolving hub capabilities and unique software portfolio,
we’re putting in place the building blocks of the enterprise metaverse.
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 4,000
companies globally to commit to a science-based decarbonization target.
We aspire to both achieve our own aggressive climate targets and support our
stakeholders in their decarbonization journey through our solutions and experiences. As
the demand for cleaner energy sources and climate action strategies has grown, so has
Schneider Electric’s Sustainability Business, which now serves 40% of Fortune 500
companies.
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Chapter 1 – Group strategy and sustainability
S T R A T E G I C R E P O R T
1.3 Schneider Electric’s priorities for sustainable growth
1.3.1 2022 innovation highlights
We are proud to showcase our 2022 innovations. With these innovations, we were able to satisfy our
customers’ needs from different end markets and learn more about what it really means to be the leader in our
business. These offers are testaments to the progress made in our commitment, which is, making energy
safe, reliable, efficient, sustainable and connected.
Data Centers
APC™ Smart-UPS™
Modular Ultra
The first modular Lithium-ion single
phase UPS and the most sustainable
modular UPS of its kind.
EcoStruxure™ IT Expert &
EcoStruxure™ IT Advisor
An innovative platform to enable capacity
planning decisions through data analysis.
Buildings
EcoStruxure™ for eMobility
Solutions for homes, buildings
and fleets.
EcoStruxure™ Buildings
Open, secure building management
platform integrating multiple systems for
centralized, real-time control across
1-to-many enterprise buildings.
TransferPacT
Next generation transfer switch providing
best-in-class reliability with ultra-fast
transfer performance.
Power Digitization
Solutions for better decision-making,
faster issue resolution, minimized
downtime and reduced energy usage.
ComPacT, PowerPacT,
PrismaSeT Active, FlexSeT
Next generation low voltage (LV) circuit
breakers and switchboards.
Grids
EcoStruxure™ Grid
Bridges supply and demand sides,
with End-To-End software lifecycle
(from planning, design, build, operate
to maintain) while ensuring protection
against cyber attacks.
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Homes
Square D Energy Center
& Wiser Home Energy
Management Solution
Solutions for smart and
sustainable homes.
Acti9 Active
Miniature circuit breakers for space
optimization in electrical distribution.
Industries
EcoStruxure™
Automation Expert
World’s first universal automation solution
reducing engineering by almost 50% with
AVEVA System Platform integration.
EcoStruxure™
Machine Expert Twin
Digital twin software suite for digital
models of real machines. Software-
centric industrial automation system.
Lexium™ MC12 multi carrier
Innovative transport system for moving,
positioning or grouping objects in
machines for discrete processes.
Motor Management innovations
Holistic lifecycle solution for advanced
asset management and energy
efficiency. From “Design & Build”
to “Operate & Maintain.
AirSeT Family
Sustainable medium-voltage
(MV) switchgear SF6-free,
powered by pure air and digital.
S T R A T E G I C R E P O R T
Chapter 1 – Group strategy and sustainability
1.3.2 Digital Flywheel
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.
At Schneider Electric, we see a world where efficiency can be catalyzed through integrations. EcoStruxure™ is our solution to deliver each of
these five integrations to our customers.
What is EcoStruxure™?
EcoStruxure™ is our open, interoperable, IoT-enabled system architecture and platform. EcoStruxure™ delivers enhanced value around
safety, reliability, efficiency, sustainability, and connectivity for our customers. EcoStruxure™ leverages advancements in IoT, mobility,
sensing, cloud, analytics, and cybersecurity to deliver Innovation at Every Level. This includes connected products, edge control, and
apps, analytics and services which are supported by customer lifecycle software. EcoStruxure™ has been deployed in almost 500,000 sites
with the support of 20,000+ developers, 650,000 service providers and partners, 3,000 utilities and connects over 7,400,000 assets under
management.
How do we measure EcoStruxure™ growth?
To measure our performance in the digital sphere and how
EcoStruxure™ grows at each level, we employ a digital flywheel.
The flywheel represents the digital transformation of Schneider
Electric’s business: shift from non-connectable to connectable
products; in order to drive more solutions towards software and
services; and generate more recurring business for Schneider
Electric.
The layers of the flywheel represent groups of offers:
• L1 – Connectable Products
• L2 – Edge Control Solutions
• L3 – Software and Digital Services
• FS – Field Services
Non-connectable products and systems are classified as
NF – off-set.
Digital flywheel
definition by layer
Software: System and application
software which are hardware agnostic and
monetized independently of the hardware
Digital Services: Analytics-based
services which are digitally enabled
Edge Control Solutions: Devices or
systems that enable an operator to monitor
and/or control a specific process,
manufacturing line, or installation
L2
L3
L1
FS
Field Services: Installation, repair,
modernization, maintenance, etc.,
performed at a customer site (excl. digital
services)
Connectable Products: Smart,
connectable device or equipment that can
communicate with an edge control system
(from Schneider Electric, or not)
EcoStruxure™ represents the ecosystem of hardware, software, and digital services
that leverages data to create actionable insights for customers and help them
optimize their installation for higher sustainability
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Chapter 1 – Group strategy and sustainability
S T R A T E G I C R E P O R T
1.3 Schneider Electric’s priorities for sustainable growth
How do we use the digital flywheel?
Step 1: Shift from non-connectable to connectable products:
Step 3: Generate more recurring business for Schneider Electric:
• L1 sales enable L2, L3, and FS sales.
• Recurring revenues are an indicator of business continuity.
Step 2: Drive more solutions towards software and services,
enabling data collection, monitoring, and analysis from these
connectable products:
• Software and services provide a competitive advantage with
truly differentiating offers.
Where do we aim to go with digital?
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:
2021 Baseline
2025 Target
Digital flywheel as % of Group revenues
c.50%
+10pts
60%
Software and Services % of Group revenues
c.18%
+5pts
23%
Recurring revenue as % of Software and Services revenues
c.30%
+15pts
45%
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For more information on our digital
Flywheel performance, please refer to page 17.
S T R A T E G I C R E P O R T
Chapter 1 – Group strategy and sustainability
1.3.3 More services: Lifelong partner to decarbonize
and electrify faster
With the energy and climate crisis, energy efficiency, sustainability, and decarbonization through electrification
are top priorities for our customers; and an opportunity for our services business to accelerate and support
our customers.
x p e r t Support
E
Schneider Electric Consulting
• Sustainability
• Digital Transformation & Cybersecurity
• Electrification & EcoConsult, Asset
Management
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EcoFitTM
Circularity and
Reparability
Consulting and Design
Exclusive Be n e fi t s
Life extension, replacement
and new life
Strategize
Digitize and Decarbonize
End-to-end digital experience and cybersecurity with EcoStruxure™
SAFETY
EFFICIENCY
SUSTAINABILITY
RESILIENCY
Building, Industry, Data Center and Infrastructure
2022 Highlights: New Services portfolio
EcoConsult experts provide actionable insights and map
electrical and automation assets and systems with best-in-class
software and a digital twin such as ETAP. Recommendations
through the mySchneider platform generate new Services
business opportunities.
EcoCare, our recurring services, is an exclusive membership for
the entire life of equipment. It offers exclusive access to expertise,
24/7 monitoring for maximum business continuity, and extended
reality solutions.
EcoFit™ is a unique approach for modernization to minimize waste
and maximize safety and efficiency. We upgrade equipment with
connectivity to boost EcoCare, we replace the core components
to avoid up to 90% of waste, and we take back to recover, rebuild,
and give a new life to resell.
Three strategic and transformational pillars
Seamless CapEx to OpEx to recurring
Services reinforce customer intimacy at every stage of the
lifecycle, from CapEx to OpEx to recurring and from Build to
Operate to Maintain phases:
• Connected products are manufactured with native connectivity
to our cloud platform.
• Our Digital Logbook enables customers to stay constantly
connected to their assets increasing our greenfield tracking
knowledge.
• EcoCare membership offers 24/7 remote assets monitoring,
proactively reducing breakdown risk thanks to advanced
analytics from EcoStruxure Advisors
Full Customer lifecycle experience
• Our coverage model and consultative approach, via
EcoConsult, bring end-to-end solutions to focused segments.
• We innovate and contribute by identifying mergers,
acquisitions, and investments, and reinforce partnerships in
domain knowledge, predictive analytics, and new business
models.
• We drive a lifecycle circularity and sustainability approach as
a differentiator with ECOFIT™.
Scale through partners
• Access to >1,200 certified Services partners able to buy,
resell, and perform our services.
• Extension to non-certified partners and channels to influence
and scale through our network.
• Our vision is to enable all partners, through a digital
marketplace, to reach the diffused market (pilot in North
America).
430
6,000
service centers
customers
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Chapter 1 – Group strategy and sustainability
S T R A T E G I C R E P O R T
1.3 Schneider Electric’s priorities for sustainable growth
1.3.4 Software and data: enabling the enterprise
metaverse for sustainability and efficiency
We accelerate the digital transformation of buildings, infrastructure, Industries and Data Centers to deliver
complete lifecycle efficiency and sustainability thanks to the power IoT, data, and open, agnostic software
applications.
Having worked with hundreds of customers across industries, we know that efficiency and sustainability can only be achieved thanks to
insights based on energy, process, and carbon emissions data. We also understand our customers’ need for a unified, simple way of
managing and acting upon all this complex data. That is why with our evolving data hub capabilities and unique software portfolio, we’re
putting in place the building blocks of the enterprise metaverse – to allow our customers to manage all their energy and operations in a
unified, complete, frictionless experience.
Our Data Hub Model
Digital Twin
Across the lifecycle
Industry Twin
Data Hub
One singular source
for Enterprise Software
Energy Twin
IoT
Plug & Play Architecture
We are building this experience with the fully acquired teams of
AVEVA by converging the data platforms with shared services and
connectors to create a single cloud data hub:
• Across buildings, data centers, industry, and infrastructure.
• Across lifecycle stages.
• From design and build to operate and maintain.
• To enable tracking of operations, assets, process, energy,
and carbon emissions.
This powerful data hub and a single digital twin of our customers’
energy and process can be used by the agnostic software
applications in our portfolio, with offers from software companies
such as AVEVA, ETAP, ALPI, IGE+XAO, RIB, Planon, and our
EcoStruxure software.
Based on industry standards with an open and agnostic approach,
this central data hub enables advanced analytics, visualization
capabilities, and the largest ecosystem of partners. All these
elements together make up the building blocks of the enterprise
metaverse in energy management and industrial automation.
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S T R A T E G I C R E P O R T
Chapter 1 – Group strategy and sustainability
Design
Build
Operate & Maintain
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Partnerships
1
AVEVA: Over 90% of leading companies in 12 industrial sectors
rely on AVEVA’s solutions to help them deliver life’s essentials: safe,
reliable energy, food, chemicals, infrastructure, transportation, and
more. By connecting people with trusted information and AI-
enriched insights, AVEVA’s software helps companies design
capital projects and engineer better, operate more efficiently, and
create sustainable value.
ETAP is the worldwide leading software making electrical power
systems’ digital twin a reality. Over 90% of the largest EPCs in the
world trust ETAP to design, analyze, optimize, simulate, train,
control, and automate their electrical power systems. ETAP’s recent
software releases cement their worldwide expertise on battery
energy storage systems among many contributions to a sustainable
energy landscape. The combination of AVEVA and ETAP offers the
twin intelligence of power and process.
RIB is the European leader of digital transformation making
engineering and construction, efficient and sustainable. RIB group
offers an enterprise platform for construction management
(iMTWO) and multiple costing, scheduling, and collaborative site
management cloud software. Created 40 years ago, RIB helps
600,000 users across contractors and enterprises executing
buildings, infrastructure, and plants projects. RIB software
enhances AVEVA project execution capabilities.
IGE+XAO is the second largest software vendor specialized in
computer-aided design for detailed schematics, engineering, and
manufacturing of electrical harnesses and cabinets. IGE+XAO
serves all industries, transport infrastructure, and buildings.
IGE+XAO software suite is a perfect continuum from AVEVA
engineering towards detailed electrical engineering,
manufacturing, and equipment maintenance.
ALPI is a European leader in automated design software for
low-voltage electrical installations in a BIM model. ALPI’s solutions
include calculation, sizing, schematics, and costing to enable users
to manage a complete project.
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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S T R A T E G I C R E P O R T
1.3 Schneider Electric’s priorities for sustainable growth
1.3.5 Sustainability Business
The past year has demonstrated the urgent need for the energy transition. This urgency has been reflected in
the growth of corporate climate action and a surge in new legislation to increase corporate disclosures on
climate risk. The combination is leading to a rapid uptake of sustainability among corporations, with more than
4,000 companies globally committing to a science-based decarbonization target.
Transitioning energy sources remains the fastest path towards decarbonization since energy drives approximately two-thirds of global
emissions today. As the demand for cleaner energy sources and climate action strategies have grown, so has Schneider Electric’s
Sustainability Business, which now serves 40% of Fortune 500 companies through a unique combination of strategic consulting and
implementation services, paired with best-in-class digital solutions.
Our differentiated value proposition is to support our customers on climate, from strategy setting to execution.
Digitize
Strategize
Decarbonize
Strategize: Define climate strategy to meet client ambitions.
Decarbonization starts by quantifying environmental baselines and
definining organizational ambitions. Our consultants help
companies measure their emissions, set decarbonization targets,
create a roadmap for action, structure their program and
governance, and communicate on commitments.
Digitize: Create a single-source-of-truth for energy, emissions, and
resource data management. AI-powered EcoStruxure™ Resource
Advisor and award-winning PPA marketplace solutions NEO
Network™ and Zeigo™ provide clients with the data they need to
identify savings opportunities, make strategic decisions and take
action on decarbonization.
Decarbonize: Execute decarbonization strategy using four key
levers: electrification of operations, reduction of energy use,
replacement of energy source, and engagement of the whole value
chain. Ultimately, decarbonization requires action. Schneider
Electric’s robust portfolio of end-to-end net-zero solutions supports
clients in their pursuit of their energy and emission ambitions. Our
global team of experts help customers deploy solutions to
systematically achieve their decarbonization aspirations.
Collaborating for climate action
Scope 3 emissions
Energize program
CDP estimates that an average of 11.4 times as many emissions
can be found in the value chain than in corporate operations.
This extensive category, classified as Scope 3 emissions by the
Greenhouse Gas (GHG) Protocol, is also the most difficult to
decarbonize.
At COP27, Schneider Electric announced that the first European
and U.S. cohorts under the Energize program have also been
formed and will go to market together. The cohort consists of
nine companies, representing a potential aggregate of two
terawatt-hours of electricity demand.
Recently, the Sustainability Business has partnered with clients
including Walmart, PepsiCo, a group of 15 pharmaceutical
companies (known as the Energize program), and Schneider’s
own Zero Carbon Project to reduce Scope 3 emissions,
specifically within the supply chain.
Walmart Gigaton PPA program
In 2022, the first cohort under the Walmart Gigaton PPA program
was announced. Consisting of five Walmart suppliers working
together to go to market as an aggregated buyer’s consortium,
the cohort worked with consultants from Schneider Electric to
procure a 12-year wind Power Purchase Agreement from
Orsted’s Sunflower Wind Farm, expected to generate
approximately 250,000 megawatt-hours annually of new
renewable power. The aggregated consortium model allowed
the cohort participants to gain market access they could not
achieve alone.
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Chapter 1 – Group strategy and sustainability
1.3.6 Global supply chain
A vast global network covering the end-to-end value chain
Source
Make
Deliver
Customer
20,000 suppliers,
€11 billion
(production parts
procurement)
162 factories
in 40 countries
84 logistics centers
in 45 countries
17 segments and
personas 180,000
order lines a day
290,000 references
Towards an even more resilient and regional footprint
Moving from 80% to 90% regional sales
Supply chain is well balanced across our regions:
Industrial costs
GSC headcount
27%
29%
23%
22%
23%
21%
34%
21%
Europe
North America
International
China
Each are responsible for their product specifications, research and
development, supply chain, and suppliers. Our supply chain works
hand in hand with the regional sales and marketing organization,
and the multi-hub approach allows us to adapt to the requirements
of the market at pace, work very closely with all the stakeholders in
the market, and be as sustainable as possible.
60% to 70% of the products that we are selling in India today have
been designed in India, with 90% of what is sold there having been
produced there.
Key announcements in 2022
North America
Asia
Invested $46 million to upgrade and increase capacity in
Lexington, Kentucky, and Lincoln, Nebraska factories. Augments
the $100 million already committed in 2021.
New factory in El Paso, Texas announced to boost domestic
manufacturing capacity.
India
Construction starts on new factory in Hyderabad, the second
for Schneider Electric in Telangana, and to be spread across
18 acres.
Launched carbon netural, smart logistics distribution center,
Hub Asia, in Singapore. Spanning 21,000 square meters, the
new warehouse will see a 30% increase in operational capacity
compared to the previous site in Penjuru. At the doorstep of the
new Tuas Mega Port, Hub Asia will support operations for annual
revenue totaling €2 billion for Schneider Electric and will
increase physical operational efficiency and supply chain
resiliency. Schneider has committed to invest SGD $110 million
over the next 10 years to operate Hub Asia.
Investing for future growth
22
16
sites with major extension projects
in construction
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S T R A T E G I C R E P O R T
1.3 Schneider Electric’s priorities for sustainable growth
1.3.7 SE Ventures
“There’s never been a greater need for transformation, or a greater opportunity to
digitize, electrify and decarbonize. Fund II reinforces our commitment to a future
where startups with bold solutions and companies with bold ambitions together
have access to the resources, tools, and partners they need to meet this moment
and make an even better future.”
Nadège Petit, Chief Innovation Officer, Schneider Electric
Innovation at the Edge
SE Ventures invests in the future
We believe a more digital and electric world is key to addressing
the climate crisis. Innovation at the Edge sits at the intersection of
technology, internal and external, and brings to market new
solutions, services, and businesses for a future that is more
digitized, electrified, and sustainable. It is important for us to
continue our internal innovation engine, but also fuel ideas from
outside our organization. Our team explores new businesses,
technology, and business models through partnerships,
investments, incubations, and joint ventures. Through our venture
capital fund, SE Ventures, we have invested in startups, who have
disruptive ideas or technologies with potential to drive real
business value.
Structured like a typical venture fund, in addition to capital, SE
Ventures provides agility in decision making and unparalleled access
to Schneider Electric’s global ecosystem of customers and partners.
SE Ventures’ Fund I has proved the efficacy of this unique model, with
investments in over 40 startups and seven venture funds alongside
partnership engagement with over 200 startups. As a result of our SE
Ventures’ model, we have accelerated new energy and automation
technology faster, with 70% of all portfolio companies entering a
commercial partnership with Schneider Electric. Fund II was
launched in 2022, bringing total investment to €1 billion. With a focus
on new technologies and business models in climate tech, new
energy, and industrial technology, SE Ventures’ investments advance
our mission toward a more efficient and digital world.
SE Ventures - Areas of interest
Climate Tech/Energy
Industrial Tech
Sustainability
Electrification and
Digitization
Automation
Category leading software solutions
Examples of SE Ventures investments
SaaS Vegetation
Management
Industrial Predictive
Maintenance
IoT Cybersecurity
Climate Technology
Platforms
Construction Industry
Materials Management
Prosumer acquisitions in 2022
Distributed Energy Resources
Solar
Marketplace
EV Charging
Platform
EV Charging
Installation Network
SE Ventures at-a-glance
€1B
committed venture
capital
30+
10
5
active investments
incubations
major exits
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Chapter 1 – Group strategy and sustainability
1.4 End-customer focus
Schneider Electric, leveraging digital, helps customers
to identify and unlock value creation opportunities in
five areas.
Operational
Efficiency
Operational
Resilience
Occupant
Experience*
Sustainability
*Occupant experience: for Residential and Building
The value proposition of Schneider Electric to end-customers from the different markets leverages digital and address five areas that
are very synergetic:
• Sustainability: Carbon emission reduction, environmental
• Occupant experience: Comfort, healthy and attractive
impact mitigation, recycling, net-zero design…
• Operational efficiency: Throughput/quality improvement,
flexibility, asset performance management, utilities efficiency,
workforce efficiency, value chain optimization…
• Operational resilience: Uptime, process safety,
cybersecurity, license to operate, regulation compliance…
environment, occupant productivity… (for Residential and
Buildings segments only)
• CapEx project efficiency: Project cost, TCO, time to market,
de-risking…
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Chapter 1 – Group strategy and sustainability
S T R A T E G I C R E P O R T
1.4 End-customer focus
We serve end-customers from all markets: Residential,
Buildings, Data Center, Industry, Infrastructure
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.
Buildings: We are the trusted advisor on sustainability and
efficiency for our building customers across healthcare,
hotels, retail, real estate and design consultants. Our
solutions combine early engagement, data driven design, building
and power management technologies, and software to provide
more resilient, sustainable, people-centric, and hyper-efficient
buildings. In an All Digital, All Electric world, our technologies give
our customers the structure to Design, Build, Operate, and Maintain
future-ready operations, assets, and portfolios.
Cloud and service providers: Data centers will continue
to be the backbone for digital solutions and sustainability
Mining, minerals, and metals: We help our resources
industries to contribute to progress, ensure social license
to operate, and build a sustainable mining, minerals, and
metals business that is responsible, efficient, and profitable with
digitally-integrated automation, power, and process along a unified
value chain.
Water and wastewater: We are the digital partners for
sustainability, resilience, and efficiency for the water cycle,
from water resources to water distribution, sewage
management, and treatment. We support customers from strategy
to execution, combining power and process solutions for energy
efficiency and net-zero water, and innovative smart water
technologies and services to boost water efficiency, safety,
reliability, and circularity.
Energies and chemicals: We are the digital partners for
sustainability and efficiency for oil, gas, and chemicals
industries. We empower customers to manage the entire
lifecycle of capital projects, achieve sustainability targets,
will be integrated into their infrastructure. Schneider Electric has
expertise in power, building, and IT domains and is uniquely
positioned to partner with clients globally. Digitization enables
sustainability, reliability, safety, and risk management, improving
time to market.
and improve safety. Leveraging the best of power, process and
digital solutions (AVEVA, ETAP), we help them to achieve the
energy transition. Our strong field-proven experience enables them
to decarbonize their operations and develop them into new
energies businesses.
Mobility: We partner with automotive manufacturers and
electric vehicle (EV) battery manufacturers in their
transformation by enabling the digitization of operations, massive
electrification, and new sustainable mobility. We also provide
solutions for critical transportation infrastructure, such as railways
and metropolitan transport, airports, and ports for their digitization,
electrification, and decarbonization. Our solutions include
microgrids and Energy-as-a-Service, to help customers run safe,
reliable, efficient, and carbon-free operations.
Power and grid: We help power and grid customers to
fulfill growing low-carbon electricity demand, efficiently
and reliably, and we enable a flexible energy system from
power plant to grid to prosumers. Thanks to a stepwise
digitalization and optimized data management, they can overcome
challenges such as increased intermittent renewables,
decentralized generation, and extreme weather events. We are the
trusted partner for our customers to achieve their sustainability
objectives.
Consumer packaged goods: We provide digital solutions
to help food and beverage and life science companies
improve their competitiveness and profitability. We enable
digital transformation on every step of the value chain, focusing on
decarbonization, manufacturing flexibility, asset performance,
product safety/compliance, and workforce empowerment for better
sustainability, efficiency, and resiliency of the operations.
Semiconductor: We are the digital partner to Design,
Build, Operate, and Maintain semiconductor fabs with the
utmost efficiency and resiliency towards a sustainable
future.
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S T R A T E G I C R E P O R T
Chapter 1 – Group strategy and sustainability
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 mySchneider Portal 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.
We lead the ecommerce transformation in our industry. 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 an All Digital, All
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 mySchneider
Portal and Schneider Electric Exchange.
Design Firms/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
digital networks with more than 300,000 electricians
worldwide. We enable electricians to operate more
efficiently through training, technical support, and digital
tools, accessible on the go via the mySchneider mobile app. Our
relationship with electricians is strengthened by increasing their
visibility to end-users through different tools, including online
“electrician locators”.
Original equipment manufacturers (OEMs): We work
with more than 140,000 OEMs to improve machine
performance and reduce time-to-market for packaging, conveyor,
CPG process machinery, material handling, pumping, generator
sets, assembly, battery manufacturing, semiconductor, wind
turbines, hoisting, and heating, ventilation, and air conditioning
(HVAC) applications, providing tools and software such as
EcoStruxure™ Automation Expert and others. We nurture strong
OEM partnerships through programs to enhance their capacity to
deliver internationally.
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
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Chapter 2 – Sustainable development
2
Sustainable
development
75
2.1 Sustainability for all
2.1.1 Our strategic vision towards long-term positive impacts
76
2.1.2 Our 6 long-term commitments and tools to measure progress 77
2.1.3 Contribution to the United Nations
Sustainable Development Goals
2.1.4 Open dialogue with stakeholders
2.1.5 Analysis of material risks, opportunities and impacts
2.1.6 Main sustainability risks, opportunities and impacts
2.1.7 Integrated and transverse governance of sustainable
development
82
84
85
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92
2.1.8 Global and local external commitments
to move forward collectively
95
2.1.9 Measuring our contribution to a more sustainable world 100
105
2.1.10 Key external frameworks and ESG ratings
2.2 Driving responsible business
with Trust
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 Responsible Workplace
2.2.5 Compliance with tax regulations
2.2.6 High standards for the quality and safety of our products
2.2.7 Digital trust and security
2.2.8 Human rights
2.2.9 Employee health and safety
2.2.10 Vigilance plan
2.2.11 Relationships with project execution contractors
2.2.12 Sustainable relationships with suppliers
2.2.13 Vigilance with local communities
108
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2.3 Leading on decarbonization
150
2.3.1 Climate risks, opportunities and impact management
154
2.3.2 Schneider Electric’s Greenhouse Gas footprint
2.3.3 Schneider Electric’s Net-Zero Commitment
156
2.3.4 Investing to achieve the Group’s climate strategy and vision 158
159
2.3.5 Decarbonizing the Group’s operations by 2030
165
2.3.6 Decarbonizing the Group’s supply chain by 2050
170
2.3.7 Decarbonizing the Group’s downstream emissions
2.3.8 Enabling customers to decarbonize with EcoStruxure™
172
2.4 Being efficient with resources
2.4.1 Minimize the Group’s impacts and dependencies
on nature
2.4.2 The Group’s commitment to product sustainability
2.4.3 Lead with transparency: provide environmental
data to customers
2.4.4 Manufacturing products sustainably
2.4.5 Product use phase and end-of-life
2.5 Great people make Schneider
Electric a great company
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 dialogue and relations
2.6 Delivering social impact
for a just transition
2.6.1 Improving lives through access to green electricity
2.6.2 Investing for high social impact
2.6.3 The Schneider Electric Foundation
2.6.4 Schneider Electric Sister Foundations
2.6.5 Social impact in France
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
2.7.5
Disclosures (TCFD) correspondence table
Report of one of the Statutory Auditors, appointed
as independent third party, on the verification of the
consolidated non financial statement
2.7.6 Reasonable assurance report from one of the Statutory
Auditors on the Identified Sustainability Information of
Schneider Electric’s non financial performance
statement as for the year ended December 31st, 2022
2.8 Indicators
2.8.1 Environmental and climate indicators
2.8.2 Social indicators
2.8.3 Societal indicators
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
An introduction by Chief Strategy & Sustainability Officer, Gwenaelle Avice-Huet
“Companies that want to do well must also
do good – and vice versa.”
I stepped into my new role as Schneider Electric’s Chief Strategy
and Sustainability Officer in the midst of what was one of the most
tumultuous years in recent history.
On the environmental front, we saw extreme heatwaves,
devastating droughts and floods, and reports of record-breaking
biodiversity loss. On the economic and political fronts, we saw war
and intensifying geopolitical tensions, lingering supply chain
issues, soaring inflation, rising interest rates, debt distress and
widespread energy and food insecurity, plunging many countries
around the world into recession.
As the latest United Nations’ Sustainable Development Goals
Report remarked, “these cascading and interlinked crises are
putting the 2030 Agenda for Sustainable Development in grave
danger”.
In this context, combining corporate strategy, quality and
sustainability into one joint role, as we have done at Schneider
Electric, makes more sense than ever. My combined remit aims to
ensure that sustainability drives all corporate decision-making and
generates maximum impact for both the company and our
stakeholders, starting with quality which is good for customers and
also for the environment.
So, in 2022, despite rising costs and increased political and
economic uncertainty, we remained focused on accelerating the
transition to a cleaner and fairer world with our long-standing
strategy of providing digitalization, electrification, efficiency and
sustainability solutions that tackle today’s energy, climate and cost
of living crises hand-in-hand.
Engaging in the pursuit of long-term positive impact
Addressing these global challenges requires commitment and
determination. At Schneider, we firmly believe that companies that
want to do well must also do good – and vice versa.
Our success reflects the significant investments and efforts we’ve
made into sustainability and innovation over the past years. These
have helped prepare us for a new energy future while also
reinforcing our resilience to upheaval and disruption. As an Impact
Company, we are committed to bringing everyone along,
employees, customers and suppliers, and working more closely
than ever with policy makers and local communities to make a
difference.
Sustainability achievements to be proud of
In terms of climate commitments, we raised the bar by validating
our decarbonization roadmap according to new Corporate
Net-Zero Standards from the Science Based Targets initiative. We
were one of the world’s first companies to do so.
And prominent, independent ESG rating providers recognized our
leadership, with best-in-sector rankings from S&P Global, CDP,
Moody’s ESG Solutions, and Corporate Knights’ Global 100.
We also made good progress on the zero-carbon journey that we
began with our top 1,000 suppliers in 2021. So far, we’ve helped
them reduce their operational CO2 emissions by close to 10% and
we’re ready to accelerate this momentum towards our 50%
reduction target for 2025.
The Schneider Electric Foundation also played a vital role in
sustaining our commitments to communities in need and to leaving
no one behind. When the war broke out in Ukraine, our employees
from around the world raised funds to help local colleagues and
their families, while our Foundation worked to support refugees
displaced by the conflict.
We continue to address the complex, systemic inequalities
associated with energy poverty. Our technologies improve the lives
and livelihoods of communities with little or no access to energy
and our training initiatives are creating the skilled workforce
required to support the growing energy needs of developing
countries and close the energy access gap by 2030.
I’m proud of what we achieved in 2022, but since attending the
COP27 summit, I realize that much more remains to be done. I look
forward to advancing on this at speed and scale by working
together, building on our achievements, and delivering lasting and
positive impact for the future.
Gwenaelle Avice-Huet, Chief Strategy & Sustainability Officer
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Chapter 2 – Sustainable development
2.1 Sustainability for all
In this section
2.1.1 Our strategic vision towards long-term positive impacts 76
2.1.7
2.1.2 Our 6 long-term commitments and
tools to measure progress
2.1.3
Contribution to the United Nations
Sustainable Development Goals
2.1.4 Open dialogue with stakeholders
Integrated and transverse governance
of sustainable development
77
2.1.8 Global and local external commitments
to move forward collectively
82
84
2.1.9 Measuring our contribution to a
more sustainable world
92
95
100
105
2.1.5
Analysis of material risks, opportunities and impacts 85
2.1.10 Key external frameworks and ESG ratings
2.1.6 Main sustainability risks, opportunities and impacts
87
Distinctions 2022
Rated
2022
byyby
2022 highlights
4.91/10
45%
440M
40M
Schneider Sustainability
Impact score,
outperforming 2022
target (4.70/10).
Sustainable packaging
for our products
(vs 21% in 2021).
Tonnes of saved and
avoided CO2 emissions
for our customers since
2018 (+93MT vs 2021).
People have access
to green electricity in
2022, since 2009
(+5.5M vs 2021).
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75
Chapter 2 – Sustainable development
2.1 Sustainability for all
2.1.1 Our strategic vision
towards long-term positive
impacts
The world is changing
The world is facing multiple challenges that require a significant
and rapid response from business. The climate crisis is causing
flooding and droughts that have already resulted in billions of
dollars in damage and mass population migrations. It is
jeopardizing access to basic needs and services such as health,
food, water and energy for billions of people – generating further
social inequalities. The biodiversity crisis, driven by changes in the
usage of land and sea, direct exploitation of natural resources,
pollution, climate change and invasive species will further
destabilize our economies as the ecological services nature
provides to an ever-growing population are degraded. Meanwhile,
the digital revolution is completely changing the way people
interact with one another, how we interact with machines, and the
way machines interact with each other.
The onset of the COVID-19 pandemic, and the geopolitical crisis in
Ukraine have also set in motion a series of global events which
have led to significant disruptions, many of which have impacts
across the world. These include constrained labor availability,
global shortages of raw materials and electronics, unreliable
transportation, and reductions in energy availability. Supply chains
across industries have been challenged by these outcomes.
New expectations and practices have emerged to help the world
adapt to, or mitigate the impacts of this disruption:
• Local dynamics in response to ecological and social
considerations as well as supply chain disruptions
• The mobilization of new generations, demanding a radical shift
towards a more sustainable economy
• The flourishing of new environmental, social and governance
regulations for both financial and non-financial undertakings
• New ways of working, which are more flexible and more digital
• Circular business models to preserve the planet’s resources
Articulating our strategy around an Impact
Company model
While everybody — governments, NGOs, investors, and individual
citizens — has an important role, companies can be crucial
players.
S T R A T E G I C R E P O R T
They can be both developers and users of new solutions. They
have the resources, talent, technology, and geographic footprint to
make real and fast change and use it to drive sustainable financial
performance.
The foundation of Schneider’s sustainability strategy and Impact
Company model is the belief that investing in the transition to a
more sustainable future - in energy sobriety, gender equity or low
carbon solutions – is about future-proofing the company. It drives
the company’s competitiveness, innovation and resilience. It
secures sustainable growth because any company’s health is
deeply interconnected with the health of the environmental and
social systems it evolves in. It encompasses continuous
improvement of environmental, social, and ethical dimensions
across an organization’s entire value chain and stakeholders. This
holistic approach allows the Group to greatly mitigate risks and also
brings tangible added value by being more attractive to
stakeholders, while boosting innovation.
The transformation of Schneider Electric reflects this. The adoption
of an Impact Company model has seen the company triple in size,
growing from €9 billion in 2003 to €34 billion in revenues in 2022.
Schneider Electric products, software solutions and services help
households, companies, buildings, data centers, infrastructure
projects and entire industries make the most of their energy and
resources and bolster their energy resilience. With its solutions, the
Group plays a major role in accelerating the energy transition and
fighting the climate crisis, while making a long-term positive impact
on the planet and society.
Our purpose is to empower all to make the
most of our energy and resources, bridging
progress and sustainability for all.
This positive contribution is measured as Impact revenues, which
represent close to 72% of the Group’s total revenues in 2022. In
addition, in order 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.
Climate change, biodiversity loss and rising inequalities, are all
issues that have long-term consequences and cannot be
addressed with a short-term mindset alone: solving these issues
requires a combination of a long-term vision and concrete
short-term action presented below.
Carbon neutral
in our
operations
25% absolute reduction across our
entire value chain and “Net-Zero
ready” in our operations (SBTi)
Carbon neutral
across our entire
value chain
Net-Zero CO2
emissions across
our entire value chain (SBTi)
2025
2030
2040
2050
Objectives of the Schneider
Sustainability Impact (SSI),
and Schneider
Sustainability Essentials
(SSE)
Provide access
to energy to
100 million people
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Chapter 2 – Sustainable development
2.1.2 Our 6 long-term
commitments and tools to
measure progress
In response to the societal, economic and ecological worldwide
transformations, expectations from its stakeholders and aligned
with its Purpose and the United Nations Sustainable Development
Goals (SDGs), Schneider Electric has made six long-term
commitments. By tracking its sustainability performance and
publishing quarterly results, Schneider Electric upholds its
commitments to the SDGs and industry leadership in corporate
social responsibility.
Our tools to measure progress
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 Schneider
Sustainability Essentials (SSE). 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.
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, audited annually,
and linked to short-term incentive plans for more than 64,000
employees.
The SSE reflects continuous improvement actions taken by the
Group, complementing the SSI. This tool brings balance between
the innovative transformation plans of the SSI and the need to keep
making progress with other long-lasting programs.
A notable addition to the 2021-2025 program 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.
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Long-term commitments and tools
Tool
KPIs
Scope
Reporting
Assurance
Link to STIP
Schneider
Sustainability
Impact (SSI)
Schneider
Sustainability
Essentials (SSE)
Local Sustainability
Impact programs
(SSI #+1)
11
Global
Quarterly
Yes
Yes
25
Global
Annual
Yes
No
~200
Local
Annual
No
No
Read more on the SSI and SSE programs
on the next page and throughout the report.
Read more on the local commitments
on www.se.com
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 2 – Sustainable development
2.1 Sustainability for all
S T R A T E G I C R E P O R T
2.1.2.1 The Schneider Sustainability Impact:
a unique transformation tool
Since 2005, Schneider Electric has measured its sustainability
performance each quarter in a dashboard known as “Schneider
Sustainability Impact” (or 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. Each SSI mobilizes
the whole company around holistic sustainability goals impacting
its ecosystem, shares the Group’s improvement plans with
stakeholders, and create system value.
A single ESG performance score
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 target 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 2022, SSI #6 is excluded
from the score calculation, as 2022 constitutes the first
measurement and baseline of the program. In 2022, the SSI
achieved a great score of 4.91/10 (vs 3.92/10 in 2021), exceeding
its 4.70/10 target for the year, and is well on track to achieve its
2025 ambition. The 2023 objective is keep accelerating and reach
6.00/10.
Transparent quarterly progress disclosure
The results of the SSI are published every quarter together with
financial results and made available to all stakeholders via the
Group’s website. On these occasions, results are collated and
presented to the Function Committee, which makes decisions on
any corrective actions that may be necessary to reach objectives.
The Human Resources & CSR Committee within the Board of
Directors conducts an annual review of the Group’s Sustainability
strategy, analyzing, in particular, the performance of the SSI. The
results are also publicly presented to shareholders by Schneider
Electric’s Chairman & CEO or CFO, demonstrating the Group’s
commitment to making sustainability part of the Company’s
long-term strategy.
In addition, the results of the SSI are released in various external
reports (such as the Universal Registration Document including the
statutory auditors’ report), and are shared during customers and
investors events. Internally the results are published on the intranet,
and in various communications to employees (including a quarterly
internal video featuring the CEO and the CFO on the quarter’s
results).
Find all quarterly releases on the Financial Result page
on www.se.com
Annual publication and external assurance
The annual publication of the SSI results follows thorough internal
data controls performed by each relevant team and supervised by
the Sustainability team, as well as a complete “limited” external
assurance from an independent third-party verifier for all of the SSI
and SSE indicators (except SSI #+1 and SSE #12), in accordance
with ISAE 3000 assurance standard. Progressively, Schneider
Electric aims to obtain a reasonable assurance level on the SSI. In
2022, the SSI #8 obtained a reasonable assurance level, as well as
other energy, CO2 and safety KPIs.
See Independent verifier’s
report on page 270.
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, further highlighting the importance of
sustainability on Schneider Electric’s business agenda. In 2022, the
SSI performance impacted the short-term incentive plans for
64,000 employees (20% of collective share), including the
Executive Committee members and the CEO.
Read further details in the 2.5.4. “Compensation and
benefits” section on page 218.
SSI and Sustainable Finance
In November 2020, Schneider Electric announced its first
sustainability linked convertible bond, due 2026, for a nominal
amount of approximately €650 million. This bond issuance is linked
with three programs of the SSI 2021-25 (SSI #2, SSI #8 and SSI
#11) a .In 2022, Schneider Electric signed €2.7 billion Syndicated
Sustainable-linked Revolving Credit Facilities with a margin indexed
on the annual performance of the SSI.
More information about debt and bonds on the Debt page
on www.se.com
SSI creation process
The SSI is a cyclical process taking place every 3 to 5 years. In
2020, a specific SSI Steering Committee was created, comprising
around 50 members representing 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.
The breadth of stakeholders involved in the design of the SSI, and
the variety of analyses leveraged, makes it a powerful tool to move
the Group forward on its major challenges.
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S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
Three scenarios may emerge from one SSI to the next:
2.1.2.2 Schneider Sustainability Essentials
The SSE reflects continuous improvement actions taken by the
Group, complementing the SSI. This new tool brings balance
between the innovative transformation plans of the SSI and the
need to keep making progress with other long-lasting programs.
All SSE KPIs are externally assured each year like for the SSI.
Notable SSE achievements and challenges in 2022
Corporate vehicule fleet transformation (SSI #7) accelerated by 14
points in 2022 thanks to a strong performance in Europe and
growing market maturity.
Schneider committed to having 100% of its sites adopt local
biodiversity conservation and restoration programs, and 100% of
its sites in water-stressed areas to deploy a water conservation
strategy and related action plan by 2025. In 2022, SSE #8 made
good progress with 17% of sites putting biodiversity programs in
place, as well as SSE #11 as 48% of sites have adopted and
implemented water conservation action plans.
Schneider upgraded SSE #15 to reflect better its ambition to
eliminate recalls through the adoption and rigorous execution of a
quality system consisting of the highest available standards.
In 2022, 880 new suppliers have been assesed under Schneider’s
‘Vigilance Program’ in 2022, notably thanks to the increase of
remote Vigilance assessments (SSE #17).
SSE #23 was deployed in 2022 and recorded 43% of employees
who had access to meaningful career development programs
during later stages of their career.
Improving CO2 efficiency in transportation (SSE #4) is a challenge
as it is primarily driven by the mode mix of the Group’s aggregate
freight globally, to best serve its customers.
Deploying a ‘Social Excellence’ program through multiple tiers of
suppliers is one of Schneider’s 2021-25 objectives (SSE #12). This
program is stilll in development.
2.1.2.3 Local Sustainability Commitments
A notable addition to the 2021-2025 program 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. 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.
Discover Schneider’s local sustainability commitments on
the Empower local communities page on www.se.com
• Programs are maintained and their targets are renewed or
increased
• New and more innovative or better-adapted indicators are
implemented;
• Programs are removed; if for instance they have reached a
threshold. Any former program may continue to be monitored
internally if relevant.
The Sustainability department presents a draft version of the new
SSI to the Human Resources & CSR Committee, which reports on
its work to the Board of Directors, and to the Group Sustainability
Committee (now “Function 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 SSI is then approved by the CEO.
During the deployment of the SSI, annual reviews take place
organized by the sustainability team together with internal experts
and new or complementary programs may be launched or be
evaluated in more depth.
Notable SSI achievements and challenges in 2022
SSI #2 delivered +93MTCO2e saved and avoided for customers, a
net improvement compared to 2021 (+84MTCO2e), driven by good
progress in Power Purchase Agreements services and Variable
Speed Drives sales.
The Zero Carbon Project (SSI #3) recorded a 10% progress (vs 1%
in 2021) thanks to the CO2 emissions efficiencies achieved by close
to 1,000 onboarded suppliers.
45% of the Group’s primary and secondary packaging is now free
from single-use plastic, and uses only recycled cardboard,
compared to 21% in 2021. This rapid progress was possible thanks
to the mobilisation of all teams worldwide, and particularly in
Pacific, India, North America and Europe.
Close to 28% of Group leaders are now women, a 4 points increase
since 2020, but women hiring remains at 41% and will be a focus
for 2023.
Lastly, SSI #9 delivered access to green electricity to 5.5 million
people in 2022 alone, thanks notably to the solarization of Health
Centers in Greater India and the delivery to Investment Funds. It is
30.7% more than in 2021 where 4.2 million people benefited from
these offers.
SSI #6 was launched for the first year, with 59% of suppliers
committing to join the program and 1.5% already meeting the
Decent Work expectations set by Schneider Electric. This KPI is
excluded from the calculation in 2022 as this year constitutes the
baseline for this program.
One of the most challenging 2025 objectives will be to train 1 million
people in energy management (SSI #11). Excellent progress was
delivered in 2022 with close to 70,000 new people trained (vs more
than 46,000 in 2021) but due to the delay caused by the pandemic,
an acceleration will be needed in the coming years to reach the
target. To achieve it, the Group will open trainings to more OECD
countries and support new types of programs for the youth.
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Chapter 2 – Sustainable development
2.1 Sustainability for all
S T R A T E G I C R E P O R T
2022 Score:
4.91/10
vs 3.92/10 in 2021 and outperforming
4.70/10 target for the year
Schneider Sustainability Impact
6 Long-term Commitments
11+1 targets for 2021-2025
Baseline(1)
2022 Progress(2)
2025 Target
Climate
1. Grow Schneider Impact revenues(3)
2019: 70%
72%
Help our customers save and avoid millions of tonnes
of CO2 emissions
Reduce CO2 emissions from top 1,000 suppliers’
operations
Increase green material content in
our products
Primary and secondary packaging free from
single-use plastic, using recycled cardboard
2020: 263M
440M
2020: 0%
10%
2020: 7%
18%
2020: 13%
45%
Strategic suppliers who provide decent work to their
employees
2022: 1%
1%
2.
3.
4.
5.
6.
7.
Level of confidence of our employees to report
unethical conduct
2021: 81%
+1pt
+10pts
80%
800M
50%
50%
100%
100%
8.
Increase gender diversity in hiring (50%), front-line
management (40%) and leadership teams (30%)(4)
2020: 41/23/24
41/27/28
50/40/30
9.
Provide access to green electricity to 50M people
2020: 30M
+9.7M
50M
Resources
Trust
Equal
Generations
10. Double hiring opportunities for interns, apprentices
2019: 4,939
x1.33
and fresh graduates
11. Train people in energy management
2020: 281,737
397,864
x2.00
1M
Local
+1. Country and Zone Presidents with local commitments
2020: 0%
100%
100%
that impact their communities
(1) The baseline year is indicated in front of each SSI baseline performance.
(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 #+1 and SSE #12 in 2022), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 270). In addition, SSI
#8 received a “reasonable” assurance level in 2022. Please refer to page 242 for the methodological presentation of each indicator. The 2022 performance is also
discussed in more details in each section of this report.
(3) Per Schneider Electric definition and methodology. Note that for the reporting requirements under the European Taxonomy Regulation, please refer to pages 253 to 263.
(4) Calculation methodology for SSI #8 has been expanded in Q2 2022 to include blue collar managers in the scope of front line managers. Due to this methodological
change, the 2020 baseline for front line managers has been recalculated to 23% instead of 25%.
Read more about the SSI indicators methodology
on the pages 243 to 247.
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S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
Schneider Sustainability Essentials
6 Long-term Commitments
11+1 targets for 2021-2025
Baseline(1)
2022 Progress(2)
2025 Target
Climate
1. Decarbonize our operations with Zero-CO2 sites
2.
Substitute relevant offers with SF6-Free medium
voltage technologies
2020: 30
2020: 26%
77
41.5%
3.
Source electricity from renewables
2020: 80%
85%
4.
Improve CO2 efficiency in transportation
2020: 0%
-7.7%
Resources
5.
Improve energy efficiency in our sites
6.
Grow our product revenues covered
with Green Premium™
2019: 0%
2020: 77%
7.8%
80%
7. Switch our corporate vehicle fleet to electric vehicles
2020: 1%
13.8%
8.
9.
Deploy local biodiversity conservation and
restoration programs in our sites
Give a second life to waste in
‘Waste-to-Resource’ sites
2020: 0%
17.6%
2020: 120
127
150
100%
90%
15%
15%
80%
33%
100%
200
10. Avoid primary resource consumption through
2020: 157,588
261,128
420,000
‘take-back at end-of-use’ since 2017 (metric tons)
11.
Deploy a water conservation strategy and action plan
for sites in water-stressed areas
2020: 0%
48%
100%
Trust
12. Deploy a ‘Social Excellence’ program through multiple
--
In progress
--
tiers of suppliers(3)
13. Train our employees on Cybersecurity
2020: 90%
95.5%
100%
and Ethics every year
14. Decrease the Medical Incident rate
2019: 0.79
0.58
15. Reduce total number of safety recalls issued to 0
2020: 25
24
0.38
0
16. Be in the top 25% in external ratings for
Cybersecurity performance
2020: Top 25%
Top 25% Top 25%
17. Assess our suppliers under our ‘Vigilance Program’
2020: 374
2,083
Equal
18. Reduce pay gap for both females and males
19. Increase subscription in our yearly Worldwide
Employee Share Ownership Plan (WESOP)
2020: F: -1.73%
2020: M: 1.00%
-1.6%
1.02%
2019: 53%
62%
4,000
<1%
<1%
60%
20. Pay our employees at least a living wage
2019: 99%
100%
100%
21. Multiply the number of employee-driven development
2020: 5,019
x1.9
interactions on the Open Talent Market
Generations
22. Support the digital upskilling of our employees
2020: 41%
77%
23. Provide access to meaningful career development
programs for employees during later stages
of their career
2022: 43%
43%
24. Increase our employee engagement level
2020: 69%
70%
Local
25. Increase the number of volunteering days since 2017
2020: 18,469
41,093
x4
90%
90%
75%
50,000
(1) See note (1) under the SSI table in the left page.
(2) See note (2) under the SSI table in the left page.
(3) SSE #12 ‘Social Excellence’ program is under development.
Read more about the SSE indicators methodology
page 248 to 253.
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Chapter 2 – Sustainable development
2.1 Sustainability for all
S T R A T E G I C R E P O R T
2.1.3 Contribution to the United Nations Sustainable
Development Goals
The 17 United Nations Sustainable Development Goals (UN SDGs) are focused on protecting the planet, alleviating poverty, and achieving
worldwide peace and justice. The Schneider Sustainability Impact and Essentials programs contribute to those global goals, either directly
or indirectly and for all stakeholders in the company’s value chain. Schneider Electric is an active promoter of the SDGs and a member of
the UN Global Compact, notably with its CEO being a member of the global Board. The Group discloses each year its Communication on
Progress and was one of the 850 participants in the UNGC Early Adopters program in 2022. The mapping of Schneider’s contribution by
SDG and stakeholder presented hereafter has been realized internally by reviewing in detail all 169 targets and leveraging the SDG
Compass tools.
Suppliers
Operations
Customers
Communities
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Schneider Electric operates with the conviction that
human wellbeing comes first. Living a fulfilling life
with decent living wage and opportunities for
development enables employees within the company
and communities present around, to thrive.
Schneider Electric believes in closing gaps between
all populations. As such, the long-lasting difference
in society’s treatment of men and women is a
challenge we face and rise to, as we believe that
equality fosters sustainable development.
Key programs
SSI #9; SSI #10; SSI #11; SSE #20
Key programs
SSI #8; SSE #18
Schneider takes great care in ensuring its operations
don’t impact biodiversity and water quality. Even
though the Group does not consume a lot of water, it
protects this scarce resource through its production
and provide solutions to its customers.
Key programs
SSE #6; SSE #11
Schneider provides solutions for clean, reliable, and
efficient energy consumption to its customers, and is
committed to help people in underserved areas gain
access to green and reliable electricity.
Key programs
SSI #1; SSI #2; SSI #3 SSI #9; SSE #1 SSE #3;
SSE #5; SSE #6, SSE #7
Schneider places human well-being at the core of its
operations and philanthropy. Food is a basic need and
a necessity for livelihood. Underserved populations
are at the margin of society, and the Group knows we
all have a part to play to protect their livelihood.
Key programs
SSI #9
Schneider’s commitment to prioritizing people
everywhere necessitates taking a holistic view of
well-being – physical, mental, social, and emotional
– and to govern and develop programs that empower
and support all its stakeholders.
Key programs
SSI #6; SSE #12; SSE #14; SSE #17
Sustainability goals go beyond creating a greener
world. Learning never stops, and Schneider actively
promotes a learning and teaching culture by
connecting tomorrow’s energy leaders with the
education, support, and opportunities they deserve.
Key programs
SSI #10; SSI #11; SSE #2
Consult Schneider Electric’s commitments to SDGs on the
sustainability page on www.se.com
S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
Schneider Electric is certain that sustainability
requires decent work and opportunities to allow a
prosperous development for all its stakeholders. It is
our commitment to trust, equality, and opportunities
for all generations, that drives us.
Key programs
SSI #6; SSI #10; SSE #12; SSE #14; SSE #17;
SSE #18; SSE #20; SSE #22; SSE #23
Schneider Electric’s identity and legacy drive the
company towards perpetual innovation and
mobilization to make its infrastructures and products
modern and up to date with its commitment to
sustainability.
Key programs
SSI #1; SSI #2; SSE #1; SSE #2; SSE #4
Schneider is devoted to empowering and positively
impacting all employees, customers, and
communities. The Group hopes to bring everyone
together on the same level of equality, thus allowing
all to strive individually and collectively.
Key programs
SSI #8; SSI #10; SSI #11; SSE #18; SSE #20
Schneider offers a solution to ensure sustainability in
urban areas, with smarter homes and buildings. The
Schneider Electric Foundation acts to give
sustainable access to sustainable energy to all,
turning our global commitments into local realities.
Key programs
SSI #1; SSI #12; SSE #1; SSE #4; SSE #9
Schneider Electric believes that circularity is key for
sustainability. In fact, using less resources and
producing higher quality products is the ideal
combination to ensure safety for employees,
consumers, and the environment.
Key programs
SSI #4; SSI #5; SSE #6; SSE #9; SSE #10; SSE #15
Schneider Electric has been leading the fight against
climate change for 15 years and counting. Its
strategy focuses on acting for climate protection,
preserving resources, and maintaining ethical
practices between everyone to fight for our planet.
Key programs
SSI #2; SSI #3; SSE #1; SSE #3; SSE #4
Resources are essential to our business; preserving
them not only make good business sense but is also
the right thing to do. Hence, preserving the ocean
has become core to our sustainability engagement
and we commit to protecting marine life.
Key programs
SSI #5; SSE #8; SSE #11
Schneider Electric is committed to using fewer
natural resources, living within our planet’s means,
and advancing an accelerated biodiversity strategy.
We align with like-minded partners to prioritize
conservation and help create a more sustainable
world.
Key programs
SSI #4; SSI #5; SSE #8
Sustainability is a job for all; the urgency of the
situation is impossible to ignore. All hands must be
on deck and it is crucial to establish frameworks,
programs, and infrastructure to allow a just and
peaceful development.
Key programs
SSI #6; SSI #7; SSE #12; SSE #13; SSE #16;
SSE #17
Schneider Electric is a global company that aims to
adapt and ensure cooperation amongst all its
stakeholders to create an environment of trust and
prosperity in its operations but also for its employees’
and local communities’ fulfillment.
Key programs
SSI #3; SSI #6; SSI #11; SSI #12; SSE #2; SSE #11;
SSE #12; SSE #17; SSE #24; SSE #25
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Chapter 2 – Sustainable development
2.1 Sustainability for all
S T R A T E G I C R E P O R T
2.1.4 Open dialogue with stakeholders
Schneider Electric engages in open and continuous dialogue 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 strategy and programs. This feedback
is integrated into the drawing up of the registration document, and new improvement plans, as well as during the design of the SSI which
takes place every three to five years.
Stakeholder
How we create value
Key achievements
Suppliers
The Group established an ambitious sustainable procurement strategy
providing guidelines to its 53,000 suppliers to ensure that all are aligned
with the Group’s ambitions to build an inclusive and carbon neutral
world, where ecosystems and resources are preserved, and people get
access to economic opportunities and decent lives.
Employees
and social
partners
The Group is committed to all its employees empowering people across
generations and regions and offering equal opportunities. The Group
motivates its employees and promotes involvement by making the most
of diversity, supporting professional development, and ensuring safe,
healthy working conditions.
Customers
To enable a more sustainable future we ensure our customers that we
provide them with efficient, safe and decarbonized solutions through
digitalization, and electrification, providing them with high environmental
performance products and full transparency on environmental impact
with Green Premium™ offers. The Group insists on high quality and
cybersecurity to provide strong customer experience.
Financial
partners
Our 15 years of experience and expertise in sustainability has led us to
understand that not only does sustainability allows us to do good but it
also makes good business sense. In fact, our business model delivers
consistent, sustainable and strong financial performance providing our
financial partners attractive returns.
Institutions
and technical
bodies
The Group is involved in various local and international associations and
organizations supporting sustainability, working with key players from all
levels of society. Schneider Electric makes it its priority to maintain a
constructive dialogue with policymakers and regulators so that our views
are represented on issues affecting our industry.
Communities
and civil
society
Schneider Electric acts to empower local communities by promoting
local initiatives and enabling individuals and partners to make
sustainability a reality for all, everywhere. Through education on energy
management and investment supporting high social impact, the Group
hopes to have a positive and sustainable impact on its ecosystem.
10%
CO2 emissions
reduction from our
top 1,000 suppliers’
operations
82%
of our employees are
confident to report
unethical behavior
440M
tonnes of CO2
emissions saved and
avoided for our
customers
72%
impact revenues
300+
associations and
organisations we
take part in
worldwide
200+
local commitments
that positively impact
communities
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S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
2.1.5 Analysis of material risks, opportunities and
impacts
Assessment principles
Each year, Schneider Electric performs risks, opportunities and
impact assessments, considering issues that can have direct
positive or negative financial impacts for the company in the
short-term (3 - 5 years), medium-term (5 - 10 years) or long-term (10
- 30 years), as well as impacts the company may have on people or
the planet, directly or indirectly in its value chain.
The assessments rely on a panel of both internal and external tools,
take into account stakeholders’ expectations and are coordinated
by different teams. In particular, the Strategy and Sustainability
team, the Group Risk Management function and the Duty of
Vigilance Committee play a key role. Other topic-specific
committees exist that oversee the Group’s strategy on those issues,
such as the Carbon Committee, Human Resources Committee, or
the Ethics Committee.
Key internal tools include:
• An internal and external stakeholder consultation (materiality
assessment), focused on analyzing key stakeholders
expectations, is performed prior to each Schneider
Sustainability Impact program launch every three to five years
(last exercise done in 2020). This assessment is described in
the next pages of this chapter;
• The Group risk matrix, led by the Group Risk Management
function is updated every year and focuses on identifying 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. For more details about the Enterprise Risk
Management (ERM) please consult chapter 3, pages 244 to 319;
• The Vigilance risks matrix, which is presented and described in
chapter 2.2.10 “Vigilance Plan” page 133, focuses on the
potential adverse impacts the Group may have on people or the
planet, directly or indirectly in its value chain through its
business relationships. A dedicated Vigilance report is available
online.
• Other specific risk mappings, for instance dedicated to Ethics &
Compliance risks (including Anti-Corruption and Conflicts of
Interest risks), Climate, Water and Biodiversity risks, supplier
risk, cybersecurity risk etc, are done regularly.
Internal tools are complemented with outside-in inputs:
• Regulatory frameworks: for instance, the key topics listed under
Article R. 225-105 of the French Commercial Code (Extra-
Financial Performance Declaration), the EU taxonomy or
upcoming European Sustainability Reporting Standards (ESRS);
International institutions and Non-Governmental Organization
(NGOs) and peer working groups and initiatives;
•
• Analysis of Environment, Social, and Governance (ESG) rating
agencies expectations;
• Specific requests from investors and customers;
• Recommendations from the Task Force on Climate-related
Financial Disclosures (TCFD), the Task Force on Nature-related
Financial Disclosures (TNFD) and various other 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.
The main identified risks, opportunities and impacts are quantified
on probability of occurrence and magnitude of impact by the
relevant departments to determine gross risks, and an assessment
of current mitigation measures informs on potential net impacts. In
this sustainability chapter, we present and discuss gross risks, and
detail the mitigation actions implemented. Net risks are presented
in Chapter 3, page 304, in accordance with “Prospectus 3”
requirements.
On this basis, the list of extra-financial risks is reviewed and
validated annually by relevant Senior Vice Presidents, 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.
Six main risk categories were identified in 2022 and are presented
in detail in the following pages:
• Sustainable Supply Chain
• Cybersecurity and data privacy
• Responsible and attractive workplace
• Ethical business conduct
• Product, projects, system quality and offer reliability
• Corporate governance
Creation of the SSI programs and targets
leveraging the analysis
The Group sustainability team collates the various inputs to identify
the strategic issues that need to be addressed. Every 3 to 5 years,
the analysis leads to the creation of new programs under Schneider
Sustainability Impact.
For each target and indicator composing the SSI, the ambition is
defined in consultation with the departments concerned, and
leveraging the various risks, opportunities and materiality analyses
as described above as well as best practice benchmarks.
Zoom on the latest materiality analysis
In 2020, Schneider Electric built its third materiality matrix by
questioning external stakeholders (such as customers, suppliers,
international organizations, trade associations, experts and
shareholders) and top and senior managers within the Group,
including the Executive Committee. Nearly 200 stakeholders were
consulted in total. The details of the analysis can be found in the
Group’s Universal Registration Document 2021 pages 76-77.
Overall, stakeholders pointed 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 benefits all equally. Stakeholders also mentioned the
growing expectations in providing ethical and sustainable
products.
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Chapter 2 – Sustainable development
2.1 Sustainability for all
S T R A T E G I C R E P O R T
• 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 it requires, the potential 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 featured very highly in
terms of internal expectations.
During the discussions, a number of matters were frequently
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
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 topics are deemed important, reinforcing our holistic vision of
sustainability. Issues were prioritized based on three groups:
− License 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.
Schneider Electric 2020 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
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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
Top four expectations
The materiality matrix above displays the results of the analysis, which can be summarized in four megatrends:
1.
2.
Leading climate action in our
ecosystem with our partners.
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.
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S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
2.1.6 Main sustainability risks, opportunities and
impacts
As part of its Extra-Financial Performance Declaration, the Group presents the main risks, opportunities and impacts identified with respect
to major societal challenges in this section.
Risk description and impact
Ethical business conduct
Competition law
Non-compliance with
competition laws and
regulations, could result in:
• Fines
• Brand and reputational
impact
Corruption and bribery
Corruption may occur through
third parties’ activities
(partners, suppliers,
intermediaries, companies to
be acquired) and cause
various impacts:
• Legal proceedings,
prosecutions and sanctions
• Subverting local social
interests and/or harming
local competitors
•
• Debarment from public
tenders/ public funds
Increasing costs for
companies, and further
down the chain, its
customers
• Public relations backlash
Policies and systems
Main actions and 2022 performance
Opportunity created
Trust Charter
Conflict of Interest Policy
Competition Law Policy
• New Competition and Contracting
Policies issued and Trainings
conducted
Increase relationship
with suppliers to ensure
compliance
• SSI #7: 82% achieved in 2022 (vs
Trust Line whistleblowing system
81% in 2021)
• Anti-corruption e-learning and ad
hoc anti-corruption learnings
• Communication campaigns
• Dedicated Key Internal Controls
and central monitoring process
• SSI #7: 82% achieved in 2022,
aiming for 10pts increase by 2025
• SSE #13: 95.5% of employees
trained on Cybersecurity and
Ethics in 2022 (vs 96% in 2021)
Increase employee
satisfaction
Improve workplace
culture
Strengthen legal
compliance and public
reputation
Reinforce customer,
partner, supplier and
local communities’
engagement and loyalty
Trust Charter
Anti-Corruption Policy
Whistleblowing Policy
Case Management &
Investigation Policy
Conflict of Interest Policy
Business Agents Policy
Gifts & Hospitality Policy
Philanthropy Policy
Sponsorship Policy
Specific M&A guidelines
Dedicated Trust Standards
Risk mapping dedicated to
“Ethics & Compliance” risks
Corporate governance
Delivering on Sustainability Commitments
Failure to achieve our
long-term sustainability
commitments with Schneider
Sustainability Impact (SSI) and
the Group Net-Zero
commitment. Missing the public
objectives set by the Group
could result in:
Internal Governance in place
from Board to operational levels
to monitor performance and
ensure progress
SSI performance embedded in
managers’ and leaders’
short-term incentives
• Brand and reputational
impact
• Distrust from stakeholders
and loss of attractivity to
investors, customers or new
talents
ESG performance in four
external ratings linked to
attribution of performance
shares for leaders (Schneider
Sustainability External and
Relative Index, SSERI)
• SSI 2022 performance reached
4.91/10, above the 4.70/10 target
• 100% performance in Schneider
Sustainability External and
Relative Index (SSERI) thanks to
industry leader ranking in several
ESG Ratings
• Good progress in SSI and SSE
Climate programs and CO2
footprint reduction of 22% vs
2021
Higher credibility and
attractivity to
stakeholders (such as
investors, new talents,
customers, or
governments)
Risks mitigation ahead of
competition thanks to the
SSI disruptive and
virtuous continuous
improvement process
Business opportunities
thanks to innovation &
transformation
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Chapter 2 – Sustainable development
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S T R A T E G I C R E P O R T
Risk description and impact
Cybersecurity and data privacy
Business disruption
Business disruption of
Schneider’s industrial and
customer operations.
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
Policies and systems
Main actions and 2022 performance
Opportunity created
Greater confidence of
our customers and
partners in our supply
chain and products
Market access to critical
infrastructures/customers
Critical certifications
obtained IEC 62443
Advanced discussions
with authorities and
greater collaboration on
safety and security
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
Acceptable Use of Assets Policy
Security testing for products
and systems
appointed and trained
• Cyber performance of sites part
of the bonus of the plant manager
• Operational Technologies (OT)
workers security awareness
deployed
• Access level defined, granted,
and checked as per the profile/
need
• OT network, monitoring and threat
•
detection, incident response
process
IT/OT network segmentation
secured industrial Personal
Computer (PCs), secure remote
access, backup restore for PCs
and Programmable Logic
Controllers (PLC)
• SSE #13: 95.5% of employees
trained on Cybersecurity and
Ethics in 2022 (vs 96% in 2021)
• SSE #16: top 25% in external
ratings for Cybersecurity
performance achieved
Compliance
Non-compliance
with data laws may result in:
• Endangerment, modification
and exfiltration of data from
Schneider Electric’s data
systems
• Potential fines
Data Privacy Policy
Data Classification Policy
Global Data Retention
Record Creation
Backup and Recovery Policy
Log Management & Monitoring
Policy
Acceptable Use of Assets Policy
Digital Certification Policy
• Mandatory Cybersecurity & Data
Privacy annual training sessions
• Data privacy champions
Increase trust among our
customers, partners and
larger community
appointed
• Annual review of all policies
• Data Retention implemented by
area
• Sensitivity label feature enabled
on Microsoft Office 365 Suite for
all employees
Prove alignment to
regulations and devotion
to ESG requirements
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Chapter 2 – Sustainable development
Risk description and impact
Damage to customers assets
Damage to customer assets
due to firmware compromise
and field services operations.
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
Sustainable Supply Chain
Supply Chain Disruption
Lack of Supply Chain
flexibility and resilience:
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
Human Rights
Violations of human rights
and fundamental freedoms,
in particular in supply chain
and off-site projects: Lack of
transparency at suppliers
or the discovery of
malpractices in terms of human
rights may lead to
• Workers Health & well-being
impact
• Legal impact
• Reputation and brand
image
Policies and systems
Main actions and 2022 performance
Opportunity created
Product and system security
policy
Source Code Security Policy
• Cybersecurity contact identified,
with ad hoc and periodic
assessments for strategic ones
Increase trust among our
customers, partners and
larger community
Cyber Badge Principles
For customer-facing employees:
Third-Party Security Principles
Network Security Policy
Malicious Software Policy
• Deployment of Cyber Badges
across 20,000+ employees
• Compliance monitoring
For customer-facing suppliers:
• Cybersecurity and Privacy Terms
& Conditions developed for all
suppliers
•
•
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
• On-site supplier audits with
Responsible Business Alliance
(RBA) protocol
ISO 26000 assessment
•
• SSI #6: 500+ suppliers
•
onboarded in the Decent Work
program
‘Social Excellence’ program
through multiple tiers of suppliers
in progress (SSE #12)
• SSE #17: 2,083 suppliers
assessed under our ‘Vigilance
Program’ since 2018 (+880 vs
2021)
Regional Supply Chain footprint
calculation
Multi-sourcing
Independent risk assessment
(fire, weather, climate) of our
Industrial sites
Preventive and reactive risk
management of Natural risks in
Supplier Risk Management
(SRiM) program
Recurring risk assessment of
our Industrial sites and suppliers
through Global Risk Consulting
program
Trust Charter and associated
trainings
Trust Line
Supplier Code of Conduct
Schneider Human Rights Policy,
updated in 2022
Environmental Engineering and
Health Services (EEHS) risk
mapping of suppliers
EEHS included in procurement
process
Strong local presence
Deepening Strategic
Supplier Relationship
with greater C-Level
engagement
Shorter lead times and
low logistics costs and
CO2 from deliveries
Improving component life
cycle visibility and taking
the opportunity to
standardize electronic
components.
Increased cooperation
with suppliers
Increased trust with our
customers
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Chapter 2 – Sustainable development
2.1 Sustainability for all
S T R A T E G I C R E P O R T
Policies and systems
Main actions and 2022 performance
Opportunity created
Supply chain resiliency
• SSI #4: 18% green material
Risk description and impact
Resources
Scarcity of resources
used in our products or in
manufacturing:
Volatile prices and availability
of materials and resources
could lead to:
• Cost increase of primary
materials and energy
• Disruption of supply
Raw material productivity and
hedging strategy
Water stewardship in water-
stressed areas
Proactive product returns and
take-back policies for a range of
offers
Differentiation through
greater environmental
performance
Access to demanding
green markets
Superior resiliency to
face potential decrease
in availability of virgin raw
materials
Work in collaboration
with customers
Challenging innovation
and R&D to seek
perpetual improvement
Increase brand
reputation and value
content in our products (vs 11% in
2021)
• SSI #5: 45% of our primary and
secondary packaging is free from
single-use plastic and uses
recycled cardboard (vs 21% in
2021)
• SSE #11: 48% of sites in water-
stressed areas have a water
conservation strategy and related
action plan (vs 9% in 2021)
• Resilience management :
short-term by business impact
prioritization; medium-term by
de-risking portfolio, long-term
through re-design
• New Quality Strategy
•
Implemented Advanced Product
Quality Planning
• Deploy 10 Fundamentals of
design assurance, training and
implementation
• Quality Basics into Schneider
Performance System (SPS)
enhancement
• Enhanced Quality Fundamentals
for suppliers: Supplier
Assessment Module (SAM) 2.0
Implemented Quality
Fundamentals for field execution
•
• Deployed Quality Basics for
Software
• SSE #15: 24 safety units recalled
in 2022
Safety strategy
• SSE #14: 0.58 Medical Incident
rate (vs 0.65 in 2021)
Global safety directives
Serious Incident Investigation
Process (SIIP)
GlobES reporting, Global Safety
Alerts, EHS assessment
Increase confidence of
current and prospective
employees.
Continuous Safety
improvement
Product, project, system quality & offer reliability
Deficient product safety
Product malfunctions or
failures could result in:
All our sites are certified ISO
9001
Phoenix program launched in
2018 covers 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
•
• 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
Responsible workplace
Health and Safety
Serious or fatal employee
injury or illness could result
in:
• Loss of, or impact to,
employees
• Property damage
•
• Decreased customer
Impact to Company image
confidence
• Fines
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Chapter 2 – Sustainable development
Risk description and impact
Equity, Diversity & Inclusion
Discrimination in the
workplace: not providing equal
opportunities to everyone and
limiting the ability to attract and
retain the best talents may lead
to:
• Cost of turnover
• Loss of women in top
potential pipeline
• Legal issues
• Company image
Well-being and mental health
Lack of focus on well-being &
mental health: not providing
ideal working conditions may
lead to:
• Absenteeism
• Cost of turnover
• Disengagement
• Poor company image in the
marketplace
Talent acquisition and retention
Attrition of talents and skills:
not attracting, developing, and
retaining the best talent in the
market especially for critical
skills leads to:
• Cost of recruiting and
onboarding
• Gaps in critical skills
• Less positive brand
perception by talent pool
Policies and systems
Main actions and 2022 performance
Opportunity created
People attraction and
retention with equal
opportunities for
everyone
Improved talent
attractivity and retention
Recognized as an
employer of choice and
market leader for talent
development for
everyone, everywhere,
leading to greater talent
attractivity
Diversity & Inclusion Policy
• SSI #8: 41.4% women in hiring,
Global Anti-Harassment Policy
Trust Line whistleblowing system
Women representation in
leadership roles
Gender pay equity
26.6% in front-line managers and
27.7% in leadership teams (vs
41%, 27% and 26% achieved
respectively in 2021)
• SSE #18: Pay gap for both
females and males <1%
• Discrimination, Harassment or
unfair treatment Trust Line alerts
successfully treated
• Several recognitions as a great
place to work and a leader in
Diversity, Equity and Inclusion in
2022
Global Family Leave Policy
• 99% of countries deployed the
Career development and
learning
Flexibility@Work hybrid policy
Well-being practices and
training
new Flex@Work policy to support
hybrid work
• 81% of our employees say they
have the flexibility to modify their
work arrangements as needed
• New Ways of working playbook
and training rolled out to all
managers and employees
• Mental Health mandatory training
completed by 98% of employees
New talent acquisition platform
to simplify the application
process and track the candidate
journey by stages
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
Support employees to build a
sustainable and meaningful
career by democratizing access
to development opportunities
(internal mobility, project and
mentoring) via Open Talent
Market (OTM), and upskilling for
today and tomorrow
Flexibility@Work policy
• Global Career Week in over 90
countries and >100 events
• SSE #21: x1.9 employee-driven
development interactions in 2022
vs 2020 on the Open Talent
Market platform
• SSE #22: 77% performance in
digital upskilling through the
Digital Citizenship program (vs
74% in 2021)
• SSE # 23: 43% of employees were
provided access to meaningful
career development programs
during later stages of their career
(first year of deployment)
• Global candidate feedback tool to
track recruitment experience
• Boost Your Digital Knowledge 2.0
launched in 2022
• Functional and digital skills
program (CoMET) deployed
(>60K employees)
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Chapter 2 – Sustainable development
2.1 Sustainability for all
S T R A T E G I C R E P O R T
2.1.7 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.
Management oversight
The Board of Directors
In 2013, the Board of Directors extended the powers of the
Governance & Remunerations Committee to include corporate
social responsibility (CSR) issues. Since 2014, the Group has
benefited from a specific Human Resources & CSR Committee.
This 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 meets at least three times a year (6
meetings in 2022). 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.
More details about the composition and activities of the
Human Resources & CSR Committee are provided in
Chapter 4, page 359.
The Function Committee
In 2022, the Group Sustainability Committee (created in 2010)
became the Function Committee. The committee is composed of
the Executive Committee members in charge of key Functions:
Governance, Global Marketing, Human Resources, Strategy &
Sustainability, Finance and Digital. The committee meets quarterly.
In 2022, this committee met 4 times. The Committee may seek
advice from any person it feels will help it with its work.
Main responsibilities:
• Decides the sustainability agenda;
• Sounding board for Functions;
• Escalation body for highly transversal programs, such as the
Schneider Sustainability Impact;
• Informs the Board Human Resources & CSR Committee.
The Stakeholder Committee
In order to reinforce its sustainability governance further with solid
external insights, Schneider Electric created a Stakeholder
Committee in 2021. The Committee comprises eight external
members who share the Group’s passion for sustainability, and its
mission is to oversee the delivery of short-and long-term
commitments undertaken by Schneider Electric in accordance with
its Purpose and Sustainability strategy. The company strives to
ensure diversity of the Stakeholder Committee members, in terms
of origin, gender and experience. The Stakeholder Committee
meets three times a year and is chaired by Jean-Pascal Tricoire,
Chairman & CEO of Schneider Electric, while Gwenaelle Avice-
Huet, the Chief Strategy & Sustainability Officer of Schneider
Electric, acts as its secretary.
More details about the Stakeholder Committee
are provided on page 37.
Coordination and monitoring
The Group Sustainability department
The Sustainability department, created in 2002, is part of the
Strategy and Sustainability department. It has the following
responsibilities:
• Schneider Electric’s sustainability strategy and rollout of action
plans at Group level with relevant entities;
• Central point of contact for internal and external stakeholders
regarding sustainability at Schneider Electric.
It is organized around four areas:
• 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, and external ESG reporting;
• Sustainability Transformation, in particular driving the ENGAGE
program.
Territory Sustainability Leaders
In 2021, Schneider Electric’s Country and Zone Presidents
worldwide made 200 local commitments that impact their
communities, in line with the Group’s six long-term commitments.
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 about
40 Territory Sustainability Leaders. This new network meet every
two months and works 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.
Diffusion
SSI and SSE pilots and sponsors
The execution of all Schneider Sustainability Impact and Schneider
Sustainability Essentials programs is ensured by operational
managers or “pilots”, and sponsors at SVP-level as well as
Executive Committee level to ensure proper oversight and efficient
program implementation.
Other key organizations
Several further Committees and organizations drive progress on all
pillars of the sustainability strategy, including:
• Global Supply Chain organization, with responsibilities including
safety and the environment;
• Human Resources organization;
• The Ethics & Compliance organization;
• The Corporate Citizenship department and the Schneider
Electric Foundation.
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Chapter 2 – Sustainable development
Sustainability governance at Schneider Electric
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Board of Directors
Executive Committee
Stakeholder Committee
Human Resources & CSR
Committee
Group Sustainability Committee
• Approve the sustainability
strategy and SSI
• Approve LTIP and STIP
for the Chairman & CEO
• 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
Sustainability department and territory sustainability leaders
• 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 Pilots & Sponsors
• Establishes 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 Committees, 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
Engage Employees in Sustainability
To support all employees to better understand and act for a more sustainable world, the Group launched a new internal initiative in 2022
called ENGAGE. This program has the ambition to make every employee an advocate for sustainability, thereby accelerating the Group’s
transformation and contribution to the UN SDGs.
The Sustainability School was launched in 2022. Each employee can choose learning paths and find tips to know how to act both in a
personal and professional way. The training modules cover a large range of topics from the understanding of environmental and social
challenges of our decade, to the detailed explanation of Schneider’s Sustainability Strategy.
The ENGAGE program builds on other initiatives already underway:
•
•
•
the Sustainability Essentials training deployed for all employees,
the “Act For Green” initiative, which aims at supporting all employees to pursue local environmental actions,
the UN World Environment Day on June 5th has been celebrated on all sites since 2014. Communities of ambassadors facilitate
e-learning and workshops (such as Climate Fresk),
• The Schneider Electric VolunteerIn initiative, as part of the Schneider Electric Foundation, enables Schneider employees to participate in
volunteering missions since 2012.
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Chapter 2 – Sustainable development
2.1 Sustainability for all
Internal governance model
Internal policies are 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. 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 levels of quality. 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 of 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 110.
Discover Schneider’s Trust Charter
on www.se.com
Human rights & corporate citizenship
Schneider Electric wrote 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 124). The policy was updated in 2022.
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.
S T R A T E G I C R E P O R T
Ethical business conduct
In addition to the Trust Charter, the Business Agents Policy
specifies the rules to be followed when an external stakeholder is
solicited to secure 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
Schneider Electric developed a number of 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.
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. It sets 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 2021, Schneider renewed its Supplier Code of
Conduct whereby it requires all its suppliers to review their own
operations, set 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 satisfy its customers with outstanding
end-to-end experience. Quality is every customer’s right and every
employee’s responsibility. Experience is the most important 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. Hence, 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.
These are supported by the Quality Management System, which is
improved continuously. It is in full alignment with the Trust Charter
and the ISO 9001 standard.
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S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
2.1.8 Global and local external commitments to move
forward collectively
Schneider Electric works with more than 300 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.
Organization
Description
Key actions with Schneider
Access to Energy
Alliance for rural
electrification
Solar Impulse
Foundation
All digital topics
Information
Technology
Industry (ITI)
Council
Digital Climate
Alliance (DCA)
Alliance for rural electrification advocates
for a decentralized, sustainable and
inexpensive renewable energy sector that
generates local employment and inclusive
economic growth.
Schneider is premium sponsor as of 2022 and took part in
several events such as the Energy Access Investment Forum
2022 (Dar Es Salaam), virtual forums, webinars and newsletters,
promoting the launch of Schneider’s new product Homaya Pro
and its access to energy business.
The Foundation relies on innovation to
propose solutions helping decision makers
harness the economic opportunities of the
ecological transition whilst reducing their
environmental footprint.
Schneider 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 SDG. In 2022, they
partner to host the exhibition ‘1000+ Solutions for Cities’ in
Schneider’s Grenoble headquarter “Intencity”. The Group also
works with the Foundation for its products certification.
ITI Council is the trusted leader of innovation
policy that drives sustainable, ethical, and
equitable growth and opportunity for all.
Digital Climate Alliance is a coalition of
major international corporations that has
come together to enlighten public policy on
how digitalization may help create climate
solutions.
Schneider Electric only global trade association that provides
commentary and influences all key national governments and all
key digital policy topics. ITI staff, in coordination with members,
submit feedback on nearly all key digital policies that reflect
member input.
In 2022, Schneider worked hand in hand with DCA to host a
summit on federal sustainability solutions. The event was called
“Federal Sustainability Solutions: Leveraging Technology for
Resilience and Decarbonization”.
Circular Economy and product environmental performance
Ellen MacArthur
Foundation
Membership
Product
Environmental
Profile (PEP)
ecopassport
Cybersecurity
Global
Cybersecurity
Alliance (GCA)
Cybersecurity
Coalition
The Ellen MacArthur Foundation works to
accelerate the transition to a circular
economy by developing and promoting this
new and innovative model. The Foundation
works with business, academia,
policymakers, and institutions to mobilise
systems solutions at scale, globally.
PEP employs the LCA approach and will be
acknowledged as a framework and method
that are compatible with the PEF
methodology created by the European
Commission. PEP ecopassport will be a
recognized body for the EU’s upcoming
Sustainable Product Initiative.
The Global Cybersecurity Alliance is a new
organization aiming at influencing
government policies in favor of the IEC
62443 suite of standards. Of late, they have
set up helpful meetings with DHS
(Department of High Security) and DOE
(Department of Energy) officials.
The Cybersecurity Coalition is the only trade
association that focuses on global
cybersecurity policy issues. Through its
members’ input, they provide feedback on a
variety of cybersecurity policy matters and
provides companies’ access to a number of
global cybersecurity officials.
Schneider has been a member of the Ellen MacArthur
Foundation since 2021. The goal for the Group is to gain
knowledge on circular economy, develop its network, identify
best practices, challenge its circularity strategy and share
practices.
In 2022 80,2% of Schneider’s producted were covered by
PEP-Green Premium™.
In 2022, the GCA and Schneider worked with the Cybersecurity
and Infrastructure Security Agency to map ISA/IEC 62443 to
CISA Cross-Sector Cybersecurity Performance Goals.
Schneider collaborates with the Cybersecurity Coalition to
influence digital policies and regulations throughout the world.
They for example worked together to influence European
policymakers around the implementation of the EU NIS2
Directive and pending EU Cyber Resilience Act.
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Chapter 2 – Sustainable development
2.1 Sustainability for all
S T R A T E G I C R E P O R T
Organization
Description
Key actions with Schneider
Diversity, Equity and Inclusion
World Woman
Foundation
The World Woman Foundation is a global
community of 15,000 members committed
to scaling and accelerating the impact of
women and girls through long-term
investments to expand skills, connections,
capacity, and visibility. Over the last five
years, it has built a network of 300
change-makers and 55,000 Global
Mentorship Program graduates in 20
countries.
Schneider Electric partnered with the World Woman Foundation
in 2022 to promote the role of women in the energy sector. To
mark International Women’s Day on March 8, 2022, women
leaders from the world of energy shared their stories to inspire
young women and girls to persevere with their personal and
professional aspirations.
Valuable 500
The Valuable 500 is a worldwide corporate
alliance of 500 CEOs and their organizations
that collaborates on innovations for disability
inclusion.
In June 2022, Schneider Electric joined the Valuable 500 with a
commitment to ensure that disability inclusion is on its senior
leadership agenda and that the company shares its commitment
with the business and the world.
United Nation
Women's
Empowerment
Principles (WEP)
The WEPs are a set of Principles offering
guidance to businesses on how to promote
gender equality and women’s empowerment
in the workplace, marketplace and
community.
Sustainable governance and crossfunctional topics
In 2019, Schneider Electric became the first multinational
company to achieve 100% of Country leaders committed to the
UN Global Compact / UN Women’s Empowerment Principles.
World Business
Council for
Sustainable
Development
(WBCSD)
Business for
Inclusive Growth
(B4IG)
World Economic
Forum (WEF)
GIMELEC
The WBCSD is a community of over 200 of
the world’s leading sustainable businesses
working collectively to accelerate the
system transformations needed for a
net-zero, nature positive, and more
equitable future.
Participation in various workstreams such as PACT (Partnership
for Carbon transparency) on carbon accounting, avoided CO2
emissions, SOS1.5 (a cross-sectoral framework to assist
businesses in modernizing their processes and preparing for
1.5°C enabeling businesses to see the obstacles to be
overcome and the steps required to hasten change).
Business for Inclusive Growth (B4IG) is a
partnership between the OECD and a
global, CEO-led coalition of companies
fighting against inequalities of income and
opportunities.
The World Economic Forum is a nonprofit
organization that works to improve the
status of the world by bringing together
influential figures from business, politics,
academia, and other sectors of society to
help set priorities for the globe, individual
regions, and various industries.
GIMELEC is a trade association promoting
efficiency and electrification, supported by
digitization. It has 4 Market’s Committees:
Smart Building, Industry 4.0, Smart Grid &
Infrastructures, Datacenters.
Contributed to Operational Recommendations Ethnic Diversity &
Inclusion published June 2022.
Schneider has joined the WEF and McKinsey in their Global
Parity Alliance, a global, cross-industry community whose goal
is to facilitate peer sharing between companies, and showcase
DEI Best practice. In addition, Schneider is part of the WEF’s
Good Work Alliance, to promote peer exchange between
companies on Future of Work topics. We endorsed the ‘Good
Work Standards Framework’ and submitted some best
practices. More peer sharing to come.
Schneider and GIMELEC work hand in hand on different topics
such as Energy Efficiency, Decarbonization, Digitization,
Flexibility, Circular Economy, SF6-free, Standardization...
National Electrical
Manufacturers
Association (NEMA)
NEMA is a trade association that allows
electrical equipment manufacturers to
provide feedback to relevant governments
on a variety of policy and standards.
In 2022, Schneider has been working closely with the NEMA to
advocate for the Bipartisan Infrastructure Law and on the
implementation of that law as well as implementation of the
Inflation Reduction Act’s climate provisions.
Climate
Business Council for
Sustainable Energy
Energy Transition
Commission
BCSE is a trade group for the clean energy
sector. Energy efficiency, natural gas,
renewable energy, energy storage,
sustainable mobility, and developing
decarbonization technology suppliers are all
represented by BCSE.
The Energy Transition Commission (ETC) is
a global coalition of leaders from across the
energy landscape who are committed to a
net zero world by 2050 and focused on
advancing the debate and solutions to
climate change.
BCSE and Schneider worked together to launch the 2022
Factbook which covers the progress of the energy efficiency,
natural gas, and renewable energy sectors.
Schneider has collaborated with the Energy transition
Commission on multiple topics of research such as hydrogen
and clean electricity all in the direction of Net-Zero.
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Organization
Description
Key actions with Schneider
Energy Efficiency / Electric mobility / Digital Renewables
European Alliance
to save Energy
This association actively lobbies for greater
climate ambition, in particular through more
stringent European legislation on energy
efficiency and buildings.
It influences the Energy Efficiency Directive and the Energy
Performance of Buildings Directive and Hosted Energy
Efficiency Day. It was an important participant in the Sustainable
Energy Week (organised by the European Commission).
Comité Stratégique
de Filières
Nouveaux Systèmes
Energétiques
The Committee attempts to turn the energy
transition into a chance to reindustrialize
areas. With two key goals for the energy
transition: to drive a competitive energy
transition and to grow industry, it combines
state, industrial, and trade union players
under a common roadmap.
Ethics and Human rights
Decarbonization, electrification, flexibility, microgrids, “I
decarbonize” initiative which consists in decarbonizing French
industry and offer decarbonation solutions with a significant
local content.
Cercle d’Éthique
des Affaires
Its mission is to promote ethics and
compliance in the management and
governance of French companies by
organising different meetings and
discussions with multiple parties.
In 2022, Schneider has worked with the Cercle d’Ethique des
Affaires on the Barometer of Ethical Climate in Companies,
which is a survey put in place to have a global overview of
perception of employees of large companies regarding ethics
and compliance.
Entreprises pour les
droits de l’Homme
It aims to promote the understanding and
integration of human rights within
companies through the deployment of
vigilance approaches.
In 2022, the group represented the association to a network of
Japanese companies with a presentation on human rights and
due diligence and actively participated in exchanges on human
rights indicators.
Industry 4.0 and Smart Manufacturing
OPC Foundation
FDT Group
The OPC Foundation is an industry
consortium that establishes and maintains
standards for automation, open systems
and equipment connectivity.
In 2022, OPC and Schneider worked together to publish a joint
report about the next generation of industrial network with OPC
UA FX as unified network for controller to controller (C2C) and
controller to Device (C2D).
FDT is the open standard for enterprise-
wide connection that uses IIoT and Industry
4.0 to integrate networks and devices for
industrial automation.
In 2022, FDT Group and Schneider worked hand in hand to
contribute to the missing pieces of the FDT 3 standard.
FieldComm Group
FieldComm Group is in charge of industrial
protocols implemented in Process
Automation Systems (HART, FieldBus, FDI).
FieldComm and Schneider have published a joint report to
reduce gap between Process automation and Factory
Automation networks.
Smart Grids and Sustainable Cities
T&D Europe
Smart Energy
EuropeEurope
Philanthropy
Alliance pour le
Mécénat de
compétences
Electricity transmission and distribution
equipment and services are represented in
Europe by T&D Europe. Their portfolio of
services and products covers the whole
spectrum required to transfer and distribute
power at high and medium voltages
between generators and consumers.
SmartEn integrates consumer-driven clean
energy transition solutions. The aim is to
offer opportunities for companies to
integrate an increasingly renewable energy
system.
The Alliance pour le Mécénat de
compétences is a coalition of French
companies involved in volunteering of big
companies employees.
T&D and Schneider have published a joint report on IEC 62443
adoption and its representativenes for the sector in regulations.
Schneider and SmartEn have worked hand in hand to publish
different position papers on energy systems efficiency and other
related topics.
The group has participated in the establishment of a multi-
enterprise impact study.
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Schneider Electric contribution to
standardization
At international level
IEC – International Electrotechnical Commission
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. These standards address environmental impacts
throughout life cycles to prepare for a better circular economy,
support the new energy landscape with the goal of greener energy
integration, ensure safer energy delivery and better integration of
prosumers, support the digital transformation of the industry and
any other customer values.
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
assessments 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.
Our experts contribute through joint technical committees and joint
working groups to ISO and ITU.
Smart grids and sustainable cities
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 and 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
To support high standards of health and safety, Schneider experts
continuously contribute to standards around materials and
substances. They provide standards on methodology and test
methods, raising the bar on safety and protection against toxicity.
Regarding environmental footprint, our experts ensure fair
comparison, relevance of assumptions, consistency of approach,
interoperability and meaningful content for our customers.
At National level
Our experts are involved in National Committees in US, China, India
and European countries. The French Electrotechnical Institute is a
founding member of CENELEC – European standardization body
and IEC – International standardization body.
Schneider Electric chairs many French standardization committees
hosted by AFNOR (French standards organization) and sits on
other national committees, such as the chair of the French and
Swedish Committees for environmental standardization. Schneider
was a major contributor to smart manufacturing initiatives such as
the AIF (Alliance Industrie du Futur) in France. Notably, it is a
member of the Council Board and of the IEC Conformity
Assessment Board.
At European level
CENELEC (European Committee for Electrotechnical
Standardization), CEN (European Standardization Committee), and
ETSI (European Telecommunications Standards Institute) are the
three official European standardization bodies. They have been
officially recognized by the European Union and by the European
Free Trade Association (EFTA) as being responsible for developing
and defining voluntary standards.
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.
Most Schneider Electric activities and offers are covered by
CENELEC, although CEN and ETSI also benefit. In addition,
Schneider Electric experts are participating in the development of
common works and standards in specific joint technical
committees and joint working groups.
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They are developing standards around:
Digital transformation
Digitization is the key driver for advanced manufacturing,
optimizing production with more flexibility, more interoperability,
more predictability, and continuity to provide a new level of system
efficiency and sustainability. Further data, software and tools
enabling virtual descriptions – known as digital twins – and creating
new capabilities and services are combined with Machine learning
and Artificial Intelligence, while taking account of Safety and
Cybersecurity.
•
•
•
•
In cybersecurity, Schneider is secretary of Joint Advisory Group
between IEC TC65 and ISO/IEC JTC 1/SC 27 from Enterprise
level to Field Devices and participates in several working groups
bridging Regulation to Standardization (EU, US)
It is particularly heavily involved in the working groups on Smart
Manufacturing in ISO and IEC technical committees (Chair of
ISO/TC 184, Secretary of IEC TC65, Chair of IEC SC65E)
It chairs Industrial Digital Twin Association (IDTA) to deep dive
and deploy the Asset Administration Shell as standardized
digital twin
It chairs UniversalAutomation.Org association to address a
more functional and distributed approach for the orchestration
of industrial systems.
• Terminology and catalogue data
• Product Category Rules for Life Cycle Assessment dedicated to
electrotechnical products,
• Product Specific Rules for high and low voltage equipment, low
voltage switchgear and controlgear, power electronics,
• Extension of Product Specific Rules and Environmental
conscious design to cover material efficiency or digital format,
• Quantification of greenhouse gas emission reduction and
avoidance.
Relating to Circular Economy and eco-design, Schneider chairs the
Ecodesign Coordination Group (CEN-CLC/Eco-CG) and has
contributed to the European Commission’s Circular Economy
package, and with CEN-CENELEC-ETSI developed a set of
published standards assessing factors such as durability,
reparability, reusability, recyclability, and ability to be
remanufactured, which fall within the scope of the EcoDesign
directive and the new Ecodesign for Sustainable Product
Regulation. Schneider continues to contribute to the evolution of
those standards and their extended scope and has appointed
active experts in each of the existing and new working groups. For
example, our experts are highly involved in the development of the
future standard on circular design: material efficiency within
environmentally conscious design.
As digitalization is a lever for circular economy and environmental
performance, our experts are contributing to standards on
terminology and digital formats.
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.
•
•
•
•
•
It is particularly heavily involved in the working groups on
sustainability (chairing environment and circular economy
groups, participating in working groups in product technical
committees dealing with environmental aspects (IEC TC121, IEC
TC17, CLC TC22X) 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).
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2.1.9 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, consolidating
revenues from 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 activities included, and in end-segments exclusions.
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. Schneider‘s aim is to be our customers’ digital partner of choice
to help them realise their sustainability and efficiency ambitions.
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 its
Schneider Sustainability Impact (SSI) program and is committed to
help its customers save and avoid 800 million tonnes of CO2 by
2025 (cumulatively since 2018). As of end 2022, the Group
delivered 440 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.
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
assessment.
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%
Schneider Electric supported Live Nation’s Cardiff Arena in
improving operational efficiency and the situation of
unplanned outages with MasterPact MTZ™ solution.
MasterPact MTZ™ is a circuit breaker that trips and cuts off
electricity supply to protect electrical circuits if there are
overloads due to electricity overconsumption, short-circuits
due to faults in electrical outlets or earth leakage where
electricity flows to earth via unintended paths. It also makes
maintenance easier by sending alerts to a smartphone app,
which diagnoses problems quickly and avoids downtime.
In doing so, MasterPact MTZ™ provides energy
management to identify potential savings due to overloads,
unbalanced loads, helping users reduce energy and
maintenance costs.
Live Nation is now able to monitor the health and
consumption of electrical equipment, receive proactive
maintenance recommendations so they can make better
data-backed OpEx decisions in their business.
2019 Baseline
2022 Progress
2025 target
70%
72%
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 ensure the
operational performance of equipment and avoid a decrease of
energy efficiency over time).
(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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Additionally, revenues derived from activities with fossil sectors and
others are systematically excluded, such as 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. Neutral technologies such as signaling, racks and
enclosures, access control, or emergency lighting are excluded.
Based on internal assessment, which covers all revenues of
Schneider as published in the financial statements, the total share
of Schneider Impact revenues is 72% in 2022 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.
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 contributed to a sustainable world and works
collaboratively and constructively with relevant stakeholders to
advance the transition to a sustainable and low-carbon economy.
In particular, Group experts have contributed to the Platform on
Sustainable Finance, an expert group assisting the EU Commission
in developing technical criteria.
Reporting requirements under the
European Taxonomy Regulation
The adoption of the Taxonomy Regulation(2) 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 six identified environmental objectives, which
activities are included in the EU taxonomy (eligibility), and the
screening criteria to determine if they are indeed making a
substantial contribution to at least one of the environmental
objectives, while also Doing No Significant Harm (DNSH) to the
remaining objectives and meeting minimum standards on human
rights and labor standards (alignment).
Pursuant to Article 8 of the regulation and the delegated regulation
published on 6 July 2021, the proportion of turnover, Capital
Expendiiture (CapEx) and Operating Expenditure (OpEx) resulting
from products or services associated with economic activities
considered sustainable is due to be reported progressively over
the fiscal years (FY) 2021 to 2024. In FY 2022, large undertakings
are required to disclose those three Key Performance Indicators
(KPIs) for activities eligible and aligned to climate objectives
according to the EU Climate Delegated Acts already published. Full
reporting on alignment for all six objectives is expected in 2025 (on
FY 2024).
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. To date, Delegated Acts have been
published for only two environmental objectives (climate change
mitigation and climate change adaptation) out of six. In addition,
more activities may be incorporated into the existing EU Climate
Delegated Acts in 2023. 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.
Read more on our EU Taxonomy assessment methodology
and the full list of activities eligible under the current EU
Taxonomy pages 253 to 263.
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FY 2022 EU Taxonomy reporting focuses on two out of six environmental
objectives, for which a Delegated Act has already been published
Climate change
mitigation
Circular economy
Climate change
adaptation
Pollution prevention
and control
Sustainable use and
protection of water
Biodiversity and
ecosystems protection
1. Schneider Electric’s main eligible activities identified under Climate Delegated Act
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
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
Manufacture of renewable
energy technologies,
equipping wind and solar
power generation
capacities
Equipment and projects
for the construction of
transmission and
distribution infrastructure
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
29% of turnover
| 54% of CapEx
| 50% OpEx
Eligible activities
2. Evaluation of eligible activities against alignment criteria
Alignment criteria
Conclusions of the assessment
Reference for details
1. Substantial contribution to environmental
objectives? (Technical Screening Criteria)
4% of revenues from eligible offers not
aligned with technical criteria
Section 2.7.2 page 253
2. Compliance with DNSH?
• Climate change adaptation (Appendix A of
Annex 1 to the Delegated Regulation)
Aligned
Section 2.3.1 page 150
• Sustainable use and protection of water and
Aligned
Section 2.4.4.3 page 191
marine resources (Appendix B)
• Transition to a circular economy
• Pollution prevention and control
(Appendix C)
Aligned
4% of revenues from eligible offers not
aligned
Section 2.4.5 page 195
Section 2.7.2 page 253
• Protection and restoration of biodiversity and
Aligned
Section 2.4.1 page 176
ecosystems (Appendix D)
3. Compliance with minimum safeguards?
Aligned
Section 2.7.2 page 253
Aligned activities (Complies with all 3 criteria
20% of turnover
| 27% of CapEx
)(1)
| 50% of OpEx
(1) Due to the impact of rounding on individual elements within this disclosure table numbers may not exactly sum to the Group total.
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Chapter 2 – Sustainable development
Calculation of Taxonomy-eligible and
-aligned turnover
Calculation of Taxonomy-eligible and
-aligned CapEx and OpEx
Schneider Electric identified several business activities that are
eligible (i.e. listed) according to the current EU Climate DA. We
provide the list of those activities in our methodological notes on
pages 254 and 255.
Alignment of each activity has then been assessed against
Technical Screening Criteria (TSC), Do No Significant Harm
(DNSH) and minimum safeguards criteria with the Group’s experts
and with the support of external consultants. As a result,
Taxonomy-eligible and -aligned turnovers amount to 29% and 20%
respectively, representing EUR 9,775 million and EUR 6,934 million
respectively out of EUR 34,176 million.
The difference between eligibility and alignment is first related to
the Technical Screening Criteria (TSC) for Activity 4.9 (Transmission
and distribution of electricity). Alignment with this TSC is dependent
on the carbon intensity of the electricity supply in the country of
sale and the type of power generation source being connected to
the grid. 4% of the taxonomy-eligible revenues from this activity is
made in countries (such as the USA and China) where the carbon
intensity is above the threshold stipulated in the TSC, or
contributing to connect to the grid a power generation source with
carbon intensity above the threshold stipulated in the TSC, hence
considered as not aligned.
The second reason for the difference comes from the generic
criteria for DNSH to pollution prevention and control regarding use
and presence of chemicals.
About 1% of Schneider eligible revenues do not comply with the
Restriction of Hazardous Substances (RoHS) Directive and are
therefore not aligned. In addition, the Taxonomy regulation
stipulates that products using substances identified in the
candidate list for eventual inclusion in the list of substances subject
to authorization, Annex XIV of Regulation (EC) 1907/2006 are not
aligned, except if they are considered of essential use. However,
the concept of essential use has not yet been defined by the
European Commission. Therefore, Schneider has taken a
conservative approach and declared as non-aligned all revenues
coming from such products, amounting to 3% of eligible revenues.
All other eligible activities comply with Technical Screening Criteria,
do not cause any significant harm to any of the other environmental
objectives and respect the minimum safeguards as specified in
Annex 1 of the EU Climate Delegated Act.
Read more about calculation method of
Taxonomy-eligible and -aligned turnover
pages 253 to 254.
Read more about the DNSH
checks performed page 255.
In 2022, Taxonomy-eligible and -aligned CapEx amount to 54% and
27% respectively, representing EUR 854 million and EUR 419
million respectively out of EUR 1,573 million.
To compute the Group’s Taxonomy-eligible and aligned capital
expenditure, CapEx related to assets, processes and business
combinations associated with Taxonomy-eligible and aligned
activities were calculated using allocation keys of eligible, and
respectively aligned, turnover per business and operations, except
for Research and Development (R&D) CapEx and IFRS 16 long
term leasing of buildings CapEx, which have been qualified
through the prism of CapEx for eligible and aligned individual
measures. Indeed, as described more exhaustively in section 2.3.4
“Investing to achieve the Group’s climate strategy and vision”, page
158, each and every R&D project of the Group demonstrating a
substantial carbon footprint saving, CapEx associated to R&D
projects are both Taxonomy-eligible and -aligned under the
European Taxonomy activity 3.6 (Manufacture of low carbon
technologies).
The difference between eligibility and alignment in turnover, as
explained in the previous section, also applies to capital
expenditure. In addition, the fact that capital expenditure based on
IFRS 16, related to long-term leasing of buildings, is fully eligible
but not aligned increases the difference between the Group’s
Taxonomy-eligible and -aligned CapEx.
In 2022, Taxonomy-eligible and -aligned OpEx amount to 50%,
representing EUR 856 million out of EUR 1,716 million.
To determine the Group’s European Taxonomy-eligible and -aligned
operating expenditure, only non-capitalized costs related to
Research and Development (R&D) are analyzed for the
establishment of the numerator of the OpEx KPIs. This includes
non-capitalized costs relative to R&D projects but also, among
others, costs incurred in relation with support and platforming,
costs of IT global applications dedicated to R&D, costs relative to
continuous engineering costs for quality, productivity and
obsolescence. As mentioned for CapEx, each R&D project of the
Group demonstrating a substantial carbon footprint saving, the
numerators of the KPIs correspond to operating expenditure
directly associated to Group’s R&D projects: these OpEx are both
Taxonomy-eligible and -aligned under the European Taxonomy
activity 3.6.
Read more about calculation method
of Taxonomy-eligible and -aligned capital
and operating expenditures pages 254 to 255.
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Chapter 2 – Sustainable development
2.1 Sustainability for all
S T R A T E G I C R E P O R T
Spotlight: Schneider supports the development of
EVs with EcoStruxureTM EV Charging Expert
While the electrification of transportation is critical in the journey to a net-zero destination, this transition
will impact the energy demand in multi-family, commercial and industrial buildings since up to 40% more
energy will be required. Building owners and facility managers need to think smarter to manage their
buildings’ electricity loads to accommodate this increased consumption.
EcoStruxure™ for eMobility (with EcoStruxure™ EV Charging
Expert as the edge control) is the solution to that challenge,
enabling end-to-end EV smart charging solutions for an
efficient, resilient and sustainable future all-electric mobility at
homes, buildings, and infrastructures. This activity is qualified
as “Infrastructure enabling low-carbon road transport and
public transport” (6.15) in the EU Climate DA.
Powered by Schneider Electric’s EcoStruxure™ EV Charging
Expert, the intelligent EV charging infrastructure ensures an
optimized use of energy where the charging infrastructure
owners or operators can monitor, control and maximize the EV
charging more efficiently based on real-time available power in
the property. By leveraging the existing power infrastructure and
EcoStruxure™ EV Charging Expert, more EV chargers can be
installed to respond to an increase in demand without the need
to increase the existing power capacity. The system can adapt
and limit the load dedicated to EV charging installations, define
on-peak and off-peak time-of-use periods to optimize EV
charging and avoid facility disruption and operating losses.
Schneider’s EV chargers are Green PremiumTM certified and
recognized with the efficient use of energy and natural
resources, optimization of the total cost of ownership of
customers’ assets, regulatory compliance and strong value
propositions through third-party labels and services.
Schneider Electric is actively promoting the development of EVs
with more than 150,000 EV chargers sold in 50 countries. For
example, in Hong Kong, Schneider Electric recently leveraged
its strategic partnership with Sino Group and expanded its
network with another 420+ EV chargers – in addition to 1,700+
EV chargers already installed in 53 locations there – at Grand
Central and the adjacent YM2, the new landmark in Kowloon
East, making it the largest EV charging site at a composite /
residential new development in Hong Kong.
Through close collaborations with all stakeholders,
Schneider aims to further boost EV charging network by
offering 15,000 EV chargers across the territory in 2025,
with the hope of bringing more convenience to the EV
community and making the city more sustainable.
40%
more energy will be required.
180,000+
EV chargers sold in 50 countries since 2018.
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S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
2.1.10 Key external frameworks and ESG ratings
External guidelines
The United Nations Global Compact and
Sustainable Development Goals (SDGs)
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.
Schneider Electric is committed to contributing to the 17 SDGs
through its sustainability programs.
Consult Schneider’s latest COP on the
Global Compact website www.unglobalcompact.org
International Organization for
Standardization (ISO)
Schneider Electric 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 189; ISO 45001, page 128; ISO
9001, page 94; ISO 27000, page 305; and ISO 14025 and
14021, page 187.
The Global Reporting Initiative (GRI)
Schneider Electric SE has reported in accordance with the GRI
Standards for the period from 1 January 2022 to 31 December
2022. 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.
Consult Schneider’s GRI reports on the
Sustainability Reports page on www.se.com
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 pages 264 and 265 of this
report.
The Task Force on Climate-related
Financial Disclosures (TCFD)
In June 2017, the TCFD, a working group led by Michael
Bloomberg under the 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 pages 266 to
269.
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 2,000+ 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 269). The Group’s Net Zero commitment was
validated with the new Net Zero Standard in 2022.
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.
Consult Schneider’s ESG reporting according
to various external frameworks (Schneider
Sustainability Disclosure Dashboard) on www.se.com
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Chapter 2 – Sustainable development
2.1 Sustainability for all
S T R A T E G I C R E P O R T
ESG and Impacts ratings and awards
EcoVadis Advanced level and Platinum rating
Dow Jones Sustainability Index (DJSI)
In 2022, Schneider Electric ranked 1st among industry peers in
S&P Global’s Corporate Sustainability Assessment (CSA) with a
score of 90/100 (top 1%). The Group was included in the DJSI
World Index for the 12th year in a row, which is comprised of
332 corporate leaders in sustainability, representing the top
10% from among around 2,500 companies worldwide.
CDP Climate A List and Supplier
Engagement Leader
In 2022, Schneider Electric was among just 283 Climate Change
A List companies out of 18,600+ companies assessed by CDP,
and the only one in its sector to achieve this 12 years running.
Schneider Electric also scored A in CDP’s Supplier Engagement
Rating (SER) in 2022. 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 5th participation in
CDP’s Water Security questionnaire.
Vigeo Eiris industry leader
Following assessment in July 2022 by Vigeo Eiris (part of
Moody’s ESG Solutions), Schneider Electric ranked first in the
Electric Components and Equipment sector at the highest level
(Advanced), with a rating of 73/100. As of February 2023, the
Group is part of the Euronext Vigeo World 120, Europe 120, Euro
120, France 20 and CAC40 ESG indices, which are composed
of the highest-ranking listed companies in terms of their
performance in corporate responsibility.
FTSE4Good
Schneider Electric is part of the FTSE4Good Developed, FTSE
Environmental Opportunities, and FTSE EO Energy Efficiency
indices.
In 2023, Schneider Electric has achieved Advanced level with a
rating of 79/100 and obtained a Platinum medal (top 1% of all
companies assessed) for the 3rd 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
As of February 2023, Schneider Electric was also recognized as
the Top-Rated ESG Performer, ranking 11/255 in its industry
group with a 11.3 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.
Global 100 most sustainable corporations
Schneider Electric was featured on Corporate Knights’ Global
100 list of corporate sustainability leaders every year since
2012, ranking 1st in 2021, 4th in 2022 and 7th in 2023.
2022 Terra Carta Seal
In January 2023, the Group was one of the 19 companies being
awarded the Terra Carta Seal, which recognizes global
companies who drive innovation and demonstrate their
commitment to, the creation of genuinely sustainable markets.
2022 most responsible French companies
In November 2022, Schneider was ranked 1st among 250 French
companies by French magazine, Le Point and German
independent institute, Statista for its commitment to
sustainability and its innovative tool - the SSI Schneider
Sustainability Impact.
Sustainability external ratings
DJSI
CDP Climate
Change
Vigeo Eiris
EcoVadis
MSCI ESG
Ratings
Sustainalytics
2022 Schneider score
Industry average score
90/100
21/100
A
B-
Progress vs. 2021
+4 pts
Same
73/100
39/100
+2 pts
79/100
45/100
-3 pts
AAA
BB
Same
Low risk
Low risk
Same
Highlights
12th year in
world index
12th year
in A List
World 120 and
Europe 120
Indices
Platinum
medal
AAA for
twelfth year
1st in industry
Assessed universe (# companies)
2,500
18,600+
4,800
90,000
8,500
15,500
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S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
Other awards in 2022
Diversity & Inclusion
Workforce Disclosure Initiative (WDI)
In 2023, Schneider obtained a disclosure score of 79% (up from
78% in 2022), above the industry average of 64%, in the
investor-backed WDI survey, which aims to improve corporate
transparency and accountability on workforce issues.
Impak Finance
In 2022, the independent, B-Corp Certified, impact rating
agency, has ranked Schneider Electric 1st in CAC40 for its
contribution to the UN Sustainable Development Goals. The
Group obtained a score of 495/1000, way ahead of the CAC40
average of 212/1000.
Climate
Carbon Clean 200 list
Schneider Electric has consistently been included in Corporate
Knights’ Carbon Clean 200 list since ranking began in 2016, for
its revenue devoted to energy transition. In 2023, the Group
ranked 11th worldwide.
EcoAct Climate Reporting Performance
In 2022, Schneider Electric ranked 7th for international companies
on EcoAct’s Climate reporting performance leaderboard.
Supply Chain
Best Global Sustainable Supply Chain
Organization
Schneider Electric was 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.
2022 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 partners and internal stakeholders in sustainability.
Gartner 2022 Supply Chain top 25
Schneider ranked 2nd in 2022 in the Gartner Supply Chain top
25, and 1st in the Europe Top 15 for third consecutive year,
recognizing the exemplary management of its value chain.
2022 CIPS Excellence in Procurement Awards
In 2022, Schneider Electric was awarded the “Best Sustainability
Project” and “Overall Winner” for its Zero Carbon Project.
Bloomberg Gender Equality Index
In 2023, Schneider confirmed its inclusion in Bloomberg’s
Gender Equality Index among 484 companies for the 6th year in
a row. The Group achieved an overall score of 81%, up from
77% vs 2021 and well above the index average of 73%.
Financial Times Top 50 Diversity leader 2022
The Group was recognized as a Top 50 Diversity leader by the
Financial Times for the 3rd year in a row, ranking 5th in its industry.
Equileap Global Gender Equality Report and
Ranking
In March 2023, Schneider Electric ranked 30th globally out of
3,787 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.
Refinitiv Top 100 Company 2022 Diversity and
Inclusion Index
In 2022, Schneider Electric was included as one of the top 100
companies by Refinitiv, ranking 5th in its industry.
Ethics and Governance
Ethisphere
In 2023, 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.
Grand Prix de la Transparence
In 2022, Schneider Electric was included in the Top 10 most
transparent companies by ranking 9th out of 126 companies.
Employer awards
Universum Top 50 World’s Most Attractive
Employers
In 2022, Schneider was recognized by students worldwide as
one of the World’s Most Attractive Employers ranking 29th in
Engineering. Over 185,000 respondents from the Universum
Talent Surveys particiapted to the ranking.
Fortune’s World’s Most Admired Companies
In 2023, Schneider was recognized by Fortune as one of the
“World’s Most Admired Companies” for the sixth consecutive
year, ranking 3rd in the electronics industry sector.
Glassdoor
Schneider received a score of 4.2/5 from Glassdoor as of
February 2023. 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
S T R A T E G I C R E P O R T
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 Responsible Workplace
2.2.5 Compliance with tax regulations
110
111
117
118
119
2.2.8 Human rights
2.2.9 Employee health and safety
2.2.10 Vigilance plan
2.2.11 Relationships with project execution contractors
2.2.12 Sustainable relationships with suppliers
2.2.6 High standards for the quality and safety of our products 119
2.2.13 Vigilance with local communities
2.2.7 Digital trust and security
122
124
127
130
135
136
146
Context and Group’s commitments
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. 2022 enabled Schneider to
strengthen its commitment to Trust by relying on actions and tools
to helps all stakeholders reinforce their trust in the company and
collaboration between all actors. Therefore, after creating the Trust
Charter in 2021, it was time for Schneider to deploy its new Code of
Conduct.
Present in over 100 countries with diverse standards, values, and
practices, Schneider Electric is committed to behaving responsibly
in relation to all its stakeholders. Recognizing that its responsibility
extends beyond compliance with local and international
regulations, the Group is engaged to doing business ethically,
sustainably, and responsibly. At Schneider Electric, we believe that
trust is earned and starts with walking the talk, in relying on
mechanisms and not only intentions.
Schneider lives up to the highest standards of corporate
governance, through initiatives that monitor and educate teams on
ethics, cybersecurity, safety, and quality. The Trust Charter is the
evolution of the Group’s Principles of Responsibility and sets out
the expectations of how we work at Schneider, and it equips teams
to confront any unethical behavior they might encounter.
Under our 2025 Sustainability Strategy, we commit to live up to our
principles of trust by holding ourselves and all around us to high
social, governance and ethical standards. In this report, we share
our progress on the transformations achieved in 2022 under the
Trust pillar of our Schneider Sustainability Impact and Schneider
Sustainability Essentials programs.
“As business risks become more
interconnected and unpredictable,
building resilience is top of mind:
even with the best risk
management systems in place,
setbacks are bound to occur.
Therefore, it is key for companies
to rely on clear frameworks such
as the Trust Charter – our
Schneider Electric Code of
Conduct – to earn and nurture
trust with our stakeholders.”
Hervé Coureil, Chief Governance Officer and Secretary General
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S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
Progress of the Trust commitments
Schneider
Sustainability
Impact
(SSI)
Essentials
(SSE)
#
6.
7.
12.
13.
14.
15.
16.
17.
2021–2025 programs
Baseline(1)
2022 progress(2)
Strategic suppliers who provide decent work
to their employees
Level of confidence of our employees to report
unethical conduct
Deploy a ‘Social Excellence’ program through
multiple tiers of suppliers(3)
Train our employees on Cybersecurity and
Ethics every year
2022: 1%
1%
2021: 81%
+1pt
+10pts
--
In progress
--
2020: 90%
95.5%
100%
Decrease the Medical Incident rate
2019: 0.79
0.58
Reduce total number of safety recalls
issued to 0
Be in the Top 25% in external ratings for
Cybersecurity performance
Assess our suppliers under our
‘Vigilance Program’
2020: 25
24
2020: Top 25%
Top 25%
Top 25%
2020: 374
2,083
4,000
2025
Target
100%
0.38
0
These programs
contribute to UN SDGs
(1) The baseline year for each indicator is provided together with its baseline performance.
(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 #+1 and SSE #12 in 2022), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 270). Please
refer to page 242 for the methodological presentation of each indicator. The 2022 performance is also discussed in more details in each section of this report.
(3) 2022 performance is in progress for SSE #12 ‘Social Excellence’ because the program is still in development.
2022 Highlights
Schneider was named as
Ethisphere’s ‘most ethical
company in the world’ in 2022,
for the 12th consecutive year.
Schneider was among the top
10 in the Transparency
Awards 2022.
Triple recognition in UK and
Ireland, for demonstrating
excellence in safety, health and
environmental impact.
Gartner #1 Supply Chain in
Europe. Our third consecutive
year at the top.
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
2.2 Driving responsible business with Trust
2.2.1 Trust Charter, Schneider Electric’s Code of
Conduct
2.2.1.1 Earning trust with people
2.2.1.2 Trust Charter
Trust powers all Schneider Electric’s interactions with its
stakeholders and all relationships with customers, shareholders,
employees, and the communities they serve, in a meaningful,
inclusive, and positive way. Trust is evident in the following ways:
• Trusted Teams that are built thanks to leaders setting the tone
and exemplifying Schneider Electric’s culture, as well as through
creating for all our employees equal opportunities, harnessing
the power of all generations, championing well-being and new
ways of working, and being S.A.F.E. (Self, Activity, Facility,
Environment) 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;
• 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 information
technology and related intellectual property assets as well as
Schneider Electric’s reputation;
• 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.
Cybersecurity
C ustomers an
C ustomers an
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Discover our Trust Charter
on www.se.com
In 2021, Schneider Electric launched the Trust Charter, which acts
as the Group’s Code of Conduct and demonstrates its commitment
to ethics, safety, sustainability, quality, and cybersecurity.
Schneider Electric believes that trust is a foundational value. It is
earned and serves as a compass, signaling true north in an ever
more complex world, and Schneider Electric therefore considers
trust to be core to its environmental, social, and governance (ESG)
commitments.
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 the Group’s Code
of Conduct.
As trust fuels empowerment, each section of the charter states
clear Dos 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.
2.2.1.3 Deployment of the Trust Charter
In addition to the Trust Charter being available in 30 languages on
Schneider’s website (se.com), a Trust Portal was made available to
Schneider’s employees to guide them towards related content such
as policies, useful contacts, sites, guidelines, templates, and reports
for each section of the Trust Charter. In 2022, the Group saw an
increase of global policy views of +72% compared with 2021.
Finally, the Trust portal is an Intranet portal that gives access to the
right resources to all employees when they face situations in which
they need support, and to help give them the confidence to alert
any unethical behavior they witness or even remain informed of the
news the Group provide on new Trust programs or policies they
publish. As a testimony of the risen awareness and engagement to
Trust, more than 17,000 unique views between February and
November 2022 have been recorded on the Trust Portal.
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 its Code of Conduct.
2022 was a strong deployment year for the Trust Charter. In fact, as
a proof of this increasing involvement in Trust at all levels, almost
23,000 downloads of the Trust Charter on se.com have been
recorded, which takes into account not only employees but all the
Group’s other stakeholders.
The mandatory Schneider Essentials trainings aim at ensuring that all
employees are trained on the most important topics covered by the
Trust Charter, notably: “Trust at Schneider Electric”, “Cybersecurity
for Schneider Electric 2022”, “We All Have Mental Health” and “The
Schneider Electric Story”. Thanks to the high level of engagement of
all employees and the effort of sensibilization, the course dedicated
to Trust was completed at 97.5% overall.
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Chapter 2 – Sustainable development
The Trust Month, the largest and longest-running global internal
communication campaign, has been a great medium to draw
together all the pillars of Trust into a single event. The campaign
consisted of 15 keynotes, 70 webinars and more than 15,000
webinar attendees. By offering different activities and involving all
employees in the events the group noticed a very high level of
engagement and impact, with 88% of participants agreeing they
learnt something that impacts their daily work life.
Discover the Trust Charter of Schneider Electric
on www.se.com
2.2.2 Ethics & Compliance program
2.2.2.1 Context
Over the years, Schneider Electric has earned the trust of its
customers, shareholders, employees, and communities through the
quality of its products and its sustainability commitments. To fully
serve these stakeholders, the Group’s commitment to business
integrity must be equally robust. This means acting at all times in
accordance with the ethical principles it has set and in compliance
with the laws and regulations in force in all the countries where it
operates.
2.2.2.2 Risk and opportunities
Unethical practices or non-compliance of Schneider Electric, its
employees or third parties acting in its name and/or on its behalf
with applicable laws and regulations may expose Schneider
Electric to criminal and civil proceedings, reputational damage,
business interruption and damage to shareholder value. Due to
broader externalities, the Group’s exposure to those risks has been
increasing for several years, through its geographic expansion,
participation in complex projects, and a large range of acquisitions.
Moreover, over the past years, there has been an increase in law
enforcement by public authorities, new regulations, and higher
reputational risk with media exposure.
In 2021, Schneider Electric carried out a specific risk mapping
dedicated to “Ethics and Compliance” regarding the following
risks: Corruption, Conflict of Interest, Human Rights & Labor Laws,
and Sanctions & Export Control. Its objective is to capture
operational risk exposure at zone level, based on local interviews
led by the Regional Compliance Officers and the Legal teams.
The process at regional level was as follows:
• 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. In addition, a global risk mapping was
consolidated at Group level.
• Step 3 – each region defined action plans to reduce the risk
exposure. In addition, a set of global action plans was
established at Group level. All action plans were monitored
during the course of 2022.
By contrast with those risks, there is competitive advantage in
approaching this proactively. Companies can experience
significant improvements when they hold themselves to high
standards of integrity. The primary benefits range from increasing
employee satisfaction, improving workplace culture, maintaining
legal compliance and strengthen public reputation. It can also
reinforce the engagement and loyalty of customers, partners,
suppliers and local communities.
2.2.2.3 Group policy
Through its Ethics & Compliance program, Schneider Electric aims
to prevent, detect and mitigate integrity risks, including corruption,
fraud, violation of human rights, health and safety, responsible
workplace (including discrimination, harassment and sexual
harassment), anti-competitive practices, sanctions and export
control. The program design and operation are influenced by
the Group’s risk profile, business model, organizational structure
and culture.
To reflect this commitment to integrity and to enable employees to
respect the Trust Charter, Schneider Electric deployed global and
local policies: Anti-Corruption Policy (aligned with French Sapin II
law requirements), Conflict of Interest Policy, Business Agents
Policy, Anti-Harassment Policy, Export Control Policy, and Case
Management & Investigation Policy.
In 2022, the Group also updated and deployed a set of new
policies: Gifts & Hospitality Policy, Competition Law Policy, Human
Rights Policy, Whistleblowing Policy, Philanthropy Policy, and
Sponsorship Policy. Moreover, to ensure that the principles and
rules of the Ethics & Compliance program apply throughout the
Group and for new entities joining the Group, the Ethics &
Compliance department worked on specific Trust Standards. This
work is part of the Governance Models program (see page 114),
applicable during the acquired company’s integration.
All Schneider Electric employees are expected to comply with
Schneider’s Ethics & Compliance program. The Ethics &
Compliance program is based on management commitment which
makes its pillars effective and on risk assessment which assists
decision making, determining the risks to be treated and the priority
to implement the treatment.
Management commitment
Monitoring
& Audit
Risk
Assessment
Corrective
actions
Code of
conduct
& Policies
Training &
Awareness
Whistle
blowing
Ethics &
Compliance
Program
Specific
accounting controls
Third parties
integrity
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
2.2 Driving responsible business with Trust
2.2.2.4 Governance
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Board – Audit & Risk Committee
Executive Committee
Define, explain and disseminate priorities
Speak-Up Supervision
Corporate departments
Group Operational
Compliance Committee
Group Disciplinary
Committee
Detect and monitor the
Ethics & Compliance program
Detect and manage
non-compliance
Disciplinary review of
non-compliances and levy
sanctions
Regional, Zone, Cluster and
Country Ethics & Compliance
Committees
Ensure implementation of Ethics
& Compliance program
accordingly to risks
Regional Compliance
Officers
Ethics Delegates
Support employees in
navigating with Ethics &
Compliance program. Support
prevention, detection and
management of misconduct
Support awareness of
employees about Ethics &
Compliance in Schneider
Electric
The Ethics & Compliance program is managed through a
dedicated governance framework:
Speak-Up Supervision
• Board level: 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. In addition, the
Directors agree on the audit plan which covers several audits
related to the Ethics & Compliance program.
• Executive level: Since April 2022, the Ethics & Compliance
program is overseen by the Group Executive Committee,
through the Group Function Committee. This Committee merged
several existing committees, including the pre-existing Group
Ethics and Compliance Committee.
• Corporate level: Schneider Electric has created a standalone
Ethics & Compliance department, chaired by a Chief
Compliance Officer acting on behalf of the Group Ethics &
Compliance Committee, and reporting to the Chief Governance
Officer & Secretary General, to drive the strategy of the Ethics &
Compliance program. The Ethics & Compliance department
includes the following teams: Group Compliance, Group HR
Compliance, Fraud Examination, Health & Safety, and IT Assets
Governance. It works closely with the Legal, Human Resources,
Finance, Digital and Strategy & Sustainability departments, as
well as Internal Control and Audit; which are directly responsible
for managing certain specific risks.
Schneider Electric employees must feel free and
psychologically safe to share their ideas, opinions, and
concerns, without fear of retaliation. To ensure the effectiveness
of that Speak Up mindset and related whistleblowing system,
the Group has created two specific committees:
• The Group Operational Compliance Committee (GOCC)
detects and manages cases of non-compliance with the
Ethics & Compliance program in accordance with the
Whistleblowing Policy and Case Management &
Investigation Policy, 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.
• The Group Disciplinary Committee levies sanctions and
remediation actions on serious non-compliance cases to
guarantee a fair and transparent disciplinary policy upon
request of the GOCC. The Group Disciplinary Committee is
composed of the following members: Chief Governance
Officer & Secretary General, Chief Human Resources
Officer, Chief Compliance Officer (secretary of the
Committee), Chief Legal Officer, and one rotating member.
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• Operational level: 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.
Ethics Delegates, Schneider Electric’s
Integrity Ambassadors
Ethics Delegates is an honors program designed to enable
well-respected employees with high personal integrity to
support the promotion of the Ethics & Compliance program,
influence the behavior of the people and the culture of
Schneider Electric, and help embed ethics and compliance in
how people do their jobs within their business/location. In 2022,
the community had 250 members.
Experience feedback from Isabel Matos, Ethics Delegates in
South America in 2022: “I have been an Ethics Delegate for
four years in South America. I am proud to be part of this
community. We have the opportunity to guide people to be
compliant with legal regulations and to make right decisions.
As the company is totally committed with its Trust Charter, we
have all support needed from stakeholders and employees to
have a strong governance and risk management in place”.
2.2.2.5 Actions and impacts
Management Commitment
Rules and policies alone do not suffice. Management sets the
company standards and promotes a culture of integrity and a Speak
Up mindset. Top management regularly expressed its commitment
through statements and extensive communication (called “tone from
the top”), such as during the Trust Month organized in June 2022.
This global event marked the deployment of the Trust Charter. Its
launch was supported by the Chairman and CEO in a video in which
he notably reminded colleagues of the importance of business
running on trust and integrity. This integrity is also expressed by
middle- and first-line management (called “tone from the middle”) by
spreading the right message in their teams and supporting reporting
of misconduct.
Management commitment is evidenced by the participation of
Schneider’s Chairman and CEO who sits on the global Board of the
United Nations Global Compact. Schneider Electric also works with
other companies and stakeholders to build integrity and common
standards. The Group participates in the initiatives of many
non-governmental organizations (NGOs) and professional
associations, such as Transparency International France, Le Cercle
d’Éthique des Affaires (The Ethical Business Circle), International
Deontology & Compliance Committee of the Mouvement des
Entreprises de France (Movement of the Enterprises of France) and
Anti-Corruption Committee of Business at OECD (BIAC).
Training and awareness
Internal communication provides employees with essential baseline
information on Schneider Electric’s integrity commitment while also
raising awareness and understanding of the Ethics & Compliance
program. To do this, the Group created a dedicated intranet page,
a global internal social network group and a specific email address
to answer questions. Schneider Electric also regularly distributes
videos and other communication assets on integrity-related
subjects to its employees. In addition, communication around the
Ethics & Compliance program is rolled out locally by the Regional
Compliance Officers and Local Internal Communication teams.
Each year a global campaign of mandatory training is run for all
employees, called Schneider Essentials, from March to the end of
September. Training is available in 18 different languages in the
organization’s Learning Management System. In 2022, Schneider
Essentials trainings were: Trust at Schneider Electric,
Cybersecurity, We All Have Mental Health and The Schneider
Electric Story. For around 40,000 employees exposed to corruption
risks, an additional anti-corruption training is required each year.
A number of specific trainings are also delivered:
• A dedicated module on Ethics & Compliance was prepared for
Country Presidents. The module raises Country Presidents’
awareness about their role and responsibility in supporting the
Ethics & Compliance program.
• The Ethics & Compliance program includes dedicated training
for leaders of companies acquired as part of the integration
process. 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 2022, ad hoc learnings were organized for all employees and
managers as part of the Trust Month in June 2022 (e.g.
Speak-Up) in sensitive geographic areas (e.g. Brazil, India) or in
locations where a specific risk is higher (such as the export
control risk).
•
The Group monitors and discloses its completion rate on trainings on
ethics (Trust Charter and anti-corruption for eligible employees) and
cybersecurity, aiming for 100% completion each year (SSE #13). The
performance of this KPI received a “limited” external assurance level
each year as part of the Group’s annual extra-financial audit. At the
end of 2022, SSE #13 achieved a 95.5% completion rate.
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Chapter 2 – Sustainable development
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2.2 Driving responsible business with Trust
Trust
SSE #13
100% of employees trained every
year on Cybersecurity and Ethics
Feedback received from employees confirm that the
trainings are efficient in helping them to act with integrity.
Cybersecurity training is regarded as “Good training.
Essential in today’s world.”
Trust at Schneider Electric training: “We have never had
this topic before in training but this is great course!”
Anticorruption training: “Excellent!”
2020 Baseline
2022 Progress
2025 target
90%
95.5%
100%
External communication informs stakeholders of Schneider’s
integrity and of the design and implementation of the Ethics &
Compliance program. The Group communicates through a
webpage dedicated to Ethics & Compliance and the dissemination
of specific external communications. Schneider Electric also
responds to several questionnaires from extra-financial rating
organizations related to ethics and compliance. In 2022, Schneider
Electric was once 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.
7 steps to securing long-term value creation in acquisitions
Third-parties integrity
Third-party relationships may create risks for companies, including
corruption exposure and impact on brand and reputation.
Conducting third-party due diligence is important to make informed
decisions and avoid potential problems associated with
compliance, regulations and public image:
• Customer questionnaires: Schneider Electric is a third party
for its clients and is subject to evaluation as such. The Group
regularly responds to questionnaires and other additional
requests to demonstrate its integrity to its customers.
• Compliance screening: In 2022, 100% of direct customers
were screened for both export control and sanctions as well as
corruption risks. A pilot was also launched to provide automatic
real-time screening of all direct customers. The Group is also
working to screen its vendors and started an initial screening of
its strategic direct vendors in 2022.
• Business Agents: Schneider Electric has implemented a due
diligence process for its intermediaries that it qualifies as
“Business Agents”. The Business Agent Policy sets out the rules
under which Schneider Electric will determine whether there is a
legitimate business purpose before engaging. The Ethics &
Compliance department performs the due diligence and
manages the approval process by analyzing risks of corruption,
sanctions, and unethical practices.
• Mergers and acquisitions: M&A operations represent specific
risks regarding ethics and compliance. 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 developed by the Ethics &
Compliance department, the Legal department and the M&A
team, ensuring a methodology that fits with M&A processes and
ways of working. In 2021, this process was extended to the
management of Human Rights risk. In 2022, the integration of
ESG assessments at each stage of the M&A process has been
reinforced to further protect the Group and accelerate the
integration of new entities to its Sustainability Strategy and
reporting.
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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Specific accounting controls
Schneider Electric has developed accounting control procedures
to ensure that books, records, and accounts are not used to
conceal corruption or the influence peddling. In 2022, a revised
cross-functional program involving mainly Accounting, Internal
Control, Digital and Ethics & Compliance, as well as upstream
functions such as Procurement, Sales, Marketing, was launched to
further improve and digitalize the defined preventive and detection
controls with the sponsorship of Executive Committee members.
The program’s priorities were defined based on the results of the
2021 Ethics & Compliance risk assessment, i.e. Gifts & Hospitality,
Travel & Expenses, Sponsorship, Donations, Business Agents,
Marketing Development Funds, Performance Bonuses.
Whistleblowing
As part of the Speak Up mindset, and as developed in the
Whistleblowing Policy, Schneider Electric employees have a
responsibility to report potential unethical behaviors.
histleblowing corresponds to all methods of reporting available to
employees, interns or contractors, and external stakeholders
(suppliers, subcontractors, customers, business agents, etc.) to
voluntarily report a potential violation of laws and regulations, and/
or of the Group’s Trust Charter and Group policies.
At Schneider Electric, stakeholders, either internal or external, may
report concerns either by contacting an appropriate person in the
Group (manager, HR business partner, Legal Counsel, or
Compliance Officer) and/or by using the Trust Line, Schneider
Electric’s whistleblowing system. The latter is available online
globally, at all times, and protects the anonymity of the
whistleblower (unless there is legislation to the contrary). 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 case management.
Case management: a structured process led by Group Compliance
1. Report
2. Assess
3. Investigate
4. Remediate
5. Follow-up
Report potential
violation
By employees,
third parties
Confirm (or not)
validity of alert
Assign investigator(s)
By Group
Compliance Team
Facts finding process,
interviews, data
analysis
• Allegations
confirmed or not
• Root cause
analysis.
By assigned
investigator(s)
Remediation and/or
disciplinary measures.
By Group
Compliance Team
and Management
Check implementation
of actions decided
and non-retaliation.
By Group
Compliance Team
In 2022, Schneider Electric reinforced the protection of the reporter, reported person, witnesses and other involved people by highlighting
rights and responsibilities of people involved. A significant reinforcement of people protection has taken place in particular with:
• a new procedure to ensure Schneider Electric’s zero-tolerance
policy against retaliation by prohibiting retaliation or other
discrimination.
• a set of protection and care measures that can be offered in the
course of the investigation, in case he/she needs and as per
local legislation, such as: security measures (distancing),
accommodations, flexible time management, change of
function/service and psychological support.
• a possibility of internal or external mediation to help rebuild
respectful collaboration.
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
9%
5%
6%
10%
38%
719
concerns
received
3%
12%
24%
13%
32%
48%
19%
3%
13%
8%
13%
44%
North America
Rest of the World
Europe
China
France
India
Valid alerts confirmed after investigation
Valid alerts not confirmed after investigation
Valid alerts under investigation
Not valid alert
Ongoing assessment
* as of 31st January 2023
Discrimination, Harassment, Unfair treatment
Fraud
Conflict of interest
Bribery & Corruption
Health & Safety
Other
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2.2 Driving responsible business with Trust
Corrective actions
Deficiencies associated with the implementation of the Ethics &
Compliance program – and potentially reported through
whistleblowing – are analyzed to identify their cause and remedy
them with appropriate measures, which can take the form of:
• disciplinary measures decided by the relevant managers
together with Human Resources, or by the Group Disciplinary
Committee for the most sensitive alerts based on the findings of
an investigation and depending on local disciplinary policies
and law;
• remediation measures (such as launching a specific audit,
reviewing a process or performing training);
• external actions (such as entering civil litigation or similar
legal proceedings).
Monitoring and audit
The Ethics & Compliance program is an integral part of the Group’s
Key Internal Controls (KIC). Developed in 2021 and becoming
effective in 2022 for the first time, this KIC framework has been
significantly reshaped and enhanced by increasing the number of
KICs for the Ethics & Compliance program aligned with new
policies and processes. In addition, in 2022 Schneider Electric
executed the central monitoring of key processes of the Ethics &
Compliance program such as Business Agents, Conflict of Interest,
Whistleblowing and Anti-corruption training results. The outcome of
these controls is regularly shared with key stakeholders to ensure
continuous process and design improvements.
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 2022 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 126.
In 2021, to measure the effectiveness of the Trust Line, Schneider
Electric created SSI #7 and added a question to its annual
employee engagement survey, OneVoice: “I can report an instance
of unethical conduct without fear”. 81% of employees surveyed
answered “yes”. Since then, the Group is working to increase this
measurement by 10 points by 2025 as part of Schneider
Sustainability Impact. In 2022, 82% of employees surveyed
answered “yes” which constitutes an improvement of +1 point over
a 12-month period.
Trust
SSI #7
Measure the level of confidence
of our employees to report
unethical conduct
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 2022.
“I didn’t feel to do it as long as I was still reporting inside
the team where I had the issue, so I declared the issue 2
months after, when I was in my new position. I felt safe
because several colleagues at VP/SVP level expressed
their support to me and recommended me to do it,
mentioning that I would be protected in any cases. In full
transparency, I called a HR colleague at management level,
asking him how protected I would be. I got a clear answer
that I would be 100% protected.”
2021 Baseline
2022 Progress
2025 target
81%
+1pt
+10pts
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Chapter 2 – Sustainable development
2.2.3 Zero-tolerance for corruption
2.2.3.1 Context
2.2.3.3 Group policy and governance
Corruption is illegal and refers to the abuse of entrusted power for
private gain. It undermines the effectiveness of any given
ecosystem by undermining the trust and confidence which are
necessary for the maintenance and development of sustainable
economic and social relations. Moreover, it threatens the rule of
law, democracy and human rights, undermines good governance,
fairness and social justice, distorts competition, hinders economic
development and endangers the stability of democratic institutions
and the moral foundations of society. Over the past years,
anti-corruption regulations have been strengthened worldwide.
Fighting corruption has become a legal obligation in several
countries with more controls and sanctions in case of misconduct.
2.2.3.2 Risks and opportunities
Engaging in corruption exposes to legal proceedings, prosecutions
and sanctions for companies and individuals. Companies accused
or convicted of illicit behavior may then suffer a serious public
relations backlash and expose themselves or individuals to being
debarred from public tenders/ public funds. They may also be
subverting local social interests and/or harming local competitors
while the cost of funding corruption may be perceived by investors
as a hidden “tax” or illegal overhead charge, thereby increasing
costs for companies, and further down the chain, their customers.
Multiple studies indicate that companies that have anti-corruption
measures significantly increase profits compared to companies
that do not. Indeed, such an approach will attract customers,
investors, employees and suppliers who are concerned about risks
as well as those who value integrity. It is then translated directly into
tangible benefits, including risk reduction, cost savings and
sustainable growth.
Schneider Electric’s exposure to corruption risk materializes
through various factors, in particular:
• Organic growth and mergers and acquisitions in countries with
a high perceived level of corruption (especially in Asia and
Africa);
• Business model relying on a large ecosystem of partners,
including accountability for activities performed on behalf of the
Group;
• Participation in complex projects in sector at risk, such as oil
and gas, where the amounts invested may be very high and with
end-users from the public sector subject to more restrictive
anti-corruption regulations.
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 in 2018. 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 111. In 2021, 8% of the
confirmed valid alerts, reported through whistleblowing, concern a
potential violation of the Anti-Corruption Policy. In 2022, this
represented 13%.
As stated in the Trust Charter and Anti-Corruption Policy, Schneider
Electric has zero tolerance for corruption and is committed to
comply with all applicable anti-corruption laws. This commitment is
demonstrated by a strong and continuously developing Anti-
Corruption Compliance program, which is part of the Ethics &
Compliance program and managed by the same Ethics &
Compliance Governance (see page 112).
Schneider Electric published and rolled out a revised Anti-
Corruption Policy in 2019, meeting the requirements of the French
Sapin II law, to take into account results of the corruption risk
mapping and to provide employees with examples illustrating
situations they may face. This policy acts as a handbook to be
consulted when in doubt about the appropriate behavior to adopt.
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.
2.2.3.4 Actions and impacts
To operationalize the behavior rules of the Anti-Corruption Policy,
Schneider Electric has created a set of additional policies and
procedures related to Conflict of Interest, Business Agents, Gifts &
Hospitality, Philanthropy and Sponsorship and revised anti-
corruption accounting controls program. Moreover, 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 possible stage. These guidelines aim to cover the very first
steps of identifying potential targets, what to look out for in
data-rooms, and finally how the Group plans to integrate the
acquired entity into its anti-corruption compliance framework
through dedicated Trust Standards. These same rules also apply
when Schneider Electric decides to make a divestiture with a
step-by-step approach to managing the transition.
Schneider Electric has also developed a suite of anti-corruption
e-learnings, providing guidance on real life risk scenarios,
designed to meet the trainees’ needs and expectations. The
training is mandatory for targeted employees exposed to corruption
risks, as identified by the corruption risk mapping. A curriculum of
modules of e-learnings was 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 hospitality. In 2021, four
additional modules were created on facilitation payments, conflict
of interest, the conditions that create a climate for wrongdoing and
how to raise concerns. The modules were supported by videos
from top leaders demonstrating the “tone at the top” and are
available in 14 languages. In 2022, those e-learnings were rolled
out to more than 40,000 employees, with a completion rate of 97%.
Moreover, the year saw ad hoc anti-corruption learnings delivered
to all employees and managers as part of the Trust Month that took
place in June 2022 (e.g. Conflict of Interest) and in functions
deemed to be priorities (e.g. Services). Notably, Schneider Electric
also organized specific communication campaigns dedicated to
the new policies for Gifts & Hospitality, Philanthropy and
Sponsorship.
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2.2 Driving responsible business with Trust
2.2.3.5 Focus on responsible lobbying,
political activity, and donations
Through its Trust Charter, Schneider Electric has taken 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. Donations and lobbying activities are risks
specifically addressed in the Anti-Corruption Policy.
Schneider believes that this representation of interests should be
conducted in a transparent and fair manner, allowing 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
2022, Schneider Electric was not 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.
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.
From 2019 to 2022, the Group discloses expenses in membership
fees towards trade associations, business coalitions, and think-
tanks, that are dedicated by the association to lobbying or
representation. Generally, the budget allocated to lobbying in these
organizations is small as these associations mostly organise
business workshops, peer-learning groups, or work on
standardization. Schneider Electric updated its reporting
methodology compared to previous years and now discloses the
budget allocated to lobbying or representation rather than total
membership fees. The data collected covers the main Group
geographies, in particular Europe including France, North America,
China, India, Indonesia, the UK or Philippines.
2.2.4 Responsible
Workplace
2.2.4.1 Context
A responsible workplace is an open and supportive place where all
employees, no matter who they are, or where they live in the world,
feel uniquely valued and safe to contribute their best. It is settled
when everyone is treated fairly, when difference is acknowledged
and valued, and everyone feels free from any type of harassment,
victimization and discrimination.
2.2.4.2 Risks and opportunities
Not creating a responsible workplace may expose Schneider
Electric to liability towards the person who has allegedly been
harassed or discriminated, potential claims from the alleged
perpetrator and future allegations to not prevent a potential culture
of harassment and/ or discrimination to flourish or took insufficient
steps to protect employees. Moreover, the Group could be
exposed to reputational risk.
To assess risks relating to the workplace, Schneider Electric
conducted a risk mapping exercise as part of the Ethics &
Compliance risk mapping, under the Human Rights risk stream. In
2021, 30% of the confirmed valid alerts, reported through
whistleblowing, concern Discrimination, Harassment or Unfair
treatment. In 2022, this represented 44%.
Building a responsible workplace establishes trust for employees. It
also encourages talented candidates to join Schneider Electric’s
safe and comfortable work environment. Additionally, for the same
reasons, it retains Talents by developing engagement and
increasing employee morale. As Schneider’s Employees are first in
the line of defense, the Group has renewed and deployed its Core
Values and Leadership Expectations. Each year, Employees are
evaluated on their global performance, taken into consideration
their alignment with the Group’s values and corresponding
demonstrated behaviors.
See more details in Chapter 2.5
page 196.
Total contributions globally amounted to about €0.5 million in 2019,
€0.6 in 2020, €1.2 million in 2021 and €1.1 million in 2022.
2.2.4.3 Group policy and governance
The 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 about
€0.6 million in 2022 (€0.5 million in 2021) globally;
• The second is “Powering the digital economy”: the Group
supports the emergence of the 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
about €0.2 million in 2022 (€0.1 million in 2021) globally.
Schneider Electric has “zero tolerance” for any kind of workplace
misconduct. This commitment is evidenced by a specific HR
Compliance program, which is part of the Ethics & Compliance
program and manages by the same Ethics & Compliance
Governance.
Schneider Electric published and rolled out an Anti-Harassment
Policy in 2018, serving as an employee manual to address and
prevent misconduct that violates the dignity of employees. In 2022,
the Group worked on a new version and extended the policy on
discrimination. The new Anti-Harassment and Anti-Discrimination
Policy will be rolled out in 2023.
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2.2.4.4 Actions and impacts
To operationalize responsible workplace behavior principles,
Schneider Electric has renewed the Global “Flexibility at Work”
Policy in 2020 and the Global Family Leave Policy in 2022, which
both support greater inclusion and care to help its diverse
workforce adapt to the “next normal” workplace. Moreover, the HR
Compliance program is applied across the Schneider Electric
group through dedicated Trust Standards. These are deployed
during the integration of new entities and the onboarding of new
employees when they join the company.
To build a common understanding and alignment, Schneider
Electric also created a mandatory training entitled “Building a
Culture of Respect” and assigned it to all employees as part of
Schneider Essentials (mandatory for all) in 2021. 98% of employees
completed the training. This training was available to all employees
who wished to take it in 2022. In addition, some specific trainings
were deployed in line with local initiatives to prevent harassment
and discrimination in specific countries (e.g. U.S.).
In 2022, Schneider deployed a new e-learning called “We All Have
Mental Health” as a mandatory training for all, to raise awareness of
the “next normal” working conditions and the company’s care of its
employees. Due to the sensitivity of workplace-related alerts and
the human factor involved, the Group has also created a specific
e-learning for its network of internal investigators. This aims to
ensure full impartiality and fair common practices everywhere.
More than 240 HR investigators were trained. In addition,
workshops have been conducted for internal investigators in many
geographies.
Schneider Electric also organized specific communication
campaigns promoting a responsible workplace as part of the Trust
Month that took place in June 2022. As part of this initiative, the
company organized a dedicated awareness session on
psychological safety. In addition, Schneider Electric encourages
the Speak-Up mindset to allow employees and stakeholders to
report any violations of the group’s ethical standards or any
workplace-related concerns.
2.2.5 Compliance with tax
regulations
Schneider Electric Group applies a responsible fiscal approach
supported by strong governance, as outlined in the tax policy of the
Group which can be consulted on our website at se.com. Tax risk
management is an integral part of the company’s risk management
process, and in this context, the Tax Director, under the authority of
the CFO, is in charge of implementing the Group’s tax policy and
reports regularly to the Audit Committee. The Group engages to
comply with the international and local tax regulations applicable in
each of the countries in which it operates, and to build a lasting and
transparent relationship of trust with the tax authorities. In this
respect, the Group provides the tax authorities with all the
information necessary to enable them to carry out their mission. As
an example, the Group has entered into a tax partnership - a
relationship of trust - in France, and works in consultation with the
tax authorities. Similar steps are being taken in other countries.
2.2.6 High standards for
the quality and safety of
our products
2.2.6.1 Context
Schneider Electric holds dear the trust customers and employees
place in its products and services to protect themselves and their
property. Continuous quality improvement is therefore central to the
organization’s strategy and foundational to achieve its overall
business purpose and mission. Recognizing the opportunity that
delivering superior quality would bring, the Group began a
company-wide transformation of quality to accelerate its journey.
2.2.6.2 Risks and opportunities
Schneider Electric operates globally with a wide-ranging portfolio
of customer solutions. The corresponding complexity of the
product portfolio and supply chain brings with it risks and
opportunities for quality. Many of the Group’s solutions serve
essential industries where product quality and safety are a critical
topic. 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 governed by national and supranational
regulations and standards. Maintaining compliance to new or more
stringent standards or regulations could result in capital investment.
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-mentioned risks could have a significant impact on the
financial performance of the Group. The business reputation of
Schneider Electric could also be negatively impacted. Indeed, the
Group has been impacted by several recalls. With the quality
transformation, Schneider Electric has established the visionary
goal to eliminate product recalls by 2025 (SSE #15).
2.2.6.3 Group quality policy
In its Trust Charter, Schneider clearly outlines its commitments to
strive for high quality.
The Quality Policy of the Group is guided by the following principles:
1 Customer First: Quality is the safety of customers. Schneider
Electric prioritizes their interests and anticipates customer
needs through customer journeys and customer personas
deployment everywhere in the Group.
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.
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2.2 Driving responsible business with Trust
3
Intelligence: Schneider Electric runs strong analytics to convert
its process performance and customer experience data into
actionable information, enabling us to better fulfil customer
needs, prevent complaints, and improve customer satisfaction
all touch points.
4 People: Quality is every employee’s responsibility. Schneider
Electric puts customer first by empowering them to stop work
whenever they have a concern and removes internal barriers to
achieve customer-centric solutions.
5 Ultimate experience: Customer experience is recognized in
the Group as a strong competitive advantage, to earn trust from
customers and develop business in a sustainable manner.
Therefore, the group deeply analyzes customer experience to
prioritize improvement efforts and investments.
It is the policy of Schneider to only propose 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. They are:
• 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 offers are safe when properly installed (based on
safety manual), maintained and used for their intended purpose
and other reasonably foreseeable use or misuse.
2.2.6.4 Governance
The Group policy is realized through a robust Quality Management
System, which is improved continuously to fulfill expectations of all
relevant parties. It is in full alignment with the Group’s Trust Charter,
Schneider Electric’s Code of Conduct, as well as in compliance
with and certification to ISO 9001 standard. 231 Schneider Electric
manufacturing sites have achieved their ISO 9001 certification.
At Schneider Electric, the customer satisfaction and quality network
covers all layers, functions, global supply chain, operations, and
lines of businesses. Within presence of quality throughout the
Group, Schneider seeks to create a culture of quality and spread
the customer-first mindset everywhere.
Schneider has strengthened the governance committee with a new
accelerated operating rhythm wherein the new Head of Customer
Satisfaction & Quality (CS&Q), together with the Executive
Committee, reviews the status of quality across the company and
guide the quality transformation journey.
The quality transformation is further informed with first-hand
experience gained from over 50 quality-focused Gemba walks
through Schneider operations worldwide. During the Gemba walks,
the new Head of CS&Q personally compares the current standard
to actual conditions and to industry best practice to identify
necessary corrections and opportunities for improvement.
2.2.6.5 Actions and impacts
To accelerate and focus the company-wide transformation of
quality, the Group has invested in strengthening and reorganizing
the quality function, beginning with a new Head of CS&Q bringing
to the Group best practices that produce world-class quality in
Automotive and Aerospace industries. The Group further enabled
and accelerated the change through a revised organizational
structure and investing in new capability.
Quality System
Building on the foundation of the existing quality system, the Group
has identified opportunities to simplify the existing processes and
procedures, while adopting the highest applicable standards in
every category. To ensure processes are completely implemented
and procedures followed with discipline, the Group aims to greatly
strengthen quality internal auditing program.
Quality Planning
The Group continues its ReeD program (Reliability End To End by
Design), to secure fundamentals and ensure full integration of new
customer expectations (from Quality to Reliability). Designed with
R&D at its heart, with huge interactions with all functions and
businesses of Schneider Electric:
• By ensuring that new offer 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 systems,
software, and products to prevent associated issues and risks.
It is the obsession of the Group to ensure that “Reliability” is a
signature value of Schneider Electric branding. Accordingly, the
program is being further strengthened with dedicated resources
and the introduction of new processes and methods supporting
increases in Reliability and Robustness. The new processes and
methods are being animated though capability-building “design
fundamentals” training and practices.
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Chapter 2 – Sustainable development
Quality Assurance
Schneider strengthened its use of Failure Modes and Effects
Analysis extending coverage, deepening the analysis, and creating
a laser focus on severe failure modes, ensuring risk-mitigating
controls are in place, and successfully reducing the risk on over
600 processes.
Trust
SSE #15
Zero product recalls by 2025
In 2022 the Group recalled 24 products as approved by the
Offer Safety Alert Committee, vs 14 in 2021. In addition to
Safety, recalls have large environmental footprints
consisting of re-production of the recalled units and
multiplications of packaging and transportation.
The increase of Offer Safety Alerts in 2022 is consistent
with the increase of detection policy close to defect “Point
of Creation”, reducing the magnitude of impact for
customers and for the environment.
For each alert, Schneider 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.
It is the ambition of the Group to eliminate recalls though
the adoption and rigorous execution of a quality system
consisting of the highest available standards.
2020 Baseline
2022 Progress
2025 target
25
24
0
Through the process improvement efforts, the Group recognizes the
opportunity to integrate and strengthen existing industrialization
procedures with “Advanced Product Quality Planning” (APQP) which
seeks to introduce new products with outstanding quality. As APQP
matures it would enable the Group to bring together the Design,
Industrialization, Manufacturing, and Service teams to co-create
solutions that are more reliable, robust, manufacturable and
serviceable, contributing to the sustainability goals of the group.
Quality Control
Within operations, the Group pursues a twin strategy of “back to
basics” while it accelerates and leverages its digitization. The
“quality basics” were developed and are being deployed or
strengthened across the group. To introduce the quality basics
special radical change events (kaikaku) were held to immediately
implement the basics. The radical change events serve to build
quality capability in participants and organizations, further
strengthening the Group quality culture.
Accelerated implementation of digital solutions for real time
process control and statistical process control, traceability, and
other digital capabilities to over 300 manufacturing lines.
Establishing the digital foundation encourages innovative thinking
and ways the Group can unleash its digital potential. Globally the
Group identified over 100 applications for Artificial Intelligence (AI)
and Machine Learning, successfully adding AI to manufacturing
processes to improve first-time quality and successfully applying
vision and machine learning to improve quality control.
Quality Improvement
Schneider Electric’s “Issue to Prevention” process continues to
deliver valuable insights to root causes of problems and their
corresponding improvement opportunities. The process was
further strengthened through the implementation and verification of
corrective and preventive actions, and by creating a mechanism to
share learning horizontally across the Group.
Schneider 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 the customers’ best interest. As
part of the Trust pillar of Schneider Sustainability Essentials 2021–
2025, Schneider has set the visionary objective to eliminate recalls by
2025 (SSE #15), which is an enhancement of the previous program to
“reduce scrap from safety units recalled” originally set.
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
2.2 Driving responsible business with Trust
2.2.7 Digital trust and security
2.2.7.1 Cybersecurity context
Schneider Electric commits to provide solutions to achieve a
greener low-emissions future, a shift mostly driven by digitalization
and fueled by innovation. While hyperconnectivity and subsequent
digital enablers provide transformative business and operational
value, they also expand cybersecurity threats.
Finally, as cybersecurity is a collective play, Schneider Electric
works collaboratively with the ecosystem sitting along its value
chain (suppliers, authorities, customers, especially the ones in
critical infrastructure etc.) to build trust, as it has an ambition to
raise the defense level of the industry at large.
2.2.7.3 Group Policy
On top of that the Group operates in over 100 countries, sources
goods and services from five continents and manages more than
50,000 unique suppliers. All of this increases the cyber complexity
under which our companies operate and introduces sources of
risks.
Cybersecurity policies are foundational to the Group’s security
posture as they are compulsory for all stakeholders, they set
management’s tone and provide guidance towards secure
behaviors (people), practices (processes) and environment
(technology) throughout the company.
Cybersecurity is an essential business imperative for Schneider
Electric. This means that the Group takes a risk-informed approach,
managing cyber risks thoroughly to better protect its supply chain,
working to shape a company-wide cybersecurity culture and finally
partnering with experts to reach the highest cyber standards.
2.2.7.2 Risks and opportunities
Schneider Electric’s strategy aims:
1. to protect its customers assets and operations
2. to mitigate the possibility of having its operational continuity
disrupted by an attack by identifying and prioritizing high-value
digital assets within the company’s operations and enforcing a
certification discipline across its major sites and assets
3. to comply with global and local regulations where the company
operates
4. to prevent voluntary and involuntary loss or exposure of its
intellectual property.
In this journey, Schneider Electric seeks to learn and mature its
posture. Hence, cyber events are continuously monitored,
detected, responded to, and learned from. The Group measures its
improvement thanks to date-based reality checks, internal and
external reviews, cyber crisis drills, and vulnerability assessments
to its acquired companies and entities acquired which are under
control form a business standpoint but whose IT management
systems are out of our control.
Schneider Electric believes that cybersecurity is everyone’s
responsibility, hence at Group level, clear expectations shape both
individual and collective secure behaviors, not only to protect the
Group but the society at large. Online training on cybersecurity is
mandatory for all employees. This training helps employees to
identify the cyber threats they may face and understand how to
protect themselves. At the end of 2022, 99% of Schneider Electric
employees had completed this training. Certain employee
categories received mandatory training for risks linked to their
activity. Hence there are trainings for:
• HR teams as they are confronted daily to data
• 33,000 shopfloor employees are concerned, as well as the
84,000 white collars of the Group.
• Employees that are directly facing customers, approximately
20,000 employees, need to validate a “cyber badge” as they
access customer sites
• Teams in charge of R&D are bound to train as they deal with
intellectual property on a daily basis.
The company’s overarching General Information Security Policy
and all supporting security policies are in line with broadly
recognized standards and regulations such as ISO27001, NIST,
ISA/IEC62443, and General Data Protection Regulation (GDPR).
Schneider Electric’s current policy framework governs and
regulates security behaviors, and encompasses products,
solutions, services, and sites. These guidelines apply to all
employees and contractors, and relevant populations are regularly
trained on them.
Our public security-related policies can be found in the
Cybersecurity and Data Protection page on www.se.com
2.2.7.4 Governance
Cybersecurity and data protection are integral to the Group’s
corporate business strategy and digital transformation journey, and
at the core of the Trust Charter. In addition to corporate commitment,
executives play a crucial role through the sponsorship of the
Executive Committee and oversight from the Board of Directors.
A central body governs the companywide cybersecurity portfolio,
coordinating the execution of strategic and operational initiatives,
and orchestrating a broader community of security practitioners
distributed across businesses and territories. The community
includes:
• Digital and operational Security Leaders appointed to manage
security risks within their domain (Sales, R&D, Supply Chain,
Finance, HR, AI, Digital Offers…). They prepare for and respond
to an incident by coordinating the investigation, containment,
and remediation.
Industrial and R&D Site Leaders nominated to act as
cybersecurity experts in all industrial and R&D sites. They carry
a strong knowledge of OT assets and technologies as well as
their plant’s network infrastructure.
•
For all security practices and initiatives, monthly updates on
projects and report on metrics are orchestrated centrally to allow
continuous improvement on all capabilities.
The company relies on an open and transparent culture where
employees are encouraged to self-report any possible issue
(intrusion, errors, vulnerabilities etc.). Schneider Electric has
adopted a “see something, say something” approach to encourage
escalation to facilitate more rapid detection of exposure and
breaches via “people sensors”.
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Chapter 2 – Sustainable development
2.2.7.5 Actions and impact
Schneider Electric seeks to align with broadly recognized
standards and has received several recognitions for its
performance (available on dedicated se.com page(1)).
Trust
SSE #16
ISO 27001 demonstrates
rigorous information security
methodologies, reducing
risks, and safeguarding
against security breaches
within Schneider Electric.
See the certification
ISA/IEC 62443-4-1 certified
Secure Development
Lifecycle (SDL) process
testifies that Schneider
products and systems
development practices are
in line across all software
and system development
lifecycles.
See the certification
CREST Certification for
Penetration testing
acknowledges Schneider
Electric’s product security
teams for their skills and
proficiency when it comes to
testing the resilience and
security of the company’s
products and systems.
See the certification
Rated
2022
byyby
CyberVadis is a third-party
cybersecurity risk
assessment platform.
Schneider Electric was
certified mature based on
international information
security standards such as
ISO 2700x, NIST
Cybersecurity Framework,
Cybersceurity for ICS, PCI,
DSS, and GDPR.
See the certification
Schneider Electric also works collaboratively with cross-industry
organizations to secure and strengthen digital trust.
As a result the Group became:
• A founding member of the ISA Global Cybersecurity Alliance
and a member of both the Paris Call and Cybersecurity
Coalition.
• A signatory of the Cybersecurity Tech Accord, and now works
with its partners towards addressing supply chain security.
• An active contributor to the World Economic Forum, sitting at the
advisory board of Oil and Gas group to strengthen resilience
across the industry, leveraging collective intelligence and
expertise. Public reports (available on Schneider’s website(1))
are an output of this strong collaboration, as well as tighter
connections with leaders from other companies.
Finally, as part of the Trust pillar of its 2021–2025 sustainability
strategy, Schneider Electric commits to remain in the top 25% in
external ratings for Cybersecurity performance (SSE #16).
(1) https://www.se.com/ww/en/about-us/cybersecurity-data-protection
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
enables the Group to identify and address vulnerabilities
and weaknesses (along with Intelligence-driven detections)
around main risk categories such as Compromised
Systems, Diligence, User Behavior and Public Disclosures.
Addressing findings that can negatively impact overall
cybersecurity rating and benchmarking Schneider’s
performance against is supporting the Group’s maturity
journey on cybersecurity, from a performance, risk, and
communication perspective.
Monitoring performance enables the Group to measure its
improvement: from a baseline of 520 in January 2018, we
scored 810 for the year 2022. Schneider Electric’s external
rating since 2018 has risen by +56%.
2020 Baseline
2022 Progress
2025 target
Top 25%
Top 25%
Top 25%
2.2.7.6 Data privacy and protection
Schneider Electric implemented the General Data Protection
Regulation (GDPR) requirements and launched specific training to
manage the major challenges of this regulation. This training is
mandatory for Schneider Electric employees in Europe and key
functions.
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 has established 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.
A governance ecosystem is in place including a Group Data
Protection Officer (DPO), a DPO network, an implementation team,
Data Privacy & Protection Champions and Steercos.
Schneider Electric is rolling out its Global Data Privacy & Protection
compliance approach beyond GDPR in China, the USA, and India
and is globalizing its standards to address new regulatory
challenges like PIPL and CPRA. A new data protection addendum
has been deployed, including the new Standard Contractual
Clauses of the European Commission.
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
2.2 Driving responsible business with Trust
2.2.8 Human rights
2.2.8.1 Context
Human Rights issues have been increasing in terms of risk
exposure and geopolitical influence. New challenges are emerging,
due to social, economic, and digital disruptions, such as forced
labor, living wages, migrant workers or artificial intelligence.
As a global company operating in over 100 countries, Human
Rights have been a main priority for a long time. Schneider
Electric’s ambition goes beyond compliance with existing
regulations. Its ambition is to ensure that Human Rights are not
infringed upon and to play an influential role with external
stakeholders by promoting health and safety, diversity, inclusion,
equity, and decent work for all.
2.2.8.2 Risks and opportunities
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 2022, Schneider
reviewed and updated its “duty of vigilance risk matrix” which
highlights the risks the Group poses on its ecosystem including its
sites, suppliers, contractors, and local communities (for more
details please see page 133).
This review of risk covers fundamental Human Rights. This includes
some rights that may be threatened as a result of the evolution of
the geopolitical context: increased flow of migrant workers and
threats of modern slavery(1) as a consequence of regional conflict
and wars, pressure on working hours and individual income as a
result of tension in the supply chain and accelerated inflation.
In front of these risks, the Group engaged into several programs
that span across its supply chain and its workforce. A core
commitment regarding Human Rights is the transformation
program related to Decent Work launched in 2021. This program is
based on 10 fundamental Human Rights pillars, with the aim of
ensuring dignity for all and protecting workers’ rights. The program
benchmarks current standards around worker rights to ensure that
fair policies and practices are followed. This was rolled out to all the
Group’s employees in 2022, and has started to be rolled out for the
Group’s strategic suppliers (see page 138).
Schneider Electric’s Global Human Rights Policy(2) 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.
At the end of 2022, Schneider published the second version of its
Global Human Rights Policy. The Company intends to increase its
commitments by making clear its position on new challenges such
as migrant workers and artificial intelligence. It confirms the
Group’s engagement to strive for the respect of all internationally
recognized Human Rights and to ensure that Human Rights are
respected for everyone, everywhere, at all times. The new policy
includes eight new topics: respect and dignity, human rights in
cyberspace, migrant workers, conflicts minerals, intergenerational
solidarity, human rights activities within the Group’s supply chain,
civic space and human rights defenders, and access to a healthy
environment. Full deployment including the creation of an
e-learning is planned for 2023.
Find Schneider’s Global Human Rights Policy
on www.se.com
Alignment with international standards and frameworks
Schneider Electric adheres to the following principles or guidelines:
• The international human rights principles encompassed in the
Universal Declaration of Human Rights (as part of the
International Bill 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.
• The ILO Declaration on Fundamental Principles and Rights at
Work.
• The UN Guiding Principles on Business and Human Rights
(UNGPs) 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.
The Group has also engaged into Duty of Vigilance program. As
part of this program, Schneider Electric is performing audits of
risky suppliers to identify potential gaps and suggests areas for
improvement.
The procedures implemented by Schneider Electric, notably its
vigilance plan and Ethics and Compliance program, ensure that the
Group adhere to the EU Taxonomy “minimum safeguards”
requirements referred to in Article 18 of Regulation (EU) 2020/852.
2.2.8.3 Group Human Rights 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.
(1) Report: Global Estimates of Modern Slavery: Forced Labour and Forced Marriage (ilo.org)
(2) Human Rights Policy Institutional Document | Schneider Electric (se.com)
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Chapter 2 – Sustainable development
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
Policies
Diversity & Inclusion
Family Leave
Anti-Harassment
Flexibility at Work
Employee Benefits
Health and safety
Policies
Health & Safety
Travel
Security
Policy description
Reference in this URD and online
Applies to the entire Company and covers all
facets of diversity, as Schneider Electric wants
to reflect the communities in which the Group
operates. This policy is based on respect and
dignity, which are the foundations of fairness
and equity.
Provides a framework so that every employee,
in every country, can take leave specifically to
enjoy some of life’s special moments with their
families.
States Schneider Electric’s commitments to
have zero-tolerance for any kind of
harassment or offensive behavior.
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.
Defines the global principles, standards, and
governance for the provision of employee
benefits at Schneider Electric.
Pages 202 to 208
Consult and download the Policy:
https://www.se.com/ww/en/about-
us/diversity-and-inclusion/
Page 217
Pages 203
Consult and download the Policy: https://
download.schneider-electric.com/files?p_
Doc_Ref=GAHP
Page 204
Pages 215 to 217
Policy description
Reference in this URD and online
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 is
the subject of an annual “Global Health &
Safety Day”.
Defines the rules applicable to travelers,
including the safety guidelines, procedures,
and processes to ensure the safety of
Schneider business travelers at all times.
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.
Pages 127 to 130
Consult and download the Policy: https://
download.schneider-electric.com/files?p_
Doc_Ref=SE-Health-Safety-Policy
Page 303
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S T R A T E G I C R E P O R T
2.2 Driving responsible business with Trust
2.2.8.4 Governance
Suppliers
The strategic part of the Human Rights policy as well as the
measurement and its full deployment is led by the Corporate
Citizenship Department, composed of Human Rights experts
supported by Human Resources, Global Supply Chain
Departments as well as the countries, the internal audit team and
the compliance functions.
This policy is validated by the Chief Strategy and Sustainability
officer, Chief Governance officer and Secretary General, the Chief
Human Resources officer and the Executive Vice President Global
Supply Chain.
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 UNGPs. 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 best practices with regards to on-site auditing and
monitoring of suppliers’ activity, including forced-labor issues.
The Group also took part in the Global Compact LEAD working
group “Decent Work in Global Supply Chain”. Lastly, 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.
Human rights are included in the approach to select new suppliers.
Schneider Electric uses a qualification process called Schneider
Supplier Quality Management (SSQM) to select new suppliers. This
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, a third party that leverages ISO 26000 standard,
and includes Labor and Human rights as one of the four pillars in its
methodology. Other actions are implemented through the Group’s
vigilance plan.
Lastly, Schneider Electric launched in 2022 a Decent Work
Program (SSI #6) for the Group’s strategic suppliers (see more
details page 142 to 143).
See more details about supplier programs in the
Vigilance plan, and Sustainable relations with suppliers
sections pages 130 to 144.
Consult and download Schneider Electric’s
Supplier Code of Conduct from the Suppliers
page on www.se.com
2.2.8.5 Controls, actions and impacts
Contractors
Schneider Electric has developed specific actions to mitigate
human rights risks related to project execution environment. These
apply anywhere co-ordination with project contractors is
necessary.
The Group is working to evolve 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. Pilots have been launched in 2022.
Schneider Electric is also conducting specific on-site audits for
contractors included into the Vigilance Supplier Audit program. At
the end of 2022, 17 subcontractors had been audited. For more
details, see section “2.2.11 Relations with project execution
contractors”, page 135.
Communities
The risks for these locations were assessed for the first time in 2020
in the vigilance risk matrix. 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 “2.2.13 Vigilance with local communities”, page 146.
Internal
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
of 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 198.
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, how to
overcome bias and how to develop an inclusive culture. For more
details, see section 2.5.3 Talent attraction and development,
page 211.
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
alert all relevant employees. 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 127.
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Chapter 2 – Sustainable development
2.2.9 Employee health and safety
2.2.9.1 Context
2.2.9.3 Group policy
The world in which Schneider Electric operates is changing and
many aspects of this change accelerated during the COVID-19
pandemic. Health and Safety is a value Schneider Electric will not
compromise, which was demonstrated by Health and Safety being
one of the five Schneider Electric Trust Charter pillars and by
setting ambitious 2025 Health & Safety Targets.
The advances in digitization have made the world a smaller place,
and it is now so much easier for H&S teams across the world to
work together efficiently, to implement global solutions, including
virtual audits, remote Factory Acceptance Testing, live
performance dashboards and working from home.
In a fast-changing environment, where so many communication
opportunities are available to everyone, Schneider Electric H&S
team is making the most of all the new technologies and innovative
ideas, to convey its messages to all employees.
New technology also exists to identify ‘at risk situations’, and to
warn employees about risks so they can take action to mitigate
them. Schneider Electric is constantly exploring how these
technologies can make the work environment safer. Schneider
Electric has embedded new digital technologies in many products
so customers can benefit from improved safety while operating
their electrical equipment.
2.2.9.2 Risks and opportunities
Key Health & Safety risks include human injury connected with a
workplace accident, and non-compliance with regulations. These
risks can potentially impact productivity, customer confidence,
company image or financial penalties through legal proceedings.
At the same time, the effort taken to manage risks can create new
business opportunities through greater trust.
Strategic action plans, based on previous incidents and results of
risk analysis are performed each year. 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. The plans are built
on the previous Top 5 Hazards, which include driving, electrical,
falls, powered industrial trucks (PIT), and fixed powered machines
(FPM).
Injuries based on the Top 5 Hazards since 2018
20%
32%
4%
14%
17%
13%
Electrical
Falls
Machines
Road/driving
Powered Ind Truck
Other
With regards to compliance, all Schneider Electric sites prepare a
legal register, which identifies improvement opportunities and is
audited as part of the ISO 45001, external certification.
Safety is a key pillar of the latest Schneider Electric Trust Charter, is
reviewed each year and is fully aligned with ISO 45001 and is
available publicly.
Schneider Electric is committed to invest in its people and its
workplace as stated in its Group Safety and Occupational Health
Policy.
Schneider cares for all, including colleagues, customers,
contractors, and partners, and wants everyone returning home safe
& well every day.
Each employee is responsible for safety and plays a key role in
identifying and mitigating hazards. This practice applies at
Schneider Electric sites, at customer sites and while driving or
traveling.
The Group values engagement at all levels and:
• Expects each Manager to role model Safety as defined in the
Global Safety Strategy (see details below).
• Empowers employees to Act Like Owners, by having an active
role with their personal Health and Safety.
• Seeks the views of all employees, their representatives and
those working on the Group’s behalf, through consultation,
including their participation in reporting and resolving safety
improvement opportunities.
• Sustains relationships with Suppliers, Contractors and
Customers under the condition that Safety commitments are
agreed and met.
The Group provides a safe work environment for all and:
•
Invests in resources and training to support Schneider’s Safety
& Occupational Health vision and goals.
• Complies to external legal requirements and internal directives.
• Embeds safety into its business practices and is an integral part
of all major decisions, from acquisition, product development,
the launch of a business and change management.
Is determined to eliminate hazards and reduce risks.
•
The Group communicates in an open and transparent manner and:
• Continually improves its Safety & Occupational Health Systems
by benchmarking, adopting best available techniques and
through continuous learning.
• Captures, analyzes and communicates safety improvement
opportunities, near-misses, and incidents in a systematic
manner.
• Creates global action plans and share with all potentially
impacted employees to prevent (re)occurrence.
• Sets Safety & Occupational Health goals and objectives,
monitor performance, and reports progress internally and
externally.
Consult and download Schneider’s Health & Safety Policy
on www.se.com
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2.2 Driving responsible business with Trust
2.2.9.4 Strategy and action plan
The Schneider Electric H&S Strategy has been developed to
deploy the Schneider Electric Health and Safety Policy.
The fundamentals of the Strategy are:
• “S.A.F.E. First” at its core, developed as a personal reminder to
pause and reflect on safety before beginning any task.
• Top five hazards, which have been identified and controlled to
prevent serious accidents.
• Five guiding principles, which have been defined to set the
expected H&S behaviors.
• Four strategic priorities, which have been identified as strong
levers to deliver the Schneider Electric Policy.
Schneider Electric engages employees by using the internal social
media tool, Yammer, to post H&S updates, interact with the
community and collect feedback from employees. Schneider also
encourages employees to report safety opportunities, which are
translated into risk reduction actions to engage employees in the
H&S program. In 2023, following the good employee engagement
(1.5 safety opportunities reported per employee), the focus is now
on the completion of improvement actions connected with the
safety opportunities.
2.2.9.5 Governance
Schneider Electric has a strong H&S governance in place with
several instances of control to ensure the H&S strategy is fully
deployed.
Steering Committees
Quarterly H&S Report to Executive level:
Operational
discipline
and execution
A report is created each quarter by the Global H&S VP and
presented to the Executive level. The report includes H&S
performance versus targets and H&S program deployment update.
Monthly Global H&S Steering Committee
Each month the Global H&S team share H&S performance versus
targets and H&S program deployment, with the Regional and
Organizational H&S VP’s.
Audits & Engagement
Integrated Management System (IMS) – ISO 45001: The key
elements of certification to ISO 45001 includes annual site
management review and internal site audit program, and external
audit program at site and corporate level. This certification is in
place for 211 locations, including 176 manufacturing and logistics
sites and the headquarter.
Annual Environmental Health and Safety Assessments
(EHSA): To ensure successful implementation of the strategy,
annual EHSA are performed in industrial and customer facing sites
worldwide, by the site Safety team and validated by the regional
H&S specialist. This assessment is a global process which
measures compliance against H&S directives and identifies
improvement opportunities and recognizes excellence. The EHSA
digital Tool has been deployed in manufacturing and logistics
locations in 2022. 96% of sites have carried out a self-assessment
and for 84% of sites the assessment has been validated by regional
H&S expert.
Technical
qualifications
and safe
behaviours
G u i d i ng principles
We report
opportunities
Unsafe?
We stop
work
We resolve
and share
solutions
We are
qualified
Driving
We care for
each other
Powered
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Trucks
S.A.F.E.
First
Electrical
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Falls
Top 5 haz a r d s
Safe
workplace
for everyone
Leading
as role
models
Each year a global action plan is generated by the H&S corporate
team based on previous years’ performance and 2025 vision. In
2023 the plan will cover the implementation of a new H&S software
solution, a safe driving initiative, a program on high-risk activity and
H&S training for front line managers.
A local action plan, managed by each region, complements the
global plan and includes the improvements identified by the
Environment Health and Safety Assessment deployment, the IMS
implementation and the Safety Culture assessment. In 2022 the
Safety Culture assessment of Industrial and field service
employees had a high engagement rate and employees responded
positively to their sites Safety Culture. In 2023 the Safety Culture
assessment will be extended to all Schneider Electric employees.
Communication is important to ensure that standards are known
and implemented to provide a safe workplace for everyone and
make safety performance visible, so that leaders can take action to
continuously improve risk prevention. Each quarter, Schneider
Electric focuses on key safety subjects (Quarterly H&S Spotlights)
to raise awareness of both workplace and human factors. The
campaign, promoting the importance of safety globally, is
supported by training materials, posters, employee videos and a
quarterly video message from Schneider Electric’s top leaders.
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2.2.9.6 H&S Performance Results
In 2020, Schneider set a 5-year safety target to reduce the Medical
Incident Rate (MIR) to 0.38 by 2025, from a 0.79 baseline in 2019.
The Medical Incident Rate (MIR) is the number of work-related
medical incidents (including injuries and occupational illnesses)
multiplied by one million hours (average hours of 500 employees
working for one calendar year) divided by the total hours worked.
Work related injuries and occupational illnesses requiring medical
treatment are included. Medical Incidents, where the Injured Party
requires hospital treatment for 24hrs, are classified as Serious.
The MIR performance has reduced to 0.58 in 2022, which
represents a 51% progress of the 2021–2025 program. 2022 was
the best performance ever showing a MIR reduction of 11%
compared to 2021, this translates to 171 medical incidents, of which
9 were classified as serious without any fatal accidents.
As a result of all the H&S programs deployed over the last 8 years,
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. The frequency of incidents
(Medical Incident Rate, MIR) has reduced by 69% and the severity
of incidents (Lost Time Incident Rate, LTIR) by 66%.
Trust
SSE #14
0.38 or below Medical Incident Rate
We believe that all accidents are preventable, and use the
MIR indicator to measure progress made against this target.
The 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 a Schneider Electric employee and their
friends and family would have experienced.
2019 Baseline
2022 Progress
2025 target
0.79
0.58
0.38
Employee safety participation trend
MIR historical trend
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2018
2019
2020
2021
2022 2025 target
LTIR historical trend
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2019
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2021
2022
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2.2.9.7 Recognition and awards
2.2.10 Vigilance plan
Schneider Electric was the recipient of several awards for
occupational health and safety programs in 2022. This includes 137
Occupational Excellence Achievement Awards from the National
Safety Council (NSC) for safety performance that was 50% or better
than their industry peer group.
Schneider Electric’s Safety VR Program was awarded the
Singapore International Chamber of Commerce awards for
Collaborative Innovation.
Schneider Electric UK&I received three RoSPA Awards (The Royal
Society H&S Performance Awards) during 2022: RoSPA Gold
Medal (5 consecutive Golds) Award, RoSPA Fleet Safety Gold
Medal (6 consecutive Golds) Award, and RoSPA Winner in the Fleet
Safety Trophy.
In 2022, a Schneider Electric employee, from Australia, was
awarded 2021 Safety Representative of the year.
2.2.9.8 Future evolution of safety at
Schneider Electric
Safety is a never-ending journey towards excellence. Schneider
Electric’s vision is for all employees and contractors to work in a
safe and healthy workplace, so they can perform to their full
potential, positively impacting safety for its customers, and
therefore always returning home safely to their family.
This translates into the following health and safety three-year
improvement plan:
• To strengthen H&S knowledge, skills, and abilities of all
employees and contractors.
• To equip all leaders to role model H&S at every opportunity and
encourage employees to speak up and engage in safety
program.
• To accelerate transformation with digitization, data analytics and
promote local innovation to accelerate H&S maturity.
• To develop and implement effective controls for high-risk
activities and to sustain a safe workplace for everyone.
• To positively impact all stakeholders through effective
communications.
2.2.10.1 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
also strives to have a positive impact on the planet and the
environment by contributing to finding solutions to limit climate
change, and by trying to be more efficient with natural resources.
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 to the ecosystem and environment (ie externalities)
• 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
analysis and describes the actions that mitigate these risks.
Readers are also directed to other sections of the report for 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.
Consult and download Schneider Electric’s Vigilance report
on www.se.com
2.2.10.2 Group policy
Duty of Vigilance is a notion that has been evolving significantly
over the recent years. In 2017, a French law was introduced, that
applies to large multinational companies. In 2023, a similar law will
be implemented by Germany and Norway. In 2023 also, a draft for
a European directive on vigilance will be presented to the European
Parliament for a probable vote in the same year, and a transposition
in local laws for each EU member state starting in 2024.
The objective of Schneider Electric is not only to respect these
national laws but also to be at the forefront of the notion of vigilance,
and to implement the actions that will contribute to significantly
reduce the risk for its ecosystem, whether these actions are part of
a law, or part of Schneider Electric’s own ambition.
2.2.10.3 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, 15 Committee meetings
have been held (five in 2017, and two per year in 2018, 2019, 2020,
2021 and 2022). 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)
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Management:
Risk location
Global Duty of Vigilance Group coordinator
Duty of vigilance coordinator for German law deployment
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, Human Resources
SVP, Ethics and Compliance
Experts:
Environment Performance Measurement
Sustainable Procurement
Human Rights
2.2.10.4 Vigilance risk assessment
Methodology
Schneider Electric has developed a specific vigilance risk matrix,
using a methodology consistent with other risk evaluations
maintained at Group level but focused specifically on adverse
impacts Schneider has or may have on its environment and
ecosystem. The methodology is based on interviews with internal
experts from areas such as Health & Safety, Social Relations, and
Data Privacy. In 2021, Schneider expanded the scope of the risk
mapping to local communities living close to Schneider locations
and customer project sites. In 2022, Schneider initiated specific
workshops that include members of the European Work Council.
The conclusions of the workshops will be integrated into the 2023
risk evaluation. This process will gradually include other
stakeholders, both internal and external.
The scope of work covers Schneider Electric and its subsidiaries,
joint ventures, suppliers, and subcontractors. A review of the
downstream supply chain is carried out for a sample of large
customer projects.
Risk categories
Four risk categories have been identified and for a more 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.
Overall, these risk areas cover more than 60 natures of risk and
were selected from a saliency perspective. However, to simplify the
reading, they have been grouped into the following sections that
are synthesized as below.
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
The Group has focused on four areas where risks may occur:
• Schneider Electric sites: these have been segmented based
on categories that present a specific level of risk. For example,
office buildings, R&D laboratories and production factories each
carry a different level of risk.
• Suppliers: the level of risk differs based on the type of process
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, such as
building a large electrical system at a customer’s site, Schneider
Electric works with contractors, leveraging their expertise (civil
work, electrical contracting, etc.). This “off-site” project work
bears specific risks 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 project
sites. Communities have been assessed against three risk
categories: human rights, environment, and business ethics.
Risk evaluation and scale
The evaluation combines the probability of occurrence of the risk,
with the seriousness of potential impacts. The risk level displayed in
the matrix is an evaluation before impact of mitigation actions
(“gross risk”). After taking into consideration the impact of these
mitigation actions, the level of risk may be significantly reduced.
However, this “net risk” is not reported in the matrix. Risks are
assessed on the following scale:
1 – Non-existent; 2 – Low; 3 – Medium; 4 – High; 5 – Very high.
In this 2022 risk assessment, no “very high” risks were identified.
Key findings
The overall risk mapping exercise across Schneider’s value chain is
detailed in the matrix below, and can be summarized as follows:
Medium to high risk: Suppliers
Schneider uses a large panel of suppliers across different
geographies in the world: more than 53,000 in the first tier, and
several million at the level of tier 2 and above.
− Human Rights have been identified as a key risk, especially
in countries where labor laws and social protection are below
average standards. The areas of concern are mostly around
safety at work, decent workplace and labor standards. The
most frequent issues detected by Schneider’s audits are
related to decent working hours, paid leave and proper
resting time;
− CO2 emissions coming from the transformation of raw
materials into components, and then the transportation of
these components, have been identified as an area of risk.
This risk is quantified in the Scope 3 “upstream” analysis of
the company’s carbon footprint;
− A few very specific pollution risks are linked with some
categories of purchases, due to the nature of substances
used (solvents, Greenhouse gases, etc…).
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Medium to high risk: Contractors
Among Schneider’s 53,000 tier 1 suppliers, 9,900 are off-site
contractors (or otherwise called solutions suppliers), working on the
construction sites for customer projects. Key risks identified are:
− Health and Safety has been identified as a high risk, mostly
linked to the physical injuries that can happen during
construction, or when doing services and maintenance
operations. Some of the risks are specific to the presence of
electrical equipment, and some other risks are more general
to a construction site.
− Business Ethics is also identified as a risk due to the
contractual nature of this activity. Specifically, corruption,
conflict of interest and integrity are the most salient subjects.
− Human Rights is an area of concern, as these contractors
often resort to temporary manpower, contracted for the
duration of the construction at conditions that may not
respect decent work standards. In several countries, this
manpower is also coming from other countries of origin,
therefore at risk of being forced labor or in the difficult
condition of migrant workers.
Low to medium risk: Schneider entities and sites
Schneider Electric is operating in 100+ countries, with 162
production factories, 84 distribution centers, and about 800
commercial offices and R&D laboratories. The risk evaluation for
these locations has been assessed from low to medium, with the
exception of cybersecurity, which is considered high (see below).
− Health and Safety risks mostly concern production sites,
especially when the components or equipment manufactured
are heavy (medium voltage activities) or when electrical tests
are being performed (project execution centers). The risk is
also concentrated on the service teams, as their activity is
performed on customer sites, and in the frequent presence
of powered electrical systems.
− Human rights concerns are linked to working hours and
business pressure, these two subjects also being linked to
social dialogue. Following the challenge of COVID-19, supply
chain disruptions have left little room for teams to rest,
therefore increasing the overall fatigue, and its
consequences on mental health.
Specific situation of cybersecurity on Schneider Electric sites
and systems: as Schneider is a supplier of connected components
and software for complex, digital solutions, the company is a
potential target for cyberattacks aimed at reaching its customer’s
systems. Therefore, Schneider considers this risk as high, and top
of the agenda for its support to customers.
Low to medium risk: local communities
The ongoing risk evaluation for communities living around
Schneider Electric sites (factories, offices) demonstrates that the
level of risk is mostly low to medium, as Schneider Electric
operations are usually located in large, well-structured urban areas.
A very limited number of production sites may be an exception to
this, and they are the subject of a specific review.
As regards customer projects, the review of a sample of large
projects shows that in most instances, impacts on local
communities are limited. However, in a few specific cases,
interactions with communities are significant, and require greater
attention. As these projects are usually very different from one
another, a “customized” approach is necessary, both for risk
evaluation, and selection of mitigation actions.
Special mention of Carbon emissions for customers
(scope 3)
Since the beginning of the vigilance plan in 2017, the focus has
been on Schneider operations, on the upstream supply chain and
the transformation programs associated (supplier vigilance,
contractors, The Zero Carbon Project, Decent Work, etc.). The
downstream part of the supply chain has not yet been the subject
of an evaluation from a Human Rights perspective. However it has
been analyzed from the perspective of climate and CO2 emissions.
Scope 3 carbon emissions have been quantified, and several major
action plans are deployed as part of Schneider’s Net-Zero
Commitment. Schneider considers that acting on carbon and
climate are key responsibilities of the company. The Duty of
Vigilance section does not provide details of these measures. For
more information, please see the description of the program
included in Chapter 2.3 “Leading on decarbonization”, page 148.
Comparison of the 2022 analysis with 2021:
The following items have evolved:
− Psycho-social risks are increasing. Although this is difficult to
quantify, the impact of a complex business environment and
the pressure it entails is having consequences on employee
well-being and mental health, This subject is carefully
monitored at global and local level;
− Business Ethics is also at risk due to the highly competitive
pressure commercial teams are facing;
Given the increasing complexity of regulatory environment,
combined with the increased sophistication of the Group’s software
and systems, the subject of data privacy (employees and
customers) is also the subject of specific attention;
Schneider is using an independent database and risk assessment
methodology for its suppliers from the Responsible Business
Alliance (RBA). In 2022, RBA reviewed some of the parameters
used in its database. Some of the adjustments are merely
“technical”, and some others reflect a slight degradation of risk
parameters for specific categories of suppliers. The consequence
for Schneider is that the number of “risky suppliers” increased from
1,300 to 3,000. In response, Schneider’s on-site supplier audit
program remains focused on the top 1,300 risky suppliers. The
1,700 remaining suppliers are covered by the digital self-
assessment tool; which allows to monitor suppliers that may
become eligible for an on-site audit (see more details in the section
“Vigilance plan for suppliers” later in this report).
2023 German Law on Supply Chain Due Diligence: Schneider
Electric has significant operations in Germany and is subject to the
new vigilance law that came into force in January 2023. The
specific requirements of this law are being integrated into the
global Vigilance Plan.
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Schneider Electric 2022 vigilance risk matrix
The risk matrix below summarizes Schneider Electric’s risk analysis:
Schneider Electric sites
Suppliers
Contractors
Communities
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Very high risk
High risk
Medium risk
Low risk
Human rights
Decent
workplace
Health and
Safety
Environment
Pollution and
specific substances
management
Waste and
circularity
Energy CO2
and GHG
Business
Ethics
Ethical business
conduct
Offer safety
and
cybersecurity
Alert system,
protection and
non-retaliation
Offer safety
Cybersecurity
and data privacy
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S T R A T E G I C R E P O R T
2.2 Driving responsible business with Trust
2.2.10.5 Actions and impacts
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 “2.2.8 Human Rights” (i) and section “2.2.9 Employee health and safety”
(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.
See section “2.3 Leading on decarbonization”, 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.
(i) page 124;
(ii) page 127
page 148
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 111;
(ii) page 117
Offer safety
Offer safety
Cybersecurity
and Data
privacy
Cybersecurity
Data privacy
Suppliers
Suppliers
Supplier vigilance
Subcontractors
Sub-
contractors
Subcontractors
vigilance
Local Communities
Local
communities
Around Schneider
Electric sites
Around customer
projects sites
See section “2.2.6 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 “2.2.7 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 “2.2.12 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.
page 119
page 122
page 136
See section “2.2.12 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.
page 136
See section “2.2.13 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 146
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Chapter 2 – Sustainable development
2.2.11 Relationships with project execution contractors
2.2.11.1 Context
2.2.11.3 Group policy and governance
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 building 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 added value. Each
project is unique in its size, duration, and location.
Therefore, relationships with contractors are specific to a contract,
and not necessarily recurrent. In 2022, Schneider Electric worked
with approximately 10,000 solution suppliers in the Group’s
portfolio (with a total spend of approximately €1 billion please note
that not all of them may be simultaneously active during a year).
2.2.11.2 Risks and opportunities
Human Rights: as project sites are located in countries where
Schneider Electric may not be present, and involve independent
subcontractors, there is a risk that the standard policies
recommended by Schneider Electric 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 ethical
risks such as corruption, bribery, or pressures of a similar nature.
Cybersecurity: Some subcontractors may have digital interactions
with the end customer and Schneider Electric at the same time.
Therefore, their level of cybersecurity and data protection may
create some risks for the project and the final customer.
A rigorous management of subcontractors supports a reduction in
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.
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 enable
Schneider Electric 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 has
been implemented in pilot mode to project reviews in 2022, on a
selection of projects based on their size. The process will be
gradually enlarged based on the pilot’s result.
The overall governance for this topic is under the responsibility of
the Duty of Vigilance steering committee. The implementation of
actions is a joint responsibility between procurement teams and
global customer projects teams.
2.2.11.4 Actions and impacts
Out of the 10,000 solutions suppliers, Schneider Electric has
identified about 130 solution suppliers categorized as “high risk”.
Since 2018, around 80 of those suppliers have been audited, with
17 audits performed in 2022 leading to Schneider raising 190
non-conformances. Out of these non-conformances, 7 were
assessed as “top priority” for two suppliers.
The most recurring non-conformances with high-risk solution
contractors are related to labor, in particular terms of working
contract which needs to be provided in writing and in workers’
native language, and working hours which need to be better
controlled not to exceeding standard.
As a consequence of 2022 audits, it has been decided to stop
business with one solution supplier.
In addition to these non-conformances, specific risks related to
local contract negotiation and relations with local authorities may
occur.
Actions following non-conformances 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 has 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 have been adapted to
ensure vigilance topics are considered early in the project stage.
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Chapter 2 – Sustainable development
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2.2 Driving responsible business with Trust
2.2.12 Sustainable relationships with suppliers
2.2.12.1 Context
Schneider Electric is the most local of global companies, with a
presence in more than 100+ countries and a revenue and
employee footprint almost evenly distributed across major
geographies. While this provides a balanced market position, it
also results in a supply base that is almost evenly distributed
across the world. In 2022, Schneider Electric sourced goods and
services from more than 53,000 suppliers, across more than 60
categories amounting to approximately €16 billion. This diverse
supply base represents a unique combination of mature companies
operating on a global scale, to small & medium scale enterprises
serving local or niche markets and categories which require simple
assembly to complex manufacturing activities. Deeply committed
to advance all UN SDGs, and delivering solutions for sustainability
and efficiency, Schneider Electric is in a unique position to
influence and support its supply chain partners to progress and
embrace more sustainable social and environmental practices.
Schneider Electric embeds sustainability at every stage of supplier
lifecycle. It starts with the mission of the global procurement
organization, which embodies sustainability in its core. In addition
to top line growth and bottom-line impact, sustainability in sourcing
operations is one of the three key enablers for procurement
function and firmly institutionalized.
In order to sensitize all current and potential suppliers about
expectations and various stages of collaboration with Schneider
Electric, a Guide Book is documented, initially launched in 2016
and updated regularly. The document 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 and subsequently
dwells on various stages for approval, qualification, and
performance evaluation.
Consult and download Schneider’s Supplier Guidebook on
the Suppliers page on www.se.com
2.2.12.2 Risks and opportunities
Supplier collaboration steps
Owing to the location, size and nature of the Group’s operations, its
operating environment is directly impacted by climate change,
resource scarcity and human rights issues across its global supply
base. While the impact of Schneider’s own operations is relatively
limited, the footprint of its wider supply chain is more significant
and affected by the evolving trends. As an example, GHG
emissions from its upstream supply chain is estimated to be 25
times higher than its operations emissions.
By taking a combined approach to proactively managing upstream
supplier risks through Schneider Electric’s Vigilance plan, while
also driving ambitious Sustainable Development programs and
processes, Schneider Electric secures its business resilience and
increases its attractivity to customers, investors or new talents.
Key risks identified by the Vigilance risk assessment include human
rights (in particular safety at work, decent workplace and labor
standards), CO2 emissions (especially coming from the
transformation of raw materials into components and their
transport), and pollution risks linked with some specific purchases
categories.
2.2.12.3 Group policy and governance
Our global procurement mission aims to strongly align with our
company strategy of delivering customer value through
transformation of energy management. We will do this by
contributing to top line and bottom line growth, while establishing a
leadership position in sustainable sourcing. Our key priorities of
Quality, Innovation, Cost, Cash and Sustainability are strongly
supported by our people, our Tailored, Connected, Sustainable
Supply Chain and Digitization. As a key part of our end-to-end
supply chain, we count on our suppliers to be strong contributors
across all aspects of performance.
Schneider Electric deploys a three-step process comprising of
Supplier Approval Module (SAM), Supplier Qualification Module
(SQM) and Supplier Performance Module (SPM), to qualify new and
legacy suppliers for continued business association, where
Sustainability performance is a key evaluation criteria.
Supplier Approval Module (SAM)
The journey of a new supplier starts with the SAM. This module has
a dedicated evaluation on labor, ethics, environment, and
occupational health & safety, in addition to other elements. It is a
questionnaire-based evaluation combined with on-site audits by
Schneider Electric auditors. For all new suppliers, it is mandatory to
undergo this evaluation and only approved partners can proceed
to next stage of functional and technical audits required for
business qualification. Legacy suppliers are also required to
periodically renew the approval module.
Supplier Risk Management (SRiM)
The SAM assessment results have an impact on the overall risk
profile of the supplier managed by the SRiM process. Suppliers
with low and medium risk are favored for business association, and
those with high risk are requested to work on risk mitigation plan.
Supplier Qualification Module (SQM)
Post the successful approval module the suppliers undergo SQM,
which evaluates the technical feasibility with respect to the
supplies, and after successful completion the supplier can begin
the commercial association by supplying products to Schneider
Electric.
Supplier Performance Module (SPM)
During the commercial stage the performance of supplier is
constantly evaluated by the SPM. Different functional teams
evaluate different performance parameters, including sustainability
as one of the pillars and the overall performance has an impact on
the nature of business relationship (strategic or non-strategic).
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Chapter 2 – Sustainable development
Supplier
Approval
Module (SAM)
Supply
Qualification
Module (SQM)
Supplier
performance
module (SPM)
To secure Suppliers
capabilities to
satisfy Schneider
Electric’s needs
To ensure rigorous
evaluation of Supply
and Supplier
commitment against
all the qualification
requirements
To optimize the
performance of our
End-to-End supply
chain to maximize
our Customers
satisfaction
Co-operative
attitude
Quality
10
8
6
4
2
0
Delivery &
Logistics
Sustainability
Productivity
Offer or process
Innovation
Competitiveness
Best in class level
Current level
Development Area
Gaps in performance must
be tackled by suppliers
themselves or through
development programs initiated
by Schneider Electric (Quality,
Logistics, Lean…)
For Indirect Procurement; Quality, Delivery & Logistics are merged
into 1 dimension: Service Level
For more details please visit se.com/ww/en/about-us/suppliers.
Schneider Supplier Portal–Supplier Relationship
Management (SSP-SRM)
The results of approval and performance evaluation are available in
real time on the Schneider Electric supplier portal (SSP-SRM) and
are accessible to global supply chain community, making supplier
interactions/decisions more fluid and preventing any supplier with
poor sustainability performance from entering into the supply base.
The supplier performance is 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. All business
reviews with suppliers and internal functional business reviews with
department Executives cover the sustainability performance as a
key criteria of evaluation.
General Procurement Terms and Conditions
All Schneider Electric suppliers must abide by the General
Procurement Terms and Conditions: each supplier undertakes to
apply the principles and guidelines of the ISO 26000, the rules
defined in the ISO 14001 standard.
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.
Consult and download Schneider General
Procurement Terms and Conditions from the
Suppliers page on www.se.com
Supplier Code of Conduct
The foundation of Schneider Electric’s sustainability ambition is its
own Supplier Code of Conduct. It is the mother document of all
supplier relationships and lists out the basic expectations with its
suppliers across, but not limited to, environment, human rights and
decent work, fair business practices, sustainability procurements,
occupation health and safety. The document also provides access
to remedy by means of Trust Line, which is the ethics hotline of
Schneider Electric. Any partner can access this help line to raise
concern associated with ethical or sustainability standards with
respect to business association. The Supplier Code of Conduct is
also included in General Terms & Conditions, and in all other
contractual documents.
Consult and download Schneider Supplier Code of Conduct
from the Suppliers page on www.se.com
2.2.12.4 Sustainable Procurement
framework and strategy
Schneider Electric has deployed a Sustainable Procurement
Framework, which institutionalizes strong governance mechanism
to proactively screen, identify and mitigate sustainability risk from
suppliers and embed preventive controls into the procurement
processes and integrate in the day-to-day operations. This ensures
sustainability is embedded in the routine operational activities of all
procurement team working around the world.
The framework also identifies thematic areas across ESG
spectrum, where Schneider Electric has material impact and can
play an industry transforming role. Collaborating and engaging with
supply partners to develop maturity on climate action, circularity,
human rights and challenging status-quo allows to unlock newer
areas of growth. The Group’s ambitious sustainability roadmap
leads its partners to define the next wave of evolution of industry,
making them fore-runners who shape the future. This pursuit of
sustainability helps identify new and several hidden avenues of
efficiency, operational improvement and creating and capturing
new markets, which provide competitive advantage and positively
corelate with financial performance. All engagements within
Schneider Electric and its supply base establish that sustainability
is good for business and has to be looked at as an opportunity.
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S T R A T E G I C R E P O R T
2.2 Driving responsible business with Trust
Sustainable Procurement Framework 2021–2025
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.
Environment
Social
Governance
The Zero
Carbon Project
Green
Materials
Sustainable
Packaging
REACH/RoHS
Conflict
Mineral/Cobalt
Decent Work
Social
Excellence
Reduce CO2
emissions
from top 1000
suppliers’
operations by
50%
Increase green
material content
in our products
to 50%
100% packaging
uses recycled
cardboard &
no single-use
plastic
Continued adherence and compliance
to regulations governing hazardous
materials and conflict minerals
100% strategic
suppliers
provide decent
work to their
employees
Deploy a “social
excellence”
program through
multiple tier of
suppliers
• Supplier Approval
Module (SAM)
&Quality Mgt (SSQM)
• Sustainable
Development,
Environment, Ethics &
Compliance Terms &
Conditions
• Quarterly Business
Review
• Trust Line
• Sustainability in all
our Procurement
Excellence System
(SSI #3)
(SSI #4)
(SSI #5)
(SSI #6)
(SSE #12)
ISO26000:
Improve sustainability profile of suppliers though leading ESG practices (strategic suppliers)
Duty of Vigilance:
4,000 suppliers assessed under Vigilance Program (SSE #17)
Supplier Code of Conduct:
Summarizes the most fundamental requirements from Schneider Electric towards its Suppliers
~53,000 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
Target + 1,000 audits
2021–2025
SSE #17 indicator: 4,000 suppliers assessed
under Schneider Electric’s ‘Vigilance Program’
2.2.12.5 Vigilance plan for suppliers
Supplier risk categories and audit plan
In order to evaluate and mitigate the sustainability risk from its
global suppliers, Schneider Electric conducts a risk evaluation of its
entire supply base on an annual basis. This evaluation covers
sustainability risks and specific parameters such as the type of
industrial process used by the suppliers, their technology, and the
geographic location. 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 Electric’s entire network of about 53,000
tier 1 suppliers is processed through this methodology and is
refreshed every year with the new supplier baseline in order to
identify high risk suppliers.
Overall plan
The audit plan started in 2018. 2020 was the third year of
implementation and Schneider Electric completed 3 years
schedule with 374 audits.
From 2021 to 2025, Schneider Electric has defined new objectives
as part of its sustainability strategy: expanding from the previous
plan, the Group set an objective to conduct 1,000 on-site audits of
high-risk suppliers and deploy 3,000 self-assessment audits for
other suppliers not in the high-risk category. This audit plan is
integrated into the Schneider Sustainability Essentials (SSE #17)
and progress is externally assured and published each year.
For the Group’s 2022 plan, about 1,300 “high risk” suppliers have
been identified; this number varies depending on the year.
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Chapter 2 – Sustainable development
On-site audits
Self-assessments
Schneider Electric’s on-site 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 and decent workplace: 36 questions
• Health and safety: 40 questions
• Environment: 21 questions
• Offer Safety: non-applicable in RBA framework. More details
about Schneider’s quality strategy are provided in section “2.2.6
High standards for the quality and safety of our products” page
119.
• Business Conduct: 11 questions
• Cybersecurity: non-applicable in RBA framework. More details
about Schneider’s end-to-end cybersecurity approach are
provided in section “2.2.7 Digital trust and security” page 122.
• In 2022, despite COVID-19 travel restrictions during the first part
of the year, notably in Asia, the Group conducted 223 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 were then conducted to review the
corrective actions implemented to remediate non-conformances
identified during the initial audit and validate the closure.
Information and findings regarding on-site audits with new
suppliers are described below.
Most non-conformance in 2022 were related to health and safety,
labor standards and management systems (32%, 27%, and 23%
respectively). Graph 3 provides the breakdown of non-
conformances by topic and graph 4 by geography.
For the most serious non-conformances, each case is escalated is
to the Chief Procurement Officer level. An analysis of the 172 “top
priorities” raised in 2022 shows the following issues are the most
recurring:
• Labor standards (47% 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 (44% 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
• Environment and management systems (9% of top priorities):
lack of administrative compliance, management tools, and
systems; and insufficient waste management and pollution
prevention systems.
As of end of 2022, Schneider Electric has closed 90% of 2021 and
28% of 2022 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 the end of
the business relationship. In 2022, two relationships with suppliers
were terminated, including a contractor for project execution.
In 2022, Schneider Electric implemented a program to review a
selected number of audits that were carried out in previous years to
review whether the non-conformances resolution measures were
still in place and durable. So far, no major drift has been identified,
confirming the efficiency of the program.
In 2021, a specific self-assessment questionnaire was developed,
building on the experiences of on-site audits performed during
previous years. Among the questions asked, the core ones aim to
check whether the suppliers are compliant on mandatory subjects
of labor, human rights, environment, and health and safety. The two
main goals of this assessment are to help the supplier to reflect on
its compliance to vigilance standards, and for Schneider Electric to
identify whether on-site audits may be necessary.
Trust
SSE #17
4,000 suppliers assessed under our
‘Vigilance Program’
Overall, the resolution of non-conformances identified
since the program’s inception in 2017 has supported the
improvement of the working conditions for 250,000
employees.
• Decent Work: during an audit, Schneider Electric
identified a medium size company active in plastic
molding that did not correctly pay overtime to workers.
The overtime was measured, but not paid in full as it
should have been. The supplier acknowledged the
situation and proceeded to recalculate the amounts due.
Two months after the audit, the situation was corrected.
After the re-audit, Schneider Electric validated the
resolution, and the non-conformance was closed. The
supplier now precisely tracks the working hours and
makes payment of overtime at the legal rate.
• Health & Safety: during an audit, Schneider Electric’s
auditor noticed that the fire alarm/fire detection system
was not operative. An analysis of the root cause showed
that the emergency activation point was blocked. The
supplier worked with its safety contractor to analyze the
root cause, and subsequently implement remediation
actions. A comprehensive maintenance plan was
implemented following this event. After two months, a
reaudit was carried out to verify compliance and
Schneider Electric decided to close the
nonconformance.
2020 Baseline
2022 Progress
2025 target
374
2,083
4,000
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During 2021, 624 suppliers submitted answers, and 657 in 2022.
Procurement teams reviewed the answers and identified a few
suppliers where on-site audits were conducted to ensure suppliers
have implemented corrective actions.
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 2022, approximately 800 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 2022, approximately 1,000 supplier team members
had attended these events. These sessions include in-class
face-to-face workshops and digital webinars.
% Risky suppliers identified in 2022 by geography – Graph 1
% Audits carried out in 2022 by geography – Graph 2
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India
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India
EAJP*
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North
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South
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% Non-conformances in 2022 by geography – Graph 4
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** EMEA: Europe Middle East Africa
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India
EAJP*
EMEA**
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South
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From the beginning of the program in 2017 to the end of 2022,
about 800 suppliers had been audited on site, and 10,000+
non-conformances were raised, and subsequently remediated.
Most were related to health and safety and 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.
Schneider Electric is well on track to reach the new target. The 223
on site audits performed in 2022 have allowed Schneider to raise
2,700+ non-conformances. Out of these non-conformances, 170+
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.
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2.2.12.6 Promotion of a continuous
improvement process based on the ISO
26000 standard for strategic suppliers
Sustainable development is one of the pillars to measure supplier
performance, allowing the highest-performing suppliers to become
and remain “strategic” suppliers. Performance resulting from the
EcoVadis / ISO26000 evaluation is a key element of the sustainable
development strategy and SRiM process. The results of the
assessment are an integral part of the business reviews scheduled
between buyers and suppliers on a quarterly to yearly basis. The
goal is to share with suppliers all improvement plans to put in place
before next assessment, in order to improve all aspects of their
sustainability posture, based on facts and clear recommendations.
2.2.12.7 Conflict Minerals program
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.
The Group has set out to engage all its strategic suppliers in a
process of continuous improvement in sustainability. At the end of
2022, strategic suppliers represented c. 55% of Schneider
Electric’s purchases volume. Strategic suppliers who have passed
the third-party evaluation process cover 70%+ of total strategic
purchasing volume.
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 of 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.
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.
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.
The new ambition for 2021 – 2025 is to raise the bar even higher to
achieve an average of 65 points within 5 years.
2021 end of year result was +1.3 points with an average of 58.7
points, and , the target set at +1.6 points was achieved, so to reach
60.3/100 average score. Overall, since end 2017 the average
ISO26000 score of Schneider’s strategic suppliers has increased
by more than 9 points.
ISO 26000 Program Progress
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Note that average score of companies assessed by EcoVadis more
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Schneider’ strategic suppliers sustainability position is much more
mature than the global average.
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At the end of 2022, 88% of the smelters and refiners identified in
Schneider Electric’s supply chain were designated as compliant
with a recognized third-party validation scheme or actively
engaging in same approach (equivalent to approximately 67% of
the relevant spend being compliant). The reduction of 14% points is
due to the ongoing war in Ukraine and the campaign is still
ongoing, and the Group is still working on eliminating all unwanted
smelters from its supply chain. At the time of the creation of this
report the due diligence process is still ongoing and the campaign
will close at the end of February 2023. Schneider Electric is actively
working with its suppliers and closely monitors its supply chain to
comply with the Conflict Minerals regulations and meet the
Customers’ expectations as much as possible. Based on current
knowledge, 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, nor supported
illegally operating or sanctioned entities.
Consult the page dedicated to Suppliers
on www.se.com
Cobalt and Mica program
Mid-2020, Schneider Electric added cobalt to its Conflict Minerals
Compliance program and added Mica in 2021, shifting to Extended
Minerals Program. Cobalt and Mica 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, and are often characterized by widespread human
rights abuses and violations of national or international law.
The program is focusing on the responsible sourcing of cobalt used
as a key element for lithium-ion batteries in Schneider Electric’s
supply chain. With 64% data collected (that is relevant to 90% of
the spend of selected suppliers), 100% of the smelters and refiners
identified in the Group’s supply chain were designated as
compliant with a recognized third-party validation scheme or
actively engaging in same approach. Therefore, the Group has no
reason to believe that any Cobalt or Mica the Group sourced, have
directly or indirectly financed or benefitted armed conflict in the
covered countries, nor supported illegally operating or sanctioned
entities.
2.2.12.8 REACH and RoHS
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. Through 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
enabled by working in an adapted manner with certain suppliers.
In France, Schneider Electric is a major player in the International
SME Pact.
Finally, by the very nature of its activity, the Group continually
encourages its ecosystem (including customers and suppliers) to
implement energy efficient solutions.
2.2.12.9 The Zero Carbon Project (SSI #3)
In 2022 Schneider Electric’s new Net-Zero commitment was
validated by the Science Based Targets initiative. The Group aims
to reduce its scope 3 emissions by 25% by 2030 and by 90% by
2050 against a 2021 baseline. This means that all Schneider
factories and transportation, and those of its suppliers in the entire
upstream value chain need to transition towards operating without
using any fossil fuel and run only on clean energy. To achieve this
ambitious target, as a first step Schneider has launched The Zero
Carbon Project, which aims to cut 50% of operational carbon
emissions from its top 1,000 suppliers by 2025 (SSI #3). At the end
of 2022 SSI #3 achieved a remarkable 10% performance and has
laid the ground to accelerate decarbonization in the coming years.
Read more details on The Zero Carbon Project in
Chapter 2.3 “Leading on decarbonization” page 148, and
in chapter 2.7 “Methodology and audit of indicators”
page 242.
Consult our webpage dedicated to The Zero Carbon
Project from the Sustainability section on www.se.com
2.2.12.10 Green materials (SSI #4) and
sustainable packaging (SSI #5)
Green Materials (SSI #4)
Similarly, an initiative has been launched to increase the proportion
of green material in Schneider products to 50% by 2025 (SSI #4).
The scope of this initiative currently includes about 30% of
Schneider’s procurement volume:
thermoplastics (direct and indirect purchase);
•
• steel (direct purchase); and
• aluminum (direct purchase).
Other kinds of materials such as 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 the next phases. At the end of 2022, 18% of
materials in scope were qualified as “Green”, following specific
criteria.
For thermoplastics, the 2022 performance was achieved mainly by
embedding recycled plastics in products and by obtaining supplier
proof for both recycled and green flame retardant.
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For steel, good progress was made, notably due to the certification
of large steel suppliers to Responsible Steel in 2022, as well as
sourcing from suppliers using Electric Arc Furnaces.
For aluminum a similar approach to the one for steel will be applied,
focusing on building trust and transparency with suppliers.
Read more details on the Green materials program
in chapter 2.4 “Be efficient with resources”,
page 174, and in chapter 2.7 “Methodology and
audit of indicators” page 242.
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.
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, over 45% of the
packaging spend in scope was attributed to sustainable packaging
and the end of 2022, vs 21% end 2021.
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 50
million people are trapped in modern day slavery worldwide, with
more than 70% being women and children. The COVID-19
onslaught had a catastrophic 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.
Decent Work Program
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 dialogue
and normalizing universal worker rights irrespective of the
geography or the context of employment.
The Decent Work Program focuses on engaging suppliers to
protect worker rights, going beyond the regulatory requirements
and prevailing normative practices. The initiative is aimed at
implementing preventive controls that act as an additional buffer
against any potential violations and reduce the likelihood of any
malpractices. Gradually, such actions need to become the new
norm for evaluating performance of the supply chain.
Read more details on the sustainable packaging
program in chapter 2.4 “Be efficient with resources”,
page 174, and in chapter 2.7 “Methodology and
audit of indicators” page 242.
The key requirements of the initiative are based on the principles of
decent work, promulgated by the International Labour Organization
(ILO), and also leverage concurrent issues, to make it
comprehensive. The details of the 10 pillars forming the foundation
of the program are outlined on the next page.
2.2.12.11 Decent work
Implementation
Context
Supply chains power the economic engine of the world. On the one
hand they help companies leverage the global capabilities and
benefit from 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.
The scope of the program includes strategic suppliers across
direct (also known as production) and indirect (known as non-
production) procurement.
The initiative adopts the approach of a development program,
acknowledging that the program criteria may be new for many
suppliers and Schneider Electric will need to support them by
handholding, capacity building, and constant engagement for
implementation. To facilitate the execution by suppliers in a gradual
way, the program is split in two stages.
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2.2.12.12 Supplier diversity program in the
United States
Schneider Electric’s US supplier diversity program strives to
identify, include, and engage qualified diverse suppliers to support
the company’s goals and 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).
• LGBTQ+-Owned Enterprises (LGBTBE)
As of end of December 2022, the Group is on target to spend more
than 4% of its total US Procurement spend with uniquely diverse
businesses. This represents an increase of nearly 0.5% vs. 2021.
Schneider Electric is aware of the work it has to do in this area and
is committed to growing its program within, and outside, the US to
bring more opportunities to the diverse business community.
In 2022, Schneider Electric enhanced its Supplier Diversity
program in the following directions:
• Expanded relationships with supplier diversity partner
organizations
• Performed data cleansing exercises quarterly to reflect the
diversity more accurately in its supply chain
• Updated policies, procedures and web site content to more fully
articulate its efforts in supplier diversity
• Conducted robust training across the North America
organization for both procurement and other employees who
have authority to purchase good/services on behalf of the
company
The evaluation of supplier performance will be carried out through
an online questionnaire that is rolled out via SSP-SRM – Schneider’s
supplier relationship portal. A specifically trained team of
associates from the Global Procurement Services (GPS) lead the
launch of the initiative. The suppliers are required to respond to the
questions and upload evidence to support the responses. All
responses and accompanying evidence are evaluated to meet the
minimum criteria of decent work. In cases where the supplier
actions do not meet the minimum requirements, feedback is given,
and corrective actions need to be implemented by the suppliers in
a timely manner. Upon rectification, the information needs to be
resubmitted along with the evidence for the re-evaluation.
To formally record suppliers’ commitment to the Decent Work
Program, a participation confirmation survey is sent to the
suppliers. Once the supplier responds in the affirmative, the decent
work program stage 1 survey is sent to them for participation.
During the year, 765 suppliers were invited to participate in the
Decent Work Program and by the end of 2022, more than 525
suppliers agreed to join the program, and engagements are
underway to onboard other eligible suppliers. Owing to the
dynamic nature of the supplier categorization, Schneider Electric
will review the list of eligible suppliers on an annual basis and
ensure inclusion of relevant suppliers in the program. In addition to
English, the program requirements were also translated into
Mandarin, including trainings to ensure adequate coverage for
suppliers.
Trust
SSI #6
100% of our strategic suppliers
provide decent work to their
employees
During the year Schneider Electric conducted four
dedicated sessions for procurement teams worldwide, to
introduce the program, its objective and requirements of
implementation. These sessions were attended by more
than 225 procurement staff. 23 sessions were organized
during the year to sensitize and equip the suppliers about
the rationale, structure and implementation requirements of
the program. These sessions included focused group
trainings as well as one to one dedicated trainings for the
suppliers and were attended by more than 350 supplier
participants. As of end of 2022, 473 suppliers have been
invited to respond to the decent work program stage 1
questionnaire, 104 suppliers have responded to the survey
and 13 suppliers were assessed as compliant post the
evaluation of their responses and validation of required
documentation.
2022 Baseline
2022 Progress
2025 target
1%
1%
100%
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Key pillars of the Decent Work program include:
1. Employment
opportunities
Employment opportunities should be available to all eligible, in a transparent, well-informed manner, and
without any charges, 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 address and resolve 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 wage policies to ensure the affordability of a dignified living by the
workers. Additionally, employment should equip the workforce to improve current skill sets 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 raise concerns in a timely manner, 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 and the 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
Industrial wages are often not sufficient to provide 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.
9. Purchasing
practices
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 leveler/equalizer and not augment the disparity.
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
2.2 Driving responsible business with Trust
2.2.13 Vigilance with local communities
2.2.13.1 Context
In 2020, Schneider Electric extended the scope of its vigilance risk
analysis to communities in geographic proximity of Schneider’s
local operations. As a result of this proximity, people’s conditions of
living could be affected by the Group’s activity. Schneider’s local
operations are 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.
2.2.13.2 Risks and opportunities
The risk overview exercise has been carried out for the top 30
Schneider Electric sites throughout the world and a selection of 40
customer projects and is still in pilot mode. The main risks that have
been explored were related to the impact of Schneider Electric’s
activities on the local infrastructures such as transportation and
mobility, access to energy or water, access to staple-good and
utilities, safety, and protection against ethical breaches.
Opportunities have also been identified in the form of improvement
of infrastructures, better access to education, support to socio-
cultural local projects, and improvement of local employment.
2.2.13.3 Governance
The overall governance is under the responsibility of the Duty of
Vigilance steering committee, throughout the pilot phase. In the
next phase, the steering committee will bring in additional
stakeholders to implement the actions that will be decided.
This subject is governed by Schneider Electric’s Human Rights
policy as well as the ambition set forth in the Group’s vigilance plan.
At a later stage, some specific policy may be drafted to further
structure the framework.
2.2.13.4 Communities living around
Schneider’s sites
Vigilance risk assessment for Schneider Electric’s
30 largest sites
The overall result shows that the level of risk to local communities
living around Schneider Electric sites is “low” in most cases. This is
mainly due to the fact that the Company is usually located in large,
urban, or peri-urban areas, crowded with many similar or larger
companies. In the case of factories, they are mostly located in
already existing dedicated industrial areas, with stable
infrastructures and transportation networks, and Schneider
Electric’s presence does not have an impact on these areas.
Among the top 30 sites, the Group only identified a very limited
number 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 Schneider Electric speaks 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.).
2.2.13.5 Communities living around
customers’ project sites
In 2021, Schneider Electric extended its risks assessment to cover
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.
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:
Top country risk
Top customer activity risk
Chad
Mauritania
Angola
Nigeria
Tanzania
Mining, minerals and metals
Oil, gas and petrochemicals
Power and grid
Life sciences
Water
Based on the combination of these criteria, a sample of 40 projects
have been selected for review.
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Chapter 2 – Sustainable development
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 1: Schneider Electric provides 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 2: Schneider Electric provides switchgear and/or industrial
equipment, but it is not the main contractor. Mitigation
capabilities are limited.
• Type 3: Schneider Electric provides software and control, and is
mostly working remotely, being present on site only for final
testing and commissioning. Mitigation capabilities are very low.
Among the projects reviewed, two were of type 1, six of type 2, and
six of type 3.
• A study of the two projects of type1 shows the following risks
and benefits to local populations:
− Temporary/brief disturbance in 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.
For type 1 projects that have been reviewed, Schneider Electric
and the contractors under its responsibility were not found to create
major or significant risks for communities. Some points of
improvements that would contribute positively to the communities
were identified, such as for example: additional focus on local
education and technical training, awareness of energy-related
subjects, or more emphasis on local hiring. Globally, a more
structured communication and pattern of interaction with
communities or their representatives would bring value.
• Among the 12 projects of type 2 and 3, six are projects with
significant impact on the local communities (petrochem, etc.)
and six have limited impact (desert or remote location). For the
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, adapted to these project profiles, are currently under
review.
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S T R A T E G I C R E P O R T
2.3 Leading on decarbonization
In this section
2.3.1 Climate risks, opportunities and impact management
150
2.3.5 Decarbonizing the Group’s operations by 2030
2.3.2 Schneider Electric’s 2022 Greenhouse Gas footprint
2.3.3 Schneider Electric’s Net-Zero commitment
2.3.4
Investing to achieve the Group’s climate strategy
and vision
154
156
158
2.3.6 Decarbonizing the Group’s supply chain by 2050
2.3.7 Decarbonizing the Group’s downstream emissions
2.3.8 Enabling customers to decarbonize with EcoStruxure™ 172
159
165
170
Context and the Group’s commitments
As the United Nations Environment Programme (UNEP) points out
in its Emissions Gap Report 2022, the window to limit the global
temperatures rise to 1.5°C is closing. The world is not on track to
reach the Paris Agreement goals, and global temperatures could
reach a 2.8°C average increase by the end of the century. Urgent
action and a system-wide transformation are needed to deliver the
enormous cuts in emissions necessary to limit GHG emissions by
2030.
As 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 that there are ways for companies to “do good while doing
well and vice-versa”. First, the Group takes responsibility for its
carbon footprint, across its operations and full value-chain.
Second, it adapts and improves the solutions and products it offers
to its customers to help them in their decarbonization journey.
The number of companies pledging to align their business
strategies to a 1.5°C (or well below 2°C) trajectory has increased.
Since 2018, more than 2,000 companies have set science-based
reduction targets approved by the Science Based Targets initiative
(SBTi). To determine science-based targets and align with Net-Zero
ambitions, the SBTi released the SBTi “Corporate Net-Zero
Standard” at the end of 2021. Schneider Electric was one of the first
companies to have its Net-Zero targets validated by the SBTi with
this new standard in August 2022. But pledges are not enough –
and Schneider Electric is committed to action, acknowledging that
the world needs to move from pledges to progress.
Concrete actions for the 2021-2025 period are monitored and
shared transparently in Schneider Sustainability Impact, and
Essentials. They are overseen by various dedicated Committees up
to the Board of Directors. In the longer term, the Group is
committed to be Net-Zero in its operations by 2030, and across its
entire value chain by 2050. It has made specific commitments for
energy efficiency, electrification, and renewable electricity under
the EP100, EV100, and RE100 initiatives of the Climate Group.
Schneider Electric also aims to deliver to its customers 800 million
tonnes of saved and avoided CO2 emissions between 2018 and
2025 thanks to EcoStruxure™ solutions.
“The fight against climate change is
driving a profound transformation
of our economic and energy
systems. Schneider Electric is one
of the world’s first companies to
validate science-based Net-Zero
targets and so far, we’ve made
good progress in meeting them.
Yet this requires faster and more
concerted action, and we’re ready
to engage with all our stakeholders
and lead the way.”
Xavier Denoly, SVP Sustainable Development
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Chapter 2 – Sustainable development
Progress of our Climate commitments
Schneider
Sustainability
Impact
(SSI)
Essentials
(SSE)
#
1.
2.
3.
1.
2.
3.
4.
2021-2025 programs
Baseline(1)
2022 progress(2)
Grow Schneider Impact revenues(3)
2019: 70%
72%
Help our customers save and avoid millions of
tonnes of CO2 emissions
Reduce CO2 emissions from top 1,000
suppliers’ operations
Decarbonize our operations with Zero-CO2
sites
Substitute relevant offers with SF6-Free
medium voltage technologies
2020: 263M
440M
2020: 0%
10%
2020: 30
77
2020: 26%
41.5%
100%
Source electricity from renewables
2020: 80%
85%
Improve CO2 efficiency in transportation
2020: 0%
-7.7%
90%
15%
2025
Target
80%
800M
50%
150
These programs
contribute to UN SDGs
(1) The baseline year for each indicator is provided together with its baseline performance.
(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 #+1 and SSE #12 in 2022), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 270). Please refer
to page 242 for the methodological presentation of each indicator. The 2022 performance is also discussed in more details in each section of this report.
(3) Per Schneider Electric definition and methodology. Note that for the reporting requirements under the European Taxonomy Regulation, please refer to pages 253
to 263.
2022 Highlights
A LIST
2022
CLIMATE
Schneider Electric is on the CDP Climate
Change A-List for the 12th year in a row.
Guidehouse Insights released its 2022
Power Purchase Agreement (PPA)
Marketplace Solution Providers
leaderboard, which ranked Schneider
Electric in first place.
Altivar variable speed drives named The
Most Climate-positive Carbon Handprint
Product and RM AirSeT medium-voltage
switchgear received an honorary
certificate for High Potential Carbon
Handprint Innovation.
Long-term roadmap
2030
2025
2040
2050
• Carbon neutral
• 25% absolute
• Carbon neutral
operations
GHG emissions
reduction across the
entire value chain
from a 2021 baseline
across the entire
value chain (Scopes
1, 2, and 3), including
carbon offsets
• Net-Zero CO2
emissions
across the entire
value chain
• “Net-Zero ready”
operations
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Chapter 2 – Sustainable development
2.3 Leading on decarbonization
S T R A T E G I C R E P O R T
2.3.1 Climate risks, opportunities and impact
management
Schneider Electric’s Net-Zero Commitment is part of a broader
awareness of the climate-related risks, opportunities, and
associated sustainability and resilience measures that any
company must undertake. The Group is assessing its risks and
opportunities following the recommendations of the Task Force on
Climate-related Financial Disclosures (TCFD). In 2022, it conducted
a forward-looking climate scenario analysis, expanded its
climate-related risk governance and defined its strategy to address
climate-related risks and opportunities.
Risks are identified and assessed with specific internal and
external metrics, but also with 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. The risk assessments cover market risks,
acute physical risks, chronic physical risks, legal risks, current and
emerging regulations as well as reputational risks. In 2022, around
40 of the Group’s top managers were interviewed in addition to
Board members.
Climate-related risks are included in Schneider Electric’s Enterprise
Risk Management framework built around 3 lines of defense and an
independent control:
• businesses and operations manage risks while achieving
organizational objectives;
• risk domain leaders act as risk overseers, set guardrails and
•
review the risk management systems;
the Group risk management is accountable for the overall risk
governance with oversight by the Board of Directors.
Internal Audit acts as an independent assurance to advise on the
adequacy and effectiveness of governance and risk management.
More details in chapter 3 page 292
“How we manage risks at Schneider Electric”.
Schneider places dependency analysis at the heart of its risk
management and performs a forward-looking climate risk and
vulnerability assessment to identify and price the materiality of
physical and transition climate risks that may affect its own
operations and sites, its extended value chain (upstream and
downstream), and overall economic activities in the short-term,
medium-term and long-term, using scenario analysis.
The Group has developed a scenario-based analysis of climate
physical and transition risks, applying climate-related risk
scenarios entailing different emission pathways between 1.5°C and
>4°C temperature rise by 2100, with a digital-twin of the company
including financial projection, market breakdown, supply chain, and
carbon footprint to quantify financially the physical and transition
risks for the Group. Five emissions pathways have been
considered: SSP5-8.5, SSP3-7.0, SSP2-4.5, SSP1-2.6 and SSP1-1.9
by 2050, 2070 and 2100.
2.3.1.1 Climate-driven opportunities
The climate crisis calls for significant action and innovation across
businesses, industries, and governments. Increasing awareness of
the risks posed by climate change has led thousands of
businesses to make commitments to act on decarbonization,
energy efficiency, electrification, renewable energy procurement,
and more. More than 4,000 companies have either set or made a
commitment to set targets in line with the Science-Based Targets
initiative. However, only a fraction manage to reduce their carbon
footprint in line with 1.5°C to 2°C scenarios.
2022 saw an unprecedented number of changes in climate or
Corporate Sustainability Reporting (CSR) regulations – from the
CSR Directive (CSRD) in Europe and the implementation of the
climate objectives of the European Taxonomy Regulation, to the
Securities Exchange Commission (SEC) Climate Disclosures
consultation in the US and the Business Responsibility and
Sustainability Reporting (BRSR) in India.
Schneider Electric is uniquely positioned to seize opportunities
from the growing demand for greener, low-carbon products and
services, and to help its suppliers and customers in their
decarbonization journey. The Group promotes a three-step
approach with its ecosystem: strategize, electrify, and decarbonize.
The Group sees the energy and climate transition as an opportunity
for companies that are “part of the solution” to grow their revenues.
Schneider’s Energy Management and Industrial Automation
solutions help customers use their energy and resources more
efficiently, and reduce their CO2 emissions. Furthermore, smart grid
technologies unlock the potential to electrify and, optimize energy
usage, powered by renewable electricity.
Following internal research, the Group sees an acceleration in the
dominant roles 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, resource use,
and circularity, as well as increased resiliency and security.
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Chapter 2 – Sustainable development
All these findings, and their potential financial impact on Schneider
business has helped the Group fine-tune key development areas
that will allow it to actively contribute to the low-carbon transition,
enabling it to develop its portfolio of sustainability-related products
and solutions.
In 2022, 72% of the Group’s revenues qualified as “Impact”,
meaning revenues from products and solutions that generate
energy or resource efficiency to customers. 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.
See more details about Schneider Impact revenues and
EU taxonomy in chapter 2.1.9 page 100.
2.3.1.2 Climate-related risks
Reputation risk
As Schneider Electric has been working to reduce its own GHG
emissions for over 15 years and has a proven track record of
success with its past commitments related to reducing its own
emissions, the Group does not anticipate significant reputational
risk. Yet, the risk from the Group’s actual or perceived failure to
achieve its environmental targets, or commitments could negatively
impact its reputation or otherwise materially harm its business. This
risk is also tied to growing and moving environmental regulations.
Risk monitoring and management
The Group monitors and manages its reputation risk by:
• continuously monitoring its sustainability performance and
revising its strategy to adapt to regulations, and customer
demand;
• consistently and transparently presenting its sustainability
performance to its stakeholders, across all environmental,
social, and governance topics;
• considering 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 Scopes 1 & 2 carbon emissions, carbon pricing has
indirect rather than direct impacts, resulting in increased supply
chain costs or product costs;
• working collaboratively with relevant stakeholders to develop
and strengthen regulatory frameworks, advance standards to
create common methodologies to measure the environmental
footprint of products, and to improve corporate carbon
accounting.
Supply chain disruption
Schneider Electric has over 200 industrial and logistics sites
globally and is exposed to the physical effects of climate change in
the form of more frequent and severe acute weather events. This
could result in damage to assets, disruption to business operations,
and human consequences. Extreme weather events do not only
threaten Schneider’s assets and properties but also the overall
supply chain. Shortages or logistic bottlenecks in the upstream and
downstream supply chain can translate directly into revenue losses,
higher costs, and increased working capital requirements. Delays
in production and delivery can impact customer experience.
Risk monitoring and management
To understand the risk exposure of Schneider’s sites and extended
supply chain and identify mitigation and adaptation actions, the
Group performed a physical climate risks and vulnerability
assessment. In this assessment, the Group developed a digital-
twin of the company including geographic location and
dependency of key facilities, and quantified for each site the
exposure of both assets and business operations to acute and
chronic climate-related perils, calculating the exposure of the
Group’s economic activities in the short, medium (2030) and long
term (2050) under different scenarios from the Intergovernmental
Panel on Climate Change (IPCC), from 1.5°C to >4°C temperature
rise by 2100.
The Group monitors events across 10,000 nodes (such as ports
and critical supplier locations) to shorten reaction time should
events occur, and thereby minimize business impact. In addition,
an analysis of criticality of industrial sites is performed by
independent experts, covering areas including interdependency
analyses, alternative supply, and time to recover in case of
damage. At present, the impact of natural hazards is not material to
the Group’s financial statements. Indeed, the magnitude of impact,
whether on physical or supply chain risks, is considered “medium
to low”, and likelihood “as likely as not”, however the Group is
proactively monitoring this risk. The Group’s Supply Chain uses a
resiliency index that includes natural and climate-related hazards to
assess and mitigate business interruption risks.
To mitigate and adapt to these risks, the Group launched the
“Power of Two in Manufacturing”, a project to bolster greater supply
chain resiliency. The project aims at ensuring that no product is
manufactured in a single location, or with only one supplier for any
critical parts or components. More information on Schneider’s
measures to adapt to climate change are provided in the next
section.
Finally, the Group’s Property Damage and Business Interruption
program, aligned with ISO 22301 standard, maps substantive risks
on the business and ensures crisis management, from the initial
phase following an incident all the way to the recovery of critical
activities.
Adaptation measures
Schneider Electric’s approach to climate change adaptation
consists of several resilience initiatives. Weather risks are part of
the Group’s Business Continuity & Risk Management program,
leading to preventive investment to secure assets and mitigate
material climate risks.
Firstly, Schneider’s management method consists of risks
quotations. Climate-related physical risks including floods are part
of the risk assessments and standard practice reviews made by
independent global risk experts (GRC), thereby defining potential
financial impacts as well as the cost of response.
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GRC measures and weighs (external and independent standard
measurement):
2.3.1.3 Governance
• passive (exogenous) threats relating to floods, hurricanes
(windstorms), earthquakes, construction, occupancy, other;
• active (endogenous) risks relating to physical protection, human
exposure, natural hazards, business continuity plan.
All industrial and logistics sites worldwide are evaluated every
three years. Risk profiles of each site are regularly updated, and
recommendations are made to mitigate and adapt to identified
risks.
The Group deploys protection measures to mitigate or avoid the
risks. Action plans are being developed for its sites potentially
exposed to floods. Plans may include installing flood gates or
moving equipment to a higher level, production increase or
reduction, delivery increase, checking external areas for possible
objects that could float, and so on. As of 2022, eight Schneider
sites are protected by levees.
The cost of management can be approximated by that of insurance
plans. The cost (including tax) of the Group’s main global insurance
programs, excluding premiums paid to captives, totaled around
€28 million in 2022.
In addition, the supply chain strategy called STRIVE, launched in
2021, includes an increased focus on resilience to ensure supply
chain flexibility is continually improved. More than 80% of selected
CapEx is engaged in the “Power of Two in Manufacturing” project,
whereby the Group is proactively working to qualify alternate
factories for same products and suppliers for all critical parts and
components to improve continuity of supply. By doing so, the
Group can dual-source critical components from partners in
different geographies to help ensure availability regardless of
business disruptions that may occur, such as natural disasters. As
a result of the STRIVE strategy, 84% of top manufacturing risks are
secured with strategic stocks, and 51% of top supply risks are
secured under a specific multi-sourcing project.
For example, in the Philippines, the Group identified products at
risk based on revenues, and then conducted a study to assess
whether it should implement its Power of Two resilience strategy.
The industrial planning team investigated associated existing
technological challenges and budgeting. The site then worked with
partners in the region (for example, in Vietnam) and invested in
tools and equipment to mitigate potential business interruptions
and secure the cost of goods sold (and therefore revenues), with
the objective of securing around 35% of its sales through a
business continuity plan by 2024.
Overall, the different governance bodies involved in the definition
and monitoring of the sustainability commitments and programs are
responsible for 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. Each program of
the Schneider Sustainability Impact (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.
The sustainability strategy, including climate, is overseen by the
Board of Directors with the assistance of the Human Resources
and Corporate Social Responsibility (HR & CSR) Committee.
Schneider was one of the first companies to address this topic at
the Board level with the creation of the HR & CSR Committee in
2014. The Group further addressed the topic by deciding that the
annual variable compensation of the Chief Executive Officer and of
the more than 64,000 employees (who benefit from a variable
compensation), includes ESG criteria, part of which relates to
climate. The long-term incentive plan is also correlated with ESG
criteria (for more details on compensation, please refer to section
2.5.4, page 218).
Several other governance bodies are involved in this matter: the
Executive Committee and its Function Committee, the Stakeholder
Committee and the Sustainability department. At Group level, the
Chief Strategy & Sustainability Officer, who is part of the Executive
Committee, helps determine and enforce the Group’s
environmental goals and underlying transformations. Three
Committees involving Group Executive Vice-Presidents and Senior
Vice-Presidents are dedicated to oversee the implementation of the
Group’s decarbonization roadmap, respectively focusing on the
supply chain, low-carbon product design, and the decarbonization
of Schneider’s operational emissions.
Schneider Electric’s Chief Strategy and Sustainability Officer is the
head of the Global Environment team, leading the overall
environmental vision, strategy, and program execution, including
climate. The Global Environment team participates in the Group
Enterprise Risk Management (ERM) program, which identifies,
assesses, and prioritizes risks and, through regular reporting and
discussion, assists senior management and the Board with
governance of risk. The team gathers input from climate experts
across the company to support this reporting.
In addition, 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.
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Chapter 2 – Sustainable development
2.3.1.4 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, the
Strategy Prospective & External Affairs team. This team is in charge
of climate and environment scenario analysis, and reports 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 ten regions and a number
of sectors individually, framing the business landscape in which
Schneider operates.
In 2020, those scenarios were further updated. Beyond long-term
impact 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.
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Key findings are regularly cross-checked with new publications,
particularly the ones from the International Energy Agency, BNEF,
and the IRENA, among others. Both short- and long-term analysis
are shared internally and used to inform strategic priorities across
businesses and operations.
More about Schneider Electric’s climate scenarios
can be found on www.se.com
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2.3.2 Schneider Electric’s Greenhouse Gas footprint
Schneider Electric calculates its end-to-end carbon footprint
(Scopes 1, 2, and 3) annually in line with the Greenhouse Gas
Protocol Standards, and obtained a “reasonable” assurance from
an independent third-party verifier on Scopes 1 & 2 reported
Greenhouse Gas (GHG) emissions, and a “limited” assurance on
Scope 3 reported GHG emissions.
The charts below represents Schneider’s 2022 carbon footprint for
Scopes 1, 2, and 3, including all GHG emissions, from the
upstream activity of all its suppliers to the use and end-of-life of its
products sold to customers.
Suppliers
Scope 3
upstream
14%
Schneider’s
Operations
Scopes 1 & 2
<1%
Customers
Scope 3
downstream
86%
Purchased goods
and services
7.6 MtCO2e
Energy consumption
in sites
0.17 MtCO2e
Use of sold products
47.3 MtCO2e
Freight
Other
0.7 MtCO2e
Company cars
0.06 MtCO2e
End-of-life
(mostly SF6)
4.6 MtCO2e
0.4 MtCO2e
SF6 leakage
<0.01 MtCO2e
Freight
0.4 MtCO2e
Coverage of reported emissions is 99% 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 spend on purchases and
business travel, surface for energy and capital goods, headcount
for commuting and waste). Schneider Electric reports no GHG
emissions on franchises, investments, or downstream-leased
assets, because these emission categories are not considered
relevant for its activities.
Emissions from Scopes 1 & 2 are primarily from the use of
electricity, gas, and fuel for the company fleet (respectively 43%,
23%, and 24% of total Scopes 1 & 2). Scope 3 emissions represent
more than 99% of the Group’s carbon footprint, of which:
• 77% are due to the use phase of products: these emissions
correspond to the electricity consumption of Schneider’s
products throughout their lifecycle, through heat dissipation
(Joule effect). This value is based on a lifecycle approach,
leveraging the Product Environmental Profiles (PEP) of products.
This number is calculated following the GHG Protocol Scope 3
guidelines for category 11, use of sold products. It is not the
volume of CO2 emitted in the reporting year from the use of
products sold and in use by customers. It is a forward-looking
view and an estimate of emissions resulting from the use of
products sold in the reporting year, during their full useful life. It
is worth noting that the Group’s products have long lifetime,
which can be up to 30 years in calculations.
• 12% result from the purchase of goods and services: the
calculations are based on the purchasing database combining
spending and volumes (e.g., tonnes). The methodology
considers the wide heterogeneity of the Group’s procurement
portfolio: raw materials, electronic and electrical products,
printed circuit board assembly, fabricated components, along
with purchases that are not directly related to production (e.g.,
services such as insurance and banking services). As per the
principles of carbon accounting, calculations are based on
physical quantities as much as possible, using the tonnes of
metals and plastics purchased for instance.
• 8% are from the products’ end-of-life, and more specifically
end-of-life treatment of SF6: the calculation is based on the
SF6 gas used by Schneider in products sold in 2022, and that
may be released at the end of product life. An assumption is
made on the release in the atmosphere of SF6 at product
decommissioning, based on Schneider’s research, considering
that some SF6 in equipment is being recycled, while the majority
is not recycled.
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Chapter 2 – Sustainable development
2022 CO2 footprint reduction performance
Over the last five years, since 2017, emissions from Schneider
Electric’s operations (Scopes 1 & 2) have decreased by 67%
absolute, while the emissions from the value chain, both upstream
and downstream, have been more challenging to control.
•
On operations, direct emissions from Scope 1 have decreased by
36% since 2017, thanks to efforts focused on energy efficiency and
electrification of the Group’s onsite processes and company cars.
In addition, targeted efforts to reduce SF6 have yielded great
results. On Scope 2, emissions have decreased by 79% between
2017 and 2022. On Scopes 1 & 2 combined, the emission reduction
has historically been driven by energy efficiency, leveraging the
Group’s portfolio of EcoStruxure solutions.
Between 2021 and 2022, the emission reduction (-22%) had three
main drivers:
• consumption behavior changes linked to the energy crisis (with
electricity consumption at sites decreasing by 5% and gas
consumption by 20% as compared to 2021);
•
• energy efficiency (SSE #5): 6.6% in 2021, 7.8% in 2022. An
additional modeled savings of 10GWh compared to 2021;
the switch to more renewable electricity consumed by the
Group’s facilities, whether directly, via onsite renewable energy
or green tariffs from the utilities serving Schneider’s operations,
or indirectly, via unbundled and bundled market mechanisms.
On Scope 3, emissions have decreased by 12% between 2021 and
2022. This is the result of two opposite evolutions in upstream and
downstream emissions:
•
the emissions from the supply chain upstream emissions, have
increased by 5%. This increase is mainly due to the increased
volume of purchased goods and services driven by the growth
of the Group’s activity, despite the efforts to support suppliers’
decarbonization with the Zero Carbon Project, and to source
green materials. Indeed, the outcome of these programs are not
yet reflected into the Group’s corporate carbon accounting due
to necessary methodology and emission factors updates that
are not yet implemented. The Group is working on the
reconciliation of the data in 2023.
the Group’s downstream emissions, mostly emissions from the
use of sold products, have decreased by 14% between 2021
and 2022. This is mainly due to external factors and the
decarbonization of the grids that the Group’s consumers rely on.
The emissions under the “use of sold products” category
correspond to the lifetime emissions from the use of products
sold by Schneider during the year of reporting. These emissions
are attributable to electricity consumption of products, either
due to internal consumption or due to heat dissipation (Joule
effect). When calculating these emissions, the Group has to
factor the useful life of the products and the projected carbon
intensity of the grids where its consumers are located over that
lifetime. The Group has historically based the emission factor of
the grids where its customers are located on a scenario from the
International Energy Agency (IEA) that models the future
decarbonization of the grids. Previously, the emission factors of
the grids were based on the Reference Technology Scenario of
the “Energy Technology Perspectives 2017” (IEA, 2017).
For the 2022 carbon footprint, the GHG emissions from electricity
have been updated with the most recent scenario, to better reflect
the current stated policies of countries (Stated Policies Scenario
from the “World Energy Outlook 2022” (IEA, 2022), which is based
on current policies, as well as policies announced by governments
at the time of publication). This update of the emission factors of the
electricity grids, where customers are located, is the major driver
for the significant reduction in the emissions from category 11
between 2021 and 2022: -15% as compared to the reported
emissions in 2021 for this category. To better illustrate the evolution
of the emissions from this category under the evolution of
Schneider Electric’s activities, the 2021 emissions from category 11
have been re-calculated using the same scenario for the evolution
of the carbon intensity of the grids. With this recalculation, the
difference between 2021 and 2022 is a 3% emissions reduction.
• The rate at which Schneider can implement emission reductions
is dependent on many factors that can fluctuate over time,
ranging from the Group’s business growth and its geographic
distribution, its supplier mix and their own decarbonization
journey, to the rate of decarbonization of the grids that power
the products the Group sells.
• The Group will work to develop increasingly robust and precise
activity data and use more granular or higher quality emission
factor datasets. The quality and granularity of the emission
factor datasets are critical to support greater accuracy and
reliability of GHG measurement and reporting. For example, on
supply chain emissions, the Group is engaged with the
Pathfinder Framework, a guidance for the calculation and
exchange of product-level carbon emissions data across value
chains.
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2.3.3 Schneider Electric’s Net-Zero Commitment
In August 2022, Schneider Electric was one of the first companies
to see its Greenhouse Gas (GHG) reduction targets validated by
the Science Based Targets initiative (SBTi), aligned with its
“Corporate Net-Zero Standard” published in October 2021. As part
of its Net-Zero Commitment, the Group has defined mid- and
long-term targets. Ultimately, the Group is committed to be
Net-Zero across its entire value chain by 2050, which means that
the Group aims to reduce its 2021 footprint by an absolute 90% by
2050 and neutralize residual emissions with high quality and
durability carbon removal credits.
The four milestones towards Schneider’s Net-Zero Commitment are
presented below together with the key decarbonization levers, and
are detailed in the subsequent sections of this chapter. Please note
that this graph is intended to provide a simple visualization of the
Group’s roadmap, so the proportions between Scopes 1, 2, and 3
have been adjusted to facilitate readability. lt is not representative
of year over year targets. Yet, what is important to note is that
between 2040 and 2050, the above and below the line are
symmetrical, meaning the emissions that are not reduced need to
be compensated, and by 2050 at the latest removed.
2021
Baseline
2025
Carbon
Neutral
Operations
2030
“Net-Zero ready” Operations
25% GHG absolute reduction
across the Value Chain
2040
Carbon Neutral Value Chain
2050
Net-Zero
Value Chain
Scopes 1 & 2
Decarbonizing our
operations with:
• Energy conservation measures
• Sites and vehicle fleet electrification
• Sourcing and generation of
renewable power
Scope 3
Carbon offsets
Decarbonizing our upstream
value chain by:
Progressively compensate
residual emissions with:
• Engaging and supporting suppliers
to decarbonize
• Ecodesigning safe and high quality
products with lower lifecycle CO2
footprint
• Sourcing of low-carbon materials
• High quality carbon removals
• The more GHG emissions are
reduced, the less residual emissions
need to be compensated with
removals. From 2040 onwards,
carbon offsets shall equal residual
value chain emissions
Scopes 1 & 2 emissions
Scope 3 emissions
Carbon offsets
Decarbonizing our
downstream value chain by:
• Influencing for global decarbonization
• Innovating with more efficient
products and SF6- free medium
voltage equipment
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By 2030, reduce value chain emissions by
25% and be “Net-Zero ready” in operations
Schneider Electric commits to reduce its absolute Scope 3 GHG
emissions across its entire value chain by 25% from a 2021 base
year. This encompasses all Scope 3 emissions, in particular
upstream emissions from purchased goods and services, as well
as downstream emissions from the use of electricity by its sold
products.
Schneider is already carrying out concrete actions to engage its
value chain in decarbonization under its Climate and Resources
commitments:
•
• engage 1,000 top suppliers to reduce their operational CO2
emissions by 50% with The Zero Carbon Project (SSI #3);
increase green material content in products to 50% (steel,
aluminum, and plastics) by 2025, favoring bio-sourced,
recycled, and sustainable options (SSI #4), and improve the
end-to-end lifecycle environmental footprint of its offers with
EcoDesign Way™;
• have 100% of primary and secondary packaging free from
single-use plastic and made from recycled cardboard (SSI #5);
• propose SF6-free alternatives for all medium voltage
•
technologies by 2025 (SSE #2);
increase CO2 efficiency in transportation of goods by 15% by
2025 (SSE #4), and replace at least 5% of conventional jet fuel
use with sustainable aviation fuel by 2030 (WEF First Movers
Coalition);
• reduce CO2 emissions from waste management, and reach 200
“Waste-to-Resource” sites (SSE #9).
Having “Net-Zero ready” operations means the Group plans to
reduce absolute emissions from Scopes 1 & 2 by 76% from a 2021
base year (equivalent to a 90% reduction compared to 2017) and
neutralize residual emissions from its operations with carbon
removal credits of growing quality and durability (see details
thereafter).
To deliver on this operational target, the Group has launched
several transformations:
• reach 150 Zero-CO2 sites by 2025 (SSE #1);
• source 90% of electricity from renewables by 2025 (SSE #3),
•
and 100% by 2030 (RE100);
increase energy efficiency in its sites by 15% by 2025 (SSE #5),
and double energy productivity by 2030 compared to 2005
(EP100);
• shift one-third of corporate vehicle fleet to electric vehicles by
2025 (SSE #7), and 100% by 2030 (EV100).
By 2050, reach Net-Zero CO2 emissions
across the entire value chain
To reach its Net-Zero Commitment, the Group will reduce its
absolute Scopes 1, 2, and 3 GHG emissions by at least 90% from a
2021 base year, and compensate residual emissions with carbon
offsets, in line with the SBTi “Corporate Net-Zero Standard”.
Schneider Electric has already implemented a solid foundation of
initiatives, which will be reinforced and completed by additional
actions. Considering the company profile in terms of GHG
emissions, meeting the targets will require to engage even more
with customers and suppliers on decarbonization, leveraging the
Group’s portfolio of solutions to grow the energy efficiency of the
global economy, the electrification of the energy mix, and the
sourcing of renewable electricity.
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In addition to that, the growing share of circularity services in the
revenue of the company, along with the greater environmental value
added by the Group’s Green PremiumTM offers, are enablers to lead
to the decoupling of company activity from absolute emissions.
Reach carbon-neutral operations and a
carbon-neutral value chain in 2025 and
2040 respectively
To achieve carbon neutral operations by 2025, Schneider Electric
will compensate residual Scopes 1 & 2 GHG emissions with quality
carbon offsets. Similarly, by 2040, the Group aims to compensate
its end-to-end carbon footprint.
Since 2011, Schneider has invested in the Livelihood Carbon Fund
(LCF) and renewed its engagement with the LCF2 and LCF3 funds.
These funds invest into three kinds of projects combining climate
change resilience with strong social and economic impact:
1. agroforestry and regenerative agriculture (which combines
productivity and biodiversity restoration);
2. reforestation and restoration of key natural ecosystems,
including mangrove restoration (mangroves are powerful carbon
sequestration agents and natural barriers to coastal areas);
3. rural energy (the fuel-efficient cookstoves distributed by
Livelihoods decreases wood consumption by half, preserves
forests, and mitigates climate change).
The return of the fund is measured in carbon credits from the
highest available standards (VERRA and Gold Standard). To date,
those credits have not been used to compensate the Group’s GHG
emissions, but some have been used to compensate emissions
from the Schneider Electric Paris Marathon.
Read more about Livelihoods in
chapter 2.6 pages 224 to 241.
To fulfill Schneider’s Net-Zero targets, solely carbon removal will be
used to “net” the company’s emissions. At this stage, the current
market maturity, lack of standard definition regarding quality and
durability of carbon removals make it challenging to define the
nature and composition of the company’s carbon removal portfolio.
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2.3 Leading on decarbonization
S T R A T E G I C R E P O R T
2.3.4 Investing to achieve the Group’s climate strategy
and vision
Schneider Electric has defined short and medium-term financial
investments priorities in order to set the course towards its SBTi
validated Net-Zero Commitment, and more broadly to meet its
long-term commitments for climate, and to preserve natural
resources.
These investments mainly relate to the following areas:
1. The evolution of the Group’s portfolio towards a greater
proportion of Digital and Services, expanding the Group’s
portfolio of connected solutions for efficiency and sustainability.
Those investments typically vary year on year.
2. Research and Development (R&D) to design products that use
fewer virgin resources, bring additional CO2 or resource
efficiency for customers, have longer lifespans and lower
end-of-life impacts, such as SF6-free products. 5.4% of turnover
(about €1.8 billion) was invested in 2022, and the Group expects
a step-up in strategic R&D investments over the coming years.
3. The decarbonization of the Group’s own operations, by investing
progressively in energy efficiency, site electrification, renewable
energies, and electric vehicles. In 2022, the Group has
estimated the remaining cumulative investments needed until
2030 at about €200 million.
4. The decarbonization of the Group’s upstream supply chain and
decoupling business growth from virgin resource consumption,
by improving traceability, and controlling that Schneider
Electric’s ESG expectations, including for climate (SSI #3) or
resources (SSI #4 and #5), are met by its suppliers, while
securing business resilience. Long-term investments required
are under assessment.
Mergers and acquisitions
In 2022, Schneider Electric acquired the remaining minority shares
of AVEVA, which will allow the Group to accelerate its software
strategy, building a single data-hub to bring together the digital
industry twin and the energy twin of its customer’s enterprise, for
holistic efficiency across domains, and across the lifecycle of
assets and installations. The Group also performed early-stage
acquisitions with EnergySage, Autogrid, EV Connect, and QMerit,
and all of them are part of the new energy landscape, maximizing
digitization and energy efficiency. Such investments can typically
greatly vary year on year.
Redesigned investment tools and processes to
embed low-carbon and resource criteria
In order to track and steer its low-carbon investments, the Group’s
investment monitoring and approval tool was redesigned in 2022 in
order to:
• prioritize low-carbon investments, with a dedicated validation
workflow;
• monitor investments to decarbonize its own operations, notably
for Zero-CO2 sites (SSE #1).
This process will improve both qualitative and quantitative
information on individual low-carbon investments, thereby
facilitating decision-making.
Investments in R&D
About 99% of the Group’s carbon footprint are either related to
upstream emissions from the transportation and transformation of
raw materials by its suppliers, or to downstream emissions from
product use or end-of-life that all depend on product design and
R&D investments.
Schneider has been embedding environmental considerations into
product design for more than 15 years, since the creation of its
internal Green PremiumTM label. In 2022, the Group revamped its
EcoDesignWayTM process to better manage the environmental
impact throughout the lifecycle of products, and to coordinate
efforts across the value chain. In addition to that, Schneider is
reinforcing its process at an early stage of product development,
so that all future generations of products achieve substantial
carbon footprint savings, meaning that any new product developed
by the Group will result less greenhouse gases than the previous
generation.
Schneider has been stepping up its investment in R&D, both in
value and as a percentage of Group revenues, investing about
4.8% of its turnover in R&D between 2012 and 2016, 5.1% between
2017 and 2021, 5.4% in 2022 and, as outlined during its 2021
Capital Markets Day, expects a step-up in strategic R&D
investments over the coming years with a strong focus on ensuring
return on investment. In 2022, this represented an investment in
R&D of approximately €1.8 billion. The Group estimates that about
90% of its innovation is either strictly green or neutral according to
its Impact revenues methodology. More details on Schneider’s
Impact revenues and EU Taxonomy indicators is provided in
Chapter 2.1.9 page 100.
An example of investment priority is on SF6-free products, in line
with Schneider Electric’s target to substitute 100% of relevant offers
with SF6-free medium voltage technologies by 2025 (SSE #2). For
SF6-free products, more than €100M have already been invested in
both R&D and CapEx in factories, and a total future spend
(2023-2027) close to €100M more is already planned.
Decarbonizing operations
For the past years, the Group has invested between €5 million and
€15 million each year in energy efficiency, deploying its own
solutions in its sites, which enabled equivalent savings on energy
costs, and a reduction of 67% of Scopes 1 & 2 CO2 emissions
compared to 2017. The last miles in Schneider’s journey to be
“Net-Zero ready” in 2030, achieving 90% CO2 reductions vs. 2017
will be the hardest.
To support this objective, an estimated €200 million will be invested
by 2030, in technologies such as heat pumps to substitute comfort
gas or to install electric vehicle chargers. Such investments are
usually not linear year on year as large projects may take a few
years to design and implement, and opportunities at a given time
depend on the local economic and regulatory context.
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2.3.5 Decarbonizing the Group’s operations by 2030
This strategy has delivered an absolute reduction of 469,731 tonnes
of CO2e emissions on Scopes 1 & 2 (compared to 2017), which is a
67% decrease, as presented in the chart below, and a 64,703 tCO2
reduction versus 2021.
2.3.5.1 Group energy policy and
management system
Group Energy Policy
The Group’s Energy Policy requires sites to implement the following
actions:
• improve energy efficiency, sustainably decoupling energy
consumption from activity growth;
• decarbonize energy consumption;
• adopt Schneider’s own Energy Management and Automation
EcoStruxure™ solutions, wherever feasible, to showcase the
Group’s solutions for customers and business partners, and
help them embark on an energy excellence journey.
Progress against these goals is tracked in the Group’s Schneider
Sustainability Impact (SSI) and Schneider Sustainability Essentials
(SSE) programs. Relevant SSI and SSE targets are SSE #1, SSE #3,
SSE #4, SSE #5, and SSE #7.
ISO 50001 Energy Management System
The Group certifies all sites consuming over 5GWh with ISO 50001.
As of end 2022, 132 Schneider Electric sites are ISO 50001
certified as part of the Group’s Integrated Management System to
drive energy excellence, focusing on the highest energy-
consuming sites. ISO 50001 certification is complementary to ISO
14001 certification and enables the company to define and sustain
robust energy governance. With the support of this certification,
sites are able to understand and reduce their energy footprint.
Resource Advisor data management system
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 expert
services.
Emissions from operations are the Scopes 1 & 2 of the Group’s
carbon footprint, representing 229,348 tonnes of CO2e in 2022, and
0.4% of the company’s GHG footprint. Direct Scope 1 emissions
result mostly from the natural gas consumption of sites that are not
yet electrified, from the fuel used by company cars as well as a
small amount from SF6 leakages in a limited number of
manufacturing plants. Indirect Scope 2 emissions result primarily
from the electricity consumption of sites (manufacturing and
offices).
To deliver its “Net-Zero ready” target on these emissions by 2030,
the Group leverages its Power and Building EcoStruxure™ IoT
architectures, to monitor and optimize energy consumption,
manage assets and grid infrastructure, manage distributed
renewable energy resources and electricity load, and power
electric vehicles.
Schneider set best-in-class operational ambitions engaging with
the Climate Group on their EP100, EV100 and RE100 programs.
The Group’s approach has three pillars:
• save: foster energy conservation and avoid SF6 leakages;
• electrify: switch from gas or car fuel to electricity;
• decarbonize electricity: use renewable energy, either from
onsite generation, or through external procurement of renewable
power.
Schneider’s Operations
Scopes 1 & 2 annual GHG emissions (MTCO2e)
Induced: 0.2 MtCO2e in 2022
0.4%
0.6M
0.5M
0.4M
0.3M
0.2M
0.1M
0
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2019
2020
2021
2022
2030
Electricity & heat
Energy fuels
Company cars
SF6 leaks
Target
-22%
GHG emissions reduction in Scopes 1 & 2 vs. 2021.
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Chapter 2 – Sustainable development
2.3 Leading on decarbonization
2.3.5.2 EP100: deliver efficiency from the
inside out
Schneider Electric measures its energy program in a variety of
ways. Two such ways are energy productivity and energy
efficiency. On the one hand, energy productivity is the amount of
output the Group produces vs. the amount of energy consumed
(turnover/MWh), and the goal is to increase this value by both
increasing the Group’s business performance while simultaneously
reducing the energy consumed in its operations. Energy efficiency,
on the other hand, uses linear regression models to predict how
much energy the Group would consume based on various inputs
(production, weather, worked hours, etc.) vs. the actual energy
consumed. The goal here is to reduce energy consumption
compared to predicted value by driving energy efficiency in its
operations.
Schneider Electric has been a member of Energy Productivity 100
(EP100), a Climate Group initiative, since 2017. Schneider’s target is
to double energy productivity by 2030 against the 2005 baseline,
which means doubling the economic output from every unit of
energy consumed within 25 years. In 2022, the Group achieved
129% energy productivity (against a 2030 target of 100%)
compared to 2005. This huge jump compared to 2021 performance
(76%) is a result of strong business performance and intensified
energy savings efforts. Achieving its commitment 8 years early,
Schneider demonstrates the feasibility of decoupling business
growth from energy consumption. Simultaneously it tangibly
illustrates Schneider products, solutions, and services are a core
foundation to energy saving opportunities. The Group will re-
evaluate its energy productivity program in 2023 to identify its next
ambition.
Annual energy productivity progress (in %) against 2030
EP100 target (vs 2005)
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Climate
SSE #5
15% energy efficiency in our sites
A good example to illustrate the SSE #5 program is the
Wuxi plant in China. Wuxi is an electronic manufacturing
site that manages a large product mix. As one of the
Group’s Smart Operations showcase sites, the Wuxi
campus embraces Schneider Electric’s 4IR-based
EcoStruxure™ technologies to rebuild its end-to-end value
chain. Using the latest digital tools like automated supply
chain management, 5G-supported flexible production,
augmented reality, and digital twins, the site has achieved
improved flexibility, efficiency, time-to-market, and
sustainability. These implementations have earned the
plant the following recognitions:
• 2021 End-to-End Advanced Manufacturing Lighthouse
by World Economic Forum (WEF);
• Schneider Zero-CO2 Site since 2021;
• 2021 Carbon neutral certification by Bureau Veritas;
• 2019 Green Factory by the Ministry of Industry and
Information Technology of China.
The site has achieved the following results by implementing
Schneider Electric EcoStruxure™ solutions in its site:
• Building Operation (EBO): EBO AI- box for Heating
ventilation and air conditioning (HVAC) operation
optimization reduced energy consumption of the HVAC
system by 14% in 2022 compared to 2020;
• Power Monitoring Expert (PME): Optimizing with
Power and Buildings has driven 721MWh energy
reduction, and 38.4% water use reduction compared to
2020;
• Microgrid Advisor (EMA): 100% of site energy sourced
from renewables, with onsite solar power and Power
Purchase Agreements (PPAs).
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2030
Wuxi WEF Lighthouse factory in China
Annual progress
Target
2019 Baseline
2022 Progress
2025 target
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Chapter 2 – Sustainable development
Despite being low consumers of energy compared with other
industries, due to its discrete and assembly-based industrial
processes, Schneider has had a clear obsession with efficiency
since long before its EP100 commitment. The Schneider Energy
Action program uses site energy experts along with Schneider’s
Sustainability Business consulting team to report and analyze
energy consumption, identify energy saving opportunities, and
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. In 2021, the
Group renewed its commitment to improve energy efficiency by
another 15% between 2019 and 2025, tracked under SSE #5. 7.8%
were achieved in 2022, totaling over 50% reductions between 2009
and 2022.
The Group measures energy efficiency in its 200+ largest
energy-consuming sites, which account for 85% of the total energy
consumption of the Group. At the end of 2022, this program
enabled the following achievements:
• around €6 million and 75.7 million kWh were saved in 2022
compared to the 2019 baseline;
• around €5.8 million were invested, of which €5.5 million were
capital expenses and €0.3 million were operating expenses.
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. In its 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.
Five of Schneider’s Smart Factories have been designated as 4th
Industrial Revolution (4IR) Advanced Lighthouses by the World
Economic Forum (WEF), with the newest 2022 member Hyderabad
in India joining four others in China, France, the US, and Indonesia.
In 2022, the Le Vaudreuil plant in France joined the Lexington
facility in the US as a Sustainability Lighthouse designated by the
WEF. At the time, these two factories were among only six
worldwide facilities receiving this new recognition by the WEF. With
its Smart Factory and Distribution Center (DC) programs, the Group
has deployed advanced manufacturing technologies in over 120
smart factories and DCs in the past 6 years.
In offices, Schneider Electric’s EcoStruxure™ solutions Building and
Workplace Advisor enable analytics of Building Management
System 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.
2.3.5.3 RE100: switch to 100% renewable
electricity by 2030
In 2022, electricity consumption in Schneider Electric’s sites
generated 98,312 tonnes of CO2e emissions, i.e. 59% of emissions
from energy consumption at sites. In 2017, Schneider joined
Renewable Energy 100 (RE100) and committed to sourcing 100%
of its electricity from renewables by 2030, with an intermediary
target of 90% by 2025 (SSE #3).
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Contracted unbundled
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Contracted bundled
renewable energy credit 3
Onsite renewable electricity
Target
1 Data represents renewable electricity consumption for ISO 14001 sites, in
alignment with the scope of SSE #3.
2 Specific targets are not defined for the split between onsite renewable,
bundled renewable, and unbundled renewable for 2025 or 2030. However, the
Group is committed to reducing the amount of unbundled certificates and
increasing the amount of onsite renewables and bundled certificates as it
moves towards 2030.
3 Contracted unbundled renewable energy credits include options such as
Energy Attribute Certificates (EACs) and unbundled Renewable Energy
Certificates (RECs). Contracted bundled renewable energy credits include
options such as “green tariffs”, power purchase agreements (PPAs), virtual
PPAs (VPPAs), bundled RECs, etc.
Since 2017, Schneider Electric has accelerated renewable
electricity sourcing and the installation of on-site solar panels,
coupled with EcoStruxure™ metering and power architectures. As
its program has progressed, the Group has progressively
increased the share of renewable electricity coming from onsite
renewable generation and bundled renewable electricity sourcing.
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2.3 Leading on decarbonization
S T R A T E G I C R E P O R T
The Group will continue to focus on additionality where feasible and
prioritize onsite sourcing of renewables or bundled renewable
electricity opportunities. It will progressively reduce the reliance on
unbundled certificates as it moves towards its 2030 goal of 100%
renewable electricity. Critical to the success of this program is
leveraging Schneider Electric’s Sustainability Business (SB), an
expert in sourcing renewable electricity with additionality benefits.
SB helps Schneider and many customers source renewable
electricity. Their expertise on renewable electricity markets around
the world is key to finding solutions in less mature renewable
markets as well as monitoring the evolution of marketing offerings,
funding mechanisms, and sourcing requirements (e.g., RE100 2022
revised technical criteria).
Climate
SSE #3
90% of electricity sourced from
renewables
In 2022, 14 countries signed contracts to source 100%
renewable electricity for Schneider operations in their
country, and 203 ISO 14001 sites sourced 100% renewable
electricity which accounted for 60% of the Group’s
measured electricity consumed. Additionally, there are 56
sites generating onsite renewable electricity, for a total of
23,000 MWh. Onsite generation and bundled certificates
now account for 64% of the Group’s total renewable
electricity consumption, up from 58% in 2021.
2020 Baseline
2022 Progress
2025 target
80%
85%
90%
2.3.5.4 EV100: shift 100% of company fleet
to electric vehicles
Company cars generated 56,856 tonnes of CO2e emissions in
2022, 25% of Schneider Electric’s Scopes 1 & 2 emissions.
To reduce these emissions, Schneider looks at opportunities to
reduce the use of cars for travel by improving the accessibility of
sites, with commuting shuttles, secure bicycle storage, personal
lockers and changing areas, as well as pedestrian-friendly access
paths connecting to local routes. The Group also promotes flexible
working arrangements to avoid unnecessary or avoidable trips
thereby reducing travel-induced emissions by enabling employees
to connect remotely, to work from home, and at customer sites.
Additionally, Schneider began its journey towards 100% electric
cars by 2030 in 2019, with an intermediary target of one-third by
2025 (SSE #7). The Group demonstrates this commitment by being
a member of Electric Vehicles 100 (EV100), a Climate Group
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 2022,
electric vehicles represented 14% of the Group’s corporate car
fleet.
Resources
SSE #7
One-third of corporate vehicle fleet
comprised of electric vehicles
(100% by 2030)
The United Kingdom (UK) has significantly accelerated the
deployment of electric vehicles, starting in 2019 with less
than a 2% electrified fleet and achieving 41% at the end of
2022. The country has achieved this strong growth despite
facing global challenges around supply chain shortages,
increased vehicle costs and delays in infrastructure
deployment. UK maintains its vision to roll out a green fleet
in line with Schneider Electric’s values, ensuring the
deployment strategy is agile, and provides the right vehicle
to each driver without penalizing the employee or the
performance of the zone.
2020 Baseline
2022 Progress
2025 target
1%
13.8%
33%
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Chapter 2 – Sustainable development
2.3.5.5 Going further with 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 biofuels.
In 2022, emissions from energy consumption at sites accounted for
167,715 tonnes of CO2e, which is 73% of Scopes 1 & 2 emissions, of
which 53,895 tonnes from natural gas consumption. The path
towards “Net-Zero ready” operations by 2030 will require more than
just powering sites with renewable electricity. While many
applications can be electrified, some applications from industrial
sites are more challenging to electrify with current technologies. As
such, Schneider Electric has begun identifying applications at sites
that currently have electrification alternatives as well as those which
will require the use of fossil-free fuel solutions under the current
circumstances.
As a general rule, a Zero-CO2 site emits no greenhouse gases
related to energy and monitors energy digitally, meaning:
• no fossil fuels from energy consumption (exceptionally up to 3%
of a site’s total energy can be exempted from the fossil-free
requirement, on a case-by-case basis, if the application does
not have a feasible fossil-free alternative on the market. In 2022,
15 out of 77 Schneider’s Zero-CO2 sites benefitted from this
exception);
• digital energy monitoring;
• no SF6 leaks;
• no CO2 offsets.
Beyond using renewable electricity and fuels, it remains critical to
continuously improve energy efficiency. That is why the program
also requires digital energy monitoring. For large sites, this means
installing meters to monitor 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 consumption,
which allows for active energy management and efficiency
improvement.
In 2022, thanks to the Zero-CO2 sites, Schneider reduced 54,000
tonnes of CO2.
Climate
SSE #1
150 Zero-CO2 sites
AHM is a site located in Hungary, established in 1964. The
site is part of Schneider Electric’s Global ETO Power
System and manufactures medium voltage switchgears
(PIX, MCSet). In 2022, as part of the company’s Zero-CO2
sites commitment, the site worked to electrify and
decarbonize a paint line, and oven renewal process for its
equipment, which had been built over forty years earlier.
With the help of governmental subsidies and the Hungarian
Investment Promotion Agency (HIPA), the site achieved
three major successes:
• surface pre-treatment modernization which resulted in
less usage of chemicals and decreased water
consumption;
• automatized powder recovery unit which reduced
painting powder consumption by 70%;
• 100% renewable electricity powered drying oven, which
reduced the natural gas consumption of the entire
paintline by 33%.
In 2023, the site will implement actions to fully power the
paintline with 100% renewable electricity, reducing CO2 by
nearly 140 tonnes annually. This transformation to electrify
its operations, combined with Schneider Electric Building
and Power Management technologies, highlights one of the
many actions the Group is taking in its commitment to
decarbonize its operations. For the benefit of customers
and the industrial community, that illustrates the importance
of electrification and renewable sourcing, and
demonstrates the real and tangible opportunities and
solutions that exist today.
Renovated paint line in AHM site in Hungary
2020 Baseline
2022 Progress
2025 target
30
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From August to December 2022, Schneider Electric succeeded in
reducing gas consumption by more than 32% and electricity
consumption by more than 10% for its operations across Europe,
as compared to the same period in 2021 and with no disruption to
operations or service to customers.
More about Schneider Electric’s management
of the energy crisis can be found on Schneider’s blog.
Spotlight: sufficiency actions at “The Hive”,
Schneider Electric’s Paris headquarters
Schneider Electric is responding to the energy crisis with a plan
that supports France’s EcoWatt charter and aims to reduce energy
consumption by 10% and shed or shift loads to avoid demand
peaks when required.
Enabled by integrated EcoStruxure solutions, the indoor
temperature at this Schneider building has been reduced a few
degrees, with ventilation and heating start times adjusted. In
addition, hot water to washroom taps has been cut all year long.
The kitchen lighting and ventilation schedule is optimized. Corridor
lighting is reduced from 100% to between 40 and 70%, and car
park lighting hours are reduced. All employees have been
encouraged to take additional steps.
In total, electricity consumption has been reduced by almost 300
MWh per year. The facility can also automate responses to EcoWatt
peak period alerts, reducing demand by more than 500 kW by
controlling heating and ventilation, limiting or shifting EV charging,
and more.
“The Hive”, Schneider Electric’s Paris headquarters
Chapter 2 – Sustainable development
2.3 Leading on decarbonization
2.3.5.6 Reduce SF6 leakage on sites
SF6 is an excellent gas in terms of insulating properties, which is
why it is commonly used in the electric power industry. Yet, SF6 is a
harmful greenhouse gas with a global warming potential 25,200
times higher than CO2 over 100 years. While Schneider Electric’s
product portfolio is progressively moving away from SF6 (see
additional information in section 2.3.7.1, page 170), SF6 is used in 13
of the Group’s manufacturing sites. Handling this greenhouse gas
can inevitably result in leakages despite having good practices in
place. Converted into CO2-equivalent, these leakages represented
4,777 tonnes of CO2e in 2022, which is 2% of emissions from
Scopes 1 & 2. The GHG emissions at end-of-life is 4,477,721 tonnes
of CO2e, which is 7.3% of total GHG emissions of 2022.
All the Group’s manufacturing sites handling SF6 gas in their
processes are working hard to actively reduce SF6 leaks and
emissions during the different phases of their activities. A
worldwide community of SF6 experts shares best practices for
processes, including procedures, equipment, and training.
In 2022, an advanced and digital system of emission monitoring
has been designed, to be deployed at the Group’s biggest
manufacturing sites in 2023. 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
carried out with helium instead of SF6. This method ensures that no
emissions come from non-compliant enclosures during production.
Thanks to this global activity and to the commissioning of efficient
equipment, the Group achieved 0.08% leakage rate globally in
2022, exceeding the 0.11% target set for 2022 and systematically
decreasing from 0.26% since 2018. This SF6 leakage reduction
enabled the avoidance of 900 tonnes of CO2 equivalent in 2022
versus 2021.
2.3.5.7 Energy sufficiency plan in Europe
In 2022, Europe faced an unprecedented energy crisis: risks on
energy supply (mainly electricity and gas), along with escalating
prices placed pressure on businesses and households. On
companies especially, this had an impact on costs, profits, and – in
some cases – business continuity.
Tackling Europe’s energy security problem and the climate crisis
are two sides of the same coin. Reducing both our use and
dependence on fossil fuels, increasing electrification and the
transition to renewable energy are now essential to tackling both
the current energy crisis and reducing Europe’s greenhouse gas
emissions.
In this context, Schneider Electric implemented an energy
sufficiency plan to adapt quickly to the fast-changing energy
situation. Criticality assessments were conducted at Schneider’s
sites across Europe, assessing the potential likelihood that
electricity or gas supplies may be cut. Business continuity plans
were proactively put in place to ensure the Group is able to
continue to serve customers through this time of uncertainty.
Schneider adopted European Commission recommendations on
energy consumption reduction as targets for sites in Europe: gas
consumption by 15%, and electricity consumption by 10%.
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Chapter 2 – Sustainable development
2.3.6 Decarbonizing the Group’s supply chain by 2050
In 2022, upstream emissions in Scope 3 accounted for 8.6 million
tonnes of CO2e, which is 14% of the total carbon footprint of the
company. Purchases are the predominant source if emissions, and
transportation of goods make a significant contribution as well.
Decarbonizing the world at scale requires immediate collective
action. Schneider Electric is already taking concrete actions to
meet its absolute 25% reduction across its value chain by 2030 and
to be on track for its net-zero emissions by 2050. This includes:
•
the Zero Carbon Project (SSI #3), which aims at halving
emissions from operations of the top 1,000 suppliers;
• sourcing more and more green materials, including materials
•
such as steel and plastics with lower carbon footprints (SSI #4);
increasing the CO2 efficiency of transportation of goods
(SSE #4).
Suppliers
Scope 3
upstream
Induced: 8.6 MtCO2e in 2022
14%
10M
8M
6M
4M
2M
0
2018
2019
2020
2021
2022
2030
Purchases
Freight
Target
Employee
commuting
Other Scope 3
upstream
+4.6%
CO2e emissions in Scope 3 upstream vs. 2021. Note
that total Scope 3 GHG emissions decreased by
11.5% in 2022 vs. 2021.
2.3.6.1 The Zero Carbon Project
Carbon emissions from Schneider Electric’s procurement of goods
and services (emissions from its suppliers up to the last tier)
represented 7.6 million tonnes of CO2e in 2022, which is 12% of its
cradle-to-grave carbon footprint, and 88% of its cradle-to-gate
industrial footprint. This is the largest contributor to the Group’s
Scope 3 upstream emissions. The Zero Carbon Project (TZCP),
launched in April 2021, is the first step of a journey to reduce the
greenhouse gas (GHG) emissions from Schneider Electric’s
suppliers.
The ambition of TZCP is to collaborate with 1,000 suppliers and
reduce their operational (Scopes 1 & 2) GHG emissions by 50% by
2025 (SSI #3).
Participating suppliers are required to make public commitments
for their reduction targets and share the emission reduction
progress with Schneider. The participating companies in the
program are based in more than 50 countries, represent 60
procurement categories and vary in terms of carbon maturity and
size. To adapt to this diversity, the participating suppliers are
allowed flexibility to customize their reduction plans by defining
their own base year and baseline and adopting relevant reduction
targets and time frames.
The fundamental actions that need to be implemented by suppliers,
as part of this program include:
• quantifying their GHG emissions (Scopes 1 & 2 are mandatory
and Scope 3 is optional for now);
• establishing an ambitious emission reduction target;
implementing an action plan to achieve the target.
•
As of 2022, more than 1,000 suppliers have committed to
participate in the program, achieving an overall operational
emission (Scopes 1 & 2) reduction of 10%.
The GHG emission reduction reported in Schneider Sustainability
Impact (SSI) #3, is measured as the average supplier carbon
intensity reduction for the proportion of the reporting suppliers out
of 1,000 suppliers. This normalization helps achieve a more reliable
picture of the overall progress of all participating suppliers.
The extensive capacity building efforts towards the quantification of
carbon footprint and decarbonization actions have resulted in:
•
increased participation and quality of carbon accounting
response from suppliers. As of December 2022, 946 suppliers
out of 1,013 participating suppliers have calculated their CO2e
emissions. This is 6 times higher than at the end of 2021, when
126 suppliers reported their CO2e calculations.
• strong supplier actions, resulting in ~10% GHG reduction for
1,000 suppliers vs. 1% reduction at the end of 2021. Schneider
Electric 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.
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2.3 Leading on decarbonization
S T R A T E G I C R E P O R T
Climate
SSI #3
Reduce CO2 emissions from top
1,000 suppliers’ operations by 50%
To accelerate the decarbonization journey of Schneider
Electric suppliers, partnership is at the heart of The Zero
Carbon Project. This is especially important as over 70% of
participating suppliers had no previous experience of GHG
emission quantification. Schneider Electric deployed an
extensive supplier support framework. This framework
focuses on three focal areas:
1. Capacity building
2. Digital support
3. Expert consultation
Key figures In 2022:
• 946 suppliers computed their CO2 footprint
• Accelerated decarbonization led by continuous
deployment of:
− Supplier Support Framework
− iAccelerate Zero Carbon Day workshops
− Dedicated 1:1 support led by Schneider’s
procurement team
− More than 130 live trainings
• Supply Chain Renewable trainings
• “S3” digital tool (for SME) to be launched in 2023
2020 Baseline
2022 Progress
2025 target
0%
10%
50%
Capacity building
One of the first barriers for suppliers to embark on their
sustainability journey is measuring their carbon footprint and
understanding what they can do to reduce their carbon footprint.
Extending Schneider’s spirit and effort of collaboration from the
quantification of the GHG emissions to the implementation of
decarbonization actions, an acceleration plan was developed and
deployed with the suppliers. This acceleration plan identified
various levers of emission reduction that can be implemented by
the suppliers. Each lever was analyzed in detail and compared with
the characteristics of the participating supply base to determine
the reduction potential per lever. To increase the practicality of
implementation, individual actions were identified for each lever.
More than 130 live, training, mentoring and experience sharing
sessions were conducted for suppliers in a variety of settings
(group; focused; 1-1). Building on the foundation of the end-to-end
decarbonization training delivered in 2021, a common feedback
received from suppliers was the need for guidance and
implementation support for the first steps towards decarbonization.
Schneider Electric defined a simple step-by-step roadmap of
decarbonization, and explained each step in detail.
iAccelerate
To drive and scale up the adoption of emission reduction levers by
suppliers, Schneider Electric adopted an innovative approach and
curated a dedicated workshop under the aegis of “iAccelerate Zero
Carbon Day”. The India Middle East Africa (IMEA) and East Asia
Japan (EAJ) regions of Schneider Electric, led by the local
Procurement leadership teams successfully piloted its execution in
Singapore and this is now being rolled out to other regions.
The fundamental idea behind iAccelerate workshop is that
suppliers lack the practical knowledge to decarbonize, and if this
information gap were filled, they would readily adopt emission
reduction practices. To ensure this gap was bridged, a suitability
analysis was conducted to identify the appropriate decarbonization
levers and the specific actions that are feasible and applicable
across various geographies. Specific diagnostic tools were then
developed and shared with suppliers to analyze their own
operations and identify their most relevant actions. These
diagnostic tools included:
1. Low-hanging energy efficiency checklist
2. Solar energy suitability calculator
3. Digital emission calculator
In addition to the diagnostic, which was self-administered by the
suppliers, subject matter experts were identified within the
Schneider Electric ecosystem. The main task of these experts was
to demystify and explain to the suppliers in very practical terms, for
each action, what needs to be done, how it impacts their in-house
processes and what are the overall benefits to the organization. In
addition, service/solution providers were identified who can
support suppliers in the execution of these actions. The Schneider
Electric procurement team executed an expression of interest to
identify the right companies and held screening discussion to
ensure they were aligned with the idea and objective. This created
a pool of service providers, in case they were needed.
Following this background preparation, the suppliers were
engaged in an intensive five-week pre-workshop process to review
the GHG emission data, results of diagnostics and commitment of
the leadership to overall decarbonization. During the iAccelerate
Zero Carbon Day, the supplier teams were able to listen to and
understand subject matter experts who explained how individual
actions can help their companies, and subsequently were able to
visit the roadshow organized by the service/solution providers and
engage on implementation modalities.
The purpose of the iAccelerate workshop is to provide an overview
of actions and approaches to decarbonize and no commercial
interests are associated. The suppliers are free to learn and
discuss with the stakeholders, to treat it as a educational
experience and then to explore the market to find the most suitable
partner to engage for implementing decarbonization measures.
The power of peer-to-peer experience sharing was also harnessed.
Separate sessions were organized with participating companies
who are leading the decarbonization journey, to share their
experiences and lessons learnt with other suppliers. We are
thankful to Henkel AG and ArcelorMittal teams, who shared the
actions and processes implemented in their companies and
provided practical suggestions for enhancing decarbonization
efforts.
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Chapter 2 – Sustainable development
A dedicated series on renewable energy procurement was
organized, enabling experts from the cleantech domain to explain
various renewable energy options including onsite/offsite
installations and various market instruments that can be adopted,
including suitability conditions.
The outcome of the iAccelerate event resulted in the strong
acceleration in the decarbonization commitment from the supplier
partners. As a result of the exercise, the emission reduction
forecast for the two regions increased.
Digital support
To ensure that participating suppliers have access to all the latest
knowledge, research, trainings, and tools for decarbonization, the
Group developed a dedicated web portal on decarbonization,
which is exclusively available to TZCP member companies. The
portal hosts all the key trainings conducted so far. To automate the
supplier emission calculation, a digital tool was developed and
made available to suppliers. This tool removes the need to identify
appropriate emission factors and manual calculations. The
suppliers can simply collect and enter the usage data of various
energy sources and the tool refers to the appropriate emission
sources and gives the emission sources, standardizing and
improving the quality of the data reported by suppliers.
Supply Chain Renewable Initiative
A dedicated program called “Supply Chain Renewable Initiative”
(SCRI) is under implementation to help suppliers with low electricity
demand to access renewable electricity.
Expert consultation
Suppliers can engage deeply with Schneider, and leverage its
in-house expertise. Several visits of factories and offices were
organized for suppliers to learn about operational decarbonization
solutions. Specific knowledge-sharing was done on energy
management, field services and automation.
In addition, Schneider leveraged its partnership with organizations
delivering best-in-class trainings. The Group invited 500 suppliers
who are CDP members to respond to the survey and use their
resources. In Singapore, Schneider launched a SME kickstarter
decarbonization program, leveraging incentives offered by the
Government to SME to decarbonize.
Learn more about the Zero Carbon Project from the
Sustainability section on www.se.com
2.3.6.2 Buying more Green Materials
Schneider Electric has committed to increasing the volume of
green materials in products to 50% by 2025, for about 30% of its
procurement volume, and is tracking quarterly progress as part of
the Schneider Sustainability Impact program (SSI #4).
While this program does not focus solely on CO2, but also mitigates
other environmental impacts such as resources, biodiversity or
toxicity, it will contribute to reducing the Group’s Scope 3 upstream
emissions, in line with its Net-Zero Commitment. To achieve this
ambition, Schneider is actively participating 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 2022, 18% of materials in scope were qualified as
“Green”.
Read more details on the Green Materials and Sustainable
Packaging programs in chapter 2.4 “Being efficient with
resources”, page 182, and in chapter 2.7 “Methodology
and audit of indicators” page 242.
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Chapter 2 – Sustainable development
2.3 Leading on decarbonization
2.3.6.3 CO2 efficiency in the transportation
of goods
Schneider Electric uses a robust transport network to connect
factories and distribution centers, and to deliver to customers. The
related CO2 emissions are part of the Scope 3 upstream emissions
of the Group’s carbon footprint, as this activity is performed by
external transport suppliers.
In 2022, emissions from the transportation of goods represented
1.1 million tonnes of CO2, which is 2% of the Scope 3 upstream
emissions company-wide. The transportation that is directly paid
by the Group (about 60% of the freight CO2 emissions) is closely
monitored, with primary data coming from detailed shipment
information from the top 70% of transport suppliers. The CO2
emissions are then calculated including the emissions from the full
lifecycle of fuels, which means upstream emissions in the energy
sector and the direct emissions at point of use.
From 2015 to 2017, CO2 emissions intensity from transportation was
reduced by 10%, and an additional decrease of 8.4% was
achieved between 2018 and 2020. With its Schneider Sustainability
Essentials (SSE) 2021-2025, the Group aims to further reduce CO2
intensity in transportation by 15% compared to 2020 (SSE #4).
For 2022, continued shortages and supply chain challenges early
in the year led to the use of more expedited modes of transport.
Additionally, internal focus on building resilience within operations
through increased regionalization of manufacturing resulted in an
increased use of regional road freight and a decrease in
international sea freight. Together, these factors shifted the
transportation mode mix, resulting in a 7.7% increase in transport
CO2 emissions intensity compared to 2020. Looking forward, as
operations normalize, there will be a continued focus internally to
optimize the transportation mode mix towards lower CO2 options.
2022 freight CO2e emissions by mode (%)
48.3%
0.1%
35.4%
9.7%
6.6%
Rail
Air
Air-Express
Ocean
Road
S T R A T E G I C R E P O R T
Climate
SSE #4
15% CO2 efficiency in
transportation
As part of its efforts to reduce the CO2 intensity of
transportation, Schneider Electric is focusing on both the
optimization of its transport networks, modes, and
utilization, and on piloting low-carbon transportation
technologies such as electric vehicles.
For example, for one of the Group’s critical transport lanes,
from Singapore to France, a multi-model solution was
implemented to replace airfreight with a hybrid sea
freight-airfreight solution. This achieved an estimated 47%
annual reduction in CO2 emissions for this flow. Additional
multimodal opportunities have been deployed globally and
new ones are being identified as the Group seeks to
reduce the overall impact of airfreight emissions.
In Europe, an annual road freight optimization contest is
held internally within plant and distribution center
operations to reduce the total number of outbound road
freight trips. This has led to a reduction in the number of
trucks used by 419 and resulted in saving 347 tonnes of
CO2 across 14 sites in the past two years, with plans to
expand this best practice globally to scale the CO2 savings
opportunity.
2020 Baseline
2022 Progress
2025 target
0%
-7.7%
15%
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In 2022, Schneider joined the World Economic Forum (WEF) First
Movers Coalition, a global initiative harnessing the purchasing
power of companies to decarbonize seven “hard to abate”
industrial sectors that currently account for 30% of global
emissions: aluminum, aviation, chemicals, concrete, shipping, steel,
and trucking; along with innovative Carbon Removal technologies.
The 50+ companies who make up the Coalition seek to send a
powerful market signal to commercialize zero-carbon technologies.
To jump-start the market, the coalition’s members commit in
advance to purchasing a proportion of the industrial materials and
long-distance transportation they need from suppliers using
near-zero or zero-carbon solutions, despite the premium cost.
More about the First Movers Coalition of the World
Economic Forum can be found on the organization’s page
Schneider made an initial commitment to the aviation working
group to replace at least 5% of conventional jet fuel use with
Sustainable Aviation Fuel (SAF) by 2030. This commitment to the
use of SAF, in conjunction with a focus on reducing company use of
air freight, will have a significant impact on Schneider’s carbon
footprint from the hard-to-abate aviation sector. Additionally, the
Group further enhanced CO2 reporting capabilities to not only
report on freight CO2 footprint, but to provide analytics to facilitate
engagement internally, and with transport suppliers, on
decarbonization initiatives.
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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 overland freight.
Evidence of Schneider’s initiatives to mitigate the impact of
transport-related CO2 emissions include:
• ongoing reviews globally of lead-time requirements, allowing a
shift to lower CO2 emissions transport modes and introduction of
multimodal solutions;
• network design optimization to move towards more direct flows
or opportunities to source products closer to the customer;
• in all regions, pilot implementations of electric vehicles for final
mile customer deliveries;
• in Asia, implementation of a rail solution from China to Singapore
to replace existing air, sea, and road freight solutions;
• with the Group’s key transport providers, identifying
opportunities to use sustainable fuel options where zero-
emission options are not available.
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2.3 Leading on decarbonization
S T R A T E G I C R E P O R T
2.3.7 Decarbonizing the Group’s downstream emissions
Downstream emissions are by far the largest category of emissions.
They represent 86% of Schneider Electric’s footprint, and largely
come from the electricity consumption by the Group’s customers
during the use phase of the products.
Schneider’s strategy to decarbonize its downstream emissions is
articulated around 4 main pillars:
•
innovating and eco-designing in product development:
eco-design principles aim at reducing the environmental impact
of products, including the product carbon footprint, for instance
by increasing the energy efficiency of products in use phase;
• substituting all relevant offers with SF6-free medium voltage
technologies by 2025: since end-of-life emissions from sold
products are predominantly due to their SF6 content, this
substitution will result in a significant drop in the downstream
carbon footprint;
• using the Group’s voice for influencing the transition towards a
more electric, digital, and decarbonized world;
• supporting customers in their own decarbonization journey by
providing products and services that drive significant
decarbonization of their operations.
Ecodesign is developed in chapter 2.4 “Being efficient
with resources”, page 180, and the decarbonization of
customers with Schneider Electric’s products in section
2.3.8, page 172.
Customers
Scope 3 downstream
Induced: 52.3 MtCO2e in 2022
86%
80M
60M
40M
20M
0
2018
2019
2020
2021
2022
2030
Use of Products
End-of-life products
Freight
Target
-13.7%
CO2e emissions reduction in Scope 3 downstream vs.
2021, mostly driven by an update of electricity
emission factors projections.
2.3.7.1 Developing SF6-free offers and SF6
recovery services
The SF6 gas has excellent insulating properties and has therefore
been widely used for building switchgear – especially medium
voltage gear – for the past 30 years, as it allows a reduction in the
size of the electrical equipment. The electric power industry uses
roughly 80% of all SF6 produced worldwide, and the global
installed base is still expected to grow by 75% by 2030.
SF6-free AirSeT, a suite of award-winning medium
voltage innovations
While helping ensure the safety and quality of certain medium
voltage equipment, SF6 gas has a Global Warming Potential (GWP)
25,200 times higher than CO2, making it one of the highest
greenhouse gases. Schneider is therefore innovating its offers to
move away from SF6 gas, as part of the SSE #2: 100% substitution
with SF6-free medium voltage technologies by 2025. In 2021,
Schneider’s promises to deliver new SF6-free medium voltage
switchgear became a reality with the installation of innovative
products at several customer sites. 2021 was the year of the
industrialization of several new product lines, free of SF6, to prepare
for the full commercial launch of this new generation of products. In
2022, Schneider unveiled the latest equipment in the SF6-free
medium voltage solutions contributing to the global fight against
climate change, with GM AirSeT, a breakthrough primary gas-
insulated technology for electrical networks and demanding
applications in industrial buildings and critical infrastructure.
Schneider’s technology has been piloted at numerous electric
utilities, infrastructure and buildings, by customers such as
GreenAlp in France, EEC Engie in New Caledonia, Renault Group
in France, and Azienda Trasporti Milanesi in Italy. AirSeT has also
received multiple recognitions, most recently at the Greek Energy
Mastering Awards 2022 and by the International Carbon Handprint
Award at Climate Week NYC.
The average RM AirSeT switchgear installation removes the need
for up to 3 kg of SF6 gas, the equivalent of over 75 tonnes of CO2.
SF6 recovery services
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, and
customer support is being developed to expand a model adaptable
to 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 the Group’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,
dismantling and reusing, recycling or disposing 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.
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Climate
SSE #2
100% substitution with SF6-free
medium voltage technologies
As part of its sustainability strategy, Renault Group is
transforming its factory in Flins, France, into a Refactory:
Europe’s first circular economy factory dedicated to
mobility.
Electrical distribution was identified as an area to deploy an
innovative solution that reduces greenhouse gases;
therefore Renault Group chose AirSeT MV switchgear that
eliminates SF6 and offers lower total cost of ownership.
AirSeT switchgear also addresses the Group’s concern to
maximize reliability, since the integrated smart sensors will
allow Refactory to remotely monitor all operating
parameters.
2020 Baseline
2022 Progress
2025 target
26%
41.5%
100%
2.3.7.2 Using the Group’s voice to drive
collective action
Getting to net-zero is going to take more than commitments, and
technologies. Policies underpin the pace and the progress that the
world will be able to make towards decarbonization. The Group will
use its voice to speak out on public policy issues that Schneider
Electric thinks can advance the world’s carbon efforts:
• public policy initiatives that accelerate the electrification,
digitization, and decarbonization of the economy;
• the removal of regulatory barriers to help catalyze markets to
enable carbon-reduction technologies to scale more quickly;
• the use of market and pricing mechanisms so people and
businesses can make more informed carbon decisions;
• the empowerment of consumers through transparency based
on universal standards to inform purchasers about the carbon
content of goods and services.
In 2022, Schneider Electric signed Corporate Knights’ Action
Declaration on Climate Policy Engagement together with more than
50 other companies to support climate action aligned with the Paris
Agreement when engaging with policymakers, work with trade
associations to advance alignment with the Paris Agreement and
monitor and disclose climate policy alignment.
Schneider is engaged in sectoral and multi-stakeholder
organizations that drive ecosystem change.
Read more details on Schneider Electric global and local
external commitments to move forward collectively in
chapter 2.1.8 page 95, and on Schneider Electric lobbying
activities in chapter 2.2.3.5 page 118.
Electrification policies
Schneider advocates for strong climate and clean energy policies
in many jurisdictions where it operates. The Group supports
innovative technologies and projects that reduce carbon dioxide,
modernize and digitize the grid, accelerate clean energy, and
strengthen resilience to the impacts of a changing climate. In the
USA, Schneider submitted comments to the U.S. Securities and
Exchange Commission’s proposal for The Enhancement and
Standardization of Climate-Related Disclosures for Investors.
In Europe, Schneider engages actively with the European
institutions advocating for rapid electrification and decarbonization
of the grid. For example, in May 2022, it submitted its views about
the REPowerEU plan of the European Commission, a strategy plan
that aimed to fast forward the green transition. Schneider’s own
position paper highlighted ten ideas to move forward Europe policy
framework into that direction.
Discover the white paper “REPowerEU: Empowering energy
consumers for a more sustainable and resilient Europe”
on www.se.com
The Group engages with local governments on the electrification,
digitization and decarbonization of the economies.
Carbon policies
Schneider Electric calls for policymakers to define robust and
predictable carbon pricing for companies, enabling companies to
integrate collaterals on climate into their strategy. A high and stable
price for carbon will strengthen incentives to invest in sustainable
technologies and to change behaviors.
Schneider supports the implementation of carbon pricing.
Internally, the Group is incorporating an internal or shadow price for
carbon to test its portfolio’s resilience to climate scenarios. The
Group internal shadow price is meant to uncover inefficiencies,
incentivize low carbon innovation, and understand the potential
impact of external carbon pricing on the profitability of a project, a
new business model, or an investment. Schneider uses different
carbon price scenarios, varying from EUR 50-130/ton (depending
on time horizons) to inform the Group’s climate strategy.
The internal carbon price is used to assess the performance and
resiliency of operations. The cost of carbon is evaluated for
industrial activities, taking into account CO2 emissions from energy
consumption and SF6 leaks at industrial sites. CO2 cost is also taken
into consideration in industrial network modelling to account for
future CO2 prices in industrial decisions. This enables the
measurement of the potential impact of CO2 pricing on the Group’s
supply chain.
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Chapter 2 – Sustainable development
2.3 Leading on decarbonization
S T R A T E G I C R E P O R T
2.3.8 Enabling customers to decarbonize with
EcoStruxure™
Climate
SSI #2
Deliver 800 million tonnes of saved
and avoided CO2 emissions to our
customers (cumulated between
2018 and 2025)
Altivar variable speed drives were awarded as “Most
Climate-Positive Carbon Handprint Product Award” at
Climate Week 2022. By allowing motors to operate at the
ideal speed for every load condition, Altivar variable speed
drives can generate up to a 30% reduction in energy
consumption in industrial processes.
Consequently, it’s estimated that over 180 million tonnes of
CO2 emissions could be saved or avoided during the
service life of the drives sold by Schneider Electric during
the 2018-2022 period.
2020 Baseline
2022 Progress
2025 target*
263M
440M
800M
* cumulated since 2018
To transparently measure these saved and avoided emissions, the
Group developed a methodology that is publicly available on the
Group’s website. It was developed with Carbone 4, an expert CO2
accounting consulting company. 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 defining rigorous calculations, with
conservative assumptions. The methodology was first published
in July 2019 and was independently reviewed by the audit company
EY with regards to its consistency, accuracy, understandability,
neutrality, completeness, and relevance. The methodology has been
assessed in view of the requirements of ISO 14067 and ISO 14021.
2.3.8.1 Schneider Electric helps customers
decarbonize and aims to avoid 800 million
tonnes of CO2 emissions by 2025
Schneider Electric products and services can help customers
decarbonize and reduce their environmental footprint, thanks to
various value propositions that leverage the IoT-enabled
architecture EcoStruxure™. Examples include:
• energy Efficiency: the Group helps companies become more
efficient and reduce their CO2 emissions, for instance with
variable speed drives or energy performance contracting;
• renewable power generation: Power Purchase Agreements or
microgrids lead to the consumption of less carbon-intensive
electricity;
• reduced GHG leakage: SF6-free equipment or SF6 recovery
services lead to reduced emissions;
• materials efficiency: circularity business models (e.g.,
refurbish) or lead battery recycling lead to reduced emissions
for manufacturing virgin materials.
To demonstrate this positive impact, a new indicator was launched
in 2018 which tracks how Schneider’s offers enable its customers to
save and avoid emissions. The Group has committed to reaching a
cumulated 800 million tonnes of CO2 of saved and avoided
emissions by its customers between 2018 and 2025 (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. Overall, from 2018 to 2022, Schneider Electric
helped customers save and avoid 440 million tonnes of CO2e.
Cumulative saved & avoided CO2e emissions since 2018
(MtCO2e)
800M
600M
400M
200M
0
2018
2019
2020
2021
2022
2025
Saved
Avoided
Targets
+93M tonnes
CO2e emissions saved and avoided for our customers
in 2022.
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S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
Apps, analytics
and services
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)
Edge control
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
Examples: high efficiency uninterruptible
power supply (UPS), Variable Speed Drives
Saved and avoided CO2 emissions arise from the difference
between the induced emissions of Schneider Electric’s offer
compared to the induced emissions of the reference situation.
For both cases, induced emissions are evaluated on the expected
lifetime of the offer and cover the full lifecycle (manufacturing, use
and end-of-life). The reference situation is carefully defined, and
transparently described, in order to reflect the most realistic market
situation in the absence of the sale of the offer. Saved emissions
are delivered on brownfield (retrofit) projects when emissions are
actually reduced compared to a previous situation, whereas
avoided emissions are defined with respect to greenfield sales
(new infrastructures), where emissions are smaller than the
reference situation, yet lead to an increase in emissions, due to the
e are new assets.
fact that there are new assets.
fact that there are new assets.
ectric’s saved and avoided methodology, “
c s saved and avoided methodology,
CO2 Impact
Schneider Electric’s saved and avoided methodology, “CO2 Impact
ectric s saved and avoided methodology,
“CO2 Impact
Schneider Ele
Schneider Ele
Methodology” is available for download on se.com. The detailed
available for download on se.com. The
e detailed
” is a
Methodology
calculation rules and assumptions for each offer covered by the SSI
and assumptions for each offer covere
ed by the SSI
ules a
calculation ru
t of the independent review, are also a
available.
#2, and the report of the independent review, are also available.
eport
#2, and the re
2.3.8.2 Delivering access to energy
products and solutions
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
modern energy and digital access. The Group is committed to
providing 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.
Read more details on Schneider Electric Access
to Energy programs in chapter 2.6.1 page 226.
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Read more about Schneider’s saved and
Read moo
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avoided methodology on www.se.com
avoided
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
2.4 Being efficient with resources
In this section
2.4.1 Minimize the Group’s impacts and
2.4.4 Manufacturing products sustainably
dependencies on nature
2.4.2
The Group’s commitment to product sustainability
2.4.3
Lead with transparency: provide
environmental data to customers
176
180
186
2.4.5 Product use phase and end-of-life
188
195
Context and the Group’s commitment
Ecosystem services provided by nature such as food, clean water,
medicine, and shelter are essential for humanity to thrive.
Nevertheless, growing human activity puts an increasing pressure
on the planet, using and consuming more resources than Earth can
renew. The threat to our natural ecosystems is now greater than
ever.
The world is facing a twin crisis of climate change and nature loss,
which are inextricably linked and require a unified effort to be
addressed. On the one hand, climate change is the third driver of
biodiversity loss (IPBES 2019), and is projected to become the first
in the years to come, unless we achieve the objectives of the Paris
Agreement. On the other hand, nature has historically provided
carbon sinks to help balance the growing carbon emissions
created by human activity. These sinks are now disappearing
rapidly, due to deforestation.
Schneider Electric’s long-term commitment is to be efficient with
resources, by behaving responsibly and making the most of
technology, including digital technology to preserve our planet.
Concretely, its strategy is to minimize the lifecycle environmental
footprint of its products and solutions, while maximizing the
environmental benefits they can bring. This strategy has three pillars:
first, to be efficient with resources and responsibly source materials,
second to protect, and restore biodiversity and third to innovate with
circularity as the end game.
With Schneider Sustainability Impact and its concrete programs,
the Group is constantly innovating, so its offers contribute to a more
circular economy, in industrial processes, product design, and
business model. In 2022, the proportion of sustainable packaging
doubled, from 21% to 45%, and the Group joined The Copper Mark
and Responsible Steel to accelerate responsible material sourcing
for metals.
“2022 was a challenging year for
supply chains with continuous
disruptions. We have taken further
actions to strengthen resilience for
the short, medium, and long term
— making significant capacity
investments, accelerating
regionalization, and simplifying
flows. With our strategic supply
chain partners, we are building
additional resilience, improving
energy efficiency, reducing carbon
emissions, advancing circularity,
and preserving local biodiversity.”
Mourad Tamoud, Chief Supply Chain Officer
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174
S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
Progress of our Resources commitments
2021–2025 programs
Baseline(1)
2022 progress(2)
Schneider
Sustainability
Impact
(SSI)
Essentials
(SSE)
#
4.
5.
5.
6.
7.
8.
9.
10.
11.
Increase green material content in
our products
Primary and secondary packaging free from
single-use plastic, using recycled cardboard
Improve energy efficiency in our sites
Grow our product revenues covered with
Green Premium™
Switch our corporate vehicle fleet to
electric vehicles
Deploy local biodiversity conservation
and restoration programs in our sites
Give a second life to waste in
“Waste-to-Resource” sites
Avoid primary resource consumption
through “take-back at end-of-use” since 2017
(metric tons)
Deploy a water conservation strategy and
action plan for sites in water-stressed areas
2025
Target
50%
2020: 7%
18%
2020: 13%
45%
100%
2019: 0%
2020: 77%
7.8%
80%
2020: 1%
13.8%
2020: 0%
17.6%
2020: 120
127
15%
80%
33%
100%
200
2020: 157,588
261,128
420,000
2020: 0%
48%
100%
These programs
contribute to UN SDGs
(1) The baseline year is indicated in front of each SSI baseline performance.
(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 #+1 and SSE #12 in 2022), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 270). Please refer
to page 242 for the methodological presentation of each indicator. The 2022 performance is also discussed in more details in each section of this report.
2022 Highlights
Schneider Electric’s Wiser range for
homes is packaged with 100% materials
free from single-use plastic and recycled
cardboard.
Schneider Electric became a partner
of Responsible Steel and The Copper
Mark to accelerate the sourcing of
Green Materials.
Schneider Electric ranked 2nd in The
Gartner Supply Chain Top 25 and was
listed in the top five for the third
consecutive year.
Long-term roadmap
2030
• No net biodiversity loss in Schneider Electric
• Double energy productivity vs. 2005 (EP100)
direct operations by 2030
• 100% deforestation-free wood in our
operations and supply chain by 2030
• Shift 100% of Company fleet to electric
vehicles (EV100)
• 100% waste recovery by 2030
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Chapter 2 – Sustainable development
2.4 Being efficient with resources
S T R A T E G I C R E P O R T
2.4.1 Minimize the Group’s impacts and dependencies
on nature
2.4.1.1 Context
Opportunities
A sustainable future for people and economies will only be possible
if nature, climate, and people are addressed in an integrated way.
Climate change is among the main drivers of biodiversity loss,
while nature is part of the climate solutions. If the limit of warming of
1.5°C becomes impossible to reach, climate change will likely
become the dominant cause of biodiversity loss in the coming
decades. WWF “Living Report 2022” points out that rising
temperatures are already driving mass mortality events, as well as
the first extinctions of entire species. Every degree of warming is
expected to increase these losses and the impact they have on
people.
An analysis of 163 industry sectors and their supply chains found
that over half of the world’s Gross Domestic Product (GDP) - US$44
trillion of economic value generation - is moderately or highly
dependent on nature and its services. Pollination, water quality and
disease control are three examples of the services an ecosystem
can provide. As nature loses its capacity to provide such services,
the economy could be significantly disrupted. This report found
that many industries have significant “hidden dependencies” on
nature in their supply chain and may be more at risk of disruption
than expected.
2.4.1.2 Risks and opportunities
When considering this “climate-nature nexus”, Schneider Electric
recognizes the inability to mitigate – or adapt to – the impacts of
climate change without protecting, restoring, and enhancing our
global stocks of nature. The Group used the Taskforce on Nature-
related Financial Disclosures (TNFD) framework to conduct a
double materiality assessment: impacts and dependencies; risks
and opportunities related to nature. The double materiality
approach looks at the two-way interaction with nature: how nature
impacts a company and its operations, but also how the operations
of a company impact nature.
Schneider assessed impacts and dependencies on the four realms
of nature defined by TNFD (land, ocean, freshwater, and
atmosphere), and five main drivers of nature change: climate
change, resource exploitation, land and sea use change, pollution
and invasive alien species.
Risks
As a discrete manufacturing industry, Schneider Electric’s physical
footprint from its operations and value chain may impact nature’s
capital, local and global ecosystems.
To measure its impact on nature, Schneider Electric has conducted
an end-to-end biodiversity footprint assessment, quantifying
biodiversity-related risks and identifying opportunities for reducing
these risks across its value chain, with a global and scientific
approach. The Group’s biodiversity footprint shows that most of its
impacts are indirectly caused by its carbon emissions, and that
dependencies come mainly from the use of resources in
manufacturing, and logistics.
Schneider Electric is convinced that the circular economy can help
create a win-win-win-win ecosystem:
• good for the planet, because it reduces the use of virgin
resources;
• good for customers, because it enables lower total cost of
ownership, or increased lifespan of assets;
• good for business resilience because it improves customer
intimacy and stickiness as well as overall stakeholder
attractivity;
• good for collaborators because it provides a meaningful
purpose.
Schneider Electric has a fantastic opportunity to enable more
repair, retrofit, and recycling services, provided the product
categories concerned are adequately maintained, and serviced by
qualified and certified experts.
The regionalization of environmental regulations is creating
complexity for companies across the value chain and requires
enhanced product traceability. Schneider’s worldwide approach of
environmental product stewardship directives fed by a local
network of experts enables the group to adjust promptly to future
requirements, providing Schneider with the opportunity to
strengthen its relationships with its suppliers, and to provide its
customers with the robust product life cycle information they
demand.
2.4.1.3 The Group’s commitment
Schneider Electric reduces its GHG emisions by engaging and
transforming its value chain to be efficient with resources,
increasing recycling and responsible behaviors towards raw
materials, plastics and wood used. Finally, Schneider acts locally,
engaging employees and partners to implement local biodiversity
conservation and restoration programs. Site managers and
biodiversity leaders define their site’s biodiversity program.
Guidelines define the rules applicable for the Schneider
Sustainabiity Essentials target and share best practices across
sites for continuous improvement.
Schneider Electric’s commitment to act4nature
international
1. Quantify and regularly publish the assessment of the Group’s
impacts on biodiversity;
2. Commit to reduce Schneider’s impacts and align biodiversity
objectives with science;
3. Develop solutions and technologies that contribute to the
preservation of biodiversity;
4. Engage and transform the value chain;
5. Act locally, engaging employees and partners.
Consult Schneider’s commitments to Act4Nature
international on www.se.com
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S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
2.4.1.4 Biodiversity footprint measurement
The BFA allowed Schneider Electric to identify the main levers of
action to reduce its biodiversity footprint across its value chain:
The quantification of the Group’s impacts on biodiversity is an
essential firs step to understand its impacts and dependencies on
nature and take appropriate action. In 2020, Schneider Electric
became the first company to publish the end-to-end Biodiversity
Footprint Assessment (BFA) of its activities, using the Global
Biodiversity Score (GBS) tool developed by Caisse des Dépôts et
Consignations (CDC) Biodiversité. By sharing its experience with
other companies and publishing the results transparently, the
Group aims to demonstrate that measuring biodiversity footprints is
a key first step in helping 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). Synthetic, easy to understand and widely available, this
metric has the potential to become the international standard.
et c as t e pote t a to beco e t e te at o a sta da d
The results of Schneider’s BFA are presented hereafter illustrating
The results of Schneider s BFA are presented hereafter illustrating
The results of Schneider’s BFA are presented hereafter illustrating
the Group’s dynamic terrestrial impact, with details by pressure.
the Group’s dynamic terrestrial impact, with details by pressure.
The pie chart highlights the weight of greenhouse gas (GHG)
The pie chart highlights the weight of greenhouse gas (GHG)
emissions, which represent almost 70% of Schneider Electric’s
emissions, which represent almost 70% of Schneider Electric’s
pressure on biodiversity. Land use accounts for almost 30% of
pressure on biodiversity. Land use accounts for almost 30% of
“cradle-to-gate” impacts.
“cradle-to-gate” impacts.
Read more about Schneider Electric’s
commitment to biodiversity on www.se.com
• Reduce GHG emissions in the Group’s own operations and in
the supply chain. Climate change is one of the major pressures
on biodiversity globally and is the Group’s main impact on
biodiversity (close to 70%). Therefore, Schneider’s Net-Zero
Commitment will have a significant impact on reducing the
Group’s pressure on biodiversity.
More details on Schneider’s climate programs
and achievements are presented in chapter 2.3
pages 148 to 173.
• Reduce the “land use” due to the extraction of raw
materials. The main driver of land use is the extraction of wood
and metals. Wood is mainly used for packaging purposes
(cardboard, pallets, boxes); metals are the core of the Group’s
products (silver, copper, steel, aluminum...). Greater
transparency and access to data on end-to-end supply chain is
key to understand how to minimize the Group’s impacts and
dependencies on nature. Nevertheless, whether on climate or
nature, data quality should not get in the way of necessary
immediate action. Schneider made several commitments :
− Source 100% deforestation-free wood by 2030;
− Source 50% “green materials” in its products by 2025 (SSI
#4);
− Use 100% of sustainable primary and secondary packaging
by 2025 (SSI #5).
Schneider Electric’s biodiversity industrial footprint by scope
(in MSA.km2)
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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
2.1%
0.1%
0.1%
29.3%
69.3%
Climate Change
Land use
Encroachment
Fragmentation
Atmospheric Nitrogen Deposition
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Chapter 2 – Sustainable development
2.4 Being efficient with resources
S T R A T E G I C R E P O R T
2.4.1.5 Actions to minimize the Group’s
impact on biodiversity
Deforestation-free wood by 2030
In June 2022, Schneider Electric made the commitment to be
deforestation-free by 2030. Deforestation is currently running at a
rate of 10 football fields a minute in the areas most critical for
carbon storage and biodiversity. Last year, primary tropical forests
the size of the Netherlands were destroyed. There is no path to
net-zero that does not address deforestation and supports
nature-based solutions.
To date, the deforestation-free wood program runs largely through
the SSI #5 (100% of our primary and secondary packaging is free
from single-use plastic and uses recycled cardboard), which
addresses the large majority of wood consumption by Schneider
Electric. In parallel, streams of work are being created to address
the complementary topics, such as technical wood or marketing
materials.
Use the Group’s voice for mandatory
disclosure on nature
In October 2022, Business for Nature launched the United Nations
Biodiversity Conference of Parties (COP15) advocacy campaign
(#MakeItMandatory) to call on governments to mandate
assessment and disclosure on impacts and dependencies on
biodiversity for businesses and financial institutions above a certain
size across the 196 member states of the UN Convention on
Biological Diversity (CBD). Schneider signed the campaign, joining
more than 330 companies calling on Heads of State and
Governments to include in COP15 agreement Target 15, mandatory
requirements for all large and transnational businesses and
financial institutions to assess and disclose their impacts and
dependencies on biodiversity, by 2030. During the COP15
Biodiversity, Schneider supported an ambitious Target 15, shared
its actions to date and ambitions relating to nature, and learned
from others public and private sector actors. Leading businesses
already recognize the multifaceted benefits and opportunities that
come with investing in nature, and the risks that come from
inaction, and are working towards assessing and disclosing their
impacts. COP15 also showed how Schneider and others are
already accelerating efforts to restore ecosystems, including
anticipating and avoiding asset stranding, circumventing value
chain disruptions and protecting vital habitats through responsible
sourcing.
2.4.1.6 Governance
Because Schneider Electric builds products that can help people
and businesses decarbonize and digitize, environmental
sustainability is core to every step of the cradle-to-cradle product
lifecycle. The Group works hard to minimize the environmental
impact of how it designs, manufactures, delivers, and maintains its
products. The Group engages with partners and suppliers on the
materials it uses, and integrates strict social and environmental
accountability standards that address considerations around
business ethics, human rights, and environmental impact.
The Group’s environmental performance is delivered with the
involvement of its strategy, R&D, manufacturing, procurement,
finance, human resources, transportation, sales, marketing and
services teams. This environmental performance is core to the
customer value proposition, and is reported and discussed during
leadership meetings of concerned entities, including the Global
Supply Chain, the Decarbonization Committee, the Low-carbon
product design Committee, the Board Audit & Risks Committee, the
Board of Directors, the Executive Committee, Human Resources &
the CSR Committee, and with the ExCom Function Committee.
The 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. 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 measuring and reducing CO2 emissions from freight at Group
level.
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Chapter 2 – Sustainable development
• 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 Waste from
Electrical and Electronic Equipment (WEEE) in relation to
end-of-life product management, and monitoring national
substance regulations such as RoHS China); the proactive
management of local environmental initiatives; and finally,
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 Edison experts are
identified, one of them being environment. Each year, an
Environment Edison expert 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.
Group Operations’ Environment policy
Schneider Electric’s operational environment strategy aligns with its
broader sustainability strategy. Under this strategy, the Group’s
ambition is to operate sustainably within the limits of the planet and
reconcile beneficial global economic growth and progress with the
need for environmental preservation and regeneration.
Within its global environment policy, Schneider sets operational
goals that emphasize the steps necessary to help advance towards
its ambition. These goals are:
• Continuously improve the environment management system and
meet compliance obligations (see section 2.4.4.1);
• Continue protecting the environment, preventing pollution,
limiting emissions, and promoting biodiversity (see section 2.4.2
The Group’s commitment to product sustainability);
• Decouple our supply chain from natural resource consumption
(see section 2.4.2 The Group’s commitment to product
sustainability).
Targets enabling those goals are defined in the Group’s Schneider
Sustainability Impact (SSI) and Schneider Sustainability Essentials
(SSE) scorecards. Relevant SSI and SSE targets are SSI #5, SSE
#8, SSE #9, and SSE #11.
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2.4 Being efficient with resources
S T R A T E G I C R E P O R T
2.4.2 The Group’s commitment to product sustainability
At Schneider Electric, every product or solution fulfils strict
environmental performance. The Group has embraced a circular
approach throughout the lifecycle of its products, and aims to
design products with minimal material footprint and maximal
lifetime value. Implementing a circular model that minimizes waste
requires interventions up and down the value chain – innovative
design, materials, service business models, reuse and
redistribution processes, collection, and more.
2.4.2.1 Design with circularity in mind
Circularity is a key enabler and lever to climate change mitigation
and biodiversity preservation. With circularity in mind, the Group
can maximize the value retention of everything it produces through
the products’ lifetime.
2.4.2.2 Ecodesign approach
Ecodesign is the design of products or services that aims to
minimize the environmental impact throughout a product’s lifecycle.
In 2015, to respond to customers’ growing demand for products
with a smaller environmental foootprint, and to embed circular
principles in its products and offers, Schneider Electric adopted
EcoDesignWay™, a process to understand and manage the
environmental impact throughout the lifecycle of products, and to
coordinate efforts across the value chain. In each phase of the
product lifecycle, ecodesign principles are defined and followed.
Mining/Minerals
To embed circular principles in its products and offers, the Group
adopted EcoDesign Way™, a process developed to understand and
manage the environmental impact throughout the lifecycle of
products, and to coordinate efforts across the value chain.
50% green materials in
products
Recycle
Take-back and
end-of-life
management
Any circular journey starts with the design phase, designing new
business models, products and systems that use less resources,
reduce the CO2 emissions and keep materials in use. Schneider’s
designers embed circular design, integrate recycled and bio-
based materials, and aim to design durable, repairable and
upgradable products that can be either repaired on-site while
they’re being used, retrofitted on-site or taken back to the Group’s
ECOFITTM and repair centers.
The designers benefit from Ecodesign tools, playbooks and
trainings that are regularly updated, easily available on the Group
intranet. From the corporate level to the design squads, several
teams define the Ecodesign and circularity strategy, develop
materials to support the designers’ upskilling and deployment of
the circular design, and contribute actively to the development of
standards at European and international level regarding circularity
and material efficiency. This ensures that the internal practices are
aligned with the latest standards and that the Group’s expertise is
well incorporated in the standardization landscape.
Finally, the circular design actions are valued through the Green
PremiumTM program, communicating the environmental
performance of Schneider’s offers, with transparency, on aspects
relating to durability, repairability, recycled content or recyclability.
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
Collection
Refurbish/
Remanufacture
ECOFITTM
Reuse/
Redistribute
Maintain/
prolong
Services, asset
performance
management
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Schneider Electric end-to-end ecodesign approach
Design & procure
Produce
Use
End of use
• Phase out potentially
harmful substances and
provide transparent
information on
environmental
performance of products
Integrate 50% Green
materials in the products
by 2025 (SSI #4)
• Design durable,
•
dismantlable, upgradable
and repairable products
to enable circular services
and business models, and
maximize the use of
Schneider products
• Switch to 100% primary
and secondary packaging
free from single-use
plastics and use of
recycled cardboard (SSI
#5)
• Have 200 “Waste-to-
Resource” sites by 2025
to minimize waste
generation and optimize
recycling on the Group’s
various sites (SSE #9)
• Help customers improve
resource efficiency
through EcoStruxureTM
solutions (SSI #2)
• 80% of product revenues
covered by Green
Premium™ (SSE #6)
• Deliver digitized
environmental footprint
information
• Offer circular services
such as maintenance,
repair, refurbishment to
maintain the products in
use
• Waste regulation
compliance by providing
transparent information for
the proper dismantling
and end-of-life
management of products
• Scale-up take-back
programs to give a
second-life to products or
recycle them if no better
option is feasible
In 2022, the Group revamped its ecodesign strategy on two levels.
Ecodesign in business strategy:
• Each business unit defined its sustainability targets and
roadmap to reflect operationally the resources required to
achieve a decarbonization plan. The Human Resources
department performed a thorough assessment to ensure each
business unit was correctly staffed to foster ecodesign. It
includes roles and responsibility descriptions and upskilling
plans.
• Environmental attributes (green materials, circular performance,
low-carbon were included systematically in R&D priorization.
The inclusion of a carbon price in R&D projects has also been
tested. The objective is to include a carbon price in all R&D
investment decisions in 2023.
Ecodesign in projects:
• The Group has continued to rely on the EcoDesign WayTM
process to incorporate ecodesign principles into every project.
EcoDesign Way is a project scorecard that provides an
exhaustive list of ecodesign performance attributes, fully
aligned with the Green PremiumTM program.
• Apart from the EcoDesign Way Scorecard, environmental
footprint tools such as Simplified Life Cycle Analysis (LCA) have
been tested. In 2023, Schneider aims to develop a web-based
ecodesign calculator to enable easier and faster environmental
footprint by project teams, and help identify the most relevant
ecodesign features.
• Group Ecodesign experts have working with the Offer
Excellence Academy to define an ecodesign training path to
ensure all resources are available for the R&D community to
raise awareness, train and upskill their teams. The training
modules of the ecodesign training path will progressively be
available in 2023.
2.4.2.3 Substances management to
eliminate hazardous substances
Schneider Electric continues to remove hazardous chemicals from
its products, processes, and supply chain, to minimize the potential
harm for the environment and people health. The Group has
tackled this issue for many years as part of its environmental
programs reducing and managing its waste, emissions- and
water-related risks, including pollution. It constantly substitutes
substances or substance groups listed among the declarable and
regulated substances in its products, whenever this is technically
possible. The recent development of the new medium voltage
switchgears without SF6 (one of the most impacting greenhouse
gases) is an illustrating example.
The Group operates in different jurisdictions with evolving
regulations on environmental, health, safety, and product
compliance. The regionalization of environmental regulations (e.g.
California Prop 65, China RoHS, UAE RoHS) creates complexity,
with thousands of suppliers. Therefore, Schneider has put in place
a strong governance, relying on a worldwide approach of
environmental product stewardship directives fed by a regional and
local environmental steward network. Because substance
presence identification and traceability is key, the Group is
investing in robust digital systems to preform and report the
environmental compliance of its wide portfolio of products, across
several hundreds of thousands of commercial references.
RoHS and REACH
Schneider Electric has adopted, for many years, a proactive
implementation of the RoHS European Directive. This means the
Group strives to have products compliant with RoHS and REACH
substances restriction even if it is not in the legal or geographical
scope of the directive. This includes all Schneider’s offers, its local
or independent name brands, manufactured in its plants or only
labelled.
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2.4 Being efficient with resources
S T R A T E G I C R E P O R T
Schneider is committed to fulfill its legal obligation and pursues the
product compliance coverage to the largest possible extent making
business sense. It continues to work to reduce the number of
products under the RoHS directive exemptions, and it continues to
reduce the number of global exceptions to REACH and RoHS. 79%
of products globally (83% of revenue) are compliant with RoHS
restrictions, among which 36% without directive exemptions.
Research programs are carried out to find alternative solutions to
the presence of lead in some metallic alloys, brominated flame
retardants in PCBs, cobalt in surface treatments, to anticipate
future possible restrictions. Per- and polyfluoroalkyl substances
(PFAS) is a wide family of substances that are targeted by both
Europe and the United States of America in coming regulations. A
first identification action was carried out in order to map the
different usages both in the Group’s products and manufacturing
processes. The concept of “essential use” will be associated to the
regulation and Schneider must identify which of its applications are
in line with this concept (which is not yet fully defined by the
legislator) and where substitutions will be required.
In Europe, the Regulation on Registration, Evaluation, Authorization
and Restriction of Chemicals (REACH) and the Restriction of
Hazardous Substances in Electrical and Electronic Equipment
(RoHS) directive are engaged in a refit process. Schneider actively
participates in the public consultations through the professional
organizations (FIEEC, Orgalim, Digital Europe), making some key
proposals to improve efficiency and limit the administrative burden.
Compliance system
A strong data management system is key to ensure product
compliance and anticipate substitution actions. Internal IT
processes are continuously adjusted with the goal of taking a more
proactive and safe approach to the use of materials and
substances, and to more efficiently fulfill the declaration
requirements such as those of the European Substances of
Concern In Products (SCIP) database through direct link or IEC
62474/IPC1752 structured data exchange formats.
Requirements of the EU WEEE Directive 2002/96/EC and national
regulations generally include, among others, the following:
•
•
financing the collection, treatment, recovery and
environmentally sound disposal of WEEE resulting from
products on the corresponding market which have reached their
end of useful life ;
labeling products with a crossed-out wheelie bin symbol to help
minimize WEEE disposal as unsorted municipal waste and
facilitate its separate collection. All applicable Schneider
Electric products in the European markets need to comply with
WEEE regulation and carry the “Wheelie Bin” sticker.
2.4.2.4 Reach 50% of green materials in
products by 2025
Risk relating to sourcing materials
The acceleration of electrification globally is increasing competition
to access some critical raw materials. For example, renewable
power generation is shifting dependency of the energy sector from
fossil fuels to mineral resources. The electric vehicles industry is
expected to increase the demand for lithium 50-fold by 2040 and
the demand for cobalt and graphite 30-fold, according to the
International Energy Agency (IEA).
Evolving economic trend, global overexploitation, and limited
access can result in shortages of natural resources within the
Group’s operations and its value chain. This can result in business
disruptions and rising costs in both the short- and long-term, and
additional challenges to secure supply for sustainable
transformation programs (green materials, substances substitution,
sustainable packaging).
Risk monitoring and management
Risks are taken into account in the STRIVE initiative of the Group’s
Global Supply Chain and covered by the Property Damage and
Business Interruption program at site level.
In addition to IT tools, supplier compliance data collection is
continuously improved with a new workflow and a wider scope of
requests, pushing for full material disclosure information.
The Group approaches access to resources at different time
horizons, to ensure supply resilience both now and in the future.
The Group is:
WEEE
Related to RoHS is WEEE, which stands for Waste from Electrical
and Electronic Equipment (also known as “e-waste”). It refers to
regulations, typically passed at a country or state level, aimed at
promoting the reuse and recycling of electrical and electronic
equipment and thereby reducing resource consumption and the
amount of e-waste going to landfill. Requirements of WEEE
regulations include, among others, financing the collection,
treatment, recovery, and environmentally sound disposal of WEEE.
With the rapidly expanding use of electrical and electronic
products globally and the resulting growth in e-waste, more and
more jurisdictions are enacting WEEE regulations.
The European Union (EU) WEEE Directive, is implemented through
national regulations in all European Economic Area (EEA) countries
including all EU member states, Norway, Liechtenstein, and
Iceland. Schneider closely monitors developing WEEE legislation
and complies with the EU WEEE Directive and EEA national
regulations, as applicable.
• building short-term resilience in securing supply and protecting
operations against price volatility with real time alerts to notify
and activate action plans;
• de-risking its portfolio with technological solutions and circular
business models;
• shaping the future with long-term material resilience and
sustainability with disruptive actions.
To address uncertainty in long-term resource disruption, Schneider
has added resource parameters in product EcoDesign and defined
substitution strategies for critical resources. R&D actions are in
place, focusing on materials with main strategic functions
accompanied by communication channels to escalate and alert.
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Chapter 2 – Sustainable development
Green materials in the Group’s products
Definitions of “green thermoplastics” and “green metals”
Schneider has committed to increase green materials in its
products to 50% by 2025, as part of its Schneider Sustainability
Impact program (SSI #4). With that 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 upstream emissions, in line with the Group’s
Net-Zero Commitment;
• Differentiate Schneider’s products by using low CO2, circular,
and safer materials.
According to Schneider, a green material has a lower
environmental and social footprint, meaning low greenhouse gas
emission, high recycled content, and no negative impact on people
and the planet.
Therefore, performance could be achieved, either through
selecting material and/or supplier with a proven lower
environmental footprint (e.g. proof of a material produced out of a
100% recycled content), or strengthening the traceability of
sustainable initiatives in the value chain.
While the first action is particularly relevant for thermoplastics
materials, the second action is a priority for metal commodities
where visibility of the environmental impact and technology-origin
of procured metals is low.
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 2022, the
scope of green materials focused on three types of commodities
covering around a third of purchased materials in volume:
• Thermoplastics (including both direct and indirect
procurement). Thermoplastics are qualified as “green” when the
supplier provides evidence of a minimum recycled content,
biobased content (the 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 provides 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 provides evidence that the product carbon
footprint is below 8 tonnes of CO2 per tonne 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.
Volume and distribution of “green materials” (in kt)
18
100
A GREEN THERMOPLASTIC IS
REACH / RoHS / POP compliant(1)
AND
Case 1
Case 2
If plastic is
Halogen free(2)
If plastic is still
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
& additives
For flame retardant
plastic only (5)
(1) Persistent Organic Pollutants (POP) / Latest versions
(2) According to IEC 63355
(3) According to ISO 14021 & EN 45557
(4) According to EN 16785 or ASTM D6866
(5) According to GreenScreen used in TCO Certification
A GREEN METAL IS
Steel from direct
procurement
Aluminum from direct
procurement
Complies with at least one
criteria below:
Steel product is sourced
from Electric Arc
Furnace (EAF)
Steel product has a
Green Certificate(1)
Complies with at least one
criteria below:
≤ 8 tCO2eq/tonne of
Aluminum(2)
≥ 90% recycled
scrap(3)
Aluminum product has a
Green Certificate(4)
237
Steel
Thermoplastics
Aluminum
(1) E.g. Responsible Steel
(2) According to Aluminium Stewardship Initiative (ASI)
(3) According to EU green taxonomy
(4) E.g. Aluminium Stewardship Initiative (ASI)
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2.4 Being efficient with resources
The inclusion of other commodities like copper, thermoset, and
indirect steel will be reassessed in the next phases, as the program
matures and the transparency of supply chains improves. In 2022,
Schneider Electric businesses strengthened their green materials
implementation targets and roadmap to accelerate the demand for
greener alternatives from suppliers.
Partnerships to accelerate the sourcing of green
materials
In 2022, Schneider Electric accelerated its engagement with
suppliers regarding their sustainable transformation by building
stronger connections and by securing the first volume of certified
green steel.
In 2022, Schneider purchased 700 tons of Bluemint® Steel, a
high-quality flat steel with reduced carbon intensity, from
ThyssenKrupp. Purchasing Bluemint® Steel comes with a third
party certificate to ensure CO2 is directly reduced at the
ThyssenKrupp Duisburg production site. Opting for such branded
products helps Schneider to reduce its Scope 3 upstream
emissions, enhance traceability in the steel supply chain and
strenghten trust with suppliers. The Group is working to further
develop this alternative and to leverage environmental benefits at
offer level.
Schneider also contributed as official partners to industry-wide
associations and certification schemes. For example, the Group
participated in Responsible Steel working groups, the world’s first
global scheme for responsibly sourced and produced steel. The
Group supported the definition and publication of the latest
ResponsibleSteel™ International Standard V2.0, launched in
September 2022, and incorporating additional requirements on
GHG emissions and the sourcing of input materials.
ResponsibleSteel™ International Standard defines 13 principles
covering environmental, social and governance issues.
In 2022, Schneider became an official partner of The Copper Mark,
which aims to accelerate responsible material sourcing for metals.
Joining The Copper Mark will help the Group to improve the
environmental and social aspects of the copper value chain.
Schneider is looking forward to engaging further in pursuit of
responsible materials sourcing goals together with The Copper
Mark, and encourages its suppliers to participate in The Copper
Mark Assurance Process, and aim collectively at responsible
copper production.
Ultimately, Schneider aims to include all types of products, which is
why definitions for copper and thermosets were prepared and
tested with its suppliers in 2022.
S T R A T E G I C R E P O R T
Resources
SSI #4
Increase green material content in
our products to 50%
The Merten Ocean Plastic family of products was
recognised in 2022 by the CES of Las Vegas as a 2022
Innovation Award honoree in the Sustainability Category.
To develop this range from postconsumer recycled plastic,
the Group partnered with DSM, a Netherlands-based
company, converting fishing net waste into high-grade
technical plastic that can be used in electrical devices.
DSM collaborates with several local communities in India to
recover and collect discarded fishing nets, providing a
significant benefit to the local economy and environment.
The abandoned fishing nets are then cut up, cleaned,
extruded, and inspected for quality before being sent to
DSM for processing into Akulon Repurposed compound.
The carbon footprint of this new compound is 82% lower
than the traditional virgin material used in similar products,
reducing the potential impact on global warming, air
acidification, and photochemical ozone formation in its
manufacturing process.
2020 Baseline
2022 Progress
2025 target
7%
18%
50%
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Chapter 2 – Sustainable development
2.4.2.5 Sustainable Packaging
In 2023, the teams will work on:
• accelerating SUP phase-out program to ensure new and legacy
products switch to more sustainable packaging options;
• strengthening procurement systems to better track single-use
plastic packaging.
Resources
SSI #5
100% of our primary and secondary
packaging is free from single-use
plastic and uses recycled
cardboard
Our Wiser range products are packaged with 100%
materials free from single-use plastic and using recycled
carboard.
2020 Baseline
2022 Progress
2025 target
13%
45%
100%
Packaging is the first visible asset seen by customers and is
associated with major environmental challenges such as resource
depletion, waste generation, and marine pollution. Schneider
Electric sustainable packaging program aims to foster innovative
packaging solutions to ensure a safe and frustration-free
packaging experience with a reduced impact on the environment.
Globally, a growing number of regulations require the development
of packaging alternatives, with a focus on recyclability. To comply
with these regulations and avoid current or upcoming polluter-pays
packaging taxes, innovation and partnership with suppliers are key.
Schneider suppliers are required to comply with applicable laws
and regulations, including compliance with the European Union’s
Directive on Packaging and Packaging Waste (1994/62/EC), as
amended by 2018/852/EU and CEN packaging standards (EN
13427:2005), as well as the US Toxics in Packaging legislation.
Schneider is working with its suppliers to ensure adequate supply
of sustainable packaging materials.
By 2025, Schneider Electric is committed to reach:
• 100% of primary and secondary packaging with recycled
cardboard. Cardboard is considered as recycled when it
includes at least 70% of recycled fiber by weight, if legally
accepted. Exception may be approved to avoid any
compromise in product protection, safety or quality standard.
Temporary exemption is made for North America, where an
average of 50% of recycled fiber by weight is required to be
considered as recycled.
• 100% of primary and secondary packaging free from single-use
plastic. At Schneider, the definition of Single Use Plastics (SUP)
is based on the European Plastic Pact : “A single-use plastic
product means a product that is made wholly or partly from
plastic and that is not conceived, designed or placed on the
market to accomplish, within its life span, multiple trips or
rotations by being returned to a producer for refill or reused for
the same purpose for which it was conceived.”
Source: Directive 2019/904/EC of 5 June 2019 on the
reduction of the impact of certain plastic products on the
environment.
In 2022, Schneider’s packaging teams worked to:
• establish partnerships with key suppliers to secure alternative
packaging options;
• build up traceability in the supply chain by collecting suppliers’
declarations and certificates for recycled cardboard;
• update the sustainable packaging guideline and associated
tools to facilitate sustainable packaging adoption in projects.
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2.4 Being efficient with resources
S T R A T E G I C R E P O R T
2.4.3 Lead with transparency: provide environmental
data to customers
2.4.3.1 Green PremiumTM
Schneider Electric launched in 2008 its Green Premium™ program
to transparently communicate the environmental value of a product
to customers, with both qualitative and quantitative data. The Green
Premium label means that a product follows the EcoDesign
principles, and :
In 2015, the Green Premium label added other environmental
criteria. For example, the Green Premium label signals circularity
business models, such as “take-back” programs. An example of a
take back program is for customers who have purchased one of the
Uninterruptable Power Supplies (UPS) to have access to
complementary recycling when the battery in the product reaches
its end of useful life. In 2022, this service collected more than
15,000 tonnes of batteries globally for recycling.
•
is compliant with RoHS and REACH regulations;
• has an estimated lifecycle assessment impact (LCA);
• has clear end-of-life instructions.
RoHS
PEP
EoLI
EcoDesign Way™
RoHS
REACH
RoHS
REACH
2003
2007
European Union
adopts RoHS
European Union
adopts REACH
2008
2015
2018
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
2022
Enhanced environmental
performance criteria
Data Digitization
acceleration
In 2022, Schneider has redefined the program to encompass three
pillars: Trust, Transparency, and Performance.
• Trust means Schneider continues to be transparent with
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 commitment 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
attributes 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:
− use of lower impact materials such as 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);
− SF6-free products;
− easy repair of product parts.
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
In 2022, Schneider revamped the pages of its online catalogue to
make all environmental information more easily available to
customers, so that they can quickly identify Green Premium
products and can choose the product they want according to
environmental features.
Consult digital conformity declarations, Product Environmental
Profiles (PEP) and End-of-Life Instructions, on product pages,
on the mySchneider mobile app, and on the “Check a
Product” website at https://checkaproduct.se.com
Resources
SSE #6
80% of product revenues covered
by Green Premium™
In 2022, 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 number of
products through the Green Premium™ program to deliver
even more transparent information.
2020 Baseline
2022 Progress
2025 target
77%
80%
80%
2.4.3.2 Product Environmental Profiles
A greater number of customers, regulators, and standards bodies
request quality and detailed environmental data. Many building
standards and local regulations demand or promote offers
providing Environmental Product Declarations.
An environmental footprint is a product or solution-related
measurement that provides quantitative information based on Life
Cycle Assessment (LCA, according to ISO 14040-44 standard). It
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 to 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 (for example,
PEP Ecopassport).
• 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 lines of business other
than their own, thus ensuring independence. Internal PEPs
comply with the ISO 14021 self-completed declaration.
In 2022, more than 2,000 valid PEP were publicly available online,
covering all of Schneider’s product lines, and 87% of product lines
are covered by an ISO 14025 type III declaration.
PEP Ecopassport PCRed4
In 2021, Schneider Electric made a major contribution to the
development of the new Product Category Rules of the PEP
Ecopassport association (PCRed4 issued in September 2021),
which are:
• Compliance with the EN 50693:2019 standard: Product
category rules for lifecycle assessments of electronic and
electrical products and systems – currently being mirrored in
the IEC/TC111 Working Group 15 (IEC 63366);
• Full alignment with the EN 15804+A2 standard: Sustainability of
construction works – Environmental product declarations – Core
rules for the product category of construction products;
• Integration of key elements of the EU Product Environmental
Footprint (PEF), such as mandatory impact indicators, end-of-
life formulae, and quality ranking;
• Alignment 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 to use 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).
In 2022, Schneider updated its LCA tools in order to include new
requirements from the PEP Ecopassport PCRed4. From 2023
onwards, all PEPs published by the Group will be compliant with
the PCRed4.
By relying on the PEP Ecopassport PCRed4 methodology and the
acceleration of environmental impact data digitization, Schneider
strives to provide quantified environmental footprint information
systematically and seamlessly to customers to differentiate its
sustainable offers, and therefore, be a change agent towards a
low-carbon and circular economy.
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Chapter 2 – Sustainable development
2.4 Being efficient with resources
S T R A T E G I C R E P O R T
2.4.4 Manufacturing products sustainably
In addition to the ever-increasing offer of digital solutions such as
its various EcoStruxure™ software, consulting and advisory
services, and field services teams, Schneider Electric still relies on
traditional manufacturing to produce its wide range of energy-
saving products.
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.
In order to continue manufacturing into the future to help its
customers deliver on their sustainability and business objectives,
while simultaneously preserving the environment and its limited
resources, the Group is committed to minimizing its impact on
natural resources and operating with sustainability principles at its
core.
The Group aims to progressively move towards closed-loop
systems in its operations and with its partners in order to prolong
the life and use of the resources it depends on.
Schneider Electric real estate footprint
Schneider Electric’s real estate footprint is made of approximately
1,000 sites in total, across six continents, with a total occupied floor
area of approximately 5 million square meters. Around two thirds of
this surface is occupied by large industrial facilities for
manufacturing and logistics purposes. The remainder consists of
office buildings, that vary in size and characteristics. Overall,
Schneider’s largest 100 sites account for about 50% of the Group’s
footprint and its largest 200 sites account for approximately 80%.
For this reason, the KPIs in the following sections are built around
those 200 largest sites, ie those with the most material impacts.
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.
Environmental regulatory compliance, environmental management
systems, and engagement programs with key stakeholders are the
foundation of Schneider Electric’s environmental risk management,
prevention, and continuous improvement program for current,
former, and prospective operations.
Compliance with environmental regulations
Historical environmental liabilities are managed at a regional level
to ensure that local expertise, regulatory knowledge, and cultural
awareness are 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.
Environmental risks and provisions are reviewed with local and
corporate finance, as well as legal functions.
2.4.4.1 Risks and opportunities within
manufacturing operations
During 2022, no new material environmental impacts were
identified. See section 2.4.4.4 page 193 for more information.
Furthermore, no Schneider Electric sites are Seveso-classified.
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 to that, with factories and distribution centers spread
across dozens of countries and different national environmental
regulatory frameworks, risks of non-compliance exist. These risks
include effluent management, handling of waste, and greenhouse
gas-related expectations.
A proactive approach towards site and property environmental
risks and compliance helps preserve the continuity of operations,
reduce reputational and legal risks, and avoid expensive
remediation steps.
Resource and energy efficiency not only delivers financial savings,
but also limits the Group’s exposure to commodity-price volatility
and shortage risks. Electrification megatrends are increasing
competition to access some raw materials, creating shortage risks
for Schneider Electric. The risk extends to the reliability of the
energy on which a facility relies to maintain production.
Environment management systems
Schneider has put in place an Integrated Management System
(IMS) which allows for standardized, streamlined, and collaborative
deployment of its various management systems. The IMS covers
the Group’s plants, distribution centers, and large offices, and
hosts ISO 14001, ISO 50001, ISO 9001, and ISO 45001 compliance
management systems. Each site is audited periodically, either
externally by Bureau Veritas (every three years), or internally. In
particular, the relevant management system for the environment is
ISO 14001.
ISO 14001 certification allows Schneider Electric to define and
maintain robust environment governance on its sites, supporting
continuous improvement to deliver environmental performance. The
Group certifies all industrial and logistics sites with more than 50
employees and all large tertiary sites with more than 500
employees, within two years of their acquisition or creation.
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Chapter 2 – Sustainable development
243 sites were certified ISO 14001 as of the end of 2022,
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 83% of the Group scope in terms of water
usage, waste generation, and Volatile Organic Compounds (VOC)
emissions.
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 269 and include energy consumption, Scopes 1
& 2 CO2 emissions, waste generation, water usage, and VOC
emissions.
With the Sustainability, Environment and Real Estate (SERE)
network working hand in hand with the Customer Satisfaction &
Quality (CS&Q) network, a robust governance is in place to mitigate
environmental risks and drive continuous improvement.
The internal Energy and Environment Policies supported by the
Global Environment Directives on legal compliance, event reporting
and alerts, and environmental liabilities provide clear expectations,
scope and accountability rules, enabling the harmonization of
environment and energy governance across regions and activities.
Each site is assessed under more than 240 indicators consolidated
under the Environmental, Health and Safety Assessment (EHSA)
and published to all Global Supply Chain sites in a global EHSA
dashboard. Sites are also benchmarked based on best available
techniques documented and shared within SERE and CS&Q
networks.
The Group has therefore established the following engagement
programs:
• The Company-wide Look at Environmental Assessment and
Risk Review program (CLEARR), which focuses on historical
and current potential environmental site risks, surveys new and
existing selected manufacturing sites each year.
• Thorough environmental due diligence reviews of mergers,
acquisitions, and disposals, at any site where chemicals are or
have been used. Any environmental risks or liabilities identified
are addressed through proper risk management activities.
• Third-party services assess the risk profiles of key sites in
relation to certain external risks such as fires, earthquakes,
floods, and other natural disasters.This process is combined
with the business continuity planning efforts to gauge related
risks and anticipate possible steps which would be required.
• Risks and mitigation actions are presented to the Board Audit &
Risks Committee.
Resilience materials program
The Group approaches the access to resources at different time
horizons, to ensure materials supply resilience both now and in the
future. The Group is:
• building short-term resilience in securing supply and protecting
operations against price volatility with real-time alerts to notify
and activate action plans;
• de-risking its portfolio with technological solutions and circular
business models;
• shaping the future with long-term material resilience and
sustainability with disruptive actions.
To ensure materials sourcing resiliency, Schneider has added
resource parameters in product EcoDesign and defined
substitution strategies for critical resources. R&D actions are in
place, focusing on materials with main strategic functions
accompanied by communication channels to escalate and alert.
Engagement programs
Environmental risk management and prevention require more than
just the appointment of technical environment experts. Robust
governance with key stakeholders across the entire organization is
critical to achieve and maintain success in the numerous areas
surrounding environmental risk and prevention.
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In 2023, the Group will pursue its Waste-to-Resource efforts to
more sites, thereby strengthening its culture of circular economy
across its operations.
Schneider generated around 131,000 tons of waste in 2022, most of
it being solid waste. Continuous improvement plans have been
deployed to manage this waste, in line with the ISO 14001
certification. Despite the challenges with the Waste-to-Resource
program, the Group still managed to improve from 96% to 96.3%
recovery of reported waste, and from 91% to 91.3% recycling rate
without energy recovery in 2022 compared to 2021. The recovery
ratio has increased from 81% to 96.3% since 2009, thanks to
site-by-site waste management action plans.
By 2025, the ambition is to reduce hazardous waste intensity by
30% against the 2017 baseline. In 2022, hazardous waste
generation intensity was 0.24 tonnes/million EUR of revenue, which
represents an evolution of -44% versus 2017.
96.3%
waste recovery in 2022
Target:
100% by 2030
Chapter 2 – Sustainable development
2.4 Being efficient with resources
2.4.4.2 Waste-to-Resources
Schneider Electric is committed to mitigating the potential adverse
impacts of hazardous waste on environment and health. Two main
levers have been identified through the “Waste-to-Resource”
program. First, all sites generating hazardous waste ensure
visibility of handling and end-of-life treatment paths. They must also
seek to add value to waste where possible (through material or
energy recovery) while neutralizing its hazardous nature. Secondly,
top hazardous waste-generating sites should 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 lead to superior performance
from a resource efficiency perspective, and/or chemical
substances use, and/or emission reductions.
In 2022, global challenges with supply chains, material shortages,
and increased visibility towards waste pollution such as ocean
plastics have confirmed that Schneider is heading in the right
direction with its circularity strategy.
In its previous 2018-2020 program, “Towards Zero Waste to
Landfill”, the Group placed strong emphasis on diverting waste
from landfill through alternative solutions.
In its new program called “Waste-to-Resource” (SSE #9),
Schneider Electric takes its waste recovery program even further:
sites must now achieve 99% recovery for all waste not classified as
hazardous 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 are not 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, and alongside external suppliers and waste
management providers, to find innovative reduce, reuse, and
recycle solutions.
In 2022, the Group did successfully add 19 new Waste-to-
Resource sites in 2022, but removed 18 sites that were Waste-to-
Resource in 2021, of which half were either closed, sold, or
transferred to third parties for business reasons. The other half,
while collectively achieving a commendable 98.7% recovery with
only 5.2% waste to energy, still missed the very challenging 99%
recovery target.
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Chapter 2 – Sustainable development
Resources
SSE #9
200 “Waste-to-Resource” sites
The SEPSL plant located in Bangalore, India is a
manufacturing site that produces cabinet enclosures.
Sheet metal is a mandatory raw material in this production
process. While the site takes action to reduce scrap metal
where possible, there is still some remaining scrap in the
process. Instead of simply recycling or selling the scrap,
the site has undertaken a circular economy project to reuse
the scrap metal internally.
The site analyzed opportunities to reuse the scrap and
discovered there were wooden pallets being used for
in-house material movement and storage, but that these
pallets would routinely need replacement, and there were
issues with shortages of the needed pallets. By fabricating
pallets from the scrap metal, the site was able to increase
the longevity of the pallets’ lifespan, decrease the reliance
on wooden pallets, eliminate shortages issues, and reduce
the metal waste linked to the production process.
This project has saved the site 220 wooden pallets to date
and resulted in more than €36,000 savings annually.
Moving forward, the site continues looking for ways to
implement circular economy practices and reduce the
waste generated.
Before and after of the Circular Economy project in SEPSL
Bangalore India site
2020 Baseline
2022 Progress
2025 target
120
127
200
2.4.4.3 Water withdrawal, discharge,
and stress
Schneider Electric regularly assesses water-related risks. The
Group conducted a materiality analysis, with both internal and
external stakeholders. In 2022 a specialized consultancy was
mandated to map its corporate water footprint across the value
chain, covering water consumption, scarcity, eutrophication,
ecotoxicity, and acidification. The assessment showed that direct
water use and indirect energy water use in facilities amounts for
less than 1% of Schneider Electric’s overall water footprint. This is
explained by the nature of most of Schneider’s industrial processes
(manual and automatic assembly), which have limited water use.
The impact on water quality is considered minimal as well; the
highest impact on water quality indicators comes from the use of
products and upstream purchases categories. In 2022, water
management and performance information were disclosed in the
CDP Water Security program, and Schneider was awarded a B
rating.
Water withdrawal
The Group measures water withdrawals per source, with details on
water withdrawn from the public network, groundwater, surface
water (for example lakes and rivers), and other sources of water
(including rain and recycled water).
Water is primarily used for cooling and sanitary purposes and, at a
few selected sites, for processes such as surface treatment. Water
drawn for the sole purpose of cooling is immediately released
without alteration and is also monitored separately.
Schneider Electric aims to reduce water intensity (in m3 of water
withdrawn per euro of turnover) by 35% in 2025 versus 2017, with a
focus on sites with high water withdrawal and within water-stressed
areas. In 2022, water withdrawal intensity was 56 m3 per million
euro of revenue, an evolution of -48% against the 2017 baseline.
Annual water withdrawal intensity (m3/million €)
120
100
80
60
40
20
0
5
0
1
4
9
7
7
2
7
0
7
6
5
2018
2019
2020
2021
2022
2025
Water intensity
Target
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2.4 Being efficient with resources
Water discharge
The majority of water discharged by Schneider Electric is sent to a
third party for treatment without requiring additional prior treatment
in Schneider’s facility. Whenever water is used for industrial
processes requiring additional internal treatment (e.g. surface
treatments), resulting water discharges are subject to appropriate
treatments to reduce pollutant potential and subject to a monitoring
plan. All sites with such water usage have designated water quality
and treatment experts to ensure all local regulations are followed
regarding water discharge.
For example, at the Isle Espagnac plant (Poitou-Charentes, France),
water is used as part of a chrome plating process and
systematically treated before being discharged in sewers with
adequate water quality as set by the local water discharge
convention, which is monitored by an independent laboratory
accredited by the local public administration. In addition, the site is
investing EUR 1.7 million between 2022 and 2024 to transform its
operations and discharge no water thanks to a closed water loop
approach. This means that the site will no longer discharge water in
sewers, with estimated savings of at least 2,000,000 liters per year
and 330 tonnes of CO2 per year as the site will ship less filtered
waste to incineration/landfill.
Water stress
Schneider Electric is also committed to minimizing its impact on
water. The Group fully realizes the importance of water to local
communities, especially those that are located in water-stressed
areas. The Group therefore monitors the water stress level of all ISO
14001 sites using the World Resources Institute’s (WRI) Aqueduct
Water Risk Atlas. Using the baseline water stress methodology, the
Group considers sites classified as “high” or “extremely high” to be
a water-stressed site, regardless of the amount of water withdrawn.
85 sites have been identified under this methodology, accounting
for about 44% of total water withdrawals, including factories,
distribution centers, and large offices, with water usages such as
process-based, HVAC, sanitary/canteen, and irrigation. The Group
has set the target that 100% of its sites in water-stressed areas
have a water conservation strategy and related action plan by 2025
(SSE #11). In 2022, the Group achieved 48% of its 2025 target.
-48%
water intensity in 2022 compared to 2017
Target:
-35% by 2025
S T R A T E G I C R E P O R T
Resource
SSE #11
100% of sites in water-stressed
areas have a water conservation
strategy and action plan
The E&A Vadodara plant in India has a plating operation
which represents a significant amount of the site’s water
withdrawal. The site is located in a water-stressed area, so
it is especially important to be efficient with water at the
site. Hence, the site’s effluent treatment plant (ETP) was
designed to recycle & reuse wastewater. Three major
actions were implemented to optimize the process:
Improve the existing treatment process.
1. Segregation of input effluent to ETP (generating source).
2.
3. Develop a new system to recycle and reuse of treated
ETP water to make it suitable for the plating process.
The existing ETP treatment system was improved by
converting two sand filters to one sand and one carbon
filter and installing a new five-micron bag filter in the
existing cartridge to improve treated water quality. A
two-stage reverse osmosis system was also installed along
with a special process to avoid chemical accumulation and
biological growth on repeated water use in the closed loop.
These actions and improvements resulted in the following
impacts:
• 80% recycling of treated wastewater to reuse in the
plating process
• 60% reduction in the freshwater intake for the plating
process
The site continues working to improve efficiency and has a
target to achieve an 80% reduction of the freshwater intake
in the future.
Effluent treatment plant at Vadodara site in India
2020 Baseline
2022 Progress
2025 target
0%
48%
100%
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Chapter 2 – Sustainable development
2.4.4.4 Pollution mitigation
2.4.4.5 Biodiversity actions at sites
Conditions of use and release into the soil
Schneider Electric’s sites are mainly located in urban or industrial
areas. None of the Group’s businesses involve extraction or land
farming. In 2022, Schneider’s manufacturing sites conducted their
annual review of pollution risks as part of the ISO 14001 monitoring.
No spills or discharges causing soil pollution occurred in 2022.
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 placed on hazardous waste, with efforts to
eliminate, substitute, or improve treatment.
Discharge into the water and the air
Because Schneider is mainly an assembler, its discharge into the
air and water is very limited. The Group’s manufacturing sites are
carefully monitored, as part of the ISO 14001 certification.
Discharges are tracked locally as required by the current
legislation. No spills or discharges causing water or air pollution
occurred in 2022.
Emissions of NOx (Nitrogen oxides), SOx (Sulphur oxides) and
particles into the air are monitored at site level in accordance with
applicable legal requirements, with monitoring of these emissions
verified via ISO 14001 audits.
Schneider is committed to preventing air pollution and adverse
health 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,
which are primarily linked to production, decreased from 29 kg/
million EUR in 2017 to 9 kg/million EUR in 2022 (-69%). The Group
engages with each of its industrial sites that contribute the most to
VOC emissions, and which together account for over 90% of the
Group’s VOC emissions. For these sites, environment, health and
safety, and industrialization teams, come together 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, chlorofluorocarbon (CFC) and Hydrochlorofluorocarbon
(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’s industrial activities.
Noise, odors, and light
All Schneider’s sites comply with local regulations on noise and
odor. Given the nature of its activities and distribution model, the
Group does not have any significant external light pollution.
With the objective of gaining an overview on biodiversity priority
sites, informing risk management, and addressing potential
biodiversity impacts, the Group ran 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.
The IBAT report enables users to assess the biodiversity-related
features of multiple operational sites for risk management and
strategy setting. 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
1-kilometer radius.
The results of the “IBAT multi-site Report, 2021” include all
Schneider sites and show that, within a 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 results are made available to sites, so that they can better
understand the local threat to biodiversity and restoration potential.
Sites use these results at their discretion to drive the local
bodiversity actions previously described.
Find IBAT Multi-site Report generated under
license 26614-25299 from the Integrated Biodiversity
Assessment Tool on 15 December 2021 on
www.ibat-alliance.org
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2.4 Being efficient with resources
The Group has committed to increase its biodiversity site actions
and raise the awareness of employees. Site activities such as
energy consumption, water withdrawal, 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 withdrawal 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, Schneider sites have to define and deploy a biodiversity
program consisting in the elimination of single-use plastics (relating
to office use) and at least one local action with significant
ecological impact, structured governance and stakeholder
involvement.
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.
The program was launched in 2021 and many sites have already
started on their journey, understanding the complexities of
biodiversity, assessing their impact and identifying the right local
stakeholders to engage in a preservation or restoration program.
The program requires a complete elimination of single-use plastics,
and the adoption of impactful biodiversity actions. As projected,
there has been a slow ramp-up in terms of global performance.
Nevertheless, the new governance structure adopting in 2022,
allowed to accelerate the deployment of the program. The current
governance is based on nominated country biodiversity leaders
who lead and animate a group of sites biodiversity leaders that
follow the daily operation of the biodiversity actions. This renewed
structure has allowed the Group to accelerate from no reported
progress in 2021 to 18% in 2022.
S T R A T E G I C R E P O R T
Resources
SSE #8
100% of sites with local biodiversity
conservation and restoration
programs
Schneider Electric is engaged to act at local level. Every
site will engage in at least one action pursuing an
ecological impact with social benefits.
For example, in Grenoble (France), three sites (IntenCity,
Technopole and Electropole) have been labeled “Wildlife
Shelter” by a national NGO working on wildlife protection
and restoration (Ligue de Protection des Oiseaux). To be
granted this label, the sites have committed to a
transformation journey with the NGO, where they
understand how to optimize the management of their green
areas to welcome and restore local biodiversity, notably
with reasoned mowing, and a ban of pesticide usage. With
the support of biology experts, the sites are in the process
of creating hibernaculum and ponds to allow for a favorable
environment to endemic species.
2020 Baseline
2022 Progress
2025 target
0%
17.6%
100%
65
sites banned single-use plastics in 2022.
Target:
400 sites by 2025
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Chapter 2 – Sustainable development
2.4.5 Product use phase and end-of-life
Schneider Electric aims to maximize the environmental
performance of its products. To achieve such ambition, the Group
develops services and business models to extend the useful life of
its products, and when no option is possible, take back the
product, assess whether a second-life is possible, and ultimately
ensure the product or components are recycled.
Activities in this program will be extended in line with the Group’s
increasing focus on circularity business models, and currently
include:
• Take-back and recycling of batteries;
• Volume of devices refurbished and repaired in our repair
centers (such as UPS or drives);
This section presents the Group’s actions to keep products in use
and increase their recyclability at the end-of-life, through:
• Volume of medium voltage, low voltage and transformers
refurbished or recycled in our ECOFIT™ Centers.
• services for maintenance and repair;
• business models to take products back and give them a second
life;
• the maximization of the products’ recyclability at the end-of-life.
2.4.5.1 Services for maintenance,
repairability and circularity – EcoCare &
ECOFITTM
Schneider Electric Services experts and partners are dedicated to
extend the lifespan of assets and systems while making customers’
operations safe, efficient, and resilient every day.
With EcoStruxure’s digital capabilities, innovation, and expertise
across multiple technologies, the Group advises, modernizes,
monitors, and maintains the health of its customers’ energy and
automation assets and systems around the clock and the globe.
Throughout the lifecycle of the installed base, Schneider Electric
Services’ expertise answers customers’ needs by:
• providing EcoCare recurring services to monitor and maintain
the installed base during its use;
• providing access to spare parts and repair services;
• advising and triggering optimization recommendations to
increase safety, reliability, and efficiency;
• digitizing and modernizing the assets to increase life and
Resources
SSE #10
420,000 metric tons of avoided
primary resource consumption
through “take-back at end-of-use”
since 2017
In order to properly promote the environmental benefits in
terms of CO2 and material savings, the ECOFITTM teams
have developed a calculator making use of the
environmental impact database (based on Product
Environmental Profiles – PEP created by Schneider).
The calculation method of this calculator has been
independently reviewed by an audit and assurance leading
firm to ensure reliability of the information provided to the
customers.
2020 Baseline
2022 Progress
2025 target
prolong reliable operations;
157,588
261,128
420,000
• supporting the handling of end-of-life through recovery services
(for example, for batteries, SF6, and modernized equipment)
These historical activities are critical to address the “maintain and
prolong” loop of circularity, no matter the customer typology or
sector of activity.
Retrofit of equipments with ECOFIT™
Schneider quantifies its circular economy efforts (repair, reuse,
refurbish, and recycle) 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
savings in waste, material, energy consumption, CO2 emissions,
and/or water.
Modernizing and upgrading low voltage and medium voltage
switchgear equipment does not necessarily mean demolishing the
existing infrastructure. Schneider’s retrofit modernization combined
with proper switchgear maintenance can help clients to improve the
reliability of their installation. They can choose to replace the
existing electrical installation with new equipment or can pinpoint
where they will benefit from retrofitting existing equipments,
modernizing, and upgrading those equipments for pre-equiped
sensors, which are more cost-effective, enabling innovative service
plans with 24/7 remote monitoring, and reducing operational
downtime of the customer, compared to buying new equipment.
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Chapter 2 – Sustainable development
2.4 Being efficient with resources
S T R A T E G I C R E P O R T
The ECOFITTM service can, for a customer’s system 20 to 40 years
old, retrofit equipments in a very short time to the latest
technologies and get them connected for real-time monitoring. The
equipments that cannot be retrofitted can be taken-back to be
reused, rebuilt and sold as second-hand products.
This approach makes ECOFITTM service an end-to-end value
proposition to customers, avoiding up to 90% waste.
2.4.5.2 Circular business models
Schneider Electric creates shared value for its customers 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).
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. These solutions, using up to 60% less
materials than using brand new equipment, enable pull-through
and constant payback, increase customer stickiness, and build
long-term relationships.
• Ensuring the safety of people and assets through qualified
and certified services. In fact, 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.
Second life distribution center
Since 2019, Schneider has developed additional capabilities to
address more circularity loops, to ensure a maximized second life
for its products.
These capabilities include:
• repack: repackaging of Schneider products when packaging
has been damaged.
• give a second chance: sorting, selecting, redistributing
never-energized Schneider products which cannot be sold
anymore.
• refurbish and remanufacture: developing refurbishment and
remanufacturing capabilities for relevant products to deliver on
manufacturer-level circularity and provide state of the art
second life solutions across selected markets.
• recycle: dismantling of products to recover and resell the
valuable materials.
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”.
In 2022, Schneider significantly increased its offer of circular products
to serve the growing demand for circular products, doubling the
number of references available up to 6,400. In 2023, the Group
expects to add more than 3,000 new references to its offer.
To achieve that, new refurbishment capabilities have been
developed on the industrial sites, increased take-back from various
sources. Spare parts production has also been expanded to
enable the repair of new references.
In 2023, Schneider Electric will continue to grow circular industrial
capabilities to support business innovation and differentiating
offers to customers:
• more repack and reuse;
• more refurbish;
• easier access to take-back and second life solutions.
The risks that Schneider Electric has identified 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
repairability, 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 identified. 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.
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Chapter 2 – Sustainable development
Case study: Remanufactured MasterPacT MTZ
One great example of a circular product is the remanufactured
MasterPacT MTZ. For the first time, Schneider has developed
production lines, quality test, engineering expertise to collect,
disassemble, and remanufacture MasterPacT MTZ. To offer the
same guarantee as the new, these remanufactured breakers are
assembled in the same production lines as the original new
products. The Group is proud to announce that each
remanufactured MasterPacT MTZ sold helps to cut by 45% the CO2
emissions and requires 45% less resources. With this new product,
Schneider strongly reinforces the link between sustainability and
business, also ensuring business continuity, customers’ trust, and
the development of the Group’s circular economy journey. In 2022,
71.5 tonnes of CO2 emissions were avoided thanks to the
remanufactured MasterPacT MTZ sales.
2.4.5.3 Managing the end-of-life of
products
End-of-life regulations
Schneider Electric has deployed a process that ensures a safe
treatment and recycling of its products at the end of their lifecycle.
In compliance with 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 following 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.
Enhance recycling
Schneider’s unique approach for the modernization of aging
equipment, minimizing waste and maximizing safety, efficiency,
and resiliency, avoids up to 90% of waste by upgrading customers’
equipment with the latest technologies using sensors and
connectivity to optimize uptime and extend the assets’ lifespan
replacing the core components. This approach also enables the
take-back of products, to reuse, rebuild, resell and recycle them
when no other option is possible.
Case study:
Azalys, Suez Hélyséo –
Carrières-sous-Poissy,
France
Azalys Suez site in Carrieres-sous-Poissy
(France) is a household waste to energy
facility, managing 125,000 metrics tons of waste
and producing 50 gigawatts/hour of electricy
each year.
The goals of the project were to add capacity to the electrical
installation replace outdated equipment without a lengthy
interruption to service, and to enable predictive maintenance.
This involved installing state-of-the-art RM6 and SM6
switchgears in place of FluoKit units, which were later
recycled. In addition, starting in 2022, recovered Fluokit
equipment by Schneider are reused as part of the circularity
offers: providing prolonged service life and spare parts to
customers.
Developing a win-win solution through circularity models is
good for the Group’s customers and the environment, and is
the avenue Schneider Electric continues to innovate and
accelerate in this area.
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
2.5 Great people make 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
200
204
211
2.5.4 Compensation and benefits
2.5.5 Social dialogue and relations
218
222
Context and goals
Great people make Schneider Electric a great company. The Group
motivates its employees and promotes their involvement by making
the most of its diversity, supporting professional development, and
ensuring safe, healthy working conditions. Its ultimate ambition is to
deliver higher performance and greater employee engagement,
through world-class people practices that are supported by a
multi-hub model.
Schneider Electric is a people-centric company where employees
come to work for a meaningful purpose and are empowered to
deliver impact in an inclusive environment. The Group offers equal
opportunities based on employees’ skills, and supports this
commitment with common processes and consistent policies
regarding recruitment, employment, talent identification, training,
and remuneration.
The Human Resources function plays a key role in enabling
performance and talent development at Schneider Electric.
Progress is characterized by sustained expansion and ongoing
acquisitions that deliver growth in core markets and by momentum
created through incremental growth drivers.
Over the last several years, the Group has made significant
progress in many areas, including: a new People Vision, unique
multi-hub model and a leaner organization structure; leadership
and culture transformation, widely acknowledged diversity, equity
and inclusion initiatives; and setting up a transformation of skills to
enable growth and innovation.
By 2025, Schneider Electric has committed to creating equal
opportunities and harnessing the power of all generations. It will
achieve this by ensuring all employees are uniquely valued in an
inclusive work environment and by fostering learning, upskilling and
development for each generation. This report shares the progress
on the key transformations under the Equal and Generations pillars
of the Schneider Sustainability Impact and Schneider Sustainability
Essentials programs.
“The world has reset and so must
we. We aspire to achieve our
company purpose and mission by
empowering and developing our
employees to achieve their fullest
potential. By building resilience
and enabling agility, we will
enhance our culture and
leadership transformation at
Schneider Electric. The 2025
People Strategy aims to set the bar
even higher to support business
growth and deliver business
ambition.”
Charise Le, Chief Human Resources Officer
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Chapter 2 – Sustainable development
Progress of our Equal and Generations commitments
Schneider
Sustainability
#
8.
2021-2025 programs
Baseline(1)
2022 progress(2)
Increase gender diversity in hiring (50%),
front-line management (40%) and leadership
teams (30%)(3)
2020: 41/23/24
41/27/28
2025
Target
50/40/30
Impact
(SSI)
Essentials
(SSE)
10.
Double hiring opportunities for interns,
apprentices and fresh graduates
18.
Reduce pay gap for both females and males
Increase subscription in our yearly Worldwide
Employee Share Ownership Plan (WESOP)
Pay our employees at least a living wage
Multiply the number of employee-driven
development interactions on the Open
Talent Market
19.
20.
21.
22.
23.
2019: 4,939
x1.33
x2.00
2020: F: -1.73%
2020: M: 1.00%
-1.6%
1.02%
2019: 53%
62%
<1%
<1%
60%
2019: 99%
2020: 5,019
100%
100%
x1.9
x4
Support the digital upskilling of our employees
2020: 41%
77%
Provide access to meaningful career
development programs for employees during
later stages of their career
2022: 43%
43%
90%
90%
75%
24.
Increase our employee engagement level
2020: 69%
70%
These programs
contribute to UN SDGs
(1) The baseline year for each indicator is provided together with its baseline performance.
(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 #+1 and SSE #12 in 2022), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 270). In addition,
SSI #8 obtained a “reasonable” level of assurance in 2022. Please refer to page 242 for the methodological presentation of each indicator. The 2022 performance
is also discussed in more details in each section of this report.
(3) Calculation methodology for SSI #8 has been expanded in Q2 2022 to include blue collar managers in the scope of front line managers. Due to this
methodological change, the 2020 baseline for front line managers has been recalculated to 23% instead of 25%.
2022 Highlights
The Company’s Glassdoor
rating is steadily increasing,
recognizing Schneider Electric
as one of the Best Place to
Work for 2022.
The Financial Times awarded
Schneider Electric the title of
‘Diversity leader’.
Schneider Electric is one of
Universum’s Top-30 World’s
Most Attractive Employers
according to students.
For the 6th year in a row, we
were recognized by Bloomberg
for our commitment to gender
equality and building a culture
of inclusion.
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S T R A T E G I C R E P O R T
2.5 Great people make Schneider Electric a great company
2.5.1 2025 people strategy and vision
2.5.1.1 Context
The People Vision consists of the following:
The world is moving fast and is at an inflexion point: the desire for
climate neutrality and energy transition are driving our business
strategy and pushing the Group towards sustainable growth. At the
same time, digital transformation and changing social needs
demand greater inclusion.
The post-pandemic world followed by ever growing supply chain
constraints due to geopolitical issues are creating more
opportunities for Schneider Electric to be the most local of global
companies.
Being agile by demonstrating resilience and adaptability is the
most important prerequisite for success in today’s unprecedented
environment of uncertainty. It requires the leverage of both human
capabilities and digital technologies. Schneider Electric’s People
Vision and People Strategy help achieve this.
2.5.1.2 Schneider Electric’s People Vision
– Employee Value Proposition, Core Values,
and Leadership Expectations
People Vision
Schneider Electric’s People Vision provides the impetus to change
the way we work and accelerate the cultural transformation at the
company. Comprising Employee Value Proposition (EVP), Core
Values and Leadership Expectations, the People Vision is a strong
anchor to the People Strategy.
1 Our Employee Value Proposition 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 to 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
Our Employee Value Proposition
MEANINGFUL
INCLUSIVE
EMPOWERED
Our mission is to be your digital partner for
Sustainability and Efficiency.
We want to be the most diverse, inclusive
and equitable company, globally.
Freedom breeds innovation.
We empower all to make the most of their
energy and resources, ensuring Life Is
On everywhere, for everyone, at every
moment.
We value differences, and welcome
people from all walks of life.
We believe in equal opportunities for
everyone, everywhere.
We adhere to the highest standards of
governance and ethics.
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
Core Values define the way we work together
Customer First. 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 can have an impact on the
customer’s experience.
Dare to Disrupt. 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. 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. 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. 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.
Our Leadership Expectations
Shape our future. In a world that is in constant flux, we cannot sit
around and wait for the future. We have to imagine, disrupt and
lead our industry. Be an entrepreneur of digital transformation with
customers. Think big and be bold, create disruptive strategies and
architecture ahead of the curve and execute with agility, quality,
and speed. Take initiative and learn from success and failure. After
all, the only thing certain in the next normal is change.
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Free up Energy. Free up your and your team’s energy to focus on
customers, transformation and what really matters in life and work.
Keep things simple, but never at the expense of ethics or safety.
Remove roadblocks and unnecessary bureaucracy. Champion new
ways of working - more digital, flexible, and efficient. Empower
teams throughout multi-local, multi-hub model and agile methods.
Speed is our ultimate differentiator.
Build the Best Team. Step up to lead in a digital world while
building strong human connection with customers and colleagues.
Give and ask for coaching and feedback every day. Care for your
health and well-being and that of others. Be inclusive and build
psychological safety. Hire great and diverse talent and develop
them to their fullest potential. Drive team engagement and high
performance. The sign of a great leader is a great team.
Achieve together. It all starts with making a human connection and
working together with customers, partners and colleagues.
Connect across our teams with an ‘easy to do business with’ spirit.
Share information freely, don’t hide it. Engage in constructive
dialogue, don’t avoid tough conversations. Collaborate with focus
and in attitude; be inclusive but efficient on who to involve.
Collaboration is the seed for innovation and winning.
Use your judgement. Ultimately, we are accountable and
empowered to make the right decisions for the company. Trust your
own judgment and common sense and empower teams to do the
same. Don’t overcomplicate decision-making. Give clear direction
in the face of ambiguity. Be agile and curious and use your best
intuition and logic. Let ‘doing the right thing, in the right way’ be
your compass.
Core Values
CUSTOMER
FIRST
Above and beyond for
our Customers.
DARE TO
DISRUPT
Constantly in Beta
EMBRACE
DIFFERENT
LEARN EVERY
DAY
ACT LIKE
OWNERS
Different is
Beautiful.
#Whatdidyoulearntoday?
All in. Together.
Our Leadership Expectations
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
S T R A T E G I C R E P O R T
2.5 Great people make Schneider Electric a great company
2.5.1.3 2025 People Strategy
2.5.1.5 Employee Engagement
Engaged employees are key to enable the company to be at its
best and support the achievement of the Group strategy. By
measuring engagement and responding to feedback, Schneider
Electric can foster an environment in which people feel connected
to their work and strive to perform.
Key updates in 2022
• High survey response rate of 85%, with a relatively stable
engagement score, against the backdrop of an increasingly
uncertain world.
• Employees feel empowered in their work, with flexibility to
enable how they work, while remaining connected to Schneider
Electric’s purpose in an inclusive environment.
• Emergence of two critical areas related to the employee
experience and engagement: recognition and effectiveness.
1. OneVoice Survey
As an inclusive company, all employees are asked to provide their
honest feedback through the annual OneVoice survey, which
evaluates their engagement and measures nine drivers of
engagement, including leadership, development, and
empowerment. This process helps the Group identify key avenues
for improving employees’ engagement and their unique life at work.
Attributable to a continued high participation rate, the results of the
survey are robust and representative, empowering leaders to focus
on the right topics to drive change in their teams. The ability to
maintain an engagement score above pre-pandemic levels
illustrates the positive impact of providing stability and a vision for
the future in the face of an increasingly uncertain global landscape.
Schneider’s ambition is to achieve 75% engagement score by the
end of 2025 (SSE #24).
The Top 4 Drivers of Engagement from the 2022 results
demonstrate that employees feel empowered in their work,
benefitting from flexible work arrangements, while drawing
inspiration from Schneider Electric’s purpose and goals in an
inclusive environment.
Schneider Electric aspires to achieve its purpose and mission by
empowering and developing its people to their fullest potential. The
Group acts with agility and trust to innovate for its customers and
strives to win in the market.
Launched in 2021, Schneider’s People Strategy provides the Group
with the framework to support business growth and culture
transformation. To achieve the mission of its People Strategy and
shape the workforce of the future in the “next normal”, the
framework includes three outcome-based themes:
Organizational agility – a growth and innovation culture, enabled
by a leaner, agile and multi-hub 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 a
personalized experience to realize their potential.
Leadership Impact – leaders deliver impact on results and
transformation through disruption, collaboration and inclusion. They
build great teams, coach and care to achieve together.
2.5.1.4 Organization and Governance
At Schneider Electric the 3-pillar model has been followed within
the HR function by adapting the various responsibilities in
accordance with organizational context.
HR Business Partners focus on defining and implementing
strategic people transformations (key talents, competencies,
workforce planning, training for their community, footprint) in their
respective entities. They provide strategic support and deliver day
to day local support towards operational activities for managers
and employees.
HR Solutions shape the future in line with the people vision, focus
on a limited number of global priorities, define strategic
transformation and priorities, develop global governance, policy &
processes, and drive digital.
HR Services manage HR operations, standardize programs and
systems, simplify processes, and drive digital transformation to free
up energy.
Since 2020, Schneider Electric reinforced the governance of the
Group, the professionalism of its processes, and its foundations for
trust. In line with our Corporate Governance directions, the Group
follows HR Governance led by a single point of contact with
corporate organizations such as M&A, Internal Audit, Internal
Control, Ethics & Compliance, and Data Privacy, which facilitates
an agile response to corporate directions.
Participation
85%
107,916 responses.
Engagement
70%
Action plans
1,000+
Managers
41%
-1 point since 2021
+1 point since 2020
recorded since
July 2022
of managers have access
to a customized report.
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Chapter 2 – Sustainable development
Generations
SSE #24
75% employee engagement score
In alignment with being the most local of global companies,
managers are empowered to work with their teams to
generate action plans to drive meaningful change. The
2022 survey results show increased scores for both action
plan awareness and impact.
With an engagement score +6pts vs 2019, and +2pts vs the
2022 Global Average benchmark, the resiliency of
employees is clear. The verbatim analysis indicates that
employees appreciate a workplace sustained by positive
peer and customer interactions, a company mission
committed to sustainability, and feeling supported during
times of crisis.
2020 Baseline
2022 Progress
2025 target
69%
70%
75%
2. Turning insight into action
Supported by a global network of engagement partners, leaders
communicate results to their teams, followed by formulating
impactful action plans.
A holistic approach is taken to guide leaders on next steps
following survey closure:
• Communicating the high priority of the topic among leaders
• Ensuring full understanding of the why, what and how of
engagement
• Manager resources to facilitate action planning with their teams
• Embracing transparency through open dialogue with teams on
what could or could not be acted upon
• Committing to continuous communication of the action plan
progress
One example of local teams turning insight into action is France’s
‘Next Normal’ program, which is delivering on 10 initiatives for an
improved employee experience. With an updated work from home
and office policy, supported by remote work training, a system of
management for hybrid teams, and an emergency protocol,
leaders have responded to employees’ feedback. The program
also includes training and hosted discussion forums for managers,
bringing the program to life across all teams, driving strong
leadership with employee empowerment and recognition at the top.
New in 2022, a nudge communication template was developed to
bolster communication of actions taken in response to employee
feedback.
3. Focus on recognition and effectiveness to sustain
the employee experience
With a Recognition score of 63% across 2021 and 2022,
Schneider Electric launched the refreshed recognition platform,
Step Up, introducing enhancements to how employees can be
appreciated for their work. Read more about this initiative in section
2.5.4 “Compensation and Benefits”, page 218.
A second engagement driver of attention relates to Effectiveness,
ensuring teams have the tools and resources to support their work,
while simplifying processes where possible. In response, the
Schneider Digital team has prioritized simplifying the digital
landscape, including several initiatives aimed at creating a ‘Lovable
Employee Experience’. Focused on offering a best-in-class digital
workplace, the aim is to engage employees with a personalized
digital environment that enhances employee efficiency, supports
new dynamic ways of working, and improves their sense of
purpose and well-being, while boosting their overall experience at
Schneider Electric.
81%
feel they have flexibility
to modify their work
arrangements when
needed.
80%
feel empowered to
choose how best to
complete their work.
62%
find the collaboration is
good between entities.
68%
say they have the
necessary tools and
resources to process
their jobs.
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S T R A T E G I C R E P O R T
2.5 Great people make Schneider Electric a great company
2.5.2 Diversity, equity, inclusion, and well-being
2.5.2.1 Context
At the turn of the decade, Schneider Electric observed a clear shift
regarding the risks and expectations surrounding Diversity, Equity
and Inclusion (DEI). With continuous global social unrest and a
global pandemic that exacerbated inequalities and impacted
underrepresented groups the hardest, inclusion and care is
needed now more than ever. This paired, with the rising importance
of Envrionmental, Social, Governance topics (ESG) for
organizations, stakeholders and investors puts DEI at the forefront
of Schneider Electric’s business, and people priorities.
Data shows that companies with a diverse set of employees
experience greater financial performance. For example, one study
from McKinsey1 found that over a three-year period companies with
ethnically-diverse and gender-diverse workforces experienced an
increase in cash flow. These companies were 36% and 25% more
likely to have financial returns above their respective national
industry medians than those with less diverse workforces. The
bottom line is that more diverse companies can attract and retain
top talent, improve overall employee and customer satisfaction, and
achieve greater innovation.
Taking all of this into context, Schneider Electric is keenly aware of
the ever-increasing need to focus on mental health. The pandemic
has accentuated existing vulnerabilities. According to Mercer2, 81%
of employees felt at risk of burnout in 2021, compared to 63% in
2019. Companies must make mental health a priority and integrate
it into their overall inclusion and care efforts.
2.5.2.2 Risks and opportunities
Diversity, equity and inclusion is a business imperative. Without a
clear focus on these priorities, companies open themselves up to
risks. For example, fair and equitable talent practices are
imperative to providing equitable access to job opportunities,
career development and advancement. When companies do not
have a focus on these areas, they risk making biased and
discriminatory talent decisions. In addition, companies without
clear policies and practices that embrace an inclusive culture are
not as attractive to talent, leading to challenges in recruitment and
retention. All of these risks, entail costs for companies and loss in
efficiency. It can also lead to legal ramifications and a negative
impact on the company’s image.
Schneider Electric defines its strategy taking into consideration
those risks and opportunities, internal and external trends, insights
and feedback from leaders and employees, and it’s desire to
become the most inclusive and caring company in the world.
Schneider Electric believes this leads to greater engagement,
performance, and innovation.
2.5.2.3 Group Policy
In its Trust Charter, Schneider Electric clearly expresses that its
Diversity, Equity and Inclusion ambition aims to offer equal
opportunities to everyone, everywhere. The Group wants its
employees – no matter who they are, or where they live in the world
– to feel uniquely valued and safe to contribute their best, free from
harassment, victimization and discrimination of any kind.
The Group’s DEI policy recognizes that diversity comes in many
forms; visible and non-visible, including cognition, experience,
education, gender and gender identity, age, nationality, race and
ethnicity, color, sexual orientation, disability status, religious,
cultural and socio-economic background, life experience, location,
and more, depending on local adaptations.
Read more about our DEI policy on the Diversity and
Inclusion page on www.se.com
Since 2016, the company enriched its strategy beyond a gender
focus to better address inclusion and psychological safety for all
diversities. This included developing and implementing global
polices that empowered our employees to manage their unique life
and work as well as ensured our employees felt valued and safe
(Global Family Policy Leave, Flexibility at Work, Hidden Bias
Education and Global Anti-Harassment Policy). In addition,
partnerships were expanded with organizations to address
important topics related to other diversities, such as LGBT+
community and people with disabilities.
Looking ahead with the UN SDGs as a compass, Schneider’s
strategy has been extended to embrace diversity, equity and
inclusion and well-being. The group brings its ambition to life by
empowering all employees to develop inclusive practices and
behaviors, ensure fairness and equity in core people processes and
policies, and, advocate internally and externally for change with
partners, like UN Women through the Generation Equality Forum, and
the World Economic Forum. Schneider is committed to becoming
among the most inclusive and caring companies in the world.
2.5.2.4 Governance
The implementation of Schneider Electric’s DEI strategy involves
several different bodies and stakeholders, working hand in hand
with the global DEI team.
The Global DEI team, led by the Chief Diversity Officer, SVP of
Talent and Diversity, defines the strategy and is accountable to
deliver on Schneider Electric’s DEI transformation, working with the
Group’s Executive Committee and the Group Global DEI Board.
Progress and results of the DEI ambition are also reported to the
Board of Schneider Electric (HR & CSR Committee) on an annual
basis. The team works in close collaboration with the HR Center of
Excellence (Talent Acquisition, Talent Management, Learning and
Rewards), Sustainability, Compliance, Internal communications,
and Marketing and Employer Branding teams, as well as with the
broader HR and Communication ecosystem.
Schneider Electric’s Global DEI Board is a group of top leaders
from all the Group’s markets, sponsored by the Executive
Committee, which acts as a sounding board for the Global DEI and
Well-being strategy, and as internal and external DEI champions.
Board members are nominated by the Executive Committee to
serve a two to three-year term. Schneider Electric entities develop
local DEI and Well-being action plans based on the global strategy
and employee feedback, while meeting local regulations and
addressing country-specific situations. To support the local focus,
leaders, ambassadors, and champions have been appointed in
more than 100 countries/zones and entities to develop and lead
local action plans. This global network convenes bi-monthly to
share progress and best practices.
(1) Diversity wins: How inclusion matters, McKinsey, May 2020 Diversity wins: How inclusion matters.
(2) Global Talent Trends 2022-2023, Mercer, 2023 https://www.mercer.com/our-thinking/career/global-talent-hr-trends.html
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Beyond this governance structure, all employees at Schneider
Electric are held accountable for our DEI and Well-being
transformation through the core value, #Embrace Different, and the
Schneider Sustainability Impact (SSI) and Schneider Sustainability
Essentials (SSE) performance.
2.5.2.5 Schneider Electric’s
‘Inclusion and Care by Design’ Strategy
The Group’s new DEI strategy is known as Inclusion and Care by
Design. With this strategy the Group’s ambitions are:
• Thriving Individuals: Schneider Electric is committed to
making sure every individual feels respected and safe to be
their unique self. Leaders coach and care with respect, empathy
and well-being in mind.
• Diverse Teams, at Every Level: Schneider Electric is
committed to reflecting the diversity of the communities in which
it operates. The Group continues its efforts to hardwire equity
and inclusion at all stages of its employee experience, ensure
fairness in people processes and policies, and foster a culture
of care and inclusion at all levels.
• Open Organization: Schneider Electric is committed to driving
change within its broader ecosystem and society at large,
through advocacy and role-modelling. The Group works closely
with its strategic partners and suppliers and invests in local
actions through the Schneider Electric Foundation.
ALL
Gender
Identities
R
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To continue raising the bar on Schneider Electric’s ambition to be
one of the most inclusive and caring companies in the world, the
Group is focused on hardwiring equity, inclusion and care into all
processes and behaviors. The Group seeks to achieve Inclusion
and Care by Design in everything it does.
2.5.2.6 Thriving individuals
Built on a foundation of trust and respect, the Group’s inclusive
practices seek out and embrace different perspectives, support
flexible ways of working, and protect each individual’s well-being.
Bulding a culture of inclusion and respect
Zero tolerance for harassment
Schneider Electric has zero tolerance for harassment, victimization,
discrimination, and retaliation of any kind at all levels of the
organization. In 2018, the Group formalized its zero-tolerance
stance on harassment by launching a Global Anti-Harassment
Policy. 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 of any kind, and highlights the different reporting
channels available to report concerns, 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. A revised and
expanded policy will be launched for all employees globally in
2023.
Read more about our anti-harassment policy
on the Ethics and Compliance page on www.se.com
Inclusion and Care
By Design
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In all processes
• We hardwire inclusion and care in all our processes.
• End-to end, with clear accountability.
• From employee to customer interaction and business
process.
In our behaviours
• We lead with Respect and extend Trust.
• Living our EVP, Core Values and Leadership
Expectations.
• Demonstrating empathy, care and openness.
For more information on core values,
please see page 220.
Creating a standard of inclusion and care for all
The Group’s Core Values, Leadership Expectations, and Trust
Charter ensure all employees, managers and leaders are trained
and held accountable to a standard of inclusion and care for all.
Also, the Group believes that transparency leads to greater trust,
and drives better outcomes for all; and has committed to more
transparency in data, ambitions, partnerships, and initiatives.
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2.5 Great people make Schneider Electric a great company
To support cultural awareness and understanding, as well as
celebrate the uniqueness of the Group’s global teams, the Group
hosts events, webinars, communications, and more for International
Women’s Day, Pride Month, International Men’s Day, Global
Accessibility Awareness Day, Global Mental Health Day,
International Day of Persons with Disabilities. In 2022, these
campaigns generated more than 30 million impressions through
external social networks.
Inclusion and respect building programs:
• “Overcoming Hidden bias” eLearning: Understand what
hidden bias means, explore clear steps to keep decision-
making objective, and how to call out bias when seen. In 2022,
82% of employees had completed this training.
• “Building a Culture of Respect” eLearning: Explore the
importance of building a culture of respect, learn to recognize
the different forms of harassment, and understand the actions to
take (as employees and managers) when witnessing such
conduct. In 2022, more than 93% of employees had completed
this training.
• Employee Resource Networks (ERNs): Employee volunteer
led networks, globally and locally, made up of individuals with
similar backgrounds, experiences, characteristics and/or who
share a passion or interest, play a key role in building an
inclusive and equitable culture. ERNs within the Group include,
Women professionals, Emerging professionals, Black, Hispanic
and Asian professionals, LGBT+, and People with Disabilities
and Allies networks.
Fair and equitable talent processes
Schneider Electric is committed to transparent and equitable
access to career opportunities, growth and development to the
fullest potential, and equal pay for equal work for all its employees
worldwide.
Talent decisions are based on skills, values, performance, and
potential, and the Group 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. To check and mitigate hidden bias in its main human
resource programs, the Group has built in reminders and prompts
for moments that matter, 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. More details on SE’s compensation and benefits are
provided in 216 of this report.
Supporting employees’ well-being, mental health
and unique lives and work
Built on a foundation of trust and respect, Schneider Electric seeks
to support the unique needs of a diverse workforce with flexible
ways of working, global inclusive benefit standards, and programs
that care for its employees’ well-being. It is the Group’s belief that
this makes them stronger and more resilient in today’s world. The
Group has implemented several policies to support employees and
respect their unique lives and ways of working.
The Group’s global benefits standard is reviewed annually by the
rewards and benefits teams for compliance with its global benefit
policies and principles. This review ensures that the Group’s
inclusive global benefit standards are delivered for everyone,
everywhere. More details on SE’s compensation and benefits are
provided in p.218 of this report.
To ensure they are creating a supportive and healthy working
environment where every individual thrives, the Group has a holistic
view of well-being (physical, mental, emotional, and social) as key
components of the current strategy, tackling three areas of impact:
1. The ways of working and flexible work arrangements,
2. Overall employee well-being,
3. Mental health support.
Schneider Electric has implemented many services at its sites
throughout the world (gym facilities, concierge, creativity rooms,
cultural events, mindfulness activities, back-up dependent care,
and more) to support all employee’s mental load, energy recovery
and overall resilience.
As of 2020, 90% of employees worldwide have access to a
comprehensive workplace wellness program, including medical
coverage and dedicated programs to educate and support
employees on new, smarter ways of working, mindfulness in the
workplace and working in a hybrid world.
Flexibility at Work
Schneider Electric’s Global Flexibility@Work Policy creates 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(1). This global standard was introduced in
response to feedback in the Group’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”). The
policy addresses hybrid work holistically, providing employees with
mental health resources and training on best practices. The policy
reflects the broader shifts of a global, digital, and ever-changing
environment, and contributes to a more agile, inclusive,
empowered, and trusting Group culture. At the end of 2022, 99% of
the countries have implemented the new Flexibility@Work policy.
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, Germany,
the United Kingdom, and the United States, operating with a fully
flexible, output driven philosophy.
Global Family Leave
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. To find out more about our Global Family
Leave Policy please refer to section 2.5.4 “Compensation and
Benefit” on page 218.
(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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Mental Health Support
Schneider Electric integrated mental health into its global well-
being focus in 2019, and has provided all employees with a
playbook, and series of trainings (available in multiple languages)
on how to deal with mental health challenges. In addition, the
Group actively participates in World Mental Health Day, and a
volunteer-based global mindfulness team holds annual events to
support employees and annually in October.
In 2022, 98% of employees completed “We All have Mental Health,”
an eLearning module focused on what mental health means, and
how to recognize the signs of mental health challenges and take
action. Nearly 1,500 employees shared mental health tips and
personal commitments on Schneider Electric’s internal social media
platform reaching many through the #MentalHealthMatters. During
the annual mental health campaign, beyond local actions
organized by country, more than 3,000 employees attended live
global webinars on dealing with emotions, managing the mental
health of teams, and financial well-being. In addition, 18
mindfulness practice sessions were organized, in English, Spanish,
French, and Italian to promote this practice.
2.5.2.7 Diverse teams at Every level
Schneider Electric desires to be among the most inclusive and
caring workplaces. This includes visible and non-visible dimensions
of diversity, including cognition, experience, education, gender and
gender identity, age, nationality, race and ethnicity, color, sexual
orientation, disability status, religious, cultural and socio-economic
background, life experience, location, and more, depending on local
requirements. To achieve this ambition, the Group recognizes that it
must continue to build an understanding of the demographic
makeup and experiences of inclusion by its employees. As a global
organization, the Group collects limited demographic information on
its global workforce (gender, generation, and nationality) aligned with
globally accepted definitions and legalities. In addition, the Group’s
local operations collect additional demographic information based
on local regulations (Race/Ethnicity in the US; Disability status in the
US, France and India, etc).
2025 Gender Diversity Commitment
Schneider Electric began its journey to becoming a gender-
balanced organization more than 15 years ago and has identified
increasing the share of women in its workforce and leadership as a
business imperative. To support this aim, the Group has stated
ambitions on increasing female representation in the overall
workforce, and seeks to engage all genders in the journey.
In 2021, Schneider Electric renewed its commitment to gender
balance with the 2021 – 2025 SSI gender balance ambition, SSI #8,
50/40/30 – with women representing 50% of all new hires, 40% of
frontline managers, and 30% of senior leadership by 2025. This
commitment is a testament to the progress the Group has made,
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, Schneider focuses on 30% representation
because research has shown that 30% is the tipping point for
diversity to have a real impact on teams. To support this ambition,
the Group invests in development programs for female talent to
grow within the organization, and access senior levels, while also
recruiting great talent from the external market.
While significant progress has been made in the representation of
women, especially on the Board and Executive Committee level
(respectively, 41% and 45% female as of end of 2022), the Group
recognizes that there is more work to do at all levels in the
organization.
One of the programs the Group created to support this is
Schneider Women Leaders’ Program (SWLP), a global program
focused on enabling mid-career women to build the skills and
confidence to step up their leadership capability and impact. SWLP
is delivered through coaching, group and individual learning, and a
global summit. Since its launch in 2019, more than 320 women have
benefited from this targeted leadership development program and
thousands more through programs delivered at the local level.
Employee Resource Networks (ERNs) also play a significant role in
empowering women locally and helping drive efforts to advance
women in leadership. As of the end of 2022, local ERNs have
contributed to the Group’s efforts towards gender equality and
inclusion in more than 40 countries.
Equal
SSI #8
Increase gender diversity in hiring
(50%), front-line management (40%)
and leadership teams (30%)
The group is advancing gender equity through innovative
programs designed for experienced professionals who
have spent two or more years out of the traditional
workforce. Through a structured program, the “returnees”
receive nurture-based coaching, hands-on work
experience, and a built-in support system to aid their return
to work. The program focuses on soft skill development and
technical upskilling, with a specific focus on the Schneider
Electric business. At the end of the program, they become
eligible for full-time or extended contracting work in varied
roles across the Group, including pricing, marketing,
customer success, supply chain, and finance.
2020 Baseline
2022 Progress
2025 target
41/23/24
41/27/28
50/40/30
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2.5 Great people make Schneider Electric a great company
Total New Hires*
Board of Directors
41%
41
59%
45%
2025 Target: 50%
Frontline management**
Executive Committee
27%
73%
41%
2025 Target: 40%
Leadership***
28%
2025 Target: 30%
Female
Male
Overall Workforce
72%
33%
Female
Male
Total new hires – all new hires in 2022.
*
** Frontline management – junior and mid-level management whose direct reports are individual contributors only.
*** Leadership – Vice-Presidents and above.
55%
59%
67%
See page 282 for more data points on our representation and
hiring of sales, IT, revenue producing and engineering roles.
Generational diversity
For the five generations working at Schneider, the Group seeks to
foster life-long career development and knowledge exchange for
and across all generations to boost learning and innovation. The
Group is committed to creating new opportunities for the next
generation through apprenticeships, internships, and its annual
global student competition for innovation, Schneider Go Green.
With tailored career development opportunities including career
week, coaching, development plans, and mutual mentoring the
Group is harnessing the power of all generations. With this,
Schneider Electric is committed to supporting talent in the later
stages of their career to have meaningful and fulfilling
development, and to recognize and leverage their unique expertise
and experience to boost learning and innovation across
generations. For more information, see 2.5.3 Talent attraction and
development, page 211.
Generation breakdown
8%
10%
33%
49%
Gen Y (Millenials)
Gen X
Gen Z
Baby Boomers
Origin, Race, Ethnicity and Nationality
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. The Group’s multi-hub model is key to delivering on this
ambition with teams that represent diverse origins, nationalities,
ethnicities and races, locations and cultural backgrounds. The
multi-hub model focuses on attracting and developing local talents
for global and local roles, and ensuring leadership reflects the
diversity of nationalities and ethnic backgrounds present in local
markets. 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 long-term success.
Because these diversity of origin dimensions are addressed
differently depending on the local context and culture, and their
categories and definitions vary widely from country to country,
there is no internationally accepted criteria and our local country
teams drive local ambition and actions.
Race and ethnicity in the US
Schneider Electric US is committed to evolving the racial and
ethnic diversity of its employee population, with a specific focus on
increasing ethnic representation. To support its ambition, in 2021,
the Group became a member of the National Society of Black
Engineers’ (NSBE) Board of Corporate Affiliates (BCA). A group of
sponsored and volunteer employees formed SExNSBE, an internal
NSBE community, to focus on increasing the attraction, recruitment,
and retention of Black professionals at Schneider Electric through a
company-funded multi-touch transformational partnership. The
Group’s SExNSBE Community includes 240 employee members
who spent more than 850 volunteer hours mentoring school-aged
children in 2022 through the NSBE Jr program, and more than 600
volunteer hours mentoring collegiate NSBE members.
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Accessibility and inclusion for people with
disabilities
Since January 2021, Schneider Electric has been a member of the
International Labour Organization (ILO) Global Business and
Disability Network and is committed to promoting and including
people with disabilities throughout its operations worldwide. As a
follow up to this commitment, in March 2022 the Group announced
the creation of the Global Accessibility Office, addressing the
holistic needs of people with disabilities through a strategy of
Inclusion and Care by Design, for people with disabilities. This is
underpinned by global awareness and education about what is the
largest minority group in the world, consisting of 1.3 billion people.
The Group focuses on all dimensions of disability: visible, invisible,
permanent, and temporary. These include Physical Motor or
Physical Health, Sensory, Cognitive and Neuro diversities, and
Psychological, Emotional or Behavioral.
The Group’s approach of “accessibility by design” creates holistic
disability inclusion through four pillars:
1. Customer First design: Fully accessible product, software, and
UI/UX design
2. People, processes, and tools: Accessibility by design in all
processes (including recruitment), platforms and tools
3. Brand and Communication Accessibility: For all events and
communication – internal and external, digital, physical, and virtual
4. Built environment: Accessible buildings and workplaces
applying Universal Design principles, local legislation, and the
International Accessibility Standards
In June 2022, Schneider Electric joined The Valuable 500 (V500)
– a global business collective made up of 500 CEOs and their
companies, innovating together for disability inclusion – with a
commitment to:
• Ensure that disability inclusion is on our senior leadership agenda.
• Make at least one firm commitment to action.
• Share our commitment with the business and the world.
With inclusion and care for all as a major focus of the Group’s DEI
and Well-being ambition, building awareness and education about
People with Disabilities and Accessibility was a major focus in
2022. In December 2022, the Group then celebrated the UN
International Day of Persons with Disabilities, with a focus on
addressing “ableism” and “inclusive decision making” for people
with disabilities, using the tagline “Don’t make decisions about me,
without me”.
Focus on France
In France, an employee with disabilities is one who is recognized
as such by the French commission for the rights and autonomy of
people with disabilities.
Schneider Electric France (SEF) reports 6.4% of the direct
workforce (as of end of 2021) are employees with disabilities. In
December 2021, SEF entered an agreement with unions, to recruit
at least 100 people with disabilities over the next three years. In
addition, they agreed to more accessibility (physical and digital),
and more collaborative actions to allow employees facing health
issues to work with more involvement of Union representation.
Schneider Electric France works closely with a diverse panel of
partnerships and the Group remains committed to the recruitment
of People with Disabilities. In 2022, 24 new permanent workers, 23
apprentices and 8 new interns were recruited.
Annually, the Group hosts an internal competition for “The Handi
Trophy”, to recognize and promote the involvement of teams with
regards to the inclusion of people with disabilities.
In addition, Schneider France works with a start up specializing in
behavioural science analysis with a group of employees, including
managers, people with disabilities, Human Resources Business
Partners, individual contributors, and in-house medical staff. As a
result of their analysis, Schneider France has greater
understanding of the barriers preventing employees from talking
about their disability. Resources have been created in collaboration
with a group of employees to address recruiters, managers, and
people with disabilities.
Focus on India
In 2018, Schneider Electric India launched a program “SAKSHAM”
(which means capable), focused on the inclusion of People with
Disabilities through continuous education, enabling infrastructure
and equitable processes and policies. The program focuses on
employing, engaging, enabling and empowering those with
disabilities. Two awareness and educational sessions of SAKSHAM
were conducted in 2022, covering more than 700 employees.
Within the SAKSHAM program, Schneider India has also launched
a Digital Accessibility campaign which educates and empowers all
employees on how to be digitally inclusive in both personal and
professional interactions.
LGBT+ inclusion
We recognize and celebrate the Lesbian, Gay, Bi, Trans and
Intersex People (LGBT+) community and its members for its
diversity and uniqueness. The Group aims to build awareness and
advocate for the community and wants its employees to be allies,
playing a decisive role in creating an open and safe community
where individuals are comfortable bringing their whole authentic
self to work.
84%
of Country Presidents are
either local or regional
56%
182
Of employees are in
New Economies; and 36% of
leadership teams
Nationalities represented
in our global workforce across
109 countries
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2.5 Great people make Schneider Electric a great company
Schneider Electric is 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. Across the globe, Schneider Electric has also made
public statements of support to advance LGBT+ inclusion. 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, further
build inclusion in the workplace, and to prevent discrimination,
including workplace discrimination, against LGBT+ people.
Schneider Electric partnered with l’Autre Cercle, a French LGBT+
association, and contributed to the “Odyssey for Equality” project.
The project aims to bring concrete recommendations on LGBT+
inclusion for corporate members and partners for the next ten
years.
Building allyship
• LGBT+ and Allies Employee Resource Network (ERN): A
volunteer, employee-led network of employees focused on
co-creating internal and external awareness and education
campaigns and feedback and design of the Group’s benefits
and policies. In 2022, the ERN developed and launched a
Transgender Playbook, piloted in South America. The playbook
is designed to guide employees, managers, and HR teams in
supporting those transitioning in the workplace with inclusion
and care.
• Focus on North America: In 2022, Schneider Electric North
America launched a “Pronouns in the Workplace” program,
providing stickers and pins with the pronouns, He/Him, She/Her
and They/Them in selected US, Mexico and Canada sites. This
initiative is intended to raise awareness around self-identification
as well as fostering a safe and welcoming work environment and
will serve as a catalyst for expansion into other countries and
regions.
• Focus on France: In 2022, Schneider Electric France took part
in the ‘StOpE initiative’, which defines eight actions to combat
sexism and LGBT+ phobia. With senior leader sponsorship, the
initiative deployed educational resources for managers on
recognizing and responding to signs of sexism. In 2022, more
than 100 managers completed the training. For all employees,
an eLearning provides essential information on how to
recognize and act against signs of sexism and LGBT+ phobia.
The Group has also created a network of 60 harassment,
sexism, and LGBT-phobia referents located all over France.
2.5.2.8 Driving change by 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 Group 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. In addition,
Schneider Electric US has committed to diversifying its supply
chain through its Supplier Diversity program (see section 2.2.12.12
“Supplier diversity program in the United States” page 144).
Inclusive Mindset for Children Program in India
JAGRITI was launched in 2016 to focus on impacting
young minds to build an inclusive and equitable society.
The program aims to educate and influence school
children on equity, culture of respect, inclusion, gender
stereotypes and biases. In 2022, this program was
extended to schools in Mumbai, Chennai and
Hyderabad, engaging more than 200 students from five
schools. Since 2016, we have engaged 7,500+ students
in over 45 schools across India.
A snapshot of some of our global recognitions are summarized here:
Global Awards
Schneider joined for the
5th consecutive year the
2022 Bloomberg Gender
Equality Index,
measuring gender
equality performance of
public companies
Schneider ranked 20th
globally, and third in
France, among the 100
leading companies
included in Equileap’s
milestone report
Schneider ranked 2nd in
its industry, 5th in France
and 61st in the overall
Refinitiv’s annual
Diversity and Inclusion
Index
Schneider Electric
ranked 16th among its
41 industry peers in the
Financial Times’
Diversity Leaders 2023
ranking, for the fourth
consecutive year
Schneider was listed on
the 2022 “Best Places to
Work for Disability
Inclusion” list,
recognizing its Diversity
and Inclusion
commitments
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Chapter 2 – Sustainable development
Global Strategic Partnerships
• United Nations Generation Equality Forum (GEF), 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.
• United Nations Women’s Empowerment Principles (WEPs):
Schneider Electric became the first multinational Group 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.
• World Economic Forum Global Parity Alliance, a global,
cross-industry community whose goal is to facilitate peer
sharing between companies, and showcase DEI best practices/
research World Economic Forum Good Work Alliance, a
partnership to promote peer exchange between companies on
Future of Work topics. In 2022, Schneider Electric endorsed the
‘Good Work Standards; a global, cross-industry partnership
aiming to pave the way in building a healthy, resilient, and
equitable future of work.
• The Valuable 500 (V500), a global business collective made up
•
of 500 CEOs and their companies, innovating together for
disability inclusion.
ILO Global Business and Disability Network (GBDN), a
business-to-business support network promoting disability
inclusion in the workplace.
• Business 4 Inclusive Growth (B4IG) DEI Working Group. B4IG is
a partnership between the OECD and a global, CEO-led
coalition of companies fighting against inequalities of income
and opportunities. In 2022, Schneider Electric contributed to the
publication of the group’s Operational Recommendations on
Ethnic Diversity & Inclusion.
• WeQual - WeQual is on a mission to achieve 50/50 gender parity
at the top of the world’s largest companies.
2.5.2.9 Recognitions and awards
Schneider Electric has been included in many global and local
indices for multiple years due to the Group’s commitment,
transparency and impact in the DEI and Well-being space.
2.5.3 Talent attraction and
development
2.5.3.1 Context
Attracting, developing and retaining talent is crucial to the ongoing
success of companies. Business growth 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 and resilience, developing leaders who build
strong and caring connections in a digital world, and shape the
workforce of the future.
2.5.3.2 Risks and opportunities
Schneider faces the risk of talent and skills attrition given the
current talent scarcity in the market, the volatile, uncertain, complex
and ambiguous (VUCA) world we live in, the demand for a more
local world, and the unprecedented changes in the future of work.
The risk of not attracting, developing and retaining the best talent in
the market, especially for critical skills, would have an impact in
terms of:
• Cost of recruiting and onboarding
• Gaps in critical skills to stay ahead of the competition
• Talent’s brand perception
At the same time, with the right policies and programs in place,
these risks become opportunities for the Group to strengthen its
brand as talent developer for everyone, everywhere, leading to
greater talent attraction. The policies and programs from the Group
include:
• A new talent acquisition platform to simplify the overall
candidate experience, migrate to more digital, borderless, and
self-paced offers to attract talent, and create a more equal
playing field for those interested in Schneider.
• An annual performance and development approach with fair,
transparent, and competitive rewards and development,
supported by regular meaningful career conversations.
• A digital ecosystem powered by AI to enable access to
development opportunities (internal mobility, project, and
mentoring) via Open Talent Market (OTM).
• Programs for employees at different stages of their professional
career and specific talent segments (e.g. Digital, AI, Software,
R&D, Supply Chain, Sustainability), with a strong focus on digital
skills, commercial excellence, leadership and functional
expertise.
• A Global Flexibility@Work policy and a balanced Multi-hub
footprint to enable its employees to have more flexibility and
manage their unique life and work in the way that works best for
them
These key policies and programs ensure the investment in the
attraction and development of talent at all levels. They create
equitable opportunities and the environment for employees to learn
and grow, while empowering them to own their career by
developing critical skills to support their personal and professional
growth, supported by their manager and enabled by digital tools.
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2.5 Great people make Schneider Electric a great company
2.5.3.3 Group policy
Schneider Electric believes that all their employees are talent and
empowers people to grow to their fullest potential, developing new
skills and building careers for today and tomorrow, enabled by the
Group 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. Most activities are driven through an
annual People Calendar, which is adopted globally to ensure that
development is accessible to all employees.
• For all employees, the Group ensures there are tools and
processes in place to set individual performance and
development goals, and access learning and development
opportunities for their current role, as well as preparing
themselves for 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, 76% of employees responded
favorably to being able to renew their skills through learning and
development opportunities.
• For specific groups of talent, there are targeted programs for
specific skills to support Schneider commercial, digital, and
leadership transformations and equip our blue-collar workers for
the supply chain of the future. There is a strong focus on high
potentials, expert talent, and employees at different career
stages, including early career talent and those who are in a later
stage of their career. An annual talent review process operates
across the Group to help ensure high potential talent, including
technical and digital talent, is identified, recognized, and
supported with an accelerated development path.
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 a positive spirit and willingness to go above and beyond. The
2022 OneVoice results amongst leaders also show progress in a
shared meaningful purpose and innovative capabilities. The Group
has identified a future leader profile that will be used as a
framework moving forward.
At Schneider Electric, feedback is key to building trust and care,
and transforming its leadership and culture. In 2022, over 7,000
leaders opted-in to participate in the Upward Feedback campaign.
This is an anonymous questionnaire which gathers input from
employees on how well they think their leaders demonstrate the
Core Values and Leadership Expectations, as well as suggestions
for behaviors to Start, Stop, and Continue. This questionnaire gives
leaders additional insights about their behavioral strengths and
development areas and helps them identify opportunities to
continue to deliver greater impact as leaders, and together with
their team.
2.5.3.4 Governance
The Executive Committee regularly discusses the overall health of
the leadership pipeline and succession strength for top positions,
including during the monthly Executive Committee people
committee and the year-end global talent reviews with the CEO and
CHRO. In addition, the Executive Committee meets regularly to
make critical selection and succession decisions and review
specific talent attraction and development strategies, for example
expert talent, 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.
2.5.3.5 Actions and impacts
The Group strives to provide a meaningful experience for their
talent from talent attraction and onboarding, to performance and
development. Schneider empowers all employees to grow their
fullest potential, deliver with impact based on the ‘what’ and the
‘how’, build sustainable careers, refresh and learn new skills for
today and tomorrow.
Attracting talent to shape the workforce of the
future
Attracting talent at all levels is more crucial than ever before – not
only in terms of enabling the delivery of the Group strategy, but also
to continue to innovate for our customers and build a long-term
pipeline of future talent that could join Schneider Electric.
Having improved the ability to manage a talent network through the
introduction of new tools and systems in 2021, the focus through
2022 has been on three key areas:
• Technology and Digital Experience: continuing to simplify and
optimize the overall experience for both candidates and
colleagues involved in the recruitment process, reducing our
time to apply from thirty minutes to one minute.
• Strategic Sourcing: focusing on priority talent groups for skills
and diversity with specialized campaigns and recruiter
taskforces.
• Employer Branding: increasing awareness of Schneider
Electric as a company, especially among the next generation of
talent, including Always On recruitment to help build a
sustainable pipeline of talent.
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Chapter 2 – Sustainable development
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,
the five-year ambition is to achieve a doubling of growth in the
early-career pipeline. 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: completely
digital experience designed to provide students with a way to
engage with Schneider Electric through eLearning modules and
on project simulations.
• 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. In 2022, Schneider Go
Green has had over 140,000 registrations and more than
22,000+ students have submitted ideas from over 200
countries.
• 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 Electric is doubling its commitment to the Next
Generation of Talent. During 2022, the Company recruited
a diverse mix of 60% students and 40% recent graduates,
and engaged brand ambassadors on campus through
global programs and partnerships as well as by enhancing
its development program offers. One of the newest
programs is the Sustainability Development Program which
brings Next Generation Talent into our Sustainability
Business and develops them as future leaders.
2019 Baseline
2022 Progress
2025 target
4,939
x1.33
x2.00
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. This approach encourages learning and
growth, enabling employees, teams, and the Company to reach
their full potential. 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 2022, 98%
of eligible employees* completed a performance and development
review.
E m b r a ce Different
GOALS
Set clear
expectations
to drive high
performance
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Regular review
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*This includes employees with a valid Schneider email address, whose
employment status is active (or suspended, which is country specific), who are on
permanent/ fixed term contract type and those who were hired on or before 30
Sept 2022, in addition to country or entity specific conditions.
Enabling sustainable careers
Developing employees in their current role and for future career
growth is critical to enable growth of the Group’s businesses. In line
with the conviction that all employees are talent and the aim to
provide equitable development opportunities for all, Schneider
Electric believes that all employees should take ownership of their
own unique career development, supported by their managers and
enabled by digital tools. To empower and engage employees with
this approach, Schneider Electric held its second Career Week for
all employees in 2022. Over 100 events took place with employees
participating from over 99 countries, sharing career stories,
unleashing the power of networking, 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. 94% of employees surveyed were
positive about the event, especially appreciating the time to
discuss and learn about career development.
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2.5 Great people make Schneider Electric a great company
Generations
SSE #23
Access to meaningful career
development programs for >90%
employees during later stages of
their career
In 2022, DACH conducted career conversations for all their
senior talent involved in the second wave of the program.
Both their HR Business Partner and managers were
equipped and briefed on how to manage those meaningful
conversations and better support the employees. The
conversations helped recognize their unique contribution,
set expectations and provide clarity on future opportunities.
“I believe the Senior Talent Conversation was a good focus
point to plan and become clear about the next years of my
career and what it will mean to the company and my
personal development. You get so engaged in your
day-to-day work that you hardly think about what the
remaining work life will look like and what motivates you.
The discussion with HR and my Manager was very open
and while there are lot of attention on the next generations,
I felt valued in what I can still bring to Schneider Electric in
the future.”
Joern Fellenberg, Delivery Director Central Europe
2022 baseline
2022 Progress
2025 target
43%
43%
90%
Boosting expertise and knowledge across the
organization
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 Group has a renowned
expert program called “Edison” to recognize individual employees
who have demonstrated outstanding achievement, expertise, and
leadership throughout the Company. The “Edison” 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. A revamp of the
Edison program is planned for early 2023.
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 October with
the purpose of recognizing, developing, and connecting internal
trainers. This year it was a 2-day conference, on the theme of
“Engaging Learners in a Virtual World” with keynote speakers from
MIT-Sloan & INSEAD sharing insights on the “Future of Learning”.
There are currently over 5,000 identified internal trainers who
collectively delivered over 18,000 sessions in 2022, accounting for
63% of formal training.
Additionally, Schneider Electric currently has 300 communities of
practice as part of the Communities@Work (C@W) program
encompassing more than 35,000 members. Each community has a
leader and a robust animation plan, and each year, the
communities’ activities are reviewed, with the most active
communities being recognized for the value they bring to the
organization. These communities are an effective way to enable
learning, personal growth and productivity.
• They promote knowledge sharing through conversations and
other activities (such as webinar, training, and gamification),
creating collective intelligence and enabling innovation.
• They offer opportunities for employees to grow - learning from
their peers through best practices and experience sharing in
the community.
• They are a natural support system – providing immediate
support, agility and speed to their members.
• They also contribute to increasing Employee Satisfaction,
addressing the need of belonging in the next normal through
social interactions (90% of the Active Community respondents
feel enthusiastic about being part of a community).
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Chapter 2 – Sustainable development
Upskilling for today and tomorrow
The Group recognizes some skills need to be refreshed frequently, 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 to build both depth and breadth of skills and
experiences based on the 3E model (education, exposure, and experience).
Key programs focused on critical skill upgrading include:
Target Audience
Objectives and business
benefits of the program
Impact of
business benefits
Program
Title
Consultative
Selling
Approach
for Sales
Employees
CoMET
- Competency
Management
and Execution
Tool for Global
Supply Chain
Roles
All sales employees
(15,000 sales
employees)
Completion rate:
41%
85,000 Global
Supply Chain
employees for
assessment &
~12,000 white-collar
employees with
competency
development action
plans
Completion rate:
100% completing
assessment and
>50% of white collars
Leadership for
Profitable
Growth
Leadership Team
VP and Above: 1,200
Directors: 2,300
Completion rate:
VP and above: 96%
Director level: 46%
Foundational
digital skills for
all employees
All white-collar
employees (75,000+
employees)
Completion rate:
~50%
• A blended digital learning curriculum to
• Sales employees participating in the
enable sales teams to build trusted advisor
relationships with business decision
makers.
• Understanding customers’ undiscovered
pain points by conducting strategic sales
dialogues through effective questioning and
articulating outcome-based results and
benefits.
• A key pillar in the overall customer-centric
commercial transformation at Schneider
Electric, driving sustainable and profitable
growth.
• A global approach, using an intuitive
platform, CoMET. to ensure expertise
development is meaningful and inclusive.
• Identification, development and
sustainability of high critical skills in the
plants, distribution centers and central
functions.
• Development and tracking of actions plans
to anticipate and mitigate all competency
gaps.
• A 100% digital learning solution to align,
educate and mobilize the Executive
leadership team to sustain profitable growth
for the Company.
The entire learning path encompasses
3 main parts:
• Markets & Financial theory.
• Applications in the context of Schneider
Electric’s core business models.
• A business game simulation designed to
engage leaders in competitive learning for
optimizing share price performance.
A “Digital Upskilling for All” program to
prepare Schneider Electric’s workforce for its
digital transformation and enabling Digital
Citizenship (SSE #22 commitment).
It consists of 3 key elements:
• Digital Skills assessment – Digital Boost 2.0.
knowledge check that allows employees to
discover individual strengths and
development areas in 6 critical digital skills.
• Digital Skills dedicated learning paths linked
to individual assessment results with tailored
content to facilitate continuous upskilling.
• Digital Skills dashboard for HR and
Managers to visualize collective digital skill
assessment results supporting data-driven
upskilling actions based on the strengths
and development areas to accelerate talent
readiness.
program have shown a +13pts
improvement in their ability to apply
the consultative selling skills based
on a pre-training and post training
assessment.
• NPS (Net Promoter Score) of 59 rated
by learners in 2021-2022 (>50 is
excellent).
• 93% of managers say they have
observed the participants using the
consultative approach consistently.
• Based on competency gaps
identified, several critical programs
have been launched, including
digital upskilling by job code,
communities of expertise by region
and expert certification programs.
• Site leaders recognize the benefits
for expertise management with
action plans automatically
generated ensuring competency
development for the site’s
performance.
• Global domain owners can
compare competencies between
sister factories.
• Leaders have experienced a
substantial increase in business
literacy and commercial capability
across the executive leadership
team.
• Recipient of the 2021 Brandon Hall
Group HCM Excellence Awards
Gold in the ‘Best Unique or
Innovative Learning and
Development Program’ category
and two Silver awards.
• Post the assessment, 38,000
employees completed 110,000
training programs around the 6
digital skills through the ‘Digital
Citizenship Learning Corner’.
• New digital skills assessment;
highly rated by employees (4.6 out
of 5) for its seamless learning
experience and practical value for
their digital upskilling.
• Digital Skills Dashboard creates
value for line managers and
leadership, assisting in developing
actions plans on digital upskilling for
their teams.
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2.5 Great people make Schneider Electric a great company
Schneider Electric also has an open learning ecosystem comprised
of interconnected platforms at the center of which is My
LearningLink (MLL). This platform provides digital and classroom
learning opportunities and was made available to all employees on
mobile since 2021. Schneider Electric also continues to invest in
providing My LearningLink connectivity to shop floor employees
either through the “Digital Learning Corner” (a computer or kiosk
installed in their facilities) or, from their mobile phones.
In 2022:
• More than 300,000 training completions every month
• More than 30,600 modules of learning content were available in
more than one language
• Digital learning consumption stood at 69%, which has remained
stable since 2020
Schneider Electric also offers a broad catalogue of online courses
and webinars to partners and customers, accessible via free
registration at mySchneider Partner Portal (an extranet). The
mySchneider Partner Portal is deployed in 140 countries and
provides a customized learning experience with targeted training
content that is most relevant to over one million Schneider Electric’s
partners and customers who have completed around two million
courses since its inception in 2015.
“Open Talent Market was a turning point in my
professional career. After browsing through multiple
opportunities, I got to understand different domains and
teams that SE has better than ever.
OTM really identified my career dream job, to be
honest, because I landed exactly in the role which I
wanted and have the global exposure together within
this position.
Without OTM I would never
know about this opportunity.
–
It’s a great tool to use –
nally.
like LinkedIn but internally.
Being there is a MUST
for all of us!”
Roopa MN
Senior GM –
ERM Framework
Deployment Leader
Schneider Electric harnesses the power of all generations by
fostering lifelong learning, upskilling and development for everyone
- from fresh graduates to senior talent. In this respect, the Group
has 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.
Generations
SSE #22
>90% of employees undergo digital
upskilling through the Digital
Citizenship program
China Operations accelerated digital upskilling with a
holistic approach.
Over 5,700 employees joined the 2022 Digital Learning
week, gaining digital insights from internal and external
experts on digital mindset, strategy, and customer
solutions.
For digital experts, some accelerated their growth through
a 15-month Digital Master Program combining intensive
education with 1:1 coaching and business projects, while
others were supported with specific learning to prepare for
Edison Digital domain certification resulting in three times
more employees certified.
Key digital roles supporting customer value chain were
upskilled through targeted learning paths consisting of
focused workshops with action learning for
300+professionals.
Additionally, employees received on-the-job opportunities
for digital upskilling: a talent rotation program called
‘Prometheus’ enabled commercial and supply chain talent
to spend one year with the Software Research &
Development team, and a Digital Energy trainee program
called ‘Kunpeng Sheng’ was launched to accelerate digital
execution capabilities on customer sites.
2020 Baseline
2022 Progress
2025 target
41%
77%
90%
A digital ecosystem to enable development
opportunities for all
Schneider Electric invests in the development of its people,
creating equitable opportunities and environment for all employees
to learn and grow their career.
In 2020, Schneider Electric launched a global career development
platform, Open Talent Market (OTM), to empower employees to
drive their own careers by discovering opportunities for mentoring,
new positions, and part-time projects, as well as potential career
paths. The platform is available to all connected employees
globally and leverages AI (Artificial Intelligence) to match the
supply and demand of internal talent with a transparent, digital, and
borderless approach. The ambition for usage is to increase 4x the
number of employee-driven development interactions in the OTM
by 2025 (SSE #21). At the end of 2022, more than 80% of eligible
employees were registered on the platform resulting in 26k digital
development opportunities since registration. Through OTM in
2022, ~1,500 employees were given visibility to over 16,000 open
positions, 6,000 mentoring relationships were formed and 2,700
project roles were assigned. An average of ~20,000 employees
visit the platform each month.
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In addition to career programs for early talent, pilot programs for
talent in the later stages of their career started in four countries in
2021, to support employees in the later stages of their career to
enjoy meaningful and fulfilling development, and to recognize and
leverage their unique expertise and experience to boost learning
and innovation across generations.
Similarly, in Germany, Switzerland, and Austria, Senior Talents are
offered the opportunity to make an impact with their experience
and network in the Talent Acquisition team. Senior Talent became
great recruiters and brand ambassadors - they have a comparable
network to headhunters, and they can best describe the job
requirements authentically, speaking from their own experience.
Equal
SSE #21
4x the number of employee-driven
development interactions on the
Open Talent Market
Schneider Electric has created an internal ‘gig’ economy
through an Open Talent Market (OTM), and by 2025 will
grow the skills in the workforce through digitally enabled
engagements. These engagements include via projects
(internal gigs), mentorships, and new positions. By
leveraging AI the company empowers employees and
creates more connections that support development
across departments, countries, and functions. In 2022,
Schneider Electric focused on increasing the number of
employees registered in the Open Talent Market closing the
year with 81% of their workforce on the Open Talent Market
+16pts vs 2021.
2020 Baseline
2022 Progress
2025 target
5,019
x1.9
x4
Other countries such as France and China focused on facilitating
workshops with Senior Talents and their managers, to help them
reflect and understand their personal and career aspirations, their
opportunities and how to take ownership of their development.
According to their feedback, participants felt valued, listened to
and positive about the company supporting them in this stage of
their career. At the same time, the structured methodology and
tools to make a career discussion and build a strong development
plan were highly appreciated both by them and their managers.
To learn more about how Senior Talent Program connects with the
Future Ready program and Diversity, Equity & Inclusion please
check section 2.6.5 Social Impact in France, sub-sections Future
Ready Program and Senior Talent program page 240.
2.5.3.6 Recognitions and awards
Schneider Electric achievements include:
• 2022 Brandon Hall Group HCM Excellence Award- Bronze in
the category of ‘Best Advance in Compliance Training’ for two
training programs: ‘Schneider Essentials’, which is a series of
mandatory training on Ethics, Risk Management and Cultural
topics deployed to all employees, and ‘Anti-Corruption’ training
for customer facing, finance, procurement or employees
exposed to the risk. See section 2.2.2.5 for more details.
In 2022, Schneider Electric expanded the pilot program to 12
countries/entities including France, India, Japan, China, Germany,
Brazil, Australia, UK & Ireland and South Africa among others, and
will continue to scale progressively in the upcoming years to reach
its SSE #23 ambition by 2025. The program is anchored in career
conversations resulting in a robust development plan linked to their
unique career aspirations and supported by different offers
including new contractual schemes, upskilling, knowledge transfer,
pivoting, recognition, care, and personal planning among others.
The launch of the program was received positively by this group
of talent.
Schneider Electric also started to observe in 2022 the positive
impact of the program through different initiatives deployed by the
pilot countries. For example, India tapped into the wealth of
experience of Senior Talent by engaging some retired employees
as consultants. They possess not only the depth of knowledge and
breadth of experiences but also a powerful network, allowing
Schneider to continue benefiting from long-term customer
relationships.
• Bloomberg Gender Equality Index 2022 (fifth year in a row)
• Fortune’s 2022 World’s Most Admired Companies (fifth year
in a row)
• Schneider recognized as one of the World’s Top 100 for Gender
Equality by Equileap
• Forbes (April 2022) – Schneider Electric named one of
America’s Best Employers for Diversity (fourth year in a row)
• Forbes – America’s Best Employers for New Grads, #41
• Forbes – America’s Best Employers for Women, #63 (#1 in our
category) and World’s Top Female friendly companies 2022
• Great Place to Work certified Schneider Electric in the US,
Singapore, Malaysia, Taiwan, Thailand, Philippines, Indonesia
and Vietnam, US, Canada, Mexico
• Universum university student ranking listed Schneider as #29
amongst engineering students and #62 amongst IT students in
their “World’s Most Attractive Employers 2022” ranking
• Charise Le, Schneider’s Global CHRO, recognized by Fortune
Most Influential Women Business Leader and 2022 Top 100 HR
Tech Influencer.
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2.5 Great people make Schneider Electric a great company
2.5.4 Compensation and benefits
2.5.4.1 Context
2.5.4.4 Governance
To ensure employees feel valued and respected in their workplace
companies are increasingly expected to provide all employees with
attractive compensation but also with benefits meant to facilitate
aspects of their lives. As we are now in a post-pandemic era,
people and specifically younger generations have higher
expectations in terms of creating better work and life balance, and
rely on their employer to ensure that this need is met.
The implementation of group policies on compensation and
benefits are overseen by the highly experienced global, regional
and local reward organizations.
2.5.4.5 Actions and impacts
Compensation
2.5.4.2 Risks and opportunities
Job architecture and compensation process
Having the best talent and attracting new talent is the main goal of
inclusive compensation and benefits offerings.
Schneider Electric is committed to delivering best in class benefits
and opportunities to its employees; and aware that unfit
compensation and benefit could risk talent attraction.
2.5.4.3 Group policy
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.
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 goes beyond pay and
benefits. The portfolio is 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 the principles outlined above
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.
Schneider Electric has implemented a global job architecture to
support HR processes and programs and to enable
Schneider Electric to engage, develop, and move talent 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 supports working towards creating greater
transparency for career development and progression.
Pay competitively and pay-for-performance
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.
Equal pay for equal work
The basic foundational principles of fairness, equity, ethics, and
transparency are fully embedded in the company values. Through
reward policies and processes, employees are compensated fairly
and equitably for the skillset they possess and value contributions
as a business imperative. Over the past eight years, Schneider
Electric has successfully transformed the Pay Equity Framework
covering all employees across all countries of operation. The
company has created a fair and equitable ecosystem of HR
processes and taken proactive actions to prevent new pay gaps
from being created. Salary changes when hiring new recruits,
promoting employees, and reviewing salaries internally are closely
monitored. Managers and HR professionals are trained to be
mindful of every pay decision they make, and to ensure that their
decision process is bias-free.
As part of the Schneider Sustainability Essentials for 2025, the
company has committed to attain and maintain a pay gap below
1% by 2025 for both females and males. At of the end of 2022, the
pay gap was -1.6% for females and 1.02% for males. Note: this
measurement will differ from country figures that may be required
to be reported due to statutory requirements.
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Equal
SSE #18
<1% pay gap for both females and
males
A dedicated Pay Equity budget by country is in place to
create awareness and eliminate unconscious biases during
processes such as salary reviews, and education and
training for leaders, HR and managers. A country-level
governance framework has also been established to
facilitate the attainment of our ambition to achieve pay gaps
of <1% for both females and males.
2020 Baseline
2022 Progress
2025 target
Female
-1.73%
Male
1.00%
-1.6%
1.02%
Living wage
<1%
<1%
Schneider Electric believes earning a living wage is a basic human
right and a key element of decent work. Schneider Electric is
committed to paying all employees at or above the living wage to
meet their families’ basic needs. The Group considers basic needs
to include food, housing, sanitation, education, healthcare, plus
discretionary income for a given local standard of living. This is
guided by our Human Rights Policy and Trust Charter. All
permanent direct employees of Schneider Electric with open ended
contracts or fixed term contracts that are above 1 year are in scope
of the annual gap analysis. Third parties such as suppliers or
contractors or interns are out of scope.
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 of evaluating and mitigating 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 31 December 2022,
100% 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.
In 2021, the analysis covered 63 countries (representing over 99%
of Schneider’s global footprint). As of December 31, 2022, 100% of
relevant employees had received at least a living wage. Where
living wage gaps were identified, corrective action was taken to
ensure that all employees received a living wage and that no new
gaps emerged. In addition to ensuring that all employees within the
scope are paid at least a living wage, Schneider continues to
comply with all applicable federal, state and local minimum wage
regulations.
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From 2021 onwards, the Group underlined 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. In 2022 the Group started
working with a new consultant, Fair Wage Network, with the aim of
improving the geographical coverage, having a dynamic and
web-based living wage benchmark and initiating an independent
review and certification of the living wage gap analysis. As of
December 2022, 100% of the employees were covered by the
review, in 111 countries.
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 the Company 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 to raise the bar by advancing
decent work for its ecosystem and other companies.
2019 Baseline
2022 Progress
2025 target
99%
100%
100%
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2.5 Great people make Schneider Electric a great company
Short-term incentive
Recognition in the company DNA
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 included, the annual short-term
incentives for the Group’s executives and around 64,000 eligible
employees helps 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.
From 2022, Schneider have introduced a Customer First
Performance Criteria in the incentive goals for Group executives.
The Group is building Trust through Superior Customer Experience
and Quality. It measures the Net Customer Satisfaction (NCS)
through real-time digital customer surveys covering six critical
touchpoints as part of the customer operational interactions. Every
employee is part of this journey and is fully empowered to bring
Customer Experience to the highest level. All the results on
Customer Satisfaction are available in the Customer Feedback
Management Platform where all employees are engaged and
empowered to improve the Customer Experience.
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.
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 376.
Every day, Schneider Electric employees make important
contributions to help the organization achieve its mission and key
business objectives. 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 2022, Schneider Electric refreshed the global recognition
program and launched a new platform for recognition with a new
partner. With this program, Schneider brought recognition in the
work ecosystem for employees and also introduced functionality to
put emphasis on the importance of sharing and acknowledging
gratitude in the workplace. Throughout 2022, the recognition
culture remained strong, with many employees continuing to utilize
the dedicated platform to appreciate and recognize colleagues.
Benefits
Benefits provided by the Group represent a considerable business
commitment by Schneider Electric everywhere in the world. The
company 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.
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.
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 well-being at work program – translated into
a dual standard of access to healthcare and well-being training
programs (detailed further in subsection “Supporting employees’
well-being, mental health and unique lives and work”, page 206). It
also provide access to an inclusive and comprehensive standard of
healthcare coverage (outpatient, hospitalization, key health risks/
chronic conditions, maternity, children) defined by local regulations
and employment agreements. Schneider 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.
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Chapter 2 – Sustainable development
Equal
SSE #19
60% subscription in yearly
Worldwide Employee Share
Ownership Plan (WESOP)
Schneider Electric had committed 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 covers 29 recurring
participating countries, among the 42 participating
countries representing 86% of the eligible headcount.
From 53% subscription rate in the recurring countries in
2019, WESOP has reached 62.2% passing the 2025 target
three years ahead of the deadline. The Group aims to
maintain 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 2022 capital increase, together
representing around 30% of the 2022 total subscription.
2019 Baseline
2022 Progress
2025 target
53%
62%
60%
Global Family Leave Policy
As a caring and responsible employer, Schneider launched its
Global Family Leave policy along with care leave in 2017. Through
its policy, the Group 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. The group applies a
continuous improvement approach to all employee benefits and
policies and has made several notable improvements with
employees’ inputs. While the countries have flexibility to define
eligibility and policy details per statutory/market requirements, the
policy sets global minimum standards for paid leave. In 2020,
Schneider expanded its care leave from 1 to 2 weeks for
employees to care for their dependents diagnosed with COVID-19.
In 2022, the Group conducted extensive internal and external
research and will be expanding its Global Family Leave policy from
2023 for all employees globally. Parental leave for birth adoption or
surrogacy will go from 12 weeks paid to 20 weeks paid for primary
leave, and from 2 weeks to 4 weeks for secondary leave. Care
leave will increase from 1 paid week to 2 paid weeks. Bereavement
will remain the same 1 week. Ahead of that, beginning in July 2022,
the Group’s North America operations were the first ones to benefit
from these new expansions. All employees eligible for benefits
have access to this global policy.
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 2022, the Group successfully offered WESOP in 42 countries,
achieving 60.5% subscription rate, a higher rate than in 2021 which
was already at 59%. As of December 31, 2022, the employee
shareholding represented 3.8% of Schneider Electric SE’s capital
and 6.6% of the voting rights. 78% of the Group employee
shareholders were located outside of France, of which 13% are in
China, 15% in India, and 9% in the US. This also includes employee
shareholding resulting from the long-term incentives grants.
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2.5 Great people make Schneider Electric a great company
2.5.5 Social dialogue and relations
2.5.5.1 Context
2.5.5.4 Governance
The International Labor Organization (ILO) describes social
dialogue as “all types of negotiation, consultation or simply
exchange of information between, or among, representatives of
governments, employers and workers, on issues of common
interest relating to economic and social policy.” The objective for a
company to ensure regular and safe social dialogue is to build
consensus amongst all employees’ of the company. To do so,
companies integrate a third unbiased party in discussions to help
resolve issues and encourage change to adapt to global and local
workforce expectations.
2.5.5.2 Risks and opportunities
Social dialogue and freedom of association must be seen within the
wider context of Ethics & Responsibility. As a global company,
Schneider Electric believes that its responsibility goes beyond
compliance with local and international regulations and is therefore
committed to conducting its business ethically, sustainably and
responsibly.
The Group constantly interacts with all its stakeholders across 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.
2.5.5.3 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 dialogue 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 dialogue 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 dialogue as a means to foster decent
work, quality jobs, increased productivity and, by extension,
greater equality and inclusive growth.
Social dialogue is managed at country level by 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 dialogue 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 Health and Safety Committees 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 dialogue at international level.
2.5.5.5 Actions and impacts
European Works Council (EWC)
Since 2014, Schneider Electric has significantly enhanced the
intensity and the impact of social dialogue at European level. This
channel for dialogue aims to enable management to make more
efficient decisions by giving employee representatives the
opportunity to be informed of such decisions and to understand
their reasoning, as well as to put forward proposals to supplement
or improve them.
In this respect, new spaces for discussion were explored in order to
strengthen the contributions of the members of the EWC on
strategic issues. Several workshops for reflection and ideation were
organized, namely during the implementation of the new alert
system and the review of the approach to the duty of vigilance. The
benefits of these workshops were several, starting with a better
awareness of these topics by the members of the European Works
Council, and an opportunity to contribute upstream on decisions
impacting the company’s strategy.
European Works Council members visiting the Innovation Hub in
Le Hive (Rueil-Malmaison)
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Group Works Council, France
Social dialogue in China
Schneider Electric is organized in France through more than 25
legal entities. However, with 80% employee coverage, Schneider
Electric Industries and Schneider Electric France SAS set the tone
for social dialogue in France mainly through the Central Works
Council and the Group Committee. During the first quarter of 2022,
Schneider Electric negotiated a new “work from home” agreement
for its employees in France with the following main objectives: an
increase in the number of beneficiaries, more flexibility, and the
introduction of financial compensation. Around 8,000 employees
currently use telework, up from 6,000 at the beginning of the year.
In addition, the introduction of a new collective agreement for the
Metallurgy branch, the largest Branch in France, effective from
January 1, 2024, has led to the opening of various negotiations,
including one on classification.
This is a major transformation for Schneider Electric in France. All
the trade unions began participating in this deployment during the
second half of 2022, and the project will continue throughout 2023.
At the same time, all the members of the works council have
received specific training regarding roles, Company organization,
and its financial culture.
Social dialogue in the United States
In North America, and more specifically in the US, 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 2022, Company
officials met with the local unions to discuss strategic investments
intended to upgrade equipment, improve efficiency to support
expected demand, enhance the smart factory profile, and reduce
CO2 emissions in several factories. In addition, 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.
Social dialogue in Mexico
In addition to regular communications and in accordance with
Mexican law reform, during 2022 the Group conducted the
legitimization process with the Mexican unions at all Schneider
Electric sites where employees had the opportunity to review their
collective agreements and confirm their agreement and
commitment to the unions and the company. All of these processes
were supported by the Legal and Human Resources teams.
Schneider Electric China has a strong culture of social dialogue
with all employees in over 30 legal entities and at more than 100
sites across the country.
The HR department, in partnership with the union, facilitates active
and open communications with employees and takes action on
employee feedback to enrich their career experience as well as
ensure sustainable talent development. Specific effort has been
made on several key topics in line with employee suggestions,
notably around Learning, Development and Well-being:
• Upskilling programs are now more diversified for all employees
and in targeted job roles, from customer-facing teams to
support functions, with face-to-face and virtual options including
mobile and AI-facilitated, based on 3E methodology (education,
experience and exposure). Employee individual average
learning time has increased to 21 hours.
• There are also more opportunities for employees to develop and
grow in an inclusive workplace that promotes agile organization,
internal talent mobility, and specific development focus for
different genders and generations. 91% of China employees are
now users of the Open Talent Market platform which enables
them to search for internal jobs, projects, and mentorship
opportunities proactively and freely; 200+ project engagements
and 300+ mentorship pairings have been achieved.
• Well-being remains a priority to support the continual
enhancement of the employee experience. In collaboration with
the union, a new Employee Assistance Program was launched
in 2022 with 24/7 online counseling via phone, laptop or mobile
to help employees address work and non-work issues such as
stress management, interpersonal and family problems.
Furthermore, a flexible benefit platform has been introduced
which integrates all employee benefits from both company and
union, allowing employees to make certain personalized
choices based on their own situations.
Social dialogue in India
Schneider Electric India has a strong culture of social dialogue with
all employees, both unionized and non-unionized. Schneider
Electric India continues to engage 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). The Company also has strong engagement with other
committees such as Health & Safety, Canteen, Sports and
Transport, including a special committee for women employees. In
addition, a prevention of sexual harassment committee, which is
fully compliant with the prevention of sexual harassment
governance as per local laws, comprises employees and external
women with specialist knowledge of the subject and with legal
backgrounds. These committees provide a platform for employees
to present 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.
The process of social dialogue also includes monthly employee
communication at plant level, as well as through Quarterly Town
Hall communications on company performance, strategy and
challenges.
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
2.6 Delivering social impact for
a just transition
In this section
2.6.1
Improving lives through access to green electricity
2.6.2
Investing for high social impact
2.6.3
The Schneider Electric Foundation
226
228
233
2.6.4
Schneider Electric Sister Foundations
2.6.5
Social Impact in France
239
240
Context and goals
Schneider Electric has been building a sustainable development
approach since the early 2000s thanks to the Schneider
Sustainability Impact, which measures 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. This accolade, together with the success of
the Schneider Sustainability Impact, further inspired the Group to
do even more and to think about the world of tomorrow by
developing forecasted scenarios, both in the environmental and
climate fields – 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 businesses. The planet has to be saved, and that also
means saving its inhabitants.
Four main action priorities have been defined within the Corporate
Citizenship Department. The first is to ensure that the Group’s
business partners respect all human rights for everyone,
everywhere, at all times and in all situations, from decent work
standards to the creation of a social label for the Group’s products.
In 2022, a new version of the Human Rights Group Policy was
published in order to embark on eight new challenges such as
respect and dignity, Human Rights in cyberspace, conflict
minerals, intergenerational solidarity, Human Rights activities within
the Group’s value chain, migrant workers, civic space and Human
Rights defenders, and access to healthy environment.
The second priority is to ensure that everyone is supported in
building their futures, regardless of their generation: young people
as well as seniors. Schneider has always played an active role in
the economic development of the communities in which it has a
presence, in order to have an impact and to accelerate the just
transition. In 2022, a new program called Future Ready defined the
Group’s roadmap for the coming years.
Youth is also the focus of the third major priority. There have never
been so many young people on the planet, but many have no
access to education Yet it is young people who drive innovation.The
Company has a role to play in supporting them.
The fourth priority is to make citizenship a collective commitment to
co-construct the future in a dynamic way by learning and sharing
across many different initiatives.
“2022 was another year of crisis
leading to growing inequalities, but
also a year of progress and
stronger commitments to go
further along the road to the just
transition in favor of youth, human
rights, respect and dignity. We
strongly believe that we have an
invaluable asset: young people.
There has never been a generation
this vast and receptive. They really
are the main drivers and players.”
Gilles Vermot Desroches, Senior Vice President Corporate
Citizenship & Institutional Affairs
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Chapter 2 – Sustainable development
Progress of our Social Impact commitments
Schneider
Sustainability
Impact
(SSI)
Essentials
(SSE)
#
9.
11.
25.
2021–2025 programs
Provide access to green electricity
to 50M people
Baseline(1)
2022 progress(2)
2020: 30M
+9.7M
2025
Target
50M
Train people in energy management
2020: 281,737
397,864
1M
Increase the number of volunteering days
since 2017
2020: 18,469
41,093
50,000
These programs
contribute to UN SDGs
(1) The baseline year for each indicator is provided together with its baseline performance.
(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 #+1 and SSE #12 in 2022), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 270). Please
refer to page 242 for the methodological presentation of each indicator. The 2022 performance is also discussed in more details in each section of this report.
2022 Highlights
Homaya Pro, a smart solar-hybrid inverter
with an inbuilt MPPT controller, was
launched in 2022. It aims to provide
remote locations with unreliable or no
electricity with customizable, reliable,
and sustainable energy.
In line with our commiment to train people
in energy management, the Indonesia-
France Partnership, has impacted 14,900
students and 1,300 trainers since 2017
Tomorrow Rising Ukraine: an incredible
spirit of solidarity, employees have donated
over €500,000 matched by Schneider
Electric which decide to add €1 million to
the fund and the Schneider Electric
Foundation also donated €400,000.
SEEA’s investment in GoParity, the first in
Europe outside France, which confirms the
importance of participatory and inclusive
financing of the citizen in the implementation
of the energy transition in the world.
+13,112 days of Volunteering in 2022 with
a dedicated part related to mentoring,
a new program of the Schneider Electric
Foundation.
The Schneider Electric Foundation has
reached the bar of 400,000 young people
trained in energy related professions.
Our long-term commitment
2030:
Give access to green electricity to 100 million people cumulatively
since the beginning of the program in 2009
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
2.6 Delivering social impact for a just transition
2.6.1 Improving lives
through access to green
electricity
2.6.1.1 Context
Today(1), more than two billion people have little or no access to
electricity.
In 2020(2), 733 million people had no electricity. Although notable
progress has been made in recent years, in the words of SEforAll(3),
“electricity access is growing, but not for everyone”.
In sub-Saharan Africa, colossal additional efforts are required to
achieve universal access:
• Today, around 570 million people in sub-Saharan Africa do not
have access to electricity. That is close to one in two people in
the region.
• The pace of electrification is not sufficient relative to population
growth, and the COVID-19 pandemic has slowed progress even
further.
• Therefore, in 2030, still close to 570 million people would remain
without electricity in sub-Saharan Africa. That would be 85% of
the unelectrified world population.
Asia-Pacific is approaching universal electrification, thanks to
ambitious government programs. Nevertheless, the grid can be
unreliable or insufficient for productive use in remote areas where it
must be supplemented with renewable energy solutions.
Access to green electricity offers a chance to live a better life,
because 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
Access to Energy’s purpose is to bring green and reliable
electricity to populations in emerging markets, both as a
fundamental right and a means for social and economic
development, by providing a safe, affordable, reliable, and
sustainable energy offer. At Schneider, we call this Electricity for
Life and Electricity for Livelihood.
2.6.1.3 Action & Impact
Schneider’s ambition is to bring green and reliable electricity to 50
million people by 2025, and 100 million people by 2030,
cumulatively since the start of the program in 2009.
Electricity for Life means providing access to green electricity to
off-grid populations and refugees. These communities need
energy as a fundamental right to meet essential needs in homes
(such as lighting, communication and education).
Electricity for Livelihood means providing access to green
electricity to people connected to an unreliable grid and in order to
enable productive businesses. These communities need quality
energy with solar backup equipment as a driver of economic
development and poverty reduction. For example, electricity can
make a real difference to the lives of farmers and ensure food
security through irrigation, food storage, and processing, and by
connecting farmers to markets to ensure better prices, while
allowing people to be the agents of their own transformation.
The Access to Energy social business works in synergy with the
Schneider Training & Entrepreneurship program and the Impact
investment funds, in a virtuous circle of providing products and
solutions, capacity building and support to startups.
Equal
SSI #9
Provide access to green electricity
to 50 million people and 100 million
by 2030
Schneider Electric is providing solar solutions for
190 health centers in South Asia. These facilities were
facing frequent power cuts resulting in lack of access
to quality healthcare for people who depend on public
health centers. The projects are impacting more than
750,000 people.
2020 Baseline
2022 Progress
2025 target*
30M
+9.7M
50M
* cumulated since 2009
(1) Source: Off-Grid Solar Market Trends Report 2020, World Bank
(2) 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).
(3) Sustainable Energy for All (SEforALL) is an international organization that works in partnership with the United Nations and leaders in government, the private sector,
financial institutions, civil society, and philanthropies to drive faster action towards the achievement of Sustainable Development Goal 7 (SDG 7) – access to
affordable, reliable, sustainable and modern energy for all by 2030 – in line with the Paris Agreement on climate.
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S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
A full range of products and solutions to provide green electricity
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 microgrids.
Mobiya
3 products
Portable, robust, and
affordable solution for
individual lighting and
charging a cell phone
Mobiya Original: robust and waterproof solar
powered LED lamp with mobile charger, offering
innovative mounting options, 48 hours of lighting
without recharging, and easy battery replacement.
Mobiya Lite: lighter solar powered portable
LED lamp with mobile charger. White light with
variable intensity and innovative mounting
options enabling it to conveniently light up all
surroundings.
Mobiya Front: rechargeable and robust
headlamp that can be worn and mounted in
various positions. Features a white light with
variable intensity, red light for night vision, and
a red blinking SOS function.
Homaya
5 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, with
Pay-As-You-Go function fully compatible with
all mobile payment platforms.
Homaya Hybrid: AC and DC, solar and grid
home system.
Homaya Hybrid PAYG: AC and DC, solar and
grid home system with Pay-As-You-Go function.
Homaya Pro: smart hybrid inverter powered
from solar with an inbuilt MPPT controller and
compatible with grid charging.
Villaya
3 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 Water: solar water pumping system.
EcoStruxure
Energy Access
Remote monitoring for rural
electrification to enhance
visibility of off-grid site
performance in real time
Offer
• An economically affordable and open
platform enabling sustainable off-grid
electrification.
• A cyber secured, demand-side energy
management software platform.
• Monitoring real-time demand, analyzing and
improving operational efficiency.
• In-built GSM/GPRS communication for easy
installation, remotely configurable and
easily scalable.
• Power and energy modes with limits, remote
connect/disconnect, build local tariff plan,
to better manage peak load.
Case Study: Schneider Electric, its Foundation
and ADEME, the French Agency for Ecological
Transition, are collaborating to provide 45,000
solar lanterns to vulnerable women in Africa.
Objective: Distribute solar lanterns to women
entrepreneurs in order to extend hours of work
activities, as well as to underprivileged women
and families in order to enjoy lighting for
nighttime home activities and to limit the use of
kerosene lamps.
Solution: Mobiya Original. An impact study is
being conducted, measuring the benefits of the
solution across five African countries: Kenya,
Nigeria, Cameroon, Benin, and Senegal.
Case Study: 10 health clinics in remote and rural
areas of DR Congo have been equipped with
access to clean and reliable electricity through
Schneider Electric’s solar home systems solution.
Objective: Provide clean and reliable access to
electricity to health clinics and to medical staff in
their workplaces.
Solution: Homaya Hybrid Solar home system.
Case Study: 150+ farmers in Bangladesh are
able to raise multiple crops because of reliable
irrigation, impacting the lives of more than 800
rural people.
Objective: Develop a reliable and sustainable
solution for farmers to irrigate their farms with
clean energy solutions.
Solution: Solar water irrigation pumps installed
in remote area in Bangladesh.
Case Study: 600 women tribal farmers in India
are able to raise multiple crops per year due to
reliable irrigation enabled via solar irrigation
pumps and EcoStruxure Energy Access
Livelihood digital platform. This is impacting the
lives of 3,000+ indigenous people.
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S T R A T E G I C R E P O R T
2.6 Delivering social impact for a just transition
2.6.2 Investing for high social impact
2.6.2.1 Context
Social Impact Invesment (SII) is a medium for organizations to
address and finance social needs with the explicit objective of
having a positive and measurable impact.
All actors of society have a role to play to support social well-being
and help people access development opportunities. The rising
importance of SII forces companies to think of new ways to support
social businesses. Hence many are building partnerships with local
and international actors to drive and nurture innovative and
responsible initiatives.
2.6.2.2 Group Impact Investing policy
The ambition of Schneider Electric’s Impact Investing practice is to
contribute to a transition towards a fairer and more inclusive
society. Supported by its strong and deep knowledge of the energy
ecosystem, Schneider Electric focuses its Impact Investing mission
on funding and supporting high social and environmental impact
initiatives, which are contributing to a better future and positively
impacting climate and resources.
The goal is to generate high social impact while protecting the
assets under management. Accordingly, Schneider Electric has
adopted strict management rules, such as:
• Always investing in partnerships with recognized players;
• Never taking a majority stake;
• Always providing efficient company support (such as helping
develop a business plan or provide technical advice) to deliver
the optimum social impact while minimizing risk;
• Ensuring alignment with the Schneider Electric ecosystem;
and
• Ensuring that ethical business practices and rules are
implemented and 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
which is in charge of ensuring compliance with all legal and
ethical regulations. In most cases investors are represented on
this board.
• The second one is a Management Investment Committee which
can either be totally independent or composed of 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 an
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.
2.6.2.4 Actions and Impacts
As early as 2009, Schneider Electric was a pioneer in the
Corporate Impact Investments space and launched its first
investment vehicle, Schneider Electric Energy Access (SEEA).
Since then, the company has never stopped innovating. In total, it
has initiated or participated in four vehicles targeted at:
1. Contributing to an inclusive economy with Schneider Electric
Energy Access (SEEA)
2. Bringing access to green energy and contributing to Net Zero in
South and South-East Asia with Schneider Electric Energy
Access Asia (SEEAA)
3. Enabling green energy access in Africa with E3 Capital impact
fund (formerly EAV)
4. Contributing to global decarbonization with the Livelihoods
Carbon Funds
Regardless of geographies or the type of investment vehicle, all
these Impact Investing activities aim to 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.
1. Contributing to an inclusive economy with
Schneider Electric Energy Access (SEEA)
SEEA is an Impact Investing structure in the form of a variable-
capital SAS (simplified joint-stock company), 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).
SEEA contributes to an inclusive economy for the benefit of the
most vulnerable people and communities worldwide. SEEA brings
together different stakeholders by inviting Schneider Electric’s
employees and business partners around the world to play an
active role in this commitment. At the end of August 2022, 6,487
(past or present) Group employees in France had invested EUR
43.2 million in the Schneider Energie SICAV Solidaire fund.
Since 2009, SEEA has invested in 25 companies and exited from
ten. In 2022, SEEA invested in three new companies (Kajou,
Enogrid, GoParity), re-invested in two companies (Dorémi and
Okra Solar) and exited from two (SunFunder, Foncière Chênelet).
2009
2011
2015
2017
2020
2021
Launch of
Schneider
Electric Energy
Access (SEEA)
Investment in
Livelihoods
Carbon Fund #1
Launch of
Energy Access
Venture (EAV)
Investment in
Livelihoods
Carbon Fund #2
Launch of
Schneider
Electric Energy
Access Asia
(SEEAA)
Investment in
Livelihoods
Carbon Fund #3
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As of December 2022, SEEA portolio included 15 companies, 10 in
France, with five operating in Africa, South-East Asia and Latin
America, 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).
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:
− Five invested companies for a total of EUR 2 million (Foncière
du Possible, LVD Energie/HomeBlok, Soliha BLI, Dorémi,
Réseau Eco-Habitat)
Réseau Eco Habitat (REH)
Réseau Eco Habitat is a French social enterprise that offers
social and technical support to help very low-income
households carry out energy-efficient renovations. REH also
offers social support to help vulnerable families get out of
energy poverty. REH has a strong social impact, by
substantially improving the living conditions of people in very
precarious situations, but also economic impact, by supporting
local construction companies, and environmental impact, by
reducing the carbon footprint of renovated housing.
Their goal is to renovate 200 houses between 2021 and 2026.
• Promote digital and financial inclusion:
− Two invested companies for a total of EUR 430,000 (SIDI, Kajou)
Kajou
Kajou is a social enterprise dedicated to distributing
educational and informative content directly to the phones of
vulnerable populations in West Africa with little or no internet
connection. Access to quality information, education and
entertainment content is a prerequisite for empowering
people and building more just and inclusive societies.
Kajou’s catalog of more than 30,000 pieces of content is
available in 24 languages and has been accessed by more
than 47,000 users since its inception in 2019. Within the next
10 years, Kajou aims to give 10 million people the means to
inform, educate and develop their professional activity thanks
to tailor-made content with a strong social impact.
Photo: Kajou; Two Burundi children using Kajou solutions.
• Provide access to affordable, clean and sustainable energy:
− Four invested companies for a total of EUR 1.5 million (Okra
Solar, Amped Innovations, Enogrid, GoParity)
Amped Innovations
Amped is a social company that designs and distributes
affordable and efficient energy products and appliances for
use in homes and small businesses. An integrated PAYGo
system enables Amped’s partners to reach their customers,
who are able to become more economically efficient and
more comfortable.
Amped has already impacted over 300,000 lives since 2019.
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after renovation.
Photo: Amped Innovation, WOWSOLARTM, lighting and phone
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2.6 Delivering social impact for a just transition
• Promote job creation, income generation and inclusion:
− Four invested companies for a total of EUR 550,000 (Talendi,
Incubethic, Envie Rhône Alpes, Fabrik à Yoops)
Goal to increase access to affordable and reliable
energy.
This goal primarily targets unprivileged communities where last
mile energy access is either not available or unreliable. SEEAA
aims to create social impact for these rural communities. For
example, this can be achieved through companies that provide
access to energy for productive and income-generating purposes,
like Oorja Development Solutions.
Oorja provides clean energy agri-services such as reliable irrigation,
agro-processing and cold-storage, powered by solar, and is cheaper
than the diesel options. The services are offered on a pay-per-use
basis, which make them affordable to the small and marginal farmers
targeted in remote weak-grid areas of Northern India.
As well as having a positive impact on CO2 emissions, Oorja helps
farmers increase income and reduce food waste. The company
also creates jobs by hiring operators to run the solar systems.
Some key impact figures for Oorja, as of September 2022 and
cumulative since the company inception:
• 880 tons CO2 equivalent saved
• 12,750 direct and indirect users
• + 30 jobs created in last-mile rural communities
• 28.5 tons of food waste saved
• 57% increase in user’s agricultural income in a year
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.
Goal to accelerate transition towards renewable energy
and net zero.
Enabling the transition of economies to clean renewable energy
sources and supporting solutions that reduce CO2 emissions can
be achieved by investing in companies like Xurya which are
developing renewable energy assets such as solar or biogas.
Xurya is a clean energy services company that provides solar
installation services for clients via process management from
installing and monitoring to maintenance and billing. It focuses on
rooftop solar installation for Commercial & Industrial clients from
sectors including FMCG manufacturing, cold chain logistics,
industrial manufacturing, and shopping centers.
La Fabrik à Yoops
La Fabrik à Yoops is a social company that specializes in
building small wooden houses (known as Tiny Houses) for
homeless people or those with precarious living conditions.
La Fabrik à Yoops aims to help the most vulnerable people
access shelter, regain confidence, find jobs and re-integrate
into society. Furthermore, the tiny houses are eco-friendly and
have a very low carbon footprint.
This project will make it possible to house 140 people living
on the streets of France within five years.
Photo : La Fabrik à Yoops, a recently built tiny house
beneficiary.
2. Bringing access to green energy in 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 is 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 envisioned the SEEAA impact investing vehicle in
2018 to help the region tackle these challenges and advance
towards SDG 7 “Affordable and Clean Energy”. Three other investors
joined forces with Schneider: the European Development Finance
Institution Management Company (EDFI MC), Norwegian Investment
Fund for Developing Countries (Norfund), and Amundi Finance et
Solidarité (Amundi), committing a total of EUR 20.9 million.
SEEAA, through its dedicated Schneider management team based
in Singapore, 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. As of December 2022, SEEAA had invested in
seven start-up companies, Freyr Energy, Xurya, Frontier Markets,
Oorja Development Solutions, ATEC, Carbon Masters and SMV, for
a total of EUR 4.5million, contributing to both of the SEEAA’s goals:
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Xurya offers solar energy and energy services to clients through a
leasing model where the clients do not have to pay any upfront
investment cost. Through this innovative financing arrangement,
Xurya helps foster adoption of solar energy in Indonesia and
creates job opportunities and also helps structure the solar
ecosystem in Indonesia by training their network of installers.
Some key impact figures for Xurya, as of November 2022 and
cumulative since the company inception:
• 35MWp of solar capacity installed
• 40Mtons CO2equivalent saved
• 750 cumulative jobs created
Zonful Energy
Zonful Energy is a for-profit social enterprise that sells
modular decentralized and scalable solar energy systems via
a Pay As You Go model to rural, urban and peri-urban off-grid
consumers in Zimbabwe. The systems consist of solar panels,
batteries and a broad range of appliances including lights,
radios, televisions.
Photo: Zonful; solar panel installation.
• 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)
SolarX
SolarX provides reliable, clean and affordable energy
solutions to commercial and industrial clients in West Africa.
The company also offers easy access to financing and
energy efficiency services, enabling its customers to focus on
their core businesses.
SolarX contributes to increasing clean energy generation and
to job creation and economic development thanks to reliable
and affordable energy for businesses.
Indonesia: solar rooftop installation.
© Xurya Daya Indonesia.
3. Enabling green energy access in Africa with E3
Capital impact fund (formerly EAV)
Schneider Electric initiated and supported E3 Capital, 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, British International Investment (BII) (on behalf
of the Foreign, Commonwealth and Development Office (FCDO)),
the European Investment Bank, FMO (Dutch development Bank),
FISEA-PROPARCO, OFID, and AFD-FFEM.
At the end of 2022, E3 Capital had invested in 15 companies and
exited one. The E3 Capital’s independent management team based
in Nairobi (Kenya) is now focusing on enhancing value creation in
the portfolio, follow-on investments, and on driving liquidity events.
E3 Capital 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, BBoxx, Nuru in DRC, Zonful Solar Energy in
Zimbabwe, ZIZ Energy in Chad)
Photo: SolarX installation.
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2.6 Delivering social impact for a just transition
4. Contributing to global decarbonization with the
Livelihoods Funds
Schneider Electric is a founding member of the Livelihoods Carbon
Fund. The first sustainable carbon fund with high social impact,
was created in 2011 and is managed by an independent team
based in Paris.
Schneider Electric invested EUR 35 million in Livelihoods Carbon
Funds #1, #2 and #3.
A total of EUR 290 million, invested by private companies and
financial investors, is dedicated to investing in high potential carbon
offset projects to generate positive impact for people and the planet.
Projects supported by Livelihoods Carbon Fund #1 (2011) have
already impacted 1 million people and avoided or sequestered
over three million tons of CO2. Carbon Fund #2 (2017) aims to
benefit 2 million people and to avoid or sequester 12 million tons of
CO2 over 20 years while Carbon Fund #3 (2021) objectives are to
benefit another 2 million people and to avoid or sequester 30 million
tons of CO2 over 20 years.
The Livelihoods Funds support three types of projects: reforestation,
agroforestry, and agricultural practices and rural energy.
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 by restoring the ecosystem and encouraging
lifeforms such as fish and crabs.
Livelihoods Agroforestry projects enable farming communities to
increase their revenues thanks to improved conditions for cash
crops such as coffee or cocoa and the planting of fruit trees such
as mangoes. In addition, the Livelihoods Funds contribute to the
creation of new downstream activities such as food processing and
commercialization.
Rural energy projects play an important role in improving women’s
lives and create jobs through the construction and distribution of
cookstoves.
All these projects are an integral part of Schneider Electric’s
Carbon Pledge: the carbon credits generated are used to offset
carbon emissions. For example, part of these carbon credits is
used to offset all the carbon emissions generated by the Schneider
Electric Paris Marathon; the race is carbon-neutral since 2019.
As of December 2022, the total carbon credits accumulated since
2011 was 426,548 tons, of which 100,546 tons have been used to
offset Schneider Electric’s Paris Marathon carbon emissions.
• Promote digital and financial inclusion:
− Three invested companies for a total of EUR 8.9 million
(Mawingu, Solarise Africa, Palgo in Kenya)
Mawingu
Mawingu Wifi is an affordable internet service provider
leveraging solar-power and high-quality, affordable radio
technologies to provide internet connectivity to rural and
peri-urban areas in Kenya.
Mawingu employs several hundred people and have served
more than 180,000 customers.
Photo: Mawingu customer.
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2.6.3 The Schneider Electric Foundation
2.6.3.1 Context and goals
Today’s younger generation is the first generation to feel the direct
impact of climate change and certainly the last generation capable
of doing anything about it.
Beyond simply being aware, younger generations are already
heavily involved in climate and social transition initiatives led by civil
society, for example through climate marches and citizen
movements emerging all over the planet, but also through their
career choices, volunteering, involvement in NGOs and more.
Connected to each other like never before, young people today want
to contribute to the resilience of their communities, by putting forward
innovative solutions, stimulating social progress and inspiring new
political movements. They are also agents of change, taking action to
achieve the United Nations Sustainable Development Goals (SDGs)
and thereby improve people’s lives and the health of the planet.
2.6.3.2 Group policy
To successfully secure a sustainable future for humanity, younger
generations express the same need for guidance, training and
recognition. At the Schneider Electric Foundation, under the aegis
of Fondation de France, our goal is to support these young people
and empower them to get involved and innovate, so that they can
take their rightful place in the world of tomorrow being built before
our eyes today. We go about fulfilling this objective each and every
day, all over the world, through concrete initiatives and programs.
The Group’s first philanthropy policy was published in 2022, with
full implementation planned for 2023. Its objective is to define
Schneider Electric’s position on philanthropy, its priorities and its
principles of action, in line with the UN’s 17 Sustainable
Development Goals (SDGs). It will provide a coherent and
consistent framework enabling Schneider Electric entities and
employees to contribute and act.
In 2022, more than 170 projects were active, supporting 69,393
young people through 13,112 days of volunteering. With an annual
budget of EUR 4 million, the Schneider Electric Foundation
contributes to partnerships that are made possible by more than
EUR 17.5 million support from Schneider Electric’s entities. Group
employees are also involved in these partnerships. In total, more
than EUR 23.5 million has been invested to help local communities
worldwide.
2.6.3.3 Governance
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 (945 in 2022) 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.
Since 2019, the composition of the Schneider Electric Foundation’s
Executive Committee is as follows:
• 10 Members: 5 from Schneider Electric (including The Chairman
and 2 representatives of the employees) and 5 external experts.
• 1 observer from Fondation de France
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 members of the operational team are:
• General Delegate;
• Corporate Philanthropy Director;
• Employee Engagement Leader;
• Administrative and financial Assistant;
• Mentorship Leader;
• Social impact assessment Leader.
Lastly, the Foundation’s Selection Committee is composed of:
• General Delegate;
• Corporate Philanthropy Director;
• Program Director, Training & Entrepreneurship.
2.6.3.4 Key actions driven by the Schneider
Electric Foundation
Schneider’s global presence allows it to have a greater reach and
impact on underserved communities. The Group believes in
contributing through different initiatives such as the Schneider
Electric Foundation programs and initiatives. Through charity and
donations, teaching and lending its time, the Company will support
local organizations and stimulate communities.
In fact, Schneider focuses on two key elements:
1. Developing access to education and entrepreneurship for
the youth with its Youth Education and Entrepreneurship
Program deployed globally.
2. Acting as a corporate citizen by supporting international causes
with its Tomorrow Rising Fund, in 2022, it was dedicated to
employees in Ukraine and their families.
2.6.3.5 Youth Education and
Entrepreneurship Program
Context and goals
Today’s young people are forward-thinking and creative. We need
to empower them with the necessary skills and support to create a
life aligned with their dreams and aspirations. Education,
technological and social innovation and entrepreneurship are all
essential ingredients to ensure that these initiatives are relevant
and effective, that they have the biggest possible impact and are
appropriate responses to the needs of beneficiaries.
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2.6 Delivering social impact for a just transition
Group Policy
Actions
The program is divided into three main areas:
1. Support access to qualitative jobs through vocational and
entrepreneurship training in the energy field, key drivers of
socio-economic and sustainable development across
generations.
2. Learn new skills for the future, technical and soft, giving
younger generations the boost they need to succeed and build
the world of tomorrow.
3. Create the right ecosystem to spread entrepreneurial spirit
and encourage innovation, enhancing younger generations to
define their future and take part in social and environmental
challenges.
Resources
SSI #11
Train 1 million people in energy
management
The Youth Education and Entrepreneurship program has
supported the training of 397,864 people worldwide since
2009. More than 6,500 trainers and 5,500 entrepreneurs
have also been supported. After COVID-19. we are
committed to go further and faster by reaching a total of
one million people trained by 2025, 10,000 entrepreneurs
supported, and 10,000 trainers trained.
In June 2022, we celebrated “Indonesia-France
Partnership with Schneider Electric” in Jakarta. Since 2017,
the Ministry of Education, Culture, Research & Technology
Indonesia (MoEC), Ministry of National Education of France
(MENESR), SE Foundation and SE Indonesia, have created
one Center of Excellence in Bandung and renovated 125
vocational high schools (SMK) in Indonesia. The
partnership’s focus is on electrical installation, industrial
automation and renewable energy. More than 14,900
students and 1,300 trainers have been impacted.
The Youth Education & Entrepreneurship program aims to give all
young people the means to build solutions for a better life,
contribute to a fairer, low carbon society, and transform the world.
By funding projects, sharing its expertise, volunteering employees’
time and collaborating with its partners on the ground, Schneider
Electric is empowering younger generations and the broader
community to achieve a better future through sustainable
development.
The Schneider Electric Foundation promotes volunteering activities,
through the VolunteerIn association, and mentorship as key
contributions to the success of youth projects and initiatives
through the mobilization of Schneider Electric employees.
Schneider Electric’s ultimate goal is to skill and empower one
million young people in energy management by 2025, and to train
10,000 trainers and support 10,000 entrepreneurs.
Governance
The Program follows the rules and governance of the Schneider
Electric Foundation and Fondation de France.
To increase the effectiveness of following up the partnerships and
achieve the 2025 ambition, every six months the program is
evaluated by the zone President, the Foundation representatives,
and the Youth Education & Entrepreneurship program leaders.
Each zone has a defined ambition up to 2025 and a pipeline of
projects that is reviewed under regular review. Corrective actions
are implemented if necessary.
The program is led by zone representatives and in-country leaders
that share ideas on a daily basis. A global coordinator 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 use a centralized tool to report on
the impact of the program, and data is reviewed by an external
auditor. With rare exceptions, all projects benefit from monitoring by
employees of Schneider Electric entities operating in the countries
concerned.
The Schneider Electric Foundation has broken new ground in the
measurement of social impact and aims to enable its partners to
better fulfill their missions by identifying areas for improvement. The
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. For
example, CLER, the Energy Transition Network, has used this
methodology. In 2020–2021, the Foundation conducted an impact
assessment study of its involvement in the COVID pandemic.
More recently, the Foundation conducted a study of employees’
volunteering, working with the Goodwill company.
2020 Baseline
2022 Progress
2025 target*
281,737
397,864
1M
* cumulated since 2009
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1. Support access to qualitative jobs through vocational
training and entrepreneurship in the energy sector
Training in the energy field provides an inclusive answer to several
challenges of the United Nations Sustainable Development Goals
(SDGs). For more than 10 years the group has been supporting
technical and vocational education and training (TVET). 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. Its second role is to build a generation of skilled
manpower, which is required 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. Schneider Electric’s strategy, backed by its
Foundation 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;
• The training of trainers to support the effective and quality
roll-out of training down the line.
Schneider Electric and its Foundation are developing digital
training to complement the training offered in energy and
automation. Theoretical courses but also practical courses will be
created to deliver comprehensive training curricula, that can be
followed online only or through blended learning (a mix of in-class
and online training).
The Youth Education & Entrepreneurship program has a specific
focus on supporting youth, refugees, women in vulnerable
situation, 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.
2. Learn new skills for the future
Since 2022, the Youth Education & Entrepreneurship program
supports the spread of the skills to unlock current and future
opportunities for the youth.
Current uncertainty and a fast-changing environment require every
individual to be able to adapt. The future of work will look more flexible
and encourage every individual to reinvent themselves during their
professional career. The programs help build digital skills, relational
and collective intelligence, and encourage the youth to become
change makers and create a future aligned with their aspirations. The
value of technological competence cannot be underestimated but is
not the only goal in equipping the youth with skills for life, employment,
and entrepreneurship. We believe in integrating both formal and
non-formal education to provide a flexible and personalized learning
experience and ensure the youth can adapt to changing and diverse
circumstances, identify opportunities for growth and innovation.
The projects deliver support to young people over a period of 3
months minimum.
Conserve My Planet program India
The objective of the Conserve My Planet program is to embed
sustainability into communities where there are both energy and
environmental challenges, by educating young people on energy
conservation. Conserve My Planet (CMP) is a participative educational
green initiative created by Schneider Electric India Foundation for
students of class 5th Standard-7th standard (10–14 years). The whole
program follows the activity-based learning model. We teach them
about Energy Efficiency, Recycling Concepts, Reduction in E- waste,
Water conservation, Plantation etc. They are taught the preliminary
concepts of Energy Audits etc. It is also a fun program where children
are given the role of Green Cops and Green Detectives and by the
end of the program are termed as “Green Ambassadors”. In 2022,
CMP program was introduced into 50 schools across 5 metro cities
(Delhi, Mumbai, Hyderabad, Bangalore and Chennai) of India in
collaboration with SHARP NGO, impacting 6,000 students.
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2.6 Delivering social impact for a just transition
Testimony of a trainee in South Africa
The Centre of Excellence at the Vaal University of Technology
(F’SASEC) was developed through a partnership between the
French Ministry of Education, Schneider Electric South Africa, the
Schneider Electric Foundation and the Vaal University of
Technology, to train underprivileged students who are unable to
afford to study at a TVET college
or university in the fields of electricity, energy and automated
systems control.
The projects deliver support to young people over a period of 3
months minimum.
The Schneider Electric Foundation also supports emblematic and
international programs by making available its knowledge of energy
systems management, through donations in resources and/or
knowledge, to encourage innovation for the energy transition. 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:
“Landing at the center of excellence (French South
African Schneider Electric Training Center) was the
perfect stepping-stone for me to launch my career. I
came in as a student, having no background in
electrical engineering or the essential requirements
to be in that field of study. It became a little
challenging for me, but I managed to work my way
up with the help of the brilliant facilitators we had. I
worked really hard till I was offered a job. If you wish
to become an Engineer, but don’t know where to
start because of funds or low pass rates on your
matric certificates, F’SASEC is the stepping-stone
for your dream to come true.”
Khomotso Monyai, who secured N1 and N2 Electrical
qualifications from F’SASEC and N3 Electrical
Engineering from Sedibeng College.
• 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).
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.
The Solar Sound System project by Atelier 21, a Foundation partner,
has been granted 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 means of 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, is
promoting this portfolio of solutions to corporate and political
leaders worldwide. At the end of 2021, 1,000+ solutions had
already been granted the Solar Impulse Efficient Solution label.
These included insulating blocks made from hempcrete, wind
turbine floats, and a web-based pallet exchange platform.
In 2022, with the support of the Schneider Electric Foundation an
exhibition of the solutions was organized in the Schneider Electric
premises in Grenoble, known as Intencity, this exhibition was
attended by more than 2,000 visitors.
3. Create the right ecosystem to spread entrepreneurial
spirit and encourage innovation
Impacts of the Youth Education &
Entrepreneurship program
The Youth Education & Entrepreneurship program, with a wide
range of partners is designed to engender a sense of creativity,
innovation and risk taking among young people. Innovation and
creativity can help young people become resources in co-creating
solutions for the social and energy transition. They can inspire
policy making and help solve problems adapted to the local
context.
Programs are specifically designed to inspire young people,
delivering soft and technical skills, mentoring young people and
supporting their network development, to help them create their
own project from conception to completion. This builds creative
and innovative thinking and the ability to turn challenges into
opportunities. They can choose to become effective entrepreneurs
or to continue with another activity. We encourage them to work in
groups and participate in collective thinking.
The involvement of women in the energy sector
Since the beginning of the Youth Education & Entrepreneurship
program, female participation in energy training 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. For Schneider
Electric and its Foundation, it is essential to include women in all
stages of the energy value chain. Most programs today only
include women in non-technical and non-essential activities, such
as selling solar products.
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Schneider Electric Foundation’s Youth Education &
Entrepreneurship Program supports local organizations
specializing in skills development and female 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.
“An innovative experience! It was something
new in my life, but I always say it was one of the
best experiences I’ve ever had – I fell in love
with electric!”
Vitoria Eliziario – 17 years old – former student at AFESU
Since 2021, Schneider Electric Brazil, the Schneider Electric
Foundation and the Non-Governmental Organisation, associacao
feminina de estudos sociais e universitarios (AFESU), come together
to improve the equipment required for technical training in industrial
automation and spread the know-how in AFESU training centre.
Promoting self-employment initiatives in the energy
sector
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. The Youth Education & Entrepreneurship program is
providing informal entrepreneurs and those trained in the electricity
sector with support in setting up their own businesses.
Since 2017, 52 technical laboratories in electricity and energy
management have been upgraded in Pakistan’s Punjab province,
7,129 youths have been trained and 2,331 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. Due to the floods in 2022, Muslim Hands,
Schneider Electric Pakistan and the Schneider Electric Foundation
have decided to join forces and provide 1,000 tool kits to the young
qualifying graduates in the flood affected areas to ease their
access to the employment by promoting self-employment
initiatives.
Supporting trainers’ skills development in the energy
sector
The international community has pledged to provide quality
education for all by 2030. School leaders and trainers play a key role
in delivering quality education. The key challenge for trainers in the
energy sector is to provide young people 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 economic self-sufficiency.
The Youth Education & Entrepreneurship program 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. The program also supports the trainers in
upgrading training curricula and adding new modules relevant to
the market needs. We actively work to develop our trainer
instruction program by opening more and more centers dedicated
to this type of training. Training of trainers ensures effective
long-term transmission of quality, up-to-date knowledge. Training of
trainers is supported by the VolunteerIn association via missions at
the partners training centers: IEEM, Bengaluru, Karnataka, India
(Institute of Electricity and Energy Management) was established in
collaboration with the Karnataka Government, Schneider Electric
Foundation, Schneider Electric India and the French Ministry of
Education in January 2014.
At IEEM, trainers and teachers from Industrial Training Institutes and
Schneider Electric India Foundation’s partnered training centers, get
trained in an intensive and comprehensive 24 days training program.
They are trained in the latest technologies and practices in a field of
electricity such as safety and security, domestic distribution and
installations, industrial distribution and installations, energy quality,
renewable energies and energy management. More than 1,480
trainers have been trained since the beginning.
Develop volunteering and mentorship as a key
contribution to the success of youth projects
and initiatives
In December 2022, a new mentoring partnership was launched
allowing employees to take extended volunteer leave to become
youth mentors through the Raise Foundation. These employees will
be able to take more than double their usual volunteer leave
allocation of 21 hours per year to meet the requirements of the
program and best support their young mentees.
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2.6 Delivering social impact for a just transition
The Schneider Electric Foundation strongly focuses on the
involvement of Group employees in all its activities. Whether they are
Foundation delegates or employee volunteers, these individuals 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, especially abroad;
• The Schneider Electric entities host the volunteers when the
mission takes place outside their country of habitual residence.
The Schneider Electric VolunteerIn Executive Board is composed of
Schneider Electric leaders:
• Chairman, Chief Human Resources Officer;
• Vice-President,
• Secretary, in charge of the Training & Entrepreneurship program;
• Treasurer, in charge of the SEEA solidarity investment fund;
• Member, Vice President, Diversity, Equity, Inclusion & Well-Being;
• Member, volunteer representative;
• Member, Senior Vice-President Corporate Citizenship and
institutional affairs.
Youth Education & Entrepreneurship program: key figures and 2025 targets
People trained
since 2009
397,864
Trainers trained
since 2009
6,992
Entrepreneurs trained
since 2009
5,616
2025 target:
1m
2025 target:
10k
2025 target:
10k
Breakdown of people trained by geography since 2009
3,572
people trained
in 2022: 687
6,413
people trained
in 2022: 193
48,866
people trained
in 2022: 21,200
87,411
people trained
in 2022: 11,710
50,146
people trained
in 2022: 2,118
27,620
people trained
in 2022: 4,981
173,836
people trained
in 2022: 26,356
Americas
Africa
Middle East
China
Asia & Indonesia (excl. China, India)
India
OECD
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One to two Executive Board meetings are organized each year.
The Schneider Electric Foundation draws on a network of around
85 delegates, covering 80 countries. Their role is to select local
partners in the fields of vocational training in the energy sector, and
to support entrepreneurship, sustainability awareness and
volunteering initiatives, particularly mentorship. The delegates
inform employees about their entity’s activities, and also about the
Foundation. 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. Following a project’s launch, progress and reporting is
monitored by the delegates.
The delegates manage a digital platform known as VolunteerIn, that
brings together all the missions proposed by the Foundation locally
and internationally. Available in 34 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.
During 2022, these included the Tomorrow Rising fund and the
Giving Tuesday dedicated for Mentoring scheme as well as the
International Volunteer Day which focused on mentoring and will
continue for the next two years. These campaigns showcase local
initiatives to a global audience. Delegates also participate in
campaigns following natural or other disasters. For example, in
2022 employees responded enthusiastically to the launch of the
Tomorrow Rising Ukraine campaign. In 2023, an assignment
campaign will be conducted to renew the Foundation delegates’
mandates.
Generations
SSE #25
50,000 volunteering days since 2017
2.6.3.5 Tomorrow Rising Ukraine:
an incredible spirit of solidarity
Context and Goals
The war in Ukraine has had profound humanitarian, geopolitical and
economic ramifications for Europe and the world. In addition to
disrupting global food and energy supplies, the conflict has claimed
tens of thousands of lives. It has devastated critical civilian
infrastructure and has displaced more than 13 million people.
Actions and Impacts
Schneider Electric employees have always demonstrated an
incredible spirit of solidarity in the face of crisis. Through the
Tomorrow Rising Campaign Schneider Electric employees have
donated over EUR 500,000 matched by Schneider Electric which
decided to add EUR 1 million to the fund. Schneider Electric
Foundation also donated EUR 400,000.
A special steering committee is being established to take charge of
organizing the appropriate release of funds to support Ukrainian
colleagues and families, based on their needs. The actions of our
employees from around the world are already contributing by
providing material donations, hosting families and children, or
supporting refugees and NGOs’ missions.
The budget has been leveraged to provide more than 500
individuals (Schneider Electric Ukraine employees, agency workers
and their families) with hardship allowance, settlement allowance,
housing support, psychological support, foreign language lessons,
and legal support over more than six months.
The project supported the following NGO initiatives:
• SOS Children village
− Providing complex and long-term care for over 150 Ukrainian
children and caregivers who were welcomed in SOS
Children’s Villages in Poland, Romania and Lithuania, and
also revamping electrical installations
• SOS Attitude
− Providing support to set up a refugee camp in Moldavia with
tents and electrical equipment, and distributing food and
water
In 2022, employee participation in the activities of the
Schneider Electric Foundation greatly increased.
• Global Compact Ukraine
− Providing on-line psychological support
Schneider Electric employees show a high level of
commitment to give back. Mainly through digital and
remote missions, they demonstrated their ability to adapt
and to help the most vulnerable; especially young people in
need of support and coaching. With more than 13,112
volunteering days in 2022, over 80% of the 2025 target for
this indicator has already been reached.
2020 Baseline
2022 Progress
2025 target
18,469
41,093
50,000
2.6.4 Schneider Electric
Sister Foundations
The Schneider Electric Foundation operates in 100 countries
across all continents. Its impact is reinforced in some regions
through the activities of sister foundations in North America, India
and Australia.
2.6.4.1 North America
The Schneider Electric North America Foundation provides
monetary support, products, expertise, and volunteers to non-profit
organizations that align with business priorities, values and
geographies. We drive change in our communities through our
Foundation. We also offer 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;
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2.6 Delivering social impact for a just transition
• 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 that focus on supporting the Schneider Electric
Foundation areas:
• Disaster Relief – Provides support to those impacted by
disasters through American Red Cross and the Footprint
Project. This year our partnership with Footprint Project won a
Time Magazine award and was highlighted in a Microsoft Ted
Talk video
• Habitat For Humanity – Supports sustainable and transformative
housing with product donations, financial support, and more
than 5,000 hours of work by volunteer employees
• FIRST Robotics – Inspiring future leaders through STEM
education with employee mentors and financial support, we
impacted over 1,200 students this year
• National Merit Society – Invests in the future by providing
scholarships for children of employees
In 2022, the North America Foundation contributed over 6.6 million
dollars in cash and product donations to over 1,700 charitable
organizations.
2.6.4.2 India
During 2022, Schneider Electric India Foundation (SEIF), which is
the CSR arm of all Schneider Electric business entities in India,
focused on:
Training in energy management project
26,814 unemployed youth were trained, including 1,460 females,
with 291 trainers also being trained. In addition, 140 entrepreneurs
started their journeys in the energy profession through SEIF’s skill
development program, which is spread across 27 states in India.
Clean to sustainable livelihood project
2,400 indigenous farmer families were supported to ease access to
reliable irrigation through solar powered pumps and grow two or
three crops in a year under the ‘Clean Energy for Sustainable
Livelihood’ project. This took place in the very remote villages of
Bihar, Jharkhand and Odisha. The project impacted the community
by doubling the annual income of women smallholders and
farmers, and ensured food and nutrition security.
Conserve my planet project
To build responsible communities which are sensitive towards
conserving energy and environment, we are training 6,045 school
children, the future leaders of tomorrow, across five metro cities
under the Conserve My Planet Program. Additionally, SEIF will
provide scholarships to 55 meritorious engineering and diploma
graduates from underprivileged backgrounds by the end of the
year.
Planting trees project
More than 150,000 trees have been planted in order to help save
the environment and increase Carbon Sequestration.
SEIF encourages in-house employees to participate in all the above
initiatives, and during 2022 more than 450 volunteers contributed to
500 volunteering days. Approximately 300 Schneider Employees
shared their knowledge with underprivileged young people training
to be electricians by taking part in guest lectures delivered under
the Teacher’s Mission Initiative.
2.6.4.3 Australia
In 2022, Schneider Electric Pacific Fund contributed AU$385,000
to major Australian charity partners – Live and Learn, Australian
Wildlife Conservancy, Kokoda Track Foundation, Brotherhood of St
Laurence and the Centre for Appropriate Technology. In New
Zealand, NZ$40,000 has supported Sustainable Coastlines and Te
Pai Roa Tika. Through our Giving@SE program, a total of more than
AU$100,000 was donated to charities thanks to individual
employees and matched donations from Schneider Electric (up to
AU$5,000/employee/year)
2.6.5 Social Impact in
France
2.6.5.1 Empowering All generations through
the Future Ready Program
Context and goals
Schneider Electric has been actively engaged in social corporate
responsibility for many years with activities ranging from local
economic development to youth empowerment. Thanks to this
strong foundation and with the goal of addressing new challenges,
the Corporate Citizenship team created the Future Ready Program
in 2022, to expand the Group’s positive impact globally and
accelerate a just transition.
There is a growing gap between the skills and competencies
needed to drive the energy transition and those that our ecosystem
(e.g., workforce, partners, suppliers, NGOs, customers, etc.)
currently has. These skills, including knowledge in electricity and
digital, are becoming increasingly essential for the transformation
needed and can be hard to acquire. Part of this gap is due to many
groups (particularly young adults) in situations of unemployment
and/or with no access to education (for diverse reasons of social
inequality). Investments are required to close this gap and give
everyone the opportunity to take control of their professional future.
The group’s workforce, as well as our external communities must
be supported, trained, and knowledgeable.
The Future Ready Program is dedicated to empowering all,
regardless of their generation, to build their desirable future based
on their individual aspirations by providing opportunities for
everyone, everywhere.
Youth Empowerment in France
Today’s youth is the future, however, many of them are in situations
of low education or unemployment and therefore have lower access
to resources to build their skills. To support our conviction of
empowering young adults especially those from disadvantaged
backgrounds, Schneider Electric is significantly involved in three
major National French programs dedicated to young people facing
concerns related to education, apprenticeship, network, or
unemployment.
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The “paQte” and “La France une chance, les Entreprises
s’engagent” both sponsored by the French Government, and
“Le Collectif pour une Économie plus Inclusive,” gathering 39 major
French companies engaged. These companies are deploying
collective actions concerning youth employment (particularly in 10
French areas), inclusive offers and procurement. The actions on
youth employment are being led by Schneider Electric and Engie.
15 years after having created it, Schneider Electric still strongly
supports the NGO “100 Chances 100 Emplois (100 Opportunities
100 Jobs). This initiative (focused on coaching, mentoring, and
networking) has already helped more than 9,000 young people
make progress towards employment when they were previously
facing difficulties and roadblocks, such as discrimination or/and a
lack of network. “100 Chances 100 Emplois” is now engaged in an
ambitious scale-up plan (launched in early 2022) aiming to provide
its benefits to 6,500 young people (1,000 in 2022) in 100 areas (44
in 2022) to cover all French regions by 2026.
Schneider Electric is also focusing on this mission of empowering
young adults by offering more opportunities for professional
integration to apprentices, interns, and doctoral students.
Senior Talent Program
Within this journey to further develop our talent and enable all to
take control of their career path, the Senior Talent Program was
launched in 2021 connecting the people and sustainability
together. Throughout all stages in an employee’s career, there is
the potential and opportunity to continue growing one’s skill set, so
Schneider Electric wants to offer all employees the chance to learn
and design their professional journey. Accompanying employees in
the later stages of their career can accelerate the transfer of
knowledge and skills across all generations, which is a great
enabler to a just transition. To learn more about this program go to
section 2.5.3 “Talent attraction and development” pages 211 to 217.
Contribution to local communities in France
To accompany employees in creating a future based on their
individual aspirations, Schneider Initiatives Impact (which regroups
Creation Pass, Solidarity Pass, and Competencies Pass) was
created in France to offer three innovative pathways to support
employees in designing their professional future. The Creation Pass
(Schneider Initiatives Entrepreneurs) is an internal support system to
help employees start their own business. Since 2010, 1,042 projects
have been supported and 577 of them have resulted in the creation
or takeover of a business. These businesses have created more than
699 jobs in France and range in sectors including electricians,
organic trades, restaurants, consultants, asset managers, and tech
start-ups. The second option is the Solidarity Pass which allows
employees to experience a skill sponsorship for a certain period
where they offer their skills, energy, and dedication to an NGO. There
are approximately 38 assignments each year. Finally, there is the
Competencies Pass where employees offer start-ups/SMEs their
knowledge and skills to enable local economic development. There
have been 11 assignments in the past 5 years. These final two
options allow for a mutually enriching experience where employees
share their competencies to the wider community and gain
knowledge in a new area/working structure.
Schneider Initiatives Impact’s structure in France is totally
connected and represented in local business networks such as
Chambre de commerce et d’industrie, Réseaux Entreprendre,
DIESE association made up of other major groups, local public
stakeholders (Direction du Travail et de la Solidarité, Préfecture…)
and local NGOs such as Emmaus Connect or La Cravate Solidaire.
In the next few years, the ambition is to continue offering these
meaningful career opportunities to as many employees as
possible, so the team is focused on expanding Schneider Initiatives
Impact to other countries. In the first quarter of 2023, these
programs will be deployed in Belgium and Germany.
2.6.5.2 The 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 continues to focus 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.
In 2019, to reinforce the link with the Group, the school changed its
name to École Schneider Electric and new vocational training was
added to support 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 against the backdrop of
increasing concern about the professional future of young people,
the CFA took 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 now:
• 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).
In 2022, the CFA has signed a new partnerhip to increase its
footprint.in France.
2022 was a successful year with 101 internships. Of these students,
92% graduated, 48% continued studies and 52% gained
employment.
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S T R A T E G I C R E P O R T
2.7 Methodology and audit of indicators
In this section
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
242
253
264
266
2.7.5 Report of one of the Statutory Auditors, appointed as
independent third party, on the verification of the
consolidated non financial statement
270
2.7.6 Reasonable assurance report from one of the Statutory
Auditors on the Identified Sustainability Information
of Schneider Electric’s non financial performance
statement as for the year ended December 31st, 2022 272
2.7.1 Methodology elements on the published indicators
In conformity with regulations in place and in a spirit of
transparency with its stakeholders, Schneider Electric regularly
publishes Corporate Social Responsibility (CSR) data, which
includes notably:
•
•
Indicators of the Schneider Sustainability Impact (SSI),
published quarterly and externally assured annually
Indicators of the Schneider Sustainability Essentials (SSE),
published and externally assured annually
• Other standard Human resources (HR), safety and
environmental indicators published and externally assured
annually for the most material ones.
Reporting Year
Annual CSR data is reported for the calendar year (CY) preceding
the publication year, ie 2022 in this report, in line with the financial
reporting calendar.
Reporting Perimeter
As a general rule and subject to any particular exception described
below:
(i) Schneider Electric reports CSR data at Group level for all
financially consolidated entities over which it has operational
control
(ii) New acquisitions are included in the reporting scope within 2
years, meaning that data is consolidated into Group at the
latest from the third year post acquisition.
(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.
Reporting coverage is provided together with indicators’
tables.
Timing for inclusion may differ between indicators. Typically
financial or HR data are deployed more rapidly as acquired
companies usually have existing systems and teams in place,
which is not necessarily the case for environmental systems.
Progressive consolidation of new acquisitions into
the Group CSR reporting
All majority-owned, financially consolidated, entities shall
participate in all relevant Schneider Electric’s SSI, SSE and other
environmental, social and ethical programs and adopt the required
policies and reporting practices as per each respective Trust
Standard. Unless otherwise agreed with Schneider Electric’s
Sustainability team for practical or cost-effectiveness reasons, the
following calendar shall be respected:
• Year +1: strategic alignment and material KPIs selection
• Year +2: data cleaning and baseline and target setting
• Year +3: start of consolidated reporting into Group public
reporting
When an entity is not fully integrated into Schneider’s IT systems,
the consolidation of CSR data is done manually and may take
longer than the standard calendar above. For those entities, if the
cost of reporting is deemed unreasonable compared to the size of
the company, the entity may ask to opt-out from CSR reporting.
This may be granted on a case-by-case basis. However these
entities still need to follow applicable Trust Standards.
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.
Notable exclusions in 2022 (apart from SSI #1 Schneider Impact
revenues which is calculated on the same scope as the financial
perimeter due to data availability) are presented in the table below.
Details for data coverage are specified in tables page 274 for each
topic and are generally well above 85%.
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Company
AVEVA
(including
OSIsoft)
Acquisition
year
% Group
employees
% Turnover
Comments
2018
(2021)
4.3%
4.0%
AVEVA remained a listed company in 2022 and publishes its financial and
extra-financial statements on a regular basis. It acquired OSIsoft in March
2021. Aveva was delisted on January 19th 2023. AVEVA has aligned its
sustainability strategy with Schneider’s and obtained an A rating from MSCI
and Bronze medal from Ecovadis in 2021.
Read more in AVEVA’s 2022 Sustainability progress report (https://www.aveva.
com/content/dam/aveva/documents/reports/AVV011_Sustainability%20
Report_2022.pdf.coredownload.inline.pdf) AVEVA is excluded from all KPI
calculations except SSI #1.
Larsen & Toubro’s integration is in progress. HR statistics are included in Group
results, except for SSI #8, which is calculated on a constant scope.
Larsen & Toubro
2020
3.3%
2.4%
RIB Software
2020
2.0%
1.0%
RIB Software’s integration is in progress
RIB Software is excluded from all KPI calculations except SSI #1.
Other exclusions
-
4.1%
2.7%
Other exclusions concern either non-integrated entities or recently acquired
entities grouped here for readibility.
Total exclusion figures presented in this table represent the maximum
exclusions for given KPIs. More precise reporting perimeter estimates are
provided in each data table.
Total maximum
exclusions
-
13.7%
10.0%
Note that exclusions of software companies have limited impact on
environmental KPIs, and no impact on product-related KPIs at Group level
given the nature of their activities.
The Group has set a plan to increase its reporting coverage
progressively to at least 95%, as described in the previous page.
2.7.1.1 Indicators from the Schneider
Sustainability Impact
Internal control
Schneider Electric has drawn up a frame of reference with
dedicated reporting protocols for Schneider Sustainability Impact
(SSI), Schneider Sustainability Essentials (SSE) indicators and for
other Human Resources, safety and environmental data. This frame
of reference includes the scope, collection and consolidation
procedures and definitions for these 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.).
External Assurance
Once a year, an external auditor reviews the procedures in place
and data accuracy in order to provide limited assurance on
extra-financial information as required by Article R225-105-2 of
French Commercial Code, notably the indicators of the Schneider
Sustainability Impact, Schneider Sustainability Essentials and other
Human Resources, Safety and Environmental indicators, (see
independent verifier’s report on page 270). This external assurance
practice is in place at Schneider Electric since 2006.
In keeping with its commitment to continuous improvement,
Schneider Electric asked the firm PricewaterhouseCoopers Audit to
conduct an additional review in order to obtain a “reasonable” level
of assurance for strategic indicators (Energy consumption, Scope 1
and 2 CO2 emissions, Safety, Gender diversity – SSI #8).
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;
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2.7 Methodology and audit of indicators
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 PricewaterhouseCoopers.
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.
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 PricewaterhouseCoopers.
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.
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 PricewaterhouseCoopers.
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Chapter 2 – Sustainable development
SSI #4: Increase green material content in our
products to 50%
A Green Material is defined as either of the following:
SSI #5: 100% of our primary and secondary
packaging is free from single-use plastic and uses
recycled cardboard
• 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 PricewaterhouseCoopers.
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 PricewaterhouseCoopers.
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.
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.
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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
PricewaterhouseCoopers.
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.
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
PricewaterhouseCoopers.
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 PricewaterhouseCoopers.
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.
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:
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•
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 PricewaterhouseCoopers. 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).
Calculations are based on actual external requisition positions filled
in the Global Applicant Tracking System and opportunities tracked
via connect Candidate Relationship Management.
This indicator was audited by PricewaterhouseCoopers.
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):
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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 PricewaterhouseCoopers.
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.
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Progress against these commitments is measured by precise Key
Performance Indicators (KPI). The assessment of this objective
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.
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 PricewaterhouseCoopers.
This indicator was not audited by PricewaterhouseCoopers and is
not included in the SSI score.
SSE #3: 90% of electricity sourced from
renewables
2.7.1.2 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 PricewaterhouseCoopers.
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).
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.).
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 PricewaterhouseCoopers.
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 PricewaterhouseCoopers.
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).
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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 PricewaterhouseCoopers.
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
2025 target is a transformation of the existing program, for products
focused on green materials, low CO2, circularity and digitization of
data.
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 PricewaterhouseCoopers.
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 PricewaterhouseCoopers.
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).
Each site reports initiatives at completion. At Group level,
performance is calculated by dividing completed initiatives by total
required initiatives.
This indicator is audited annually by PricewaterhouseCoopers.
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 PricewaterhouseCoopers.
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 PricewaterhouseCoopers.
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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 PricewaterhouseCoopers.
SSE #12: Deploy a ‘Social Excellence’ program
through multiple tiers of suppliers
This indicator has not yet been deployed by Schneider Electric.
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 PricewaterhouseCoopers.
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
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.
This indicator was audited by PricewaterhouseCoopers.
SSE #15: Reduce total number of safety recalls
issued to 0
When sustainability supports Customer Satisfaction, it translates
into new processes and policies to allow returns of adapted
products for reuse, remanufacture and refurbishment. 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
poor quality due to product recall.
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 SSE 2021-
2025, Schneider is committed to reduce total number of safety
recalls issued to 0.
This KPI covers customer notification and containment actions from
any suspected condition in Schneider’s Offer that may cause
customer bodily injury or property damage with Offer Safety Alert
Committee (OSAC) Go decision.
This indicator was audited by PricewaterhouseCoopers.
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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.
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
PricewaterhouseCoopers in the previous years.
This indicator was audited by PricewaterhouseCoopers.
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 PricewaterhouseCoopers.
This indicator was audited by PricewaterhouseCoopers.
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.
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 PricewaterhouseCoopers.
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.).
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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. 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 PricewaterhouseCoopers.
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.
• 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 PricewaterhouseCoopers.
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.
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.
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:
This indicator was audited by PricewaterhouseCoopers.
SSE #22: >90% of employees undergo digital
upskilling
• 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.
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.
• 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.
• 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.
The methodology for this indicator was reviewed by
PricewaterhouseCoopers.
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.
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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.
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 PricewaterhouseCoopers.
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 PricewaterhouseCoopers.
2.7.2 Methodology
elements on EU taxonomy
indicators
Regarding the calculation of the proportion of activities considered
eligible and aligned in accordance with the Disclosure Delegated
Act in turnover, capital expenditure (CapEx) and operating
expenditures (OpEx), Schneider Electric provides the following
additional details:
Calculation of Taxonomy-eligible and -aligned
turnover
This calculation is 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 offers fitting with the economic activities
description sold to Taxonomy-eligible end-segments (Green
Transport and Renewables mainly) is reviewed. Double-counting
between offer-based approach and end-segment-based
approaches are then removed before consolidation.
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
34,176 million, as disclosed in the first line of the consolidated
statement of income in this Universal Registration Document (URD,
page 344).
For 87% of revenues (excluding entities having their own reporting
framework), eligibility calculation combines two approaches:
• For 86% of revenues, eligibility and alignment calculation is
using 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. Compliance with the technical screening
criteria is assessed along with the eligibility by the offer
technical experts at product category level. 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).
• For 1% of revenues eligibility and alignment calculation is using
an end-segment-based approach, whereby commercial teams
indicate for each product line if it matches with the economic
activity’s as described in the Annex 1 of the EU Climate
Delegated Act and provide with the related amount of revenues
generated from Taxonomy-eligible end-segments (Green
Transport and Renewables mainly). Potential double-counting
between the two approaches is avoided in applying the end
segment-based approach to only 1% of revenues issued from
eligible businesses sold to end segments supporting climate
change mitigation and the offer-based approach to the
remaining 86% of revenues.
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2.7 Methodology and audit of indicators
For the remaining 13% of revenues (related to entities having their
own reporting frameworks), an offer-based analysis is conducted
separately following a review of each entity’s product line reporting.
In order to determine the amount of eligible and aligned revenue
(numerator), the following assumptions are made:
• At the granularity level of product categories, data is based on
net sales before rebate instead of net sales after rebate.
Therefore, the eligibility and alignment ratios are calculated by
dividing respectively the amount of eligible net sales before
rebate by the total amount of net sales before rebate, and then
applied to the net sales after rebate.
• At the granularity level of product categories, a non-significant
share of revenues (<5%) is not allocated per product category.
These are not considered in the calculation of Taxonomy
eligibility and alignment per product line (the product line’s
average eligibility and alignment ratios are applied to those
revenues).
• End-segment sales data is based on net sales before rebate. A
correction factor is applied to assess the value of net sales after
rebate per end-segment.
A rigorous assessment of the compliance with the technical
screening criteria is performed for each activity. Under activity 3.6
(Manufacture of low carbon technologies), GHG emission savings
are calculated using Schneider’s saved and avoided emission
methodology. This calculation method was audited by an
independent third-party in accordance with ISO14067:2018
standard. Under activity 4.9, taxonomy-eligible revenues made in
countries where the carbon intensity is above the threshold
stipulated in the technical screening criteria (TSC), or contributing
to connect to the grid a power generation source with carbon
intensity above the threshold stipulated in the TSC are considered
as not aligned.
Proportion of turnover from Taxonomy-eligible and -aligned
activities in the template required by EU Taxonomy Delegated Act
on Article 8 available page 258.
Calculation of Taxonomy-eligible and -aligned
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 2022 (including IFRS 16 rights of use), considered
before depreciation, amortization and any re-measurement,
including those resulting from revaluations and impairments for the
financial year 2022 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 2022.
At Schneider Electric, total tangible assets resulting from the above
definition represents EUR 727 million over 2022, including EUR 721
million from additions, as disclosed in the note 11 of the Group
financial statements in this URD, and EUR 6 million from business
combinations.
The total covered IFRS 16 rights of use over 2022 represents EUR
356 million, as disclosed in the note 11 of the Group financial
statements (page 452).
The total intangible assets resulting from the above definition
represents EUR 490 million over 2022. This amount is split as
follows: EUR 386 million from additions, as disclosed in the note 10
of the Group financial statements (page 449) – this includes EUR
357 million of capitalized Research and Development (R&D)
projects, as disclosed in the note 10 of the Group financial
statements, and EUR 104 million from business combinations.
As per specification of CapEx as detailed in Annex 1 of the
Delegated Act on Article 8, all capital expenditures based on IFRS
16 related to long-term leasing of buildings are considered eligible.
None of these are aligned since the Group rental real estate
portfolio does not meet all Taxonomy-alignment criteria described
in EU Taxonomy activity 7.7. CapEx related to assets, processes
and business combinations associated with Taxonomy-eligible and
aligned activities were calculated using allocation keys of eligible,
and respectively aligned, turnover per business and operations,
except for Research and Development (R&D) and IFRS 16 CapEx.
As described more exhaustively in section 2.3.4 Investing to
achieve the Group’s climate strategy and vision page 158, R&D
projects of the Group aim at and demonstrate substantial life cycle
GHG emission savings and substantial carbon footprint saving.
Thus, all 2022 R&D capitalized expenditures directly linked to
capitalized R&D projects are considered both eligible and aligned
according to EU Taxonomy activity 3.6.
The Group launched in December 2022 a reporting process to
track additional EU Taxonomy -eligible and -aligned individual
CapEx from 2023. Taxonomy analysis is now required for each
non-financial capital expenditure, through a Group tool dedicated
to investments validation and follow-up.
To not only simplify the reporting exercise but also to support the
divisions in their sustainable transformation, providing them with
more visibility on the proportion of their activities qualified as
sustainable under the European Taxonomy regulation, Schneider
Electric is automating the reporting of the turnover KPI.
See detailed proportion of CapEx and OpEx from Taxonomy-
eligible and -aligned activities on pages 260 and 262.
Calculation of Taxonomy-eligible and aligned
Operating Expenditure (OpEx)
To determine the Group’s European Taxonomy-eligible and -aligned
operating expenditure, only non-capitalized costs related to
Research and Development (R&D) are analyzed for the
establishment of the numerator of the OpEx KPIs.
The denominator of Taxonomy-eligible and -aligned OpEx KPI
represents EUR 1,716 million over 2022, corresponding mainly to
non-capitalized Research and Development costs of the Group for
EUR 1,488 million presented before offsetting with the R&D Tax
Credit for EUR 51 million, as disclosed in the note 4 of the
consolidated financial statements in this URD (page 445). This
includes non-capitalized costs relative to R&D projects but also,
among others, costs incurred in relation with support and
platforming, costs of IT global applications dedicated to R&D, costs
relative to continuous engineering costs for quality, productivity and
obsolescence.
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The rest of the denominator corresponds to OpEx related to
building renovation measures, short-term leases, maintenance and
repair and other expenditures relating to the day-to-day servicing
of assets. The total of these categories represents less than EUR
178 million and is therefore considered as non-material for
Schneider Electric business, so excluded from the OpEx analysis
and OpEx KPIs numerators.
As described more exhaustively in section 2.3.4 Investing to
achieve the Group’s climate strategy and vision page 158, R&D
projects of the Group aiming at and demonstrating substantial life
cycle GHG emission savings and substantial carbon footprint
saving, Taxonomy-eligible and -aligned OpEx KPIs numerator
corresponds to operating expenditure directly associated to
Group’s R&D projects: these OpEx are both Taxonomy-eligible and
-aligned under the European Taxonomy activity 3.6.
Detailed templates required by EU Taxonomy Delegated Act on
Article 8 are available page 258.
Does Not Significantly Harm (DNSH)
As defined in Article 3 of the Taxonomy regulation, an activity shall
qualify as environmentally sustainable only if it does not
significantly harm any of the other Taxonomy objectives. For
activities specified in Annex 1 of the EU Climate Delegated Act, this
means that they must not do significant harm to:
Climate change adaptation: Schneider has assessed physical
climate risks that are material to its activity. The Group has put
dependencies analysis at the heart of its risk management and
performed a forward-looking climate risk and vulnerability
assessment to identify and price the materiality of physical climate
risks that may affect Schneider Electric sites, extended supply
chain and economic activities under different IPCC scenarios and
different timelines (short-, medium- and long-terms). In line with
these assessments, the Group has implemented adaptation
solutions consisting of several resilience initiatives as detailed in
previous sections.
Read more about the Group climate risk management and
adaptation measures in the chapters 2.3.1.1 Risks and
opportunities | Climate-driven risks and 2.3.1.2. Adapting to climate
change on page 150.
The sustainable use and protection of water and marine
resources: Schneider Electric regularly assesses water-related
risks. In 2022, the Group conducted a water footprint analysis
along the value chain, covering water consumption, scarcity,
eutrophication, ecotoxicity, and acidification. Due to the nature of
most of its industrial processes (manual and automatic assembly),
water withdrawal of the Group’s operations is considered limited.
The Group has implemented initiatives to preserve water quality
and avoid water stress – read more about the Group’s water
management in the section 2.4.4.3 Water withdrawal, discharge
and stress on page 191.
Transition to a circular economy: Schneider Electric assesses
the availability of and, where feasible, adopts techniques that
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.
Requirements related to construction and demolition waste
management in low carbon mobility infrastructures are not
applicable to Schneider as the Group only operates as an electrical
and automation solution provider in those projects.
Read more about the Group’s transition to a circular economy in
section 2.4.5.2, page 196.
Pollution prevention and control: On the manufacture, placing on
the market or use of chemicals, Schneider Electric provides the
following precisions:
• Regarding regulation (EU) 2017/852 of the European Parliament
and of the Council of 17 May 2017 on mercury and repealing is
not applicable to Schneider Electric as we do not use mercury in
our products nor in our manufacturing activities.
• Regarding the directive on the restriction of the use of certain
hazardous substances in electrical and electronic equipment
(RoHS), Schneider reports only 1% of its eligible revenues not
aligned with this requirement. The Group has deployed
significant efforts to measure and further comply, even outside
of the European Union (i.e. beyond the scope of the regulation).
• Regarding substances laid down in Article 57 of Regulation (EC)
1907/2009 and identified in accordance with Article 59(1) of that
Regulation, as the concept of essential use has not yet been
defined by the EU Commission, Schneider has considered the
worst-case scenario, and declared as non-aligned all revenues
coming from products using substances meeting those criteria.
3% of Schneider Electric’s eligible revenues are generated by
products including substances part of the candidate list for
eventual inclusion in Annex XIV.
• Regarding substances laid down in Article 57 of Regulation (EC)
1907/2006, the Group notes that obtaining material declarations
and data from suppliers beyond tier 1 is particularly challenging
and is not in a position to quantify the impact of excluding
products using substances that may be included in the list of
substances subject to authorization but not currently identified
in the candidate list. The Group plans to improve the traceability
of the components of each products beyond tier 1 year over
year, and to make this information digitally available to its
customers.
Other requirements are met and included in Schneider Electric
Global Environmental Directives and all restrictions are applied
globally.
Requirements related to pollution prevention and control on
overground high voltage lines and noise, vibration, dust and
pollutant emissions reduction during construction and maintenance
of low carbon mobility infrastructures are not applicable to
Schneider as the Group only operates as an electrical and
automation solution provider in those projects.
The protection and restoration of biodiversity and ecosystems:
As Schneider Electric is not a project developer as defined in the
Environmental Impact Assessment Directive (2011/92/EU) but only
operates as a contractor of projects listed in Annex 1 and 2 of this
directive, the Group is not subject to completing an Environmental
Impact Assessment or screening. For the same reason the
requirements related to the biodiversity risk mitigation on low
carbon mobility infrastructures are not applicable to Schneider.
Schneider’s assessments and actions on biodiversity are detailed
in section 2.4.1 «Minimize the Group’s impacts and dependencies
on nature” page 176.
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2.7 Methodology and audit of indicators
Minimum safeguards
As defined in Article 3 of the Taxonomy regulation, an activity shall qualify as environmentally sustainable only if it is carried out in
compliance with the specific minimum safeguards detailed in the regulation. Schneider Electric takes reference from the Final Report on
Minimum Safeguards by the Platform on Sustainable Finance as a guidance to report against minimum safeguards, which looks at 4 key
areas: Human Rights, Corruption, Taxation, and Fair Competition.
Human rights
The company has established an adequate human rights due diligence process as outlined in the UNGPs and OECD Guidelines
for MNEs. For details, please see our Vigilance Plan as well as section 2.2.10 “Vigilance Plan” page 130.
Corruption
The company has anti-corruption processes in place. For details, see section 2.2.3 “Zero Tolerance for Corruption” page 116.
Taxation
The company treat tax governance and compliance as important elements of oversight, and there are adequate tax risk management
strategies and processes in place. For more details, see section 2.2.5 “Compliance with tax regulations” on page 119.
Fair competition
The company promote employee awareness of the importance of compliance with all applicable competition laws and regulations.
For details, see section 2.2.1 “Trust Charter, Schneider Electric’s Code of Conduct” on page 110.
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. In 2022, two activities have been added (6.14 and 6.17) compared to 2021 and one removed
(4.15 – District heating/cooling distribution).
Activity name as specified in Annex 1
of the EU Climate Delegated Act
Activity definition as specified in Annex 1
of the EU Climate Delegated Act
Corresponding business activities
of Schneider Electric
3.1 Manufacture of renewable
energy technologies
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
3.5 Manufacture of energy
efficiency equipment for
buildings
3.6 Manufacture of low
carbon technologies
4.9 Transmission and
distribution of electricity
6.14 Infrastructure for rail
transport
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Manufacture of energy efficiency equipment for
buildings.
• 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
• 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
• Equipment, projects, as well as modernization
and maintenance services for rail transport
infrastructure
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 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, operation and
maintenance of railways and subways as well as
bridges and tunnels, stations, terminals, rail
service facilities, safety and traffic management
systems including the provision of architectural
services, engineering services, drafting services,
building inspection services and surveying and
mapping services and the like as well as the
performance of physical, chemical and other
analytical testing of all types of materials and
products.
S T R A T E G I C R E P O R T
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Activity name as specified in Annex 1
of the EU Climate Delegated Act
Activity definition as specified in Annex 1
of the EU Climate Delegated Act
Corresponding business activities
of Schneider Electric
6.15 Infrastructure enabling
low-carbon road transport
and public transport
6.16 Infrastructure enabling
low-carbon water
transport
6.17 Low carbon airport
infrastructure
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
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.
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.
Construction, modernization, maintenance and
operation of infrastructure that is required for zero
tailpipe CO2 operation of aircraft or the airport’s
own operations, as well as for provision of fixed
electrical ground power and preconditioned air to
stationary aircraft.
Installation, maintenance and repair of
instruments and devices for measuring, regulation
and controlling energy performance of buildings.
• Port infrastructure for shore-side electrical
power to vessels at berth and electrification
and efficiency of ports’ operations
• Equipment, projects, as well as modernization
and maintenance services for low carbon port
infrastructure
• Energy management equipment, projects, as
well as modernization and maintenance
services for low carbon airport infrastructure
• 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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Proportion of turnover from Taxonomy-aligned activities
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s
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a
t
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r
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d
(4)
(5)
(6)
(7)
C
l
i
r
c
u
a
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c
o
n
o
m
y
(8)
P
o
l
l
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i
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n
a
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d
e
c
o
s
y
s
t
e
m
s
i
i
B
o
d
v
e
r
s
i
t
y
(9)
(10)
Million Euros
Percent
Percent
Percent
Percent
Percent
Percent
Percent
not applicable in FY2022
-
-
-
-
-
-
-
-
-
-
-
Economic activities
(1)
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
Manufacture of renewable energy technologies
Manufacture of energy efficiency equipment
for buildings
Manufacture of other low carbon technologies
Transmission and distribution of electricity
C
o
d
e
(
s
)
(2)
3.1
3.5
3.6
4.9
64
0%
0%
589
235
4,227
2%
1%
12%
0%
1%
0%
0%
2%
1%
12%
0%
1%
0%
0%
Infrastructure for rail transport
6.14
53
Infrastructure enabling low-carbon road transport
and public transport
Infrastructure enabling low carbon water transport
Low carbon airport infrastructure
6.15
6.16
6.17
182
50
30
Installation, maintenance and repair of instruments
and devices for measuring, regulation and controlling
energy performance of buildings
Professional services related to energy
performance of buildings
7.5
459
1%
1%
9.3
1,044
3%
3%
Turnover of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
6,934
20%
20%
A.2. Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities)
Manufacture of renewable energy technologies
Manufacture of energy efficiency equipment
for buildings
Manufacture of other low carbon technologies
Transmission and distribution of electricity
Turnover of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
Total (A.1 + A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities (B)
Total (A+B)
= not applicable in FY2022 reporting
3.1
3.5
3.6
4.9
76
751
581
1,433
0%
2%
2%
4%
2,841
8%
9,775
29%
24,401
71%
34,176
100%
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i
t
i
g
a
t
i
o
n
C
l
i
m
a
t
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c
h
a
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(11)
Y/N
DNSH criteria (‘Does Not Significantly Harm’)
a
d
a
p
t
a
t
i
o
n
C
l
i
m
a
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c
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e
(12)
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Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
r
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s
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W
a
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(13)
Y/N
Y
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Y
Y
Y
Y
Y
Y
Y
Y
C
l
i
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c
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a
r
e
c
o
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m
y
(14)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
P
o
l
l
u
t
i
o
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(15)
Y/N
Y
Y
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Y
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Y
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Y
Y
Y
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m
u
m
Taxonomy-
aligned
proportion
of turnover
Year N
Taxonomy-
aligned
proportion
of turnover
Year N-1
Category
enabling
activity
Category
transitional
activity
(16)
Y/N
(17)
Y/N
(18)
(19)
Percent
Percent
(20)
E
(21)
T
E
E
E
E
E
E
E
E
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Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
0%
2%
1%
12%
0%
1%
0%
0%
1%
3%
20%
0%
20%
R
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P
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C
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C
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C
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4
C
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C
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2.7 Methodology and audit of indicators
Proportion of CapEx from Taxonomy-aligned activities
l
A
b
s
o
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C
a
p
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x
(3)
P
r
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f
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x
(4)
Substantial contribution criteria
m
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a
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c
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m
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(5)
(6)
(7)
C
l
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r
c
u
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c
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m
y
(8)
P
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B
o
d
v
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r
s
i
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a
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d
(9)
(10)
Million Euros
Percent
Percent
Percent
Percent
Percent
Percent
Percent
not applicable in FY2022
1
0%
0%
10
243
89
1
65
1
0
3
6
1%
15%
6%
0%
4%
0%
0%
1%
15%
6%
0%
4%
0%
0%
0%
0%
0%
0%
419
27%
27%
-
-
-
-
-
-
-
-
-
-
-
1
15
20
26
0
356
17
435
854
0%
1%
1%
2%
0%
23%
1%
28%
54%
719
46%
1,573
100%
C
o
d
e
(
s
)
(2)
3.1
3.5
3.6
4.9
6.14
6.15
6.16
6.17
7.5
9.3
3.1
3.5
3.6
4.9
6.15
7.7
8.2
Economic activities
(1)
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
Manufacture of renewable energy technologies
Manufacture of energy efficiency equipment
for buildings
Manufacture of other low carbon technologies
Transmission and distribution of electricity
Infrastructure for rail transport
Infrastructure enabling low-carbon road transport
and public transport
Infrastructure enabling low carbon water transport
Low carbon airport infrastructure
Installation, maintenance and repair of instruments
and devices for measuring, regulation and controlling
energy performance of buildings
Professional services related to energy performance
of buildings
CapEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
A.2. Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities)
Manufacture of renewable energy technologies
Manufacture of energy efficiency equipment
for buildings
Manufacture of other low carbon technologies
Transmission and distribution of electricity
Infrastructure enabling low-carbon road transport
and public transport
Acquisition and ownership of buildings
Data-driven solutions for GHG emissions
CapEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
Total (A.1 + A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities (B)
Total (A+B)
= not applicable in FY2022 reporting
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g
a
t
i
o
n
C
l
i
m
a
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c
h
a
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(11)
Y/N
DNSH criteria (‘Does Not Significantly Harm’)
a
d
a
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a
t
i
o
n
C
l
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a
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c
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(12)
Y/N
Y
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Y
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Y
Y
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Y
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s
W
a
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(13)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
C
l
i
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c
u
a
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c
o
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m
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(14)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
P
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l
u
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(15)
Y/N
Y
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Y
Y
Y
Y
Y
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m
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Taxonomy-
aligned
proportion
of CapEx
Year N
Taxonomy-
aligned
proportion
of CapEx
Year N-1
Category
enabling
activity
Category
transitional
activity
(16)
Y/N
(17)
Y/N
(18)
(19)
Percent
Percent
(20)
E
(21)
T
E
E
E
E
E
E
E
E
E
E
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
0%
1%
15%
6%
0%
4%
0%
0%
0%
0%
27%
0%
27%
R
E
P
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T
I
N
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G
R
A
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D
C
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1
C
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2
C
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3
C
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4
C
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5
C
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6
C
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7
C
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8
C
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Proportion of OpEx from Taxonomy-aligned activities
Economic activities
C
o
d
e
(
s
)
l
A
b
s
o
u
t
e
O
p
E
x
(1)
(2)
(3)
P
r
o
p
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r
t
i
o
n
o
f
O
p
E
x
(4)
Substantial contribution criteria
m
i
t
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a
t
i
o
n
C
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a
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c
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(5)
(6)
(7)
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(8)
P
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(9)
(10)
Million Euros
Percent
Percent
Percent
Percent
Percent
Percent
Percent
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
Manufacture of other low carbon technologies
3.6
856
50%
50%
OpEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
856
50%
50%
A.2. Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities)
OpEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
Total (A.1 + A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities (B)
Total (A+B)
= not applicable in FY2022 reporting
0
856
0%
50%
860
50%
1,716
100%
-
-
-
-
not applicable in FY2022
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DNSH criteria (‘Does Not Significantly Harm’)
m
i
t
i
g
a
t
i
o
n
C
l
i
m
a
t
e
c
h
a
n
g
e
(11)
Y/N
a
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
c
h
a
n
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(12)
Y/N
r
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s
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s
W
a
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r
a
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d
m
a
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Y/N
C
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c
o
n
o
m
y
(14)
Y/N
P
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(15)
Y/N
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Taxonomy-
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proportion
of OpEx
Year N
Taxonomy-
aligned
proportion
of OpEx
Year N-1
Category
enabling
activity
Category
transitional
activity
(16)
Y/N
(17)
Y/N
(18)
(19)
Percent
Percent
(20)
E
(21)
T
Y
Y
Y
Y
Y
Y
E
50%
50%
0%
50%
R
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P
O
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N
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C
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2
C
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3
C
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4
C
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5
C
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6
C
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7
C
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8
C
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9
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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
Gigajoules (GJ)
RT-EE-130a.1
Quantitative
Percentage (%)
Amount of hazardous waste generated, percentage
recycled
Number and aggregate quantity of reportable spills,
quantity recovered
Quantitative
Metric tons (t),
Percentage (%)
Number, Kilograms
(kg)
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
Product
Life cycle
Management
Percentage of eligible products, by revenue, that meet
ENERGY STAR® criteria
Revenue from renewable energy-related and energy
efficiency-related products
Quantitative
Reporting
currency
Percentage (%)
by revenue
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 behaviour
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) 3,526,189 GJ (979,497 MWh)
(2) 33.4 % (327,171 MWh)
(3) 65.4 % (610,643 MWh)
Hazardous waste generated: 8,091 tons.
Hazardous waste channeled according to legal requirements and Schneider Electric expectations: 8,091 tons.
Zero reportable spills in 2022, therefore no recovered quantity to report.
Topic
Energy
Management
Hazardous
Waste
Management
24 product recalls have been issued in 2022. 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.
Product Safety
No material loss at the Group level.
Around 70 to 80% 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 “Lead with transparency: provide environmental data to customers” page
186 of the URD.
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”, 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 2022, 72% of Group
revenues qualify as Impact revenues. The Group aims to grow its Impact revenues to 80% by 2025 (SSI #1).
Details regarding our sustainable procurement practices are provided in section 2.2.11 “Relationships with project
execution contractors” page 135 of the URD, in particular our Conflict Minerals and Extended Minerals programs.
Schneider Electric is actively working with its suppliers and closely monitors its supply chain to comply with the Conflict
Minerals regulations and meet the Customers’ expectations as much as possible. Based on our current knowledge, 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, nor supported illegally operating or sanctioned entities.
Rare earth material supply risk related to potential scarcity in the market has been fully assessed and is acknowledged in
our design roadmap. Top strategic partnerships with key suppliers have been reinforced through long-term agreements
and C-Level connections, with a particular focus on electronic semiconductor players. A procurement and planning hub
will be implemented in next two years to establish a direct connection to critical material sources and manage strategic
stocks, demand, and supply.
As stated in its Trust Charter and Anti-Corruption Policy, Schneider Electric is committed to complying 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 has a zero tolerance policy with regard to corruption and considers that “doing the right thing” is a key
value-creation driver for all its stakeholders. This commitment materialized through a strong and continuously developing
Anti-Corruption Compliance program (section “Zero tolerance for corruption”), which is part of the Ethics & Compliance
program.
Product
Life cycle
Management
Materials
Sourcing
Business
Ethics
No material losses.
No material losses.
A breakdown of revenues by activity is provided page 8 and page 491 of the URD.
134,931 (spot 2022 year-end headcount, excluding supplementary workforce).
More workforce statistics in section 2.7.2 “Social Indicators” page 281 of the URD.
Activity metrics
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
2.7 Methodology and audit of indicators
2.7.4 Task-Force on Climate Related Financial
Disclosures (TCFD) correspondence 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 2022 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
DEU – chapter 2 (2.1.7;
2.3.1); chapter 3 (3.3.4)
CDP – C1.2, C1.2a
DEU – 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 Function Committee, which 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.
• Three Committees involving Group Executive Vice-Presidents and Senior
Vice-Presidents are dedicated to oversee the implementation of the Group’s
decarbonization roadmap, respectively focusing on the supply chain, low-carbon
product design, and the decarbonization of Schneider’s operational emissions.
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.
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.
CDP – C2.1a, C2.2a, C2.3,
C2.3a, C2.4, C2.4a
URD – chapter 2 (2.1.6,
2.3.1)
2. b) Describe the impact
of climate-related risks
and opportunities on the
organization’s business,
strategy, and financial
planning.
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 2022, 72% 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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Chapter 2 – Sustainable development
Recommended
Disclosure
CDP Climate Change
& URD 2022 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)
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.
Schneider Electric has defined short and medium-term financial investments
priorities in order to set the course towards its SBTi validated Net-Zero Commitment,
and more broadly to meet its long-term commitments for climate, and to preserve
natural resources. Read more in section 2.3.4 Investing to achieve the Group’s
climate strategy and vision on page 156.
Two main climate-related risks are identified:
• Reputational risk: as Schneider Electric has been working to reduce its own GHG
emissions for over 15 years and has a proven track record of success with its
past commitments related to reducing its own emissions, the Group does not
anticipate significant reputational risk related to emissions from its own
operations. Yet, the risk that the Group’s actual or perceived failure to achieve its
environmental sustainability targets, or commitments could negatively impact its
reputation or otherwise materially harm its business. This risk is also tied to
growing and moving environmental regulations.
• Supply chain disruption: Schneider Electric has over 200 industrial and logistics
sites globally and is exposed to the physical effects of climate change in the form
of more frequent and severe acute weather events. This could result in damage
to assets, disruption to business operations, and human consequences. Extreme
weather events do not only threaten Schneider’s assets and properties but also
the overall supply chain. Shortages or logistic bottlenecks in the upstream and
downstream supply chain can translate directly into revenue losses, higher costs,
and increased working capital requirements. Delays in production and delivery
can impact customer experiences.
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.
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 2022, 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
S T R A T E G I C R E P O R T
2.7 Methodology and audit of indicators
Recommended
Disclosure
CDP Climate Change
& URD 2022 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 Enterprise Risk
Management framework and risk taxonomy (more details in section 2.3.1.2 Risk
Monitoring and Management p.151). 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 2022,
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.
Schneider places dependency analysis at the heart of its risk management and
performs a forward-looking climate risk and vulnerability assessment to identify and
price the materiality of physical and transition climate risks that may affect its own
operations and sites, its extended value chain (upstream and downstream), and
overall economic activities in the short-term, medium-term and long-term, using
scenario analysis. The Group has developed a scenario-based analysis of climate
physical and transition risks, applying climate-related risk scenarios entailing
different emission pathways between 1.5°C and >4°C temperature rise by 2100, with
a digital-twin of the company including financial projection, market breakdown,
supply chain, and carbon footprint to quantify financially the physical and transition
risks for the Group.
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.
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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Chapter 2 – Sustainable development
Recommended
Disclosure
CDP Climate Change
& URD 2022 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 obtained in 2022 a “reasonable” assurance
from an independent third- party verifier on Scopes 1 and 2 emissions, and a
“limited” assurance on scope 3. 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 85% are due to the use phase and the products’
end of life, and around 12% 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
278 of this document.
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
80 and 81 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 50-130 /
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.
In August 2022, Schneider Electric was one of the first companies to see its
Greenhouse Gas (GHG) reduction targets validated by the Science Based Target
initiative (SBTi), aligned with its “Corporate Net-Zero Standard” published in October
2021. As part of its Net-Zero Commitment, the Group has defined mid- and
long-term targets. Ultimately, the Group is committed to be Net-Zero across its entire
value chain by 2050, which means that the Group aims to reduce its 2021 footprint
by an absolute 90% by 2050 and neutralize residual emissions with high quality and
durability carbon removal credits.
The Group aims to:
• By 2030, reduce value chain emissions by 25% and be “Net-Zero ready” in
operations;
• By 2050, reach Net-Zero CO2 emissions across the entire value chain;
• Reach carbon-neutral operations and a carbon-neutral value chain in 2025 and
2040 respectively
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
2.7 Methodology and audit of indicators
2.7.5 Report of one of the Statutory Auditors, appointed
as independent third party, on the verification of the
consolidated non financial statement
(Year ended December 31st, 2022)
This is a free English translation of the report by one of the Statutory
Auditors issued in French and is provided solely for the
convenience of English-speaking readers. This report should be
read in conjunction with, and construed in accordance with, French
law and professional standards applicable in France.
Schneider Electric SE
35, rue Joseph Monier
92500 Rueil-Malmaison (France)
In our capacity as Statutory Auditor of the company Schneider
Electric (hereinafter the “Entity”), appointed as independent third
party (“third party”) and accredited by the French Accreditation
Committee (Cofrac), (Cofrac Inspection Accreditation, n°3-1862,
scope available at www.cofrac.fr), we have undertaken a
limited assurance engagement on the historical information
(observed or extrapolated) in the consolidated non-financial
statement, prepared in accordance with the Entity’s procedures
(hereinafter the “Guidelines”), for the year ended December 31,
2022 (hereinafter the “Information” and the “Statement”,
respectively), presented in the group management report pursuant
to the legal and regulatory provisions 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 we have performed as described under
the “Nature and scope of procedures” and the evidence we have
obtained, nothing has come to our attention that cause us to believe
that the consolidated non-financial statement is not prepared in
accordance with the applicable regulatory provisions and that the
Information, taken as a whole, is not presented fairly in accordance
with the Guidelines.
Emphasis of Matter
We draw attention to section 2.7.1 – “Methodology elements on the
published indicators”, where it is stated that the scope of published
indicators excludes certain Schneider Electric’s entities. Our
opinion is not qualified in respect of excluded entities.
Preparation of the non-financial performance statement
The absence of a commonly used generally accepted reporting
framework or a significant body of established practice on which to
draw to evaluate and measure the Information allows for different,
but acceptable, measurement techniques that can affect
comparability between entities and over time.
Consequently, the Information needs to be read and understood
together with the Guidelines, summarised in the Statement.
Inherent Limitations in preparing the Information
As stated in the Statement, the Information may be subject to
uncertainty inherent to the state of scientific and economic
knowledge and the quality of external data used. Some information
is sensitive to the choice of methodology and the assumptions or
estimates used for its preparation and presented in the Statement.
Responsibility of the Entity
Management is responsible for:
• selecting or establishing suitable criteria for preparing the
Information;
• preparing a Statement pursuant to legal and regulatory
provisions, including a presentation of the business model,
a description of the main non-financial risks, a presentation of
the policies implemented considering those risks and the
outcomes of said policies, including key performance indicators
and the information set-out in Article 8 of Regulation (EU)
2020/852 (Green taxonomy);
• preparing the Statement by applying the Entity’s “Guidelines”
•
as referred above; and
implementing internal control over information relevant to the
preparation of the Information that is free from material
misstatement, whether due to fraud or error.
The Statement has been prepared by the Board of directors.
Responsibility of the Statutory Auditor appointed as
independent third party
Based on our work, our responsibility is to express 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 pursuant to part 3 of
sections I and II of Article R. 225-105 of the French Commercial
Code, i.e. the outcomes of policies, including key performance
indicators, and measures relating to the main risks, hereinafter
the “Information.”
As we are engaged 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 doing so may
compromise our independence.
It is not our responsibility to report on:
•
•
•
the Entity’s compliance with other applicable legal and
regulatory provisions (particularly with regard to the information
set-out in Article 8 of Regulation (EU) 2020/852 (Green
taxonomy), the French duty of care law and against corruption
and tax evasion);
the fairness of information set-out in Article 8 of Regulation (EU)
2020/852 (Green taxonomy)
the compliance of products and services with the applicable
regulations.
Applicable regulatory provisions and professional guidance
We performed the work described below in accordance with
Articles A. 225-1 et seq. of the French Commercial Code, the
professional guidance issued by the French Institute of Statutory
Auditors (Compagnie Nationale des Commissaires aux Comptes)
applicable to such engagement, in particular the professional
guidance issued by the Compagnie Nationale des Commissaires
aux Comptes, Intervention du commissaire aux comptes –
Intervention de l’OTI – déclaration de performance extra-financière,
and acting as the verification programme and with the international
standard ISAE 3000 (revised) - Assurance engagements other than
audits or reviews of historical financial information.
Independence and quality control
Our independence is defined by the provisions of Article L. 822-11
of the French Commercial Code and French Code of Ethics for
Statutory Auditors (Code de déontologie) of our profession. In
addition, we have implemented a system of quality control including
documented policies and procedures aimed at ensuring
compliance with applicable legal and regulatory requirements,
ethical requirements and the professional guidance issued by the
French Institute of Statutory Auditors (Compagnie Nationale des
Commissaires aux Comptes) relating to this engagement.
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S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
Means and resources
Our work engaged the skills of 13 people between septembre 2022
and March 2023 and took a total of 23 weeks.
the key performance indicators used, with respect to the
main risks and the policies presented, and
− corroborate the qualitative information (measures and
We were assisted in our work by our specialists in sustainable
development and corporate social responsibility. We conducted 15
interviews with people responsible for preparing the Statement,
representing in particular the following Directions: Sustainable
development, Sustainability performance, Risk management,
Environment and climate, Human resources, Safety, Responsible
supply chain
Nature and scope of procedures
We are required to plan and perform our work to address the areas
where we have identified that a material misstatement of the
Information is likely to arise.
The procedures we performed were based on our professional
judgment. In carrying out our limited assurance engagement on the
Information, we:
• obtained an understanding of all the consolidated entities’
activities and the description of the main risks associated;
• assessed the suitability of the criteria of the Guidelines with
respect to their relevance, completeness, reliability, neutrality
and understandability, taking into account, where appropriate,
best practices within the sector;
• verified that the Statement includes each category of social and
environmental information set out in article L. 225 102 1 III as
well as information regarding compliance with human rights and
anti corruption and tax avoidance legislation;
• 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 main 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;
• verified that the Statement presents the business model and a
description of the main risks associated with of all the
consolidated entities’ activities, including where relevant and
proportionate, the risks associated with its business
relationships, its products or services, as well as its policies,
measures and the outcomes thereof, including key performance
indicators associated to the main risks;
• referred to documentary sources and conducted interviews to:
− assess the process used to identify and confirm the main
risks as well as the consistency of the outcomes, including
outcomes) that we considered to be the most important
presented in Appendix; concerning certain risks
(competition and corruption risks, cybersecurity and
personal data, product quality, well-being in the workplace,
human rights, value chain resilience and governance), our
work was carried out on the consolidating entity, for others
social and environment risks, our work was carried out on the
consolidating entity and on a selection of sites and countries1;
• verified that the Statement covers the consolidated scope, i.e.
all the entities within the consolidation scope in accordance with
Article L. 233-16 of the French Commercial Code within the
limitations set out in the Statement;
• obtained an understanding of internal control and risk
•
management procedures the Entity has implemented and
assessed the data collection process aimed at ensuring 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, 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 definitions and procedures and
reconcile the data with supporting documents. This work
was carried out on a selection of contributing sites and
covers between 16% and 38% of the consolidated data
relating to the key performance indicators and outcomes
selected for these tests;
• assessed the overall consistency of the Statement in relation to
our knowledge of all the consolidated entities;
The procedures performed in a limited assurance review are less in
extent than for a reasonable assurance opinion in accordance with
the professional guidelines of the French National Institute of
Statutory Auditors (Compagnie Nationale des Commissaires aux
Comptes); a higher level of assurance would have required us to
carry out more extensive procedures.
Neuilly-sur-Seine, March 22, 2023
One of the Statutory Auditors,
PricewaterhouseCoopers Audit
Jean-Christophe Georghiou
Partner
Emilie Bobin
Partner, Sustainable Performance
Appendix 1: List of information we concidered most important
Key performance indicators and other quantitative results:
Qualitative information (actions and results) :
• Schneider Sustainability Impact Indicators (SSI) except SSI #+1
• Schneider Sustainability Essentials (SSE) indicators except
SSE #12
• Workforce (including by gender), hires and terminations
• Number of training hours
• Lost-Time Injury Rate (LTIR)
• Lost-Time Day Rate (LTDR)
• Occupational Illness Frequency Rate
• Tonnages of waste generated and recovered, by type of waste
• Water consumption
• Energy consumption measured by energy source
• Sulfur hexafluoride consumption (SF6) and associated leaks
• Complete carbon footprint according to GHG Protocol guidelines
(Scope 1, Scope 2 market-based, Scope 2 location-based, all
categories of Scope 3)
• Emissions of Volatile Organic Compounds (VOCs)
• Actions and results of policies on occupational health and
safety, equity, diversity and inclusion, well-being in the
workplace, and talent attraction and retention
• Actions and results of policies on the environment, greenhouse
gas emissions, natural resource management and supply chain
resilience
• Actions and results of policies on governance, cybersecurity
and data protection, and product safety
• Actions and results in favor of human rights and fundamental
freedoms
• Actions and results in the area of business ethics and
prevention of corruption
(1) Schneider Electric France, Schneider Electric Germany (Regensburg Factory et Merten Wiehl GSC / BU) ; Schneider Electric Philippines (Cavite Admin, Cavite CCS,
Cavite PDC, Cavite 2, Cavite 3) ; Schneider Electric India (Gagret LTI 1, Gagret LPT1, Gagret LPT2, Hyperabad).
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
2.7 Methodology and audit of indicators
2.7.6 Reasonable assurance report from one of the
Statutory Auditors on the Identified Sustainability
Information of Schneider Electric’s non financial
performance statement as for the year ended
December 31st, 2022
To the Board of Directors of Schneider Electric,
In our capacity as Statutory Auditor of Schneider Electric
(hereinafter the “Company”) and in accordance with your request,
we have undertaken a reasonable assurance engagement on the
selected key sustainability performance indicators as for the year
ended December 31st, 2022 (the “Identified Sustainability
Information”) presented below and included in the document URD
presented in pages 73 to 259 of Universal Registration Document
(hereinafter “URD 2022”)(1):
• KPI 1 : SSE #14 - Decrease the Medical Incident rate
• KPI 2 : Lost-Time Injury Rate (LTIR)
• KPI 3 : Lost-Time Day Rate (LTDR)
• KPI 4 : Occupational Illness Frequency Rate
• KPI 5 : SSI #8 – A Increase gender diversity in hiring (50%),
front-line management (40%) and leadership teams (30%)
• KPI 6 : Measured energy consumption by source
• KPI 7 : SSI #3 - Source electricity from renewables
• KPI 8 : Estimated Total Scopes 1 and 2 GHG emissions
(market-based)
Our assurance does not extend to information in respect of earlier
periods or to any other information included in the URD 2022.
Our Reasonable Assurance Opinion
In our opinion, the Identified Sustainability Information set out in the
URD 2022 presented in pages 73 to 285 of URD 2022 for the year
ended December 31st, 2022 is prepared, in all material respects, in
accordance with (KPI 1 to 4 : GHSD017 ; KPI 5 : SSI 8 - SSI-SSE
KPI Reporting Protocol SS8v2 ; KPI 6 to 8 : GED 001 and 1. Carbon
footprint SE - Reporting Protocol) and the basis of preparation set
out in the section 2.7.1 of the URD 2022 as for the year ended
December 31st, 2022.
We do not express an assurance opinion on information in
respect of earlier periods or on any other information included in
the URD 2022.
Emphasis of Matter
We draw attention to section 2.7.1 – “Methodology elements on the
published indicators”, where it is stated that the scope of published
indicators excludes certain Schneider Electric’s entities. Our
opinion is not qualified in respect of excluded entities.
Understanding how Schneider Electric has Prepared the
Identified Sustainability Information
The absence of a commonly used generally accepted reporting
framework or a significant body of established practice on which to
draw to evaluate and measure Identified Sustainability Information
allows for different, but acceptable, measurement techniques that
can affect comparability between entities and over time.
Consequently, the Identified Sustainability Information needs to be
read and understood together with the reporting framework defined
by the Company in internal methodological guidelines specific to
each family of indicators (available at the Company’s headquarter
on request) and the basis of preparation set out in the section 2.7.1
- “Methodology of published indicators” of URD 2022 as for the
year ended Decembrer 31st, 2022 (together “the Reporting
Criteria”), which Schneider Electric has used to prepare the
Identified Sustainability Information.
Inherent Limitations in Preparing the Identified Sustainability
Information
As indicated in the section 2.7.1 of URD 2022, the Identified
Sustainability Information may be subject to inherent uncertainty
because of incomplete scientific and economic knowledge and the
quality of external data used. Moreover, some information is
sensitive to the choice of methodology and the assumptions and/or
estimates used for its preparation and presented in Schneider
Electric’s URD 2022.
In addition, greenhouse gas quantification is subject to inherent
uncertainty because of incomplete scientific knowledge used to
determine emissions factors and the values needed to combine
emissions of different gases.
Schneider Electric’s Responsibilities
Management of the Company is responsible for:
• selecting or establishing suitable criteria for preparing the
Identified Sustainability Information, taking into account
applicable law and regulations related to reporting the Identified
Sustainability Information;
the preparation of the Identified Sustainability Information in
accordance with the Reporting Criteria;
•
• designing, implementing and maintaining internal control over
information relevant to the preparation of the Identified
Sustainability Information that is free from material misstatement,
whether due to fraud or error.
Our Responsibilities
We are responsible for:
• planning and performing the engagement to obtain reasonable
assurance about whether the Identified Sustainability
Information is free from material misstatement, whether due to
fraud or error;
forming an independent opinion, based on the evidence we
have obtained; and
•
• reporting our opinion to the Directors of the Company.
As we are engaged to form an independent opinion on the
Identified Sustainability Information as prepared by management,
we are not permitted to be involved in the preparation of the
Identified Sustainability Information as doing so may compromise
our independence.
Professional Standards Applied
We performed our reasonable assurance engagement in
accordance with the professional guidance issued by the French
Institute of Statutory Auditors (Compagnie Nationale des
Commissaires aux Comptes) applicable to such engagement and
the International Standard on Assurance Engagements 3000
(Revised), Assurance Engagements other than Audits or Reviews of
Historical Financial Information, and, in accordance with the
International Standard on Assurance Engagements 3410,
Assurance Engagements on Greenhouse Gas Statements, issued
by the International Auditing and Assurance Standards Board.
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S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
Our Independence and Quality Control
We have complied with the independence and other ethical
requirements of the French Code of Ethics for Statutory Auditors
(Code de Déontologie) as well as the provisions set forth in Article
L.822-11 of the French Commercial Code (Code de Commerce)
and the International Code of Ethics for Professional Accountants
(including International Independence Standards) issued by the
International Ethics Standards Board for Accountants (IESBA Code)
which is founded on fundamental principles of integrity, objectivity,
professional competence and due care, confidentiality and
professional behavior.
Our firm applies International Standard on Quality Management 1,
which requires the firm to design, implement and operate a system
of quality management including policies or procedures regarding
compliance with ethical requirements, professional standards, and
applicable legal and regulatory requirements.
Our work was carried out by an independent and multidisciplinary
team with experience in sustainability reporting and assurance.
Summary of the Work we Performed as the Basis for our
Assurance Opinion
A reasonable assurance engagement involves performing
procedures to obtain evidence about the Identified Sustainability
Information. The nature, timing and extent of procedures selected
depend on professional judgment, including the assessment of
risks of material misstatement, whether due to fraud or error, in the
Identified Sustainability Information. In making those risk
assessments, we considered internal control relevant to the
Company’s preparation of the Identified Sustainability Information.
A reasonable assurance engagement also includes:
• evaluating the suitability in the circumstances of the Company’s
use of the Reporting Criteria;
• evaluating the appropriateness of measurement and evaluation
methods, reporting policies used and the reasonableness of
estimates made by the Company; and
• evaluating the disclosures in, and overall presentation of, the
Identified Sustainability Information.
We believe that the evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Neuilly-sur-Seine, March 22,2023
One of the Statutory Auditors
PricewaterhouseCoopers Audit
Jean-Christophe Georghiou
Partner
Emilie Bobin
Partner, Sustainable Performance
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
2.8 Indicators
In this section
2.8.1 Environmental and climate indicators
2.8.2 Social indicators
2.8.3 Societal indicators
274
280
289
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
(SSI)
Essentials
(SSE)
1.
2.
3.
4.
5.
1.
2.
3.
4.
5.
6.
7.
8.
9.
2021-2025 programs
Grow Schneider Impact revenues(3)
Help our customers save and avoid millions of
tonnes of CO2 emissions
Reduce CO2 emissions from top 1,000
suppliers’ operations
Baseline(1)
2022 progress(2)
2019: 70%
2020: 263M
72%
440M
2020: 0%
10%
Increase green material content in our products
2020: 7%
Primary and secondary packaging free from
single-use plastic, using recycled cardboard
Decarbonize our operations with Zero-CO2 sites
Substitute relevant offers with SF6-Free medium
voltage technologies
Source electricity from renewables
Improve CO2 efficiency in transportation
Improve energy efficiency in our sites
Grow our product revenues covered
with Green Premium™
Switch our corporate vehicle fleet to electric
vehicles
Deploy local biodiversity conservation and
restoration programs in our sites
Give a second life to waste in
‘Waste-to-Resource’ sites
2020: 13%
2020: 30
2020: 26%
2020: 80%
2020: 0%
2019: 0%
2020: 77%
18%
45%
77
41.5%
85%
-7.7%
7.8%
80%
2020: 1%
13.8%
2020: 0%
17.6%
2020: 120
127
2025
Target
80%
800M
50%
50%
100%
150
100%
90%
15%
15%
80%
33%
100%
200
10.
11.
Avoid primary resource consumption through
‘take-back at end-of-use’ since 2017 (metric tons)
Deploy a water conservation strategy and action
plan for sites in water-stressed areas
2020: 157,588
261,128
420,000
2020: 0%
48%
100%
These programs
contribute to UN SDGs
(1) The baseline year for each indicator is provided together with its baseline performance.
(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 #+1 and SSE #12 in 2022), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 270). Please refer to
page 242 for the methodological presentation of each indicator. The 2022 performance is also discussed in more details in each section of this report.
(3) Per Schneider Electric definition and methodology.
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S T R A T E G I C R E P O R T
Chapter 2 – Sustainable development
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.
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
#
#
#
%
2022
243
204
39
86%
2021
244
211
33
87%
2020
232
212
20
90%
2019
241
220
21
89%
(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
18%
45%
2021
11%
21%
2020
7%
13%
2019
UP
UP
Indicators
Units
2022
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’(3)
SSE #15 – Reduce total number of safety
recalls issued to 0 (4)
%
%
%
80%
78%
77%
55%
metric tons
57,052
46,488
60,149
53,867
# recalls
24
14
25
UP
2022 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
(3) SSE #10 figures provided in the table are annual results. Cumulative performance since the start of the program in 2017 is 261,128 avoided metric tons.
(4) SSE #15, originally “Reduce scrap from safety units recalled” has been upgraded in 2022 in line with the Quality ambition of the Group
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Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
2.8 Indicators
Waste
GRI
Indicators
Estimated coverage (% waste generation)
Units
%
2022
86%
2021
87%
2020
90%
2019
89%
306-3
Total waste generated
metric tons
131,402
136,816
125,292
152,171
Total waste generated/Turnover
metric tons/
million €
3.84
4.73
4.98
5.60
306-3
306-4
306-5
306-5
306-2
306-3
306-5
306-3
306-3
Non-hazardous waste generated
metric tons
123,311
of which reused or recycled
metric tons
111,567
of which incinerated with energy recovery
metric tons
of which landfilled or incinerated without
energy recovery
metric tons
6,719
5,025
Non-hazardous waste reduction(1)
metric tons
11,941
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)
SSE #9 - Number of ‘Waste-to-Resource’ sites
# and aggregate quantity of reportable spills
Quantity of spills recovered
Number of significant fines (> EUR 10,000)
related to environmental or ecological issues
%
96%
metric tons
metric tons
metric tons/
million €
%
#
kg
kg
#
8,091
8,091
0.24
-44%
127
0
NA
0
2022 audited indicators. UP = Unpublished. NA = Not Applicable
128,267
115,550
6,964
5,753
13,667
95.9%
8,549
8,549
117,607
143,149
113,211
136,316
4,396
6,833
7,729
96.5%
7,685
7,667
3,265
95.3%
9,022
8,727
0.30
0.30
0.33
-30%
-27%
-21%
126
0
NA
0
120
0
NA
0
NA
UP
UP
UP
(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 percentage without waste reduction is: 95.9%, 95.5% 96.3%, and 95.2% for
2022, 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
Units
#
#
#
2022
260
107
153
2021
260
107
153
2020
UP
UP
UP
2019
UP
UP
UP
2022 audited indicators. UP = Unpublished.
(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)
2022 audited indicators.
Units
%
kg
2021
90%
2021
90%
2020
90%
2019
90%
308,520
342,228
440,442
653,502
kg/million €
9.0
11,8
17.5
24.1
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Chapter 2 – Sustainable development
Water
GRI
Indicators
Estimated coverage (% water withdrawal)
303-3
Total water withdrawals (other than for cooling)
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
2022
83%
2021
86%
2020
88%
2019
88%
1,921,569
2,072,263
1,928,032
2,554,428
14,514
492,308
19,156
17,461
17,074
513,631
452,602
501,163
1,388,474
1,507,606
1,446,391
2,021,168
26,273
622,951
31,870
11,578
15,023
879,602
780,201
880,276
%
m3
m3
m3
m3
m3
m3
303-3
Water withdrawal/Turnover(3)
m3/million €
56.2
Water withdrawal intentisy reduction vs 2017(3)
303-3-b
Total water withdrawals from areas with water stress(4)
303-1
SSE #11 – Sites in water-stressed areas with a water
conservation strategy and related action plan(4)
%
m3
%
-48.0%
842,216
48.0%
71.7
-33.6%
930,603
8.5%
76.5
-29.1%
UP
UP
94.1
-12.9%
UP
UP
2022 audited indicators. UP = Unpublished.
(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)(1)
ISO 50001 certified sites
Units
%
#
2022
95%
132
2021
95%
140
2020
96%
150
2019
98%
153
302-1,
302-4
302-1,
302-4
302-1,
302-4
Estimated total energy consumption
MWh
1,201,276
1,325,491
1,216,845
1,452,002
of which measured energy consumption
of which estimated energy consumption for
sites out of reporting perimeter(2)
MWh
MWh
979,497
221,779
1,080,366
1,034,003
1,201,669
245,125
182,842
250,333
Estimated total energy consumption/turnover MWh/million €
35.1
45.9
48.3
53.5
Estimated total energy productivity
€/MWh
28,450
%
129.3%
21,803
75.7%
20,709
66.9%
18,703
50.7%
Estimated total improvement in energy
productivity vs 2005(3)
Estimated total energy consumption from
renewable sources
MWh
688,474
670,287
Estimated total percentage of renewable energy
%
57.3%
Estimated total energy consumption from
non-renewable sources
MWh
512,802
50.6%
655,204
Estimated total percentage of non renewable energy
%
42.7%
49.4%
UP
UP
UP
UP
UP
UP
UP
UP
Measured energy consumption by source
grid electricity
purchased renewable electricity(4)
self generated renewable electricity
district heating
fuel oil
gas
coal
renewable fuel and heat
MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh
108,263
588,851
20,719
24,519
6,520
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
229,552
276,954
251,377
298,319
0
1,073
0
1,231
0
0
1,155
1,778
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S T R A T E G I C R E P O R T
2.8 Indicators
Energy (continued)
GRI
Indicators
Measured renewable electricity generated on
site and sold back to the grid
SSE #3 – Measured electricity sourced from
renewables
Estimated energy consumption by source(1)
grid electricity
purchased renewable electricity(4)
self generated renewable electricity
district heating
fuel oil
gas
coal
renewable fuel and heat
2022 audited indicators. UP = Unpublished.
Units
MWh
2022
2,263
2021
2,558
2020
2,734
2019
2,149
%
85%
82%
80%
50%
MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh
107,019
77,831
0
2,829
855
33,245
0
0
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
(1) Out of scope energy consumption concerns mainly AVEVA, RIB Software and Larsen & Toubro and to a limited extent other small non-integrated entities.
(2) 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. 2022 includes 44,286 MWh of Energy Attribute Certificates
(EACs) applied to sites in the estimated energy scope.
(3) 2005 estimated energy productivity is 12,408 € per MWh
(4) 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 2022 EAC account for 35.9% of total measured purchased renewable electricity reported.
Greenhouse gas (GHG)
GRI
Indicators
Estimated coverage (% total GHG emissions)
305-1,
305-2
305-5
305-4
Estimated Total Scopes 1 and 2 GHG
emissions (market-based)(1)
Absolute reduction vs base year (2021)(2)
Total Scopes 1 and 2 per euro turnover
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)
Units
%
2022
99%
2021
99%
2020
99%
2019
100%
TCO2e
229,347
294,051
287,865
437,293
%
TCO2e/
million €
-22%
6.7
0%
10.2
NA
11.4
NA
16.1
119,617
140,936
142,658
180,751
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
%
%
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
4,414
47,271
0
55,598
4,777
0.08%
0.11%
7,557
109,730
49,674
703
8,358
50,995
4,520
56,776
0
4,451
52,197
0
62,683
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
145,207
256,542
70,145
134,122
694
795
11,550
62,818
35,020
86,605
6,104
0.10%
0.19%
10,853
153,115
66,692
701
14,714
71,008
305-3
305-5
305-4
Other relevant indirect (scope 3) GHG
emissions(6)
Absolute variation vs base year (2021)(6)
Total scope 3 per euro turnover(6)
TCO2e 60,952,497
68,901,866
65,921,222
74,256,245
%
TCO2e/
million €
-11.5%
1,783
0%
2,384
NA
2,620
NA
2,733
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Chapter 2 – Sustainable development
GRI
305-3
Indicators
Units
2022
2021
2020
2019
Other relevant indirect (Scope 3 upstream)
GHG emissions
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 goods 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(6)
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
8,613,192
8,237,192
6,966,062
8,610,739
TCO2e
TCO2e
TCO2e
7,572,974
7,278,733
6,137,388
7,388,926
57,986
43,544
62,876
53,167
63,863
55,151
64,398
67,993
37,415
670,840
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e 52,339,305
173,932
56,501
616,519
497,761
753,253
42,760
30,778
31,872
39,710
33,304
139,054
152,359
146,723
157,405
60,664,674
58,955,160
65,645,506
TCO2e
427,872
485,877
371,159
449,507
TCO2e
TCO2e
#
47,285,918
55,224,389
53,998,500
60,447,799
4,625,515
4,954,408
4,585,501
4,748,200
77
51
30
UP
TCO2e 51,325,544
49,708,425
46,964,497
50,994,695
TCO2e
41,674,416
33,930,803
28,605,883
39,406,306
TCO2e 439,960,929
346,960,969
263,321,741
187,751,362
2022 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 gas 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 for two reasons: on the one hand, energy consumption and corresponding CO2 emissions
are estimated for sites not included in the energy reporting perimeter; on the other hand, the indirect emissions are calculated on the conversion factors per country
and not with supplier-specific data. 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 298,461 TCO2e (audited value), and 385,574 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 514,648 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, 2020) for European countries, and average country emission factors for other countries (IEA, 2020)
(2) In 2017, direct (Scope 1) emissions, energy indirect (scope 2) emissions and other relevant indirect (scope 3) emissions amounted to 187,477 TCO2e, 511,602 TCO2e
and 67,683,080 TCO2e respectively. CO2 reductions in 2022 compared to 2017 are 67% for Scopes 1 and 2, and 10% for Scope 3.
(3) SF6 emissions are generated in a limited number of manufacturing sites that are the ones which are handling SF6 for the relevant products: it corresponds to 13 sites in
2022 and in 2021, and 14 sites in 2020 and 2019
(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
17,294 tCO2b in 2022
(6) These emissions correspond to products sold by Schneider Electric during the year of reporting and cumulated over their lifetime. These emissions are attributable to
electricity consumption of products, either due to internal consumption or due to heat dissipation (Joule effect). The GHG emissions from electricity considered are
forward-looking during the lifetime of products, based on a scenario from the International Energy Agency (IEA) that factors in the future decarbonization of the grids.
Previously these emissions were based on the Reference Technology Scenario of the “Energy Technology Perspectives 2017” (IEA, 2017) which provided a baseline
scenario based on existing (at the time of publication) energy- and climate-related commitments by countries, including Nationally Determined Contributions pledged
under the Paris Agreement. For 2022 carbon footprint, the GHG emissions from electricity have been updated with the most recent scenario, to better reflect the
current commitments of countries. The scenario is now the Stated Policies Scenario from the “World Energy Outlook 2022” (IEA, 2022), which is based on current
policies, as well as policies announced by governments at the time of publication. This update in terms of energy scenario is the main driver for the reduction of the
emissions by 14% year-on-year on this category. Using the same energy scenario for the emissions with sales of 2021 would lead to emissions of 48,479,617 TCO2e
i.e., a decrease of 2.5% year-on-year;
(7) Avoided CO2 emissions 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, while avoided CO2 emissions correspond to
greenfield sales that enable a limitation of the increase of global emission. Since new methodologies are developed every year, 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 addition, methodologies are continuously
improved, leading potentialy to some adjustments with retroactive impact. In 2022, out of the 93.4 MTCO2e saved and avoided, 0.92 MT (1.0%) came from 2018-2021
backdated performance.
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2.8 Indicators
2.8.2 Social indicators
2.8.2.1 Key performance indicators from the Schneider Sustainability Impact and
Schneider Sustainability Essentials
2021-2025 programs
Baseline(1)
2022 progress(2)
Strategic suppliers who provide decent work to
their employees
Level of confidence of our employees to report
unethical conduct
Increase gender diversity in hiring (50%),
front-line management (40%) and leadership
teams (30%)(3)
Double hiring opportunities for interns,
apprentices and fresh graduates
Deploy a ‘Social Excellence’ program through
multiple tiers of suppliers(4)
Train our employees on Cybersecurity
and Ethics every year
Decrease the Medical Incident rate
Schneider
Sustainability #
Impact
(SSI)
6.
7.
8.
10.
12.
13.
14.
15.
16.
17.
Essentials
(SSE)
2022: 1%
1%
2021: 81%
+1pt
2025
Target
100%
+10pts
2020: 41/23/24
41/27/28
50/40/30
2019: 4,939
x1.33
--
In progress
x2.00
--
2020: 90%
2019: 0.79
95.5%
100%
0.58
0.38
0
2020: Top 25%
Top 25%
Top 25%
2020: 374
2,083
2020: F: -1.73%
2020: M: 1.00%
-1.6%
1.02%
4,000
<1%
62%
60%
Reduce total number of safety recalls issued to 0
2020: 25
24
Be in the top 25% in external ratings for
Cybersecurity performance
Assess our suppliers under our ‘Vigilance
Program’
18.
Reduce pay gap for both females and males
19.
20.
21.
22.
23.
Increase subscription in our yearly Worldwide
Employee Share Ownership Plan (WESOP)
Pay our employees at least a living wage
Multiply the number of employee-driven
development interactions on the Open Talent
Market
2019: 53%
2019: 99%
2020: 5,019
100%
x1.9
Support the digital upskilling of our employees
2020: 41%
77%
Provide access to meaningful career
development programs for employees during
later stages of their career
2022: 43%
43%
100%
x4
90%
90%
75%
24.
Increase our employee engagement level
2020: 69%
70%
These programs
contribute to
UN SDGs
(1) The baseline year for each indicator is provided together with its baseline performance.
(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 #+1 and SSE #12 in 2022), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 270). In addition,
SSI #8 obtained a “reasonable” level of assurance in 2022. Please refer to page 242 for the methodological presentation of each indicator. The 2022 performance is
also discussed in more details in each section of this report.
(3) Calculation methodology for SSI #8 has been expanded in Q2 2022 to include blue collar managers in the scope of front line managers. Due to this methodological
change, the 2020 baseline for front line managers has been recalculated to 23% instead of 25%.
(4) SSE #12 ‘Social Excellence’ program currently under development.
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Chapter 2 – Sustainable development
Indicators below have a Group scope as described in section 2.7, page 242.
HR statistics presented below cover about 90% of the 149,812 employees from consolidated companies where HR IT systems have been
deployed. About 14,400 employees are excluded, including 6,500 AVEVA and OSIsoft employees and 2,900 RIB Software employees.
SSI #8 is calculated on constant scope and also excludes employees from L&T and Proleit, as they were acquired during 2020, which is the
baseline year for this program. SSI #8 coverage is about 87% of Group employees in 2022. Total Group workforce, ie employees and
non-employee interim workers is 164,183 people in 2022.
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.
2.8.2.2 General disclosure
Spot workforce at year-end
GRI
Indicators
Units
2022
2021
2020
2019
Spot workforce at year-end including
supplementary employees*
Spot workforce at year-end excluding
supplementary employees*(1)
Open-ended contract
Fixed-term contract
year-end HC
149,812
147,468
147,349
150,828
year-end HC
134,931
128,384
128,770
135,307
%
%
88.8%
11.2%
87.2%
12.8%
19,084
24.0%
87.3%
12.7%
18,548
23.7%
87.3%
12.7%
15,456
21.6%
Spot supplementary employees* at year-end
year-end HC
14,881
102-8
Share of temporary personnel (fixed-term
contracts and supplementary personnel*)
%
22.3%
2022 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 (134,931 employees, i.e. around 90% of employees excluding supplementary employees).
Workforce composition(1)
GRI
Indicators
Coverage (of total employees)
102-8
Organization of working time
401-1
401-1
Full-time
Part-time
Hires(2)
Departures(2)
Layoffs
Resignations
Other (retirement, end of contract, etc.)
401-1
Total employee turnover
Turnover by gender
Men
Women
Turnover by generation
Gen Z
Millenials
Gen X
Boomer
Silent
401-1
102-8
Voluntary turnover
Breakdown of workforce by region
Asia-Pacific
Western Europe
North America
Rest of the world
Units
%
%
HC
HC
HC
HC
HC
%
%
%
%
%
%
%
%
%
%
%
%
%
2022
90%
98%
2%
28,214
22,005
5,970
12,757
3,278
16.6%
15%
19%
47%
17%
8%
18%
0%
9.6%
34%
27%
26%
13%
2021
93%
98%
2%
27,189
22,877
7,114
11,944
3,819
18.1%
17%
21%
60%
19%
8%
18%
39%
9.5%
31%
27%
26%
16%
2020
97%
97%
3%
19,536
20,840
5,626
8,729
6,485
16.1%
16%
18%
64%
18%
9%
18%
69%
6.9%
32%
27%
24%
17%
2019
UP
98%
2%
25,131
23,381
8,190
10,600
4,591
17.6%
UP
UP
UP
UP
UP
UP
UP
8.0%
35%
26%
20%
19%
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2.8 Indicators
Workforce composition (continued)
GRI
102-8
Indicators
Units
2022
2021
2020
2019
Breakdown of workforce by top 10 countries
United States
China
India
France
Mexico
Germany
Spain
Indonesia
United Kingdom
Philippines
102-8
Annual change in workforce in top 10 countries
United States
China
India
France
Mexico
Germany
Spain
Indonesia
United Kingdom
Philippines
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
of which men
of which women
Blue collar
of which men
of which women
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
14%
12%
11%
11%
11%
4%
3%
3%
2%
2%
5%
6%
46%
2%
7%
2%
8%
-2%
-1%
10%
33%
42%
41%
33%
28%
27%
24%
37%
21%
22%
21%
52%
66%
34%
48%
67%
33%
14%
11%
8%
11%
10%
4%
3%
3%
3%
2%
5%
-2%
8%
7%
8%
9%
0%
6%
-3%
-9%
34%
42%
44%
33%
26%
27%
23%
37%
16%
21%
19%
51%
66%
34%
49%
66%
34%
13%
11%
7%
11%
10%
3%
3%
3%
3%
2%
-5%
-3%
-3%
-4%
36%
-9%
-5%
-10%
-6%
-2%
33%
42%
38%
23%
24%
25%
23%
34%
UP
19%
21%
50%
67%
33%
50%
67%
33%
13%
10%
7%
11%
7%
3%
3%
3%
3%
2%
-5%
-2%
1%
-2%
0%
-2%
2%
-5%
-2%
-2%
33%
42%
25%
23%
23%
24%
22%
33%
UP
19%
20%
51%
67%
33%
49%
68%
32%
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Chapter 2 – Sustainable development
Indicators
Units
2022
2021
2020
2019
* 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 (134,931 employees, i.e. around 90% 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
2022
2021
2020
2019
GRI
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
2022 audited indicators. UP = Unpublished.
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
2022 audited indicators. UP = Unpublished.
%
%
%
%
%
%
%
%
%
%
%
%
%
%
24%
59%
17%
43%
31%
17%
7%
2%
4%
13%
19%
24%
11%
29%
23%
59%
18%
40%
34%
16%
7%
3%
4%
13%
19%
24%
10%
31%
23%
59%
18%
46%
33%
13%
6%
2%
4%
13%
19%
29%
7%
28%
22%
59%
18%
46%
33%
13%
6%
2%
4%
13%
19%
30%
6%
28%
%
%
%
%
%
%
%
%
%
%
%
%
%
69%
31%
39%
61%
59%
41%
61%
37%
2%
36%
16%
37%
11%
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%
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(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 (134,931 employees, i.e. around 90% 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.
Chapter 2 – Sustainable development
S T R A T E G I C R E P O R T
2.8 Indicators
Layoffs (1)(2)
Indicators
Units
2022
2021
2020
2019
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
Breakdown by gender
Men
Women
Breakdown by generation
Gen Z
Millenials
Gen X
Boomer
Silent
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
69%
31%
21%
79%
35%
10%
48%
7%
60%
40%
34%
44%
16%
6%
0%
70%
30%
22%
78%
33%
9%
47%
10%
62%
38%
30%
44%
19%
7%
0%
72%
28%
20%
80%
28%
8%
50%
14%
63%
37%
UP
UP
UP
UP
UP
79%
21%
33%
67%
30%
8%
44%
18%
62%
38%
UP
UP
UP
UP
UP
(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 (134,931 employees, i.e. around 90% of employees excluding supplementary employees);
(2) Acquisitions/disposals and supplementary employees not taken into account in the calculation.
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
2022
2021
2020
2019
%
%
%
%
%
%
36%
40%
19%
4%
1%
0%
41%
36%
19%
4%
1%
0%
41%
39%
16%
3%
1%
0%
40%
34%
17%
5%
2%
2%
(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 (134,931 employees, i.e. around 90% of employees excluding supplementary employees);
(2) Acquisitions/disposals and supplementary employees not taken into account in the calculation.
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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
UP = Unpublished.
Units
2022
2021
2020
2019
%
%
%
%
%
%
%
%
%
62%
38%
50%
39%
11%
33%
15%
42%
10%
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%
(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 (134 931 employees, i.e. around 90% 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.
Units
2022
2021
2020
2019
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
%
%
%
%
%
%
10%
90%
54%
24%
10%
12%
8%
92%
67%
16%
6%
11%
* 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(1)
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
(1) Compared to employees recorded in our global TalentLink tool
Units
%
%
%
%
#
%
2022
94%
60%
55%
76%
202
70%
2021
92%
80%
63%
81%
150
72%
10%
90%
64%
15%
7%
14%
2020
85%
66%
70%
89%
78
69%
11%
89%
64%
16%
7%
13%
2019
92%
64%
68%
86%
81
70%
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2.8 Indicators
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
#
%
2022
211
87%
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
#
#
#
#
#
#
#
#
#
171
143
28
95
80
15
0
0
0
403-2
SSE #14 Medical Incident Rate(2)
per million
0.58
hours worked
of which Schneider Electric employees
per million
0.57
hours worked
of which temporary workers
per million
0.64
hours worked
403-2
Lost-Time Injury Rate (LTIR)(2)
per million
0.32
hours worked
of which Schneider Electric employees
per million
0.32
hours worked
of which temporary workers
per million
0.34
hours worked
2021
180
77%
186
152
34
96
76
20
2
2
0
0.65
0.63
0.73
0.33
0.32
0.43
2020
184
80%
154
133
21
85
74
11
1
1
0
2019
UP
UP
233
193
40
116
94
22
1
1
0
0.58
0.79
0.58
0.77
0.55
0.91
0.32
0.39
0.32
0.38
0.29
0.50
403-2
Lost-Time Day Rate (LTDR)(2)
per million
14.23
15.58
13.74
16.69
hours worked
of which Schneider Electric employees
per million
15.22
16.47
14.92
17.69
hours worked
of which temporary workers
per million
8.54
11.00
6.61
10.96
hours worked
403-2
Number of lost days
of which Schneider Electric employees
of which temporary workers
#
#
#
4,195
3,822
373
4,477
3,963
514
3,662
3,412
250
4,909
4,427
482
403-2
Number of hours worked
# 294,742,174
287,369,013
266,582,055
294,202,028
of which Schneider Electric employees
# 251,075,834
240,649,594
228,742,624
250,235,482
of which temporary workers
# 43,666,340
46,719,419
37,839,431
43,966,546
403-2
Occupational Illness Frequency Rate (OIFR)(2)
per million
0.003
0.017
0.019
0.014
hours worked
of which Schneider Electric employees
per million
0.004
0.021
0.022
0.016
hours worked
of which temporary workers
per million
0.000
0.000
0.000
0.000
hours worked
2022 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
2.8.2.5 Talent development and training
GRI
Indicator
Coverage
404-1
404-1
Number of training hours
Average hours of training per person
of which white collar
of which blue collar
of which men
of which 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 top 10 countries
United States
China
India
France
Mexico
Germany
Spain
Indonesia
United Kingdom
Philippines
Percentage of employees trained on the Trust
Charter, Schneider’s Code of Conduct
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)
Sustainability(2)
Technical
Languages
IT
Products, Solutions and Services
Management and Leadership
Personal Development
Functional
Mandatory/Compliance
Supply Chain
Wellbeing
Agile
Units
%
2022
92%
2021
91%
2020
90%
2019
92%
#
#
#
#
#
#
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
2,988,795
2,881,627
2,869,111
3,117,348
24.1
25.3
22.4
24.7
22.9
57%
43%
81%
74%
81%
86%
78%
90%
76%
86%
95%
71%
85%
98%
97%
24.5
25.1
24.0
24.9
23.7
53%
47%
83%
75%
81%
86%
77%
97%
70%
85%
96%
72%
93%
96%
97%
95%
96%
17%
5%
0%
6%
14%
8%
7%
22%
8%
9%
2%
2%
17%
5%
0%
6%
12%
6%
7%
25%
9%
12%
1%
1%
24.5
24.9
24.0
25.1
23.2
52%
48%
81%
76%
84%
90%
69%
74%
79%
84%
93%
65%
92%
93%
94%
90%
20%
6%
0%
8%
12%
4%
11%
24%
4%
9%
2%
UP
25.0
27.1
22.9
25.6
23.7
54%
46%
81%
78%
86%
84%
71%
87%
80%
83%
76%
69%
92%
96%
UP
UP
22%
5%
5%
8%
13%
6%
8%
27%
6%
UP
UP
UP
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2.8 Indicators
GRI
Indicator
Units
2022
Total Learning & Development spend(3)
million €
Learning & Development cost per employee
€/employee
75.6
560.8
2021
56.8
425.8
2020
44.2
356.1
2019
52.3
386.6
Breakdown of costs by category(1)
White collar
Blue collar
Breakdown of costs by training type(1)
Sustainability(2)
Technical
Languages
IT
Products, Solutions and Services
Management and Leadership
Personal Development
Functional
Mandatory/Compliance
Supply Chain
Wellbeing
Agile
404-3
Employees having had a performance review(4)
Breakdown by category
White collar
Blue collar
Breakdown by gender
Men
Women
Breakdown of promotions by gender(5)
Men
Women
Breakdown of promotions by generation
Gen Z
Millenials
Gen X
Boomer
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
63%
37%
23%
10%
2%
5%
7%
18%
5%
13%
7%
5%
1%
4%
98%
76%
24%
70%
30%
67%
33%
17%
61%
20%
2%
64%
36%
31%
9%
2%
6%
12%
13%
6%
15%
0%
4%
1%
1%
98%
76%
26%
71%
29%
UP
UP
UP
UP
UP
UP
52%
48%
39%
10%
1%
3%
10%
12%
10%
9%
1%
5%
0%
UP
98%
75%
25%
72%
28%
UP
UP
UP
UP
UP
UP
68%
32%
9%
4%
13%
11%
28%
18%
5%
12%
0%
UP
UP
UP
98%
76%
24%
72%
28%
UP
UP
UP
UP
UP
UP
2022 audited indicators. UP = Unpublished.
(1) Based on spot workforce at year-end.
(2) Includes Sustainability, Environment and Health and Safety trainings.
(3) 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.
(4) The data relates to the eligible workforce for Performance interview at 12/31/2022 (TalentLink).
(5) Based on a change in grade level.
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Chapter 2 – Sustainable development
2.8.3 Societal indicators
Indicators are published on the basis of declarative information submitted by Foundation delegates. It covers about 90% of Schneider
Electric Group employees and highlights the importance of company and employee participation in the Foundation’s approach to
involvement towards local communities. With EUR 23.7 million in 2022, 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
(SSI)
Essentials
(SSE)
9.
11.
25.
2021-2025 programs
Baseline(1)
2022 progress(2)
Provide access to green electricity to 50M people
2020: 30M
+9.7M
Train people in energy management
2020: 281,737
397,864
2025
Target
50M
1M
Increase the number of volunteering
days since 2017
2020: 18,469
41,093
50,000
These programs
contribute to UN SDGs
(1) The baseline year for each indicator is provided together with its baseline performance.
(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 #+1 and SSE #12 in 2022), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 270). Please refer to
page 242 for the methodological presentation of each indicator. The 2022 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
Raising awareness about sustainable development
Employees’ volunteering/skills-based sponsorship
Emergency
Other
Breakdown by region
Africa & Middle East
America
Asia & Pacific
Europe
Cross countries
Units
2022
2021
2020
€
4,000,000
4,000,000
4,000,000
%
%
%
%
%
%
%
%
%
%
81%
12%
2%
3%
2%
15%
6%
31%
35%
13%
75%
17%
1%
4%
3%
8%
10%
48%
18%
16%
63%
10%
1%
19%
7%
25%
4%
45%
20%
6%
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S T R A T E G I C R E P O R T
2.8 Indicators
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 entities
From partners
Units
2022
2021
2020
€
€
€
€
12,461,007
7,045,158
9,287,805
1,520,324
1,121,092
1,454,801
10,636,821
5,893,925
7,413,102
303,862
30,141
419,902
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
Transverse
Donations in products or services for a partner/project of the Foundation
2.8.3.5 Total budget for the Foundation’s actions
Units
2022
2021
2020
%
%
%
%
%
€
5%
35%
25%
31%
4%
3%
34%
29%
31%
3%
8%
31%
27%
30%
4%
7,267,507
8,444,800
6,927,700
Indicator
Units
2022
2021
2020
Foundation budget, financial contributions and donations in kind
€
23,728,514
19,489,958
20,215,505
To access all Schneider Electric ESG data, please download the disclosure dashboard Schneider Electric Sustainability Disclosure
Dashboard from the Sustainability Reports page on www.se.com
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Chapter 2 – Sustainable development
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S T R A T E G I C R E P O R T
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Chapter 3 – How we manage risk at Schneider Electric
3
How we manage
risk at Schneider
Electric
3.1 Risk management scope
295
3.2 Organization and management 295
3.2.1 Group values
3.2.2 Internal control and risk management roles and
responsibilities
295
296
3.3 Risk management mechanisms 299
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 and opportunities
3.5 Insurance
299
300
301
302
304
319
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Chapter 3 – How we manage risk at Schneider Electric
S T R A T E G I C R E P O R T
An introduction by Chief Governance
Officer & Secretary General, Hervé Coureil
Dear Stakeholders
We operate in an unpredictable world, where risks reside at every
corner. It’s becoming increasingly difficult for companies to
anticipate, understand and prepare for the extensive range of risks
that can impact their operations. Novel risks arise every day, fueled
by the rapid pace of technology developments and social and
political movements. Even with the best risk management systems
in place, setbacks are bound to occur. The manner in which a
company prepares for and responds to the ever-increasing risk
environment stands as a true testament of its resilience.
Building a strong risk management culture and mechanisms takes
a great deal of work and effective collaboration. In 2021, the Group
started strengthening its Enterprise Risk Management (ERM)
framework, aiming to increase its overall level of resilience. This
framework offers a holistic approach to managing risk, bringing the
right forces together in a common effort with a few focus areas:
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; implementing
risk prevention, mitigation, and transfer measures, and building
crisis response capabilities.
More precisely, the Group’s ERM framework looks at trust from
three vantage points. The first is integrity; this entails creating a
hospitable context for principled behaviors. The second is
transparency, which involves fostering objective, transparent and
data-backed decision-making processes to earn and sustain trust.
The third is resilience, which is focused on ensuring thoughtful,
considered risk taking throughout the organization.
As one key element of this framework, internal control procedures
are designed to drive compliance with laws and regulations,
application of policies and guidelines, effectiveness of the internal
processes and timely remediation of deficiencies and reliability of
financial reporting.
Ultimately, what guides us every day is the desire to cultivate and
maintain trust in our ecosystem, with our customers, partners and
employees. And we can only do so by acting with integrity,
fostering transparency, and demonstrating resilience.
Thank you for your support and your trust,
Hervé Coureil
Chief Governance Officer & Secretary General
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3.1 Risk management scope
The Enterprise Risk Management framework 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
Group internal control and risk management systems.
3.2 Organization and management
3.2.1 Group values
Resilience as a top value
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; and
• Implement initiatives aimed at increasing the Group resilience,
by decreasing the risk exposure and/or increasing its level of
preparedness.
Hybrid risk management model
Schneider Electric uses a hybrid risk management model. It means
that while there is a Group Risk Management function and experts
in charge of setting risk management mechanisms, establishing
policies, and other activities, ownership of the risks belongs to the
Business Units, Operating Divisions, or Global Functions who
are responsible for deploying the central framework to manage
their risks.
These are organized in three lines of defense:
• 1st line of defense: Business and Risk Owners
Operating Divisions and Business Units take ownership of how
the risks specific to their local market or function are managed
on the ground, following the procedures set by the second line
of defense.
• 2nd line of defense: Group Risk Management, Internal Control,
Risk Overseers
Set risk management mechanisms, advise and monitor the first
line of defense, helps them build action plans to improve
identification, mitigation, and control of risks.
• 3rd line of defense: Internal Audit
Independent body, not dedicated to a specific risk area or
region. Assesses if the first line of defense is managing risks
properly and if the second line of defense is setting mechanisms
and supporting the first line adequately.
The section hereafter (3.2.2) goes over the three lines of defense
and gives more detail about the hybrid risk management model
and the governing bodies.
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S T R A T E G I C R E P O R T
3.2 Organization and management
3.2.2 Internal control and risk management roles and
responsibilities
Board of Directors
Accountable to stakeholders for organizational oversight. The Board is informed about
the efficiency of the internal control and risk management systems.
Senior Management
Audit & Risk Committee
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.
Follows-up on the efficiency of internal
control and risk management systems
and reports to the board thereon.
1st line of defense
2nd line of defense
3rd line of defense
Take ownership of how the risks
are controlled on the ground,
following the risk management
procedures set by the 2nd line
of defense.
Set risk management mechanisms, advise and monitor the 1st line
of defense, helps them build action plans to improve response,
control and monitoring of risks.
Independently assesses if the
1st line of defense is managing
risks properly and if the 2nd line
of defense is supporting
the 1st line in the right way.
Operating Divisions and
business units (Risk Owners)
Group Risk
Management
Internal Control
Global Functions
and Risk Overseers
Internal Audit
Organize control of operations,
ensuring that appropriate
strategies are deployed to
achieve objectives, and
tracking business performance.
Organizes and
monitors self-
assessment
campaigns and the
implementation of
set action plans.
Deploys the
Enterprise Risk
Management
framework, driving
risk assessments
across various Group
entities, and
consolidate results in
comprehensive
reports.
Decision-making and
risk management at
corporate level. Issue
and distribute
policies, target
procedures and
instructions to units
and individuals
assigned to handle
specific duties.
Advice on the adequacy and
effectiveness of governance
and risk management.
Figure 1: The three lines model
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.
Senior Management
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.
Audit & Risks Committee
The Audit & Risk Committee is responsible for overseeing the
Group’s internal controls and risk management systems.
The Committee is presented with the conclusions and key actions
from a selected number of audit missions throughout the year and
works with management and external auditors to ensure that risks
are identified and addressed in a timely and effective manner.
The Head of Internal Audit has direct access to the Chairperson of
the Audit & Risks Committee and meets with her on a regular basis
throughout the year.
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; and
• Design and implement remediation actions.
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More specifically, Operating Division and Business Unit
management supplement and adapt the Enterprise Risk
Management framework drafted by 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: Group Risk
Management, Internal Control, Risk
Overseers
Group Risk Management
In the current context of an acceleration towards a more complex
and fragmented world, the Group has engaged in a restructuring of
its Enterprise Risk Management team, with the help of experts. It
started in 2021, with most of the deployment having taken place in
2022 and continuing in 2023. The objective is to strengthen the
overall risk management at Schneider Electric, with a more robust
Enterprise Risk Management team to implement and deploy
advanced mechanisms, support the first and second lines of
defense, and consolidate and report to Senior Management and
Audit & Risk Committee. 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 it develops and maintains a
Group risk appetite framework. 2022 has been a year of
deployment with standardized risk reviews engaged for most of the
Group’s risk categories and geographical zones. It has resulted in
an increased risk management maturity, and a consolidation of the
risk exposure at the corporate level. The deployment will continue
in 2023, with risk reviews done in a more robust and systematic
way, while also taking care of subsidiaries.
The Enterprise Risk Management framework is deployed by the
Group Risk Management department, which reports to Senior
Management and sits within the Governance function. The Group
Risk Management department is responsible for:
• The creation, deployment, and maintenance of the Enterprise
Risk Management framework;
• The planning and execution of risk reviews across various
Group entities; and
• The consolidation, in comprehensive reports, of the risks
identified and assessed, of the Group’s level of mitigation, and
of the roadmaps in place to reduce the risk exposure and
increase preparedness.
This framework relies on a network of Risk Overseers (in charge of
supervising a specific risk category) and risk owners (in charge of
managing risks efficiently with the support of all assets provided).
The Group Risk Management team engages with these
stakeholders and supports them to increase their risk management
maturity by driving several types of assessments and by evolving
standardized methodologies.
The Group Risk Management department strives to not only
manage event triggered risks, but rather to maximize value through
more informed and calculated risk taking. With this mandate, it
studies strategic issues and long-term strategy and continuously
monitors emerging trends, risks, and opportunities, sometimes with
the support of risk intelligence companies.
Internal Control
In close collaboration with Risk Overseers and the Group Risk
Management team, the Internal Control function uses a risk-based
approach to define the key controls to be embedded in the
processes and to monitor the effectiveness of the controls.
The Internal Control department reports to the Group Chief
Accounting Officer. It had an average of 40 internal controllers in
2022, with a central team leading and co-ordinating the Group
Internal Control activities and a network of Internal Controllers for
day-to-day operations. The main objectives of Internal Control
department is to:
• Define key controls to be embedded in end-to-end processes
following a risk-based approach in close collaboration with Risk
Overseers and subject matter experts – in line with the
recommendations of the French Financial Market Authority
(Autorité des Marchés Financiers (AMF)) reference framework;
• Ensure internal control is anchored in the managerial practices
for a better control environment. Drive self-assessment
campaign, accuracy of controls, self-assessment, and
compliance to minimize risks and protect assets;
• Monitor the adequacy and effectiveness of internal controls and
support timely remediation of deficiencies in a sustainable
manner;
• Partner with operations to increase standardization of key
controls across the Group for effective and efficient operations;
and
• Support design and implementation of anti-corruption and
bribery controls.
Risk Overseers
The various Group functional departments and Risk Overseers
assist the Enterprise Risk Management team with the identification
and evaluation 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. Risk Overseers and Global Functions assist all
Group entities by facilitating the sharing of risk management and
internal control best practice.
Risk Overseers are global leaders and experts overseeing risks
within their scope.
Depending on the risk category, Risk Overseers must:
•
•
Identify and manage the adoption of regulatory and legal
standards;
Initiate first risk identification as a base for risk-specific
programs design;
• Own risk-specific policies and ensure proper deployment;
specifically ensuring they have adequate representation in the
Trust Charter, the Group’s Code of Conduct;
• Define risk-specific processes and controls;
• Engage in the annual risk assessments run by the Group Risk
Management team;
• Perform risk maturity self-assessments on a regular basis; and
• Define risk thresholds and review them regularly.
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3.2 Organization and management
Global Finance department
Other Global Functions
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; and
• 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 users
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.
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
and opportunities” on page 314
In addition to specific processes or bodies such as the Group
Acquisitions Committee for making and implementing strategic
decisions 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
department’s structuring and procedures, relationships between
buyers and vendors, and procedures governing product quality,
level of service, and compliance with environmental and safety
standards.
Global Functions 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.
3rd line of defense: Internal Audit
In accordance with professional standards governing this activity,
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.
The Internal Audit department reports to Senior Management. It
had an average headcount of 20 global auditors and 26 regional
auditors in 2022. The internal auditors are responsible for ensuring
that, at the level of each Business Unit, Global Function, or
Operational Entity in the countries where the Group is operating:
• The identification and control of risks is performed and relevant
remediation is put in place;
• Significant financial, management, and operating information 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; and
• Correct integration and control of acquisitions are ensured.
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An annual internal audit plan is 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
the Group Enterprise Risk Management system, the outcome 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, and the recent replacement of holders of key managerial
roles as the case may be. 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, Global
Function, or Operational Entity 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.
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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 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 risk classification levels, described in the illustration below.
Each risk is mapped to the pieces of the risk flywheel (see section 3.3.3, page 301) to ensure there are no gaps in the Group monitoring and
mitigation of the risk universe.
Risk Level
Description
Objective
Responsible
Example
Differentiation between three
risk natures: event triggered
risks, management practice
risks, trend driven risks.
Making
strategic
decisions
Risk nature
Senior
Management
Event triggered risk
All risk categories included
in the Taxonomy are mapped
to a Risk Overseer who is
responsible for all assets and
mechanisms around the risk.
More specific risks under
a Risk Category. Risk
identification and assessment
are carried at a risk type level.
The ways a risk type
can materialize.
Risk category
Risk type
Risk vector
Figure 2: Risk taxonomy structure
Taking
accountability
Risk Overseers
Third party
screening &
sanctions
compliance
Taking
responsibility
Risk Owner
Export Control
Managing
operational
risks
Domain/
function in
charge of
the risk
Supplies from
countries under
sanction
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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 risks within each nature are
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.
Expected reward for risk
(Value for the organization. to take on risk)
Rewarded risk
Unrewarded risk
Event triggered risk
Risk originating from uncontrollable
and unavoidable external factors
(e.g. Cyber attacks,
workplace disruptions, frauds)
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 organization.
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)
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.
Examples of the assets used to achieve
this goal include: 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
The Group established a unique risk taxonomy to have a common
language with all stakeholders. All risk categories included in the
risk taxonomy 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’s 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 for
ensuring 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
2.1.7.
Mandatory PMI1 tasks
The Enterprise Risk Management framework applies not only to the
Group’s 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 and
subject matter experts (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 and type. 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.
Risk reviews and yearly risk assessments
The Group’s entities perform frequent risk assessments.
There are three types of assessments:
• 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.
• Leadership risk assessment, also called risk matrix, where the
leadership team is interviewed about the full Group risk
universe, to gain an understanding of the perception of the risk
exposure and level of mitigation.
Additionally, the Internal Audit and Internal Control departments
perform consolidated reviews and audits aiming, in particular, to
assess the internal control framework and risk management system
effectiveness.
Risk
Taxonomy
Risk Maturity
Assessment
Trust
Charter
Yearly Risk
Review
Policies
Key Risk
Metrics
Mandatory
PMI Tasks
Key Internal
Controls
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(1) PMI = Post Merger Integration
Figure 4: Risk flywheel
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3.3 Risk management mechanisms
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 optimize effectiveness and efficiency; and
• Communication and training are adapted to specific needs, with
a measured impact.
3.3.4 Risk identification
and management
General risks at the Group level
The Group Risk Management department conduct interviews to
update the list of general risks at Group level each year. In 2022,
around 40 of the Group’s top leaders were interviewed in addition
to external analysts and Board members.
The risks identified through these interviews are ranked by a risk
score (comprising impact and likelihood of occurrence) and level of
mitigation.
In complement of the risks identified through interviews, the Group
Risk Management function also consolidates all the risks identified
and assessed through the category risk reviews and zone risk
reviews. A consensus is then reached on the Group’s major risks
for which control, monitoring, and mitigation will be prioritized.
Risk factors related to the Group’s business, as well as procedures
for managing and reducing those risks, are described in “Key risks
and opportunities” in section 3.4 on page 304.
The results of the yearly risk assessments mentioned in section
3.3.3 (risk matrix, risk reviews) 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 at the Business Unit or
Operating Division level
Local risks related to the Company’s business are managed first
and foremost by the Business Units in conjuction 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.
Specific risks related to Projects
The Projects Risk Management stakeholders define and implement
principles and tools designed to manage 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).
The network of Project Risk Managers assesses the risks and
mitigations related to major projects in conjunction with the subject
matter experts and Tender Managers during the preparation of
offers. Project Risk Managers then provide a comprehensive,
360-degree view on project risk and mitigations to support the
opportunity approval process.
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Management of risks 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 319. 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.
Management of risks 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.
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
& Control 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.).
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Global Security sits on the Group Operations Compliance
Committee (previously named Fraud Committee) alongside the
Compliance, Internal Audit, and Legal departments. 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 departments inside the
Governance function 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 and opportunities
Principal risks
The Group risk inventory is organized in three categories and includes 18 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, orange, 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 302. 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.
The identification and mitigation of the Groups’ key risks can reveal opportunities for growth, enabling strategic decision making and
flexibility to move ahead with speed.
Categories and Risks
Event triggered risks
Risk of cybersecurity on Schneider Electric infrastructure and its digital ecosystem (including connected products
used as a gateway to attack Group’s customers and partners)
1
1.1
1.2
Export controls
1.3
Product quality
1.4
Competition laws
1.5
Corruption linked to B2B and project business
1.6
Human rights and safety issues through the value chain
1.7
Counterparty risk
1.8
Currency exchange risk
2
Trend driven risks
2.1 Operational disruption due to global political and economical disruptions
2.2 New competitive landscape on energy, technologies, and business models
2.3
Supply chain resilience
2.4
Evolution of software and digital services offers
2.5
Attracting and developing talent with a focus on critical skills
2.6
Risk related to the environmental performance of the Group
2.7
Natural resource crises: Shortage of resources used in Schneider Electric’s products or in manufacturing
3
Management practice risks
3.1
Data residency
3.2
IT systems management
3.3
Pricing strategy
Key to symbols
High impact
Medium impact
Low impact
Potential
net impact Page
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1. Event triggered risks
1.1 Risk of cybersecurity on Schneider Electric infrastructure and its digital
ecosystem (including connected products used as a gateway to attack Group’s
customers and partners)
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. The Energy Management and Industrial
Automation sectors, in particular, are becoming more digital with
pervasive Internet of Things (IoT) usage and augmented data being
major accelerators for mobility, the cloud, pervasive sensing, big
data, and analytics.
As an industrial and technology company, the Group has IT and
Operational Technology (OT) activities spread over dozens of R&D
sites, and more than 200 production and logistic units. On those
sites, OT systems have been converging more and more with IT
systems, especially through the use of IoT, expanding the overall
attack surface.
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. Additionally, the move
from a product-centered business model to a service-oriented
business model with software and augmented data naturally
increases cybersecurity risks, such as data breaches and
intellectual property theft.
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
To mitigate the risk of Schneider Electric’s connected products
being used as a gateway to attack Group’s customers and
partners, 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.
In line with the NIST Cybersecurity Framework(1) with its five
concurrent and continuous functions, Schneider Electric has five
stages of risk management as follows:
• Identify: Schneider Electric has identified cyber risks stemming
from main business scenarios(2) with its Cyber Risk Register,
including assets categories to be protected known as High-
Value Assets.
• Protect: 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. Moreover, 99% of
employees were trained on cybersecurity in 2022. In addition,
specific employee categories (e.g., IT administrators, customer
facing employees) received mandatory trainings for risks linked
to their activity.
• Detect:
− Independent “reality checks” were performed: three
crosscutting internal audits and external assessments.
− Multiple cyber risk assessments were completed in 2022 by
the Group’s cybersecurity consulting partners.
• Respond: 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.
• Recover: Schneider Electric’s posture is continuously revisited
and adapted through reality checks including emergency,
business, and IT recovery and improvement plans across the
Company. Furthermore, the Group is conducting regular crisis
simulation exercises on different scenarios.
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(1) National Institute of Standards and Technology, U.S. Department of Commerce - https://www.nist.gov/cyberframework
(2) 1. Damage to customers assets and operations, 2. Disruption of company’s operational continuity, 3. Non-compliance with global and local regulations, 4. Voluntary and
involuntary loss or exposure of intellectual property.
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3.4 Key risks and opportunities
1. Event triggered risks
1.2 Export controls
Risk description
Risk monitoring and management
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.
1.3 Product quality
Risk description
Schneider Electric has more than 290,000 references produced in
162 factories, spread across 40 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 or
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 €10 million to €40 million, depending on
the case.
Risk monitoring and management
In 2022, the Group launched a specific program called Quality
Reinvention to continue to strengthen quality for design,
manufacturing, supplier, and field tools and processes, and to
settle “quality” inside of the Company culture. This is extended to
all the value chain and leverages processes digitization across all
entities that have an impact to quality.
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 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-user 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.
This program includes:
• Launch of the new Quality Fundamentals for Design domain, to
increase both robustness and reliability of new offers; CS&Q
function puts a strong focus on stopping any launches that do
not comply to quality standards. In addition, roles and
responsibilities got better defined and the number of resources
focused on design quality has greatly increased.
• Unification of all manufacturing quality initiatives, fundamentals
and principles into the Schneider Performance System; CS&Q
function puts strong focus on the reduction of high-risk activities
through fully automated and interlocked systems.
• Significant strengthening of supplier quality processes by
adopting high maturity industry standards (i.e., APQP and IATF);
CS&Q function strives to secure an ever more robust supplier,
parts and supplies qualification process, and improved
performance management.
• Expansion of the quality system into Field and Project Execution,
to secure the right standards in this area.
To ensure that the culture of quality supports efforts being made,
three main changes have been introduced: 1) Quality became part
of our Trust Charter to make sure that everyone understands that a
quality deviation could become a compliance issue; 2) Quality
became an “essential” as part of the values that anchor our culture
3) “Quality academy” is being created to allow learning of both,
what is quality and non-quality, and to increase the technical
knowledge of our teams.
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1.4 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.
Both currently or in the past, Group entities including, but not
limited to, entities in Brazil, Pakistan, Belgium, France, and Spain
have been directly or indirectly cited in antitrust proceedings or
investigated.
This statement of objections is the first step of an adversarial
procedure and is without prejudice to the final assessment that will
be made independently by the board (College) of the FCA.
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 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.
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.
In France, further to on-site investigations conducted in 2018
concerning electrical distribution activities in France, Schneider
Electric SE, received on July 4, 2022, a statement of objections
(notification de griefs) from the French Competition Authority (FCA)
alleging that the pricing autonomy of some distributors in the
French market would have been limited, in breach of competition
rules.
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.
Schneider Electric strongly disagrees with the allegations of the
statement of objections and submitted its response to the FCA on
October 4, 2022.
The Group launched 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.
1.5 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 53,000 suppliers throughout the
world representing a procurement volume in excess of €16 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
Schneider Electric has created an Ethics & Compliance
department, chaired by a dedicated Chief Compliance Officer,
notably in charge of defining an anti-corruption program based on
three inseparable pillars.
First, Senior Management sets Schneider Electric’s zero tolerance
for corruption 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 supporting the reporting of misconducts.
Second, 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. Related action plans
were deployed in 2021 and 2022.
Third, the identified risks are managed by means of effective
measures and procedures:
• Code of Conduct and policies – As stated in our Trust Charter,
Schneider Electric’s Code of Conduct, and Anti-Corruption
Policy, Schneider Electric is committed to comply with all
applicable laws and regulations, and applies a zero-tolerance
policy towards corruption. Two operational policies complete
the set: Gifts & Hospitality Policy and Conflict of Interest Policy.
• Training and awareness – 97% 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.
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3.4 Key risks and opportunities
1. Event triggered risks
1.5 Corruption linked to B2B and project business (continued)
• Third parties’ integrity – Schneider Electric has put in place a
Business Agent Policy and related procedures for assessing its
intermediaries. In 2022, 100% of direct customers have been
screened. A pilot was also launched to have an automatic
real-time screening of all direct customers. Moreover, the Group
is working to screen its vendors and started an initial screening
of its strategic direct vendors in 2022. Moreover, all compliance-
related aspects are part of the due diligence undertaken for
mergers and acquisitions, in line with the specific M&A
Compliance framework put in place in February 2020.
• 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.
• Whistleblowing – A global whistleblowing system, available to
employees and external stakeholders, is also managed to
combat this risk. In 2022, 645 employee and 74 external
stakeholder alerts have been received and managed through
follow-up inquiries.
• Corrective actions – Deficiencies associated with the
implementation of procedures are analyzed to identify their
cause and correct them.
• Monitoring and audit – Second-level controls and internal audit
missions were reinforced on compliance risks with several
audits performed.
1.6 Human rights and safety issues through the value chain
Risk description
Legal
The exposure of the Group to human rights and health and safety
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. Some specific topics are emerging quite
rapidly, for example, as the context (global warming, famine, war,
geopolitics etc.) is pushing people to cross borders and to work
elsewhere, migrant workers protection is becoming a key topic for
companies.
Schneider Electric’s procurement volume represents more than €16
billion with more than 53,000 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 on several topics including human rights
and health and safety.
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;
and/or
• 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; and/or
• Events resulting from a lack of safety or insufficient protective
measures (e.g., fire prevention) that may affect the supply of
components.
Over the past two years, laws regarding human rights protection,
such as modern slavery matters in Australia, the European Union’s
new framework on restrictive measures against serious human
rights violations and abuses, or the German Supply Chain Act,
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 and health and
safety 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.
2022 specific events
The competent court regarding Duty of Vigilance (DoV) cases was
confirmed on December 22, 2021, by the French High Court. The
Paris judicial court will have jurisdiction over such cases, which is
composed of dedicated professional lawyers. Regarding the cases
related to non-compliance with the DoV, there has been no update
on the substance of the cases.
In 2022, four new cases have been opened regarding non-
compliance to the French DoV. These cases concerned freedom of
association, social and environmental rights, or human rights
violations. At the end of 2022, seven litigations and six formal
notices were pending regarding the French DoV.
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The European Commission published a draft proposal for the
European Corporate Sustainability Due Diligence Directive on
February 23, 2022. This directive should be adopted in 2023 and
enter into force in 2024. The text of this European Directive is very
close to the French DoV law and will concern Schneider Electric’s
operations and supply chain (potentially Tier 2 suppliers and
above). Regarding the actual draft of this Directive, approximately
50,000 companies based in Europe should be concerned; in
comparison, approximatively 260 companies are concerned by the
French DoV.
Risk monitoring and management
Human rights are part of the Ethics & Compliance program which is
managed by the Ethics & Compliance Committee and the 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 2022, focused on human rights and health
and safety amongst other ethics and compliance topics. 93% of
employees completed the training by the end of 2022.
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 and health and safety 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 2022 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 2022, in the scope of 2021
– 2025 Schneider Sustainability Essentials (SSE) objective #17
“4,000 suppliers assessed under our ‘Vigilance Program’”, the
Group conducted 223 on-site audits and 657 remote self-
assessments. At the end of 2022, 94% of non-conformances from
2021 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 2022, 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 Schneider Sustainability Impact
(SSI) indicator #6. The program launched in 2022. Schneider
Electric is also currently developing a program to ensure “social
excellence” for the Group’s suppliers.
1.7 Counterparty risk
Risk description
Risk monitoring and management
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 41% 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, 2022, 13% of trade receivables were overdue,
of which 3.5% by more than three months (refer to Note 16 in “Notes
to the consolidated financial statements”, section 5 of Chapter 5,
page 456).
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, 2022, the amount of the provision for
receivables impairment is EUR 489 million (as described in Note 16
in “Notes to the consolidated financial statements”, section 5 of
Chapter 5, page 456).
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3.4 Key risks and opportunities
1. Event triggered risks
1.8 Currency exchange risk
Description of risk of fluctuation of
exchange rates
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.
More than 20 currencies are involved, with the US dollar, the
Chinese yuan, the Singapore dollar, Japanese yen, Mexican peso,
Australian dollar and Swedish krona representing the most
significant sources of those risk.
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 468.
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.
Description of risk of deliverability of
currencies
In 2022, revenue in foreign currencies amounted EUR 27.29 billion,
including around EUR 9.9 billion in US dollars and EUR 4.8 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 147 million on
adjusted EBITA.
The result of exchange gains and losses of 2022 amounts to EUR
-27 million (as described in Note 7 in “Notes to the consolidated
financial statements”, section 5 of Chapter 5, page 446).
The Group has a particularly wide international presence (more
than 115 countries), which consists in purchasing and selling,
intragroup and outside group, goods and services in various
currencies.
The Group is therefore facing the risk that the currencies of
purchasing and selling are the subject of interdictions or
restrictions linked to geopolitical contexts, access to foreign
currencies, currency control, or other reasons. The Group
estimates that in the current structure of its operations, such
limitations and interdictions might arise from some countries with
emerging economies.
Monitoring and management of the risk of
fluctuations in exchange rates
Monitoring and management of the risk of
deliverability in currencies
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).
2. Trend driven risks
The Group policy consists in the diversification enabled by the
widespread geographical presence and follow up of such risk to
reduce it, when needed through repatriation of cash exposed.
2.1 Operational disruption due to global political and economic disruptions
Risk description
Stable trade is beneficial for economic growth. Trends of increased
mercantilism is leading towards possibly long-term regionalization
of trade around the United States, China, Russia, Europe, and India
poles. Regionalized, rather than globally balanced government
regulations and policies on digitization, circularity, carbon, supply
chain management, and others could handicap Schneider’s offer
development efficiency. This may force the Group to significantly
adapt operations, for example through redundant efforts, and result
in negative impacts on the Group’s profitability. In addition to the
trade regionalization trend, technology decoupling, specifically
between the United States and China, has been observed through
increased regulations.
In addition to the global trends above, the Group acknowledges
upcoming potential challenges caused by a lingering energy crisis
and monetary tightening, negatively impacting economic activities
across the world. It will result, to a degree to be determined, in
heightened social, political, and economic risks.
As a global company operating in more than 115 countries,
Schneider is increasingly impacted by this acceleration of regional
(versus global) trade and new technology policies are putting
pressure on supply chains in the forms of both tariff and non-tariff
barriers.
The armed conflict in Ukraine and the resulting sanctions is another
example of challenges the Group is facing and could face in the
future in other contexts. This is covered in “Specific events 2022”,
on page 318.
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As such, trade wars and sanctions compliance 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 Group profitability. It also increases
quality risks as the Group could be forced to work with new
suppliers.
Risk monitoring and management
To mitigate the risk on supply chain efficiencies, tariff impacts, and
sanctions compliance, 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, Europe, India and
Asia. In this multi-local context, Schneider Electric can rebalance
its activities across geographies. A strong focus is given to
duplicating active R&D, factories, and suppliers in different hubs
through a global orchestration, in order to be resilient and flexible
when needed.
This setup has proved pertinent as the Group has demonstrated a
solid resilience over the past years’ crises, from the COVID-19
pandemic in 2020 to the armed conflict in Ukraine in 2022, and the
increased decoupling between the United States and China over
the last years.
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).
2.2 New competitive landscape on energy, technologies, and business models
Risk description
Schneider Electric operates to make the most of our energy and
resources, bridging progress and sustainability for all, 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;
• Resource scarcity and resource security: Increased demand for
energy efficiency solutions with necessary acceleration for
agility, resilience, transformation, circular and shared economy,
and the creation of new business models;
• An All Digital world: ISncreasing influence of digital giants and
software players; and
• An All Electric world: Oil majors urged to reduce their impacts
on carbon emissions.
In this context, Schneider Electric’s competition landscape is
evolving, and the Group can now see:
• On one hand, 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.
• On the other hand, more local experts adopted by local markets
eager to interact with agnostic solutions and interconnect
seamlessly with other players.
It is also noted that the competitive landscape is being shaken by
increased challenges for global companies, resulting in:
• Some global companies actively descaling by withdrawing from
markets they have been present in for decades;
• Many battles for innovation being won by new and small players
backed by venture capitalist money against established large,
global firms; and
• Local scale disadvantaged consumer companies gaining share
from global scale advantaged players.
Risk monitoring and management
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.
The Group is keen to integrate the best experts or local players in
an open architecture with agnostic solutions, to offer a flexible and
scalable solution and ensure the best value for users.
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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 still taking time to abate,
particularly in electronic components such as semiconductors.
Schneider Electric has over 200 industrial and logistics sites
globally and is exposed to the physical effects of climate change in
the form of more frequent and severe acute weather events. This
can result in damage to assets, disruption to business operations,
and human consequences. Extreme weather events do not only
threaten Schneider Electric’s assets and properties but also the
overall supply chain. Shortages or logistic bottlenecks in the
upstream and downstream supply chain can translate directly into
revenue losses, increased costs, and increased working capital
requirements. Delays in production and delivery can impact
customer experience.
Energy supply risks in Europe have been assessed and business
continuity plans have been anticipated on critical factories and
suppliers, while we accelerate move towards net-zero carbon sites
and suppliers.
China dependency is continuously reducing through our plans to
produce and source 90% of what we sell in the same region. This
ratio reached 80% in 2022 and is planned to progress 1 to 2 points
per year over the coming five years. While Taiwan dependency
remains high on electronics rank 3 supplies, China–Taiwan tensions
triggered more focus and acceleration on reducing dependency
although this will be a multi-year roadmap.
Leveraging its network of more than 162 factories and 84 logistic
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. All strategic
distribution centers will have a ready-to-deliver backup logistic
center; as of today business coverage is 50% and will rise to 80%
in 2023. Sites prevention plans including cybersecurity practices
are fully deployed and monitored centrally.
Risk monitoring and management
Teams are empowered to proactively communicate with customers
to continue to support them and their operations.
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.
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. Components
have been mapped according to risk and business impact. As of
end 2022, 75% of electronic ranges related risks are covered by
strategic safety stocks, and 8% have been fully contained through
a multi-source design. 85% of Electromechanic ranges related
risks are covered by strategic safety stocks, and 26% have been
fully contained through a multi-source design. Our resilience
three-year plan targeting building a redundant network, launched
in 2021 and named Power of Two, is progressing as planned and
was even enriched with new plans; we have roughly implemented
half of our Power of Two resilience plans for logistics and
manufacturing and should reach 80% completion in 2023, targeting
to have all implemented in 2024.
Rare earth material supply risk related to potential scarcity in the
market has been fully assessed and is acknowledged in our design
roadmap. Top strategic partnerships with key suppliers have been
reinforced through long-term agreements and C-Level
connections, with a particular focus on electronic semiconductor
players. A procurement and planning hub will be implemented in
next two years to establish a direct connection to critical material
sources and manage strategic stocks, demand, and supply.
To address the risk of supply chain disruptions caused by extreme
weather events, Schneider Electric performed a forward-looking
climate risk and vulnerability assessment to identify and price the
materiality of physical climate risks that may affect its sites, its
extended supply chain, and overall economic activities in different
scenarios. This assessment combines a qualitative screening of the
acute and chronic climate-related perils to calculate the exposure of
the Group’s economic activities in the short-, medium- (2030) and
long-term (2050) under different scenarios from the Intergovernmental
Panel on Climate Change (IPCC), from 1.5°C to >4°C temperature rise
by 2100. 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.
In addition, an analysis of criticality of industrial sites is performed by
independent experts from Global Risk Consulting (GRC), covering
areas including interdependency analyses, alternative supply, and
time to recover in case of damage. To date, the magnitude of impact
is considered “medium to low”, and likelihood “as likely as not”,
however the Group is proactively monitoring this risk.
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2.4 Evolution of software and digital services offers
Risk description
Schneider Electric has a strong installed base of IoT devices and
connected products. Over the past years, the Group has been
increasingly focused on building and selling software and digital
offerings that help drive a prescription of offers, and help end-
users best utilize offers. In doing both, the Group helps users
decarbonize, reduce energy consumption, increase resiliency, and
optimize occupancy effort. The whole range of software offering is
contained in multiple Divisions. It includes, but is not limited to, a
range of advisors and edge control products. The Group is also
establishing a range of digital services that are designed to
support its end-users and partners with added value such as data
as a service, analytics, and cybersecurity.
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 2022, 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.
For the Group and its competitors, the market is still fairly new and
poses a risk of being partially misunderstood. The needs of the
market are still being defined and are rapidly evolving. As a result,
while the end goals are fairly clear (e.g., decarbonization), more
precise end-user needs are less well-defined; in many cases
because the end-users themselves are still maturing their needs.
Besides the digital offer readiness risks, and as a direct extention,
the Group must also pay attention to:
• Challenges in commercialization and selling (cross-selling,
simplified offer for effective selling, etc.); and
• Churn prevention.
Risk monitoring and management
Schneider Electric is continuously performing strategic efforts and
analysis across its multiple Divisions to better understand the
near-term and long-term end-users’ needs. Additionally, the
transversal communication and collaboration has been
dramatically improved. The Group has been focusing on how it
leverages existing efforts and platforms to create common
approaches and prevent overlaps in offers and solutions. It will
focus on this path of continuous improvement, always striving to
have a more focused set of offers with less overlap in functionality
and more clear value propositions that are therefore easier to
differentiate, understand, and sell.
Also, 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;
• Animating a business platform (Exchange) to guide expert and
local players; and
Consequently, the risk for the Group is double:
• Proposing an agnostic solution within a large software portfolio
and integrating open standards.
• Long-term potential misalignment with end-users needs; and
•
Integration of already existing offers, solutions, and roadmaps
owned by various Divisions into a comprehensive and customer-
relevant portfolio.
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3.4 Key risks and opportunities
2. Trend driven risks
2.5 Attracting and developing talent with a focus on critical skills
Additional programmatic initiatives to attract, develop, and engage
our key talents include:
•
Investing in a new talent acquisition and candidate relationship
management 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, 40 countries are using the system with the remaining
countries joining in 2023;
• A 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;
• Competitive reward and benefits practices to meet local market
needs and attract and retain key talents. This includes
Schneider’s Worldwide Employee Share Ownership Plan
(WESOP) allowing ~80% of all employees to share collectively in
the Company’s success, and building a stable and sustainable
share owner group in the long-run;
• An operating model with ~30 hubs 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;
• A revamped “Edison” expert program in areas of R&D, digital,
supply chain, etc., to support levels of expertise certification
and market recognition;
• A global program in support of “all generations” talent
development with a particular focus on senior talents and their
development and impact on the Company, including knowledge
sharing, mentoring, and coaching;
• 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, coach, and collaborate
in order to transform culture and build great teams; includes
clear criteria for leadership impact and selection/promotion
based on skills, experiences, and behaviors; and
• Continuous listening strategy to seek feedback from employees
throughout their employment lifecycle.
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, quality, 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.
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
lead transformation and build human connections in a digital world
is also necessary to reduce the risk of skill gaps and bring greater
organizational agility.
Beyond core programs and initiatives, there is a big focus on the
overall sense of purpose, culture, and way of working for
employees.
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, Core Values, and
Leadership Expectations. 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. On an
ongoing basis, a global pool of high-potential and expert talents
at all levels in the organization, is reviewed and managed in
context of development and succession. 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.
• There is an enterprise focus on accelerating the early-career
pipeline by twofold including internships, trainees,
apprenticeships, and fresh graduates. Countries (top 10) all
have next generation campus partnerships and recruitment
programs. Additionally, the Schneider Global Student
Experience and the Schneider Go Green annual competition
each year attracts thousands of university talents who become
part of the Schneider talent community on an ongoing basis.
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2.6 Risk related to the environmental performance of the Group
Risk description
Schneider Electric has set ambitious sustainability commitments
translated into concrete targets in the Schneider Sustainability
Impacts and Schneider Sustainability Essentials programs. The
Group is already tackling the reduction of GHG emissions across
all three scopes, working on its operations and bringing the value
chain along, in line with its ambition to contribute to limiting global
temperature rise to 1.5°C.
However, the risk of not meeting the ambition to decarbonize its
operations and supply chain exists and could trigger significant
financial losses if it materializes. Schneider committed to becoming
Net-Zero across its entire value chain, which implies a strong
engagement of suppliers to decarbonize Scope 3 upstream
emissions and provide to its customers enhanced energy efficient
products to reduce its Scope 3 downstream.
As an Impact company with sustainability at its core, failing short
on its Net-Zero Commitment, or conveying misleading
environmental claims on its sustainability progress and products
would expose the Group to greenwashing accusations with
potential reputational impacts.
As regulations tackling climate change develop, the Group could
see market disruptions in geographies where it operates as well as
where its supply chain is located. Schneider considers the possible
financial impacts of future carbon pricing on its extended value
chain.
Risk monitoring and management
Regarding Schneider’s offers, 100% of new products are eco-
designed, meaning that they are optimized to deliver environmental
performance throughout their lifecycle. In addition, the Group has
developed the Green Premium™ label, a unique sign of its
commitment to compliance, transparency, and sustainability
performance. Today, more than 80% of Schneider’s product sales
come from Green Premium products. Finally, notification systems
are set in place to understand external sustainability perceptions
and guidelines are defined to ensure alignment between product
characteristics and marketing communications.
2.7 Natural resource crises: Shortage of resources used in Schneider Electric’s
products or in manufacturing
Risk description
Risk monitoring and management
Schneider Electric is dependent on natural resources in both its
operations and product offerings.
As a discrete manufacturing company, the Group is subject to
business disruption risk due to energy security of supply.
Electrification megatrends are increasing competition to access
some raw materials critical for those new businesses. For example,
renewable power generation is shifting dependency of the energy
sector from fossil fuels to mineral resources. The Electric Vehicles
industry is expected to increase the demand for lithium 50-fold by
2040 and the demand for Cobalt and Graphite 30-fold, according
to IEA.
While water consumption is not generally a critical resource for the
Group due to its activities, Schneider fully realizes the importance
of water in local communities, especially those that are located in
water-stressed areas.
Changing economic trends, lack of access and overexploitation
can result in shortages of natural resources within the Group’s
operations and its value chain. This subjects the Group to business
disruptions and rising costs in both the short- and long-term and
additional challenges to secure supply for sustainable
transformation programs (Green Materials, substances substitution,
Sustainable Packaging).
Business disruption due to energy supply is taken into account in
the Global Supply Chain STRIVE initiative and covered by the
Group’s Property Damage and Business Interruption program at
site level.
In addition, Schneider leverages the power of its EcoStruxure™
architectures to deliver energy savings in factories, distribution
centers, and offices. These smart solutions enable offices to
actively develop occupancy and facility management strategies to
keep energy consumption to a minimum, while improving employee
experience and comfort.
The Group is also accelerating the installation of on-site solar
panels which, coupled with EcoStruxure™ metering and power
architectures, are further reducing Schneider Electric’s risk of
business disruption due to energy supply.
Water risks are assessed as a standalone issue, and the global
water-risk assessment covers all industrial sites above 50 Full-Time
Equivalent (FTE) employees and all service sites above 500 FTE
employees. All these sites are certified ISO 14001, and water-risk is
also considered in their environmental risk analysis. The Group’s
latest water-risk global study was performed in June 2022, covering
271 sites globally. This assessment is carried out every year as
Schneider monitors its sites that are in water-stressed regions. 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).
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3.4 Key risks and opportunities
2. Trend driven risks
2.7 Natural resource crises: Shortage of resources used in Schneider Electric’s
products or in manufacturing (continued)
To address uncertainty in long-term resource disruption, Schneider
has added resource parameters in product EcoDesign and defined
substitution strategies for critical resources. R&D actions are in
place, focusing on materials with main strategic functions
accompanied by communication channels to escalate and alert.
The Group approaches the access to resources at different time
horizons, to ensure supply resilience both now and in the future.
The Group is:
• Building short term resilience in securing supply and protecting
operations against price volatility with real time alerts to notify
and activate action plans;
• De-risking its portfolio with technological solutions and circular
business models;
• Shaping the future with long-term material resilience and
sustainability with disruptive actions.
3. Management practice risks
3.1 Data residency
Risk description
Risk monitoring and management
The last decades have seen a sharp increase in globalization
trends coupled with an acceleration of digital transformation. The
advent of cloud-based infrastructure and SaaS offers have
decreased time to market and increased global reach. However,
while the importance of the data economy as an enabler for wealth
and progress has been acknowledged by many governments who
realize the benefits of the new trend, they have been observing with
some apprehension the concentration of their citizens’ and
enterprises’ data in just a handful of infrastructure players.
The clash of the technological trends with the geopolitical
dynamics have therefore spawned a new breed of regulations
aiming at extending the physical borders to the digital world. Such
regulations are aiming at restricting either the flow of certain
categories of data and/or their localization, and while referred to
with different nomenclature such as Data Sovereignty, Data
Localization, and Data Residency, they are for all intents and
purposes data protectionist laws.
Schneider Electric, being a global player that has been pursuing a
strategy of shareholder value through efficiency of its global
processes and availability of global offers, is exposed to such
regulations across the globe, with a risk of increased cost due to
possible redundant infrastructure, reduced management oversight,
and degradation of its global customer service experience. The risk
is exacerbated by a lack of technology players that would be able
to respond globally to such challenges and by the unavoidable
inconsistency of regulations across different jurisdictions, however,
the latter is not specific to just data residency regulations.
Schneider Electric has established an “early warning system” that
monitors emerging digital policies bearing a potential impact to the
Company; each regulation (policy) is qualified with a flashcard
highlighting its type (e.g., data, digital, electronic), characteristics
(e.g., jurisdiction, scope, type of controls), and high-level impact.
All the policies are followed in their approval trajectory and close to
the enforcement date the necessary small and medium-sized
enterprises (SMEs) are called upon to start to translate the
legislation requirements into internal policy, procedures, and
internal controls (KICs) to be implemented and operated in the
relevant geographies and functions.
Specific to the data residency laws, attention is dedicated to the
analysis of the internal and external data flows that are crossing the
borders of the in-scope countries in terms of their payload, their
purposes, and their security (commonly known as Transfer Impact
Analysis), which informs a technological decision on whether to
localize processing application and/or data storage facilities.
Frequently, a description of the flows is also required by the
regulator as part of a formal approval process to export data, along
with an obligation to monitor the changes that could potentially
affect the flows and their integrity (e.g., data breach). Schneider
has capitalized on the experience built in responding to substantial
regulations such as GDPR in the European Union, and has
successfully leveraged set capabilities, like process registry, in
recent instances of data residency such as PIPL in China.
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3.2 IT systems management
Risk description
Risk monitoring and management
The Group operates either directly or through service providers, a
wide range of highly complex information systems, including
servers, networks, data repositories, applications (to include
software as a service (SaaS)), and databases with three targeted
landing zones (on premise, colocation third parties, 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
solutions 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. 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,
execution delays, or a third-party outage. 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.
3.3 Pricing strategy
Risk description
In 2022, raw material and foreign exchange rate fluctuation
continued to impact the Group’s cost base, as well as contributing
to an 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 followed suit
in overcoming these cost impacts by reacting adequately over the
cycle. In addition, our strategic Pricing program contributed to a
substantial amount.
The Group regularly examines alternative solutions to protect
against those risks, performs regular compliance checks on
service provider and 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:
• Enterprise Resource Planning (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; and
• Build and operate regional colocation (third parties) 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 colocations, or are cloud-based applications.
In 2022, the Group continued to reduce legacy IT applications
through a dedicated “Technical Debt Reduction” program as well
as a new program to ensure hardware resiliency for future years
(hardware as a service).
Pricing risk is expected to persist in 2023 as the Raw Material
Inflation (RMI) trend has slowed down and it may be harder to set
prices in proportion to energy and labor inflation. Adding to that,
accumulated backlog could pose a risk in the prospect of
cancellations, which would lead to a substantial threat on price
achievement. The ability to improve supply capacity faster than
competitors will play an important role for the Group’s pricing
power.
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.
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3.4 Key risks and opportunities
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.
The Group has been winding down its presence in Russia, in particular via the divestments of Schneider Electric Russia.
The Group resilience strategy in place allows Schneider Electric to absorb the interruption of Ukraine and Russia factories and the
supply chain due to a regional or global need. The systems and processes in place make it possible to reallocate customer orders to
other active geographies. In addition, the duplication of suppliers and the analysis and anticipation systems limit the impact of the crisis
on our orders.
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S T R A T E G I C R E P O R T
Chapter 3 – How we manage risk at Schneider Electric
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.
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 Corporate Officers;
• Environmental risks; and
• 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.
• 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 €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
€28 million in 2022.
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Chapter 4 – Corporate governance report
4
Corporate
governance
report
4.1 Governance Report
4.1.1 Framework for the implementation
of Corporate Governance Principles
4.1.2 Composition of the Board of Directors
4.1.3 Activities and operating procedures
of the Board of Directors
4.1.4 Activities and operating procedures of the Committees
4.1.5 Report of the Vice-Chairman & Lead Independent
Director
4.1.6 Internal regulations of the Board of Directors
4.1.7 Regulated agreements and commitments
4.1.8 Senior management
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356
364
365
374
375
4.2 Compensation Report
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4.2.1 Overview
4.2.2 Report on the compensation granted or paid
during the 2022 fiscal year (say on pay ex-post)
4.2.3 Compensation policy for the 2023 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
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C O R P O R A T E G O V E R N A N C E R E P O R T
Vice-Chairman & Lead Independent
Director’s introduction
Dear Shareholders,
2022 was a strong year with record revenues, profitability, and net
income despite the many challenges confronting businesses around the
world. This led the Board to propose a dividend of €3.15 per share;
making 2023 the 13th consecutive year of dividend growth. The Board is
also proud of the progress made in the second year of the ambitious
2021–2025 Schneider Sustainability Impact program as the Company
scored 4.91 against a target of 4.70, in accordance with the Board’s
commitment toward sustainability and our wish to be an Impact
company. These strong results, achieved amidst ongoing headwinds,
are testament to the success and robustness of the strategy
implemented for the last 20 years under the leadership of Jean-Pascal
Tricoire, Chairman & CEO.
After two decades where Jean-Pascal Tricoire has led the strategic
transformation of the Group and further to his wish to step down as CEO
as of May 3, 2023, the time has come for a change of governance at the
head of the Company. In accordance with the intention disclosed in
2021, the Board of Directors has decided to separate the functions of
Chairman and Chief Executive Officer.
Peter Herweck who was the CEO of AVEVA, will succeed Jean-Pascal
Tricoire as CEO on May 4, 2023, becoming responsible for the general
management of Schneider as the sole executive corporate officer. Over
the last four years, the Governance & Remunerations Committee, under
the guidance of the Board of Directors, has conducted a comprehensive
and robust succession planning process to propose a successor for the
role of CEO. Several high-quality candidates were considered. Peter
Herweck’s level of global operational experience, technology and
software acumen, skills and personal qualities were assessed by the
Board as being particularly in line with the Group’s strategy. His
appointment was unanimously approved by the Board of Directors with
Jean-Pascal Tricoire’s full support.
At the unanimous request of the Board of Directors, who want to retain
the benefit of his extensive experience, Jean-Pascal Tricoire will remain
as Chairman. On behalf of the Board, I express our deepest thanks to
Jean-Pascal Tricoire for the transformation of the Group in scale,
performance, purpose and capability. His many achievements include
the repositioning of Schneider Electric as a leader in the fields of
digitization, electrification and sustainability, as well as building a
distinctive culture and management system based on a meaningful and
inclusive mission and the empowerment of people. This
robust foundation has made Schneider Electric
future-ready and the Board of Directors is
confident in the continued success of the
Group in the coming years, which will
continue to be supported by Jean-Pascal
Tricoire in his role as Chairman.
This change of governance will go
alongside a new set up of the
Committees and a reorganization of the
powers of each corporate body. A
Governance, Nominations & Sustainability
Committee will be created and will focus on
matters considered to be central to the
work of the Board, including
governance, succession
planning of Board
members,
Corporate
Officers and
Executive
Committee
members,
and Sustainability. A separate Human Capital & Remunerations
Committee will oversee all topics related to the compensation of the
employees, Executive Committee members, as well as Corporate
officers and Board members. The Chairman of the Board will be
entrusted with extended powers and missions beyond those provided
for by law to put his experience at the Company’s service. Further to this,
my own powers, as Vice-Chairman & Lead Independent Director, will
now include the ability to request that the Chairman of the Board of
Directors call a meeting of the Board of Directors to discuss a given
agenda.
During the year, the Board continued to improve and reinforce its
composition, and invites you to support, at the Shareholders’ Meeting,
the appointment of two new Independent Directors. Abhay Parasnis, a
US citizen, is Adobe’s former Chief Technology Officer and Chief
Product Officer and serves on the Board of Directors at Dropbox. He will
bring to the Board his remarkable technology and digital skills,
especially his experience in cloud transition and in SaaS transformation,
as well as his spirit of innovation and reinvention. Giulia Chierchia, an
Italian and Belgian dual citizen, is currently Executive Vice-President of
Strategy, Sustainability and Ventures at BP. She will bring to the Board
her expertise in Sustainability and the energy sector, in particular, her
experience in energy transition strategy in large companies with a global
approach including strategy, sustainability, capital allocation and
ventures. I also invite you to renew the terms of office of Léo Apotheker,
Gregory Spierkel, and Lip-Bu Tan, all of whom bring many
complementary skills to the Board.
Throughout 2022, I had the opportunity to discuss our compensation
policy and practices by engaging with many of Schneider Electric’s
shareholders, as well as investor representative bodies. For 2023, the
compensation policies proposed by the Board reflect the Group’s
governance change. Considering that Jean-Pascal Tricoire is stepping
down as CEO on May 3, 2023, the Board decided not to increase his
fixed remuneration for the period from January 1, 2023 until May 3, 2023
and to maintain his compensation policy broadly in line with that applied
in 2022. When positioning the fixed compensation of Jean-Pascal
Tricoire as Chairman for the period beginning on May 4, 2023, the Board
used an in-depth study of industry practices for compensation and also
took into account the specific missions assigned to him by the Board. In
designing the remuneration policy applicable to the new CEO, the Board
wished to maintain an overall stability in the existing compensation
structure which has evidently driven positive behavior. It appears
balanced, provides market competitive pay, and ensures a strong link
between pay and performance. The policy also provides strong
alignment with both employees and shareholders, as well as a focus on
the long-term. The Board also took into account shareholders’ feedback
and proposed some adjustments, such as (i) the review of the targeted
amounts for the different components of the compensation which will
lead to a decrease of the on-target global remuneration opportunity by
23% compared to the previous Chairman & CEO remuneration policy,
(ii) the strengthening of the performance targets linked to the involuntary
severance indemnity, and (iii) the inclusion of a clawback provision. We
hope that these proposals which appear balanced and fair will receive
your support.
Further to this letter, I invite you to read the governance and
compensation report and notice of meeting which provide more details
on the resolutions you are asked to approve at the 2023 Shareholders’
Meeting. 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, attending physically, and expressing your views during the
Q&A session.
Thank you for your support and your trust,
Fred Kindle
Vice-Chairman & Lead Independent Director
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Chapter 4 – Corporate governance report
A new governance effective on May 4, 2023
In accordance with the intention of the Board of Directors announced in 2021 to separate the functions of Chairman and Chief Executive
Officer, the Board, at its meeting of February 15, 2023, has decided to implement a new governance structure that splits the office of Chairman
from that of Chief Executive Officer as of May 4, 2023:
• Mr. Peter Herweck who was Chief Executive Officer of AVEVA, will succeed Mr. Jean-Pascal Tricoire as Chief Executive Officer of Schneider
Electric, becoming responsible for the general management of the Company, as the sole executive corporate officer;
• Mr. Jean-Pascal Tricoire will remain as Chairman, at the unanimous request of the Board of Directors who wants to retain the benefit of his
experience in significantly and successfully transforming the company over the past 20 years.
Roles and Responsibilities
Chairman
• Organizes and directs work of Board,
presides over AGMs
• Supports the Company in its high-level
relations with select stakeholders
(notably in Asia), in coordination with
CEO
• Promotes Company’s values and culture
in particular in relation to Environmental,
Social and Governance
• Advises CEO, notably on strategic,
human capital and leadership
development matters
Vice-Chairman &
Lead Independent Director
Chief Executive Officer
• Consulted by the Chairman on
agenda and sequence of events for
Board meetings
• Has the ability to require that the
Chairman convene a Board meeting
• Deals with any possible conflicts of
interest
• Carries out annual assessments of
the Board
• Has sole authority to bind the company
toward third parties
• Defines and proposes the Strategy
• Manages the Company
• Runs the Business
• Develops human capital and
leadership
Mr. Peter Herweck, incoming Chief Executive Officer
Biography
Timeline
Mr. Peter Herweck joined Schneider
Electric, where he successfully led the
global Industrial Automation Business,
in 2016 before being appointed as
Chief Executive Officer of AVEVA.
Mr. Peter Herweck started his career as
software development engineer with
Mitsubishi in Japan, later joining Siemens,
where he held several executive positions
in Automation, Power Distribution and
Building Technologies, before becoming
Chief Strategy Officer. Mr. Peter Herweck
has a diverse, cross-cultural mindset,
derived from leading teams in both mature
and emerging markets. His passion for
technology driving positive progress in
term of energy efficiency for the world
makes him a great candidate for the role of
Chief Executive Officer of Schneider
Electric.
2021
AVEVA
2016–
2021
1993–
2015
1991–
1993
1987–
1991
1982–
1987
Chief Executive Officer, Switzerland & UK
Schneider Electric
Executive Vice President,
Industrial Automation, Switzerland
Siemens
Executive Positions in Automation, Power
Distribution and Building Technologies &
Chief Strategy Officer, China, USA,
Germany
Mitsubishi Electric Corp
Software Development Engineer, Japan
Electrical Engineering
Metz University, France
& Fachhochschule des Saarlandes, Germany
Electrician
Stadtwerke Saarbrücken, Germany
1966
Born in Germany
“Passionate about technology
driving efficiency and
sustainability, allowing both
progress and
decarbonization.”
• Multi-decade industry
experience in Energy
Management and Industrial
Automation
• Technology focus – digital
and software
• Diverse, cross-cultural
mindset derived from
leading teams in both
mature and emerging
markets
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C O R P O R A T E G O V E R N A N C E R E P O R T
4.1 Governance Report
4.1.1 Framework for the implementation
of Corporate Governance Principles
4.1.1.1 Reference to the AFEP-MEDEF Code
The Company refers to the AFEP-MEDEF Corporate Governance
Code, the latest version of which was updated on December 20,
2022. The Company complies with all the recommendations
contained in the AFEP-MEDEF Corporate Governance Code which
may be consulted online at http://www.medef.com/.
In accordance with the provisions of Article L. 225-37, paragraph 6
of the French Commercial Code, this chapter constitutes the
specific section of the Management Report on corporate
governance and reports on the following, in particular:
• The Board’s composition and application of the principle of
balanced gender representation on the Board;
• The ways in which the Board’s work is prepared and organized;
• The remuneration policy for Directors and Corporate Officers;
• Information relating to the remuneration and benefits of any kind
for Directors and Corporate Officers during the previous
financial year pursuant to Article L. 22-10-9 of the French
Commercial Code; and
• Limitations placed by the Board of Directors on the powers of
the Chief Executive Officer.
The other information included in the section of the Management
Report dedicated to corporate governance is published in
Chapter 7 of this document, specifically:
• The table summarizing the outstanding delegations relating to
share capital increase and decrease granted by the Annual
Shareholders’ Meeting (see section 7.2.3 “Authorizations to issue
and cancel shares” of this Universal Registration Document);
• The special rules for shareholder participation in the Annual
General Meeting or the provisions of the Articles of Association
providing for these rules (see sections 7.4.1 “Annual
Shareholders’ Meetings” and 7.4.2 “Voting rights” of this
Universal Registration Document); and
• The elements with the potential to have an impact in the event of
a public offer for the purchase or exchange of the Company’s
securities (see section 7.4.8 “Publication of information of Article
L. 22-10-11 of the French Commercial Code” of this Universal
Registration Document).
4.1.1.2 Governance structure
Schneider Electric is being governed through a model considered
by the Board of Directors to be best suited to the Company’s
culture, and specificities, with the ambition to constantly improve its
effectiveness. The structure responsible for the General
Management of Schneider Electric has always been selected in the
best interest of the Company and its stakeholders, with the
objective that the corporate governance model will support the
optimization of the Group’s financial and sustainability
performance, create the most favorable conditions for the
Company’s long-term development, respect the rights of
Shareholders, and maintain the necessary balance of powers
between the different governance bodies.
In 2013, after a period of 7 years (2006 to 2013) in which the duties
of Chairman of the Supervisory Board and those of Chairman of the
Management Board were separated to ensure a smooth transition
from Mr. Henri Lachmann to Mr. Jean-Pascal Tricoire, the Board of
Directors decided to change the governance structure and appoint
Mr. Jean-Pascal Tricoire as Chairman of the Board of Directors and
Chief Executive Officer.
The Board regularly reviewed its structure and its functioning
throughout since then. In accordance with the wishes of
M. Jean-Pascal Tricoire to step down as Chief Executive Officer
during his current term of office, alongside the intention of the
Board of Directors to separate the functions of Chairman and Chief
Executive Officer, the Board decided on February 15, 2023 to
implement a new governance structure that splits the office of
Chairman from that of the Chief Executive Officer.
4.1.1.2.1 Governance structure as of
May 4, 2023
Succession planning process
As publicly stated in 2021, when Mr. Jean-Pascal Tricoire’s office
as Director was coming to an end, the Board decided to renew
Mr. Jean-Pascal Tricoire’s board mandate for a further four-year
term. The Board of Directors considered his performance as both
Chairman & CEO to be outstanding and the combination of roles to
be appropriate when considering his profile, excellent track record
within the Company, and his openness to both Board Member
recommendation as well as the governance mechanisms in place
to safeguard the balance of power between the Board and the
management. The Board also confirmed that it understood and
acknowledged the general preference of investors for a clear
distinction between the roles of Chairman and Chief Executive
Officer, and, therefore, announced its intention to separate the
roles of Chairman and Chief Executive Officer before the end of
M. Jean-Pascal Tricoire’s upcoming 4 years term.
Over the last four years, the Governance & Remunerations
Committee, under the guidance of the Board of Directors, has
conducted a comprehensive process to propose the most
appropriate governance structure for the Company, and
succession plan for the role of Chief Executive Officer. The work of
the Governance & Remunerations Committee intensified in 2021 and
2022, driven by the ambition to preserve Schneider Electric’s
fundamental values, the Group and its Shareholders’ interests, as
well as the continuity of the strategy.
The Governance & Remunerations Committee met 27 times between
2020 and early 2023, following an in-depth succession plan
process:
• identification of the required skills and qualities most suited to
the Group’s future challenges;
• initiation of an external assessment of the Executive Committee
members;
• selection of top potential candidates of both genders, based on
their respective careers and achievements in their managerial
responsibilities;
• evaluation of potential candidates internal and external;
• resolution to favor internal candidates and further examine their
suitability for the role;
• further evaluation with closer exposure to the Board and its
strategic priorities;
• final selection of the new Chief Executive Officer.
The Committee led each of these steps which were then presented
to the whole Board for discussion and validation.
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Chapter 4 – Corporate governance report
When identifying the key skills required to take over the Chief
Executive Officer function, the Board, on top of global managerial
skill in complex environment, global knowledge of the industry
Schneider Electric operates in, considered essential:
• understanding of technology, in particular digital and software;
• engagement on Sustainability and climate change;
• commitment to keep building the Schneider’s advantage in
terms of globality (multi-Hub differentiated model) and diversity
(strong commitment to diversity and inclusion);
• ability to imagine, initiate and drive radical transformations to
accelerate the implementation of the strategy;
• resilience and courage to face complex situations.
Pursuant to this process, the Board has unanimously decided that
Mr. Peter Herweck who was Chief Executive Officer of AVEVA, will
succeed Mr. Jean-Pascal Tricoire as Chief Executive Officer of
Schneider Electric on May 4, 2023 at the date of the Annual
General Meeting. Mr. Peter Herweck joined Schneider Electric in
2016, where he successfully led the global Industrial Automation
Business, before being appointed as Chief Executive Officer of
AVEVA in 2021. He started his career as software development
engineer with Mitsubishi in Japan, later joining Siemens, where he
held several executive positions in Automation, Power Distribution
and Building Technologies, before becoming Chief Strategy
Officer. Mr. Peter Herweck has a diverse, cross-cultural mindset,
derived from leading teams in both mature and emerging markets.
Key amendments of the Board Internal Regulations
His level of global operational experience, technology and software
acumen, skills and personal qualities as well as his passion for
technology driving positive progress for the world, were assessed
by the Board as being particularly in line with the Group’s strategy
making him the best candidate for the role of Chief Executive
Officer of Schneider Electric. Mr. Peter Herweck will become
responsible for the general management of the Company, as the
sole executive corporate officer.
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Mr. Jean-Pascal Tricoire will remain as Chairman of the Board, at
the unanimous request of the Board members who want to retain
the benefits of his experience at the Company’s helm in
significantly and successfully transforming Schneider Electric over
the past 20 years. The Board believes his commitment to promoting
the Group’s culture and values, his governance expertise founded
on transparency, and the close ties built with all Company’s
Stakeholders will be highly valuable for the Company. His many
achievements include the repositioning of Schneider Electric as a
leader in the fields of digitization, electrification and sustainability,
and building a distinctive culture and management system based
on a meaningful and inclusive mission and the empowerment of
people.
As a consequence of this change of governance, the internal
regulations of the Board were amended on February 15, 2023 to be
effective as of May 4, 2023 with several key changes:
Power of the Chairman
of the Board
The Chairman of the Board will be entrusted with additional powers and missions of those provided for by the
Law for which he shall organize his activities so as to ensure his availability and put his experience at the
Company’s service.
Power of the Vice-
Chairman & Lead
Independent Director
The Vice-Chairman & Lead Independent Director will be empowered to request that the Chairman of the Board
of Directors call a meeting of the Board of Directors to discuss a given agenda, or to add such an agenda item
to an already scheduled Board of Directors.
Power of the Chief
Executive Officer
Under French Law, the Chief Executive Officer has the broadest powers to act in all circumstances in the name
of the Company. The internal regulations will be amended to review the key major decisions for which the Chief
Executive Officer shall request a Board’s prior approval.
Evolution of the set-up
of the Committees
Two new Committees will be created:
• a Governance, Nominations & Sustainability Committee;
• a Human Capital & Remunerations Committee.
They will replace the previous Governance & Remunerations Committee and the Human Resources & CSR
Committee. From May,4, 2023, all topics related to the compensation either of the employees or the Executive
Committee members or Corporate officers and Board members will be overseen by the Human Capital &
Remunerations Committee. The Governance, Nominations & Sustainability Committee will focus on governance,
succession plan of Board members, Corporate Officers and Executive Committee members and Sustainability
matters, which the Board considers to be central to all governance matters.
Roles and duties of the Chairman of the Board
(as of May 4, 2023)
The Board of Directors shall elect a Chairperson amongst its
members which shall be appointed for a period that can be no
longer than his/her term of office as a Director. The Board shall
deliberate once a year on the opportunity for the Chairperson to
pursue his/her functions. The Chairperson is eligible for re-election.
He/she may be removed from office by the Board of Directors at
any time.
The Board decided on February 15, 2023 that
M. Jean-Pascal Tricoire will remain as Chairman
of the Board from May 4, 2023.
In addition to his statutory missions, the Chairman of the Board will
be entrusted with additional powers and missions for which he shall
organize his activities so as to ensure his availability and put his
experience at the Company’s service.
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Missions of the Chairman of the Board of Directors
Statutory missions of the
Chairman of the Board of
Directors
• to organize and direct the work of the Board;
• to convene the Board meetings, determine the agenda and preside over the meetings;
• to request any document or information necessary to help the Board of Directors for the preparation of its
meetings and verify the quality of the information provided;
• to oversee the proper functioning of the Company’s bodies and makes sure, in particular, that (i) the
Directors are able to carry out their assignments, (ii) the Board of Directors is well organized, in a manner
conducive to constructive discussion and decision-making and (iii) the Board of Directors devotes an
appropriate amount of time to issues relating to the future of the Company and particularly its strategy;
• to preside over general shareholders meetings and report on the Board work to the annual general
shareholders’ meeting.
Additional missions
entrusted to the Chairman
of the Board
• to be kept regularly informed by the Chief Executive Officer of significant events and situations relating to the
business of the Group (including the Company’s strategy, major acquisition or divestment projects,
significant financial transactions, risks, major community projects and the appointment of the most senior
executives of the Group) and to be consulted by him on these matters;
• to assist and advise the Chief Executive Officer on strategic, technological, leadership and human capital
matters;
• to support, in coordination with the Chief Executive Officer, the representation of the Company in high-level
relations with selected stakeholders (customers and institutions);
• to represent the Company with selected Asian Partners and Asian government bodies in coordination with
the Chief Executive Officer;
• to be involved in some dialogue with shareholders in cooperation with the initiatives taken in this respect by
the Chief Executive Officer;
• to promote the Company’s values and culture in particular in relation to Environmental, Social and
Governance;
• to meet with Company’s leaders and managers;
• to hear the statutory auditors and the heads of the control functions in order to ensure that the Board and its
committees are in a position to carry out of their duties;
• to convene the members of the Board without Executive Directors being present, in particular to allow
debates on the performance and compensation of the Executive Management and succession planning;
• to participate to the recruitment process for new directors and the development of the succession plan;
• to work with the Board on the preparation and implementation of succession plan(s) for the corporate
officer(s).
The Chairman of the Board strives to develop and maintain a
trustful and regular relationship between the Board and the
General Management, in order to guarantee continuous, ongoing
implementation by the General Management of the strategies
defined by the Board. In all his/her assignments other than those
conferred by law, the Chairperson of the Board of Directors acts in
close conjunction with the Chief Executive Officer, who has sole
responsibility for the general and operational management of the
Company.
The Chairperson of the Board of Directors is the only person
authorized to speak on behalf of the Board, with the exception of
any specific assignment entrusted to the Vice-Chairperson & Lead
Independent Director pursuant to the dialogue with shareholders.
Roles and duties of the Vice-Chairman of the Board (as
of May 4, 2023)
The Board of Directors may appoint a Vice-Chairperson. If the roles
of Chairperson and Chief Executive Officer are combined or if the
Chairperson is not considered as independent according to the
AFEP/MEDEF Corporate Governance Code, the appointment of a
Vice-Chairperson is compulsory. The Vice-Chairperson shall be
appointed for a period that may not be any longer than his/her term
of office as a Director. The Vice-Chairperson is eligible for
re-election. The Vice-Chairperson may be removed from office by
the Board of Directors at any time.
The Board decided on February 15, 2023 that, as M. Jean-Pascal
Tricoire will remain as Chairman of the Board on May 4, 2023 and
he will not be considered as independent with regard to the criteria
set by Article 10.5 of the AFEP-MEDEF Corporate Governance
Code, Fred Kindle will pursue his mission as Vice-Chairman & Lead
Independent Director.
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 will be replaced by the Vice-Chairperson as
long as his inability may last and, in the case of death, until the
election of a new Chairperson.
The Vice-Chairman may also take on the role of Lead Independent
Director. The Vice-Chairperson & Lead Independent Director must
be an independent member of the Board, as defined in accordance
with the criteria published by the Company. In this respect, the
powers and missions of the Vice-Chairperson are as follows.
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Mission of the Vice-Chairman & Lead Independent Director
•
•
•
•
•
•
•
•
•
•
•
to be kept informed of major events in Group life through regular contacts and meetings with the Chairperson and the Chief Executive
Officer;
to be consulted by the Chairperson on the agenda and the sequence of events for every Board meeting as well as on the schedule for
Board meetings;
to request that the Chairperson of the Board of Directors include additional items on the agenda of any meeting of the Board of Directors;
to request that the Chairperson of the Board of Directors call a meeting of the Board of Directors to discuss a given agenda;
to convene – whenever he/she deems appropriate - an executive session with non-executive members of the Board of Directors and
without the Chairperson attending, over which he/she will preside. It is the Vice-Chairperson’s responsibility to appreciate for each topic
discussed whether the employee Directors should leave the meeting until the topic is closed. In addition, the Vice-Chairperson may
convene an executive session between two Board meetings;
to promptly report to the Chairperson on the conclusions of executive sessions held without the Chairperson attending;
to draw the attention of the Chairperson and of the Board of Directors to any possible conflicts of interest that he/she may have identified
or which may be reported to him/her;
to meet if he so wishes the Group’s leading managers and visit Company sites in order to complement his/her knowledge;
to carry out annual assessments of the Board of Directors and, in this context, assess the actual contribution of every member of the
Board to the Board’s activities;
to report on his/her actions at annual general shareholders’ meetings;
to engage with shareholders on governance matters and inform the Board of their concerns.
Roles and duties of the Chief Executive Officer
(as of May 4, 2023)
According to the French law, the Chief Executive Officer has the
broadest powers to act in all circumstances in the name of the
Company. The Chief Executive Officer represents the Company in
its relationship with third parties. He exercises his powers within the
limitations of the corporate purpose, and subject to any powers
expressly attributed by law to the Shareholders’ Annual General
Meeting and Board of Directors.
The Board has unanimously decided on February 15, 2023 that
Mr. Peter Herweck, will be appointed as Chief Executive Officer of
Schneider Electric on May 4, 2023.
Limitation of powers of the Chief Executive Officer
The Chief Executive Officer will be requested to obtain the Board’s prior approval 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;
• significant changes to the scope and portfolio of activities outside of the strategy shared with the Board of Directors;
• establishment of significant strategic alliances;
• any settlement for a sum of more than 125 million euros;
• any off-balance sheet commitment in excess of 125 million euros other than those relating to a guarantee given to an entity of the Group;
• major and very significant changes to the Group’s internal organization.
Roles and duties of the Board of Directors (as of May 4,
2023)
The Board of Directors shall determine the business strategy of the
Company and monitors its implementation, in accordance with its
corporate interest and while considering its social and
environmental aspects. Subject to the powers expressly conferred
to annual general shareholders’ meetings and within the limit of the
corporate purpose, it shall deal with all matters regarding the
smooth running of the Company and settles issues concerning the
Company. At any time in the year, the Board carries out the controls
and verifications it deems appropriate.
In accordance with its provisions, the Board of Directors’
responsibility include additional missions in addition to the exercise
its legal or statutory duties.
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Mission of the Board of Directors
Statutory missions the
Board of Directors
Additional missions of
the Board of Directors
•
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to determine the method of exercising General management of the Company;
to appoint Executive Corporate Officers, remove them from office and to set their remuneration and the
benefits granted to them;
to co-opt Directors whenever necessary;
to distribute Directors’ remuneration allocated at the annual general shareholders’ meeting amongst
members of the Board of Directors;
to convene general shareholders meetings;
to approve statutory and consolidated financial statements;
to decide on the dates for the payment of dividends and any possible down-payments on dividends;
to draw up management reports and reports for annual general shareholders’ meetings;
to draw up management planning documents and the corresponding reports;
to draw up the corporate governance report as provided for in Article L.225-37 of the French Commercial
Code;
to 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;
to grant options or restricted/performance shares within the limits of authorizations given at annual general
shareholders’ meetings;
to authorize the issue of bonds;
to authorize the issue of sureties, endorsements and guarantees;
to authorize regulated agreements (agreements covered by Article L.225-38 and following of the
Commercial Code);
to 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.
to give prior authorization for:
(i) 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;
(ii) significant changes to the scope and portfolio of activities outside of the strategy shared with the Board
of Directors;
(iii) establishment of significant strategic alliances;
(iv) any settlement for a sum of more than 125 million euros;
(v) any off-balance sheet commitment in excess of 125 million euros other than those relating to a guarantee
given to an entity of the Group;
(vi) major and very significant changes to the Group internal organization;
to be informed by its Chairperson or by its committees of any significant event concerning the Company’s
efficient operation;
to 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;
to 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 and to that end
receive all information necessary to fulfil its remit, especially from the Chief Executive Officer;
to seek assurance that the cyber risk management program is adequate and reduces the risk of attacks and,
when necessary, will respond and recover from any attack that may happen;
to ensure that a process to prevent and detect bribery and influence peddling is in place;
to exercise control over management and oversee the quality of information provided to shareholders and to
the markets, in particular via the financial statements or on the occasion of major corporate transactions;
to review every year its composition, its organization and its mode of operation;
to set up an Audit & Risks Committee on the terms specified by law and any other committees (i) which do
not have decision-making powers but have the task of providing all useful information for the discussions and
decisions which it is called upon to make, (ii) which composition and rules with regard to their modus
operandi is determined by the Board;
to be consulted prior to acceptance by the Chief Executive Officer or Deputy Chief Executive Officers, if any,
of any corporate appointment in a listed company outside the Group;
to appoint a Vice-Chairperson if the Board is compelled or wishes to do so;
to appoint up to three Board Observers if the Board wishes to do so;
to determine targets in terms of gender balance within the executive bodies and ensure that the Executive
Corporate Officers implement a policy of non-discrimination and diversity, notably with regard to the
balanced gender representation on the executive bodies.
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New set-up of the Board Committees (as of May 4, 2023)
As of May 4, 2023, the Board’s Committee will be as follows.
Governance, Nominations & Sustainability Committee
6
Members
Memberships
Missions
80%
17%
Independent Directors*
Women**
• Jean-Pascal Tricoire (Chairman)
• Leo Apotheker
• Fred Kindle
• Linda Knoll
• Anders Runevad
• Greg Spierkel
The Chief Executive Officer will be invited for the session where his presence is required such as
the review of the succession plans for key Group executives.
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
to formulate proposals to the Board of Directors in view of any appointment made to the
Board of Directors: Directors or Observers, Chairperson of the Board of Directors, Vice-
Chairperson & Lead Independent Director, Chairpersons and members of committees;
to formulate proposals to the Board of Directors in view of any appointment of Executive
Corporate Officers: Chief Executive Officer and / or Deputy Chief Executive Officer;
to ensure the implementation of a procedure for the preparation of succession plans for the
Directors and Corporate Officers in the event of an unforeseen vacancy;
to examine succession plans for key Group executives;
to be informed of any nomination of members of the Executive Committee and of the main
Group executives;
to ensure that the AFEP-MEDEF Corporate Governance Code to which the Company refers is
applied;
to discuss governance issues related to the functioning and organization of the Board and its
committees;
to propose on the conditions in which the regular evaluation of the Board is carried out;
to discuss the qualification of Directors as independent, which is reviewed by the Board
every year prior to publication of the annual report;
to conduct a review of the committees that are in charge of preparing the Board’s work;
to review the implementation of the assessment process relating to the qualification of the
related-party agreements as ‘current’ or ‘regulated’;
to prepare the decisions by the Board with regard to the update of its Internal Regulations;
to prepare the draft corporate governance report of the Board of Directors;
to ensure that the long-term commitments in term of Sustainability undertaken by the
Company are implemented;
to review the Group sustainability strategy including the Climate strategy and follow up on the
progress made on a regular basis;
to review the non-financial reporting and control systems as well as the main results of the
non-financial information disclosed by the Company;
to work with the Stakeholder Committee and set its workplan each year.
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** Excluding the Director representing the employee shareholders and the Directors representing the employees.
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Audit & Risks Committee
4
Members
Memberships
Missions
100%
75%
Independent Directors*
Women**
• Jill Lee (Chairwoman)
• Cécile Cabanis
• Anna Ohlsson-Leijon
• Greg Spierkel
The Chief Executive Officer will not attend the meeting of the Committee.
•
to prepare for annual and half-yearly financial statements to be approved by the Board and
therefore, more particularly:
(i) checks the appropriateness and consistency of the accounting methods used for
drawing up consolidated and statutory financial statements, 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;
(ii) examines off-balance-sheet risks, including those of a social and environmental nature,
and commitments as well as the cash situation;
•
•
•
•
•
(iii) examines the process for drawing up financial and extra-financial information;
to examine 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;
to handle 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;
to suggest reappointing the existing statutory auditors or appointing new statutory auditors,
after a consultation process;
to 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;
to monitor the efficiency of internal control and risk management systems and therefore, more
particularly:
(i)
to examine the organization and resources used for internal audit, as well as its annual
work program (the Committee shall receive summaries of reports produced on audits on
a quarterly basis and the Chairperson of the Committee shall receive these reports in
full);
(ii) to review Enterprise Risk Management reports including operational risk-mapping and to
make sure that measures exist for preventing or minimizing risks;
(iii) to examine how to optimize risk coverage on the basis of reports requested from internal
audit or risk management functions;
(iv) to examine Group internal control measures and look into the results of entities’ self-
assessments with respect to internal control; to ensure that a relevant process exists for
identifying and processing incidents and anomalies;
(v) 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;
(vi) to assess Cyber Risks and the Group’s Cyber Security posture (jointly with the Digital
Committee).
Independent Directors as prescribed by the AFEP-MEDEF Corporate Governance Code.
*
** Excluding the Director representing the employee shareholders and the Directors representing the employees.
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Human Capital & Remunerations Committee
5
Members
Memberships
Missions
100%
75%
Independent Directors*
Women**
• Linda Knoll (Chairwoman)
• Nive Bhagat
• Rita Felix
• Fred Kindle
• Anna Ohlsson-Leijon
The Chief Executive Officer will be regularly invited for the meetings, he will nevertheless not
participate in any meeting where the Committee studies his own compensation.
•
•
•
•
•
•
•
to formulate proposals to the Board of Directors on the compensation policy of the Executive
Corporate Officers (Chairperson of the Board of Directors and/or Chief Executive Officer,
and/or Deputy Chief Executive Officer, if any), 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 review the compensation of the members of the Executive Committee;
to propose an amount of the remuneration package for Directors to be submitted to the
annual general shareholders’ meeting and the method of distribution;
to formulate proposals to the Board of Directors on setting up the long-term incentive plans
such as, for example, grant of stock options or performance/restricted shares;
to prepare the Board of Directors’ deliberations on employee shareholding;
to review the social impact of major re-organization projects and major human resource
policies;
to review risk management in relation to human resources.
Investment Committee
8
Members
Memberships
Missions
67%
33%
Independent Directors*
Women**
• Leo Apotheker (Chairman)
• Giulia Chierchia***
• Jill Lee
• Xiaoyun Ma
• Anders Runevad
• Lip-Bu Tan
• Jean-Pascal Tricoire
• Bruno Turchet
The Chief Executive Officer will be regularly invited to the meetings of the Committee.
•
•
•
•
•
•
•
•
•
to elaborate recommendations to the Board on major capital deployment decisions;
to advise the management team on capital deployment strategies;
to launch at the Board’s request, or suggest research projects leading to material investments
for the Company, typically for capital deployment decisions of 250 million euros or above;
to investigate matters of smaller scale, if the strategic significance warrants it or the Board/
Chairperson of the Board specifically requires it;
to provide recommendations on major merger, alliances and acquisition projects;
to pay special attention to reconfiguration or consolidation scenarios happening in the
sectors the Company is operating in or likely to operate in;
to examine portfolio optimizations and divestment projects of financial or strategic
significance;
to 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;
to present to the Board social and environmental aspects of the strategic projects submitted
to it such as M&A projects.
Independent Directors as prescribed by the AFEP-MEDEF Corporate Governance Code.
*
** Excluding the Director representing the employee shareholders and the Directors representing the employees.
*** Subject to her appointment as a Director by the Annual Shareholders’ Meeting to be held on May 4, 2023.
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Digital Committee
7
Members
Memberships
Missions
67%
17%
Independent Directors*
Women**
• Greg Spierkel (Chairman)
• Leo Apotheker
• Nive Bhagat
• Xiaoyun Ma
• Abhay Parasnis***
• Lip-Bu Tan
• Jean-Pascal Tricoire
The Chief Executive Officer will be regularly invited to the meetings of the Committee.
To review, appraise and follow-up on 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, (iii) establishing its contribution to and consistency with the overall strategy;
• 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);
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;
• checking that the Company is equipped with the right pool of talents for digital transformation;
• assessment of Cyber Risks and enhancement of the Group’s Cyber Security posture (jointly
with the Audit & Risks Committee).
4.1.1.2.2 Governance structure in 2022 and until
May 3, 2023
In 2022, the functions of the Chairman & Chief Executive Officer
were 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. Mr. Jean-Pascal
Tricoire will pursue his functions of Chairman & Chief Executive
Officer until May 3, 2023.
The Chairman & Chief Executive Officer
In 2022, the performance by Mr. Jean-Pascal Tricoire of the duties
of Chairman & Chief Executive Officer seemed particularly
appropriate to the Board of Directors for the following reasons:
• The results of the internal Board assessments that continuously
confirmed that (i) all Board members individually support the
current leadership structure and (ii) the level of transparency
between the management team and the Board of Directors is
considered to be 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 (82%), independence
of the committees mainly chaired by independent Directors,
executive session proposed systematically at the end of each
Board meeting); and
• 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.
The Chairman & CEO 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 & CEO 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 agreements.
The Vice-Chairman & Lead Independent Director
On February 19, 2020, the Board of Directors designated
Mr. Fred Kindle, whose biography is provided in section 4.1.2.2 of
Chapter 4 of the 2022 Universal Registration Document to become
Vice-Chairman & Lead Independent Director of Schneider Electric
SE. 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.
Independent Directors as prescribed by the AFEP-MEDEF Corporate Governance Code.
*
** Excluding the Director representing the employee shareholders and the Directors representing the employees.
*** Subject to his appointement as a Director by the Annual Shareholders’ Meeting to be held on May 4, 2023.
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In application of Article 10 of the internal regulations which
prescribes that the Governance & Remunerations Committee shall
be chaired by the Vice-Chairman & Lead Independent Director,
Mr. Fred Kindle chairs this Committee.
• 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
As such, the Vice-Chairman & Lead Independent Director:
• Decide on the use of authorizations granted by the
submitted to shareholders;
•
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
and Chief Executive Officer and, as needed, makes proposals
for a successor in one or both functions;
Shareholders’ Meetings, more particularly for increasing
Company capital, buying back the Company’s own shares,
carrying out employee shareholding transactions, implementing
the Long-Term Incentive Plan through the granting of
Performance Shares and canceling shares;
• Authorize the issue of bonds; and
• 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;
• Chairs the “executive sessions”, i.e., meetings of the Board of
• Ascertain the implementation of a process aimed at preventing
Directors not in the presence of any executive member, namely
the Chief Executive Officer and Deputy Chief Executive
Officers(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; and
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,
• Reports on his/her activities during the Annual Shareholders’
− 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.
Meeting.
As every year, the Vice-Chairman & Lead Independent Director,
Mr. Fred Kindle, reported on the missions he carried out in 2022 in
line with his functions (see section 4.1.5 of Chapter 4 of the 2022
Universal Registration Document).
The Board of Directors
Specific powers are vested to the Board of Directors under French
law and the Company’s Articles of Association as well as the
Internal Board Regulations.
Powers vested by law
• Determine the Group’s strategic directions and ensure 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;
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4.1 Governance Report
4.1.2 Composition of the Board of Directors
4.1.2.1 Board members
As of March 28, 2023, the Board of Directors consisted of 14 Directors. Mr. Abhay Parasnis and Mrs. Giulia Chierchia were appointed as
Observers by the Board of Directors respectively on July 27, 2022, and February 15, 2023, with the intent to submit their candidacies at the
Annual Shareholders’ Meeting to be held on May 4, 2023.
Jean-Pascal Tricoire
Chairman and Chief Executive Officer
Fred Kindle
Vice-Chairman
& Lead Independent Director
C
Léo Apotheker
Director
C
Nive Bhagat
Independent Director
Cécile Cabanis
Independent Director
Rita Felix
Employee Director
Linda Knoll
Independent Director
C
Jill Lee
Independent Director
C
Xiaoyun Ma
Employee Shareholders Director
Anna Ohlsson-Leijon
Independent Director
Anders Runevad
Independent Director
Gregory Spierkel
Independent Director
C
Lip-Bu Tan
Independent Director
Bruno Turchet
Employee Director
Giulia Chierchia
Observer
Abhay Parasnis
Observer
Board committees
Governance &
Remunerations
Committee
9
meetings*
5
members
Fred Kindle
Léo Apotheker
Linda Knoll
Anders Runevad
Gregory Spierkel
Audit & Risks
Committee
Investment
Committee
Digital
Committee
Human Resources
& CSR Committee
6
meetings*
4
members
Jill Lee
Cécile Cabanis
Anna Ohlsson-Leijon
Gregory Spierkel
2
meetings
5
members
Léo Apotheker
Jill Lee
Anders Runevad
Lip-Bu Tan
Bruno Turchet
5
meetings*
5
members
Gregory Spierkel
Léo Apotheker
Nive Bhagat
Xiaoyun Ma
Lip-Bu Tan
6
meetings*
4
members
Linda Knoll
Rita Felix
Fred Kindle
Xiaoyun Ma
*
Including joint meetings with other committees.
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Chapter 4 – Corporate governance report
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
2022
Participation in Board committees
Age Gender
Natio-
nality
Number of
directorships
in listed
companies*
Number of
Schneider
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
59
M
2
840,147
2013
Fred Kindle, Vice-Chairman & Lead Independent Director
64
M
2
40,000
2016
Léo Apotheker, Non-independent Director
69
M
2
3,093
2008
Nive Bhagat, Independent Director
51
F
1
200
2022
Cécile Cabanis, Independent Director
51
F
3
1,000
2016
Rita Felix, Employee Director
40
F
1
144
2020
Linda Knoll, Independent Director
62
F
3
1,000
2014
Jill Lee, Independent Director
59
F
1
1,000
2020
AGM
2025
AGM
2024
AGM
2023
AGM
2026
AGM
2024
AGM
2024
AGM
2026
AGM
2024
Xiaoyun Ma, Director representing the employee shareholders
59
F
1
36,201
2017
Anna Ohlsson-Leijon, Independent Director
54
F
2
1,000
2021
Anders Runevad, Independent Director
63
M
3
1,000
2018
Gregory Spierkel, Independent Director
66
M
3
1,000
2015
Lip-Bu Tan, Independent Director
63
M
4
1,000
2019
Bruno Turchet, Employee Director
49
M
1
810
2021
AGM
2025
AGM
2025
AGM
2026
AGM
2023
AGM
2023
AGM
2025
Giulia Chierchia, Observer
44
F
1
0
Abhay Parasnis, Observer
48
M
2
1,000
–
–
–
–
9
6
100%
–
100% 100%
C
14
100% 90%
C
<1
100% 75%
6
2
8
2
5
100% 100%
100% 100%
100% 94%
C
100% 100%
C
89% 90%
<1
89% 100%
4
7
3
1
–
–
78% 94%
100% 100%
100% 90%
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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4.1 Governance Report
Governance structure
Read more in section 4.1.4
4
members
6
meetings**
Audit & Risks
Committee
100%
attendance
100%
independence
14
Directors including:
9 independent Directors
2 Employee Directors
1 Employee Shareholder Director
Board of Directors
97%
9
82%
independence*
meetings
in 2022
attendance
rate
in 2022
5
members
9
meetings**
Governance &
Remunerations
Committee
93%
attendance
80%
independence
5
members
5
meetings**
Digital
Committee
83%
attendance
75%
independence*
7
executive sessions
in 2022
5
members
2
meetings
Investment
Committee
100%
attendance
75%
independence*
4
members
6
meetings**
Human Resources
& CSR Committee
100%
attendance
100%
independence*
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Directors’ nationality
Board diversity
Board tenure
Canada
Portugal
Germany
Singapore
China
United Kingdom
Switzerland
USA
Sweden
France
1
1
1
1
1
1
1
2
2
3
7
Women
7
Men
1
> than 12 years
3
< or equal to 1 year
5
6–12 years
5
1–5 years
*
**
Employee Directors and
Employee Shareholders Director
excluded as prescribed by the
AFEP-MEDEF Corporate
Governance Code.
Including joint meetings with other
committees.
C O R P O R A T E G O V E R N A N C E R E P O R T
Chapter 4 – Corporate governance report
Changes in the composition of the Board of Directors in 2022 and until the date of this
Universal Registration Document
Name
Gender
Nationality
Date of appointment
Term end
Directors whose term of office was renewed at the
2022 AGM*
Directors who left the Board of Directors in 2022
Linda Knoll
Anders Runevad
Willy R. Kissling
Fleur Pellerin
Directors who joined the Board of Directors in 2022
Nive Bhagat
Observer who joined the Board of Directors in 2022
and early 2023
Abhay Parasnis
Giulia Chierchia
F
M
M
F
F
M
F
May 2014
April 2018
May 2002
April 2018
AGM 2026
AGM 2026
AGM 2022
AGM 2022
May 2022
AGM 2026
July 2022
February 2023
AGM 2023
AGM 2023
*
Annual General Shareholders’ Meeting.
4.1.2.2 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
Current term started: 2021
Term ends: 2025
Current external directorships
Other directorships at listed companies:
Director of Qualcomm, Inc. (USA).
Other directorships:
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 (France); Director of Delixi Electric Ltd.
(China); Director of Schneider Electric USA, Inc. (USA);
Chairman of the Board of Directors of Schneider Electric
Asia Pacific Ltd. (Hong Kong).
Previous directorships
Previous directorships held in the past five years:
Co-Chairman of the France-China Business Committee;
Chairman of the Board of Directors of Schneider Electric
Holdings Inc. (USA).
Skills
Jean-Pascal Tricoire
Chairman & Chief Executive Officer of
Schneider Electric SE
Age: 59 years
Nationality: French
Business address: Schneider Electric
35, rue Joseph Monier, 92500 Rueil-
Malmaison, France
840,147(1) Schneider Electric SE
shares
Attendance rate at:
Board meetings
100%
Honorary Chairman: Mr. Didier Pineau-Valencienne
(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
Corporate Finance
International Markets
Industry Knowledge
Sustainability
Digital & Technology
Accounting, Audit & Risk
Employee perspective and
knowledge of the Group
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4.1 Governance Report
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
Current term started: 2020
Term ends: 2024
Current external directorships
Other directorships at listed companies:
Chairman of the Board of Directors of VZ Holding AG
(Switzerland).
Other directorships:
None.
Previous directorships
Previous directorships held in the past five years:
Director of Stadler Rail AG (Switzerland); 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
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 President
& CEO 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
Current term started: 2021
Term ends: 2023
Current external directorships
Other directorships at listed companies:
Director of NICE-Systems Ltd (Israel).
Other directorships:
Chairman of Syncron International AB (Sweden); Director
of P2 Energy Solutions (USA); Director of MercuryGate
(USA), Director Eudonet (France).
Previous directorships
Previous directorships held in the past five years:
Chairman and Co-CEO of Burgundy Technology
Acquisition Corporation (USA); Chairman of the Board
of Directors of Unit 4 NV (Netherlands); Director of Taulia
(USA); 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: 64 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%
100%
Léo Apotheker
Company Director
Age: 69 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%
90%
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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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.
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Chief Executive Officer Cloud
Infrastructure Services of CapGemini
Age: 51 years
Nationality: British
Business address: CapGemini,
40 Holborn Viaduct, London, EC1N,
United Kingdom
200 Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
75%
Cécile Cabanis*
Deputy Chief Executive Officer of
Tikehau Capital
Age: 51 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%
Term of office
First appointed: 2022
Term ends: 2026
Current external directorships
Other directorships at listed companies:
None.
Other directorships:
Director of Capgemini UK plc. (United Kingdom);
CGS Holdings Ltd. (United Kingdom); and Capgemini
Outsourcing Services GmbH (Germany).
Previous directorships
Previous directorships held in the past five years:
Non-executive Director of Mitie Plc. (United Kingdom);
Member of Audit & Nomination Committees of Mitie Plc.
(United Kingdom).
Skills
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. Cécile Cabanis has
been a member of the Board of Directors of Danone SA (from 2018 to 2022) and served as Vice-Chairwoman (from
December 2020 to April 2022). 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. Cécile Cabanis is an engineer graduated from Agro Paris Grignon.
Term of office
First appointed: 2016
Current term started: 2020
Term ends: 2024
Current external directorships
Other directorships at listed companies:
Deputy Chief Executive Officer of Tikehau Capital
(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:
Vice-Chairwoman of the Board of Directors of Danone
SA (France); 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.
Skills
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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
Corporate Finance
International Markets
Industry Knowledge
Sustainability
Digital & Technology
Accounting, Audit & Risk
Employee perspective and
knowledge of the Group
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4.1 Governance Report
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. Since 2021 she has been working as a PMO,
Inside Sales Director and, more recently 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). She has attended the High-Performance Boards (IMD Business School,
2020), Strategy in the Age of Digital Disruption (INSEAD, 2021) and more recently Digital Transformation Foundations
program (IMD Business School, 2022).
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
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 operating positions there, culminating in her appointment to multiple senior management positions.
In 1999, she became Vice-President and General Manager of the company’s Global Crop Production business
unit. 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, and President Parts
and Service (ad interim). She served as 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
Current term started: 2022
Term ends: 2026
Current external directorships
Other directorships at listed companies:
Director of Astec Industries, Inc. (USA); Director of
Iveco Group N.V. (Netherlands).
Other directorships:
None.
Previous directorships
Previous directorships held in the past five years:
Director of Comau S.p.A.; 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
Rita Felix
Market Segmentation and Competitive
Intel Leader
Age: 40 years
Nationality: Portuguese
Business address: Schneider Electric,
Av. do Forte 3, Ed. Suécia IV, Piso 3,
2794-038 Carnaxide, Portugal
144(1) Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
Linda Knoll*
Company Director
Age: 62 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
100%
94%
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
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Jill Lee*
Company Director
Age: 59 years
Nationality: Singaporean
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%
Xiaoyun Ma
Chief Financial Officer for Schneider
Electric’s China Operations
Age: 59 years
Nationality: Chinese
Business address: Schneider Electric,
8F, Schneider Electric Building, No. 6,
East WangJing Rd. Chaoyang District
Beijing 100102, China
36,201(1) Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
89%
90%
Experience and qualifications
Jill Lee is a non-executive director of PSA International, a global port group headquartered in Singapore. She
was the Group Chief Financial Officer and a member of the Executive Committee of Sulzer Ltd from 2018 to 2022.
Beginning her executive career in Singapore in 1986 with AT&T, Tyco Electronics and Siemens, Lee went on to build
an international career where she spent several years heading CFO functions in China, followed by global strategic
positions in Germany and Switzerland. During her two-decade career up to 2010 in Siemens, Lee’s leadership roles
included Country CFO and Senior Vice-President of Siemens in Singapore, Regional CFO and Senior Executive Vice-
President of Siemens in China, as well as Group Chief Diversity Officer. Later, Lee was the Senior Vice-President,
Finance, Strategy and Investments for Neptune Orient Lines in Singapore (2010 to 2011). From 2012 to 2018, Lee held
leadership positions in ABB, including Regional CFO and Senior Vice-President for ABB China and North Asia as well
as Head of Next Level Program Management and Group Senior Vice-President of ABB. In terms of non-executive
directorships, Lee was previously a member on the board of Sulzer Ltd (2011–2018), Signify N.V. (2017–2020) and
medmix Ltd (2021–2022), and she had been the chairperson of the Audit Committee on all three boards. Lee holds
a Bachelor’s Degree of Business Administration from National University of Singapore and an MBA from Nanyang
Technological University in Singapore.
Previous directorships
Previous directorships held in the past five years:
Non-executive Director of medmix Ltd (Switzerland);
Member of the Supervisory Board of Signify N.V.
(formerly Philips Lighting, Netherlands); Non-executive
Director of Sulzer Ltd (Switzerland).
Skills
Term of office
First appointed: 2020
Term ends: 2024
Current external directorships
Other directorships at listed companies:
None.
Other directorships:
Non-executive Director of 65 Equity Partners Pte Ltd
(Singapore); Non-executive Director of PSA International
(Singapore); Advisory Board Member of Nanyang
Business School (Singapore); Foundation Board
Member of IMD Business School (Switzerland) (both
being advisory roles for the university with maximum of
two meetings per year).
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
Current term started: 2021
Term ends: 2025
Current external directorships
Other directorships at listed companies:
None.
Other directorships:
Chairwoman of the Board of Directors of Schneider
Electric IT (China) Co., Ltd.; Vice-Chairwoman of the
Board of Directors of 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)
Low Voltage Co., Ltd. (formerly known as 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.(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. and 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. and Jingxin Hongde (Beijing) Technology Co.,
Ltd. ( formerly known as Citic Schneider Smart Building
Technology (Beijing) 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. and Clipsal Manufacturing (Huizhou)
Co., Ltd.; Executive Director of Beijing Leader Harvest
Energy Efficiency Investment Co., Ltd. (China).
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.
Skills
Public Company
Management
Law, Governance, Ethics &
Compliance
Corporate Finance
International Markets
Industry Knowledge
Sustainability
Digital & Technology
Accounting, Audit & Risk
Employee perspective and
knowledge of the Group
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Experience and qualifications
Anna Ohlsson-Leijon is currently Chief Commercial Officer of Electrolux Group 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 the position as Chief Executive Officer Europe and Executive Vice-President of AB Electrolux in 2018. In 2022
she was promoted to Chief Commercial Officer for the Group. 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:
Director of Alfa Laval AB (Sweden).
Skills
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.
Term of office
First appointed: 2018
Current term started: 2022
Term ends: 2026
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).
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
Anna Ohlsson-Leijon*
Chief Commercial Officer of Electrolux
Group and Executive Vice-President of
AB Electrolux
Age: 54 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
89%
100%
Anders Runevad*
Company Director
Age: 63 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
78%
94%
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
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Chair
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Gregory Spierkel*
Company Director
Age: 66 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%
Lip-Bu Tan*
Chairman of Cadence Design Systems,
Inc.
Age: 63 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%
90%
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.
Term of office
First appointed: 2015
Current term started: 2019
Term ends: 2023
Previous directorships
Previous directorships held in the past five years:
None.
Skills
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).
Experience and qualifications
Lip-Bu Tan is currently Executive Chairman of Cadence Design Systems, Inc. from which he retired as Chief
Executive Officer in 2021 and will retire as Chairman in 2023 as he announced he will not seek re-election to the Board
at the 2023 Annual Meeting (https://d18rn0p25nwr6d.cloudfront.net/CIK-0000813672/cd2ef8b8-abb5-4620-
a08d-c5c49565fc6c.pdf). Lip-Bu Tan 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:
Director of Softbank Group Corp. (Japan); 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
Term of office
First appointed: 2019
Term ends: 2023
Current external directorships
Other directorships at listed companies:
Chairman of Cadence Design Systems, Inc.1 (USA),
Chairman of the Board of Credo Technology Group
Holding Ltd. (Cayman Islands); Director of Intel
Corporation (USA).
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.
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*
Note: bold indicates the names of companies whose securities are listed on a regulated market.
(1) Lip-Bu Tan will retire as Chairman on May 4, 2023 as he announced he will not seek re-election to the Board at the 2023 Annual Meeting
(https://d18rn0p25nwr6d.cloudfront.net/CIK-0000813672/cd2ef8b8-abb5-4620-a08d-c5c49565fc6c.pdf).
Skills
Public Company
Management
Law, Governance, Ethics &
Compliance
Corporate Finance
International Markets
Industry Knowledge
Sustainability
Digital & Technology
Accounting, Audit & Risk
Employee perspective and
knowledge of the Group
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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
Experience and qualifications
Abhay Parasnis is founder & CEO of Typeface AI, a generative AI company. Previously, he was Vice-President, CTO
& CPO of Adobe Inc. He started his career at IBM in 1996 as a software researcher before joining i2 Technologies,
Inc. in 1997 where he served as Chief Architect until 2002. From 2002 to 2011, Abhay Parasnis held various
leadership positions at Microsoft Corporation, driving strategic platform initiatives and consumer technologies. In
2012, he joined Oracle Corporation, a cloud technology company, successively as Senior Vice-President and as
Strategic Advisor of Oracle Public Cloud Initiative. In 2013, he was appointed as President & Chief Operating Officer
of Kony, Inc., an enterprise mobility leader, before joining in 2015 Adobe, Inc., a software company that provides
digital marketing and media solutions, where he held various leadership roles, including Executive Vice-President
& Chief Technology Officer, Executive Vice-President Chief Technology Officer & Chief Strategy Officer, and finally,
Executive Vice-President Chief Technology Officer & Chief Product Officer, a position from which he stepped down
in February 2022. Abhay Parasnis is also a Director of Dropbox, Inc.’s Board of Directors. Abhay Parasnis holds a
Bachelor of Science in Electronics and Telecommunications from the College of Engineering Pune and an advanced
diploma from the National Institute of Information Technology.
Term of office
Co-optation as Observer member: July 2022
Candidate for appointment as a Director: May 2023
Previous directorships
Previous directorships held in the past five years:
None.
Current external directorships
Other directorships at listed companies:
Director of Dropbox, Inc. (USA).
Other directorships:
None.
Skills
Bruno Turchet
Vice-President Industrialization for Home
& Distribution Europe Division
Age: 49 years
Nationality: French
Business address: Schneider Electric,
31 rue Pierre Mendès France, 38320
Eybens, France
810(1) Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
Abhay Parasnis
Founder & CEO of Typeface AI
Age: 48 years
Nationality: American
Business address: Schneider Electric,
35, rue Joseph Monier, 92500 Rueil-
Malmaison, France
1,000 Schneider Electric SE shares
(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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Giulia Chierchia
Executive Vice-President Strategy,
Sustainability and Ventures of BP
Age: 44 years
Nationality: Italian/Belgian
Business address: 1 St. James’ Square,
SW1Y 4PD, London, United Kingdom
0 Schneider Electric SE shares
Experience and qualifications
Giulia Chierchia is currently Executive Vice-President Strategy, Sustainability and Ventures at BP. She began her
career in 2001 working for UniCredit Bank as an analyst in the corporate banking division, followed by a two-and-
a-half-year period with Value Partners as an associate consultant, leading projects in telecommunications and
education. In 2006, she joined McKinsey & Company and was appointed Partner in 2013 and Senior Partner in 2019
leading the global downstream oil and gas practice and advising clients regarding their decarbonization strategy
and how to pivot their existing portfolio. In April 2020, she was appointed as Executive Vice-President Strategy and
Sustainability of BP, a British oil and gas industry company, in charge, in particular, of strategy and sustainability,
ethics and compliance, capital allocation, investment governance for the company, delivery of its net-zero carbon
aims, ESG transformation and external stakeholder engagement and group energy transition policy. In March
2022, she became Executive Vice-President Strategy, Sustainability and Ventures and was given the additional
responsibility for BP’s ventures arm. Giulia Chierchia holds a Bachelor’s degree in Economics and Corporate Law
from Bocconi University (Italy) and a Master’s Degree in Business Administration from INSEAD Business School
(France).
Term of office
Co-optation as Observer member: February 2023
Candidate for appointment as a Director: May 2023
Previous directorships
Previous directorships held in the past five years:
None.
Current external directorships
Other directorships at listed companies:
None.
Other directorships:
Director of BP Technology Ventures Limited (United
Kingdom).
Skills
4.1.2.3 Changes to the Board composition
submitted to the Annual Shareholders’
Meeting
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
Mr. Léo Apotheker, Mr. Gregory Spierkel, and Mr. Lip-Bu Tan,
as well as 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 Mr. Léo Apotheker’s,
Mr. Gregory Spierkel’s and Mr. Lip-Bu Tan’s situation with regards
to their relevance and performance, as well as their time
commitment, and availability to fulfill their duties as well as the
value added by each of them to the work of the Board.
• Mr. Léo Apotheker holds only one other position in a listed
company (Director of NICE-Systems Ltd), and his attendance
rate at Board meetings in 2022 is 100%, while his attendance
rate at meetings of the Committees in which he participates
is 90%. The Committee recommended to the Board that
Mr. Léo Apotheker continues to participate in the work of the
Board, particularly in the areas of software and M&A, where his
expertise as former Chief Executive Officer of SAP and
Hewlett-Packard is essential, as well as his excellent knowledge
of the Group and the balance of the composition of the Board of
Directors in terms of seniority. However, in view of his age and
his non-independence under the AFEP-MEDEF Code, since he
has been a member of the Board since 2008, the Committee
has proposed limiting his term of office to two years.
• Mr. Gregory Spierkel holds two other mandates in listed
companies (Director of MGM Resorts International and PACCAR
Inc.), his attendance rate at the meetings of the Board and the
committees in which he participates in 2022 is 100%.
Mr. Gregory Spierkel brings to the Board the benefit of his
experience as former Chief Executive Officer of Ingram Micro,
Inc. and a solid profile in digital and technology matters, which
leads the Board to propose the renewal of his mandate for a
four-year term.
• Mr. Lip-Bu Tan holds three offices in listed companies in addition to
his office at Schneider Electric: Chairman of Cadence Design
Systems, Inc., from which he retired as Chief Executive Officer in
2021 and will retire as Chairman on May 4, 2023 as he announced
he will not seek re-election to the Board at the 2023 Annual Meeting
(https://d18rn0p25nwr6d.cloudfront.net/CIK-0000813672/
cd2ef8b8-abb5-4620-a08d-c5c49565fc6c.pdf), Chairman of the
Board of Directors of Credo Technology Group Holding Ltd. and
Director of Intel Corporation. After the 2023 Cadence’s Annual
Meeting planned on May 4, Mr. Lip-Bu Tan will therefore hold two
offices in listed companies in addition to his office at Schneider
Electric. In view of his commitments, the Governance and
Remunerations Committee has carefully examined his situation. In
particular, it has ascertained from him his willingness and
commitment to devote sufficient and necessary time to the Board
of Schneider Electric, as Mr. Lip-Bu Tan has always done in the
past, as evidenced by his level of attendance at Board meetings in
2022 (100%) and at the meetings of the committees in which he
participates (90%), as well as his physical participation in several
meetings, including the Strategy Session in August 2022. His
average attendance rate at Board and committee meetings over his
term of office (2019-2022) was 94% and 97.5% respectively,
reflecting his commitment and availability. The Committee also took
into consideration the assessment of Mr. Lip-Bu Tan’s effective
contribution to the work of the Board that was conducted among the
Directors in October 2022 during the Board’s self-assessment,
which concluded that Mr. Lip-Bu Tan brings to the Board unique
expertise in the areas of software and technology, particularly in the
energy sector, venture capital, and in-depth knowledge of the Asian
and US markets. For all of these reasons, the Board has determined
that his continued service as a Director is in the best interests of the
Company, its shareholders, and is consistent with the composition
objectives identified by the Board, and therefore invites to reappoint
Mr. Lip Bu-Tan for a four-year term.
Skills
Public Company
Management
Law, Governance, Ethics &
Compliance
Corporate Finance
International Markets
Industry Knowledge
Sustainability
Digital & Technology
Accounting, Audit & Risk
Employee perspective and
knowledge of the Group
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The Governance & Remunerations Committee also identified the
skills that would be useful 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 shortlist and the members of the Committee
interviewed the short-listed candidates. Following these interviews,
the Committee recommended two candidates to the Board of
Directors, Mr. Abhay Parasnis and Mrs. Giulia Chierchia, who were
appointed as Observers respectively on July 27, 2022, and
February 15, 2023, with the aim to propose their appointment to the
2023 Annual Shareholders’ Meeting.
Mr. Abhay Parasnis, a US citizen based in San Francisco and an
entrepreneur, is Adobe’s former Chief Technology Officer and Chief
Product Officer and serves on the Board of Directors at Dropbox.
He will bring to the Board his remarkable technology and digital
skills, especially his experience in shifting to the cloud and in SaaS
transformation, as well as his spirit on innovation and reinvention.
He will qualify as an independent Director with regard to all the
criteria set by Article 10.5 of the AFEP-MEDEF Corporate
Governance Code and, if appointed, will join the Digital Committee.
Mrs. Giulia Chierchia, an Italian and Belgian dual citizen based in
the United Kingdom, is currently Executive Vice-President of
Strategy, Sustainability and Ventures at BP. She will bring to the
Board her expertise in ESG and energy sector, in particular, her
experience in energy transition strategy in large companies with a
global approach including strategy, sustainability, capital allocation
and ventures. She will qualify as an independent Director with
regard to all the criteria set by Article 10.5 of the AFEP-MEDEF
Corporate Governance Code and, if appointed, will join the
Investment Committee.
If all proposals submitted to the Annual Shareholders’ Meeting are approved by the shareholders, the Board of Directors would comprise:
Directors
16
Employee Directors
Board member nationality
Board expertise
3
Independent
Directors*
Average age of
Directors
56
Europe (6)
France (4)
North America (4)
Asia (2)
11
(85%)
Women Directors*
46%
* Excluding the Director representing the employee shareholders and the
Directors representing the employees.
Public company management
(13)
Corporate finance (12)
International markets (14)
Industry knowledge (8)
Sustainability (5)
Law, governance, ethics &
compliance (4)
Digital & technology (6)
Accounting, audit & risk (5)
Employee perspective
knowledge of the Group (4)
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4.1.2.4 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, nationality, 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.
As prescribed by Article L. 225-18-1 and L. 22-10-3 of the French
Commercial Code, the proportion of Directors of each gender must
be at least 40%, it being specified that the Directors representing
the employees and the Director representing the employee
shareholders are not counted to assess said proportion of 40%
(Articles L. 225-27 and. L. 225-23 of the French Commercial Code).
The gender diversity ratio of the Board of Directors, should the
appointments of Mrs. Giulia Chierchia and Mr. Abhay Parasnis be
confirmed at the 2023 Annual Shareholders’ Meeting, will reach
46% (excluding the employee Directors and the representative
employee shareholders’ Director).
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 level was 46% in 2022 (vs. 44% in 2021.
For the leadership pool, comprising of the top leaders (around
1,000 employees), the female representation is 28% (an increase of
+2 points vs. 2021).
At its meeting on December 14, 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; and
• At least 30% of women among the leadership (Vice-President
and above; around 1,016 employees).
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 frequently assesses the skills to include in
its skills matrix in order to meet the Company’s strategic needs, and
a review of some peer comparisons. It reviews its composition and
expertise to identify skills, relevant to Schneider Electric’s current
and future activities, 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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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 (five of the thirteen Board members excluding the
Chairman & CEO are former CEOs of listed Companies: F. Kindle, L. Apotheker,
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, G. Chierchia, J. Lee,
A. Runevad, A. Ohlsson-Leijon, G. Spierkel;
• US market: L. Apotheker, L. Knoll, G. Spierkel, LB. Tan, A. Parasnis; and
• Asian market: JP. Tricoire, Nive Bhagat, J. Lee, X. Ma, A. Runevad, A. Parasnis.
Industry Knowledge
Directors who have gained experience in energy sectors.
Employee perspective and Knowledge
of the Group
Directors who are also employees 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 organizations.
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.
4.1.2.5 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 10.5 of this Code as 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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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.
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
15, 2023, 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; and
(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 fourteen Directors, nine are independent according to
the definition prescribed by the AFEP-MEDEF Corporate
Governance Code: Mrs. Nive Bhagat, Mrs. Cécile Cabanis,
Mr. Fred Kindle, Mrs. Linda Knoll, Mrs. Jill Lee, Mrs. Anna
Ohlsson-Leijon, Mr. Anders Runevad, Mr. Gregory Spierkel,
and Mr. Lip-Bu Tan.
• Mr. Jean-Pascal Tricoire, as Chief Executive Officer,
Mrs. Xiaoyun Ma, as the employee shareholders representative,
Mrs. Rita Felix and Mr. Bruno Turchet as employee Directors,
and Mr. Léo Apotheker, who has 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 82%. The proportion would rise
to 85% should the renewal of Mr. Léo Apotheker, Mr. Gregory
Spierkel, and M. Lip-Bu Tan, and the appointments of
Mrs. Giulia Chierchia and Mr. Abhay Parasnis, who will qualify
as independent Directors with regard to all the criteria set by
Article 10.5 of the AFEP-MEDEF Corporate Governance Code,
be voted in by the Annual Shareholders’ Meeting as per,
respectively, the 12th, 13th, 14th,15th, and 16th resolutions.
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4.1 Governance Report
The following table shows the status of each Director with regard to the criteria for independence set out in Article 10.5 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
(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,
signifies that a criterion for independence is satisfied and
signifies that a criterion for independence is not satisfied.
Director of Delixi Electric Ltd, Director of Schneider Electric USA Inc., and Chairman of the Board of Directors of Schneider Electric Asia Pacific Ltd.
(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; or
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 2022
Universal Registration Document) for the Chairman & Chief Executive
Officer and a minimum 1,000 shareholding requirement for Directors.
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4.1.2.6 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 is required 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 840,147 Schneider Electric
shares.
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To the Company’s knowledge, the Directors’ shareholdings in the Company’s registered capital as of the date of December 31, 2022, are as
follows:
Board member
Jean-Pascal Tricoire
Fred Kindle
Léo Apotheker
Nive Bhagat
Cécile Cabanis
Rita Felix
Linda Knoll
Jill Lee
Xiaoyun Ma
Anna Ohlsson-Leijon
Anders Runevad
Gregory Spierkel
Lip-Bu Tan
Bruno Turchet
TOTAL
Schneider Electric shares
840,147
40,000
3,093
200
1,000
144
1,000
1,000
36,201
1,000
1,000
1,000
1,000
810
927,595
The members of the Board of Directors directly held 0.16% of the share capital as of December 31, 2022.
The table below shows the transactions in Schneider Electric securities carried out during fiscal year 2022 and notified to the Autorité des
marchés financiers (AMF) in accordance with Article 19 of Regulation nº 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
18/03/2022
Disposal
Ordinary shares
Jean-Pascal Tricoire
28/03/2022
Acquisition
LTIP – Plans 32 & 33
Xiaoyun Ma
28/03/2022
Acquisition
LTIP – Plan 33
Number of
securities/
instruments
Unit price
(in euros)
Amount of the
transaction
(in euros)
17,000
58,117
6,651
151.84
2,581,280.00
–
–
–
–
Jean-Pascal Tricoire
06/07/2022
Subscription
Shares in Schneider Electric FCPE
2,211.57
117.51
259,881.59
Jean-Pascal Tricoire
06/07/2022
Subscription
Shares in Schneider Electric FCPE
Abhay Parasnis
17/08/2022
Acquisition
Ordinary shares
Nive Bhagat
12/12/2022
Acquisition
Ordinary shares
20.49
1,000
117.49
2,407.37
139.55
139,550.00
200
136.94
27,388.00
See details regarding Performance Shares granted to Executive Directors in section 4.2.5 of Chapter 4 of this Universal Registration
Document.
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4.1.3 Activities and operating procedures of the Board
of Directors
4.1.3.1 Board of Directors activities in 2022
The Board held nine meetings in 2022 (versus seven in 2021). The meetings lasted nine hours and thirty minutes on average with an average
participation rate of Directors of 97% (same as in 2021). Eleven Directors have an attendance rate of 100% and none have an attendance rate
less than 78% 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 2021 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 2022;
• Review of the first and third quarterly results and reports prepared by Senior Management;
• Review of the Group’s 2022 guidance set in February and of the new guidance issued in July 2022;
• Proposal to the Annual Shareholders’ Meeting that the dividend be set at €2.90 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 2022 risk matrix, the framework design, and the deployment status of the Enterprise Risk Management;
• Review of the Group “Ethics & Compliance System”;
• Monitoring of the share buyback program;
• Review of the liquidity; and
• 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 three days named “Strategy session”, held physically in
Roma from August 29 to 31, 2022, specifically dedicated to the topic;
• Review, during this Strategy session, on an in-depth strategy analysis of Energy Management, Industrial Automation, Sustainability and
decarbonation, Prosumer, and Software strategies;
• Follow-up of the Ukrainian and Russian situation;
• Authorization or review of external growth and divestment operations (such as Aveva, IGE+XAO, Telemecanique Sensors);
• Review of the portfolio; and
•
Information about moves and changes concerning competitors of Schneider Electric.
Corporate governance & sustainability
• Thorough review, as every year, of the succession planning of the Corporate Officers and top management;
• Proposal for a new governance effective May 4, 2023 with separation of the functions of Chairman and Chief Executive Officer;
• 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, 2022, 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 2022 Long-term incentive plan;
• Recorded the calculation of the level of achievement of performance conditions applicable to Performance Share plans nº 32, 33, 34, 35, 36,
37, 37bis, 38, 39, 39bis, and 39ter;
• Decision of capital increases reserved for employees;
• Reviewed the CSR strategy, results, and targets of the Schneider Sustainability Impact 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; and
• Review of the assessment process relating to the qualification of the related party agreements as “current” or “regulated”.
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2022 Annual Shareholders’ Meeting
The Board approved the agenda and draft resolutions of the 2022 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.
The 2022 Annual Shareholders’ Meeting met physically. It approved all resolutions supported by 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 preparation of the 2023 Annual Shareholders’ Meeting, the
Governance & Remunerations Committee focused on furthering the
international diversification of the Board of Directors and maintaining
the number of women Directors, as well as adding digital and
sustainability expertise. A specific selection process exists for
Directors representing employees and Directors representing
employee shareholders, in accordance with prevailing regulations.
Succession planning for Corporate Officers
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
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; and
• 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 announced on February 15, 2023 is described
in section 4.1.1.2.1 of the Universal Registration Document.
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 2022, the
Board of Directors held seven “executive sessions”, vs. five in 2021.
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.
4.1.3.2 Succession planning
Board members
The Board of Directors shall have at least three and up to 18
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
Annual 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.
Director 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 & Remunerations Committee documents and ranks the
selection criteria for potential candidates, taking into account 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.
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4.1 Governance Report
4.1.3.3 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 interviews with Board members. 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 2022
An internal assessment was conducted by the Vice-Chairman & Lead Independent Director, who guaranteed the confidentiality of opinions
expressed, based on a questionnaire answered anonymously by Board members.
The report was presented and discussed in detail at the Governance & Remunerations Committee meeting on October 25, 2022, and a
summary report was presented to the Board of Directors on October 26, 2022. 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) Deep dive on the Strategy Session; (vi) 2022/2023 top Board priorities; and (vii) Effective
contribution of each Director.
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 best in class, strong, open, inclusive, engaged,
charismatic, and strategic thinking;
• Perfect fit between the Chairman & CEO and the Vice-Chairman & Lead Independent Director who have developed a balanced and
complementary relationship;
• Quality of relations between the Board and management is unanimously seen as trustful and supportive (everyone feel free to express
his 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;
• Board size is considered adequate;
• All committees operate properly, and their work are 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; and
• High quality Strategy session which is very useful, well organized, and tailored to discuss the key strategic topics for Schneider Electric.
Areas for improvement
• Large majority of Board members consider that the span of skills brought to the Board is adequate but could be reinforced in energy markets,
Robotics/Automation/AI, and ESG;
Information provided in advance of Board meetings could be more selective and synthetic;
•
• Allocation of committee assignments between members is adequate but there should be a periodic rotation of assignments; and
• Reports to the Board by business/region function leaders could be provided with a regular cadence.
4.1.3.4 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 Session” 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 some of its regions) and its
competitive environment, as well as recent market disruption trends
and technological developments.
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.
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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 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 2022, six dinners were
organized.
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:
• A set of documents including, in particular, the last Universal
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, and the Directors’ and officers’ liability master policy;
• 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: a work session with the
Vice-Chairman & Lead Independent Director, the Chief
Governance Officer, as well as with the persons in charge of
compliance, 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.
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 nº 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.
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 4.1.2.6
of Chapter 4 of this 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.
The Compliance Code provides for:
• The existence of an ethics officer, who is the Secretary of the
Board of Directors, advising on whether information is inside or
not; and
• Rules for establishing, updating, and keeping in the prescribed
electronic format a list of insiders whenever necessary, lists of
persons subject to black-out periods, and possible
confidentiality and abstention lists identifying the persons,
whether from Schneider Electric or external to the Group, who
have access to a piece of sensitive information that does not yet
qualify as inside information according to the legal definition.
Schneider Electric has deployed a digital tool to manage these
lists which automates their processing and ensures better
traceability.
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4.1 Governance Report
4.1.4 Activities and operating procedures of the
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.
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
4
100%
100%
meetings in 2022*
members
of independent Directors
average attendance rate
Composition as of December 31, 2022
The internal regulations and
procedures of the Board of
Directors stipulate that the Audit &
Risks Committee must have at
least three members.
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.
• Jill Lee
Chairwoman
• Cécile Cabanis
• Anna Ohlsson-Leijon
Member
Member
• Gregory Spierkel
Member since May 5, 2022
Independent
Independent
Independent
Independent
As demonstrated by their career records, summarized in section 4.1.2.2 of this 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. Jill Lee also brings an in-depth knowledge of Schneider Electric’s activities and
of the Asian markets, Mrs. Cécile Cabanis her extensive knowledge of the challenges of a major
French group in the CAC 40, Mrs. Anna Ohlsson-Leijon her professional experience and skills
based on her wide-ranging finance and business background, and Mr. Gregory Spierkel his
experience as the former CEO of Ingram Micro, Inc. and a strong profile on digital and
technology matters.
Changes in the composition in 2022
• Chairpersonship: Mrs. Jill Lee was appointed as Chairwoman of the Committee as from January 1, 2022, in replacement of Cécile
Cabanis who remains member of the Committee.
• Membership: Mr. Gregory Spierkel was appointed as a member of the Committee on May 5, 2022. Mrs. Fleur Pellerin left the
Committee following the expiration of her term of office as a Director on May 5, 2022.
Individual attendance rate in 2022
• Jill Lee 100%
• Cécile Cabanis 100%
Operating procedures
• Anna Ohlsson-Leijon 100%
• Gregory Spierkel 100%
• 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.
•
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
Issues related to statutory
auditors
Following-up on the
efficiency of internal
control, risk management
systems, and compliance
program
commitments as well as the cash situation;
• To examine the process for drawing up financial and extra-financial information; and
• To review the Universal Registration Document as well as the reports on the interim financial
statements and other main financial documents.
• 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, notably by examining the external audit plan and results of controls made by statutory
auditors; and
• 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, and 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, and 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, and 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; and
• 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 2022
The Audit & Risks Committee reported on its work at the Board’s meetings of February 16, July 27, October 26, and December 14,
2022.
Items
Details of missions
Financial statement and
financial disclosures
• 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; and
• Review of pension commitments.
Internal audit, internal
control, risk management,
and compliance
• Review of the risk mapping;
• Review of the 2023 audit and control missions plan;
• Review of the main internal audits performed in 2022;
• Review of risks covered by insurance;
• Status report on the Enterprise Risk Management System;
• Review the Ethics & 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; and
• Review of the main litigations.
Statutory auditors
• Review of the fees paid to the statutory auditors and to their networks; and
• Review of the 2023 external audit program.
Corporate governance
• Recommended dividend for 2022; and
• Review of the financial authorizations and proposition for their renewal by the Annual Shareholders’
Meeting of May 5, 2022.
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4.1 Governance Report
4.1.4.2 Governance & Remunerations Committee
9
5
80%
93%
meetings in 2022*
members
of independent Directors
average attendance rate
Composition as of December 31, 2022
The Board of Directors’ internal
regulations and procedures
provide that the Governance &
Remunerations Committee must
have at least three members.
It is chaired by the Vice-Chairman
& Lead Independent Director.
• Fred Kindle
• Léo Apotheker
• Linda Knoll
• Anders Runevad
• Greg Spierkel
Changes in the composition in 2022
Chairman
Member
Member
Member
Member
Independent
Non-independent
Independent
Independent
Independent
• Chairpersonship: No change.
• Membership: Mr. Willy Kissling left the Committee following the expiration of his term of office as a Director on May 5, 2022.
Individual attendance rate in 2022
• Fred Kindle 100%
• Léo Apotheker 89%
• Linda Knoll 89%
Operating procedures
• Anders Runevad 89%
• Greg Spierkel 100%
• The Committee is chaired by the Vice-Chairman & Lead
•
• The Committee meets at the initiative of its Chairperson or at
Independent Director.
• The Committee shall meet at least three times a year.
• The Committee may seek advice from any person it feels will
help it with its work.
the request of the Chairman & CEO.
• The Secretary of the Board of Directors is the secretary of the
• The agenda is drawn up by the Chairperson, after consulting
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:
Compensation of
Corporate Officers
(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 level; 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; and
• 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.
*
Including the joint meetings with the Human Resources & CSR Committee relating to the 2022 STIP, 2023 Long-term incentive plan, and Say on Climate.
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Items
Details of missions
Missions aiming at
reassuring both
shareholders and the
market that the Board of
Directors carries out its
duties with all necessary
independence and
objectivity
• To organize for yearly assessments to be made of the Board of Directors; and
• 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, and
− The compensation of the Vice-Chairman & Lead Independent Director.
Activity in 2022
The Governance & Remunerations Committee reported on its work at the Board’s meetings of February 16, May 5, July 27, October
26, and December 14, 2022.
Items
Details of missions
Proposals to the Board of
Directors
• New governance effective May 4, 2023
• Composition of the Board of Directors and its committees;
• Status of the members of the Board with regard to independence criteria;
• Compensation of Corporate Officers (amount and structure of 2022 compensation, 2022 objectives
and level of achievement of 2021 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” 2021 and the principles and criteria proposed for 2022 to the Annual
Shareholders’ Meeting;
• Directors’ remuneration;
• Training program of the Directors representing the employees for 2022; and
• Opportunity to introduce a Say on Climate.
Reports to the Board of
Directors
• Review of the succession plan for the Chairman & CEO; and
• 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 approximately 39% 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 this Universal Registration
Document).
4.1.4.3 Human Resources & CSR Committee
6
4
100%
100%
meetings in 2022*
members
of independent Directors**
average attendance rate
Composition as of December 31, 2022
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
• Fred Kindle
• Xiaoyun Ma
Chairwoman
Member
Independent
Employee Director
Member since May 5, 2022
Independent
Member
Employee Director
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4.1 Governance Report
Changes in the composition in 2022
• Chairmanship: No change.
• Membership: Mr. Fred Kindle was appointed as a member of the Committee on May 5, 2022. Mr. Willy Kissling and Mrs. Fleur
Pellerin left the Committee following the expiration of their term of office as a Director on May 5, 2022.
Individual attendance rate in 2022
• Linda Knoll 100%
• Rita Felix 100%
Operating procedures
• Fred Kindle 100%
• Xiaoyun Ma 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 will
• The agenda is drawn up by the Chairperson, after consulting
help it with its work.
with the Chairman & CEO.
• The Chief Human Resources Officer, Mrs. Charise Le, is the
secretary of the Committee.
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
eligible Corporate Officers, including executive Corporate Officer(s).
Compensation of Group
managers
• 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, and
− Pay-equity ratio.
Succession plan for key
Group executives
• To examine succession plans for key Group executives; and
• 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 reorganization projects and
major human resources policies,
− Monitoring management of risks related to human resources,
− Examining the different aspects of the Group’s CSR policy, and
− Diversity and inclusion policy, including the policy on the equal treatment of men and women.
Human resources and
CSR policy
Activity in 2022
The Human Resources & CSR Committee reported on its work at the Board’s meetings of February 16, July 27, October 26, and
December 14, 2022.
Items
Details of missions
Proposals to the Board of
Directors
• 2022 annual Long-term incentive plan and implementation of specific Performance Share plans to
support the recruitment and the retention policy; and
• 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).
Reports to the Board of
Directors
• Review of the compensation, performance, and succession plans of Executive Committee members;
• 2023 Long-term incentive plan;
• Review of equal opportunity, gender pay equity, and diversity & inclusion policy; and
• Review of the CSR strategy and performance and of the Group’s positioning vs. its peers.
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4.1.4.4 Investment Committee
2
5
75%
100%
meetings in 2022
members
of independent Directors*
average attendance rate
Composition as of December 31, 2022
The Board of Directors’ internal
regulations and procedures
provide that the Investment
Committee must have at least
three members.
• Léo Apotheker
Chairman
Non-independent
• Jill Lee
Member since May 5, 2022
• Anders Runevad
• Lip-Bu Tan
• Bruno Turchet
Member
Member
Member
Independent
Independent
Independent
Employee Director
Changes in the composition in 2022
• Chairmanship: No change.
• Membership: Mr. Fred Kindle left the Committee following his appointment as a member of the Human Resources & CSR
Committee. Mr. Gregory Spierkel left the Committee following his appointment as a member of the Audit & Risks Committee.
Mrs. Jill Lee was appointed as a member of the Committee with effect on May 5, 2022.
Individual attendance rate in 2022
• Léo Apotheker 100%
• Jill Lee 100%
• Anders Runevad 100%
Operating procedures
• Lip-Bu Tan 100%
• Bruno Turchet 100%
• The Committee meets at the initiative of its Chairperson or at
• The Committee shall meet three times a year, less or more
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, Mrs. Gwenaelle
Avice-Huet, is the secretary of the Committee.
Responsibilities
Items
Preparation of the Board
of Directors’ deliberations
on investment policy.
Details of missions
• 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 €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 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; and
− Presents to the Board, social and environmental aspects of the strategic projects submitted to it
such as M&A projects.
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Activity in 2022
The Investment Committee reported on its work at the Board’s meetings of May 5 and July 27, 2022, and during the Strategy session; it
being specified that two dedicated meetings of the Board of Directors were held on September 20, and October 27, 2022, relating to
the acquisition of the remaining minority stake of AVEVA Group plc.
Items
Details of missions
Proposals to the Board of
Directors.
• Follow-up of investment projects and opportunities;
• Offer on AVEVA share capital;
• Disposal of Telemecanique Sensors; and
• Portfolio review.
4.1.4.5 Digital Committee
5
5
75%
83%
meetings in 2022*
members
of independent Directors**
average attendance rate
Composition as of December 31, 2022
The Board of Directors’ internal
regulations and procedures
provide that the Digital Committee
must have at least three
members.
• Greg Spierkel
• Léo Apotheker
• Nive Bhagat
• Xiaoyun Ma
• Lip-Bu Tan
Changes in the composition in 2022
Chairman
Member
Independent
Non-independent
Member since May 5, 2022
Independent
Member
Member
Employee Director
Independent
• Chairmanship: No change.
• Membership: Mrs. Nive Bhagat was appointed as a member of the Committee on May 5, 2022.
Individual attendance rate in 2022
• Greg Spierkel 100%
• Léo Apotheker 80%
• Nive Bhagat 75%
Operating procedures
• Xiaoyun Ma 80%
• Lip-Bu Tan 80%
• The Committee meets at the initiative of its Chairperson or at
• The Committee shall meet at least three times a year,
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.
*
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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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), and
− Ensuring that the Company is equipped with the right pool of talents for digital transformation.
Activity in 2022
The Digital Committee reported on its work at the Board’s meetings of February 16, July 27, October 26, and December 14, 2022.
Items
Details of missions
Proposals and reports to
the Board of Directors.
• AI;
• Product Lifecycle Management;
• Enterprise Resource Planning (ERP) strategy;
• Joint review with the Audit & Risks Committee of the cybersecurity risks; and
• General updates on Schneider Digital.
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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 seven executive sessions in 2022
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 2022: one before the Annual Shareholders’ Meeting
to present to those who so wished, the resolutions submitted for the
shareholders’ approval; the other one, in the fall semester, to freely
exchange views on topical themes of corporate governance that do
not necessarily materialize in resolutions submitted for the
shareholders’ approval. On this occasion, the Vice-Chairman &
Lead Independent Director discussed 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 governance analysts of major
shareholders from a wide range of corporate governance cultures
and covered around 39% 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 2022, this
self-assessment was carried out internally. The conclusions of this
assessment, which highlighted the quest for continuous
improvement, are presented in section 4.1.3.3 of Chapter 4 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.
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 2022
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 can be found in
section 4.1.6 of Chapter 4 of this Universal Registration Document.
Information on 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.
In addition, the Vice-Chairman & Lead Independent Director
interacts regularly with the other members of the Board of
Directors. Twice a year, in June and in December, he meets
individually with each of the other Directors to obtain their feedback
on the current situation of the Company, their possible concerns,
and their wishes.
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
Human Resources & CSR 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. 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 set by the Chairman & CEO and the content
of the meeting file.
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4.1.6 Internal regulations of the Board of Directors
The Board Internal Regulations describe the rights and obligations of Board members, the composition, role and operating procedures of
the Board of Directors and its committees, and the roles and powers of the Chairman and the Chief Executive Officer. They have been
drawn up in application of Article 13.7 of the Company’s Articles of Association and are prepared in accordance with the French
Commercial Code and the AFEP/MEDEF Corporate Governance Code which Schneider Electric refers to. The present Internal Regulations
shall be binding on all members of the Board of Directors who shall be deemed to adhere to them on assuming office and shall comply with
them in full. These Internal Regulations were adopted by the Board of Directors on April 25, 2013 and last amended on February 15, 2023
with an effective date on May 4,2023.
1. Method of exercising General management – Chairpersonship and Vice-Chairpersonship of the
Board of Directors
1.1. Method of exercising General management
1.1.1. 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/Chairwoman and Chief Executive Officer, or of another natural person appointed by the Board
of Directors going by the title of Chief Executive Officer.
1.1.2. The Board of Directors decides between these two methods of exercising General management at the time when the
Chairperson 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/Chairwoman and Chief Executive Officer, it will deliberate
on this choice every year.
1.1.3. In order to maintain continuity in the Company’s operation if the Chairperson serving as Chief Executive Officer leaves his/her
role or is prevented from doing so, the Deputy Chief Executive Officer(s), if any, shall take the interim responsibility for General
management functions in the Company, unless otherwise decided by the Board, until such time as a new Chief Executive
Officer is appointed. The Vice-Chairperson shall temporarily take the Chair of the Board of Directors.
1.2. Chairperson of the Board of Directors
1.2.1 The Board of Directors shall elect a Chairperson amongst its members (“Chairman/Chairwoman”). The Chairperson shall be
appointed for a period that can be no longer than his/her term of office as a Director. The Board shall deliberate once a year on
the opportunity for the Chairperson to pursue his/her functions. The Chairperson is eligible for re-election. He/she may be
removed from office by the Board of Directors at any time.
1.2.2 The statutory missions of the Chairperson of the Board of Directors are:
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to organize and direct the work of the Board;
to convene the Board meetings, determine the agenda and preside over the meetings;
to request any document or information necessary to help the Board of Directors for the preparation of its meetings and
verify the quality of the information provided;
to oversee the proper functioning of the Company’s bodies and makes sure, in particular, that (i) the Directors are able to
carry out their assignments, (ii) the Board of Directors is well organized, in a manner conducive to constructive discussion
and decision-making and (iii) the Board of Directors devotes an appropriate amount of time to issues relating to the future of
the Company and particularly its strategy;
to preside over general shareholders meetings and report on the Board work to the annual general shareholders’ meeting.
1.2.3 The Chairperson of the Board is entrusted with the following additional powers and missions for which he/she shall organize his/
her activities so as to ensure his/her availability and put his/her experience at the Company’s service:
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to be kept regularly informed by the Chief Executive Officer of significant events and situations relating to the business of the
Group (including the Company’s strategy, major acquisition or divestment projects, significant financial transactions, risks,
major community projects and the appointment of the most senior executives of the Group) and to be consulted by him on
these matters;
to assist and advise the Chief Executive Officer on strategic, technological, leadership and human capital matters;
to support, in coordination with the Chief Executive Officer, the representation of the Company in high-level relations with
selected stakeholders (customers and institutions);
to represent the Company with selected Asian Partners and Asian government bodies in coordination with the Chief
Executive Officer;
to be involved in dialogue with shareholders in cooperation with the initiatives taken in this respect by the Chief Executive
Officer;
to promote the Company’s values and culture in particular in relation to Environmental, Social and Governance;
to meet with Company’s leaders and managers;
to hear the statutory auditors and the heads of the control functions in order to ensure that the Board and its committees are
in a position to carry out of their duties;
to convene the members of the Board without Executive Directors being present, in particular to allow debates on the
performance and compensation of the Executive Management and succession planning;
to participate to the recruitment process for new directors and the development of the succession plan;
to work with the Board on the preparation and implementation of succession plan(s) for the corporate officer(s).
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The Chairperson of the Board strives to develop and maintain a trustful and regular relationship between the Board and the
General Management, in order to guarantee continuous, ongoing implementation by the General Management of the strategies
defined by the Board. In all his/her assignments other than those conferred by law, the Chairperson of the Board of Directors
acts in close conjunction with the Chief Executive Officer, who has sole responsibility for the general and operational
management of the Company.
1.2.4 The Chairperson of the Board of Directors is the only person authorized to speak on behalf of the Board, with the exception of
any specific assignment entrusted to the Vice-Chairperson & Lead Independent Director pursuant to the dialogue with
shareholders.
1.3. Vice-Chairperson of the Board of Directors – Lead Independent Director
1.3.1 The Board of Directors may appoint a Vice-Chairperson. If the roles of Chairperson and Chief Executive Officer are combined
or if the Chairperson is not considered as independent according to the AFEP/MEDEF Corporate Governance Code, the
appointment of a Vice-Chairperson is compulsory. The Vice- Chairperson shall be appointed for a period that may not be any
longer than his/her term of office as a Director. The Vice-Chairperson is eligible for re-election. The Vice-Chairperson may be
removed from office by the Board of Directors at any time.
1.3.2 The Vice-Chairperson shall preside over Board meetings in the absence of the Chairperson.
The Vice-Chairperson shall be called upon to replace the Chairperson 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 Chairperson’s inability to fulfill his/her
functions, he/she will be replaced by the Vice-Chairperson as long as his/her inability may last and, in the case of death, until
the election of a new Chairperson.
1.3.3 The Vice-Chairperson also takes on the role of Lead Independent Director. In this respect, the powers and missions of the
Vice-Chairperson are:
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to be kept informed of major events in Group life through regular contacts and meetings with the Chairperson and the Chief
Executive Officer;
to be consulted by the Chairperson on the agenda and the sequence of events for every Board meeting as well as on the
schedule for Board meetings;
to request that the Chairperson of the Board of Directors include additional items on the agenda of any meeting of the Board
of Directors;
to request that the Chairperson of the Board of Directors call a meeting of the Board of Directors to discuss a given agenda;
to convene – whenever he/she deems appropriate - an executive session with non-executive members of the Board of
Directors and without the Chairperson attending, over which he/she will preside. It is the Vice-Chairperson’s responsibility to
appreciate for each topic discussed whether the employee Directors should leave the meeting until the topic is closed. In
addition, the Vice-Chairperson may convene an executive session between two Board meetings;
to promptly report to the Chairperson on the conclusions of executive sessions held without the Chairperson attending;
to draw the attention of the Chairperson and of the Board of Directors to any possible conflicts of interest that he/she may
have identified or which may be reported to him/her;
to meet if he so wishes the Group’s leading managers and visit Company sites in order to complement his/her knowledge;
to carry out annual assessments of the Board of Directors and, in this context, assess the actual contribution of every
member of the Board to the Board’s activities;
to report on his/her actions at annual general shareholders’ meetings;
to engage with shareholders on governance matters and inform the Board of their concerns.
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with the criteria published by the Company.
2. Roles and powers of the Board of Directors
2.1. The Board of Directors shall determine the business strategy of the Company and monitors its implementation, in accordance
with its corporate interest and while considering its social and environmental aspects. Subject to the powers expressly
conferred to annual general shareholders’ meetings and within the limit of the corporate purpose, it shall deal with all matters
regarding the smooth running of the Company and settles issues concerning the Company. At any time in the year, the Board
carries out the controls and verifications it deems appropriate.
2.2.
In accordance with legal or statutory provisions, it is the Board of Directors’ responsibility:
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to determine the method of exercising General management of the Company;
to appoint Executive Corporate Officers, remove them from office and to set their remuneration and the benefits granted to
them;
to co-opt Directors whenever necessary;
to distribute Directors’ remuneration allocated at the annual general shareholders’ meeting amongst members of the Board
of Directors.
to convene general shareholders meetings;
to approve statutory and consolidated financial statements;
to decide on the dates for the payment of dividends and any possible down-payments on dividends;
to draw up management reports and reports for annual general shareholders’ meetings;
to draw up management planning documents and the corresponding reports;
to draw up the corporate governance report as provided for in Article L.225-37 of the French Commercial Code;
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to 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;
to grant options or restricted/performance shares within the limits of authorizations given at annual general shareholders’
meetings;
to authorize the issue of bonds;
to authorize the issue of sureties, endorsements and guarantees;
to authorize regulated agreements (agreements covered by Article L.225-38 and following of the Commercial Code);
to 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;
2.3. To enable the Board to exercise its duties as defined in 2.1. and beyond its specific powers summarized in 2.2., the Board of
Directors’ remits include:
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to give prior authorization for:
(i) 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;
(ii) significant changes to the scope and portfolio of activities outside of the strategy shared with the Board of Directors;
(iii) establishment of significant strategic alliances;
(iv) any settlement for a sum of more than 125 million euros;
(v) any off-balance sheet commitment in excess of 125 million euros other than those relating to a guarantee given to an
entity of the Group;
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to be informed by its Chairperson or by its committees of any significant event concerning the Company’s efficient operation;
to 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;
to 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 and to that end receive all information necessary to fulfil its
remit, especially from the Chief Executive Officer;
to seek assurance that the cyber risk management program is adequate and reduces the risk of attacks and, when
necessary, will respond and recover from any attack that may happen;
to ensure that a process to prevent and detect bribery and influence peddling is in place;
to exercise control over management and oversee the quality of information provided to shareholders and to the markets, in
particular via the financial statements or on the occasion of major corporate transactions;
to review every year its composition, its organization and its mode of operation;
to set up an Audit & Risks Committee on the terms specified by law and any other committees (i) which do not have
decision-making powers but have the task of providing all useful information for the discussions and decisions which the
Board is called upon to make, (ii) which composition and rules with regard to their modus operandi is determined by the
Board;
to be consulted prior to acceptance by the Chief Executive Officer or Deputy Chief Executive Officer(s), if any, of any
corporate appointment in a listed company outside the Group;
to appoint a Vice-Chairperson if the Board is compelled or wishes to do so;
to appoint up to three Board Observers if the Board wishes to do so;
to determine targets in terms of gender balance within the executive bodies and ensure that the Executive Corporate
Officers implement a policy of non-discrimination and diversity, notably with regard to the balanced gender representation
on the executive bodies.
2.4. The activities of the Board of Directors and its committees shall be described in the corporate governance report.
3. Membership of the Board of Directors
In the proposals it makes and the decisions it takes, the Board of Directors shall ensure that:
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it reflects the international nature of the Group’s activities and of its shareholders by having a significant number of members
of non-French nationals;
it protects the independence of the Board through the competence, availability and courage of its members;
it pursues its objective of diversifying the Board of Directors in compliance with the legal principle of attaining balanced
gender representation 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 and experiences;
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forth in Articles 11.3 and 11.4 of the Articles of Association;
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.
4. Meetings of the Board of Directors
4.1. The Board of Directors shall meet whenever the interests of the Company so require and at 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.
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4.2. Board meetings shall be convened by the Chairperson or by the Vice-Chairperson in accordance with Article 1.3.3.
Moreover, if no Board meeting takes place for over two months, the Chairperson shall 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/herself or
themselves, stating the agenda of the proposed meeting.
Similarly, the Chief Executive Officer, if he/she is not Chairperson of the Board of Directors may also address a request to the
Chairperson 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.
4.3. Any member of the Board may appoint another member to represent him/her 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/she 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 statutory and consolidated
financial statements and the management report, the members of the Board of Directors who attend the meeting by
videoconference 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
Chairperson of the meeting shall have the casting vote.
4.4. The Secretary of the Board 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.
4.5. 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.
5.
Information of 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 Chairperson of the
Board or to the Chief Executive Officer, 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 Chairperson (or, if appropriate, the Chief Executive Officer) thereof.
The Chairperson and / or Vice Chairperson shall meet each member of the Board individually once a year.
6. Status of members of the Board of Directors
6.1. Members of the Board of Directors shall represent all the shareholders and shall act in the interests of the Company in all
circumstances.
6.2. 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/her term of office and shall be invited to resign from the Board of Directors or the committee
concerned, as appropriate.
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6.3. 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.
6.4. Directors may not exercise more than four other terms of office in listed companies outside the Group.
6.5. 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.
6.6. 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:
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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;
- any event – open occurrence during the course of the year - 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-
Chairperson & Lead Independent 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 in the discussions or to
the vote of the corresponding decision and shall leave the meeting of the Board of Directors while the decision is being debated
and voted.
6.7. Within eighteen months of their appointment, members of the Board of Directors, to the exclusion of the Directors representing
employees, shall own at least 1,000 Schneider Electric SE to be held during their term of office. To fulfill this obligation, putting
aside 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 SE shares that they
hold shall either be in purely registered (nominatif pur) or in managed registered (administré) form.
6.8. Members of the Board of Directors shall inform the French Financial Market Authority (Autorité des Marchés Financiers) 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.
6.9. 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 nº596/2014 (“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 6.8. above.
6.10. 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.
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.
6.11. Members of the Board of Directors are invited to attend the annual general shareholders’ meetings.
6.12. Members of the Board of Directors shall be remunerated by the payment of an annual amount determined by the Board of
Directors. The Board of Directors may grant exceptional remuneration for assignments or offices conferred upon Directors.
6.13. 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.
6.14. Members of the Board of Directors shall complete the on-boarding program offered to them at the beginning of their first term.
7. Observers
The Board of Directors may appoint a maximum of three Observers.
The Observers 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 & Risks Committee.
They shall act in the interest of the Company under all circumstances.
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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.
8. Committees of the Board of Directors
8.1. The committees created by the Board of Directors shall be as follows:
- Audit & Risks Committee;
- Governance, Nominations & Sustainability Committee;
- Human Capital & Remunerations Committee;
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- Digital Committee.
Investment Committee;
8.2. 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.
8.3. The Chairpersons and members of the committees shall be appointed by the Board of Directors. 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, committee Chairpersons should be rotated and not exceed four years for a given committee.
The Board of Directors shall deliberate annually on the Chairpersonship of the concerned committee whenever such four-year
limit is reached or exceeded.
8.4. Committees shall meet on the initiative of their Chairperson or on request from the Chairperson of the Board of Directors or the
Chief Executive Officer.
8.5. The Chairperson and the Chief Executive Officer shall be kept informed of committee meetings. They shall be in regular contact
with committee chairpersons.
8.6. Committee meetings shall be held at the Company’s registered office 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 recommendations.
A secretary will prepare the minutes of the meetings.
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 to the members of the Board of Directors.
After referring the matter to the Chairperson 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.
8.7. 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.
9. The Audit & Risks Committee
9.1. Membership and operation of the Audit & Risks 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 head of Internal Audit shall act as Secretary to the Audit & Risks 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 financial statements, by the statutory auditors. The Committee may invite any
person it wishes to hear at its meetings. It may also require the Chief Executive Officer 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.
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9.2. Duties of the Audit & Risks Committee
The Audit & Risks 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, the Audit &
Risks Committee’s missions include:
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to prepare for annual and half-yearly financial statements to be approved by the Board and therefore, more particularly:
(i) checks the appropriateness and consistency of the accounting methods used for drawing up consolidated and
statutory financial statements, 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;
(ii) examines off-balance-sheet risks, including those of a social and environmental nature, and commitments as well as the
cash situation;
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(iii) examines the process for drawing up financial and extra-financial information;
to examine 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;
to handle 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;
to suggest reappointing the existing statutory auditors or appointing new statutory auditors, after a consultation process;
to 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;
to monitor the efficiency of internal control and risk management systems and therefore, more particularly:
(i)
to examine the organization and resources used for internal audit, as well as its annual work program (the Committee
shall receive summaries of reports produced on audits on a quarterly basis and the Chairperson of the Committee shall
receive these reports in full);
to review Enterprise Risk Management reports including operational risk-mapping and to make sure that measures exist
for preventing or minimizing risks;
(ii)
(iii) to examine how to optimize risk coverage on the basis of reports requested from internal audit or risk management
functions;
(iv) to examine Group internal control measures and look into the results of entities’ self-assessments with respect to internal
(v)
control; to ensure that a relevant process exists for identifying and processing incidents and 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;
(vi) to assess Cyber Risks and the Group’s Cyber Security posture (jointly with the Digital Committee)
The Audit & Risks Committee shall examine proposals for distribution as well as the amount of financial authorizations submitted
for approval at annual general shareholders’ meetings.
The Audit & Risks 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 & Risks Committee shall examine all financial and accounting questions and questions related to risk management
submitted to it by the Board of Directors.
The Audit & Risks 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 & Risks Committee shall keep the Chairperson and the Vice-Chairperson & Lead Independent Director promptly
informed of any difficulties encountered by the Committee.
10. Governance, Nominations & Sustainability Committee
10.1. Membership and operation of the Governance, Nominations & Sustainability Committee
The Committee shall be comprised of at least three members.
The Secretary of the Board shall be the secretary of the Governance, Nominations & Sustainability 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 Chairperson 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.
10.2. Duties of the Governance, Nominations & Sustainability Committee
The Governance, Nominations & Sustainability Committee monitors questions related to the governance of the Company and its
sustainability strategy. It issues recommendations and prepares the Board of Directors’ decisions in these domains. For this
purpose, the Governance, Nominations & Sustainability Committee’s missions include:
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to formulate proposals to the Board of Directors in view of any appointment made to the Board of Directors: Directors or
Observers, Chairperson of the Board of Directors, Vice-Chairperson & Lead Independent Director, Chairpersons and
members of committees;
to formulate proposals to the Board of Directors in view of any appointment of Executive Corporate Officers: Chief Executive
Officer and / or Deputy Chief Executive Officer;
to ensure the implementation of a procedure for the preparation of succession plans for the Directors and Corporate Officers
in the event of an unforeseen vacancy;
to examine succession plans for key Group executives;
to be informed of any nomination of members of the Executive Committee and of the main Group executives;
to ensure that the AFEP-MEDEF Corporate Governance Code to which the Company refers is applied;
to discuss governance issues related to the functioning and organization of the Board and its committees;
to propose on the conditions in which the regular evaluation of the Board is carried out;
to discuss the qualification of Directors as independent, which is reviewed by the Board every year prior to publication of the
annual report;
to conduct a review of the committees that are in charge of preparing the Board’s work;
to review the implementation of the assessment process relating to the qualification of the related-party agreements as
‘current’ or ‘regulated’;
to prepare the decisions by the Board with regard to the update of its Internal Regulations;
to prepare the draft corporate governance report of the Board of Directors;
to ensure that the long-term commitments in term of Sustainability undertaken by the Company are implemented;
to review the Group sustainability strategy including the Climate strategy and follow up on the progress made on a regular
basis;
to review the non-financial reporting and control systems as well as the main results of the non-financial information
disclosed by the Company;
to work with the Stakeholder Committee and set its workplan each year.
11. Human Capital & Remunerations Committee
11.1. Membership and operation of the Human Capital & Remunerations Committee
The Committee shall be comprised of at least three members.
The Chief Human Resources Officer of the Group shall be the secretary of the Human Capital & 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 Chairperson 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.
11.2. Duties of the Human Capital & Remunerations Committee
The Human Capital & Remunerations Committee monitors questions related to the human resources of the Company and
compensation. It issues recommendations and prepares the Board of Directors’ decisions in these domains. For this purpose,
the Human Capital & Remunerations Committee’s missions include:
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to formulate proposals to the Board of Directors on the compensation policy of the Executive Corporate Officers
(Chairperson of the Board of Directors and/or Chief Executive Officer, and/or Deputy Chief Executive Officer, if any),
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 review the compensation of the members of the Executive Committee;
to propose an amount of the remuneration package for Directors to be submitted to the annual general shareholders’
meeting and the method of distribution;
to formulate proposals to the Board of Directors on setting up the long-term incentive plans such as, for example, grant of
stock options or performance/restricted shares;
to prepare the Board of Directors’ deliberations on employee shareholding;
to review the social impact of major re-organization projects and major human resource policies;
to review risk management in relation to human resources.
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12.
Investment Committee
12.1. Membership and operation of the Investment Committee
The Committee shall be comprised of at least three members.
The Chief Strategy & Sustainability Officer shall be the secretary of 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 Chairperson of the Board of Directors. The Committee shall meet at least three times a
year.
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In order to carry out its assignments, the Committee may hear any person it wishes and call upon the Group M&A director.
12.2. Duties of the Investment Committee
The Committee prepares the Board of Directors’ deliberations on investment policy.
To this purpose, the Committee:
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shall elaborate recommendations to the Board on major capital deployment decisions;
shall advise the management team on capital deployment strategies;
for capital deployment decisions of 250 million euros or above;
- may investigate matters of smaller scale, if the strategic significance warrants it or the Board/Chairperson 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.
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13.1. Membership and operation of the Digital Committee
The Committee shall be comprised of at least three members.
The Chief Digital Officer or the Chief Information Officer shall be the secretary of 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 consultation with the Chairperson 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.
13.2. Duties of the Digital Committee
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 on 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, (iii) establishing its contribution to and consistence with the
overall strategy;
- 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);
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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;
- checking that the Company is equipped with the right pool of talents for digital transformation;
- assessment of Cyber Risks and enhancement of the Group’s Cyber Security posture (jointly with the Audit & Risks
Committee).
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 Schneider Electric Group. They
may be modified at any time solely by deliberation of the Board of Directors.
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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 agreements were concluded during the year that would have required approval 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; and
• 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 12, 2022, 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
Annual General Meeting of the fiscal year ended December 31, 2022
To the Shareholders of the company Schneider Electric SE,
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
Agreements authorized and concluded during the past fiscal year
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
Agreements authorized and concluded during previous past fiscal years
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.
The Statutory Auditors
Mazars
Paris La Défense on March 6, 2023
PricewaterhouseCoopers Audit
Neuilly-sur-Seine on March 6, 2023
Juliette Decoux Guillemot
Associée
Mathieu Mougard
Associé
Jean-Christophe Georghiou
Associé
Séverine Scheer
Associée
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4.1.8 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 the date of this Universal Registration Document, the Executive Committee comprises of the 17 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, seven 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 41% of women (vs. 44% previously).
Name of Executive Committee member
Gender
Age
Nationality
Responsibility
Jean-Pascal Tricoire
Gwenaelle Avice-Huet
Laurent Bataille
Olivier Blum
Annette Clayton
Hervé Coureil
Philippe Delorme
Barbara Frei
Charise Le
Chris Leong
Hilary Maxson
Manish Pant
Aamir Paul
Nadège Petit
Mourad Tamoud
Peter Weckesser
Zheng Yin
M
F
M
M
F
M
M
F
F
F
F
M
M
F
M
M
M
59
43
44
52
59
52
52
52
50
55
45
53
45
43
51
54
51
French
French
French
French
American
French
French
Swiss
Chinese
Malaysian
American
Indian
American
French
French
German
Chinese
Chairman & Chief Executive Officer
Chief Strategy & Sustainability Officer
Executive Vice-President France Operations
Executive Vice-President Energy Management
Chief Executive Officer North America
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
Executive Vice-President International Operations
Executive Vice-President North America Operations
Executive Vice-President Innovation
Executive Vice-President Global Supply Chain
Chief Digital Officer
Executive Vice-President China & East Asia 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 2022 to exchange on these matters.
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4.2 Compensation Report
The compensation report presented below reflects the Group’s
governance change announced on February 16, 2023. The Board
of Directors nominated Mr. Peter Herweck to succeed to Mr.
Jean-Pascal Tricoire as Chief Executive Officer at the date of the
Annual General Meeting scheduled for May 4, 2023. Mr. Jean-
Pascal Tricoire will continue to serve as Chairman of the Board of
Directors from that date, while Mr. Peter Herweck will assume the
role of Chief Executive Officer as the sole executive corporate
officer.
In line with this new governance structure, the Group will have:
• a governance structure with a Chairman & CEO (Mr. Jean-
Pascal Tricoire) from January 1, 2023 until May 3, 2023;
• a governance structure with a Chairman of the Board of
Directors (Mr. Jean-Pascal Tricoire) and a Chief Executive
Officer (Mr. Peter Herweck) from May 4, 2023.
This section includes a complete description of the components of
remuneration for the corporate officers, including the following
components on which the Annual General Meeting of May 4, 2023,
is invited to vote:
• with regard to 2022:
− for the Chairman & CEO (Mr. Jean-Pascal Tricoire): the
components which make up the total remuneration and the
benefits of all kinds paid during 2022 or awarded in respect
of 2022 (subject of the 6th resolution proposed to the Annual
General Meeting);
− for the Board members of Schneider Electric: the
components of remuneration presented in the Report on
Corporate Governance pursuant to Article L. 22-10-9 I of the
French Commercial Code (subject of the 5th resolution
proposed to the Annual General Meeting);
• with regard to 2023, the remuneration policies which will be
applicable:
− to the Chairman & CEO (Mr. Jean-Pascal Tricoire) for the
period running from January 1, 2023 to May 3, 2023 (subject
of the 7th resolution proposed to the Annual General
Meeting);
− to the Chief Executive Officer (Mr. Peter Herweck) for the
period running from May 4, 2023 to December 31, 2023
(subject of the 8th resolution proposed to the Annual General
Meeting);
− to the Chairman of the Board of Directors (Mr. Jean-Pascal
Tricoire) for the period running from May 4, 2023 to
December 31, 2023 (subject of the 9th resolution proposed to
the Annual General Meeting);
− to the Board members for the full year 2023 (subject of the
11th resolution proposed to the Annual General Meeting).
The information included in this section also takes into account the
provisions of the AFEP-MEDEF Code of Corporate Governance for
listed companies, as interpreted by the Haut Comité de
Gouvernement d’Entreprise (French High Committee on Corporate
Governance) and the AMF’s recommendations.
4.2.1 Overview
The compensation paid or granted to the Corporate Officer in 2021
was approved by more than 84% of our shareholders at the 2022
Annual General Meeting and the 2022 compensation policy was
supported by more than 89% of the shareholders at the 2022
Annual Shareholders’ meeting.
As in previous years, in 2022, key remuneration topics were
discussed with Schneider Electric’s largest shareholders.
Schneider Electric representatives notably met with 24 investors
during the year, representing more than 39% of the issued share
capital, over 2 rounds of governance roadshow; in April, ahead of
the Annual General Meeting to discuss matters submitted to the
shareholders’ vote and in the fall to discuss broader ESG topics.
The Vice-Chairman & Lead Independent Director took part into
discussions with 19 of these investors. Feedback was reported to
the Governance & Remunerations Committee and to the Board of
Directors. This dialogue will be pursued in 2023 to ensure that the
Board takes the feedback into account to determine the
compensation policy of the Corporate Officers.
The Board values the comments received during these
engagements with shareholders. Although there were no
unanimous or major concerns being raised, the Board took the
opportunity of the change of governance to incorporate some of
the sensitivities mentioned by shareholders into its decisions.
Considering Mr. Jean-Pascal Tricoire is stepping down as Chief
Executive Officer on May 3, 2023, the Board decided not to increase
his fixed remuneration for the period from January 1, 2023 until
May 3, 2023 and almost not to change his compensation policy from
the one applied in 2022. When positioning the fixed compensation of
Mr. Jean-Pascal Tricoire as Chairman of the Board for the period
starting on May 4, 2023, the Board used notably an in-depth study of
industry practices in term of compensation and also took into
account the specific missions assigned to him by the Board.
In designing the remuneration policy applicable to the new Chief
Executive Officer, the Board wished to maintain an overall stability
in the compensation structure, which demonstravely drives the
right behaviors, appears balanced, provides market competitive
pay, and ensures a strong link between pay and performance, a
strong alignment with both employees and shareholders, as well as
a focus on the long-term. The Board also took into account
shareholders’ feedback and considered Peter Herweck’s expertise
and past experience, and proposed some adjustments (see
section 4.2.3 of this Universal Registration Document presenting
the remuneration policy).
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2022 performance highlights
Business performance
2022 was a record year setting the foundation for ongoing sustainable growth with all-time high revenues, Adjusted EBITA margin and net
income.
Revenue
€34B
Cash conversion
95.8%
Adjusted EBITA
€6B
Progress on Schneider Sustainability Impact
4.91
Positioning in relation to the Company’s performance
Chairman & Chief Executive Officer 2022 compensation vs. shareholder value creation – share price and enterprise value growth
over 10 years (re-based to 100).
3
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230
227
126
€37bn
€59
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7
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4
€
€86bn
€134
m
9
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4
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7
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4
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9
.
4
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.
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6
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4
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100
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Total Awarded compensation (base salary + actual Annual incentive + IFRS value of LTI granted)
SE share price
Enterprise value
Note: 2021 and 2022 LTIP are presented “at target”.
Summary of the compensation realized during the year 2022
Jean-Pascal Tricoire, Chairman & CEO (euros)
1,000,000
Salary
1,493,700
STIP
7,585,289(1)
LTIP
536,646
Other
(1) LTIP represents realized value of shares vested which evaluation of performance ended in 2022 (LTIP 2020).
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4.2 Compensation Report
4.2.2 Report on the compensation granted or paid
during the 2022 fiscal year (say on pay ex-post)
4.2.2.1 Pillars and principles
The principles and criteria determining the 2022 compensation described in this section were supported by the shareholders at the
Annual Shareholders’ Meeting on May 5, 2022. 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 2022 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 2022 target
package thus consists of approximately 80% variable pay component (excluding pension
payments).
Chairman & Chief Executive Officer:
On target pay mix
Fixed
17%
Annual
incentive 23%
Performance shares
60%
17%
83%
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.
2022 Annual incentive (80% financial/
20% sustainability):
2022 Long-term incentive (75%
financial/ 25% sustainability):
• 40% Group organic sales growth
• 30% Adjusted EBITA margin (organic)
improvement
• 10% Group cash conversion rate
• 20% Schneider Sustainability Impact (SSI)
• 40% Adjusted Earning per Share (EPS)
• 35% Relative Total Shareholder Return
• 25% Schneider Sustainability External &
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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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 the 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 2022 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).
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 4:
European
(Industrial
B2B)
Group 5:
US
(Capital
Goods)
Airbus Group
Air Liquide
Bayer
BASF
Eaton
Emerson
Honeywell
Johnson
Controls
Rockwell
Automation
Group 6:
US
(Technology
Hardware
& Software)
Autodesk
PTC
Principle 7: To reference the CAC 40 third quartile and the STOXX Europe 50
median.
The Board reviews the 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 2022 compensation
relative to the market benchmarks
CAC40
Company
Peer Group
Stoxx
Europe 50
75%
50%
25%
Compa
Ratio
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72
86
65
87
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Total compensation includes base salary, annual incentive at target, and IFRS value of
Performance Shares granted during the year.
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4.2 Compensation Report
4.2.2.2 Chairman & CEO’s compensation in relation to the 2022 fiscal year
At its meeting on February 15, 2023, after examining the suitability and fairness of the outcome of the 2022 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 2022 in accordance with the principles and criteria previously approved by
the shareholders in May 2022 at the Annual Shareholders’ Meeting. The outcome is detailed and commented on hereinafter along with the
performance results for each component of the compensation.
Table summarizing the compensation paid or granted to the Chairman & CEO in 2022
The following table summarizes the compensation and benefits awarded or paid to the Chairman & CEO for the fiscal years 2022 and 2021,
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
2022
2021
2022
2021
1,000,000
1,493,700
0
2,493,700
1,000,000
1,990,300
0
2,990,300
1,000,000
1,493,700
0
2,493,700
1,000,000
1,990,300
0
2,990,300
3,457,692(2)
3,457,692
3,326,329(2)
3,326,329
7,585,289(3)
7,585,289
10,022,858(3)
10,022,858
Complementary payment for pension building (fixed)
Complementary payment for pension building (variable)
SUBTOTAL (C) PENSION CASH BENEFIT
191,600
286,193
477,793
191,600
381,341
572,941
191,600
286,193
477,793
191,600
381,341
572,941
D – OTHER BENEFITS
Other benefits(4)
SUBTOTAL (D) OTHER BENEFITS
58,853
58,853
56,637
56,637
58,853
58,853
56,637
56,637
TOTAL COMPENSATION AND BENEFITS (A)+(B)+(C)+(D)
6,488,038
6,946,207
10,615,635
13,642,736
(1) The annual incentive for the fiscal year 2021 was paid in 2022 after approval by the shareholders at the Annual Shareholders’ Meeting of May 5, 2022 of the 8th
resolution relating to the compensation paid, due, or awarded to Jean-Pascal Tricoire in respect of the 2021 fiscal year. Hence, the total compensation in cash
actually paid in the fiscal year 2022 to Jean-Pascal Tricoire amounts to €3,563,241 (2022 fixed compensation + 2021 annual incentive + fixed portion of pension
benefit for 2022 + variable portion of pension benefit for 2021). 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 2022 will only be paid in 2023, subject to their prior approval by the shareholders at the Annual
Shareholders’ Meeting of May 4, 2023 under the 6th 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, 2021 or 2022, 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 (PERECO) as well as benefits from French profit-sharing plan.
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Say on pay table relating to the compensation paid or granted to the Chairman & CEO in 2022
The fixed, variable, and exceptional components of the total compensation and benefits paid or awarded for the fiscal year 2022 to the
Corporate Officer, as detailed below, will be submitted to the shareholders for approval at the 2023 Annual Shareholders’ Meeting of May 4,
2023 under the 6th 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
Annual
variable
compensation
Amounts
Description
€1,000,000
(amount
due for
2022 paid
in 2022)
Reminder:
€1,000,000
(amount due
for 2021 paid
in 2021)
€1,493,700
(amount
due for
2022 to be
paid in
2023)
Reminder:
€1,990,300
(amount due
for 2021 paid
in 2022)
Reminder of the 2022 compensation policy
For the fiscal year 2022, his theoretical gross annual fixed compensation was set by the Board
of Directors at €1,000,000 upon recommendation from the Governance & Remunerations
Committee.
Application of the 2022 compensation policy
Mr. Jean-Pascal Tricoire received in 2022 a fixed compensation of €1,000,000.
Reminder of the 2022 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 2022 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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4.2 Compensation Report
Elements of
compensation
submitted to
the vote
Annual
variable
compensation
(continued)
Amounts
Description
Application of the 2022 compensation policy
The annual incentive due for 2022 was determined by the Board at the meeting of February 15,
2023, based on the attainment rate of the objectives set for fiscal year 2022 as follows:
Weight (%)
Performance Range
Achievement
Threshold
0%
Target
100%
Maximum
200%
2022
Results
Achievement
rate
(non-
weighted)
Achievement
rate
(weighted)
40%
9%
10%
13% 12.2%
173.3%
69.3%
30% 0.3 pts
10%
0.6 pts
85% 100%
0.9 pts 0.4 pts
115% 95.8%
33.3%
72.0%
10.0%
7.2%
20%
100%
4.2
4.7
5.2
4.91
142.0%
28.4%
114.9%
2022 performance criteria
Group financial
indicators (80%)
Organic Sales growth
Adjusted EBITA
margin
improvement (org.)
Cash Conversion rate
Sustainability (20%)
Schneider
Sustainability Impact
(score)
Total
Overall, 2022 annual variable compensation resulted in a total achievement rate of 114.9%,
above target, reflecting record levels in revenues and adjusted EBITA, and good level of free
cash-flow delivered by Schneider Electric in 2022.
Indeed, after having set the compensation targets on February 16, 2022, aligned with the
targets disclosed to the market at that time, the Board decided on July 27, 2022 to use the
discretion clause provided in the 2022 compensation policy approved by shareholders at the
2022 Annual General Meeting.
The targets set at the beginning of 2022 did not appear adequate anymore considering the
price inflation which was much higher than expected. Therefore, the Board resolved to
increase the targets linked to revenue growth in order to align them with the new guidance
announced to the market at that time:
• Revenue growth of +9% to +11% organic (previously +7% to +9% organic in February
2022);
• Adjusted EBITA margin up +30bps to +60bps organic (unchanged vs. February 2022).
This decision has been made to ensure a better alignment with the shareholders’ experience
and to make sure that the Chairman & CEO was compensated only for the Company’s intrinsic
performance. Without this adjustment, the indicator linked to revenue growth would have been
overachieved by 200% delivering 80% of target variable compensation for this criteria instead
of the 69.3% which was delivered after taking into consideration the targets adjustment
resolved by the Board.
The final 2022 results for revenue growth (12.2%) having exceeded the targets disclosed to the
market in July 2022, total achievement rate of the annual variable compensation of the
Corporate Officer was set by the Board at 114.9% of the targeted variable compensation,
reflecting strong performance of Schneider Electric in 2022.
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Elements of
compensation
submitted to
the vote
Annual
variable
compensation
(continued)
Amounts
Description
Detailed achievement of each criterion:
• Organic Sales growth: The Group delivered an organic sales growth of +12.2%, which
was above both guidance communicated to the market in February of +7% to +9% and the
one reviewed in July of +9% to +11%. Therefore, this good performance resulted in an
achievement rate of this criterion of 69.3% on the range between 0% to 80%.
• Adjusted EBITA margin improvement: In 2022, Adjusted EBITA margin rate improved by
+0.4 bps organically to reach 17.6%, as a consequence of strong pricing, good cost control
and improving SFC/Sales ratio. As a result, the achievement rate on this criterion was set at
10% on a scale from 0% to 60%.
• Cash conversion: Free cash-flow was €3.33 billion. Therefore, cash conversion was 95.8%
in 2022 which represented an achievement rate of 7.2% on this criterion, on a scale from
0% to 20%.
• 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 2022 the SSI
achieved a score of 4.91/10 exceeding its target for the year, representing an achievement
rate of 28.4% on a scale from 0% to 40%.
As a result, the 2022 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
2022 Actual pay-out
as a % of salary
Amount (€)
as a % of target
as a % of base salary
Amount (€)
130%
€1,300,000
114.9%
149.4%
€1,493,700
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 2022 (see 6th resolution to be submitted to
the Annual Shareholders’ Meeting of May 4, 2023).
As a reminder, an amount of €1,990,300 was paid in 2022 to Mr. Jean-Pascal Tricoire for the
annual variable compensation due for the fiscal year 2021 after the approval of the 8th
resolution by the Annual Shareholders’ Meeting on May 5, 2022 (see page 316 of the 2021
Universal Registration Document).
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Long-term
incentive
(Performance
shares)
31,105
Performance
Shares
granted in
March 2022
(€3,457,692
according to
IFRS
valuation)
Reminder:
37,903
Performance
Shares granted
in March 2021
(€3,326,329
according to
IFRS valuation)
Reminder of the 2022 compensation policy
The 2022 Compensation policy provided:
• a maximum annual award to the Chairman & CEO capped at 200% of the combined fixed
and target short -term variable compensation at the date of the grant;
• 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 2022 to 2024 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*
Vesting linear between these points
• 0% at rank 7 and below
• 50% at rank 6
• 100% at rank 4
• 150% at ranks 1 to 3*
Vesting 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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Long-term
incentive
(Performance
shares)
(continued)
Application of the 2022 compensation policy
The volume of the maximum annual award was set in consideration of:
• The market practice and competitive positioning of the Chairman & CEO’s compensation
package;
• The Group’s good performance;
• The structure of performance measurement governing the final acquisition of LTIP awards;
• The culture of ownership deeply rooted in Schneider Electric’s DNA.
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Pension
benefits
€477,793
(amount
due for
2022 (fixed
portion of
€191,600
paid in
2022 and
variable
portion of
€286,193 to
be paid in
2023))
Reminder:
€572,941
(amount due
for 2021 (fixed
portion of
€191,600 paid
in 2021 and
variable
portion of
€381,341 paid
in 2022))
As in 2021, upon hearing the report from the Governance & Remunerations Committee, the
Board took into consideration the increase in the Company’s stock price and in the spirit of
maintaining a culture of moderation in an uncertain economic environment and decided to
allocate to Mr. Jean-Pascal Tricoire a number of shares markedly below the maximum allowed
by the compensation policy.
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 24, 2022 decided to
grant Mr. Jean-Pascal Tricoire a total of 31,105 Performance Shares (representing 0.005% of
Schneider Electric’s share capital) subject to the performance criteria described above and
measured over a period of three years:
• 9,332 Performance Shares under Plan nº 40 in his capacity as Chairman & CEO of
Schneider Electric SE;
• 21,773 Performance Shares under Plan nº 41 in his capacity as Regional Asia President
and Chairman of Schneider Electric Asia Pacific.
Reminder of the 2022 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 WTW, 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 2022 compensation policy
At the meeting held on February 15, 2023, the annual complementary variable portion for
pension for 2022 to be paid after the Annual Shareholders’ Meeting if the latter approves it,
was set by the Board of Directors at 149.4% of the annual complementary fixed portion, i.e. an
achievement rate of 114.9%.
For 2022, Mr. Jean-Pascal Tricoire is entitled to receive:
Fixed amount
due for 2022
€191,600
Variable amount
due for 2022(1)
€286,193
Total due
for 2022
€477,793
(1) Calculated by applying to the variable portion at target of the pension above (€249,080) the percentage of
target achievement determined for the calculation of the 2022 annual variable compensation, i.e. 114.9%.
In compliance with applicable law, the payment of the variable amount will be subject to
shareholders’ approval (see 6th resolution submitted to the Annual Shareholders’ Meeting of
May 4, 2023).
Reminder: an amount of €381,341 was paid in 2022 to Mr. Jean-Pascal Tricoire for the variable
portion of his pension due for the fiscal year 2021 after its approval by the Annual
Shareholders’ Meeting on May 5, 2022 (see page 319 of the 2021 Universal Registration
Document).
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Other benefits
€58,853
received in
2022
Reminder:
€56,637
received in
2021
Reminder of the 2022 compensation policy
The Compensation policy provides that the Chairman & CEO may benefit from:
•
•
• a company car;
• supplementary Life & Disability scheme.
the employer matching contributions;
the profit-sharing;
Application of the 2022 compensation policy
For the fiscal year 2022, the Chairman & 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
(PERECO) for the retirement of workers in France. The use of a company car in 2022
represented an equivalent cost of €48,171.
Employer matching
contributions to
Employee Saving Plan
Employer matching
contributions to
collective pension
saving plan (PERECO)
Profit-sharing
Company car
Total 2022 benefits
€1,404
€800
€8,478
€48,171
€58,853
The Chairman & 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 fulfillment of
some conditions as described in the compensation policy (see Chapter 4, section 2.3.1 of the
Universal Registration Document).
Involuntary Severance Pay
The Chairman & 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 4.2.3.1 of the 2021 Universal Registration
Document).
Non-compete compensation
The Chairman & CEO is entitled to non-compete compensation for a period of one year
capped at 60% of annual fixed and target variable parts (excluding complementary payments)
(see Chapter 4, section 4.2.3.1 of the 2021 Universal Registration Document).
Termination
benefits
No
payment
For 2022, 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
€353,738.12 in 2022.
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 2020 Long-term Incentive Plan
realized in 2022 (LTIP 2020)
The performance period for shares granted in 2020 finished on
December 31, 2022 and shares under the Plans nº 36 and 37 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 15, 2023, the Board assessed the
achievement rate of the performance criteria based on the Group’s
performance over the three-year period 2020 – 2022 and set the
final rate of achievement at 96.71%, i.e. a reduction of 3.29% in
relation to the number of shares originally granted.
The Chairman & CEO was conditionally granted 18,000 shares
under Plan nº 36 and 42,000 shares under Plan nº 37. 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 nº 36)(1)
Number of Shares
(Plan nº 37)
Number of shares
deemed vested
18,000
42,000
58,027
No of shares
lapsed
1,973
Value of deemed
vested shares(2)
€7,585,289
March 24, 2023
March 24, 2023
(1) Plan nº 36 – Performance Shares granted under this plan to the Corporate Officer are subject to one-year holding period following vesting, therefore shares will only
become unrestricted on March 24, 2024.
(2) Vested shares are valued at the closing share price of December 30, 2022, i.e. €130.72.
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Shares granted under the 2020 LTIP were subjected to performance conditions as follows:
40%
17.5%
17.5%
25%
Adjusted EPS improvement
Relative Total Shareholder
Relative Total Shareholder
Schneider Sustainability
Return (TSR) vs. CAC 40
Return (TSR) vs. panel of
External and Relative Index
competitors
2020 – 2022 achievement
rate: 26.67%
2020 – 2022 achievement
rate: 19.83%(1)
2020 – 2022 achievement
rate: 26.25%(1)
2020 – 2022 achievement
rate: 23.96%
(1) The over-performance of the relative TSR conditions off-set the under-performance of the adjusted EPS condition (for 11.08%).
2022 was the final year of performance measurement for the LTIP 2020. Schneider Electric ranked 6th on relative TSR among the CAC 40
companies and 3rd among the panel of competitors, delivering 55.3% return to shareholders over the same three-year period,
demonstrating a strong value creation for the shareholders. Schneider Electric delivered robust organic adjusted EPS improvement
year-on-year and demonstrated 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 96.71% out of 100%.
LTIP 2020 Performance criteria achievement
Adjusted EBITA margin (organic)
improvement (40%)
Relative TSR vs. Peer group (17.5%)
Relative TSR vs. CAC40 (17.5%)
Schneider Sustainability Impact (25%)
Total weighted achievement rate
0%
Achievement Scale
100%
26.67%
11.08%
17.5%
17.5%
23.96%
96.71%
• Adjusted EPS improvement (40%)
During the three-year plan, the Adjusted EPS improved organically by more than +13% on average even though the targets were missed
for 2020 due to COVID-19 and the Board’s decision not to change them. This result reflects 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 26.67% (out of 40%).
Adjusted Earnings per Share (EPS)
improvement rate
Total
• Relative Total Shareholder Return (TSR)
Reference
period
2020
2021
2022
Weight (%)
Min 0%
75%
Max 100%
Target
Actual
achievement
Pay-out rate
Weighted
pay-out rate
13.33%
13.33%
13.33%
40%
0%
11.5%
1.1%
3.75%
15.5%
5.9%
5%
17%
-4.86%
31.77%
8.3%
13.13%
0%
100%
100%
0%
13.33%
13.33%
26.67%
vs. CAC 40 (17.5%) – 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 buyback 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 6th among the CAC 40 companies. The achievement rate for this criterion was set at 19.83%,
including the over-performance of 2.33%, which contributed to the offsetting of the non-achievement of the adjusted EPS criterion.
vs. panel of competitors (17.5%) – Over the period, Schneider Electric’s TSR was ranked 3rd 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 26.25%, including the over-performance of 8.75%, which contributed to the offsetting of the
non-achievement of the adjusted EPS criterion.
Relative
Total
Shareholder
Return (TSR)
vs. CAC 40
companies
vs. panel of
peer
companies
Weight (%)
17.5%
17.5%
0%
21
8
Target
Actual
50%
75%
100%
120%
150%
achievement Pay-out rate
Weighted
pay-out rate
20
10
4-1
6th rank
113.3% 19.83%
4
3-1
3rd rank
150.0% 26.25%
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• 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: (i) DJSI World which covers three dimensions: economic, environmental,
and social; (ii) Euronext Vigeo which covers environment, community involvement, business behavior, human rights, corporate
governance, and human resources; (iii) Ecovadis which covers four dimensions: environment, labor and human rights, sustainable
procurement and ethics; and (iv) CDP Climate Change which covers climate change, water, and forests and represents a major
reference for climate change leadership globally. The different rating achieved by Schneider in 2020, 2021 and 2022 in those indexes
resulted in an achievement rate of the SSERI of 23.96% (out of 25%).
Schneider
Sustainability
External &
Relative Index
(SSERI)
6.25% DJSIW
• 0%: not in World
• 50%: included in World
• 100%: sector leader
6.25% Euronext
Vigeo
• 0%: out
• 50%: included in World 120
Actual achievement
2020
2021
2022
Pay-out
rate
Weighted
pay-out rate
sector leader
World
sector
leader
83.33%
5.21%
or Europe 120
• 100%: included in World 120
& Europe 120
World 120 &
Europe 120
World 120 &
Europe 120
World 120 &
Europe 120
100%
6.25%
6.25% Ecovadis(1) • 0%: Silver Medal or less
• 50%: Gold Medal (top 5%)
• 100%: Platinum Medal (top
1%)
Developed &
Env. Leaders
EU 40
Indexes(1)
Platinum
Medal
Platinum
Medal
100%
6.25%
6.25% CDP
Climate Change
• 0%: C score
• 50%: B score (25% at B-)
• 100%: A score (75% at A-)
Total
25%
A score
A score
A score
100%
6.25%
23.96%
(1) In 2020, the SSERI included the FTSE4GOOD index with the following target: 0% if Schneider is out of the index, 50% if Schneider is included in Developed &
Environmental Leaders Europe 40 indexes, 100% if Schneider is included in Developed & Environmental Leaders Europe 40 indexes. In 2020, Schneider Electric was
included in Developed & Environmental Leaders EU 40 indexes which triggered the maximum vesting for this year. From 2021 the FTSE4GOOD index has been
replaced by Ecovadis index, due to the decommissioning of one of the two FTSE4GOOD indices.
The fact that the compensation mechanism has materialized this year does not create any disconnection between pay and performance
considering that the impact is limited (i.e. 11%) and the payout rate actually reflects the good performance of the Company over the last
three years and the strong 2022 results. In addition, this result is aligned with the shareholders’ experience, the TSR being 55.3% over this
period.
Historical vesting of the Corporate Officers’ Performance Share plans:
LTIP 2020
96.71%
LTIP 2019
96.86%
LTIP 2018
98.18%
LTIP 2017
99.54%
LTIP 2016
91.46%
LTIP 2015
71%
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4.2.2.3 Non-executive Directors’ compensation in relation to the 2022 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 set at €2,500,000 by the Annual
Shareholders’ Meeting held on April 25, 2019. The 2022
compensation policy approved by the Annual Shareholders’
Meeting held on May 5, 2022 provides the allocation rules of the
fees to the non-executive Directors which are as follows:
• 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 travel) 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.
• 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.
• All payments are prorated for time served during the year and
are paid in cash.
Directors’ compensation earned in 2021 and 2022 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
Nive Bhagat
Cécile Cabanis
Rita Felix(3)
Fred Kindle
Willy Kissling(5)
Linda Knoll
Jill Lee
Xiaoyun Ma(3)(4)
Patrick Montier(6)
Anna Ohlsson-Leijon
Abhay Parasnis
Fleur Pellerin(5)
Anders Runevad
Gregory Spierkel
Lip-Bu Tan
Bruno Turchet(3)(7)
Total
Directors’ compensation
(in euros)
Other compensation & benefits
(in euros)
Total (in euros)
2022(1)
2021(2)
2022(1)
2021(2)
2022(1)
2021(2)
178,000
125,000
128,000
134,000
411,000
59,699
179,000
158,000
–
–
127,000
75,822
45,699
140,000
202,000
130,000
112,000
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
2,205,220
1,776,068
–
–
–
–
–
–
25,000(8)
–
–
–
–
–
–
–
–
–
–
25,000
–
–
–
–
–
–
21,667(8)
–
–
–
–
–
–
–
–
–
–
178,000
125,000
128,000
134,000
411,000
59,699
204,000
158,000
–
–
127,000
75,822
45,699
140,000
202,000
130,000
112,000
155,000
–
118,000
90,000
368,000
144,000
142,667
104,000
–
33,082
100,000
112,000
120,000
152,000
106,000
52,986
21,667
2,230,220
1,797,735
(1) Awarded for the fiscal year 2022 and paid in 2023.
(2) Awarded for the fiscal year 2021 and paid in 2022.
(3) Employee Directors are separately entitled to the compensation granted to
(5) Board member whose term of office ended in 2022.
(6) Board member whose term of office ended in 2021.
(7) Bruno Turchet waived the payment of 30% of the sum he was entitled to, i.e.
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.
(4) Xiaoyun Ma waived the payment of the sum of €124,000 she was entitled to.
€33,600, in favor of the trade union which appointed him.
(8) Amount paid to Linda Knoll as a member of the Stakeholder Committee.
The total amount awarded to the Board members for 2022 was €2,230,220 compared to €1,797,735 for 2021 due to more physical
attendance of the Directors and the special €25,000 fees for the strategy week. Excluding the special fee paid to the Vice-Chairman & Lead
Independent Director, the amount is composed of approximately 30% fixed compensation and 70% variable.
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4.2 Compensation Report
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 (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.
Pay Equity Ratio
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 a
comprehensive
well-being at work
program translated
into dual standards of
access to healthcare
and well-being
training programs.
The Group listens to
employees through a
number of different
channels, both
formally and
informally. Three 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
dialogue and
engages with the
local work councils
on compensation
matters on a regular
basis.
For the employees:
• 2022 fixed compensation;
• Variable compensation paid in 2022 (for the performance year
2021);
• Relevant bonuses and benefits (in cash and kind) for 2022;
• Profit sharing and employer matching contributions to employee
saving plan for 2022;
• Value of the Performance shares granted in 2022 at their fair
value (IFRS) on the grant date.
Pay Equity Ratio measures the ratio between the level of
compensation of the Chairman & CEO and the average and median
compensation of the employees, as required by Article L.22-10-9 I
6° and 7° of the French Commercial Code.
Calculation methodology
The compensation comparisons and pay ratios set out below were
calculated based on the AFEP-MEDEF guidelines. The calculation
includes employees who were continuously employed during the
financial years concerned. For part-time employees, compensation
was established on a full-time equivalent basis.
Compensation elements taken into account:
For the Chairman & CEO:
• 2022 fixed compensation;
• Variable compensation paid in 2022 (for the performance year
2021);
• Relevant benefits (cost of the company car, profit-sharing and
employer matching contributions to employee saving plan) for
2022;
• Value of the Performance shares granted in 2022 at their fair
value (IFRS) on the grant date.
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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 27.2 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 2022 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 & CEO and the average and median compensation of the
employees on a broader scope which includes approximately
126,000 Schneider Electric employees across the top 30 countries
(“Global Scope”). This represents circa 87.5% 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.
Evolution of the Corporate Officers’ and employees’ compensation, pay ratios, and Group’s performance over five years
Mr. Tricoire total compensation paid in FY
FY2018
FY2019
FY2020
FY2021
FY2022
Adusted EBITA
Revenue
155
133
129
112
100
109
103
101
98
French perimeter
Mr. Tricoire total compensation paid in FY (in €)
% change in total compensation
6,184,007
7%
5,754,154
-7%
5,525,324
-4%
5,430,941
-2%
6,506,045
+20%
Pay ratio – average compensation
% change in average pay ratio
Pay ratio – median compensation
% change in median pay ratio
Employees average compensation (in €)
% change in employment average compensation
68
5
84
4%
91,127
3%
64
-6%
78
-7%
90,369
-1%
60
-6%
73
-6%
92,861
3%
Global perimeter
Pay ratio – average compensation
% change in average pay ratio
Pay ratio – median compensation
% change in median pay ratio
57
-5%
70
-4%
94,950
2%
110
156
67
+18%
81
+16%
97,391
+3%
126
+15%
185
+19%
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4.2 Compensation Report
4.2.3 Compensation policy for the 2023 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 Officers and non-executive
Directors’ compensation policy for 2023. It will be submitted to the shareholders at the 2023 Annual Shareholders’ Meeting (7th to 9th
and 11th resolutions) and, subject to shareholders approval, will remain in force until the next policy is approved by the shareholders.
For the fiscal year 2023, as a consequence of the change of
governance, four different compensation policies will be
applicable:
− to the Chairman & CEO (Mr. Jean-Pascal Tricoire) for the
period running from January 1, 2023 to May 3, 2023 (subject
of the 7th resolution proposed to the Annual General
Meeting);
− to the Chief Executive Officer (Mr. Peter Herweck) for the
period running from May 4, 2023 to December 31, 2023
(subject of the 8th resolution proposed to the Annual General
Meeting);
− to the Chairman of the Board of Directors (Mr. Jean-Pascal
Tricoire) for the period running from May 4, 2023 to
December 31, 2023 (subject of the 9th resolution proposed to
the Annual General Meeting);
− to the Board members for the full year 2023 (subject of the
11th resolution proposed to the Annual General Meeting).
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.
Role of the Governance & Remunerations Committee
The general principles and criteria forming part of the
compensation policy for Corporate Officers, 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 Officers 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 Officers’ 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 feedback on
Schneider Electric’s compensation
policy are heard and considered in
decision-making.
The topic of Corporate Officers’
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 Officers. 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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Use of discretion
In determining executive compensation, the Board could use its
discretionary power to ensure the execution of the compensation
policy and related payouts remain in line with the performance of
the Company.
As such, and only in exceptional circumstances external to
Schneider such as unexpected changes in the industry
environment and in compensation practice generally, not taken into
account when determining the current remuneration policy, the
Board could 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 Officers’
actual contribution to the Company’s overall performance, its
positioning vs. competition, and the outcomes for shareholders and
employees.
If necessary, the Board could also adjust one or several parameters
of the remuneration schemes, such as weights, targets or criteria,
being specified that in any event, these adjustments or
modifications will not result in exceeding the maximum of annual
variable compensation and LTIP award as set in the current
remuneration policy.
Any use of discretion will be explained and an appropriate
disclosure would be provided, so that shareholders understand the
basis for the Board’s decisions.
Changes in the 2023 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.
Therefore, based on the Committee’s analyses and
recommendations, the Board proposes to implement the following
changes for the 2023 compensation policy:
Key adjustments proposed in the 2023 Chief Executive Officer’s compensation policy (Mr. Peter Herweck)
applicable as of May 4, 2023
Review of the targeted
amounts for the fixed
compensation, the annual
variable compensation,
the Long-term incentive
plan and the pension
To determine the different components of the remuneration policy, the Board used notably an in-depth study of
industry practices in term of compensation and took into account Mr. Peter Herweck’s experience and his
compensation package as Chief Executive Officer of AVEVA, the size of the Group and its evolution over the past
years, the compensation practices within the Company and in the Executive Committee.
Based on those considerations, the Board proposes:
• an increase in fixed compensation by 20% compared to the 2022 compensation policy applicable to
Mr. Jean-Pascal Tricoire;
• an annual variable remuneration of 100% of fixed remuneration on-target and 200% of fixed remuneration at
maximum (compared to 130% and 260% respectively for Mr. Jean-Pascal Tricoire);
• a targeted LTIP grant of around 85% of the combined fixed and target short-term variable compensation (or
170% of the fixed compensation) and a decrease of the maximum annual award of LTIP (valued in accordance
with IFRS standards) that the Corporate Officer can be granted (150% of the combined fixed and target
short-term variable compensation vs. 200% previously).
The on-target pay mix would thus be 27% of fixed compensation, 27% of annual variable and 46% of LTIP,
providing for 73% of performance-based compensation. The on-target global remuneration opportunity
decreases by 23% compared to the previous Chairman & CEO remuneration policy.
The Board notably proposes to introduce a new criterion, the Net Satisfaction Score (NSS) to highlight the
importance of building trust with our customers and focus on quality with a weight of 10%, while reducing the
weights of organic sales growth and Adjusted EBITA organic margin improvement to 35% and 25% respectively.
The Board proposes to amend the post-mandate benefits granted to the Chief Executive Officer compared to the
previous compensation policy by strengthening the performance targets upon which an involuntary severance
indemnity may be due: no indemnity would be due if 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 is below 80% (vs. 66% previously).
Introduction of a new
criterion for the annual
variable compensation:
the Net Satisfaction
Score (NSS)
Strengthening of the
performance targets
linked to the involuntary
severance indemnity
Inclusion of a clawback
provision
The Board proposes to introduce a clawback provision that would allow the Board the right to reduce or cancel
some elements of compensation in the event of gross misconduct or fraud by the Chief Executive Officer.
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4.2 Compensation Report
Balance between compensation elements
27%
Not linked to
performance
54%
Paid in cash
54%
Short-term
27%
Fixed
compensation
27%
Target annual
variable
compensation
100% of fixed(2)
46%
LTIP(1)
73%
Linked to
performance
46%
Paid in shares
46%
Long-term
(minimum 3 years +
presence condition)
(1) LTIP granted during
2023 fiscal year valued
in accordance with
IFRS standards.
(2) Between 0% and 200%.
Group’s strategic priorities
How the strategy links to the corporate officers’ variable compensation
Organic growth
Value for customers
Sustainability
Continuous efficiency
Value & returns to
shareholders
Annual incentive plan
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
Group
Adjusted
EBITA margin
improvement
Group cash
conversion
rate
Net
Satisfaction
score
Schneider
Sustainability
Impact
35% 25% 10% 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
External & Relative Index
40%
35%
25%
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.
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2023 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 Officers’ 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.
4.2.3.1.2 Compensation policy of Mr. Jean-Pascal Tricoire as Chairman & Chief Executive Officer until
May 3, 2023
Fixed compensation
The fixed compensation is reviewed at long intervals by the Board in accordance with the
AFEP-MEDEF Corporate Governance Code. The Board ensures that the Chairman &
CEO’s salary is set reasonably compared to similar roles in the market.
Salary increase over
the last 5 years
Considering the fact that Mr. Jean-Pascal Tricoire will end his function of Chief Executive
Officer in 2023, the Board decided not to increase his salary for 2023 and to maintain his
fixed compensation at €1,000,000 on a full year basis.
The amount will be prorated for the period from January 1, 2023 to May 3, 2023, to the
effect that the amount paid will be equal to €341,398.
2022
2021
2020
2019
2018
5%
Corporate Officer
Jean-Pascal Tricoire, Chairman and CEO
Annual variable compensation
Amount prorated
for the period
from January 1 to
May 3, 2023
Full year amount
€341,398
€1,000,000
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 & CEO.
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.
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2023 annual variable compensation opportunity at target and maximum will be prorated for the period from January 1, 2023 to
May 3, 2023:
Minimum
At target
Maximum
0% of fixed compensation
130% of fixed compensation
260% of fixed compensation
Full year amount
Amount prorated for the period
from January 1 to May 3, 2023
Nil
Nil
€1,300,000
€2,600,000
€443,817
€887,634
For 2023, the Board proposes that the measurable financial performance criteria determine 70% and sustainability and customer
satisfaction criteria, 30% of the variable cash compensation of Mr. Jean-Pascal Tricoire.
The Board notably proposed to introduce a new criterion, the Net Satisfaction Score (NSS) to highlight the importance of building trust
with our customers and focus on quality with a weight of 10%, while reducing the weights of organic sales growth and Adjusted EBITA
organic margin to 35% and 25% respectively (see more details on the NSS in section 4.2.3.1.3 of the Universal Registration Document).
Performance criteria
Description and link to strategy
35% Group organic sales growth
Fostering organic growth through deployment of strategic priorities in key
markets
25% Adjusted EBITA organic margin improvement Enabling shareholder value creation through continuous efficiency
10% Group cash conversion
Enabling returns to shareholders
10% Net satisfaction score improvement
Focusing the Company on clients’ satisfaction and quality
20% Schneider Sustainability Impact
Promoting continuous progress towards more sustainability and value for
customers
For business confidentiality reasons and as in previous years, the targets cannot be disclosed on a prospective basis; however, the
targets have been set precisely by the Board at the meeting of February 15, 2023 and will be communicated ex-post.
In compliance with Article L.22-10-34 II of the French Commercial Code, the payment of this annual variable compensation will be
subject to approval by the shareholders of the compensation granted to the Corporate Officer for the fiscal year 2023 at the 2024 annual
Shareholders’ Meeting.
Performance shares (Long-term incentive plan – LTIP)
In line with best practice, the Board has considered that, given Mr. Jean-Pascal Tricoire will leave his executive position as of May 3,
2023, he would not be entitled to any grant in 2023.
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 2023 remains unchanged, it will be prorated for
the period from January 1, 2023 to May 3, 2023 and is detailed in the table below. The 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 his pensions.
Variable portion
Corporate Officer
Full year amount
Fixed portion
Target (% of fixed
compensation)
€191,600
130%
Amount prorated for the period from
January 1 to May 3, 2023
€65,412
130%
Minimum
At target
Maximum
Total at target
€0
€0
€249,080
€498,160
€440,680
€85,035
€170,071
€150,447
In compliance with Article L.22-10-34 II of the French Commercial Code, the payment of the variable portion of the pension will be
subject to approval by the shareholders of the compensation granted to the Corporate Officer for the fiscal year 2023 at the 2024 Annual
Shareholders’ Meeting.
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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:
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
(PERECO), 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 & 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 six 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 fulfillment 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 & CEO has waived the attendance fees to which he is entitled in his capacity as 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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4.2 Compensation Report
Post-mandate benefits
As Mr. Jean-Pascal Tricoire will leave the position of Chief Executive Officer on May 3, 2023, to become non-executive Chairman of the
Board, the Board decided that, he will not be entitled to receive any severance indemnity, nor any non-compete indemnity. Having said
that, it should be underlined that, at the request of the Board, Mr. Jean-Pascal Tricoire voluntarily undertook that, in the event of
termination of his duties as Chairman for whatever reasons, he will be required, for a period of twelve months following termination, not to
work, in whatever manner it may be, for the benefit of any entity carrying on operations which are in direct competition with Schneider
Electric in any country. This commitment will not be indemnified by the Company.
Regarding the unvested LTIP granted in 2021 and 2022, the compensation policies for 2021 and 2022 that were supported respectively
by more than 81% and 89% of the shareholders, provide that in case of retirement or change of assignment within the Group, the
Chairman & CEO will retain his rights in full. The delivery of the Performance shares granted will nonetheless remain subject to the
fulfillment of (i) the performance conditions stipulated in the plans and (ii) the continuous presence condition within the Group as
Corporate Officer.
At its meeting of February 15, 2023, the Board, upon the proposal of the Governance & Remunerations Committee, confirmed this rule. It
is indeed applied to the more than 3,500 beneficiaries within the Group who also keep their LTIP if they retire or change assignment
within the Group. The Board determined that since Mr. Jean-Pascal Tricoire is going to change assignment becoming Chairman of the
Board of Directors, and not leaving the Company; as any other employee, he should keep his rights.
Under the leadership of Mr. Jean-Pascal Tricoire from 2003 to 2022, Schneider has multiplied its revenue by 3.9 (from €8.8 billion to
€34.2 billion), its net Income by 8.8 (from €0.4 billion to €3.5 billion) and its market capitalization by 7 (from €12 billion to €88 billion). The
Board is pleased for the Group to still benefit from Mr. Jean-Pascal Tricoire’s experience and considers it is in the best interest of the
Company that he keeps his rights while he will be dedicated to ensure a smooth and productive leadership transition, with enlarged
duties.
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)
NO
NO
(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.
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4.2.3.1.3 Compensation policy of Mr. Peter Herweck as Chief Executive Officer from May 4, 2023
Pursuant to the principles of the remuneration policy of Executive Officers described above, the Board of Directors on February 15,
2023, on the recommendation of the Governance & Remunerations Committee, decided to set as follows the components of the Chief
Executive Officer’s compensation policy to be granted as from his appointment to this position by the Board in connection with the
implementation of a separated governance, i.e., as from May 4, 2023.
To determine this remuneration policy, the Governance & Remunerations Committee used an in-depth study of industry practices,
including a benchmark of remuneration practices in CAC 40 and STOXX Europe 50 indices, and a selected group of peer companies
(the composition of which is described in section 4.2.2.1 of the Universal Registration Document), with the assistance of an outside firm
(WTW) based on publicly available data. With regard to this panel, it exhibits the necessary characteristics of competitiveness and
comparability.
The remuneration policy is designed to be attractive and motivating. It notably takes into account:
• Mr Peter Herweck’s experience and skills, his successful career in particular within the Group which he joined in 2016 and his
compensation package as Chief Executive Officer of AVEVA (fixed compensation of £785,000 with a maximum annual variable
compensation opportunity of 200% of his fixed compensation);
•
the size of the Group and its evolution over the past years, notably since the Board last adjusted the fixed salary of its top executive
in 2018;
•
the positioning of the compensation components compared with executive corporate officers with a comparable profile;
•
the consistency of the Chief Executive Officer’s compensation with that of Executive Committee members and compensation
practices within the Company;
• Mr. Peter Herweck’s intention to unilaterally end his current employment contract with the Group by means of resignation as from the
start of his corporate office, in compliance with the recommendations of the AFEP-MEDEF Code and best governance practices.
Based on those considerations, the Board has decided to set the amount of the key compensation elements of Mr. Peter Herweck
as follows:
• a fixed compensation of €1,200,000: this amount will be just under the median of the CAC 40 Companies, considerably below the
25th centile of the STOXX Europe 50 companies and considerably below the median of the peer group;
• a targeted annual variable compensation representing 100% of the fixed compensation: this amount will be at the median of the
CAC 40 Companies and below the 25th centile of the STOXX Europe 50 companies and peer group;
• a long-term incentive representing 170% of the fixed compensation (valued in accordance with the IFRS standard): this amount will
be between the median and the 75th centile of the CAC 40 companies and between the 25th centile and the median of the STOXX
Europe 50 Companies and peer group.
The Board thus proposes to position the total target compensation package of the Chief Executive Officer between the median and
the 75th centile of the CAC 40 companies and considerably below the 25th centile of the STOXX Europe 50 companies and peer group.
Compared to the former Chairman & Chief Executive Officer, despite an increase of the fixed compensation, this proposal represents
a decrease of more than 23% of the total target compensation package. This proposal is also in line with the enlarged scope and
responsibilities related to his change of role, when comparing to his previous pay package.
Positioning of Mr. Peter Herweck’s compensation package compared to the market benchmarks
Targeted Annual
variable
compensation (as %
of fixed
compensation)
Fixed Compensation +
Targeted annual
variable
compensation
LTI granted (as % of
fixed compensation
Fixed compensation +
Targeted annual
variable
compensation + LTI
Granted
Fixed compensation
Peter Herweck, CEO
€ 1,200,000
100
€ 2,400,000
170
€ 4,440,000
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Fixed compensation
Targeted annual variable compensation
(as % of fixed compensation)
Fixed compensation +
Targeted annual variable compensation
75th percentile
1,500
1,819
1,650
75th percentile
120
125
145
75th percentile
3,360
3,600
3,555
Median
1,250
1,550
1,390
Median
1,200
25th percentile
1,000
1,340
1,200
1,095
1,200
105
125
Median
2,685
3,455
2,955
100
100
25th percentile
100
100
100
100
100
2,400
25th percentile
2,030
3,000
2,400
2,395
2,400
CAC40
Stoxx50
Peers
CAC40
Stoxx50
Peers
CAC40
Stoxx50
Peers
LTI granted
(as % of fixed compensation)
Total compensation package:
Fixed Compensation + Targeted annual
variable compensation + LTI Granted
75th percentile
260
290
560
75th percentile
5,785
7,885
9,880
Median
170
150
210
230
Median
4,440
4,345
6,640
6,710
25th percentile
95
170
130
170
140
25th percentile
3,165
5,385
4,985
CAC40
Stoxx50
Peers
CAC40
Stoxx50
Peers
4,440
4,440
The points in black represent the amounts proposed by the Board for the different components of Mr. Peter Herweck’s compensation
as stated above.
Fixed compensation
In consideration of all elements described above, the Board decided to set the fixed compensation of the Chief Executive Officer at
€1,200,000. This amount will be prorated for 2023 at €790,323 for the period from May 4, 2023 to December 31, 2023.
The fixed compensation will be 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.
Corporate Officer
Peter Herweck, CEO
Annual variable compensation
Full year amount
€1,200,000
Amount prorated for the
period from May 4 to
December 31, 2023
€790,323
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 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.
For 2023, the Board proposes that the measurable financial performance criteria determine 70% and sustainability and customer
satisfaction criteria, 30% of the variable cash compensation of Mr. Peter Herweck.
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The Board notably proposed to introduce a new criterion, the Net Satisfaction Score (NSS) to highlight the importance of building trust
with our customers and focus on quality, with a weight of 10%, while reducing the weights of organic sales growth and Adjusted EBITA
organic margin to 35% and 25% respectively.
The NSS is measured since 2018, it is a weighted average of the grade given by customers on six Critical Touch Points: 1) Select offer,
2) Get quotation, 3) Get delivered, 4) Get delivered solutions, 5) Get technical support, 6) Get failure support. More than 240,000
answers of customers are provided to the survey each year. The grades given by customers range from 0 (very dissatisfied) to 10 (very
satisfied). The NSS is calculated by subtracting the percentage of customers who are dissatisfied (grade 0 to 6) from the percentage
who are very satisfied (grade 9 and 10). It generates a score between -100% and 100%:
• At one end of the spectrum, if all of the customers gave a grade lower or equal to 6, this would lead to an NSS of -100%;
• On the other end of the spectrum, if all of the customers gave a grade of 9 or 10, then the NSS would be 100%.
The NSS targets would be set as a percentage point improvement versus previous year. In 2021, the NSS was 49% and in 2022, 48.5%.
Performance criteria
Description and link to strategy
35% Group organic sales growth
Fostering organic growth through deployment of strategic priorities in key markets
25% Adjusted EBITA organic margin improvement
Enabling shareholder value creation through continuous efficiency
10% Group cash conversion
Enabling returns to shareholders
10% Net satisfaction score improvement
Focusing the Company on clients’ satisfaction and quality
20% Schneider Sustainability Impact
Promoting continuous progress towards more sustainability and value for customers
For business confidentiality reasons and as in previous years, the targets cannot be disclosed; however, the targets have been set
precisely by the Board at the meeting of February 15, 2023 and will be communicated ex-post.
In consideration of all elements described above, the Board decided to set the annual variable compensation opportunity at target and
maximum as follows:
Full year amount
Amount prorated for the period from May 4 to December 31, 2023
Minimum
At target
Maximum
0% of fixed
compensation
100% of fixed
compensation
200% of fixed
compensation
Nil
Nil
€1,200,000
€790,323
€2,400,000
€1,580,646
The amount will be prorated for 2023 for the period from May 4, 2023 to December 31, 2023.
The payment of the annual variable compensation is conditional upon approval by shareholders of the compensation granted to the
Chief Executive Officer.
Schneider Electric does not operate a deferral program.
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Performance Shares (Long-term incentive plan – LTIP)
LTIP links the largest part of the Chief Executive Officer’s
compensation with the long-term performance of the Group
and the actual outcome varies with performance against
criteria linked directly to strategic priorities.
LTIP time horizon
Year 1
Year 2
Year 3
Year 4
Shares granted are subject to a vesting period of three years
with an additional mandatory one year holding period for 80%
of shares which are granted under the Plan reserved to the
Corporate Officers.
Long-term
incentive
plan
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.
1 year
holding
period
Shares
released
Performance period
80% of shares
that vest
Shares
granted
Performance assessed and
shares vest (20% released)
The 2023 LTIP criteria will remain the same as in 2022, in line with Company’s objectives and the proposals approved by shareholders
under the LTIP resolution at the Annual Shareholders’ Meeting on May 5, 2022 (15th resolution). The two changes introduced last year
will be continued: 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 EPS criterion which will be disclosed 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 2023, the Board will allocate Performance
Shares to more than 3,500 Group executives and senior management, leaders, and key talents. For the 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, valued in accordance with IFRS standards, will be capped at 150% 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. This new cap represents a decrease of 25% compared to the previous cap provided in the
2022 remuneration policy (200% of the combined fixed and target short-term variable compensation).
For 2023, the Board intends to grant Mr. Peter Herweck an amount of LTIP, which value in accordance with IFRS standards will be
around(1) 85% of the combined fixed and target short-term variable compensation (i.e. 170% of the fixed compensation), well below the
maximum grant authorized under the remuneration policy. This amount is set for the full year 2023 including the months where Mr. Peter
Herweck was Chief Executive Officer of AVEVA and transitioning to his new role. Mr. Peter Herweck will not be granted any other
instruments for 2023.
The volume of the annual award will be set in consideration of:
• The market practice and competitive positioning of the CEO’s compensation package;
• The Group’s performance, 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 CEO continues to be reasonable in terms
of quantum and market practice for comparable roles; it rewards the Company’s good performance in a challenging year and supports
the culture of ownership strongly promoted by Schneider Electric.
(1) At the date of the grant, the IFRS value cannot be known with certainty as it is computed only at the end of the year. For the 2023 grant, the value of the grant to
the Chief Executive Officer will be based on the assumption that the discount rate applied according to the IFRS rules will be 26% as it was for the 2022 grant.
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Performance conditions
100% measurable and quantifiable criteria
75% financial and TSR and 25% sustainability
Performance conditions and weightings applicable to the 2023 LTIP:
• 40%, improvement of Adjusted EPS;
• 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).
• 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 the 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
judgement to decide whether Schneider Electric’s TSR shall be deemed to be ranked in the same position as those companies.
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• 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.
According to the scale of the vesting of the Schneider Sustainability External and Relative Index, only four companies in the world
would have achieved 100% of the SSERI in 2021 (Schneider achieved only 87,5% failing to be sector leader in the DJSI World index)
and only two companies achieved 100% of the SSERI in 2022 including Schneider Electric.
The table below summarizes the performance conditions that will apply to the plan:
40% Improvement of
adjusted Earnings Per
Share (EPS)
35% Relative TSR
17.5% vs. CAC 40
• 0% at the minimum Adjusted EPS improvement 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 1 to 4
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
• 0%: not in World
• 50%: included in World
• 100%: sector leader
6.25% Euronext Vigeo
6.25% Ecovadis
6.25% CDP Climate Change
• 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.
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Pension benefits
The Chief Executive Officer receives complementary cash payments which purpose is to provide a competitive retirement benefit in a
way that is cost effective to the Company and that allows the Chief Executive Officer to build his retirement benefits independently. The
cash payments will be equal to:
• a fixed portion equal to 15% of the fixed compensation; and
• a variable portion equal to 15% of the actual annual variable compensation paid to the Chief Executive Officer.
The total Pension amount actually paid will thus depend on the Company’s performance, since the calculation base of the variable
portion of the pension includes the actual variable compensation paid to the CEO depending on performance conditions linked to the
Group’s results.
The CEO has committed to depositing these additional payments, after taxes, into investment vehicles of his choice, dedicated to the
supplementary financing of pensions.
Full year amount
Amount prorated for the period from May 4 to
December 31, 2023
€180,000
€118,548
€0
€0
€180,000
€360,000
€360,000
€118,548
€237,096
€237,096
Fixed portion
Minimum
At target
Maximum
Total at target
Variable portion
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 Chief Executive Officer 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 (PERECO), 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 Chief Executive Officer 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. a private medical cover;
ii. 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;
iii. 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 six 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);
iv. 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;
v. 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;
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vi. 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 (iii) through (vi) above is conditional on the fulfillment 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 Chief Executive Officer will not receive any attendance fees.
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.
Clawback provision
Listening carefully to some concerns raised by shareholders, the Board proposes to introduce a clawback provision that would allow
the Board the right to reduce or cancel some elements of compensation in the event of gross misconduct or fraud.
In the event of gross misconduct or fraud causing a material adverse impact to the Group, in particular, resulting in a financial
restatement, the Board reserves the right to reduce or cancel unvested LTIP or annual variabIe compensation amounts (malus), seek
reimbursement of paid annual variabIe compensation or vested LTIP and/or obtain damages.
Post-mandate benefits
Listening carefully to some concerns raised by shareholders, the Board proposes to amend the post-mandate benefits granted to the
Chief Executive Officer compared to the previous compensation policy by strengthening the performance targets upon which an
involuntary severance indemnity may be due: no indemnity if 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 is below 80% (vs. 66%
previously).
The table below presents a summary of the benefits that could be granted to the Chief Executive Officer 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.
Voluntary resignation/Removal from
office for wrongful or gross misconduct Forced departure
Retirement or change of assignment
within the Group
Involuntary Severance Pay
Not applicable
Payment of an indemnity (twice
the average of the annual fixed
and variable cash compensation
paid over the last 3 years subject
to performance conditions)
Not applicable
Non-compete indemnity
If not waived by the Board, 60% of annual fixed and target variable
compensation (excluding pension payments)
Not applicable
Retention of unvested share
awards
Forfeited in full
Rights retained on prorata basis
to presence within Schneider
Electric
Rights retained in full
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• Definition of a forced departure: the termination benefits only become payable if the departure of the Chief Executive Officer is
forced, including requested resignation, in the following cases;
− Dismissal, non-renewal or requested resignation of the Chief Executive Officer, 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 Chief Executive Officer 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 Chief Executive Officer, although, on average, two-thirds of the Group
performance criteria have been achieved for the last four fiscal years from the day of departure.
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In any case, involuntary severance indemnity will not be paid if the resignation is a consequence of wrongful or gross misconduct.
• Amount of the involuntary severance indemnity: the “Maximum Amount” of the involuntary severance indemnity will be twice the
arithmetical average of the annual fixed and variable cash compensation, to the exclusion of complementary pension payments,
paid by the Group over the last 3 years taking into account the non-compete compensation, if any, and subject to the attainment of
performance conditions.
The aggregate amount of the involuntary severance indemnity and the non-compete compensation, if any, shall not exceed the
Maximum Amount.
During the first 12 months from the appointment date, a ratio will be applied to the amount of involuntary severance indemnity
equivalent to: (i) half of the Maximum Amount, plus (ii) 1/ 24th of the Maximum Amount for each additional month of service until the
12th month is completed (as which point the involuntary severance indemnity will be computed based on the full Maximum Amount).
• Performance conditions: Payment of the involuntary severance indemnity is subject to fulfillment 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
< 80%
80%–100%
>100%
No payment
80%–100% of the Maximum Amount, calculated on a straight-line basis
100% of the Maximum Amount
It being specified that in case of departure during the first three years of office, the above performance conditions will be calculated
on the fiscal year where the Corporate Officer was Chief Executive Officer (in case of forced departure in 2023, the performance
condition will be calculated on the 2023 results after the closing of the fiscal year; in case of forced departure in 2024, the
performance condition will be calculated on the 2023 results; in case of forced departure in 2025, the performance condition will be
calculated on the 2023 and 2024 results).
• Non-compete agreement: The Chief Executive Officer 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 compensation (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.
• Retention of unvested share awards: If the Chief Executive Officer 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 Chief Executive Officer
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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• Best practices: In conformity with the recommendations of the AFEP-MEDEF Corporate Governance Code:
− The entitlement to involuntary severance indemnity is subject to strict performance conditions, assessed over a period not less
than two years;
− Only circumstances of a forced departure, regardless of the form of the departure, could trigger the entitlement to involuntary
severance indemnity;
− Together with the non-compete indemnity, if any, the involuntary severance indemnity 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 indemnity in the case that he is entitled to benefit from his/
her pension rights.
Corporate Officer
Employment contract(1)
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
Peter Herweck, CEO
NO
NO
YES
YES
(1) Mr. Peter Herweck will unilaterally end his current employment contract with the Group by means of resignation as from the start of his corporate office.
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
Annual variable
compensation
Pension
Other benefits
Buy-out awards
Relocation
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 will be awarded within the parameters of the policy in force.
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.
Internal promotion 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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4.2.3.1.4 Compensation policy of Jean-Pascal Tricoire as non-executive Chairman of the Board from
May 4, 2023
The principles presented hereafter apply in the event of the roles of the Chairman of the Board and the Chief Executive Officer being
separated.
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 change, for example a major change in the duties. The Board
ensures that the Chairman’s salary is set reasonably compared to similar roles at companies of similar size or complexity.
On the recommendation of the Governance & Remunerations Committee, the Board of Directors’ meeting of February 15, 2023 set the
gross annual fixed compensation of the Chairman of the Board at €930,000 from 2023. This amount will be prorated at €612,500 for the
period from May 4, 2023 to December 31, 2023.
To determine this remuneration, the Governance & Remunerations Committee used an in-depth study of industry and market practices,
including a benchmark of remuneration practice for non-executive chairmen in CAC 40, STOXX Europe 50 and peer group companies
(the composition of which is described in section 4.2.2.1 of the Universal Registration Document), with the assistance of an outside firm
(WTW) based on publicly available data.
This study clearly identified three levels of compensation corresponding to the different types of duties performed by non-executive
chairmen:
• duties focusing solely on the chairing/leading the Board of Directors as well as being involved in the shareholder relations (25th
centile );
• participation in a strategic committee to seek out and validate major investments (median);
• support for the new CEO to ensure the success of the transition or external recruitment (75th centile ).
Fixed compensation
75th percentile
930
925
930
915
930
615
Median
640
635
390
25th percentile
450
290
240
CAC40
Stoxx50
Peers
On the recommendation of the Governance & Remunerations Committee, the Board of Directors adopted a position just above the 75th
centile of the CAC 40 companies, just above the 75th centile of the STOXX Europe 50 companies and above of the 75th centile of the peer
group. This level of compensation is also explained by the enlarged mission given by the Board to its Chairman (which is described in
section 4.1.1.2.1 of the Universal Registration Document) in order to ensure a smooth and efficient transition.
Corporate Officer
Jean-Pascal Tricoire, Chairman
Full year amount
Amount prorated for the
period from May 4 to
December 31, 2023
€930,000
€612,500
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Other benefits
The Chairman of the Board will be entitled to receive the following benefits.
Employer Matching Contributions and Profit-Sharing
The Chairman 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 (PERECO),
for the retirement of employees in France.
Company Car
The Chairman may use the cars made available to Group Senior Management with or without chauffeur services. In addition, the
Chairman is provided with a company car.
Health, Life and Disability schemes
The Chairman will be eligible to 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.
Tax assistance
The Chairman may benefit from a tax assistance.
Annual variable compensation, Long-term incentive plan, Director’s fee, Extraordinary awards,
Post-mandate benefits
The Chairman will not benefit from:
• any annual variable compensation;
• any Long-term incentive plan;
• any Director’s fee;
• any Extraordinary awards;
• any Company Pension arrangement or Pension allowance;
• any severance pay;
• any non-compete indemnity.
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
NO
NO(1)
NO
NO
(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.
Voluntary non-compete undertaking
The Board asked Mr. Jean-Pascal Tricoire to undertake that, in the event of termination of his duties as Chairman for whatever reasons,
he will be required, for a period of twelve months following termination, not to work, in whatever manner it may be, for the benefit of any
entity carrying on operations which are in direct competition with Schneider Electric in any country. This commitment will not be
indemnified in any way by the Company.
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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 increase the maximum of the total compensation that may be
awarded to members of the Board of Directors annually to
€2,800,000, in view of the increase in the number of members of
the Board of Directors and the number of Board meetings; and
• To keep the allocation rules unchanged and 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 travel) 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;
− Other Committees: €15,000; and
− Lead Independent Director: €250,000.
• 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 Compensation Report
4.2.4 Compensation of Group Senior Management
(excluding Corporate Officers)
Scope of Senior Management in 2022
Compensation paid in 2022
On December 31, 2022, Group Senior Management is composed
of 17 Executive Committee members. The Executive Committee is
chaired by the Chairman & CEO and includes:
• Executive Vice-Presidents of Corporate Functions: Finance,
Supply Chain, Digital, Strategy & Sustainability, Innovation,
Governance, Marketing and Human Resources;
• Executive Vice-Presidents of Operations: North America
Operations, China & East Asia Operations, France Operations,
Europe Operations, International Operations and Chief
Executive Officer North America;
• Executive Vice-Presidents of Businesses: Industry Automation
and Energy Management.
Gross compensation, including benefits in kind, paid by Group
companies in 2022 to the members of Group Senior Management
other than the Corporate Officers, amounted to €33.9 million,
including €11.4 million in variable compensation paid in the 2022
fiscal year.
The performance objectives for the annual incentive for the fiscal
year 2022 were:
• Group organic sales growth;
•
• Group cash conversion rate;
•
• Schneider Sustainability Impact.
Improvement of Group adjusted EBITA margin (organic);
Improvement of Net Satisfaction Score;
41% of the Group Senior Management (including Chairman & CEO)
is composed of women.
Long-term incentive plans
Compensation policy
The compensation principles of the 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 WTW;
• The proportion of variable components within their on target
compensation package is around 70% versus around 80% for
the Corporate Officer.
During the last three financial years, 506,774 Performance shares
have been allocated to the Group Senior Management, excluding
Corporate Officers. No stock options and no Stock Appreciation
Rights (SARs) have been granted during the last three financial
years.
In 2022, Performance shares were allocated under the 2022
Long-term incentive plan 40.
Pension benefits
Schneider Electric’s 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.
•
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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, 2022)
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
2022 are characterized by:
• A total of 3,963 beneficiaries in the 2022 LTIP (vs. 3,416
beneficiaries in the 2021 LTIP);
• Allocations to Executive Committee members, including the
Corporate Officer, represented 13.9% of the total attributions in
the framework of the 2022 LTIP (similar to the proportion
prevalent (14.0%) in the framework of the 2021 LTIP);
• 29.0% of the beneficiaries were women in the 2022 LTIP to
whom 27.5% of the shares were granted (vs. 28.4% of women in
the 2021 LTIP to whom 26.7% of the shares were granted).
Corporate Officers formally undertake, for each grant of shares, not
to engage in hedging transactions until the end of their duties as
executive Officers.
Plan number
Plans 32, 33, 34, 35
Plans 36, 37, 37bis
Plans 38, 39, 39bis, 39ter
Plans 40, 41, 41bis, 41ter
LTIP 2019
LTIP 2020
LTIP 2021
LTIP 2022
Apr. 25, 2016
Apr. 25, 2019
Apr. 25, 2019
Date of Annual Shareholders’
Meeting
Date of the grant by the Board
Mar. 26, 2019
Jul. 24, 2019
Oct. 23, 2019
Number of shares at grant of which:
– Jean-Pascal Tricoire
– Top ten employee beneficiaries
2,444,010
60,000
214,700
Vesting/delivery date
End of holding period
Mar. 28, 2022
Jul. 25, 2022
Oct. 24, 2022
Mar. 27, 2023 for
Plan 32
(only for
25,800 shares of
which 18,000 shares
granted to
Jean-Pascal Tricoire)
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
Apr. 25, 2019
May 5, 2022
Mar. 24, 2022
July 27, 2022
Oct. 26, 2022
1,423,558
31,105
136,346
Mar. 24, 2025
July 27, 2025
Oct. 26, 2025
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)
Mar. 24, 2026 for
Plan 40
(only for
9,932 shares
granted to
Jean-Pascal Tricoire)
Number of rights outstanding
as of Dec. 31, 2021
2,208,429
2,113,541
1,541,917
N/A
Number of rights granted in 2022
N/A
Number of shares delivered in 2022
2,135,035
Number of rights canceled in 2022
73,394
Number of rights outstanding
as of Dec. 31, 2022
0
Total number of rights outstanding
as of Dec. 31, 2022
4,895,546
N/A
1,500
98,538
N/A
1,129
61,069
1,423,558
331
20,903
2,013,503
1,479,719
1,402,324
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4.2 Compensation Report
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, 2021
25,800
18,000
20,817
Number of shares delivered in 2022
20,164
Number of rights canceled in 2022
653
2,313,650
42,000
2,089,452
2,026,181
63,271
87,110
80,710
72,704
8,006
17,450
17,450
15,986
1,464
Number of rights outstanding as of
Dec. 31, 2022
0
0
0
0
Vesting date/vesting period
Mar. 28, 2022
3 years
Mar. 28, 2022
3 years
End of holding period
Mar. 27, 2023
N/A
Jul. 25, 2022
3 years
N/A
Oct. 24, 2022
3 years
N/A
Presence condition
Yes
Performance conditions
• Yes for 70% of the shares/100% for the
Corporate Officers and Executive
Committee members
• Yes for 70% of the shares/100% for 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%)
% achievement of the Performance
conditions
96.86% for Plans nº 32 and 33
88% for Plans nº 34 and 35
Detailed achievement of the
Performance conditions of
Plans 32 and 33
At its meeting of February 16, 2022, the Board of Directors assessed the achievement rate of
performance criteria for Plans nº 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.
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%).
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LTIP 2019 continued
Detailed achievement of the
Performance conditions of
Plans 34 and 35
At its meeting of February 16, 2022, the Board of Directors assessed the achievement rate of
performance criteria for Plans nº 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%
Plans nº 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 nº 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
18,000
18,000
Number of rights outstanding as of
Dec. 31, 2021
18,000
Number of shares granted in 2022
N/A
Number of shares delivered in 2022
Number of rights canceled in 2022
0
0
Number of rights outstanding as of
Dec. 31, 2022
18,000
Mar. 24, 2023
3 years
Mar. 24, 2024
Yes
Plan 37
Apr. 25, 2019
Mar. 24, 2020
2,095,740
42,000
1,996,790
N/A
1,500
95,550
1,899,740
Mar. 24, 2023
3 years
N/A
Plan 37bis
Apr. 25, 2019
Oct. 21, 2020
103,051
98,751
N/A
0
2,988
95,763
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%)**
At its meeting of February 15, 2023, the Board of Directors assessed the achievement rate of
performance criteria for Plans nº 36, 37 and 37bis granted in 2020 based on the Group’s
performance over the three-year period 2020–2022, and set the final rate of achievement at
96.71%, i.e. a reduction of 3.29% in relation to the number of shares originally granted.
Performance conditions of Plans 36, 37 and 37bis
Adjusted Earnings per Share (EPS)
improvement rate
Relative Total
Shareholder Return
(TSR)
vs. CAC 40
companies
vs. panel of peer
companies
Schneider Sustainability External and
Relative Index (“SSERI”)**
Reference
period
Weight (%)
Actual
achievement
Pay-out rate
Weighted
pay-out rate
2020
2021
2022
13.33% -4.86%
0.00%
37.75%
13.33% 31.77%
100.00%
13.33% 13.13%
100.00%
2020–2022 17.50% 3rd rank
150.00%* 17.50%*
2020–2022 17.50% 6th rank
113.33%* 17.50%*
2020
2021
2022
8.33% 100.00% 100.00% 23.96%
8.33% 87.50%
87.50%
8.33% 100.00% 100.00%
Total
100%
96.71%
* 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 11.08%).
** Plan rules nº 36, 37 and 37bis have been modified to replace FTSE4GOOD, which is decommissioned, by
Ecovadis for 2021 and 2022.
Vesting date/vesting period
End of holding period
Presence condition
Performance conditions
Detailed achievement of the
Performance conditions of
Plans 36, 37 and 37bis
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LTIP 2021
Plan number
Plan 38
Plan 39
Plan 39bis
Plan 39ter
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, 2021
11,371
11,371
11,371
Number of shares granted in 2022
N/A
Number of shares delivered in 2022
Number of rights canceled in 2022
0
0
Number of rights outstanding as of
Dec. 31, 2022
11,371
1,463,997
26,532
1,449,124
N/A
1,129
59,098
1,388,897
48,720
48,340
N/A
0
1,190
47,150
33,082
33,082
N/A
0
781
32,301
Vesting date/vesting period
Mar. 25, 2024
3 years
Mar. 25, 2024
3 years
End of holding period
Mar. 25, 2025
N/A
Jul. 29, 2024
3 years
N/A
Oct. 26, 2024
3 years
N/A
Presence condition
Yes
Performance conditions
• 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
LTIP 2022
Plan number
Plan 40
Plan 41
Plan 41bis
Plan 41ter
Date of Annual Shareholders’ Meeting Apr. 25, 2019
Apr. 25, 2019
Date of the grant by the Board
Mar. 24, 2022
Mar. 24, 2022
Number of shares at grant of which:
– Jean-Pascal Tricoire
Number of rights outstanding as of
Dec. 31, 2021
9,332
9,332
N/A
1,321,546
21,773
N/A
May 5, 2022
Jul. 27, 2022
67,590
May 5, 2022
Oct. 26, 2022
25,090
N/A
N/A
Number of shares granted in 2022
9,332
1,321,546
67,590
25,090
Number of shares delivered in 2022
Number of rights canceled in 2022
0
0
Number of rights outstanding as of
Dec. 31, 2022
9,332
331
20,903
0
0
0
0
1,300,312
67,590
25,090
Vesting date/vesting period
Mar. 24, 2025
3 years
Mar. 24, 2025
3 years
End of holding period
Mar. 24, 2026
N/A
Jul. 27, 2025
3 years
N/A
Oct. 26, 2025
3 years
N/A
Presence condition
Yes
Performance conditions
• Yes for 70% of the shares/100% for the Corporate officer and Executive Committee
• 2022, 2023, 2024 Adjusted EPS improvement average achievement rate (40%)
• TSR ranking at end of 2024 vs. bespoke peer group and CAC 40 (35%)
• 2022, 2023, 2024 Schneider Sustainability External and Relative Index (25%)
Achievement of the Performance
conditions
To be assessed by the Board of directors in February 2025
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Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
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Chapter 5 – Consolidated financial statements at December 31, 2022
Consolidated
financial statements
at December 31, 2022
5
5.1 Consolidated statement
of income
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
5.6 Statutory Auditors’ report
on the consolidated
financial statements
5.7 Extract of the management
report for the year ended
December 31, 2022
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Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
5.1 Consolidated statement of income
(in millions of euros except for earnings per share)
Note
Full Year 2022
Full Year 2021
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
34,176
(20,300)
13,876
(1,040)
(6,819)
6,017
(433)
(227)
5,357
(424)
4,933
24
(130)
(106)
(109)
(215)
4,718
(1,211)
29
3,536
3,477
59
6.23
6.15
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
* Adjusted EBITA (Earnings Before Interest, Taxes, Amortization of Purchase Accounting Intangibles): 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): 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, 2022
Other comprehensive income
(millions of euros)
Profit for the year
Other comprehensive income:
Translation adjustment
Revaluation of assets and liabilities due to hyperinflation
Cash-flow hedges
Income tax effect of cash flow hedges
Gains and losses recorded in equity with recycling
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
Gains and losses recorded in equity with no recycling
Other comprehensive income for the year, net of tax
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 2022
Full Year 2021
3,536
3,273
19
19
20
19
631
44
36
(4)
707
(8)
2
137
(25)
106
813
4,349
4,284
65
1,839
-
130
(7)
1,962
40
(9)
451
(105)
377
2,339
5,612
5,212
400
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Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
5.2 Consolidated statement of cash flows
(in millions of euros)
Note
Full Year 2022
Full Year 2021
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 treasury 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
TOTAL V - IMPACT OF RECLASSIFICATION OF ITEMS HELD FOR SALE
INCREASE/(DECREASE) IN NET CASH AND CASH EQUIVALENTS: I + II + III + IV + V
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
*
In 2021, transactions with non-controlling interests mainly relates to RIB.
The accompanying notes are an integral part of the consolidated financial statements.
3,536
(29)
750
732
61
32
70
139
102
5,393
(305)
(553)
73
(254)
(1,039)
4,354
(707)
69
(386)
(1,024)
(297)
40
(130)
(387)
(1,411)
1,092
(829)
(219)
143
208
(73)
(1,618)
(157)
(1,453)
(70)
(20)
1,400
2,463
1,400
3,863
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
11
10
21
11
10
2
22
22
19
2
19
18
18
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Chapter 5 – Consolidated financial statements at December 31, 2022
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
Assets held for sale
TOTAL ASSETS
The accompanying notes are an integral part of the consolidated financial statements.
Note
Dec. 31, 2022
Dec. 31, 2021
9
10
11
12
13
14
15
16
17
18
1
25,136
6,373
3,935
1,241
1,125
1,616
39,426
4,346
7,514
2,155
1
3,986
18,002
940
58,368
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
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Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
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
Non-current purchase commitments over non-controlling interests
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 financial debt
Current purchase commitments over non-controlling interests
TOTAL CURRENT LIABILITIES
Liabilities held for sale
TOTAL EQUITY AND LIABILITIES
The accompanying notes are an integral part of the consolidated financial statements.
Dec. 31, 2022
Dec. 31, 2021
Note
19
2,284
2,660
19,812
683
25,439
655
26,094
1,186
994
7,330
194
885
865
2,276
2,456
19,694
14
24,440
3,669
28,109
1,395
1,091
7,554
176
997
1,003
11,454
12,216
6,254
3,787
1,036
1,887
3,133
4,554
20,651
169
58,368
5,715
3,694
933
1,685
2,195
-
14,222
-
54,547
20
21
22
22
14
21
22
22
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Chapter 5 – Consolidated financial statements at December 31, 2022
5.4 Consolidated statement of changes in
equity
(in millions of euros)
Dec. 31, 2020
Profit for the year
Other comprehensive income
Comprehensive income
for the year
Capital increase
Dividends
Purchase of treasury shares
Share-based compensation
expense
Other
Dec. 31, 2021
Profit for the year
Other comprehensive income
Comprehensive income
for the year
Capital increase
Dividends
Purchase of treasury shares
Share-based compensation
expense
AVEVA minority interest buy out*
Other
Number of
shares
(thousands)
567,069
Capital
2,268
Additional
paid-in capital
2,248
–
–
–
1,964
–
–
–
–
–
–
–
8
–
–
–
–
–
–
–
208
–
–
–
–
Retained
earnings
17,648
3,204
453
3,657
–
(1,447)
(262)
145
(47)
569,033
2,276
2,456
19,694
–
–
–
2,060
–
–
–
–
–
–
–
–
8
–
–
–
–
–
–
–
–
204
–
–
–
–
–
3,477
138
3,615
–
(1,618)
(219)
161
(1,881)
60
19,812
Equity
attributable to
owners of the
parent
Translation
reserve
Non-
controlling
interests
Total
(1,541)
20,623
3,104
23,727
1,555
1,555
–
–
–
–
–
14
669
669
–
–
–
–
–
–
683
3,204
2,008
5,212
216
(1,447)
(262)
145
(47)
69
331
400
–
(138)
–
16
287
3,273
2,339
5,612
216
(1,585)
(262)
161
240
24,440
3,669
28,109
3,477
807
4,284
212
(1,618)
(219)
161
(1,881)
60
25,439
59
6
65
–
(157)
–
23
(2,907)
(38)
655
3,536
813
4,349
212
(1,775)
(219)
184
(4,788)
22
26,094
Dec. 31, 2022
571,093
2,284
2,660
* For more information, please refer to the 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, 2022
F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial
statements
Contents
Note
Segment information
1
Summary of accounting policies
2 Changes in the scope of consolidation
3
4 Research and development expenditures
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
427
440
444
445
445
446
446
447
448
449
451
453
454
455
Note
15
Inventories and work in progress
16 Trade and other operating receivables
17 Other receivables and prepaid expenses
18 Cash and cash equivalents
19 Shareholder’s equity
20 Pensions and other post-employment
benefit obligations
21 Provisions for contingencies and charges
22 Total current and non-current financial liabilities
23 Classification of financial instruments
24 Employees
25 Related party transactions
26 Commitments and contingent liabilities
27 Subsequent events
28 Statutory Auditors’ fees
29 Consolidated companies
455
456
457
457
457
460
464
465
468
473
474
474
475
475
476
All amounts are 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, 2022 were authorized for issue
by the Board of Directors on February 15, 2023. They will be submitted to shareholders for approval at the Annual General Meeting of May
4, 2023.
The Group’s main businesses are described in Chapter 1 of the Universal Registration Document.
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Chapter 5 – Consolidated financial statements at December 31, 2022
Note 1: Summary of 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, 2022. The same accounting methods were used as for the consolidated financial statements for the
year ended December 31, 2021.
The IFRS standards and interpretations as adopted by the European Union are available at the following website: https://finance.ec.europa.eu/
capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/financial-reporting
Standards, interpretations and amendments endorsed by the European Union whose application is
mandatory as of January 1, 2022
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, 2022:
• 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.
IAS 38 - Configuration or Customization Costs in a Cloud Computing Arrangement
The Group has considered the impact of the IFRIC agenda decision issued in April 2021 when accounting for costs of configuring or
customizing a supplier’s application software in a Software as a Service (SaaS) arrangement. This decision clarifies if those costs should be
expensed, either immediately or over the contract duration, or capitalized. The group performed an inventory of those costs and amounts
previously capitalized in 2022. This review has no significant impact on the consolidated financial statements of the Group, and, given the
limited impact, no restatement was made to the opening balance sheet.
Amendments to IAS 37 - Provisions, Contingent Liabilities and Contingent Assets: Onerous Contracts – Cost
of Fulfilling a Contract
On May 14th, 2020, the IASB issued amendments to IAS 37 - Provisions, Contingent Liabilities and Contingent Assets to specify which costs
an entity needs to include when assessing whether a contract is onerous or loss-making. The amendments apply a directly related cost
approach. The costs that relate directly to a contract to provide goods or services include both incremental costs and an allocation of costs
directly related to contract activities. These amendments had no significant impact on the consolidated financial statements of the Group.
Standards, interpretations and amendments unendorsed by the European Union as of December 31, 2022
or whose application is not mandatory as of January 1, 2022
• standards adopted by the European Union:
− amendments to IFRS 17 - Insurance Contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information;
− amendments to IAS 12 - Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction;
− amendments to IAS 1 - Presentation of Financial Statements. IFRS Practice Statement 2: Disclosure of Accounting policies;
− amendments to IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates; – IFRS
17 and amendments - Insurance Contracts;
• 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; Non-current Liabilities with Covenants;
− amendments to IFRS 16 - Leases: Lease Liability in a Sale and Leaseback;
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, 2022. At this stage of analysis, the Group does not expect any material impact on its consolidated financial statements.
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Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
Climate-related matters
The potential impacts on the Group’s assets and liabilities measurement as well as on significant judgements and estimates, from the
climate-related matters, have been analysed through both climate transition risk and opportunities perspective and carbon neutral external
commitments perspective. The Group is committed to net-zero CO2 emissions in its operation by 2030, will be carbon neutral along the
whole of its value chain by 2040 and net zero along the whole value chain by 2050.
To achieve its emission reduction objectives and meet net zero commitments taken, the Group has defined a roadmap and key actions to
enable both its own operations and supply chain’s decarbonization, leading to direct consequences on processes, site transition, R&D and
investment priorities:
• Redesign of the investment monitoring and approval tool in December 2022 to support internal and external reporting, monitor
investments on Zero-CO2 sites and prioritize low-carbon investments;
• Significant investments on both industrial processes and real estate portfolio planned to decarbonize operations by 2030 (Scopes 1 & 2)
in line with company-wide energy climate targets (150 Zero-CO2 sites by 2025, double energy productivity by 2030, 100% of electricity
from renewables by 2030, shift 100% of corporate vehicle fleet to electric vehicles by 2030). Specifically on manufacturing and
distribution centers, the Group has defined a priority list and planned to invest progressively on more electrification, sustainable and
efficient systems (heat pumps, micro grids, solar panels, thermal insulation...) between 2023 and 2030 to achieve net-zero ready
operations by 2030.
Implementation of a process to follow carbon footprint evolution at an early stage of new product development to reduce the footprint of
future generations of products. The Group committed on a step up in R&D in coming years, from an existing circa 5% of Group revenues
dedicated to strategic R&D investment with a strong focus on sustainability. More than 6 billion of euros (absolute amount) have been
invested in R&D between 2017 and 2021.
•
The actual and potential financial links and effects of the Group’s external commitments or the specific climate risks identified are detailed
as follows:
• No material impact to disclose, notably on evaluation and useful life of tangible assets or in the impairment tests performed at Group
Level. The Group is not a capital-intensive company, majority of its sites are leased and not owned, and the individual residual value of its
tangible assets in the most at-risk locations is not material. Additionally, the multi hub position of the Group with agile capacity to relocate
its production in case of climate disaster is a way to significantly mitigate risks and potential effects. Also, the Group has a low
dependence on water in its production processes, and its sites are slightly located in flood zones or coastal zones. Finally, the Group is
on an opportunistic position regarding world’s desire for electrification & other company’s net zero commitments. The Group is currently
working to improve the quantification of investments and additional costs needed as well as opportunities to achieve long-term net zero
carbon commitments, taking into consideration several scenarios. The Group however identify no impairment risk as of December 2022.
• The Schneider Sustainability Impact (SSI), which includes a climate target, 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 (20% weight). 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 (25% weight).
• 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. In 2022, the Group has also linked its bank fundings with the SSI performance with the signature of a KPIs
linked facility.
1.2 – Basis of presentation
The financial statements have been prepared on a historical cost basis, except for the following:
• derivative instruments and certain financial assets, measured at fair value;
• assets held for sale - measured at the lower of carrying amount and fair value less costs to sell;
• defined benefit pension plans - plan assets 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.
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Chapter 5 – Consolidated financial statements at December 31, 2022
1.3 – Use of estimates and assumptions
The preparation of financial statements requires the Group management and subsidiaries 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 and estimates mainly concern:
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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 (Note 14);
the measurement of provisions covering uncertainties over income tax treatment (Note 1.21);
the estimation of the margin at completion for Construction contracts (Note 1.24);
the assumptions retained to evaluate the lease liability (IFRS 16): lease term and discount rate (Note 1.10).
1.4 – Consolidation principles
Subsidiaries, over which the Group exercises exclusive control, either directly or indirectly, are fully consolidated.
The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity.
Accounting policies of subsidiaries, joint-venture and associates have been changed when necessary to ensure consistency with the
policies adopted by the Group.
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.
Under equity method, the net assets and net result of a company are recognized pro rata to the interest held by the Group in the share
capital.
On acquisition of an investment in a joint venture or an associate, goodwill relating to the joint venture or the associate is included in the
carrying amount of the investment.
When the Group’s share of losses in an equity-accounted investment equals or exceed its interest in the entity, the Group does not
recognize further losses, unless it has incurred obligations or made payments on behalf of the other entity.
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.
Any acquisition or disposal of an interest in a subsidiary that doesn’t change the control is considered as a shareholder transaction and
must be recognized directly in equity.
A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to
reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any
consideration paid or received is recognized in a separate reserve within equity attributable to owners.
Intra-group transactions and balances 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).
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5.5 Notes to the consolidated financial statements
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 differential between the cost of acquisition excluding acquisition expenses and 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 allocated to Cash-Generating Units (CGUs) or groups of cash-generating units that benefit from business combination
synergies.
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 and impairment of purchase accounting intangible”.
The full goodwill method is applied at Group level, therefore, non-controlling interests are valued at fair value.
In accordance with IAS 32, put options granted to minority shareholders are recorded as financial liabilities at the option’s estimated strike
price.
The share in the net assets of subsidiaries is reclassified from “Non-controlling interests” to “Purchase commitments over non-controlling
interests” and the differential between the value of the non-controlling interests and the liability, corresponding to the commitment, is
recorded in equity.
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.
The functional currency of an entity is the currency of the primary economic environment in which it carries out its operations. In most cases,
the functional currency corresponds to the local currency. However, a functional currency other than the local currency can be retained for
certain entities, if it represents the currency of the main transactions carried out by the entity and that it ensures faithful representation of its
economic environment.
Translation adjustments are recorded in consolidated equity under “Translation reserve”.
Upon exit from the scope of consolidation, the cumulative translation reserve of a company whose functional currency is not the euro are
recycled in the income statement and are part of the gain or loss on disposal.
The Group applies IAS 29 - Financial Reporting in Hyperinflationary Economies to the Group’s subsidiaries in countries with
hyperinflationary economies (Argentina and Turkey). IAS 29 - Financial Reporting in Hyperinflationary Economies requires the non-monetary
assets and liabilities and income statements of countries with hyperinflationary economies to be restated to reflect the changes in the
general purchasing power of their functional currency, thereby generating a profit or loss on the net monetary position which is recognized
in net income within “Other financial income and expenses”. In addition, the financial statements of the subsidiaries in these countries are
translated at the closing exchange rate of the reporting period concerned, in accordance with IAS 21. In 2022, all the necessary conditions
were met to consider Turkey as a hyperinflationary country within the meaning of IFRS. The Group has applied IAS 29 to Argentina in its
financial statements from January 1, 2018 and to Turkey in its financial statements from January 1, 2022. The Group used the Consumer
Price Index (CPI) for both Argentina and Turkey to remeasure its income statement items, cash flows and non-monetary assets and
liabilities. This index was up 91% for Argentina and up 64% for Turkey compared with 2021.
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Chapter 5 – Consolidated financial statements at December 31, 2022
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 (e.g. 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 amortized cost model.
Intangible assets (mainly trademarks, technologies and customer relationships) 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 and impairment of purchase accounting intangible” assets.
Trademarks
The trademarks are recognized at fair value at the acquisition date. The trademarks fair value is determined using the relief from royalty
method.
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.
Indefinite-lived 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:
•
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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.
Development costs that do not meet these criteria are expensed in the financial year in which they are incurred.
Development costs previously recognized as an expense are not recognized as an asset in a subsequent period.
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.
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5.5 Notes to the consolidated financial statements
1.9 – Property, plant and equipment
Property, plant and equipment is primarily comprised of land, buildings and production equipment and is carried at acquisition cost, less
accumulated depreciation and any accumulated impairment losses.
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:
• 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
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.
Rental payments include fixed payments (net of rental incentives receivable), variable payments based on an index or rate initially measured
using the index or rate as at the commencement date 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.
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Chapter 5 – Consolidated financial statements at December 31, 2022
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.
1.11 – 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 7.8% at December 31, 2022 (6.8% at December 31, 2021).
This rate is based on (i) a long-term interest rate of 1.1%, 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 2022, and is completed by, for Cash-Generating Unit
(CGU) 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.
Impairment tests are performed at the level of the 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 8.6% for Low Voltage, 8.9% for Medium Voltage, 8.7% for Secure Power,
and 8.7% 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.
When 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 selling price less
costs to sell. When the tested CGU comprises goodwill, any impairment losses are firstly deducted from goodwill.
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5.5 Notes to the consolidated financial statements
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. For significant
investments not listed in an active market, the valuation is performed by external experts at least annually and whenever there is an
indication that it may be impaired.
Venture capital (FCPR) / Mutual funds (SICAV) are recognized at fair value through income statement, in accordance with IFRS 9.
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 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).
1.14 – Trade and other operating receivables
Trade and other receivables are measured at their transaction price upon initial recognition and then at amortized cost less any impairment
losses based on expected credit losses model.
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.
Assignment of receivables
When it can be demonstrated that the Group has transferred substantially all the risks and benefits related to assignment of receivables,
particularly the credit risk, the items concerned are derecognized. Otherwise, the operation is considered as a financing operation, and the
receivables remain in the balance sheet assets, with recognition of a corresponding financial liability.
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Chapter 5 – Consolidated financial statements at December 31, 2022
1.15 – Assets held for sale and liabilities of discontinued operations
Assets held for sale
Non-current assets or disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale
transaction rather than through continuing use. This classification occurs when the Group takes the decision to sell them and that the sale is
considered highly probable.
The assets and liabilities held for sale are presented on different lines of the balance sheet. They are measured at the lower of their carrying
amount or fair value less costs to sell. Assets classified as held for sale are no longer depreciated (amortized) as of the date they are
classified as assets or disposal groups held for sale.
When a sale involving the loss of control of the subsidiary is considered highly probable, all the assets and liabilities of this subsidiary are
classified as being held for sale, independently of whether or not the Group retains a residual interest in the entity after its sale.
Discontinued operation
A discontinued operation is a clearly identifiable component that the Group either has abandoned or that is classified as held for sale:
• representing a separate major line of business or geographical area of operations;
• being part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations; or,
• being a subsidiary acquired exclusively with a view to resale.
Once the criteria are met, the profit and loss and the cash flow from discontinued operations are presented separately in the consolidated
income statement and the consolidated cash flow statement for each period.
1.16 – Taxes
Income tax expense
The tax rate is calculated on the basis of the fiscal regulations enacted or substantively enacted at the fiscal year closing date in each
country where the Group’s companies carry out their business. The Group’s applicable tax rate corresponds to the average of the
theoretical tax rates in force in each country, weighted according to profit obtained in each of these countries. The average effective tax rate
is calculated as follows: (current and deferred income tax expense)/(net profit before tax less share of profit of associates, and net profit
from discontinued operations).
Deferred taxes
Deferred taxes are recognized for all temporary differences between the carrying amount of assets and liabilities and their tax base
(excluding if it arises from the initial recognition of goodwill), the tax loss carryforwards and the unused tax credits.
Deferred taxes are based on tax rates and tax rules that have been enacted or substantively enacted by the end of the reporting period and
are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. The effect of any
change in the current and deferred taxes is recognized in P&L, except to the extent that it relates to items recognized on OCI or directly in
equity. In this case, the tax is also recognized in OCI or equity.
When the Group decides not to distribute profits retained by the subsidiary within the foreseeable future, no deferred tax liability is
recognized.
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 recognized 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.
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F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
1.19 – Pensions and other employee benefit obligations
Depending on local practices and laws, the Group’ 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.
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, without any material impact for the Group, clarifies the periods over which employee benefits should be attributed
in allocating the IAS 19 expense.
Defined Benefit plans
Defined Benefit plans are measured using the projected unit credit method.
Expenses recognized in the statement of income are split between operating costs (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. The valuation is
performed by external actuaries.
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”.
Past service cost is recorded in “Other operating income and expenses”.
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.
1.20 – Share-based payments
The Group grants performance shares to senior executives and certain employees.
These equity instruments are measured at fair value, on the date of grant, using the market price discounted from the expected dividend
yield during the vesting period and adjusted for market conditions achievement.
The Group is using the Monte Carlo method to estimate the achievement of Relative Total Shareholder Return (TSR) vs. CAC 40 and a Panel
of peer companies (market conditions).
The number of equity instruments granted can be adjusted during the vesting period to reflect the Group best estimate of non-market
conditions achievement.
Main non-market conditions are the following:
• Adjusted Earnings per Share (EPS) improvement rate;
• Schneider Sustainability External and Relative Index (“SSERI”);
• Service conditions.
An employee benefits expense is recognized with a corresponding increase in equity on a straight-line basis over the vesting period, in
general three years.
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Chapter 5 – Consolidated financial statements at December 31, 2022
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, other than income tax related, 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” since 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.
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.
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F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
The Group qualifies 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 as foreign exchange hedges or as 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. According to 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, system contracts (projects) and software.
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.
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.
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Chapter 5 – Consolidated financial statements at December 31, 2022
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.
Recognition of software revenue
The group generates software-related revenue mainly through subscriptions, licenses, maintenance and services. Revenue is recognized
upon transfer of control of the promised software or service to the customers.
• Subscriptions contracts are either:
− SaaS (Software as a Service: remote access to a cloud software solution, hosting and services) contracts, which are recognized
linearly over the contract term
− On premise subscriptions: containing two separate performance obligations pertaining to on premise software license and
maintenance, the revenue from such arrangements is recognized in line with revenue from arrangements with multiple performance
obligations.
• Software license revenue represents fees earned from granting customers licenses to use the Group’s software. It includes license
revenue of perpetual and periodic license sales of software products and is recognized at a point in time when control is transferred to
the client.
• Maintenance includes annual fees as well as separate support and maintenance contracts. Revenue is recognized over time on a
straight-line basis over the period of the contract.
• Services include notably setup services, training services, customization services. Revenue from these services is recognized over time
as the services are performed.
Backlog and balance sheet presentation
Backlog (as disclosed in Note3) corresponds to the amount of the selling price allocated to the performance obligations that are unsatisfied
(or partially unsatisfied) at closing date and includes binding contracts only.
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 Note 16). 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 performance shares outstanding at the balance sheet date. The dilutive effect of performance
shares is determined by applying the “treasury stock” method.
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.
1.27 – Other operating income and expenses
Material non-recurring operations that could affect operating performance readability are classified under “Other operating income and
expenses”.
They notably include:
• gains or losses from the disposal of activities or groups of assets;
• costs in relation with acquisitions or separation (advisors’ fee, costs from external experts involved in the due diligence process);
• costs in relation with integration (one-off costs expensed in the next three years after acquisition, in relation with upgrade or modification
of existing IT systems, to reach the Group standards);
• significant provisions and impairment losses for property, plant and equipment and intangible assets;
• provisions or costs relating to significant legal risks or litigations;
• gain or loss related to the amendment, curtailment or settlement of a defined benefit plan.
1.28 – Other financial income and expense
Other financial income and expenses notably include:
• bank commissions
• Factoring fees
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F I N A N C I A L S T A T E M E N T S
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
Transaction with AVEVA’s non-controlling interests
On September 21, 2022, the Group confirmed its firm intention to acquire the share capital of AVEVA that it did not already own.
On November 11, 2022, the board of Schneider Electric and the AVEVA Independent Committee announced that they reached an
agreement on the terms of a cash offer of 3,225 pence per AVEVA share. Such acquisition is to be effected by means of a Court approved
scheme of arrangement, under Part 26 of the Companies Act 2006.
On November 25, 2022, the requisite majority of AVEVA’s shareholders approved the Scheme, and passed the Special Resolution to
implement the Scheme during respectively the Court Meeting and the General Meeting. This led to the immediate recognition of a current
financial liability in the Group’s financial statements of GBP 4,039 million (EUR 4,704 million as of November 25, 2022 closing rate). The
liability represents the commitment for the Group to purchase the 123,429,542 outstanding AVEVA shares not already owned as of
November 25, 2022, and the 1,814,217 shares to be issued in the context of AVEVA’s long term incentive plans. The recognition of this
liability triggered an immediate reduction in non-controlling interests for EUR 2,865 million and in the group share of equity for EUR 1,839
million. In addition, the Group recognized transaction costs against equity.
The liability, presented under “Current purchase commitments over non-controlling interests”, amounted to EUR 4,554 million as of
December 31, 2022. In order to meet the certain funds requirements under UK regulation law (and guarantee the availability of funds at
closing date), the Group held at December 31, 2022 an undrawn bridge facility to approximately GBP 2.4 billion (with a twelve months
maturity), a term loan facility of GBP 1.5 billion (with a three-year maturity) and a EUR 423 million cash deposit held at Schneider Electric SE
(classified in Cash and cash equivalents).
The acquisition of the remaining shares of AVEVA was hedged during the second semester 2022 by entering into FX options for a total of
GBP 4,000 million. The EUR 12 million realized loss on the hedging instruments was recorded in “Costs of acquisitions and integrations”
within “Other operating income and expenses” (in this context, hedge accounting is not possible under IFRS).
As of December 31, 2022, all regulatory conditions were met, however the Scheme remained to be sanctioned by the Court.
On January 16, 2023, AVEVA announced that the Court had sanctioned the Scheme to effect the acquisition.
On January 18, 2023, following the deliverance of the Court Order to the Registrar of Companies, the Scheme became effective. AVEVA
shares were unlisted from the London Stock Exchange on January 19, 2023. The transaction has been settled in cash in January 2023.
IFRS 5 application - Non-current Assets Held for Sale and Discontinued Operations
The following businesses have been reclassified as Held for Sale as of December 31, 2022:
Transformer plants in Poland and Turkey
On July 27, 2022, the Group signed an agreement for the disposal of its Transformer plants in Poland and in Turkey to Cahors Group, an
international company specialized in energy distribution, headquartered in France. The businesses have around 800 employees and are
currently reported within Energy management reporting segment.
In accordance with IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations, assets and liabilities of the subsidiaries were
classified respectively as assets and liabilities held for sale as of December 31, 2022 and measured at the lower of net carrying amount and
fair value less costs to sell. A resulting impairment of EUR 75 million was recognized within Other Operating Income and Expenses.
The transaction was completed on January 6, 2023.
Industrial sensors business
On October 27, 2022, the Group announced the signing of a binding agreement with YAGEO to divest its industrial sensors business,
Telemecanique Sensors. Telemecanique Sensors had revenue of around EUR 280 million in 2021, Telemecanique Sensors is reported within
Industrial Automation reporting segment. The all-cash transaction values Telemecanique Sensors at EUR 723 million (Enterprise Value). The
Group will grant YAGEO a license to use the Telemecanique Sensors trademark.
The completion of the proposed transaction is expected to occur in the coming months, subject to the receipt of required regulatory
approvals and employee information consultation process. In accordance with IFRS 5 - Non-current Assets Held for Sale and Discontinued
Operations, the assets and liabilities have been classified as “Assets held for sale” and “Liabilities held for sale”, for EUR 653 million and
EUR 40 million respectively. The assets are mainly intangible assets (including goodwill) for EUR 474 million.
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Chapter 5 – Consolidated financial statements at December 31, 2022
VinZero
On December 8, 2022 the Group entered into an agreement with a European corporate for the sale of RIB Software’s VinZero business.
VinZero is an IT infrastructure solutions group and software partner for architecture, engineering, construction, owner-operator and
manufacturing organizations providing value-add services and consulting. The proposed transaction is subject to customary regulatory
approvals and is expected to close in the first semester of 2023. The business is currently reported within Energy Management reporting
segment.
In accordance with IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations, the assets and liabilities have been classified
as “Assets held for sale” and “Liabilities held for sale”, for EUR 105 million and EUR 33 million respectively. The assets are mainly intangible
assets (including goodwill) for EUR 54 million.
Gutor
On December 23, 2022, the Group entered into an agreement with Latour Capital, a French private equity investor, for the sale of Gutor
Electronics´ operations. Gutor is a global leader in the manufacturing of industrial uninterruptible power supply (UPS) systems and the
provision of related services. Gutor sales in 2021 were approximately EUR 130 million, reported under Energy Management.
Subject to the satisfaction of certain conditions, including customary regulatory approvals, the transaction is expected to close in the first
semester 2023. In accordance with IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations, the assets and liabilities have
been classified as “Assets held for sale” and “Liabilities held for sale”, for EUR 106 million and EUR 49 million respectively. The assets are
mainly working capital items for EUR 63 million and intangible assets (including goodwill) for EUR 34 million.
Acquisitions & disposals of the period
Acquisitions
IGE+XAO
On February 16, 2022, the boards of directors of Schneider Electric SE and of IGE+XAO SA approved the terms of the merger of IGE+XAO
into Schneider Electric. This merger is in line with the intention to position IGE+XAO as an operational entity of Software Division within the
Energy Management reporting segment. The annual general meetings of shareholders of IGE+XAO and Schneider Electric SE held
respectively on May 4 and May 5, 2022, approved the merger of IGE+XAO into Schneider Electric, on the basis of an exchange ratio of 5
Schneider Electric shares for 3 IGE+XAO shares. The merger leading to the dissolution without liquidation of IGE+XAO was effective on May
5, 2022, with a retroactive effect for accounting and tax purposes as at January 1, 2022.
EV Connect Inc.
On June 21, 2022, the Group completed the purchase of a 95.52% controlling stake in EV Connect Inc. which is fully consolidated as of
December 31, 2022, and reports within Energy Management reporting segment. The Group holds an agreement to acquire the remaining
4.48% of non-controlling interests in 2027. The related debt has been recognized in “Non-current purchase commitments over
noncontrolling interests”.
The purchase accounting as per IFRS 3R is not completed as of December 31, 2022. The net adjustment of the opening balance sheet,
resulting mainly from the booking of a preliminary amount of identifiable intangible assets (technology, customer relationship and
trademark), led to the recognition of a EUR 254 million preliminary goodwill at acquisition date.
Autogrid
On July 20, 2022, the Group completed the acquisition of Autogrid, raising its stake from 24.2% to 91.8% controlling stake. Previously,
Autogrid was consolidated under equity method and was treated as if it were disposed of and reacquired at fair value on the acquisition
date, resulting in a non-cash gain in “Other operating income and expenses”. Autogrid is now fully consolidated and reports within Energy
Management reporting segment. The Group holds an agreement to acquire the remaining 8.2% of non-controlling interests in 2027. The
related debt has been recognized in “Non-current purchase commitments over non-controlling interests”.
The purchase accounting as per IFRS 3R is not completed as of December 31, 2022. The net adjustment of the opening balance sheet,
resulting mainly from the booking of a preliminary amount of identifiable intangible assets (technology, customer relationship and
trademark), led to the recognition of a EUR 184 million preliminary goodwill at acquisition date.
Disposals
In 2022, the Group recorded a total amount of EUR 108 million of losses on business disposals, mainly related to the following:
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F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
Russia
Since February 24, 2022 the Group has put on hold new investments in Russia and Belarus as well as international shipments of new orders
destined for these countries. For full year 2021, the Group generated approximately 2% of its total sales from Russia, Belarus was
insignificant.
The Group signed a binding agreement on July 3, 2022 to sell 100% of its shares in its main Russia and Belarus subsidiaries. The terms of
the agreement include a call option exercisable by the Group four years after completion, based on fair value.
The transaction closed on September 27, 2022, resulting in a loss of control by the Group over the business.
The assets and liabilities transferred notably included EUR 81 million of cash and cash equivalents. This is in line with the Group’s objective
to set up a viable business and support employees throughout the process.
For operations not divested as part of this transaction, the Group engaged during the year an orderly shutdown or disposition. Notably, the
group sold its investment in the Electroshield Samara joint venture. The joint venture was accounted for under equity method investment.
The transaction had no material impact on Group financial statements.
In total, the Group incurred EUR 287 million losses from the withdrawal of its operation from Russia, of which EUR 92 million from impairment
of working capital, mainly following customers contracts cancellation and renegotiations, and EUR 195 million from the deconsolidation of its
subsidiaries in Russia and Belarus.
ASCO load banks
On September 30, 2022, the Group closed the transaction for the disposal of the load bank business of ASCO Power Technologies to
Hidden Harbor, a U.S.-based private equity firm. Loadbank is a critical power testing device used to measure, test and improve the
efficiency and effectiveness of power systems across a broad range of industries and applications, and was consolidated within Energy
Management reporting segment.
Eurotherm
On October 31, 2022, the Group closed the transaction for the disposal of its Eurotherm business unit (a global provider of temperature and
power control and measurement solutions) to Watlow Electric Manufacturing Company, a global producer of complete industrial thermal
systems. The business was consolidated within Industrial Automation reporting segment.
Eberle
On November 30, 2022, the Group completed the sale of Eberle Controls GmbH (Eberle) to Eberle’s management and Borromin Capital
Fund IV. Eberle is a German provider of heating and air conditioning solutions for residential, commercial and public buildings. The business
was consolidated within Energy Management reporting segment.
Follow-up on acquisitions and divestments occurred in 2021 with significant effect in 2022
Acquisitions
OSIsoft LLC.
As announced on March 19, 2021, Schneider Electric’s majority-owned subsidiary, AVEVA Group Plc, completed the acquisition of OSIsoft,
for a consideration of EUR 4.5 billion (USD 5.1 billion). OSIsoft has been fully consolidated since the acquisition date, and reports within the
Industrial Automation reporting segment.
The purchase accounting as per IFRS 3R was not completed as of December 31, 2021, and led to the recognition of identifiable intangible
assets (technology for EUR 998 million, customer relationship for EUR 288 million and trademark for EUR 150 million) and to a decrease in
contract liabilities for EUR 71 million from remeasurement at fair value of deferred revenue. The preliminary goodwill recognized at
acquisition date amounted to EUR 3,001 million.
The purchase accounting is complete as of December 31, 2022, which resulted in minor adjustments. The final goodwill recognized and
converted into Euros using the exchange rate at the acquisition date amounts to EUR 2,988 million.
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Chapter 5 – Consolidated financial statements at December 31, 2022
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 USD 260 million (EUR 218 million at the acquisition date),
fully paid in cash. ETAP is consolidated within the Energy Management reporting segment. The Group holds an agreement to acquire the
remaining 20% minority interests in 2025. The related debt is recognized in “Non-current purchase commitments over non-controlling
interests”.
The purchase accounting as per IFRS 3R is complete as of December 31, 2022. ETAP carrying value at acquisition date for net identifiable
assets is EUR 13 million. The net adjustment of the acquired balance sheet is EUR 26 million, resulting mainly from the booking of an amount
of identifiable intangible assets (technology, customer relationship and trademark).
The goodwill recognized amounts to USD 310 million (EUR 261 million at the acquisition date) and includes the forward agreement for the
acquisition of the remaining 20% minority interests in 2025.
Qmerit
On December 20, 2021, the Group acquired 85.85% of the capital of Qmerit, fully consolidated in the 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 in 2026. The related debt has been
recognized in “Non-current purchase commitments over non-controlling interests”.
The purchase accounting as per IFRS 3R is completed as of December 31, 2022. The net adjustment of the opening balance sheet,
resulting mainly from the booking of an amount of identifiable intangible assets (customer relationship and trademark), led to the recognition
of a EUR 269 million goodwill at acquisition date.
2.2 – Impact of changes in the scope of consolidation on the Group cash flow
Changes in the scope of consolidation at December 31, 2022, decreased the Group’s cash position by a net EUR 297 million outflow, as
described below:
(in millions of euros)
Acquisitions
of which OSIsoft LLC
of which Uplight
of which ETAP
of which others
Disposals
FINANCIAL INVESTMENTS NET OF DISPOSALS
Full Year 2022
Full Year 2021
(559)
-
-
-
(559)
262
(297)
(4,577)
(3,534)
(398)
(205)
(440)
346
(4,231)
In 2022, cash outflows mainly relate to the acquisitions of EV Connect and Autogrid as well as other individually not significant acquisitions.
Cash inflows mainly relates to the disposals of Eurotherm and of the load bank business of ASCO Power Technologies, as well as other
individually not significant disposals. The main acquisitions and disposals of the period are described in Note 2.1.
In 2021, OSIsoft acquisition resulted in a net cash outflow for EUR 3,534 million including EUR 3,709 million cash paid and a EUR 175 million
net cash acquired for full year 2021. The remaining cash outflows were due to Qmerit and other individually not significant acquisitions.
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F I N A N C I A L S T A T E M E N T S
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. 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 Chief Executive Officer, 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 Chief Executive Officer and are mainly based on Adjusted EBITA.
Share-based payment is presented under “Central functions & digital costs”.
The Chief Executive Officer 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.
Due to the substantial number of customers served by the Group, to their significant diversity in multiple sectors and to their wide
geographical dispersion, the Group’s largest customer does not exceed 10% of Schneider Electric’s revenue.
3.1 – Information by reporting segment
Full Year 2022
(in millions of euros)
Backlog
Revenue
Adjusted EBITA
Adjusted EBITA (%)
Energy
Management
Industrial
Automation
Central functions
& digital costs
13,156
26,442
5,392
20.4%
3,334
7,734
1,458
18.9%
-
-
(833)
On December 31, 2022, the total backlog to be executed in more than a year amounted to EUR 643 million.
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)
Total
16,490
34,176
6,017
17.6%
Total
11,776
28,905
4,987
17.3%
On December 31, 2021, the total backlog to be executed in more than a year amounted to EUR 640 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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Chapter 5 – Consolidated financial statements at December 31, 2022
(in millions of euros)
Revenue by country market
Non-current assets as of Dec. 31, 2022
(in millions of euros)
Revenue by country market
Non-current assets as of Dec. 31, 2021
Western
Europe
8,304
12,383
Western
Europe
7,382
12,779
of which
France
1,986
2,579
of which
France
1,749
2,604
Asia-
Pacific
of which
China
10,341
5,540
Asia-
Pacific
8,995
5,866
5,154
1,170
of which
China
4,701
1,154
North
America
10,986
16,564
North
America
8,267
15,094
of which
USA
Rest of
the World
9,526
16,203
4,545
957
of which
USA
Rest of
the World
7,148
12,721
4,261
1,296
Total
34,176
35,444
Total
28,905
35,035
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Moreover, the Group follows the share of new economies in revenue:
(in millions of euros)
Revenue - Mature countries
Revenue - New economies
TOTAL
Full Year 2022
Full Year 2021
20,243
13,933
34,176
59%
41%
100%
16,590
12,315
28,905
57%
43%
100%
Mature countries gather mainly Western Europe and North American countries.
Note 4: Research and development expenditures
Research and development expenditures are as follows:
(in millions of euros)
Research and development expenditures in costs of sales
Research and development expenditures in R&D costs *
Capitalized development costs
TOTAL RESEARCH AND DEVELOPMENT EXPENDITURES **
Full Year 2022
Full Year 2021
(448)
(1,040)
(357)
(1,845)
(377)
(855)
(307)
(1,539)
Including EUR 51 million of research and development tax credit in full year 2022 and EUR 44 million in full year 2021
*
** Excluding amortization of R&D costs capitalized
In addition to the R&D expenditures, amortization expenses of capitalized development booked in the cost of sales, amounted to EUR 242
million in 2022 and EUR 239 million in 2021.
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 2022
Full Year 2021
(555)
(504)
(423)
(1)
(539)
(486)
(389)
(21)
IMPAIRMENT LOSSES, DEPRECIATION AND AMORTIZATION EXPENSES
(1,483)
(1,435)
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.
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F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
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
Impairment of assets
Costs of acquisitions and integrations
Others
OTHER OPERATING INCOME AND EXPENSES
Full Year 2022
Full Year 2021
5
(108)
(117)
(180)
(33)
(433)
(11)
196
(21)
(166)
(19)
(21)
In 2022, the losses on business disposals mainly relate to the 2022 divestments described in Note 2. Impairment of assets mainly relates to
Transformers disposal as described in Note 2. The costs of acquisitions and integrations are mainly related to the recent and ongoing
acquisitions of the year. In 2022, it also includes EUR 28 million of share-based payments, corresponding to the acceleration of multiple
AVEVA plans, in line with the terms of AVEVA’s transaction.
In 2021, the gains on business disposals mainly relate to the divestments of Cable Support, IMServ and USMotion. The costs of acquisitions
and integrations are mainly related to the acquisitions of OSIsoft LLC., ETAP, Uplight and Qmerit.
Note 7: Other financial income and expenses
(in millions of euros)
Exchange gains and losses, net
Net monetary gain/(loss) (IAS 29 Hyperinflation)
Financial component of defined benefit plan costs
Dividends received
Fair value adjustment of financial assets
Financial interests - IFRS16
Effect of discounting & undiscounting
Other financial expenses, net
OTHER FINANCIAL INCOME AND EXPENSES
Full Year 2022
Full Year 2021
(27)
1
(37)
3
2
(34)
18
(35)
(109)
(8)
-
(39)
3
8
(38)
(1)
(6)
(81)
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Chapter 5 – Consolidated financial statements at December 31, 2022
Note 8: Income tax expenses
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
Withholding taxes
Other elements without tax bases (current or deferred)
Other permanent differences
INCOME TAX EXPENSE
EFFECTIVE TAX RATE
EFFECTIVE TAX RATE WITHOUT RUSSIA DECONSOLIDATION
Full Year 2022
Full Year 2021
(1,195)
(16)
(1,211)
(861)
(105)
(966)
Full Year 2022
Full Year 2021
3,477
(1,211)
(59)
29
4,718
23.3%
(1,101)
107
24
(79)
(80)
(82)
(1,211)
25.7%
24.6%
3,204
(966)
(69)
84
4,155
23.1%
(959)
102
33
(70)
(48)
(24)
(966)
23.2%
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).
Restating the EUR 195 million Russia and Belarus deconsolidation impact from the profit before tax (no tax impact attached), the effective
tax rate would be 24.6%.
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F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
Note 9: Goodwill
9.1 – Main items of goodwill
Group goodwill is broken down by Cash Generating Units (CGUs) as follows:
(in millions of euros)
Energy Management:
Low Voltage
Medium Voltage
Secure Power
Industrial Automation
TOTAL GOODWILL
Dec. 31, 2022
Dec. 31, 2021
14,570
9,060
2,243
3,267
10,566
25,136
13,944
8,496
2,245
3,203
10,779
24,723
The Group performed the annual impairment test of all the CGUs using the same methodology as the one used on previous periods and
described in Note 1.11.
Impairment tests performed in 2022 did not trigger any impairment losses on the CGUs’ assets.
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.
Given the volatility environment of interest rates and its impact on discount rates, the Group increased the sensitivity analysis up to 1.0 point
increase of the discount rate. It shows that no impairment losses would be recognized for each CGU in such a case.
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 YEAR
including cumulative impairment losses
Acquisitions & Disposals
Movements from acquisitions and disposals are described in Note 2.
Other changes
Reclassifications mainly relates to Assets held for sale described in Note 2.
Translation adjustments mainly concern goodwill denominated in US dollar and UK pound sterling.
Dec. 31, 2022
Dec. 31, 2021
24,723
387
(119)
(536)
681
25,136
(367)
19,956
3,717
(118)
-
1,168
24,723
(367)
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Chapter 5 – Consolidated financial statements at December 31, 2022
Note 10: Intangible assets
10.1 – Change in intangible assets
Gross value
(in millions of euros)
Dec. 31, 2020
Trademarks
Software
Development
Projects (R&D)
2,495
964
3,478
Acquisitions
Translation adjustments
Reclassifications
Changes in scope of consolidation and other
–
162
41
163
22
17
19
19
Dec. 31, 2021
2,861
1,041
Acquisitions
Translation adjustments
Reclassifications
Reclassifications to assets held for sale
Changes in scope of consolidation and other
–
107
1
–
24
26
3
14
(6)
(3)
Dec. 31, 2022
2,993
1,075
307
61
(14)
(9)
3,823
357
37
(107)
(39)
6
4,077
Acquired
technologies
and customer
relationships
3,292
4
338
(101)
1,253
4,786
1
129
(53)
(17)
13
Other
166
–
18
28
4
Total
10,395
333
596
(27)
1,430
216
12,727
2
21
55
(1)
7
386
297
(90)
(63)
47
4,859
300
13,304
Amortization and impairment
(in millions of euros)
Dec. 31, 2020
Amortization
Impairment
Translation adjustments
Reclassifications
Changes in scope of consolidation and other
Trademarks
Software
Development
Projects (R&D)
Acquired
technologies
and customer
relationships
(424)
(834)
(2,292)
(1,649)
(30)
–
(3)
(29)
–
(59)
–
(13)
38
10
(241)
(3)
(45)
(74)
1
(353)
(20)
(143)
90
6
Other
(163)
(5)
–
(8)
2
–
Total
(5,362)
(688)
(23)
(212)
27
17
Dec. 31, 2021
(486)
(858)
(2,654)
(2,069)
(174)
(6,241)
Amortization
Impairment
Translation adjustments
Reclassifications
Reclassifications to assets held for sale
Changes in scope of consolidation and other
(40)
(9)
(10)
(1)
–
–
(70)
–
(2)
31
5
3
(244)
(4)
(26)
49
25
13
(372)
(29)
(45)
41
7
27
(6)
3
(5)
(30)
–
(1)
(732)
(39)
(88)
90
37
42
Dec. 31, 2022
(546)
(891)
(2,841)
(2,440)
(213)
(6,931)
Net value
(in millions of euros)
Dec. 31, 2020
Dec. 31, 2021
Dec. 31, 2022
Trademarks
Software
Development
Projects (R&D)
2,071
2,375
2,447
130
183
184
1,186
1,169
1,236
Acquired
technologies
and customer
relationships
1,643
2,717
2,419
Other
3
42
87
Total
5,033
6,486
6,373
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8
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Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
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
Impairment losses of intangible assets other than goodwill
TOTAL *
Full Year 2022
Full Year 2021
732
39
771
688
23
711
*
Includes amortization & impairment of intangible assets from purchase price allocation for EUR 424 million for the year 2022 (EUR 410 million in 2021)
10.2 – Trademarks
On December 31, 2022, the main trademarks recognized were as follows:
(in millions of euros)
Dec. 31, 2022
Dec. 31, 2021
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 NET BOOK VALUE
Indefinite-lived brands are tested on a yearly basis for impairment.
1,724
162
133
117
86
52
50
39
84
2,447
1,637
163
146
110
91
49
65
42
72
2,375
In 2022, the Group reviewed the value of the main trademarks in accordance with valuation model describe in Note 1.8. 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 indefinite-lived brands in 2022 did not show any impairment risk.
The sensitivity analysis on the test hypothesis shows that no material impairment losses would be recognized in the following scenarios:
• 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 royalty rate.
Given the volatility environment of interest rates and its impact on discount rates, the Group increased the sensitivity analysis up to 1.0 point
increase of the discount rate. It shows that no material impairment losses would be recognized for each brand in such a case.
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Chapter 5 – Consolidated financial statements at December 31, 2022
Note 11: Property, plant and equipment
Changes in property, plant and equipment in 2022 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, 2020
Acquisitions
Disposals
Translation adjustments
Reclassifications
Changes in scope of consolidation and other
Dec. 31, 2021
Acquisitions
Disposals
Translation adjustments
Reclassifications
Reclassifications to assets held for sale
Changes in scope of consolidation and other
Dec. 31, 2022
Amortization and impairment
(in millions of euros)
Dec. 31, 2020
Depreciation and impairment
Reversals
Translation adjustments
Reclassifications
Changes in scope of consolidation and other
Land
181
1
(3)
7
4
9
199
3
(26)
–
(4)
(6)
(1)
165
Land
(23)
(7)
1
(1)
1
1
Buildings
1,990
32
(81)
64
48
(10)
2,043
28
(94)
28
79
(47)
(36)
Machinery and
equipment
4,597
102
(198)
170
150
(26)
4,795
127
(186)
59
211
(124)
(77)
2,001
4,805
Buildings
(1,122)
Machinery and
equipment
(3,593)
(93)
67
(35)
2
14
(255)
178
(125)
26
30
Other
1,146
401
(109)
52
(234)
(3)
1,253
563
(95)
26
(295)
(19)
(19)
1,414
Other
(592)
(79)
77
(23)
(2)
11
Dec. 31, 2021
(28)
(1,167)
(3,739)
(608)
Depreciation and impairment
Reversals
Translation adjustments
Reclassifications
Reclassifications to assets held for sale
Changes in scope of consolidation and other
(1)
13
(1)
–
–
–
(94)
75
(15)
–
26
21
(274)
174
(49)
–
105
61
(78)
70
(12)
–
9
5
Rights of use of
assets (IFRS 16)
1,619
349
(113)
61
–
53
Total
9,533
885
(504)
354
(32)
23
1,969
10,259
356
(68)
22
–
(10)
(2)
1,077
(469)
135
(9)
(206)
(135)
2,267
10,652
Rights of use of
assets (IFRS 16)
(584)
(310)
18
(14)
–
(1)
(891)
(308)
8
(4)
–
3
(18)
Total
(5,914)
(744)
341
(198)
27
55
(6,433)
(755)
340
(81)
–
143
69
Dec. 31, 2022
(17)
(1,154)
(3,722)
(614)
(1,210)
(6,717)
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2
C
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3
C
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4
C
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5
C
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6
C
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7
C
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8
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Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
Net value
(in millions of euros)
Dec. 31, 2020
Dec. 31, 2021
Dec. 31, 2022
Land
158
171
148
Buildings
Machinery and
equipment
868
876
847
1,004
1,056
1,083
Other
554
645
800
Rights of use of
assets (IFRS 16)
1,035
1,078
1,057
Total
3,619
3,826
3,935
Reclassifications primarily correspond to assets put into use.
The cash impact of purchases of property, plant and equipment in 2022 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 2022
Full Year 2021
(1,077)
356
14
(707)
(885)
349
(7)
(543)
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
IFRS 16 debt by maturity:
(in millions of euros)
2022
2023
2024
2025
2026
2027
2028
2029
2030 and beyond
TOTAL
Full Year 2022
Full Year 2021
750
5
755
726
18
744
Dec. 31, 2022
Dec. 31, 2021
–
282
224
167
133
90
59
50
106
248
235
181
132
102
72
50
58
54
1,111
1,132
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Chapter 5 – Consolidated financial statements at December 31, 2022
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, 2021
Dec. 31, 2022
CLOSING VALUE DEC. 31, 2020
Net Income/(loss)
Dividends distribution
Perimeter changes
Translation impacts & others
CLOSING VALUE DEC. 31, 2021
Net Income/(loss)
Dividends distribution
Perimeter changes
Translation impacts & others
CLOSING VALUE DEC. 31, 2022
Delixi
Sub-Group
Uplight
Planon
Fuji
Electrics
Electroshield
Samara
Sunten
Electric
Equipments
Other
Total
50.0%
50.0%
29.4%
29.4%
25.0%
25.0%
367
81
(22)
–
38
464
52
(25)
–
(10)
481
–
(7)
–
398
(1)
390
(28)
–
1
51
414
–
(1)
–
113
–
112
(2)
–
–
–
110
36.8%
36.8%
140
13
(2)
–
–
151
24
(14)
–
(6)
155
60.0%
0%
25.0%
25.0%
10
(4)
–
–
1
7
(9)
–
–
2
–
44
2
(2)
–
(6)
38
2
–
–
(4)
36
37
–
(3)
–
38
72
(10)
(2)
(14)
(1)
45
598
84
(29)
511
70
1,234
29
(41)
(13)
32
1,241
Electroshield Samara was disposed on November 2, 2022.
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, based in China, is specialist in manufacturing, retail and distribution of low voltage products.
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 YEAR
Dividends paid
Dec. 31, 2022
Dec. 31, 2021
814
502
1,316
619
102
595
1,316
1,354
137
105
50
895
677
1,573
586
168
819
1,573
1,418
201
162
45
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2
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3
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4
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5
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6
C
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7
C
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8
C
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9
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Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
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)
% of interest
Acquisitions
disposals
Dec. 31, 2022
Fair value
through
P&L
Fair value
through
Equity
Dec. 31, 2021
FX &
others
Fair value
Fair value
LISTED FINANCIAL ASSETS:
Gold Peak Industries Holding Ltd
Others (Unit gross value lower than EUR 3 million)
3.2%
TOTAL LISTED FINANCIAL ASSETS
UNLISTED FINANCIAL ASSETS:
Funds
SE Ventures Funds of Funds in Portfolio
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
SE Ventures - Claroty
SE Ventures - Sense
SE Ventures - Augury
SE Ventures - Scandit
SE Ventures - AnyVision
SE Ventures - Verkor
SE Ventures - Titan Advanced Energy Solutions
SE Ventures (Unit fair value lower than EUR 10 million)
Star Charge
Others (Unit fair value lower than EUR 10 million)
TOTAL UNLISTED FINANCIAL ASSETS
PENSIONS ASSETS
OTHER
TOTAL NON-CURRENT FINANCIAL ASSETS
32.1%
29.9%
100.0%
63.1%
28.6%
19.9%
5.8%
8.3%
3.0%
2.4%
9.4%
12.2%
19.2%
1.3%
–
–
–
8
(10)
13
–
–
1
1
47
28
–
6
–
2
–
34
–
22
152
38
(29)
161
–
–
–
(3)
(4)
7
–
(1)
3
–
–
0
–
–
–
–
–
–
–
–
2
2
–
4
–
–
–
–
–
–
–
–
–
–
–
7
6
3
1
6
1
(32)
–
–
(8)
(119)
–
(127)
–
(1)
(1)
12
(1)
(2)
1
–
–
–
3
1
2
1
–
1
–
(5)
–
4
17
(11)
48
53
2
12
14
96
18
62
7
10
18
4
61
46
34
19
14
13
12
112
29
42
597
280
234
2
13
15
79
33
44
6
11
14
3
11
10
26
9
13
4
11
115
29
16
434
370
215
1,125
1,034
The fair value of investments listed in an active market corresponds to the stock price on the balance sheet date.
“Others” include mainly security deposits and contributions to US employee deferred compensation trusts (“rabbi trusts”).
SE Ventures” is a corporate venture capital fund created in partnership with Schneider Electric. SE Ventures current portfolio is composed
of direct investments in various start-up companies and funds of funds.
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Chapter 5 – Consolidated financial statements at December 31, 2022
Note 14: Deferred taxes by nature
Deferred taxes by type can be analyzed as follows:
(in millions of euros)
Dec. 31, 2022
Dec. 31, 2021
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
724
197
466
(4)
(957)
164
141
731
1,616
885
689
240
515
10
(1,040)
187
222
823
1,820
997
Deferred tax assets recorded in respect of tax losses carried forward on December 31, 2022 essentially concern France (EUR 468 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. Unrecognized deferred tax losses amount EUR 156 million as of December 31, 2022 and
are mainly related to Spain.
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 LOSSES
NET:
Raw materials
Production work in progress
Semi-finished and finished products
Finished goods
Solution work in progress
INVENTORIES AND WORK IN PROGRESS, NET
Dec. 31, 2022
Dec. 31, 2021
2,021
367
1,519
681
200
4,788
(232)
(9)
(189)
(8)
(4)
(442)
1,789
358
1,330
673
196
4,346
1,832
295
1,323
696
199
4,345
(187)
(9)
(165)
(8)
(5)
(374)
1,645
286
1,158
688
194
3,971
R
E
P
O
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T
I
N
T
E
G
R
A
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E
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1
C
H
2
C
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3
C
H
4
C
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5
C
H
6
C
H
7
C
H
8
C
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9
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Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
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
Dec. 31, 2022
Dec. 31, 2021
5,675
1,662
389
276
8,002
(489)
7,514
6,537
438
174
102
119
144
5,141
1,500
510
176
7,327
(498)
6,829
6,091
324
163
79
100
72
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 2022
Full Year 2021
(498)
(133)
58
70
4
10
(489)
(510)
(82)
30
67
(25)
22
(498)
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
Dec. 31, 2022
Dec. 31, 2021
1,662
(1,840)
(178)
1,500
(1,570)
(70)
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Chapter 5 – Consolidated financial statements at December 31, 2022
Note 17: Other receivables and prepaid expenses
(in millions of euros)
Other receivables
VAT receivables
Current income tax receivables
Other tax receivables
Derivative instruments
Prepaid expenses
Dec. 31, 2022
Dec. 31, 2021
423
713
596
41
79
303
550
687
478
62
48
173
OTHER RECEIVABLES AND PREPAID EXPENSES
2,155
1,998
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, 2022
Dec. 31, 2021
1,716
693
1,577
3,986
(123)
3,863
551
438
1,633
2,622
(159)
2,463
Non-recourse factorings of trade receivables were realized in 2022 for a total amount of EUR 264 million, compared with EUR 50 million in
2021. Substantially all risks and rewards have been transferred.
Note 19: Shareholders’ equity
19.1 – Capital
Share capital
The company’s share capital at December 31, 2022 amounted to EUR 2,284,371,684 represented by 571,092,921 shares with a par value of
EUR 4, all fully paid up.
On December 31, 2022, a total of 598,336,796 voting rights were attached to the 571,092,921 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, 2020 were as follows:
(in number of shares and in euros)
SHARE CAPITAL AT DEC. 31, 2020
Cancellation of own shares
Capital increase
SHARE CAPITAL AT DEC. 31, 2021
Cancellation of own shares
Capital increase
SHARE CAPITAL AT DEC. 31, 2022
Cumulative number
of shares
Share capital
567,068,555
2,268,274,220
–
1,964,887
–
7,859,548
569,033,442
2,276,133,768
–
2,059,479
–
8,237,916
571,092,921
2,284,371,684
In 2022, the share premium account increased by EUR 204 million following the increases in capital.
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Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
19.2 – Earnings per share
(in thousands of shares and in euros per share)
Issued shares (Net of treasury 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 2022
Full Year 2021
Basic
Diluted
Basic
Diluted
558,129
–
–
558,129
8.45
6.23
558,129
3,348
3,684
565,161
8.35
6.15
556,432
–
–
556,432
7.47
5.76
556,432
4,566
3,684
564,682
7.36
5.67
In 2022, the Group paid out the 2021 dividend of EUR 2.90 per share, for a total of EUR 1,618 million.
At the Shareholders’ Meeting of May 5, 2023, shareholders will be asked to approve a dividend of EUR 3.15 per share for fiscal year 2022.
On December 31, 2022 Schneider-Electric SE had distributable reserves in an amount of EUR 2,941 million (versus EUR 2,856 million at
December 31, 2021, not including profit for the year).
19.4 – Share-based payments
Nature and extent of existing share-based payments
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.
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.
The main characteristics of these plans were as follow at December 31, 2022:
Plan no.
Date of Annual Shareholders’ Meeting
Date of the grant by the Board
Vesting date
End of holding period
Number of performance shares
Outstanding as of Dec. 31, 2021
Granted in 2022
Delivered in 2022
Canceled in 2022
Outstanding as of Dec. 31, 2022
LTIP 2019
Plan 32
Plan 33
Plan 34
Plan 35
LTIP 2020
LTIP 2021
LTIP 2022
TOTAL
Plan 36
Plan 37
Plan 37bis
Plan 37ter
Plan 38
Plan 39
Plan 39bis
Plan 39ter
Plan 40
Plan 41
Plan 41bis
Plan 41ter
Apr. 25, 2016
Apr. 25, 2016
Apr. 25, 2016
Apr. 25, 2016
Apr. 25, 2017
Apr. 25, 2017
Apr. 25, 2017
Apr. 25, 2017
Apr. 25, 2018
Apr. 25, 2018
Apr. 25, 2018
Apr. 25, 2018
Apr. 25, 2019
Apr. 25, 2019
May 5, 2022
May 5, 2022
Mar. 26, 2019 Mar. 24, 2020 Mar. 25, 2021 Mar. 24, 2022
Mar. 26, 2019 Mar. 24, 2020 Mar. 25, 2021 Mar. 24, 2022
Jul. 24, 2019 Oct. 21, 2020
July 27, 2022
Oct. 23, 2019 Oct. 21, 2020 Oct. 26, 2021 Oct. 26, 2022
July 29, 2021
Mar. 28, 2022 Mar. 24, 2023 Mar. 25, 2024 Mar. 24, 2025
Mar. 28, 2022 Mar. 24, 2023 Mar. 25, 2024 Mar. 24, 2025
July 27, 2025
Jul. 25, 2022 Oct. 23, 2023
Oct. 24, 2022 Oct. 23, 2023 Oct. 26, 2024 Oct. 26, 2025
July 29, 2024
Mar. 27, 2023
for Plan 32
Mar. 24, 2024
for Plan 36
Mar. 25, 2025
for Plan 38
Mar. 24, 2026
for Plan 40
2,208,429
–
(2,138,217)
(70,212)
2,113,541
–
(1,500)
(98,538)
1,541,917
–
(1,129)
(61,069)
–
1,423,558
(331)
(20,903)
5,863,887
1,423,558
(2,141,177)
(250,722)
–
2,013,503
1,479,719
1,402,324
4,895,546
Schneider Electric SE has not created shares in 2022 to deliver vested plans but used existing treasury shares.
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Chapter 5 – Consolidated financial statements at December 31, 2022
Determination of fair values
In accordance with the accounting policies described in Note 1.20, the below fair value was calculated for each plan:
LTIP 2019
LTIP 2020
LTIP 2021
LTIP 2022
IFRS 2 expense
The expense recorded under “Selling, general and administrative expenses” breaks down as follows:
(in millions of euros)
Group LTIP
Aveva
Other
TOTAL
Fair Value per
share
(in euros)
Plan no.
Plan 32
Plan 33 – ExCom
Plan 33 – Other
Plan 34
Plan 35
Plan 36
Plan 37 – ExCom
Plan 37 – Other
Plan 37bis
Plan 37ter – ExCom
Plan 37ter – Other
Plan 38
Plan 39 – ExCom
Plan 39 – Other
Plan 39bis
Plan 39ter
Plan 40
Plan 41 – ExCom
Plan 41 – Other
Plan 41bis
Plan 41ter
57.3
59.0
59.9
64.6
71.3
52.9
55.2
57.8
90.7
85.3
89.3
93.4
97.3
102.9
116.6
117.5
119.0
123.0
128.8
107.8
111.0
Full Year 2022
Full Year 2021
114
34
18
166
118
36
7
161
In 2022, in relation with the terms of AVEVA’s transaction, a EUR 28 million share-based payments was recognized in “Other income and
expenses” corresponding to the acceleration of multiple AVEVA plans.
Worldwide Employee Stock Purchase Plan
Every year, Schneider Electric gives its employees the opportunity to become group shareholders thanks to employee share issues. In
countries that meet legal and fiscal requirements, the classic plan has been proposed to employees.
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.
On May 10, 2022 the Group gave its employees the opportunity to purchase shares at a price of EUR 117.51 per share, as part of its
commitment to employee share ownership. This represented a 15% discount to the reference price of EUR 138.26 calculated as the average
opening price quoted for the share during the 20 days preceding the Chief Executive Officer’s decision to launch the employee share issue.
Altogether, 1.8 million shares were subscribed, increasing the capital by EUR 209 million as of July 6, 2022. The value of the lock-up cost is
higher than the discount cost. Therefore, the Group did not recognize any cost related to the transaction.
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Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
19.5 – Schneider Electric SE treasury shares
On December 31, 2022, the Group held 11,978,255 Schneider Electric shares in treasury stock, which have been recorded as a deduction
from retained earnings.
The Group has repurchased 1,659,933 shares for a total amount of EUR 219 million in 2022.
19.6 – Income tax recorded in equity
Total income tax recorded in equity amounts to EUR 107 million as of December 31, 2022 and can be analyzed as follows:
(in millions of euros)
Dec. 31, 2022
Dec. 31, 2021
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
19
(13)
100
(3)
103
23
(15)
125
(3)
130
(4)
2
(25)
–
(27)
In 2022, the Group recognized a current financial liability which represents the commitment to purchase the outstanding AVEVA shares not
already owned and the shares to be issued in the context of AVEVA’s long term incentive plans. The recognition of this liability triggered an
immediate reduction in non-controlling interests for EUR 2,865 million (Note 2).
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 57% (2021: 62%) and 24% (2021: 22%) of the Group’s total Defined Benefit Obligations (DBO) on pensions. The majority of benefit
obligations under these plans, which represent 92% of the Group’s total commitment at December 31, 2022, 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. At December 31,
2022, 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.
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Chapter 5 – Consolidated financial statements at December 31, 2022
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.
In October 2022, a contract was purchased from an insurer for USD 518 million covering all current retirees and a portion of non-retirees of
Invensys pension plan. The buy-in contract was purchased using assets from the pension trust and is accounted for at fair value as an
investment of the trust. This transaction resulted in an additional net experience adjustment of USD 24 million recognized in other
comprehensive income in 2022.
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
4.82%
2.58%
2.12%
2.60%
4.85%
3.63%
2.05%
3.64%
5.35%
n.a.
2.77%
n.a.
Group weighted average rate
Of which United Kingdom
Of which United States
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
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 2022 discount rate is 3.75%.
The rate of compensation increases includes both the salary increase and inflation rate if relevant.
Weighted average duration of defined benefit obligations plans:
Weighted average duration in years
9.9
12.3
9.7
12.4
9.4
11.2
Total
Of which United Kingdom
Of which United States
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
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F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
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:
(in millions of euros)
Dec 31, 2020
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
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, 2022
of which UK
of which US
Defined benefit
obligations
Plan assets
Asset ceiling
Net Liability
(10,016)
8,521
(66)
2
25
(159)
–
(198)
(94)
(52)
532
(6)
–
9
701
(631)
(77)
(9,686)
(6,017)
(2,170)
(121)
(2)
84
(203)
(242)
(131)
(117)
537
(6)
10
2,395
102
(32)
(6,922)
(3,977)
(1,663)
–
–
(1)
–
121
120
86
30
(478)
6
136
–
(117)
606
77
8,871
6,524
1,692
(79)
170
91
121
41
(473)
6
130
(2)
(2,284)
(143)
6,196
4,339
1,287
(67)
–
–
–
(1)
–
(1)
(1)
–
–
–
–
–
(133)
(9)
–
(210)
(184)
-
(4)
(4)
(4)
–
26
8
(180)
(140)
(1,562)
(66)
2
24
(160)
121
(79)
(9)
(22)
54
–
136
9
451
(34)
–
(1,025)
323
(478)
(121)
(2)
5
(207)
170
(155)
(14)
(76)
64
–
130
8
137
(33)
(32)
(906)
222
(376)
The Group defined benefit obligations of EUR 6,922 million (2021: EUR 9,686 million) are broken down as EUR 6,678 million (2021: EUR
9,470 million) for post-employment benefits and EUR 244 million (2021: EUR 216 million) for other post-employment and long-term benefits.
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Chapter 5 – Consolidated financial statements at December 31, 2022
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, 2022
Dec. 31, 2021
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
(6,334)
6,196
(180)
(318)
(588)
(906)
280
(1,186)
(9,052)
8,871
(210)
(391)
(634)
(1,025)
370
(1,395)
* 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 2022
Full Year 2021
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
(81)
(2,490)
176
2,284
(26)
(137)
(146)
110
(121)
(522)
(58)
117
133
(451)
259
116
The table below shows the expected timing of benefit payments under pension and other post-employment benefit plans for the next 3
years:
(in millions of euros)
United Kingdom
United States
Rest of the World
315
309
306
102
88
88
72
65
69
Total
489
463
463
2023
2024
2025
Plans asset allocation:
(in millions of euros)
Equity
Bonds
Others
TOTAL
20.2 – Sensitivity analysis
Dec. 31, 2022
Dec. 31, 2021
5%
73%
22%
100%
6%
80%
14%
100%
The effect of a ± 0.5% change in the discount rate and in the rate of compensation increases on the 2022 Defined Benefit Obligations is as
follows:
(in millions of euros)
Discount rate
Rate of compensation increases
+0.5%
(197)
81
-0.5%
214
(78)
+0.5%
(73)
–
-0.5%
+0.5%
79
–
(60)
46
-0.5%
65
(33)
+0.5%
(330)
127
-0.5%
358
(111)
United Kingdom
United States
Rest of the World
Total
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5.5 Notes to the consolidated financial statements
Note 21: Provisions for contingencies and charges
(in millions of euros)
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
Additions
Utilizations
Reversals of surplus provisions
Translation adjustments
Changes in the scope of
consolidation and other
Dec. 31, 2022
of which long-term portion
Economic risks
Customer risks
Products risks
Environmental
risks
Restructuring
Other risks
Provisions
275
161
52
(48)
(6)
13
(16)
270
169
40
(63)
–
9
(50)
206
130
154
103
12
(21)
–
9
(7)
147
104
36
(50)
(1)
7
10
149
97
630
137
206
(150)
(39)
31
(3)
675
150
240
(233)
(23)
–
25
684
155
259
226
8
(13)
–
23
73
350
315
39
(71)
(1)
12
(10)
319
278
250
15
130
(194)
(26)
5
(5)
160
12
144
(113)
(7)
(1)
(12)
171
8
362
288
126
(100)
(15)
21
28
422
341
162
(116)
(42)
14
61
501
326
1,930
930
534
(526)
(86)
102
70
2,024
1,091
661
(646)
(74)
41
24
2,030
994
Provisions are recognized following the principles described in Note 1.21.
Reconciliation with cash flow statement:
(in millions of euros)
Increase of provision
Utilization of provision
Reversal of surplus provision
Provision variance excluding employee benefit obligation
Employee benefit obligation net variance contribution to plan assets
INCREASE/(DECREASE) IN PROVISIONS IN CASH-FLOW STATEMENT
Full Year 2022
Full Year 2021
661
(646)
(74)
(59)
91
32
534
(526)
(86)
(78)
24
(54)
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Chapter 5 – Consolidated financial statements at December 31, 2022
Note 22: Total current and non-current financial
liabilities
The breakdown of net debt is as follows:
(in millions of euros)
Bonds
Other bank borrowings
Short-term portion of bonds
Short-term portion of long-term debt
NON-CURRENT FINANCIAL LIABILITIES
Commercial paper
Accrued interest
Other short-term borrowings
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 FINANCIAL DEBT excl. purchase commitments over non-controlling interests
Non-current purchase commitments over non-controlling interests
Current purchase commitments over non-controlling interests
NET FINANCIAL DEBT incl. purchase commitments over non-controlling interests
22.1 – Breakdown by maturity
(in millions of euros)
2022
2023
2024
2025
2026
2027
2028
2029 and beyond
TOTAL
22.2 – Breakdown by currency
(in millions of euros)
Euro
US Dollar
Brazilian Real
Indian Rupee
Algerian Dinar
Other
TOTAL
Dec. 31, 2022
Dec. 31, 2021
8,627
42
(1,299)
(40)
7,330
1,491
39
141
123
1,299
40
3,133
10,463
(3,986)
6,477
194
4,554
11,225
8,234
51
(706)
(25)
7,554
950
38
317
159
706
25
2,195
9,749
(2,622)
7,127
176
–
7,303
Dec. 31, 2022
Dec. 31, 2021
Nominal
Interests
Nominal
–
3,133
1,000
1,047
1,397
1,741
756
1,389
10,463
–
109
86
78
72
54
23
81
503
2,195
1,325
996
1,045
1,397
1,240
757
794
9,749
Dec. 31, 2022
Dec. 31, 2021
10,236
41
16
77
13
80
10,463
8,803
737
13
84
22
90
9,749
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F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
22.3 – Bonds
(in millions of euros)
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 2027
Schneider Electric SE 2028
Schneider Electric SE 2029
Schneider Electric SE 2032
Dec. 31, 2022
Dec. 31, 2021
Interest rate
Maturity
–
500
799
998
747
300
651
747
497
745
498
756
795
594
706
499
798
997
746
300
651
746
497
744
–
757
793
–
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
3.250% fixed
1.500% fixed
0.250% fixed
3.500% fixed
September 2022
June 2023
September 2023
September 2024
March 2025
October 2025
June 2026
December 2026
April 2027
June 2027
November 2027
January 2028
March 2029
November 2032
TOTAL
8,627
8,234
Schneider Electric SE has issued bonds on different markets:
• as part of its Euro Medium Term Notes (EMTN) program, bonds traded on the Paris stock exchange. Issues that had not yet matured as
of December 31, 2022 are as follows:
− 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 November 2022, at a rate of 3.25%, maturing in November 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;
− EUR 600 million worth of bonds issued in November 2022, at a rate of 3.50%, maturing in November 2032.
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 2022, the debt component recorded at net book value amounts to EUR 651 million and the
optional component to EUR 42 million.
The initial conversion and/or exchange ratio of the Bonds was one share per Bond with a nominal value set at EUR 176.44 and has been
adjusted to 1.003 shares per bond in May 2022. 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.
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Chapter 5 – Consolidated financial statements at December 31, 2022
22.4 – Cash flow statement impact
(in millions of euros)
Bonds
Other borrowings
Bank overdrafts
TOTAL CURRENT AND NON-CURRENT
FINANCIAL LIABILITIES
Dec. 31, 2021
Cash
variations
Scope
impacts
Forex`
and others
Dec. 31, 2022
Non-cash variations
8,234
1,356
159
9,749
263
384
(70)
577
–
(1)
–
(1)
130
(26)
34
138
8,627
1,713
123
10,463
22.5 – Purchase commitments over non-controlling interests
(in millions of euros)
Current portion
Non-current portion
TOTAL PURCHASE COMMITMENTS OVER NON-CONTROLLING INTEREST
Maturity
Dec. 31, 2022
Dec. 31, 2021
2023
2025–2026
4,554
194
4,748
–
176
176
Current portion corresponds to the commitment over AVEVA’s non-controlling interests following the transaction described in note 2.
Non-current portion corresponds to the commitments over non-controlling interests of notably ETAP, Qmerit, EV Connect, Energy Sage &
Autogrid.
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F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
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.
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 *
Non-current purchase commitments
over non-controlling interests
Other long-term debt
TOTAL NON-CURRENT LIABILITIES
Short-term portion of bonds *
Short-term debt
Trade accounts payable
Current purchase commitments over
non-controlling interests
Other
Derivative instruments - foreign currencies
Derivative instruments - interest rates
Derivative instruments - commodities
Derivative instruments - shares
Dec. 31, 2022
Carrying
amount
Fair value
through P&L
Fair value
through equity
Financial
assets/
liabilities
measured at
amortized cost
Fair
value
Fair value
hierarchy
14
119
478
514
1,125
7,514
1
1,716
693
1,577
62
–
11
–
11,574
(6,677)
(651)
(194)
(2)
(7,524)
(1,299)
(1,834)
(6,254)
(4,554)
(174)
(264)
(3)
–
–
14
119
96
–
229
–
–
1,716
693
1,577
62
–
–
–
4,048
–
–
–
–
–
–
–
–
–
–
(182)
(3)
–
–
(185)
–
–
382
280
662
–
1
–
–
–
–
–
11
–
12
–
–
(194)
(194)
–
–
–
(4,554)
–
(82)
–
–
–
(4,636)
–
–
–
234
234
7,514
–
–
–
–
–
–
–
–
7,514
(6,677)
(651)
–
(2)
(7,330)
(1,299)
(1,834)
(6,254)
–
(174)
–
–
–
–
14
119
478
514
1,125
7,514
1
1,716
693
1,577
62
–
11
–
11,574
(6,210)
(577)
(194)
(2)
(6,983)
(1,288)
(1,834)
(6,254)
(4,554)
(174)
(264)
(3)
–
–
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 2
Level 1
Level 2
Level 2
Level 2
Level 2
Level 2
Level 2
Level 2
Level 2
(9,561)
(14,371)
TOTAL CURRENT LIABILITIES
(14,382)
* 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 8,627 million compared to EUR 8,075 million at fair value.
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Chapter 5 – Consolidated financial statements at December 31, 2022
(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
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
370
629
–
4
–
–
–
1
7
–
12
–
–
–
–
–
–
–
–
(49)
–
–
–
(49)
–
–
–
215
215
6,829
–
–
–
–
–
–
–
–
6,829
(6,877)
(651)
(26)
(7,554)
(706)
(1,489)
(5,715)
(63)
–
–
–
–
(7,973)
Fair
value
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)
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
* 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.
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
Interest Rate Swap
Interest Rate 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
< 1 year
CFH
< 1 year
FVH
> 2 years
CFH
< 1 year
Dec. 31, 2022
Nominal
sales
Nominal
purchases
Fair Value
Carrying
amount
in assets
Carrying
amount
in liabilities
Of which
carrying
amounts
in OCI
579
31
12
1,762
420
221
75
797
(316)
(19)
(19)
(5,493)
–
(1,811)
(46)
–
–
–
–
(118)
2
1
–
(87)
3,897
(7,704)
(202)
–
–
250
250
–
–
(419)
(419)
(250)
(250)
–
–
11
11
(3)
(3)
–
–
4,147
(8,373)
(194)
14
1
1
37
2
6
1
–
62
11
11
–
–
–
–
73
(14)
(1)
(1)
(155)
–
(5)
(1)
(87)
(264)
–
–
(3)
(3)
–
–
–
–
–
(3)
2
–
4
(85)
(82)
11
11
–
–
–
–
(267)
(71)
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F I N A N C I A L S T A T E M E N T S
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
Cross currency swaps
TOTAL FX DERIVATIVES
Forwards contracts
Commodities derivatives
Options
Shares derivatives
TOTAL
Accounting
qualification
CFH
CFH
CFH
FVH
NIH
Trading
CFH
NIH
Maturity
< 1 years
< 2 years
> 2 years
< 1 year
< 1 year
< 1 year
< 1 year
< 2 years
CFH
< 1 year
CFH
< 1 year
23.3 – Foreign currency hedges
Dec. 31, 2021
Nominal
sales
Nominal
purchases
Fair Value
Carrying
amount
in assets
Carrying
amount
in liabilities
Carrying
amounts
in OCI
393
55
3
1,005
410
456
88
750
3,160
–
–
–
–
(305)
(24)
(3)
(539)
–
(2,402)
(39)
–
(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)
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:
Sales
2,261
97
1
330
5
2
55
13
104
27
95
-
4
638
2
41
222
3,897
Dec. 31, 2022
Purchases
(970)
(132)
(30)
(340)
(15)
(3)
(197)
(36)
(59)
(9)
(73)
(11)
(8)
(5,555)
-
(46)
(220)
(7,704)
Net
1,291
(35)
(29)
(10)
(10)
(1)
(142)
(23)
45
18
22
(11)
(4)
(4,917)
2
(5)
2
(3,807)
(in millions of euros)
US Dollar
Chinese Yuan
Danish Crown
Singapore Dollar
Swedish Crown
Japanese Yen
Swiss Franc
UAE Dirham
Brazilian real
Canadian Dollar
Australian Dollar
Saudi Riyal
Norwegian Krone
British Pound
South African Rand
Hong Kong Dollar
Others
TOTAL
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Chapter 5 – Consolidated financial statements at December 31, 2022
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.
During the fiscal year 2022, the Group has set up EUR 250 million interest rate swaps to hedge its exposure.
(in millions of euros)
Fixed Rates
Floating rates
Total
Fixed Rates
Floating rates
Dec. 31, 2022
Dec. 31, 2021
Total current and non-current financial liabilities
Cash and cash equivalent
NET DEBT BEFORE HEDGING
Impact of Hedges
NET DEBT AFTER HEDGING
23.5 – Commodity hedges
8,627
8,627
(250)
8,377
1,836
(3,986)
(2,150)
250
(1,900)
10,463
(3,986)
6,477
-
8,234
-
8,234
-
1,515
(2,622)
(1,107)
--
Total
9,749
(2,622)
7,127
6,477
8,234
(1,107)
7,127
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:
(in millions of euros)
Fair value
Nominal amount
Dec. 31, 2022
Dec. 31, 2021
11
(419)
7
(400)
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, 2022
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
-
-
73
(264)
-
-
Gross amounts
73
(264)
Gross amounts
offset in the
statement of
financial position
Dec. 31, 2021
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
Net amounts
as per IFRS 7
73
(264)
Net amounts
as per IFRS 7
31
87
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.
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Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
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.
23.8 – Liquidity risk
As of December 31, 2022, the Group had confirmed credit lines of EUR 2.950 million, all unused with EUR 2.850 million maturing after
December 2023. Among them, EUR 2.700 million are sustainable-linked credit line with margin indexed on the annual performance of the
Schneider Sustainability Impact (SSI).
With EUR 2.9 billion available committed facility and EUR 4.0 billion cash & cash equivalent, the liquidity of the Group amounts to EUR 6.9
billion end of the year. In the next 12 months, the total short term and bond maturity amounts to EUR 3.1 billion.
In addition, to secure the funding of the minority interest of Aveva and to meet certain funds requirement under UK regulation, the Group
held undrawn bridge facility and term loan for a total amount of approximately EUR 3.9 billion.
Loan Agreement and committed credit lines do not include any financial covenants or credit rating triggers in case of rating downgrade.
23.9 – 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 2022, revenue in foreign currencies amounted to EUR 27.3 billion (EUR 23.0 billion in 2021), including around EUR 9.9 billion in US
dollars and EUR 4.8 billion in Chinese yuan (respectively EUR 7.4 and EUR 4.4 billion in 2021).
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.
Increase/
(decrease) in
average rate
10%
(10)%
10%
(10)%
Increase/
(decrease) in
average rate
10%
(10)%
10%
(10)%
Dec. 31, 2022
Revenue
Adj. EBITA
990
(900)
478
(434)
162
(147)
121
(110)
Dec. 31, 2021
Revenue
Adj. EBITA
743
(676)
438
(398)
106
(97)
109
(99)
(in millions of euros)
US Dollar
Chinese Yuan
(in millions of euros)
US Dollar
Chinese Yuan
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F I N A N C I A L S T A T E M E N T S
Chapter 5 – Consolidated financial statements at December 31, 2022
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
Full Year 2022
Full Year 2021
81,506
80,833
91,519
74,506
162,339
166,025
65,455
37,839
59,045
66,214
34,427
65,384
Full Year 2022
Full Year 2021
(8,764)
(62)
(184)
(9,010)
(8,207)
(66)
(161)
(8,434)
24.3 – Benefits granted to senior executives
In 2022, the Group granted EUR 2.2 million in attendance fees to the members of its Board of directors. The total amount of gross
remuneration, including benefits in kind, paid in 2022 by the Group to the members of Senior Management, excluding executive directors,
totaled EUR 33.9 million, of which EUR 11.4 million corresponded to the variable portion.
During the last three financial years, 506,774 performance shares have been allocated, excluding Corporate Officers. No stock options
have been granted during the last three financial years. In 2022, performance shares were allocated under the 2022 long-term incentive
plan 40. Since December 16, 2011, 100% of performance shares are conditional on the achievement of performance criteria for members of
the Executive Committee.
Please refer to Chapter 4 of the Universal Registration Document for more information regarding the members of Senior Management.
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Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
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 2022.
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.
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, 2022
Dec. 31, 2021
3,543
181
435
4,159
80
80
3,702
81
314
4,097
64
64
* 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 previously disclosed, investigations were conducted in September 2018 by the French judicial authority and French Competition
Authority (“Autorité de la concurrence”) at Schneider Electric’s head office and other premises concerning the sale of electrical products
through commercial distribution activities in France.
On July 4, 2022, Schneider Electric received a statement of objections (notification de griefs) from the French Competition Authority alleging
that the pricing autonomy of some distributors in the French market would have been limited, in breach of competition rules.
Schneider Electric strongly disagrees with the allegations of the statement of objections and has submitted its response to the French
Competition Authority on October 4, 2022.
Concurrently on October 7, 2022 Schneider Electric was indicted by an investigating judge who required Schneider Electric to provide a
bank guarantee of €20 million and a cash guarantee of €80 million which was paid mid-January 2023. As at December 31, 2022, this cash
guarantee was recognized as “Other current liabilities” against “Non-current financial assets”. Those actions do not mean that Schneider
Electric will ultimately be found guilty of any wrongdoing. Schneider Electric firmly disagrees with all the allegations made by the French
investigating judge and the French Competition Authority and intends to vigorously and fully defend itself. Should the French Competition
Authority deny Schneider Electric’s arguments and conclude, after examining the substance of the matter, that anti-competitive practices
have been involved, it has broad discretion to determine on a case-by-case basis the financial fines it may impose in accordance with the
principles of proportionality and individuality. In light of the difficulty in assessing the extent to which the French Competition Authority takes
into account the arguments of Schneider Electric in its defense as well as the multiple factors contributing to the determination of a fine, it is
not possible to reliably estimate the amount of any potential fine that might be incurred in the event of an adverse decision, even though it
might have a significant impact on the Group. In this context, no provision has been made at this stage of the investigation.
Schneider Electric has other contingent liabilities relating to legal, arbitration or regulatory proceedings arising in the normal course of its
business. Known or ongoing claims and litigation involving the Group or its subsidiaries were reviewed at the date on which the
consolidated financial statements were approved for issue. Based on the advice of legal counsel, all provisions deemed necessary have
been made to cover the related risks.
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F I N A N C I A L S T A T E M E N T S
Chapter 5 – Consolidated financial statements at December 31, 2022
Note 27: Subsequent events
27.1 – Disposal of transformer plants in Poland and Turkey
On January 6, 2023, the Group closed the transaction for the disposal of its Transformer plants in Poland and in Turkey to Groupe Cahors,
an international company specialized in energy distribution, headquartered in France.
27.2 – Issuance of bonds
On January 13, 2023, the Group has issued two bonds, for EUR 600 million at a rate of 3.125% maturing in October 2029 and for EUR 600
million at a rate of 3.375% maturing in April 2034.
27.3 – Acquisition of AVEVA’s non-controlling interests
On January 16, 2023, AVEVA announced that the Court had sanctioned the Scheme to effect the acquisition.
On January 18, 2023, following the deliverance of the Court Order to the Registrar of Companies, the Scheme became effective. AVEVA
shares were unlisted from the London Stock Exchange of January 19, 2023.
The transaction has been settled in cash in January 2023 along with the payment of UK Stamp Duty Reserve Tax.
Note 28: Statutory Auditors’ fees
Fees paid by the Group to the Statutory Auditors and their networks:
(in thousands of euros)
PwC
%
Mazars
%
Total
Full Year 2022
Statutory auditors, certification, examination
of the parent company and consolidated accounts
o/w Schneider Electric SE
o/w subsidiaries
Services other than statutory audit
- Audit-related services (“SACC”) *
o/w Schneider Electric SE
o/w subsidiaries
TOTAL FEES
11,271
1,291
9,980
996
348
648
92%
8%
9,819
971
8,848
522
-
522
95%
5%
21,090
2,262
18,828
1,518
348
1,170
12,267
100%
10,341
100%
22,608
* Audit-related services include services required by regulations and those provided at the request of the parent company or controlled entities, in particular: the review
of environmental, social and societal information, contractual audits, comfort letters, audit certificates, agreed procedures, audits of procedures and information
systems, and tax services that do not impair auditor independence.
(in thousands of euros)
EY
%
Mazars
%
Total
Full Year 2021
Statutory auditors, certification, examination
of the parent company and consolidated accounts
o/w Schneider Electric SE
o/w subsidiaries
Services other than statutory audit
- Audit-related services (“SACC”) *
o/w Schneider Electric SE
o/w subsidiaries
TOTAL FEES
12,290
1,166
11,124
1,368
317
1,051
90%
10%
9,602
988
8,614
439
-
439
96%
4%
21,892
2,154
19,738
1,807
317
1,490
13,658
100%
10,041
100%
23,699
* Audit related services include services required by regulations and those provided at the request of the parent company or controlled entities, in particular: the review
of environmental, social and societal information, contractual audits, comfort letters, audit certificates, agreed procedures, audits of procedures and information
systems, and tax services that do not impair auditor independence.
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Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
Note 29: Consolidated companies
The main companies included in the Schneider Electric Group scope of consolidation are listed below:
(in % of interest)
Dec. 31, 2022
Dec. 31,2021
Europe
Fully consolidated
Nxtcontrol GmbH
Schneider Electric ”Austria” Ges. M.B.H.
Schneider Electric Power Drives GmbH
Schneider Electric Systems Austria GmbH
Schneider Electric Bel LLC
Schneider Electric Energy Belgium SA
Schneider Electric ESS BV
Schneider Electric NV SA
Schneider Electric Services International
Schneider Electric Systems Belgium NV/SA
Proleit Bulgaria OOD
Schneider Electric Bulgaria EOOD
Schneider Electric d.o.o
Schneider Electric A.S.
Schneider Electric CZ S.R.O.
Schneider Electric Systems Czech Republic S.R.O.
Orbaekvej 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
Applications Logiciels Pour Ingenierie ALPI
Behar-Securite
Boissiere Finance
Construction Electrique du Vivarais
Dinel
Eckardt SAS
Eurotherm Automation
France Transfo
IGE+XAO SA (sub-group)
Invensys Holding France SAS
Merlin Gerin Ales
Merlin Gerin Loire
Muller & Cie
Newlog
Rectiphase SAS
Sarel - Appareillage Electrique
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
Schneider Electric Solar France
Schneider Electric Systems France
Schneider Electric Telecontrol
Schneider Toshiba Inverter Europe SAS
Schneider Toshiba Inverter SAS
Societe D’Appareillage Electrique Gardy
Societe D’Application Et D’Ingenierie Industrielle Et Informatique - SA3I
Societe Electrique d’Aubenas
Societe Francaise de Constructions Mecaniques Et Electriques
Societe Francaise Gardy
Systemes Equipements Tableaux Basse Tension, SETBT
Transfo Services
Transformateurs SAS
ABN GmbH
Eberle Controls GmbH
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Austria
Austria
Austria
Austria
Belarus
Belgium
Belgium
Belgium
Belgium
Belgium
Bulgaria
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
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
Germany
Germany
100
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
-
100
100
100
100
100
100
100
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
98.3
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
84.2
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
60
60
100
100
100
100
100
100
100
100
100
100
F I N A N C I A L S T A T E M E N T S
Chapter 5 – Consolidated financial statements at December 31, 2022
(in % of interest)
Dec. 31, 2022
Dec. 31,2021
J&K Regeltechnik GmbH
Merten GmbH
Proleit GmbH
RIB GmbH (Sub-Group)
Schneider Electric Automation GmbH
Schneider Electric GmbH
Schneider Electric Holding Germany GmbH
Schneider Electric Investment AG
Schneider Electric Operations Consulting GmbH
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 Korlatolt Felelösségü Tarsasag
Schneider Electric Ireland Limited
Schneider Electric IT Limited
Schneider Electric IT Logistics Europe Limited
Validation Technologies (Europe) Ltd Eliwell Controls S.r.l.
Eliwell Controls S.r.l.
Eurotherm S.r.l.
Schneider Electric Industrie Italia S.p.a.
Schneider Electric S.p.a.
Schneider Electric Systems Italia S.p.a.
Uniflair S.p.a.
Lexel Fabrika, SIA
Schneider Electric Baltic Distribution Center
Schneider Electric Latvija SIA
UAB Schneider Electric Lietuva
Industrielle De Reassurance S.A.
Schneider Electric Holding Luxembourg
American Power Conversion Corporation (A.P.C.) B.V.
APC International Corporation B.V.
BTR (European Holdings) Bv
Clovis Systems B.V.
Proleit B.V.
Schneider Electric Ecommerce Europe B.V.
Schneider Electric Logistic Centre B.V.
Schneider Electric Systems Netherlands N.V.
Schneider Electric The Netherlands B.V.
ELKO AS (Elektrokontakt AS)
Eurotherm AS
Lexel Holding Norge AS
Schneider Electric Norge AS
Eurotherm Poland Sp. Z.o.o.
Schneider Electric Elda S.A.
Schneider Electric Industries Polska Sp. Z o.o.
Schneider Electric Polska Sp. Z o.o.
Schneider Electric Systems Poland Sp. Z o.o.
Schneider Electric Transformers Poland SpZoo
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 LLC Novi Sad
Schneider Electric Srbija doo Beograd
Schneider Electric Slovakia, Spol SRO
Schneider Electric Systems Slovakia S.R.O.
Schneider Electric d.o.o.
Manufacturas Electricas S.A.U.
Proleit Iberia Slu
Schneider Electric Espana, S.A.U.
Schneider Electric IT Spain, S.L.
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
Luxembourg
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Norway
Norway
Norway
Norway
Poland
Poland
Poland
Poland
Poland
Poland
Portugal
Romania
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Serbia
Serbia
Slovenia
Slovakia
Slovakia
Spain
Spain
Spain
Spain
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
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
70
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
R
E
P
O
R
T
I
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T
E
G
R
A
T
E
D
C
H
1
C
H
2
C
H
3
C
H
4
C
H
5
C
H
6
C
H
7
C
H
8
C
H
9
L
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w
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.
.
c
o
m
477
Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
(in % of interest)
Schneider Electric Solar Spain, S.A.
Schneider Electric Systems Iberica S.L.
Telemantenimiento De Alta Tension, S.L.
AB Crahftere 1
Elektriska Aktiebolaget 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 (Suisse) SA
Proleit Automation Ooo
Schneider Electric Ukraine
Ascot Acquisition Holdings Limited
Aveva Group plc (sub-group)
Avtron Loadbank Worldwide Co., Limited
BTR Industries Ltd
BTR Property Holdings Ltd
CBS Group Ltd
Eurotherm Ltd
Invensys Group Holdings Ltd
Invensys Group Ltd
Invensys Holdings Ltd
Invensys International Holdings Ltd
Invensys Ltd
M&C Energy Group Limited
N.J. Froment & Co. Limited
Samos Acquisition Company Limited
Schneider Electric (UK) Limited
Schneider Electric Buildings UK Limited
Schneider Electric Controls UK Limited
Schneider Electric Invensys (UK) Ltd
Schneider Electric IT UK Ltd
Schneider Electric Limited
Schneider Electric Systems UK Limited
Tac Products Limited
Yorkshire Switchgear Group Limited
Accounted for by equity method
Aveltys
Delta Dore Finance SA (sub-group)
Energy Pool Development
Schneider Lucibel Managed Services SAS
Planon Beheer BV
AO Gruppa Kompaniy “Electroshield” - TM Samara
Carros Sensors Topco Ltd
North America
Fully consolidated
Power Measurement Ltd
Schneider Electric Canada Inc.
Schneider Electric Solar Inc.
Schneider Electric Systems Canada Inc.
Viconics Technologies Inc.
Electronica Reynosa S. de R.L. de C.V.
Industrias Electronicas Pacifico, S.A. de C.V.
Proleit S. De R. L.
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.
American Power Conversion Holdings Inc.
ASCO Power Services, Inc.
m
o
c
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s
w
w
w
.
|
2
2
0
2
t
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m
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i
t
a
r
t
s
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a
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d
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n
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S
i
478
Dec. 31, 2022
Dec. 31,2021
Spain
Spain
Spain
Sweden
Sweden
Sweden
Sweden
Sweden
Sweden
Sweden
Sweden
Sweden
Switzerland
Switzerland
Switzerland
Ukraine
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
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
France
France
France
France
Netherlands
Russia
United Kingdom
Canada
Canada
Canada
Canada
Canada
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
United States
United States
100
100
100
100
100
100
-
100
100
100
-
100
83.7
100
100
100
100
100
59.2
-
100
100
-
-
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
-
20
-
50
25
-
30
100
100
100
100
-
100
100
66.67
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
100
100
100
100
100
100
100
51
20
25
50
25
60
30
100
100
100
100
100
100
100
66.7
100
100
100
100
100
100
100
100
100
F I N A N C I A L S T A T E M E N T S
Chapter 5 – Consolidated financial statements at December 31, 2022
(in % of interest)
ASCO Power Technologies, L.P.
Autogrid Systems, Inc. BTR, LLC
BTR, LLC
Charge Holdings, LLC
Echo HoldCo LLC
ETAP Automation Inc. (sub-group)
EV Connect, LLC
Foxboro Controles S.A.
GPI Interim Inc.
H.S. Investments, LLC
Invensys LLC
Osisoft (sub-group)
Pro-Face America, LLC
Proleit Corp.
Ranco Incorporated of Delaware
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 Foundries LLC
Schneider Electric Grid Automation, Inc.
Schneider Electric Holdings, Inc.
Schneider Electric IT Corporation
Schneider Electric IT Mission Critical Services, 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 Corp.
Summit Energy Services, Inc.
Veris Industries LLC
Accounted for by equity method
Uplight Inc.
Asia-Pacific
Fully consolidated
Citect Corporation Limited
Clipsal Technologies Australia Pty Ltd
Nu-Lec Industries Pty Ltd
Scada Group Pty Limited
Schneider Electric (Australia) Pty Limited
Schneider Electric Australia Holdings Pty Ltd
Schneider Electric Buildings Australia Pty Ltd
Schneider Electric IT Australia Pty Ltd
Schneider Electric Solar Australia Pty Ltd
Schneider Electric Sustainability Business Australia Pty Ltd
Schneider Electric Systems Australia Pty Ltd
Serck Controls Pty Limited
Tamco Electrical Industries Australia Pty Limited
Beijing Leader Harvest Electric Technologies Co., Ltd
Beijing Leader Harvest Energy Efficiency Investment Co., Ltd
FSL Electric (Dongguan) Limited
Jingxin Hongde (Beijing) Technology Co., Ltd.
Pro-Face China International Trading (Shanghai) Co., Ltd
Proleit Automation Systems (Shanghai) Co.,
Schneider (Beijing) Low Voltage Co., Ltd.
Schneider (Beijing) Medium Voltage Co., Ltd
Schneider (Shaanxi) Baoguang Electrical Apparatus Co., Ltd
Schneider (Suzhou) Transformers Co.,
Schneider (Wuxi) Drives Co., Ltd.
Schneider Automation & Controls Systems (Shanghai) Co., Ltd
Schneider Busway (Guangzhou) Limited
Schneider Electric (China) Company Limited
Schneider Electric (Xiamen) Switchgear Co., Ltd
Schneider Electric (Xiamen) Switchgear Equipment Co., Ltd
Dec. 31, 2022
Dec. 31,2021
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
Australia
Australia
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
100
91.81
100
85.25
90.84
80
95.52
100
100
100
100
59.2
100
100
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
100
100
65
100
100
54
12.34
100
100
95
100
70
100
90
-
95
100
100
100
100
-
100
85.9
90.8
80
-
100
100
100
100
59
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
29
100
100
100
100
100
100
100
100
100
100
100
100
65
100
100
54
51
100
100
95
95
70
100
90
100
95
100
100
100
R
E
P
O
R
T
I
N
T
E
G
R
A
T
E
D
C
H
1
C
H
2
C
H
3
C
H
4
C
H
5
C
H
6
C
H
7
C
H
8
C
H
9
L
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w
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e
.
.
c
o
m
479
Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
(in % of interest)
Dec. 31, 2022
Dec. 31,2021
Schneider Electric Equipment and Engineering (Xi’An) Co., Ltd
Schneider Electric IT (China) Co., Ltd
Schneider Electric IT (Xiamen) Co., Ltd
Schneider Electric Manufacturing (Chongqing) Co., Ltd
Schneider Electric Manufacturing (Wuhan) Co., Ltd
Schneider Great Wall Engineering (Beijing) Co., Ltd
Schneider Merlin Gerin Low Voltage (Tianjin) Co.,Ltd.
Schneider Shanghai Apparatus Parts Manufacturing Co.,
Ltd Schneider Shanghai Industrial Control Co., Ltd
Schneider Shanghai Low Voltage Terminal Apparatus Co., Ltd
Schneider Shanghai Power Distribution Electrical Apparatus Co.,
Ltd Schneider Smart Technology Co., 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
Shenzhen Easydrive Electric Co., Ltd
Tianjin Wingoal Electric Equipment Co., Ltd.
Uniflair (Zhuhai) Electrical Appliance Manufacturing Co., Ltd
Wuxi Pro-Face Co., Ltd
Zircon Investment (Shanghai) Co., Ltd
Clipsal Asia Holdings 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 Limited
Schneider Electric India Private Limited
Schneider Electric Infrastructure Limited
Schneider Electric IT Business India Private Limited
Schneider Electric President Systems Limited
Schneider Electric Private Limited
Schneider Electric Solar India Pte Ltd
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 Schneider Indonesia
PT Tamco Indonesia
Ranco Japan Ltd
Schneider Electric Japan Holdings Ltd
Schneider Electric Japan, Inc.
Schneider Electric Solar Japan Inc.
Schneider Electric Systems Japan Inc.
Toshiba Schneider Inverter Corporation
Eurotherm Korea Co., Ltd.
Schneider Electric Korea Limited
Schneider Electric Systems Korea Ltd
Clipsal Manufacturing (M) Sdn. Bhd.
Desea Sdn. Bhd.
Gutor Electronic Asia Pacific Sdn. Bhd.
Henikwon Corporation 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.
Schneider Electric (NZ) Limited
Schneider Electric Systems New Zealand Limited
Schneider Electric (Philippines), Inc.
Schneider Electric IT Philippines Inc.
Schneider Electric Asia Pte. Ltd.
m
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s
w
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2
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m
u
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D
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i
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a
r
t
s
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a
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U
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d
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S
i
480
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
India
India
India
India
India
India
India
India
India
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Japan
Japan
Japan
Japan
Japan
Japan
Korea
Korea
Korea
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
New Zealand
New Zealand
Philippines
Philippines
Singapore
100
100
100
100
100
100
75
100
80
75
80
100
100
58
100
100
100
100
100
67.05
51
100
100
100
74.5
100
54
100
100
100
100
-
100
65
75
100
80.49
100
100
100
100
100
100
95
95
65
100
100
100
100
100
60
-
100
100
-
100
100
65
30
100
100
100
65
100
100
100
100
100
100
100
100
100
100
100
75
100
80
75
80
100
100
58
100
100
100
100
100
74.5
51
100
100
100
74.5
100
54
100
100
100
100
100
100
65
75
100
80.49
100
100
100
100
100
100
95
95
65
100
100
100
100
100
60
100
100
100
100
100
100
65
30
100
100
100
65
100
100
100
100
100
F I N A N C I A L S T A T E M E N T S
Chapter 5 – Consolidated financial statements at December 31, 2022
(in % of interest)
Dec. 31, 2022
Dec. 31,2021
Schneider Electric Export Services Pte Ltd
Schneider Electric IT Logistics Asia Pacific Pte Ltd
Schneider Electric IT Singapore Pte Ltd
Schneider Electric JV Holdings 2 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
Schneider (Thailand) Limited
Schneider Electric CPCS (Thailand) Co., Ltd
Schneider Electric Solar (Thailand) Co., Ltd
Schneider Electric Systems (Thailand) Co., Ltd
Clipsal Vietnam Co., Ltd
Invensys Vietnam Ltd
Schneider Electric IT Vietnam Limited
Schneider Electric Manufacturing Vietnam Company Limited
Schneider Electric Vietnam Limited
Accounted for by equity method
Delixi Electric Limited (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
Proleit Automaçao 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 Elétrica Ltda
Steck Industria Eletrica Ltda
Telseb Serviços de Engenharia E Comércio de Equipamentos Eletrônicos e
Telecomunicações Ltda
Inversiones Schneider Electric Uno Limitada
Marisio S.P.A
Schneider Electric Chile S.P.A
Schneider Electric Systems Chile Limitada
Schneider Electric de Colombia S.A.S
Schneider Electric Systems Colombia Ltda
Schneider Electric Centroamerica Limitada
Schneider Electric Ecuador Sociedad Anonima
Invensys Engineering & Service S.A.E.
Schneider Electric Distribution Company
Schneider Electric Egypt S.A.E.
Schneider Electric Engineering And Services - Free Zone S.A.E
Schneider Electric Systems Egypt S.A.E
Schneider Electric LLP
KMG Automation Limited Liability Partnership
Schneider Electric (Kenya) Limited
Kana Controls General Trading & Contracting Company WLL
Schneider Electric Services Kuweit
Schneider Electric Israël Ltd
Schneider Electric East Mediterranean SAL
Schneider Electric CFC
Schneider Electric Maroc
Schneider Electric Free Zone Enterprise
Schneider Electric Nigeria Limited
Schneider Electric Systems Limited
Schneider Electric O.M LLC
Schneider Solutions And Services (Private) Limited
Schneider Electric Peru S.A.
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Sri Lanka
Taiwan
Taiwan
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
Brazil
Chile
Chile
Chile
Chile
Colombia
Colombia
Costa Rica
Ecuador
Egypt
Egypt
Egypt
Egypt
Egypt
Kazakhstan
Kazakhstan
Kenya
Kuwait
Kuwait
Israel
Lebanon
Morocco
Morocco
Nigeria
Nigeria
Nigeria
Oman
Pakistan
Peru
100
100
100
65
100
100
100
100
65
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
91.99
92
51
60
100
51
100
31.9
49
100
100
100
100
100
100
100
100
100
100
100
100
100
65
100
100
100
100
65
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
100
100
51
87.4
91.9
51
60
100
51
100
31.9
49
100
96
100
100
100
100
100
100
100
100
R
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G
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1
C
H
2
C
H
3
C
H
4
C
H
5
C
H
6
C
H
7
C
H
8
C
H
9
L
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.
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c
o
m
481
Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
5.5 Notes to the consolidated financial statements
(in % of interest)
Dec. 31, 2022
Dec. 31,2021
Schneider Electric Systems del Peru S.A.
Schneider Electric Services LLC
Electrical & Automation Saudi Arabian Manufacturing Company (LLC)
Schneider Electric Saudi Arabia Limited
Schneider Electric Systems Saudi Arabia Co. LTD.
Invensys SA (Pty) Ltd
Schneider Electric South Africa (Pty) Ltd
Gunsan Elektrik Malzemelerï Sanayï Ve Ticaret Anonïm Sïrketi
Himel Elektrik Malzemeleri Ticaret Anonim Sirketi
Schneider Elektrik Sanayi Ve Ticaret A.S.
Schneider Enerji Endüstrisi Sanayi Ve Ticaret Anonim Sirketi
Cimac FZCO
L&T Electrical And Automation FZE
Schneider Electric DC MEA FZCO
Schneider Electric FZE
Schneider Electric Systems Middle East FZE
Schneider Electric Systems de Venezuela, C.A.
Schneider Electric Venezuela S.A.
Peru
Qatar
Saudi Arabia
Saudi Arabia
Saudi Arabia
South Africa
South Africa
Turkey
Turkey
Turkey
Turkey
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Arab Emirates
Venezuela
Venezuela
100
49
65
100
100
100
74.9
100
100
100
100
100
65
100
100
100
100
93.56
100
49
65
100
100
100
74.9
100
100
100
100
100
65
100
100
100
100
93.6
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S
i
482
F I N A N C I A L S T A T E M E N T S
Chapter 5 – Consolidated financial statements at December 31, 2022
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, 2022.
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 at December 31, 2022 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.
Our responsibilities under these standards are further described in the “Responsibilities of the Statutory Auditors relating to the audit of the
consolidated financial statements” section of our report.
Independence
We conducted our audit engagement in compliance with the independence rules provided for in the French Commercial Code (Code de
commerce) and the French Code of Ethics (Code de déontologie) for Statutory Auditors for the period from January 1, 2022 to the date of
our report, and, in particular, we did not provide any non-audit services prohibited by Article 5(1) of Regulation (EU) No. 537/2014.
Justification of assessments – Key audit matters
In accordance with the requirements of Articles L. 823-9 and R. 823-7 of the French Commercial Code relating to the justification of our
assessments, we inform you of the key audit matters relating to the risks of material misstatement that, in our professional judgment, were
the most significant in our audit of the consolidated financial statements, as well as how we addressed those risks.
These matters were addressed as part of our audit of the consolidated financial statements as a whole, and therefore contributed to the
opinion we formed as expressed above. We do not provide a separate opinion on specific items of the consolidated financial statements.
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Chapter 5 – Consolidated financial statements at December 31, 2022
F I N A N C I A L S T A T E M E N T S
5.6 Statutory auditors’ report on the consolidated financial statements
Measurement of goodwill and trademarks with indefinite useful lives
Notes 1.3, 1.8, 1.11, 5 and 9 to the consolidated financial statements
Description of risk
As of December 31, 2022, the carrying amount of goodwill and trademarks with indefinite useful lives was
€25,136 million and €2,447 million respectively, representing 47% of the Group’s total assets.
As described in Notes 1.8 “Intangible assets” and 1.11 “Impairment of assets” to the consolidated financial
statements, trademarks with indefinite useful lives and Cash Generating Units (CGUs) to which goodwill has
been allocated are tested for impairment at least once a year and whenever there is an indication of impairment.
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 generated by other assets or groups of assets.
The recoverable amount of a CGU is defined as the higher 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.
The recoverable amount of trademarks with an indefinite useful life is measured using the royalty method.
An impairment loss is recognized whenever the recoverable amount of a CGU or a trademark is less than its
carrying amount, to the extent that its carrying amount exceeds its recoverable amount. When the tested CGU
comprises goodwill, the impairment loss is primarily deducted therefrom.
The valuation of goodwill and trademarks with indefinite useful lives is a key audit matter due to their significance
in the Group’s consolidated balance sheet and the level of judgment required by management to:
• define the CGUs, as improper mapping could lead the Group to not recognize, or to underestimate, the
impairment of goodwill;
• determine the assumptions used for the impairment tests of goodwill, particularly the discount rate,
perpetuity growth rate and the expected margin rates or royalty rates.
How our audit
addressed this risk
Our audit work consisted in:
• reviewing the Group’s method for defining the CGUs;
• comparing the carrying amount of assets tested with the accounting data;
• assessing the procedures implemented by the Group to evaluate the discounted future cash flows
underlying the determination of the value in use of each CGU and checking their consistency with the
business plans/cash flow projections approved by the Group’s Board of Directors;
for the main trademarks with indefinite useful lives, assessing the procedures implemented to model the
revenue projections attached to the trademarks;
•
• assessing the reasonableness of the business forecasts underlying the future cash flows, in particular with
respect to past performance;
• with the assistance of our valuation experts, assessing the assumptions used such as the discount rate,
perpetuity growth rate and expected margin rates, as well as the sensitivity of impairment test results to
changes in these key assumptions;
• corroborate the royalty rates used with respect to (i) the theoretical royalty rates determined at the acquisition
date of the trademark and (ii) the performance achieved;
• reconciling the sensitivity analyses performed by the Group with our sensitivity calculations;
• verifying the arithmetical accuracy of the impairment tests.
Lastly, we assessed the appropriateness of the disclosures provided in the notes to the consolidated financial
statements.
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Chapter 5 – Consolidated financial statements at December 31, 2022
Uncertain tax positions and recognition and recoverability of deferred tax assets recognized for tax loss carryforwards
Notes 1.3, 1.16 and 14 to the consolidated financial statements
Description of risk
The Group operates in several different tax jurisdictions around the world. As a result, the company and its
subsidiaries may be subject to audits or questions from local tax authorities. Situations where cash outflows are
considered probable give rise to liabilities, measured on the basis of the known facts in the jurisdiction
concerned.
In accordance with IFRIC 23 – Uncertainty over Income Tax Treatments, provisions covering uncertainties over
tax treatments are presented under “Accrued taxes and payroll costs”, as specified in Note 1.21 to the
consolidated financial statements.
In addition, the Group recognizes deferred tax assets in several countries based on its ability to recover them in
future years. As of December 31, 2022, deferred tax assets in respect of tax loss carryforwards recognized in
the consolidated balance sheet amounted to €724 million, mainly in France for an amount of €468 million.
As described in Note 1.16 to the consolidated financial statements, the Group only recognizes future tax relief
arising from the use of tax loss carryforwards when it can be reasonably anticipated that such relief will be
granted, including when such amounts can be carried forward indefinitely.
The Group’s ability to recover deferred tax assets on tax loss carryforwards is assessed by management at the
end of each reporting period. The recognition and correct valuation of these deferred tax assets are subject to
the quality of the forecasts made by the Group.
The recognition and recoverability of deferred tax assets relating to tax loss carryforwards and the recognition
of liabilities for uncertain tax positions are key audit matters, given the judgment required from the Group to (i)
assess the recoverability of the deferred taxes and (ii) estimate the likely outflow of resources in a constantly
changing international environment.
How our audit
assessed this risk
We held meetings with management, gained an understanding of the internal control procedures implemented
by the Group to identify tax risks, and, where appropriate, to recognize any tax loss.
With the assistance of our tax specialists, we also assessed the judgments made by management as part of our
estimate of the income tax likely to be payable and the amount of any potential exposure, and, by extension, the
reasonableness of the estimates as regards tax liabilities.
With regard to the recognition and recoverability of deferred tax assets relating to tax loss carryforwards, our
audit approach consisted in assessing the Group’s likelihood of benefiting from future tax relief arising from the
use of tax loss carryforwards, in particular with regard to:
• plans for the consumption of the tax loss carryforwards of the subsidiaries or tax consolidation groups
•
concerned;
the main data and assumptions underlying the plans for the consumption of tax loss carryforwards
underlying the recognition and measurement of the corresponding deferred tax assets by the Group.
We also verified the appropriateness of the disclosures provided in the notes to the consolidated financial
statements.
Specific verifications
As required by legal and regulatory provisions and in accordance with professional standards applicable in France, we have also
performed the specific verifications on the information pertaining to the Group presented in the Board of Directors’ management report.
We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.
We attest that the information pertaining to the Group presented in the management report includes the consolidated non-financial
performance statement required under Article L. 225-102-1 of the French Commercial Code. However, in accordance with Article L. 823-10
of the French Commercial Code, we have not verified the fair presentation and consistency with the consolidated financial statements of the
information given in that statement, which will be the subject of a report by an independent third party.
Other verifications and information pursuant to legal and regulatory requirements
Presentation of the consolidated financial statements to be included in the annual financial report
In accordance with professional standards applicable to the Statutory Auditors’ procedures for annual and consolidated financial
statements presented according to the single European electronic reporting format, we have verified that the presentation of the
consolidated financial statements to be included in the annual financial report referred to in paragraph I of Article L. 451-1-2 of the French
Monetary and Financial Code (Code monétaire et financier) and prepared under the Chief Executive Officer’s responsibility, complies with
this format, as defined by European Delegated Regulation No. 2019/815 of December 17, 2018. As it relates to the consolidated financial
statements, our work included verifying that the markups in the financial statements comply with the format defined by the aforementioned
Regulation.
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Chapter 5 – Consolidated financial statements at December 31, 2022
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5.6 Statutory auditors’ report on the consolidated financial statements
On the basis of our work, we conclude that the presentation of the consolidated financial statements to be included in the annual financial
report complies, in all material respects, with the single European electronic reporting format.
Due to the technical limitations inherent in the macro-tagging of the consolidated financial statements in accordance with the European
single electronic reporting format, the content of certain tags in the notes to the financial statements may not be rendered identically to the
consolidated financial statements attached to this report.
In addition, it is not our responsibility to ensure that the consolidated financial statements to be included by the Company in the annual
financial report filed with the AMF correspond to those on which we carried out our work.
Appointment of the Statutory Auditors
We were appointed Statutory Auditors of Schneider Electric S.E. by the Annual General Meetings held on May 6, 2004 for Mazars and on
May 5, 2022 for PricewaterhouseCoopers Audit.
At December 31, 2022, Mazars was in the nineteenth consecutive year of their engagement and PricewaterhouseCoopers in their first year.
Responsibilities of management and those charged with governance for the consolidated financial
statements
Management is responsible for preparing consolidated financial statements giving a true and fair view in accordance with International
Financial Reporting Standards as adopted by the European Union and for implementing the internal control procedures it deems necessary
for the preparation of consolidated financial statements that are free of 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 expects 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 risk
management systems, as well as, where applicable, any internal audit systems, relating to accounting and financial reporting procedures.
The consolidated financial statements were approved by the Board of Directors.
Responsibilities of the Statutory Auditors relating to the audit of the consolidated financial statements
Objective 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 of 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 taken by users on the basis of these consolidated financial statements.
As specified in Article L. 823-10-1 of the French Commercial Code, our audit does not include assurance on the viability or quality of the
Company’s management.
As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditors exercise professional
judgment throughout the audit.
They also:
•
identify and assess the risks of material misstatement in the consolidated financial statements, whether due to fraud or error, design and
perform audit procedures in response to those risks, and obtain audit evidence considered to be sufficient and appropriate to provide a
basis for their 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;
• obtain an understanding of the internal control procedures 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;
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management and
the related disclosures in the notes to the consolidated financial statements;
• assess 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 the audit report. However, future events
or conditions may cause the Company to cease to continue as a going concern. If the Statutory Auditors conclude that a material
uncertainty exists, they are required to draw attention in the audit report to the related disclosures in the consolidated financial
statements or, if such disclosures are not provided or are inadequate, to issue a qualified opinion or a disclaimer of opinion;
• evaluate the overall presentation of the consolidated financial statements and assess whether these statements represent the underlying
transactions and events in a manner that achieves fair presentation;
• obtain 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 Auditors are responsible for the management, supervision
and performance of the audit of the consolidated financial statements and for the opinion expressed thereon.
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Chapter 5 – Consolidated financial statements at December 31, 2022
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 any significant deficiencies in internal control that we have
identified regarding the accounting and financial reporting procedures.
Our report to the Audit and Risks Committee includes the risks of material misstatement that, in our professional judgment, were the most
significant for the audit of the consolidated financial statements and which constitute 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, as defined in particular in Articles L. 822-10 to L. 822-14 of the French
Commercial Code and in the French Code of Ethics for Statutory Auditors. Where appropriate, we discuss any risks to our independence
and the related safeguard measures with the Audit and Risks Committee.
March 6, 2023
The Statutory Auditors
PricewaterhouseCoopers Audit
Mazars
Séverine Scheer Jean-Christophe Georghiou
Juliette Decoux Guillemot Mathieu Mougard
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Chapter 5 – Consolidated financial statements at December 31, 2022
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5.7 Extract of the management report for
the year ended December 31, 2022
Consolidated financial statements
Business and Statement of Income highlights
Transaction with AVEVA’s non-controlling interests
On September 21, 2022, the Group confirmed its firm intention to acquire the share capital of AVEVA that it did not already own.
On November 11, 2022, the board of Schneider Electric and the AVEVA Independent Committee announced that they reached an
agreement on the terms of a cash offer of 3,225 pence per AVEVA share. Such acquisition is to be effected by means of a Court approved
scheme of arrangement, under Part 26 of the Companies Act 2006.
On November 25, 2022, the requisite majority of AVEVA’s shareholders approved the Scheme, and passed the Special Resolution to
implement the Scheme during respectively the Court Meeting and the General Meeting. This led to the immediate recognition of a current
financial liability in the Group’s financial statements of GBP 4,039 million (EUR 4,704 million as of November 25, 2022 closing rate). The
liability represents the commitment for the Group to purchase the 123,429,542 outstanding AVEVA shares not already owned as of
November 25, 2022, and the 1,814,217 shares to be issued in the context of AVEVA’s long term incentive plans. The recognition of this
liability triggered an immediate reduction in non-controlling interests for EUR 2,865 million and in the group share of equity for EUR 1,839
million. In addition, the Group recognized transaction costs against equity.
The liability, presented under “Current purchase commitments over non-controlling interests”, amounted to EUR 4,554 million as of
December 31, 2022. In order to meet the certain funds requirements under UK regulation law (and guarantee the availability of funds at
closing date), the Group held at December 31, 2022 an undrawn bridge facility to approximately GBP 2.4 billion (with a twelve months
maturity), a term loan facility of GBP 1.5 billion (with a three-year maturity) and a EUR 423 million cash deposit held at Schneider Electric SE
(classified in Cash and cash equivalents).
The acquisition of the remaining shares of AVEVA was hedged during the second semester 2022 by entering into FX options for a total of
GBP 4,000 million. The EUR 12 million realized loss on the hedging instruments was recorded in “Costs of acquisitions and integrations”
within “Other operating income and expenses” (in this context, hedge accounting is not possible under IFRS).
As of December 31, 2022, all regulatory conditions were met, however the Scheme remained to be sanctioned by the Court.
On January 16, 2023, AVEVA announced that the Court had sanctioned the Scheme to effect the acquisition.
On January 18, 2023, following the deliverance of the Court Order to the Registrar of Companies, the Scheme became effective. AVEVA
shares were unlisted from the London Stock Exchange on January 19, 2023. The transaction has been settled in cash in January 2023.
IFRS 5 application - Non-current Assets Held for Sale and Discontinued Operations
The following businesses have been reclassified as Held for Sale as of December 31, 2022:
Transformer plants in Poland and Turkey
On July 27, 2022, the Group signed an agreement for the disposal of its Transformer plants in Poland and in Turkey to Cahors Group, an
international company specialized in energy distribution, headquartered in France. The businesses have around 800 employees and are
currently reported within Energy management reporting segment.
In accordance with IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations, assets and liabilities of the subsidiaries were
classified respectively as assets and liabilities held for sale as of December 31, 2022 and measured at the lower of net carrying amount and
fair value less costs to sell. A resulting impairment of EUR 75 million was recognized within Other Operating Income and Expenses.
The transaction was completed on January 6, 2023.
Industrial sensors business
On October 27, 2022, the Group announced the signing of a binding agreement with YAGEO to divest its industrial sensors business,
Telemecanique Sensors. Telemecanique Sensors had revenue of around EUR 280 million in 2021, Telemecanique Sensors is reported within
Industrial Automation reporting segment. The all-cash transaction values Telemecanique Sensors at EUR 723 million (Enterprise Value). The
Group will grant YAGEO a license to use the Telemecanique Sensors trademark.
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Chapter 5 – Consolidated financial statements at December 31, 2022
The completion of the proposed transaction is expected to occur in the coming months, subject to the receipt of required regulatory
approvals and employee information consultation process. In accordance with IFRS 5 - Non-current Assets Held for Sale and Discontinued
Operations, the assets and liabilities have been classified as “Assets held for sale” and “Liabilities held for sale”, for EUR 653 million and
EUR 40 million respectively. The assets are mainly intangible assets (including goodwill) for EUR 474 million.
VinZero
On December 8, 2022 the Group entered into an agreement with a European corporate for the sale of RIB Software’s VinZero business.
VinZero is an IT infrastructure solutions group and software partner for architecture, engineering, construction, owner-operator and
manufacturing organizations providing value-add services and consulting. The proposed transaction is subject to customary regulatory
approvals and is expected to close in the first semester of 2023. The business is currently reported within Energy Management reporting
segment.
In accordance with IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations, the assets and liabilities have been classified
as “Assets held for sale” and “Liabilities held for sale”, for EUR 105 million and EUR 33 million respectively. The assets are mainly intangible
assets (including goodwill) for EUR 54 million.
Gutor
On December 23, 2022, the Group entered into an agreement with Latour Capital, a French private equity investor, for the sale of Gutor
Electronics´ operations. Gutor is a global leader in the manufacturing of industrial uninterruptible power supply (UPS) systems and the
provision of related services. Gutor sales in 2021 were approximately EUR 130 million, reported under Energy Management.
Subject to the satisfaction of certain conditions, including customary regulatory approvals, the transaction is expected to close in the first
semester 2023. In accordance with IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations, the assets and liabilities have
been classified as “Assets held for sale” and “Liabilities held for sale”, for EUR 106 million and EUR 49 million respectively. The assets are
mainly working capital items for EUR 63 million and intangible assets (including goodwill) for EUR 34 million.
Acquisitions & disposals of the period
Acquisitions
IGE+XAO
On February 16, 2022, the boards of directors of Schneider Electric SE and of IGE+XAO SA approved the terms of the merger of IGE+XAO
into Schneider Electric. This merger is in line with the intention to position IGE+XAO as an operational entity of Software Division within the
Energy Management reporting segment. The annual general meetings of shareholders of IGE+XAO and Schneider Electric SE held
respectively on May 4 and May 5, 2022, approved the merger of IGE+XAO into Schneider Electric, on the basis of an exchange ratio of 5
Schneider Electric shares for 3 IGE+XAO shares. The merger leading to the dissolution without liquidation of IGE+XAO was effective on May
5, 2022, with a retroactive effect for accounting and tax purposes as at January 1, 2022.
EV Connect Inc.
On June 21, 2022, the Group completed the purchase of a 95.52% controlling stake in EV Connect Inc. which is fully consolidated as of
December 31, 2022, and reports within Energy Management reporting segment. The Group holds an agreement to acquire the remaining
4.48% of non-controlling interests in 2027. The related debt has been recognized in “Non-current purchase commitments over
noncontrolling interests”.
The purchase accounting as per IFRS 3R is not completed as of December 31, 2022. The net adjustment of the opening balance sheet,
resulting mainly from the booking of a preliminary amount of identifiable intangible assets (technology, customer relationship and
trademark), led to the recognition of a EUR 254 million preliminary goodwill at acquisition date.
Autogrid
On July 20, 2022, the Group completed the acquisition of Autogrid, raising its stake from 24.2% to 91.8% controlling stake. Previously,
Autogrid was consolidated under equity method and was treated as if it were disposed of and reacquired at fair value on the acquisition
date, resulting in a non-cash gain in “Other operating income and expenses”. Autogrid is now fully consolidated and reports within Energy
Management reporting segment. The Group holds an agreement to acquire the remaining 8.2% of non-controlling interests in 2027. The
related debt has been recognized in “Non-current purchase commitments over non-controlling interests”.
The purchase accounting as per IFRS 3R is not completed as of December 31, 2022. The net adjustment of the opening balance sheet,
resulting mainly from the booking of a preliminary amount of identifiable intangible assets (technology, customer relationship and
trademark), led to the recognition of a EUR 184 million preliminary goodwill at acquisition date.
Disposals
In 2022, the Group recorded a total amount of EUR 108 million of losses on business disposals, mainly related to the following:
Russia
Since February 24, 2022 the Group has put on hold new investments in Russia and Belarus as well as international shipments of new orders
destined for these countries. For full year 2021, the Group generated approximately 2% of its total sales from Russia, Belarus was
insignificant.
The Group signed a binding agreement on July 3, 2022 to sell 100% of its shares in its main Russia and Belarus subsidiaries. The terms of
the agreement include a call option exercisable by the Group four years after completion, based on fair value.
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5.7 Extract of the management report for the year ended December 31, 2022
The transaction closed on September 27, 2022, resulting in a loss of control by the Group over the business.
The assets and liabilities transferred notably included EUR 81 million of cash and cash equivalents. This is in line with the Group’s objective
to set up a viable business and support employees throughout the process.
For operations not divested as part of this transaction, the Group engaged during the year an orderly shutdown or disposition. Notably, the
group sold its investment in the Electroshield Samara joint venture. The joint venture was accounted for under equity method investment.
The transaction had no material impact on Group financial statements.
In total, the Group incurred EUR 287 million losses from the withdrawal of its operation from Russia, of which EUR 92 million from impairment
of working capital, mainly following customers contracts cancellation and renegotiations, and EUR 195 million from the deconsolidation of its
subsidiaries in Russia and Belarus.
ASCO load banks
On September 30, 2022, the Group closed the transaction for the disposal of the load bank business of ASCO Power Technologies to
Hidden Harbor, a U.S.-based private equity firm. Loadbank is a critical power testing device used to measure, test and improve the
efficiency and effectiveness of power systems across a broad range of industries and applications, and was consolidated within Energy
Management reporting segment.
Eurotherm
On October 31, 2022, the Group closed the transaction for the disposal of its Eurotherm business unit (a global provider of temperature and
power control and measurement solutions) to Watlow Electric Manufacturing Company, a global producer of complete industrial thermal
systems. The business was consolidated within Industrial Automation reporting segment.
Eberle
On November 30, 2022, the Group completed the sale of Eberle Controls GmbH (Eberle) to Eberle’s management and Borromin Capital
Fund IV. Eberle is a German provider of heating and air conditioning solutions for residential, commercial and public buildings. The business
was consolidated within Energy Management reporting segment.
Follow-up on acquisitions and divestments occurred in 2021 with significant effect in 2022
Acquisitions
OSIsoft LLC.
As announced on March 19, 2021, Schneider Electric’s majority-owned subsidiary, AVEVA Group Plc, completed the acquisition of OSIsoft,
for a consideration of EUR 4.5 billion (USD 5.1 billion). OSIsoft has been fully consolidated since the acquisition date, and reports within the
Industrial Automation reporting segment.
The purchase accounting as per IFRS 3R was not completed as of December 31, 2021, and led to the recognition of identifiable intangible
assets (technology for EUR 998 million, customer relationship for EUR 288 million and trademark for EUR 150 million) and to a decrease in
contract liabilities for EUR 71 million from remeasurement at fair value of deferred revenue. The preliminary goodwill recognized at
acquisition date amounted to EUR 3,001 million.
The purchase accounting is complete as of December 31, 2022, which resulted in minor adjustments. The final goodwill recognized and
converted into Euros using the exchange rate at the acquisition date amounts to EUR 2,988 million.
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 USD 260 million (EUR 218 million at the acquisition date),
fully paid in cash. ETAP is consolidated within the Energy Management reporting segment. The Group holds an agreement to acquire the
remaining 20% minority interests in 2025. The related debt is recognized in “Non-current purchase commitments over non-controlling
interests”.
The purchase accounting as per IFRS 3R is complete as of December 31, 2022. ETAP carrying value at acquisition date for net identifiable
assets is EUR 13 million. The net adjustment of the acquired balance sheet is EUR 26 million, resulting mainly from the booking of an amount
of identifiable intangible assets (technology, customer relationship and trademark).
The goodwill recognized amounts to USD 310 million (EUR 261 million at the acquisition date) and includes the forward agreement for the
acquisition of the remaining 20% minority interests in 2025.
Qmerit
On December 20, 2021, the Group acquired 85.85% of the capital of Qmerit, fully consolidated in the 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 in 2026. The related debt has been
recognized in “Non-current purchase commitments over non-controlling interests”.
The purchase accounting as per IFRS 3R is completed as of December 31, 2022. The net adjustment of the opening balance sheet,
resulting mainly from the booking of an amount of identifiable intangible assets (customer relationship and trademark), led to the recognition
of a EUR 269 million goodwill at acquisition date.
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Chapter 5 – Consolidated financial statements at December 31, 2022
Exchange rate changes
Fluctuations in the euro exchange rate had a positive impact in 2022, increasing consolidated revenue by EUR 1,641 million due mainly to
the evolution observed in US Dollar and in Chinese Yuan compared to the Euro and a positive impact increasing adjusted EBITA by EUR
333 million.
Results of Operations
The following table sets forth our results of operations for 2022 and 2021:
(in millions of euros except for earnings per share)
Full Year 2022
Full Year 2021
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)
34,176
(20,300)
13,876
40.6%
(1,040)
(6,819)
6,017
17.6%
(433)
(227)
5,357
15.7%
(424)
4,933
14.4%
24
(130)
(106)
(109)
(215)
4,718
(1,211)
29
3,536
3,477
59
6.23
6.15
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
Variance
18.2%
19.0%
17.2%
21.6%
13.6%
20.7%
1,961.9%
0.9%
13.0%
3.4%
13.9%
500.0%
31.3%
11.6%
34.6%
22.2%
13.5%
25.4%
(65.5)%
8.0%
8.5%
(14.5)%
8.2%
8.5%
* Adjusted EBITA (Earnings Before Interest, Taxes, Amortization of Purchase Accounting Intangibles): 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): Operating profit before amortization and impairment of purchase
accounting intangible assets and before goodwill impairment.
Revenue
Consolidated revenue totaled EUR 34,176 million for the period ended December 31, 2022, up +12.2% organic and up +18.2% on a
reported basis. Organic growth was driven by a continuation of strong and dynamic market demand in the majority of end-markets and
segments served by the Group, supported by accelerating energy transition trends and recovery in late-cycle segments. Consumer-linked
segments saw softness in some geographies in the second half of the year. The Group saw good volume expansion year-on-year, with price
actions also contributing strongly to growth. Supply chain pressures were evident throughout the year, with progressive easing through the
second half, though some tightness related to the supply of electronic components remains. Growth was impacted by the Group’s
withdrawal from Russia and the effects of COVID-19 infections and related lockdowns in China. Forex impact were +5.7% primarily due to
the strengthening of the USD against the EUR, while there was a net negative impact of (0.2)% from acquisitions and disposals.
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F I N A N C I A L S T A T E M E N T S
5.7 Extract of the management report for the year ended December 31, 2022
Evolution of revenue by reporting segment
The following table sets forth our revenue by business segment for years ended December 31, 2022 and 2021:
(in millions of euros)
Full Year 2022
Full Year 2021
Energy
Management
Industrial
Automation
26,442
22,179
7,734
6,726
Total
34,176
28,905
Energy Management generated revenues of EUR 26,442 million, equivalent to 77% of the Group’s revenues and was up +12.9% organically.
North America grew +18% organic with strong demand across all end-markets, including residential buildings. Western Europe was up
+13% organic with double-digit growth in each of the five main economies of the region with continued good traction in Data Center &
non-residential Buildings, though residential markets were impacted by pressures on consumer-spending. Asia-Pacific grew +9% organic
impacted by the resurgence of COVID-19 and softer residential markets in China, but with strong growth across the rest of the region,
notably in India. Rest of the World was up +10% organic with strong project execution in resource driven economies and despite headwinds
from Russia prior to the Group’s exit.
Industrial Automation generated revenues of EUR 7,734 million, equivalent to 23% of the Group’s revenues and was up +9.5% organically.
Growth was led by Discrete automation markets while sales into Process & Hybrid markets grew strongly, benefiting from recovery in
resource driven economies. North America grew +10% organic led by performance in Discrete automation markets, while strong growth in
Process & Hybrid markets was supported by execution on a project in Mexico. Western Europe was up +14% organic, with strong growth in
Discrete automation markets, particularly in Italy, Spain and France. Asia-Pacific was up +7% organic, impacted by the resurgence of
COVID-19 in China, but with strong growth across the rest of the region, including in India and Japan. Rest of the World was up +8% organic
despite headwinds from Russia prior to the Group’s exit.
Gross profit
Gross profit was up +10.8% organic with Gross margin down -50bps organic, reaching 40.6% in 2022. The decline in margin was mainly
driven by lower productivity due to inflationary pressures in the supply chain.
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 21.6% from EUR 855 million for 2021 to EUR 1,040 million for 2022. As a percentage of revenues, the net cost of
research and development remain stable, at 3.0%.
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 19.9% from EUR 1,539 million for 2021 to EUR 1,845 million for 2022. As a
percentage of revenues, total research and development expenses increased slightly to 5.4% for 2022 (5.3% for 2021).
In 2022, the net effect of capitalized development costs and amortization of capitalized development costs amounts to EUR 115 million on
operating income (EUR 68 million in 2021).
Selling, general and administrative expenses increased by 13.6% to EUR 6,819 million for 2022 (EUR 6,001 million for 2021). As a
percentage of revenues, selling, general and administrative expenses decreased slightly to 20.0% for 2022 (20.8% for 2021).
Combined, total support function costs, that is, research and development expenses together with selling, general and administrative costs,
totaled EUR 7,859 million for 2022 compared to EUR 6,856 million for 2021, an increase of 14.6%. Support functions costs to sales ratio
decreases from 23.7% in 2021, to 23.0% in 2022.
Other operating income and expenses
For 2022, other operating income and expenses amounted to a net expense of EUR 433 million. The gains and losses on disposal of
business for EUR (108) million are mainly due to the termination of activities and disposal of the main subsidiaries in Russia and Belarus,
partially compensated by the gains from the disposal of Eurotherm, Asco Load Banks as well as Eberle activities. The impairment of assets
mainly relates to the impairment of assets held for Sale in relation with the disposal of Transformers plants in Poland and Turkey. The costs of
acquisition and integration slightly increase versus 2021, reaching EUR 180 million, mainly due to the EUR 28 million share-based payments,
corresponding to the acceleration of multiple AVEVA plans, in line with the terms of the transaction.
Restructuring costs
For 2022, restructuring costs remain stable at EUR 227 million, and are linked to the Group’s initiatives to decrease support function costs.
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Chapter 5 – Consolidated financial statements at December 31, 2022
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 6,017 million for 2022, compared to EUR 4,987 million for 2021, an organic increase of 14.4%. As a
percentage of revenues, adjusted EBITA increased at 17.6% with margin improving 40 bps organically.
EBITA increased from EUR 4,741 million for 2021 to EUR 5,357 million in 2022. As a percentage of revenues, EBITA decreases at 15.7% in
2022 (16.4% for 2021).
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 2022
13,156
26,442
5,392
20.4%
3,334
7,734
1,458
18.9%
-
-
(833)
On December 31, 2022, the total backlog to be executed in more than a year amounts to EUR 643 million.
(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
16,490
34,176
6,017
17.6%
Total
11,776
28,905
4,987
17.3%
On December 31, 2021, the total backlog to be executed in more than a year amounted to EUR 640 million.
Energy Management reporting segment generated an adjusted EBITA of EUR 5,392 million, or 20.4% of revenues, up c. +40 bps organic
(up +10 bps on a reported basis), due mainly to a combination of good volumes and strong pricing, an improvement of gross margin in the
systems business, and good control of Support Function Costs more than offsetting the inflationary pressures in the supply chain.
Industrial Automation reporting segment generated an adjusted EBITA of EUR 1,458 million, or 18.9% of revenues, up c. +30 bps organic
(up +40 bps on a reported basis), due mainly to a combination of good volumes and strong pricing, more than offsetting the inflationary
pressures in the supply chain and a negative mix impact from lower sales at AVEVA.
Central functions & digital costs in 2022 amounted to EUR 833 million (EUR 756 million in 2021), reducing slightly as a proportion of revenue
to 2.4%. Investment in the Group’s strategic priorities continued, while the Corporate cost element continued to be an area of focus and
remained under tight control, remaining at around 0.7% of Group revenues in 2022.
Amortization and impairment of purchase accounting intangibles
The amortization and impairment of purchase accounting intangibles amounted to EUR 424 million compared with EUR 410 million last year.
The increase is mostly driven by additional amortization linked with acquisitions completed in the second semester 2021 (ETAP) and the
second semester 2022 (EV Connect and Autogrid).
Operating income (EBIT)
Operating income or EBIT (Earnings Before Interest and Taxes), increased from EUR 4,331 million for 2021 to 4,933 million for 2022, an
increase of 13.9%, as EBITA.
Net financial income/loss
Net financial loss amounted to EUR 215 million for 2022, compared to EUR 176 million for 2021, mainly due to the slight increase in cost of
debt (from EUR 95 million in 2021 to EUR 106 million in 2022), following the increase in interest rates observed in the fourth quarter of 2022,
as well as an increased negative impact from foreign exchange fluctuations (from EUR 8 million in 2021 to EUR 27 million in 2022).
Income tax expense
The effective tax rate was 25.7% for 2022, and 23.2% for 2021. Restating the EUR 195 million Russia and Belarus deconsolidation impact
from the profit before tax (no tax impact attached), the effective tax rate would be of 24.6%. The corresponding income tax expense
increased from EUR 966 million for 2021 to EUR 1,211 million for 2022.
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F I N A N C I A L S T A T E M E N T S
5.7 Extract of the management report for the year ended December 31, 2022
Share of profit/(loss) of associates
The share of associates was a EUR 29 million profit for 2022, compared to EUR 84 million profit for 2021, mainly from the lower positive
contribution from Delixi versus last year, and increased losses from Uplight.
Non-controlling interests
Non-controlling interests in net income for 2022 totaled EUR 59 million, compared to EUR 69 million for 2021. This represents the share in net
income attributable to the non-controlling interests, mainly coming from the Group Chinese and Indian 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 3,477 million for 2022, compared to EUR 3,204
million profit for 2021.
Earnings per share
Basic Earnings per share amounted to EUR 6.23 per share for 2022 and EUR 5.76 per share for 2021.
Comments to the consolidated Cash-flow
The following table sets forth our cash-flow statement for 2022 and 2021:
(in millions of euros)
Note
Full Year 2022
Full Year 2021
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 treasury 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
TOTAL V - IMPACT OF RECLASSIFICATION OF ITEMS HELD FOR SALE
INCREASE/(DECREASE) IN NET CASH AND CASH EQUIVALENTS: I + II + III + IV + V
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
*
In 2021, transactions with non-controlling interests mainly relates to RIB.
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(29)
750
732
61
32
70
139
102
5,393
(305)
(553)
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(254)
(1,039)
4,354
(707)
69
(386)
(1,024)
(297)
40
(130)
(387)
(1,411)
1,092
(829)
(219)
143
208
(73)
(1,618)
(157)
(1,453)
(70)
(20)
1,400
2,463
1,400
3,863
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
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Chapter 5 – Consolidated financial statements at December 31, 2022
The accompanying notes are an integral part of the consolidated financial statements.
Operating Activities
Net cash from operating activities before changes in working capital requirement reached EUR 5,393 million for 2022, increasing compared
to EUR 4,469 million for 2021. It represented 15.8% of revenues for 2022 (15.5% of revenues from 2021).
Change in working capital requirement consumed EUR 1,039 million in cash in 2022, compared to a consumption of EUR 853 million in
2021.
In all, net cash from operating activities increased from EUR 3,616 million in 2021 to EUR 4,354 million in 2022.
Investing Activities
Net capital expenditure, which includes capitalized development projects, increased, at EUR 1,024 million for 2022, compared to EUR 817
million for 2021, and representing 3.0% of sales in 2022 compared to 2.8% in 2021.
Free cash-flow (cash from operating activities net of net capital expenditure) amounted to EUR 3,330 million in 2022 versus EUR 2,799
million in 2021.
Cash conversion rate (free cash-flow over net income attributable to the equity holders of the parent company on continuing operations)
was 96% in 2022 versus 87% in 2021.
The acquisitions net of disposals represented a cash out of EUR 297 million (net of acquired cash) for 2022, compared with EUR 4,231
million for 2021. 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 1,453 million during the year 2022, compared to cash outflow of EUR 3,093
million during the year 2021. The variance is mainly due to the bond issuances in 2022 for EUR 1.1 billion (no bonds issuance in 2021), as
well as a year-on-year net increase in commercial papers and short-term debt of EUR 0.5 billion.
The dividend paid by Schneider Electric was EUR 1,618 million in 2022, compared with EUR 1,447 million in 2021.
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F I N A N C I A L S T A T E M E N T S
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Chapter 6 – Parent company financial statements
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
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6.4 Statutory auditors’ report on the
annual financial statements
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6.5 List of securities held at
December 31, 2022
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, 2022
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519
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Chapter 6 – Parent company financial statements
F I N A N C I A L S T A T E M E N T S
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.
31/12/2022 Net
31/12/2021 Net
1.1
1.2
2.1
2.2
2.3
3
3
4
5
6.1
6.2
6.3
9
27,429
(27,429)
2,784
48
1,221
–
(48)
–
31,482
(27,477)
–
2,784
–
1,221
4,005
–
2,784
–
1,221
4,005
5,377,099
763,201
2,513,350
81,172
8,734,822
8,766,304
392,646
232,756
625,402
734,726
8,175,864
1,393
8,911,984
9,537,386
574
15,883
20,153
–
(19,468)
–
–
–
5,357,631
763,201
2,513,350
81,172
5,357,631
637,409
3,218,096
10
(19,468)
8,715,354
9,213,146
(46,945)
8,719,359
9,217,153
–
–
–
–
–
–
–
–
–
–
–
–
392,646
232,756
625,402
351,799
136,480
488,279
734,726
8,175,864
1,393
348,250
6,878,822
306
8,911,984
7,227,378
9,537,386
7,715,657
574
15,883
20,153
–
1,151
17,021
21,246
84,928
18,340,300
(46,945)
18,292,355
17,057,156
The notes form an integral part of these parent company financial statements.
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Chapter 6 – Parent company 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
Debts related to investments
Borrowings and financial liabilities
Accounts payable – trade
Accrued taxes and payroll costs
Other
Total liabilities
Deferred revenue
Call premiums
Translation gains
TOTAL EQUITY AND LIABILITIES
The notes form an integral part of these parent company financial statements.
Notes
31/12/2022
31/12/2021
7
7.1
7.2
7.3
8
9
9
10
11
12
6.3
2,284,372
2,616,090
2,276,134
2,411,613
243,027
325,407
1,744,408
2
7,213,305
243,027
444,780
1,498,235
2
6,873,791
316,327
316,327
350,596
350,596
650,000
8,094,325
39,096
42,000
1,491,000
79,789
237,057
80,378
650,000
7,700,665
80,249
–
1,150,000
31
109,426
5,998
10,713,646
9,696,369
–
40,199
9,877
–
51,472
84,928
18,293,355
17,057,156
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Chapter 6 – Parent company financial statements
F I N A N C I A L S T A T E M E N T S
6.2 Statement of income
(in thousands of euros)
Note
2022
2021
Sales of services and other
Reversals of provisions, depreciation and amortization and expense transfers
Other
Operating revenues
Purchase 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
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.
15
16
79
11
412,303
412,393
(171,810)
(5,114)
(2,367)
(1,928)
(2,223)
(183,442)
228,952
1,500,580
89,438
–
1,590,018
(111,111)
1,396
(109,716)
–
–
–
–
(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)
17
1,480,303
1,459,598
1,709,254
312,074
93,678
145,098
1,034
551,884
(272,321)
(108,827)
(154,206)
(535,354)
16,531
18,623
1,437,276
267
82,245
149,627
154
232,293
(1)
(97,153)
(126,522)
(223,676)
8,617
52,342
1,744,408
1,498,235
18
19
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Chapter 6 – Parent company 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
• Schneider Electric announced by press release dated November 29, 2021, its planned merger by absorption of the company IGE+XAO
(subsidiary of the group since February 2018). This merger, dated May 5, 2022, took place in several stages and impacted the accounts
of Schneider Electric SE:
1) Schneider Electric Industries S.A.S. (SEISAS) sold its shares in IGE+XAO to Schneider Electric S.E. (SESE) before the implementation of
the Merger Plan, for 293 million euros.
2) At the same time, the company IGE+XAO merged within the entity Schneider Electric S.E (retroactive effect from January 1, 2022)
3) SESE subsequently sold its SEEMSF shares to SEI SAS, for 311 million euros.
•
Investigations were conducted in September 2018 by the French judicial authority and French Competition Authority (Autorité de la
concurrence) at Schneider Electric’s head office and other premises concerning the sale of electrical products through commercial
distribution activities in France. On July 4, 2022, Schneider Electric received a statement of objections (notification de griefs) from the
French Competition Authority alleging that the pricing autonomy of some distributors in the French market would have been limited, in
breach of competition rules. Schneider Electric strongly disagrees with the allegations of the statement of objections and has submitted
its response to the French Competition Authority on October 4, 2022. Concurrently on October 7, 2022 Schneider Electric was indicted
by an investigating judge who required Schneider Electric to provide a bank guarantee of 20 million euros and a cash guarantee of 80
million euros which was paid mid-January 2023. As at December 31, 2022, this cash guarantee was recognized as “Other liabilities”
against “Financial assets”. These actions do not mean that Schneider Electric will ultimately be found guilty of any wrongdoing.
Schneider Electric firmly disagrees with all the allegations made by the French investigating judge and the French Competition Authority
and intends to defend itself fully and vigorously. Should the French Competition Authority deny Schneider Electric’s arguments and
conclude, after examining the substance of the matter, that anti-competitive practices have been involved, it has broad discretion to
determine on a case-by-case basis the financial fines it may impose in accordance with the principles of proportionality and individuality.
In light of the difficulty in assessing the extent to which the French Competition Authority takes into account the arguments of Schneider
Electric in its defense as well as the multiple factors contributing to the determination of a fine, it is not possible to reliably estimate the
amount of any potential fine that might be incurred in the event of an adverse decision, even though it might have a significant impact on
the Group. In this context, no provision has been made at this stage of the investigation.
In September 2022, as part of the operation to acquire minority interests in AVEVA by its indirect subsidiary Ascot Acquisition Holdings
Limited and to comply with UK regulations on public offers, Schneider Electric SE implemented placed a 4.1 billion british pounds
bridging line of credit for 12 months with the possibility of requesting two successive 6-month extensions. This line of credit was then
partially refinanced by a 3-year loan line of 1.5 billion British Pounds and cash deposited in a segregated account. At closing, the amount
of the bridging line of credit was 2.4 billion British Pounds and was supplemented by the loan line for 1.5 billion British Pounds and a
cash deposit of 423 million Euros invested in Money market SICAVs meeting the criteria for registration as cash.
•
• On November 9, 2022, SESE carried out a bond issue in two tranches of respectively 500 million euros at a rate of 3.25% and maturing in
November 2027 and 600 million euros at a rate of 3.5% and maturing in November 2032. These two transactions implemented as part of
the financing of the acquisition of AVEVA’s minority interests included a reimbursement clause allowing the company to reimburse them
in the event that the acquisition did not take place.
• Since January 1, 2022, Schneider Electric SE has held full ownership of the Schneider Electric brand and has managed it. As such, it
collects the royalties invoiced to all the companies in the Group and bears the related costs. In May 2022, the 2021 dividend was paid in
the amount of 1,619 million euros. The company bought back 1.6 million of its own shares for 219 million euros.
• As of December 31, 2022, the company decided to fund some of its current action plans on existing shares and to re-invoice the related
expense to the various Group companies. As a result of these movements, the provision for charges was adjusted to 312 million euros.
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Chapter 6 – Parent company financial statements
F I N A N C I A L S T A T E M E N T S
6.3 Notes to the financial statements
6.3.2 Accounting principles
As in the prior financial year, the financial statements for the financial year ended December 31, 2022 have been prepared in accordance
with French generally accepted accounting principles and with the ANC no. 2014-03.
Accounting principles for the preparation of the financial statements of the parent company were applied, in accordance with precautionary
principle and based on the following fundamental assumptions:
• going concern,
• consistency of accounting methods from one period to the next,
• accrual basis
Assets and liabilities are measured according to the historical cost convention.
Only significant information is disclosed.
Non-current assets
Non-current assets of all types are stated at historical cost.
Historical costs include purchase price include import duties and non-refundable taxes, as well as any expenses directly attributable to the
preparation of the asset for use (registration fees, salaries related to the installation, set-up costs, testing…)
The company uses the component approach as defined by CRC regulation 2002-10. The analysis and investigations carried out by the
company and the Schneider Electric Group have allowed to ensure the current split of non-current asset met this principle: components with
distinct useful life are indeed accounted for separately, according their own amortization plan.
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 recorded at acquisition cost, plus directly attributable costs (including acquisition costs related to
these transactions).
Provisions for depreciation may be made if the book value is higher than the value in use estimated at the end of the financial year. This
estimate is determined mainly by reference to the net book value of the investment.
Equity investments are valued at their value in use each year.
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 or implicit 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.
A provision for risks and charges is recognized when the treasury shares are subject to an explicit or implicit allocation to cover
performance share plans.
Receivables and debts
Receivables and debts are valued at their face value (historical cost). Receivables are, where applicable, depreciated by means of a
provision to take account of the risk of non-recovery.
At the end of the period, receivables and debts in foreign currencies are revalued at the rate at the end of the period.
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Chapter 6 – Parent company financial statements
The foreign exchange risk borne by the company is managed centrally at the level of Boissière Finance SNC.
The Schneider Electric group organizes a foreign exchange risk hedging policy (“Fair Value Natural Hedge”, hereinafter “FVNH”) aimed at
comprehensively managing the monetary assets and liabilities in foreign currencies recorded on the balance sheets of the subsidiaries.
The monetary assets and liabilities included in the company’s FVNH position (customer invoices, supplier invoices, banks, current accounts)
are consolidated and balanced on a daily basis through spot foreign exchange transactions carried out in current accounts with Boissière
Finance SNC. Foreign exchange gains and losses related to the revaluation at the closing ECB fixing rate of monetary assets and liabilities
in foreign currencies offset each other within the foreign exchange position.
Provisions for depreciation of bad debts are recorded when it becomes probable that the debt will not be collected, and it is possible to
reasonably estimate the amount of the loss. The identification of doubtful debts as well as the amount of the corresponding provisions are
based on the historical experience of definitive losses on debts, the analysis by age of the specific accounts as well as the related credit
risks. When the certainty is acquired that a doubtful debt will not be recovered, it is, as well as its constituted provision, canceled by the
income statement.
Other exploitation products
Royalties from the Schneider brand have been recognized in this item of the income statement
Non-recurring income
Income and expenses for the financial year are classified in the income statement in such a way as to show by difference the items of
current profit and the items of extraordinary profit, including: the achievement is not related to the day-to-day operation of the business
which are not likely to be recurring over which the company has only limited control
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.
The actuarial assumptions used to determine the company’s commitment are as follows:
• Valuation date: December 31, 2022.
• Data date: September 30, 2022.
•
Inflation rate: 2.20%.
• Discount rate: 3.75%.
• Rate of return on assets: 2.75%.
• Retirement age: Full rate age.
• Age of beginning of salaried activity: 23 years old.
• Turnover rate: 0.00%.
• Mortality rate: TGH, TGF 05.
• Annuity growth rate: 1.50%.
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.
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Chapter 6 – Parent company financial statements
F I N A N C I A L S T A T E M E N T S
6.3 Notes to the financial statements
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.
Note 2 Investments
2.1 – Shares in subsidiaries and affiliates
(in thousands of euros)
Shares in subsidiaries and affiliates
Cost
Provisions
NET
31/12/2021
Additions
Disposals
31/12/2022
4,054
(48)
4,006
–
–
–
–
–
–
4,054
(48)
4,006
31/12/2021
Additions
Disposals
31/12/2022
5,377,099
(19,468)
5,357,631
–
–
–
–
–
–
5,377,099
(19,468)
5,357,631
The provision of Schneider Electric Japan Holding is for EUR (15,200) K and Muller SAS for EUR (4,268) K.
The main investments at December 31, 2022 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
31/12/2021
Increases
Decreases
31/12/2022
637,409
–
–
637,409
219,470
–
–
219,470
(93,679)
–
–
(93,679)
763,201
–
–
763,201
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 Directors dated July 6, 2022, the company bought back 1,659,933 of its own
shares for a total of EUR 219 million.
In line with previous years fund the performance shares of plans 32, 34, 37bis, 39bis, 39 ter, 41 and 41bis with Schneider Electric treasury
shares, 1,648,043 shares for a total amount of EUR 109 million have been classified as marketable securities. 236,474 shares for EUR 15
million were reclassified from marketable securities to “Other investment securities” following the departure of the beneficiaries.
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Chapter 6 – Parent company financial statements
2.3 – Advances to subsidiaries and affiliates
(in thousands of euros)
Advances to subsidiaries and affiliates
31/12/2021
Increases
Decreases
31/12/2022
Cost
NET
3,218,096
3,218,096
1,583
1,583
(706,339)
2,513,350
(706,339)
2,513,350
At December 31, 2022, this item mainly consisted of a loan of EUR 2,500 million granted to Schneider Electric Industries SAS with a maturity
date of 2023, and accrued interests for a total amount of EUR 13.3 million.
During the year, the loan granted in 2012 to Boissière Finance for a total amount of USD 800 million with a maturity on September 29, 2022,
was refunded.
Note 3 Accounts receivables
(in thousands of euros)
Trade receivables
Other
NET
31/12/2022
31/12/2021
392,646
232,756
625,402
351,799
136,480
488,279
Trade receivables mainly include the reinvoicing of the performance shares to SEISAS and re-invoicing related to brand royalties.
At December 31, 2022, the “Other receivables” are mainly composed of tax receivables for EUR 211 million and R&D tax credits for EUR 93
million euros.
Note 4 Marketable securities
(in thousands of euros)
TREASURY SHARES
Gross
Provisions
TOTAL NET
SICAV
Gross
TOTAL
31/12/2021
Acquisitions
Disposals
31/12/2022
Number of
Shares
5,570,816
–
–
–
–
Value
Value
Value
Value
348,250
–
348,250
–
348,250
108,827
–
108,827
422,747
531,574
(145,098)
–
(145,098)
311,979
–
311,979
–
422,747
(145,098)
734,726
Number of
Shares
4,849,753
–
–
–
–
Marketable securities primarily represent own shares held by the company for allocation to future performance shares plans and, if
appropriate, stock-options.
During the year, Schneider Electric SE subscribed to 2 SICAVs for an amount of EUR 422,747 K.
In 2022, following the decision of the board to fund the performance share distribution plans 32, 34, 41, 37bis, 39bis and 39ter with existing
shares.
1,648,063 shares for a total amount of EUR 109 million has been transferred into marketable securities. The company has distributed 2
million shares for a total amount of EUR 129 million re-invoiced to the concerned Group entities.
Following the loss of the rights of employees who left the group, the company switched back 237,594 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 relate mainly on insurance costs and fees.
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F I N A N C I A L S T A T E M E N T S
6.3 Notes to the financial statements
6.2– Bond issue expenses
(in thousands of euros)
Bond issue expenses
Sep. 27, 2012 over 10 years (USD 800 million)
Mar. 11, 2015 over 10 years (EUR 750 million)
Sep. 8, 2015 over 8 years (EUR 800 million)
Oct. 13, 2015 over 10 years (EUR 200 million)
Oct. 13, 2015 over 10 years (EUR 100 million)
Sep. 9, 2016 over 8 years (EUR 800 million)
Dec. 13, 2017 over 9 years (EUR 750 million)
June. 21, 2018 over 9 years (EUR 750 million)
Sept. 9, 2019 over 5 years (EUR 200 million)
Jan. 15, 2019 over 9 years (EUR 250 million)
Jan. 15, 2019 over 9 years (EUR 500 million)
Mar. 11, 2020 over 9 years (EUR 800 million)
Apr. 9, 2020 over 7 years (EUR 500 million)
Jun. 12, 2020 over 3 years (EUR 500 million)
Nov. 24, 2020 over 6 years (EUR 650 million)
Nov. 9, 2022 over 5 years (EUR 500 million)
Nov. 9, 2022 over 10 years (EUR 600 million)
TOTAL
6.3– Issuance premiums
(in thousands of euros)
Issuance premiums
Sep. 27, 2012 due 2022 (USD 800 million)
Mar. 11, 2015 due 2025 (EUR 750 million)
Sep. 8, 2015 due 2023 (EUR 800 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)
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.9, 2022 due 2027 (EUR 500 million)
Nov.9, 2022 due 2032 (EUR 600 million)
Oct. 13, 2015 due 2025 (EUR 100 million)
Sept. 9, 2019 due 2024 (EUR 200 million)
Nov. 24, 2020 due 2026 (EUR 650 million)
Jan. 15, 2019 due 2028 (EUR 250 million)
TOTAL
31/12/2021
Increases
Decreases
31/12/2022
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
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,375
1,950
3,325
(126)
(321)
(414)
(96)
(39)
(445)
(297)
(254)
(136)
(89)
(201)
(270)
(221)
(423)
(1,061)
(21)
(45)
–
715
289
277
112
761
1,170
1,136
231
451
1,012
1,672
945
192
3,659
1,354
1,905
(4,463)
15,883
31/12/2021
Increases
Decreases
31/12/2022
16
2,914
981
2,741
2,867
4,422
84
4,469
2,173
579
–
–
(582)
(1,579)
(40,382)
(8,929)
(30,226)
–
–
–
–
–
–
–
–
–
–
295
4,026
–
–
–
–
4,321
(16)
(903)
(578)
(1,015)
(579)
(808)
(14)
(621)
(412)
(402)
(27)
(37)
150
586
9,059
1,477
5,859
–
2,012
403
1,726
2,288
3,614
70
3,848
1,761
177
268
3,986
(432)
(992)
(31,323)
(7,452)
(20,046)
Total
6,607
217
–
(1,447)
(1)
1498
6,874
212
–
(1,619)
–
1,744
7,211
Note 7 Shareholders’ equity and retained earnings
(in millions of euros)
Share capital
Additional paid-in
capital
Reserves and
retained earnings
Net income for the
year
Regulated
provisions
December 31, 2020 before allocation
of net income for the year
Change in share capital
Allocation of 2020 net income
2020 dividend
Cost WESOP 2021*
2021 net income
December 31, 2021 before allocation
of net income for the year
Change in share capital
Allocation of 2021 net income
2021 dividend
Cost WESOP 2022*
2022 net income
DECEMBER 31, 2022 BEFORE
ALLOCATION OF NET INCOME
FOR THE YEAR
2,268
8
–
–
–
–
2,204
209
–
–
(1)
–
2,276
2,412
8
–
–
–
–
204
–
–
–
–
2,166
–
(31)
(1,447)
–
–
688
–
1,498
(1,619)
–
–
(31)
–
31
–
–
1,498
1498
–
(1,498)
–
–
1,744
2,284
2,616
567
1,744
–
–
–
–
–
–
–
–
–
–
–
–
–
* WESOP: Issuance of shares reserved for group employees who are members of the company savings plan and the international shareholding plan and for entities
set up for the benefit of group employees
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Chapter 6 – Parent company financial statements
7.1 – Capital
Share capital
The company’s share capital at December 31, 2022 amounted to EUR 2,284,371,684 consisting of 571,092,921 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 million capital increase through the issue of company shares reserved for employees participating in the PEG which correspond
to 492,482 shares with a nominal value of 4 euros bearing current dividend rights and which were subscribed at a price of 117.51 euros
by FCPE Schneider Relais France 2022).
(ii) A capital increase by issuing shares reserved for Group employees based outside France and for entities under shareholding or
employee savings programs for 5 million euros (i.e. 313,599 shares by employees in directly and 969,090 shares by the FCPE Schneider
Relais International 2022, at the subscription price of 117.51 euros through the FCPE Schneider Relais International 2022).
(iii) A capital increase of 1 million euros related to the merger/acquisition of IGE XAO.
Own shares
At the reporting date, the total number of own shares held is 7,127,444 for a total net value of EUR 763 million.
7.2 – Additional paid-in capital
Additional paid-in capital decreased by EUR 204 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 May 5, 2022, the 2021 gain of EUR 1,498 million
was allocated to retained earnings. EUR 1,619 million were distributed.
Note 8 Provisions for contingencies and expenses
(in thousands of euros)
31/12/2021
Increases
Decreases
31/12/2022
PROVISIONS FOR CONTINGENCIES
Provision for fees on own shares distribution
Other
TOTAL
348,281
2,315
350,596
108,827
2,003
(145,098)
–
110,830
(145,098)
312,009
4,318
316,327
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 312 million was booked to cover the decision of the board to allocate performance share plans with Schneider
Electric SE own shares.
Note 9 Bonds
(in thousands of euros)
Schneider Electric SE 2019
Schneider Electric SE 2022
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
Schneider Electric SE 2027
Schneider Electric SE 2032
TOTAL
TF: fixed rate.
TV: floating rate.
Share Capital
31/12/2022
31/12/2021
Interest rate
Maturity
94,325
–
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
500,000
600,000
94,325 Euribor + 0.60% TV
2.95% TF
0.875% TF
1.50% TF
1.841% TF
1.841% TF
0.25% TF
0.25% TF
0.875% TF
1.375% TF
1.5% TF
1.5% TF
0.25% TF
1% TF
0% TF
3.25% TF
3.5% TF
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
–
–
23/07/2024
27/09/2022
11/03/2025
08/09/2023
13/10/2025
13/10/2025
09/09/2024
09/09/2024
13/12/2026
21/06/2027
15/01/2028
15/01/2028
11/03/2029
09/04/2027
12/06/2023
09/11/2027
09/11/2032
8,094,235
7,700,665
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6.3 Notes to the financial statements
Convertible bonds (OCEANE)
(in thousands of euros)
Schneider Electric SE 2026
TOTAL
Share capital
31/12/2022
31/12/2021
Interest rate
Maturity
650,000
650,000
650,000
650,000
0%
15/06/2026
Schneider Electric SE has issued bonds during past years on different markets, 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 USD 800 million matured on September 2022. In the previous financial year
2021, the revaluation of the Schneider Electric SE 2022 bond issue by USD 800 million had led to an asset translation difference of EUR 85
million.
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.
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, 2022, the other remaining bonds are as follows:
• EUR 800 million worth of 0.25% bonds issued in September 2016 and maturing on September 9, 2024 and described above;
• EUR 100 million worth of 1.841% bonds issued in October 2015 and maturing on October 13, 2025;
• 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 2018 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 renewed in April 2020 and maturing on July 23, 2024;
• EUR 250 million worth of 1.5% bonds issued in January 2019 and maturing on January 15, 2028;
• EUR 500 million worth of 3.25% bonds issued in november 2022 and maturing on November 2027;
• EUR 600 million worth of 3.5% bonds issued in novembrer 2022 and maturing on November 2032.
The issue premiums and issuance costs are amortized in line with the effective interest method.
Note 10 Other borrowings
Other borrowings at December 31, 2022 included accrued interest on bonds and other debt issued by the company.
Accrued interest amounted to EUR 39 million.
Note 11 Debts related to investments
The EUR 42 million correspond to an intercompany loan with Luxembourg; they were presented in “Other borrowings and debts” in 2021.
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Chapter 6 – Parent company financial statements
Note 12 Borrowings and financial liabilities
Interest-bearing liabilities
(in thousands of euros)
Commercial Paper
Borrowings
Overdrafts
Other
NET
31/12/2021
Increase
Decrease
31/12/2022
950,000
200,000
–
–
541,000
–
–
–
–
(200,000)
–
–
1,491,000
–
–
–
1,150,000
541,000
(200,000)
1,491,000
During the financial year, the company took out a conventional loan with HSBC for EUR 200 million, maturing on January 10, 2022.
The increase in commercial paper is mainly due to the €172m increase in dividends paid and the buyback of treasury shares for an amount
of EUR 220 million.
Note 13 Maturities of receivables and payables
(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
2,513,350
2,513,350
392,646
232,756
734,726
574
8,744,325
39,096
1,491,000
79,789
237,057
80,378
–
392,646
232,756
734,726
574
1,300,000
39,096
1,491,000
79,789
237,057
378
–
–
–
–
–
–
–
–
–
–
–
5,294,325
–
–
–
–
–
–
2,150,000
–
–
–
–
80,000
–
Invoices received and issued during the period have not been subject to late payment.
Note 14 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
Gross
Net
5,355,850
2,513,350
323,614
6,414,520
5,351,582
2,513,350
323,614
6,414,520
93,678
1,576,333
It should be noted that Boissiere Finance is included in this table concerning related companies although it is held through Schneider
Electric Industries SAS and the stake is <10%.
Note 15 Other operating revenue
This item includes brand royalties billed to Group companies. Invoicing is made according to a percentage of the turnover of each
company, carried out under the Schneider brand name or under associated brands.
Note 16 Other purchases and external expenses
This item mainly includes expenses inherent in the management of the Schneider Electric brand.
Note 17 Net financial income/(loss)
(in thousands of euros)
Dividends
Net interest income (expense)
Other
NET FINANCIAL INCOME/(LOSS)
31/12/2022
31/12/2021
1,500,580
(21,673)
1,396
1,500,363
(46,122)
5,358
1,480,303
1,459,598
In 2022, the company received EUR 1,500 million of dividends from Schneider Electric Industries SAS.
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F I N A N C I A L S T A T E M E N T S
6.3 Notes to the financial statements
Note 18 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)
31/12/2022
31/12/2021
39,753
36,271
(59,494)
16,531
35
11,000
(2,418)
8,617
Non-recurring income is mainly related to the merger-acquisition of IGE+XAO for EUR 39 million as well as a re-invoicing to Schneider
Electric Industries SAS for EUR (22) million.
Note 19 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 2022 income tax due, for EUR 18 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 1,811 million at December 31, 2022.
Note 20 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 the end of 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 21 Off-balance sheet commitments
21.1 – 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.
21.2 – Guarantees given and received
Commitments given
Counter-guarantees of bank guarantees: None
Other guarantees given: EUR 2,072 million, mainly to Group companies
Bank guarantees: EUR 20 million
Commitments received
Bank counter-guarantees: None
Credit lines: EUR 2,950 million
21.3 – 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.
During fiscal year 2022, Schneider Electric SE set up a €250 million interest rate swap as a derivative instrument to partially hedge its
exposure to interest rates.
Note 22 Contingencies
Investigations were conducted in September 2018 by the French judicial authority and French Competition Authority (Autorité de la
concurrence) at Schneider Electric’s head office and other premises concerning the sale of electrical products through commercial
distribution activities in France.
On July 4, 2022, Schneider Electric received a statement of objections (notification de griefs) from the French Competition Authority alleging
that the pricing autonomy of some distributors in the French market would have been limited, in breach of competition rules.
Schneider Electric strongly disagrees with the allegations of the statement of objections and has submitted its response to the French
Competition Authority on October 4, 2022.
Concurrently on October 7, 2022 Schneider Electric was indicted by an investigating judge who required Schneider Electric to provide a
bank guarantee of EUR 20 million and a cash guarantee of EUR 80 million which was paid mid-January 2023. At December 31, 2022, this
cash guarantee was recognized as “Other liabilities” against “financial assets”.
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Chapter 6 – Parent company financial statements
Those actions do not mean that Schneider Electric will ultimately be found guilty of any wrongdoing. Schneider Electric firmly disagrees with
all the allegations made by the French investigating judge and the French Competition Authority and intends to defend itself fully and
vigorously. Should the French Competition Authority deny Schneider Electric’s arguments and conclude, after examining the substance of
the matter, that anti-competitive practices have been involved, it has broad discretion to determine on a case-by-case basis the financial
fines it may impose in accordance with the principles of proportionality and individuality. In light of the difficulty in assessing the extent to
which the French Competition Authority takes into account the arguments of Schneider Electric in its defense as well as the multiple factors
contributing to the determination of a fine, it is not possible to reliably estimate the amount of any potential fine that might be incurred in the
event of an adverse decision, even though it might have a significant impact on the Group. In this context, no provision has been made at
this stage of the investigation.
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Note 23 Other Information
23.1 – Workforce
The average number of employees is 2.5 over 2022.
23.2 – 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.
23.3 – Subsequent events
On January 30, 2023 as part of the closing of the transaction, SESE used the bridging loan for an amount of EUR 1 billion and the loan line
for an amount of EUR 1.7 billion and made the corresponding cash available to Ascot Acquisition Holdings Limited.
On January 13, 2023 SESE carried out a bond issue in two tranches: EUR 600 milllion at a rate of 3.125% and maturing in October 2029 and
€600m at a rate of 3.375% and maturing in April 2034.
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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, 2022.
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 at
December 31, 2022 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 these standards are further described in the “Responsibilities of the Statutory Auditors relating to the audit of the
financial statements” section of our report.
Independence
We conducted our audit engagement in compliance with the independence rules provided for in the French Commercial Code (Code de
commerce) and the French Code of Ethics (Code de déontologie) for Statutory Auditors for the period from January 1, 2022 to the date of
our report, and, in particular, we did not provide any non-audit services prohibited by Article 5(1) of Regulation (EU) No. 537/2014.
Justification of assessments – Key audit matters
In accordance with the requirements of Articles L. 823-9 and R. 823-7 of the French Commercial Code relating to the justification of our
assessments, we inform you of the key audit matters relating to the risks of material misstatement that, in our professional judgment, were
the most significant in our audit of the financial statements, as well as how we addressed those risks.
These matters were addressed as part of our audit of the financial statements as a whole, and therefore contributed to the opinion we
formed as expressed above. We do not provide a separate opinion on specific items of the financial statements.
Measurement of investments in subsidiaries and affiliates and related loans and advances
“Shares in subsidiaries and affiliates” paragraph of the “Accounting principles” section and Note 2 “Investments” to the financial statements
Description of risk
At December 31, 2022, shares in subsidiaries and affiliates and related loans and advances recorded in the
Company’s balance sheet amounted to €5,358 million and €2,513 million respectively.
As described in the “Shares in subsidiaries and affiliates” paragraph in the “Accounting policies” section of the
notes to the financial statements, shares in subsidiaries and affiliates are recorded at their acquisition cost and
written down when their estimated value in use at the reporting date is less than their carrying amount. The
estimated value in use of shares in subsidiaries and affiliates is determined primarily by reference to the
accounting net assets of the investments and by taking into account the profitability of the investments and the
outlook for the economic environment. For listed securities, the average share price for the last month of the
financial year is taken into account.
Due to the judgment required from management in making these estimates, particularly when they are based on
forward-looking information, we considered that the valuation of shares in subsidiaries and affiliates, and by
extension the related loans and advances, is a key audit matter.
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Chapter 6 – Parent company financial statements
How our audit
addressed this risk
We examined the methodology employed by the Company to estimate the value in use of shares in subsidiaries
and affiliates. Our audit work consisted in:
• comparing the share in accounting net assets used to determine the value in use of shares in subsidiaries
and affiliates with the financial statements of those subsidiaries and affiliates that have been audited or
subject to analytical procedures;
• assessing, when values in use have been determined on the basis of forecasts, the appropriateness of the
valuation method on which the estimation is based;
• assessing the main assumptions used in estimating values in use, in particular the long-term growth rate and
the discount rate, with the help of our valuation experts, where appropriate;
• verifying the arithmetical accuracy of the value in use calculations used by your Company;
We also assessed the recoverability of the related receivables in light of the impairment tests performed on the
shares in subsidiaries and affiliates.
Specific verifications
In accordance with professional standards applicable in France, we have also performed the specific verifications required by French legal
and regulatory provisions.
Information given in the management report and in the other documents provided to the shareholders with respect to the
Company’s financial position and the financial statements
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 provided to the shareholders with respect to the Company’s financial
position and the financial statements.
We attest to the fair presentation and the consistency with the financial statements of the information about the payment terms referred to in
Article D. 441-6 of the French Commercial Code.
Report on corporate governance
We attest that the Board of Directors’ report on corporate governance sets out the information required by Articles L. 225-37-4, L. 22-10-10
and L. 22-10-9 of the French Commercial Code.
Concerning the information given in accordance with the requirements of Article L. 22-10-9 of the French Commercial Code relating to
compensation and benefits paid or awarded to corporate officers 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 the Company from controlled companies within its scope of consolidation. Based on this work,
we attest to the accuracy and fair presentation of this information.
Concerning the information given in accordance with the requirements of Article L. 22-10-11 of the French Commercial Code relating to
those items the Company has deemed liable to have an impact in the event of a takeover bid or exchange offer, we have verified its
consistency with the underlying documents that were disclosed to us. Based on this work, we have no matters to report with regard to this
information.
Other information
In accordance with French law, we have verified that the required information concerning the identity of shareholders and holders of the
voting rights has been properly disclosed in the management report.
Other verifications and information pursuant to legal and regulatory requirements
Format of the 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 our work, we conclude that the presentation of Schneider Electric S.E.’s statutory financial statements to be included in the annual
financial report complies, in all material aspects, with the single electronic reporting 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 Statutory Auditors of Schneider Electric S.E. by the Annual General Meetings held on May 6, 2004 for Mazars and on
May 5, 2022 for PricewaterhouseCoopers Audit.
At December 31, 2022, Mazars was in the nineteenth consecutive year of their engagement and PricewaterhouseCoopers in their first year.
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Chapter 6 – Parent company financial statements
F I N A N C I A L S T A T E M E N T S
Responsibilities of management and those charged with governance for the financial statements
Management is responsible for preparing financial statements giving a true and fair view in accordance with French accounting principles,
and for implementing the internal control procedures it deems necessary for the preparation of financial statements that are free of 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 expects 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
risk management systems, as well as, where applicable, any internal audit systems, relating to accounting and financial reporting
procedures.
The financial statements were approved by the Board of Directors.
Responsibilities of the Statutory Auditors relating to the audit of the financial statements
Objective 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 of 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 taken by users on the basis of these financial statements.
As specified in Article L. 823-10-1 of the French Commercial Code, our audit does not include assurance on the viability or quality of the
Company’s management.
As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditors exercise professional
judgment throughout the audit. They also:
•
identify and assess the risks of material misstatement in the financial statements, whether due to fraud or error, design and perform audit
procedures in response to those risks and obtain audit evidence considered to be sufficient and appropriate to provide a basis for their
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;
• obtain an understanding of the internal control procedures 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;
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management and
the related disclosures in the notes to the financial statements;
• assess 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 the audit report. However, future events
or conditions may cause the Company to cease to continue as a going concern. If the Statutory Auditors conclude that a material
uncertainty exists, they are required to draw attention in the audit report to the related disclosures in the financial statements or, if such
disclosures are not provided or are inadequate, to issue a qualified opinion or a disclaimer of opinion;
• evaluate the overall presentation of the financial statements and assess 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 any significant deficiencies in internal control that we have
identified regarding the accounting and financial reporting procedures.
Our report to the Audit and Risks Committee includes the risks of material misstatement that, in our professional judgment, were the most
significant for the audit of the financial statements and which constitute 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, as defined in particular in Articles L. 822-10 to L. 822-14 of the French
Commercial Code and in the French Code of Ethics for Statutory Auditors. Where appropriate, we discuss any risks to our independence
and the related safeguard measures with the Audit and Risks Committee.
The Statutory Auditors
Mazars
Paris La Défense, March 6, 2023
PricewaterhouseCoopers Audit
Neuilly-sur-Seine, March 6, 2023
Juliette Decoux Guillemot
Partner
Mathieu Mougard
Partner
Jean-Christophe Georghiou
Partner
Séverine Scheer
Partner
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Chapter 6 – Parent company financial statements
6.5 List of securities held
at December 31, 2022
Number of securities
(in thousands of euros)
A. MAJOR INVESTMENTS
(Carrying amounts over EUR 5 million)
58,018,657
2,497
7,127,444
B. OTHER INVESTMENTS
(Carrying amounts under EUR 5 million)
C. INVESTMENTS IN REAL ESTATE COMPANIES
D. INVESTMENTS IN FOREIGN COMPANIES
Total
MARKETABLE SECURITIES
4,849,753
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
763,138
6,114,720
–
–
6,049
6,120,769
311,979
6,432,748
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Chapter 6 – Parent company financial statements
F I N A N C I A L S T A T E M E N T S
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 appreciation
of earnings*
Capital
Schneider Electric Industries SAS*** 35, rue Joseph-Monier 92500 Rueil-Malmaison
928,299
6,298,071
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.
the amounts in foreign currency have been converted into euros at the rate of December 31, 2022
*
**
*** Schneider Electric Industries SAS holds directly 99.99% of Boissière Finance.
38
–
–
766
8,191
–
–
147,834
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Chapter 6 – Parent company financial statements
Share interest held
(%)
Gross value
Net value
Loans and advances
provided by the
company and still
outstanding
Amount of
guarantees given by
the company
2022 revenues
(ex VAT)
2022 Profit
or Loss (-)
Dividends received
by the company
during 2022
100.00
5,343,544
5,343,544
2,513,350
99.84
–
–
4.8
12,305
–
–
21,249
8,038
–
–
6,048
–
–
–
–
–
–
–
–
–
4,230,446
1,666,105
1,500,580
–
–
(32)
–
–
186,149
–
53,305
–
–
–
–
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Chapter 6 – Parent company financial statements
F I N A N C I A L S T A T E M E N T S
6.7 The company’s financial results over
the last 5 years
Description
2022
2021
2020
2019
2018
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)
2,284,372
571,092,921
3,695,023
2,276,134
569,033,442
3,683,972
2,268,274
567,068,555
3,683,972
2,328,274
582,068,555
–
2,316,675
579,168,769
–
–
–
–
–
–
–
–
–
–
8,371
79
1,500,580
1,690,046
18,623
1,744,408
1,650,197(2)
–
1,500,362
1,392,930
52,342
1,498,235
1,650,197
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
2.99
3.05
2.63(2)
2.5
1,496
–
871
2.54
2.63
2.90
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
(1) For 2022, estimate based on existing shares at December 31, 2022, including treasury shares.
(2) Pending approval by the Annual Shareholders’ Meeting of 2023.
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Chapter 6 – Parent company financial statements
6.8 Extract of the management report for
the year ended December 31, 2022
Review of the parent company financial statements
In 2022, Schneider Electric SE reported an operating gain of EUR 229 million compared with a loss of EUR 22 million
the previous year.
Interest expense net of interest income amounted to EUR 22 million versus EUR 46 million the previous year.
Income from ordinary activities before tax stood at EUR 1,709 million in 2022 compared with an income of EUR 1,437 million in 2021. The
variance is mainly due to the Schneider Electric brand royalties income, as Schneider Electric SE became the full owner of the brand from
January 1st, 2022.
The net income stood at EUR 1,744 million in 2022 compared with EUR 1,498 million in 2021.
Net equity amounted to EUR 7,213 million at December 31, 2022 versus EUR 6,874 million at the previous year-end, taking
into account 2022 profit and dividend payments of EUR 1,619 million.
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Chapter 7 – Information on the Company and its capital
S H A R E H O L D E R I N F O R M A T I O N
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Chapter 7 – Information on the Company and its capital
7
7.1 Shareholding
7.1.1 Ownership structure
7.1.2 Employee shareholding
Information
on the Company
and its capital
522
7.5 Stock market data
531
533
7.6 Investor relations
7.6.1 Person responsible for financial information
7.6.2 Contacts
7.6.3 Shareholders’ Advisory Committee
7.6.4 Publicly available documents and regulated information
533
533
533
533
522
523
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525
526
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528
528
528
529
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
(Article 7 Paragraph 1 of the Articles of Association)
529
7.4.5 Disclosure thresholds
(Article 7 Paragraph 2 of the Articles of Association)
529
7.4.6 Identifiable holders of bearer shares
(Article 7 Paragraph 3 of the Articles of Association)
530
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
530
530
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Chapter 7 – Information on the Company and its capital
S H A R E H O L D E R I N F O R M A T I O N
This Chapter includes elements of the Board of Directors’ Corporate Governance Report.
The table of section 7.2.3 “Authorizations to issue and cancel shares” summarizing the outstanding delegations relating to share capital
increase and decrease granted by the Annual Shareholders’ Meeting, 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 December 31, 2022(1)
11.4%
2.1%
3.8%
0.3%
5.4%
29.3%
Western Europe
North America
Asia Pacific
47.7%
Rest of World
Employee holdings
Treasury shares
Other (mainly individual shareholders)
(1) Charts lists ownership stakes to the best of the Company’s knowledge.
Three-year summary of changes in capital(1)
7.3%
6.8%
3.8%
2.1%
80.0%
BlackRock, Inc.
Sun Life Financial, Inc.
Employees
Treasury shares
Public
At December 31, 2022, the share capital of Schneider Electric was €2,284,371,684, divided into 571,092,921 common shares, to which
598,336,796 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.
BlackRock, Inc.
Sun Life Financial, Inc.(2)
Employees(3)
Treasury shares
Public
Capital
%
7.3
6.8
3.8
2.1
80.0
Dec. 31, 2022
Number of
Voting rights
shares
41,525,844
38,697,952
21,814,127
11,978,255
457,076,743
%(4)
7.0
6.6
6.6
–
79.8
Dec. 31, 2021
Dec. 31, 2020
Number of
voting rights
Capital
%
Voting rights
%(4)
Capital
%
Voting rights
%
41,525,844
38,697,952
38,418,288
–
467,716,457
6.3
7.0
3.6
2.2
80.9
6.1
6.8
6.2
–
80.9
6.4
8.3
3.7
2.3
79.3
7.7
7.9
6.1
–
78.3
TOTAL
100.0
571,092,921
100.0
586,358,541(4)
100.0
100.0
100.0
100.0
(1) Table lists ownership stakes that have breached the 5% ownership voting rights threshold in the previous three years, to the best of the Company’s knowledge.
(2) These shares are mainly held by funds managed by MFS Investment Management which is part of Sun Life Financial, Inc.
(3) The total number of shares held by employees include:
– 8,673,800 shares held by the FCPE Actionnariat (France), corresponding to 1.5% of capital and 2.9% of voting rights,
– 5,615,500 shares held by the FCPE Actionnariat Mondial (International), corresponding to 1.0% of capital and 1.7% of voting rights, and
– 7,524,827 shares held directly by employees, corresponding to 1.3% of capital and 1.9% of voting rights.
(4) Number or percentage 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 2022 that crosses the 5%
threshold for either capital or voting rights.
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S H A R E H O L D E R I N F O R M A T I O N
Chapter 7 – Information on the Company and its capital
Control of the Company
At December 31, 2022, 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.
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)
2022
61.7
2021
65.8
2020
57.0
2019
59.3
2018
66.9
In 2022, 62% of the total from incentives and profit-sharing was invested in the Schneider Electric shareholder fund and 14% 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.
On December 31, 2022, Group employees held a total of 21.8 million Schneider Electric SE shares either directly, through the corporate
mutual funds (FCPE), or through Performance Share plans, representing 3.8% of the share capital and 6.6% 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: 22% in France, 13% in China, 16% in India, 9% in the
United States, and 40% elsewhere. Approximately 71% of all employees are shareholders of the Group.
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Chapter 7 – Information on the Company and its capital
S H A R E H O L D E R I N F O R M A T I O N
7.2 Capital
7.2.1 Share capital and voting rights
The Company’s share capital at December 31, 2022, amounted to €2,284,371,684 represented by 571,092,921 shares with a par value of
€4, all fully paid up. 598,336,796 voting rights were attached to the 571,092,921 outstanding shares as at December 31, 2022.
7.2.2 Potential capital
At December 31, 2022, the potential capital consisted of:
• 1,588,909 Performance Shares, part of which remains subject to the achievement of performance conditions (plans 37bis, 38, 39bis,
39ter, 40, 41, 41bis, and 41ter, delivery of which, either in existing shares or shares to be issued, has not yet been determined by the
Board). If all Performance Shares were vested, this would lead to the issuance of 1,588,909 shares. Schneider Electric SE capital would
be composed of 572,681,830 ordinary shares, i.e. a 0.28% increase of the number of shares as of December 31, 2022; and of
• 3,683,972 OCEANEs. If all OCEANEs were exercised, this would lead to the issuance of 3,695,023 shares(1). Schneider Electric SE
capital would be composed of 574,787,944 ordinary shares, i.e. a 0.65% increase of the number of shares as of December 31, 2022.
(1) The initial conversion and/or exchange ratio was set at one share per OCEANE subject to standard adjustments including dividend protection at €2.55€ per share. As
the result of the dividend distribution of €2.90 per share on May 19 2022, the conversion and/or exchange ratio has been adjusted to 1.003 share per OCEANE.
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, earnings or 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
None
200,000,000
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
30,000,000
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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S H A R E H O L D E R I N F O R M A T I O N
Chapter 7 – Information on the Company and its capital
Employee share issues
Company Savings Plan
(16th resolution of the AGM of May 5, 2022)
Share issues to promote share ownership among
employees in foreign companies of the Group
(17th resolution of the AGM of May 5, 2022)
Free shares or Performance Shares
(15th resolution of the AGM of May 5, 2022)
Maximum par
value of
authorized capital
increases
(in euros) Number of shares
Use of
the resolution
(number of
shares whose
issuance has
been authorized)
Amount available
(in number of
shares)
Authorization date/
authorization
expiration date
45.5 million(6)
11,375,000
22.75 million(4)(6)
5,690,000
45.5 million(6)
11,375,000
May 5, 2022/
Jun. 4, 2024
May 5, 2022/
Nov. 4, 2023
May 5, 2022/
May 4, 2025
7,675,000(3)
1,990,000(3)
92,680
11,282,320(5)
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
24-month period
56,000,000
Apr. 28, 2021/
Apr. 27, 2023
56,000,000
(1) The overall ceiling for issues is capped at €800 million in aggregate.
(2) All issuances made without preference right (17th, 18th, and 20th resolutions) are globally limited to €224 million.
(3) Using the authorization of the 22nd resolution of the Annual General Meeting (AGM) held on April 28, 2021 and the delegation of the Board of Directors granted on
December 15, 2021, 492,482 shares were issued in 2022 for French employees participating in a company savings plan. At its meeting of December 14, 2022, 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 in
a company savings plan.
(5) At the Board of Directors’ meeting of July 27, 2022, 67,590 shares were granted under the 2022 Long-term incentive plan. At the Board of Directors’ meeting of
October 26, 2022, 25,090 shares were granted under the 2022 Long-term incentive plan.
(6) On the date of the 2022 Annual Shareholders’ Meeting, the share capital was €2,276 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, 2019, through
capital increases/decreases:
Capital as of Dec. 31, 2019(1)
Decrease in capital
Performance Shares issued
Capital as of Dec. 31, 2020(2)
Employee share issue
Performance Shares issued
Capital as of Dec. 31, 2021(3)
IGE+XAO merger share issue
Employee share issue
Performance Shares issued
Number of shares issued
or cancelled
Cumulative number
Total amount
of shares
of the capital (in EUR)
582,068,555
2,328,274,220
15,000,000
–
1,964,887
–
284,308
1,775,171
–
567,068,555
2,268,274,220
569,033,442
2,276,133,768
CAPITAL AS OF DEC. 31, 2022(4)
571,092,921
2,284,371,684
(1) Increase in share capital (€11.6 million), increase in additional paid-in-capital (€156.2 million).
(2) Decrease in share capital (€60 million) and in additional paid-in-capital (€929.4 million).
(3) Increase in share capital (€7.86 million) and in additional paid-in-capital (€208.6 million).
(4) Increase in share capital (€8.2 million) and in additional paid-in-capital (€204.5 million).
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Chapter 7 – Information on the Company and its capital
S H A R E H O L D E R I N F O R M A T I O N
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 €1.5 billion to €2.0 billion share buyback program. The program
has been launched under the 15th resolution approved at the 2018 Annual Shareholders’ Meeting and pursued under the 14th, 17th, 15th, and
14th resolutions approved respectively at the 2019, 2020, 2021, and 2022 Annual Shareholders’ Meetings. These buybacks are 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 ongoing acquisitions, the share buyback program remained
on-hold after its suspension due to the COVID-19 crisis in 2020. The share buyback program restarted at the end of July 2021. On May 5,
2022, the proposal to raise the cap on purchase price to €250 per share (from the previous €150 per share) was approved at the Annual
Shareholders’ Meeting. Schneider Electric did not further progress the buyback in the second half-year primarily due to restrictions on
account of the proposed transaction with the AVEVA minority shareholders that was in progress during the period. Schneider Electric
remains committed to the completion of the existing share buyback program.
Since the beginning of the program in 2019, a total €796,969,443 of share buyback corresponding to 7,601,716 shares bought back by the
Company had been completed including €219,470,200 of share buyback in 2022 corresponding to 1,659,933 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 4, 2023
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: 11,976,390 shares, i.e. 2.10% of share capital.
• Treasury shares: 1,058 shares.
• Total: 11,977,448 shares, i.e. 2.10% 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*: 57,109,292 Schneider
Electric SE shares with a nominal value of €4,
− Taking into account treasury stock and own shares*:
45,131,844 shares or 7.90%
Maximum purchase price and maximum aggregate amount
of share purchases
•
the maximum purchase price is set at €250 per share,
i.e. €14,277,323,000
Duration of the buyback program
• 18 months maximum, expiring on November 3, 2024
Transactions carried out pursuant to the program authorized by
the Annual Shareholders’ Meeting 2022 between May 6,
2022 and February 15, 2023
• Number of shares acquired: 792,829.
• Average purchase price: €126.12.
• Number of shares transferred: 93,022.
• Average transfer price: €59.48.
* As of January 31, 2023.
7.2.6 Pledge
Pledges on Schneider Electric SE shares
419,323 shares are pledged.
Pledges on subsidiaries’ shares
Schneider Electric SE has not pledged any shares in significant subsidiaries.
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S H A R E H O L D E R I N F O R M A T I O N
Chapter 7 – Information on the Company and its capital
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, 2022, the Company’s share capital was €2,284,371,684. 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;
(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.
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Chapter 7 – Information on the Company and its capital
S H A R E H O L D E R I N F O R M A T I O N
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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Chapter 7 – Information on the Company and its capital
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.
7.4.3 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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S H A R E H O L D E R I N F O R M A T I O N
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 Corporate Officers (see section 4.2.3.1 of this 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, 2022 back-up facilities with this type of condition amounted
€2.9 billion, fully undrawn. It also applied to the Bridge Facility and Term Loan set up for a total amount of approximately €3.9 billion to
secure the funding of the minority interest of AVEVA. 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, 2022, €8.6 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 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
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
2021
2022
2023
Number of
securities traded
(in thousands
of shares)
Value
(in millions of
euros)
16,446
20,232
18,274
19,723
16,898
22,112
23,489
36,338
19,209
22,394
20,983
19,685
17,344
20,499
18,090
19,727
17,519
257,389
18,231
2,471
3,048
2,608
3,066
2,787
3,547
3,381
5,219
2,754
2,856
2,514
2,369
2,257
2,462
2,256
2,718
2,376
34,709
2,634
Month
August
September
October
November
December
January
February
March
April
May
June
July
August
September
October
November
December
Total 2022
January
High(1)
155.38
159.30
150.94
163.44
173.78
178.78
154.74
156.22
156.54
136.48
132.22
136.10
137.80
131.38
133.66
143.94
143.22
178.78
149.36
Low(1)
trading sessions
Number of
139.56
142.10
136.30
148.44
157.22
144.82
130.18
121.60
131.40
121.74
110.02
110.14
118.56
111.14
112.46
124.80
129.56
110.02
131.72
22
22
21
22
23
21
20
23
19
22
22
21
23
22
21
22
21
257
22
(1) Data corresponds to trading volumes on NYSE Euronext.
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Chapter 7 – Information on the Company and its capital
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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 (%)
2022
2021
2020
2019
2018
1,001.51
135.05
890.06
123.40
1,426.11
134.90
1,347.22
100.98
1,608.40
110.98
178.78
110.02
130.72
2.41
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
The Schneider Electric SE share results versus the CAC 40 index (rebased) over five years
Schneider Electric SE
CAC 40
180
160
140
120
100
80
60
40
Jan 2018
Monep
Jan 2019
Jan 2020
Jan 2021
Jan 2022
Dec 2022
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 507 and 508).
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Chapter 7 – Information on the Company and its capital
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 4557 1328
For individual investors:
Tel: 0 805 651 650
Email: actionnaires@se.com or via the contact form available on the institutional website at www.se.com.
7.6.3 Shareholders’ Advisory Committee
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.
7.6.4 Publicly available documents and regulated
information
The Company provides its shareholders with newsletters upon request, and videos and presentations are available in a dedicated section
on the corporate website at www.se.com.
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, press releases, regulated information within the meaning of the Autorité des marchés financiers (AMF),
registration and universal registration documents, sustainable development reports, notice of the Shareholders’ Meeting, and other
documents are also available on the Company’s website at www.se.com.
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S H A R E H O L D E R I N F O R M A T I O N
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Chapter 8 – Annual Shareholders’ Meeting
Annual
Shareholders’
Meeting8
8.1 Explanatory comments & draft
resolutions submitted to the
Annual Shareholders’ Meeting 536
8.1.1 Ordinary Shareholders’ Meeting
8.1.2 Extraordinary Shareholders’ Meeting
8.2 Statutory Auditors’ special
reports
538
547
561
8.2.1 Statutory auditors’ report on the issuance of shares
and various securities with and/or without preferential
subscription rights
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
8.2.4 Statutory auditors’ report on the reduction of capital
561
563
564
565
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Chapter 8 – Annual Shareholders’ Meeting
S H A R E H O L D E R I N F O R M A T I O N
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 4, 2023 and the report of the Board of Directors (explanatory
comments) for those resolutions. The Board of Directors’ report and the draft resolutions are those approved
by the Board of Directors in its meeting of February 15, 2023. 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
Resolution 10
Approval of statutory financial statements for the 2022 fiscal year
Determination of the total annual compensation of the Directors
Resolution 2
Resolution 11
Approval of consolidated financial statements for the 2022
fiscal year
Resolution 3
Appropriation of profit for the fiscal year and setting the dividend
Resolution 4
Approval of the Directors’ compensation policy
Resolution 12
Renewal of the term of office of Mr. Léo Apotheker
Resolution 13
Renewal of the term of office of Mr. Gregory Spierkel
Approval of regulated agreements governed by Article L. 225-38
et seq. of the French Commercial Code
Resolution 14
Resolution 5
Approval of the information on the Directors’ and the Corporate
Officer’s compensation paid or granted for the fiscal year ending
December 31, 2022 mentioned in Article L. 22-10-9 of the French
Commercial Code
Renewal of the term of office of Mr. Lip-Bu Tan
Resolution 15
Appointment of Mr. Abhay Parasnis as a Director
Resolution 16
Resolution 6
Appointment of Mrs. Giulia Chierchia as a Director
Approval of the components of the total compensation and benefits
of all types paid during the 2022 fiscal year or awarded in respect
of the said fiscal year to Mr. Jean-Pascal Tricoire
Resolution 17
Opinion on the Company Climate strategy
Resolution 7
Resolution 18
Authorization granted to the Board of Directors to buy back
Company shares
Approval of the compensation policy for the Chairman & Chief
Executive Officer, Mr. Jean-Pascal Tricoire, for the period from
January 1 to May 3, 2023
Resolution 8
Approval of the compensation policy for the Chief Executive
Officer, Mr. Peter Herweck, for the period from May 4 to December
31, 2023
Resolution 9
Approval of the compensation policy for the Chairman of the Board
of Directors, Mr. Jean-Pascal Tricoire, for the period from May 4 to
December 31, 2023
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Chapter 8 – Annual Shareholders’ Meeting
EXTRAORDINARY SHAREHOLDERS’ MEETING:
Resolution 19
Resolution 25
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 26
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 27
Authorization to the Board of Directors to cancel shares of the
Company bought back by the Company under the share buyback
programs
Resolution 28
Powers for formalities
Delegation of authority to the Board of Directors to increase the
capital by issuing ordinary shares or securities giving access to
share capital of the Company with shareholders’ preferential
subscription right
Resolution 20
Delegation of authority to the Board of Directors to increase the
capital by issuing ordinary shares or securities giving access to
share capital of the Company without shareholders’ preferential
subscription right through a public offering other than those
referred to in Article L. 411-2 1° of the French Monetary and
Financial Code
Resolution 21
Delegation of authority to the Board of Directors to increase the
capital by issuing ordinary shares or securities giving access to
share capital of the Company without shareholders’ preferential
subscription right through an offering in accordance with Article
L. 411-2 1° of the French Monetary and Financial Code
Resolution 22
Delegation of authority to the Board of Directors to increase the
number of shares to be issued in the event of a capital increase
with or without shareholders’ preferential subscription right
Resolution 23
Delegation of authority to the Board of Directors to increase the
capital by issuing ordinary shares or securities giving access to
share capital of the Company without shareholders’ preferential
subscription right in consideration for contributions in kind to the
Company
Resolution 24
Delegation of authority to the Board of Directors to increase the
capital by capitalizing additional paid-in capital, reserves, earnings
or other
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S H A R E H O L D E R I N F O R M A T I O N
8.1 Explanatory comments & draft resolutions submitted to the Annual
Shareholders’ Meeting
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 2nd resolutions, shareholders are invited to approve:
•
•
the statutory financial statements of Schneider Electric SE for the year 2022 which show a profit of €1,744,408,093.62; and
the consolidated financial statements for the year 2022 which show a net income for the Group of €3,477 million.
The activity and the results for the 2022 fiscal year are presented in the 2022 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 €3.15 per share, representing a distribution rate of 44.5% of the Group’s net
adjusted income and an estimated total distribution of €1,761,214,530.60(1) (based on the number of shares ranking for dividends at
December 31, 2022). 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 €2,069,815,278.53. The proposed dividend is an integral part of Schneider Electric’s
policy to reward shareholders over the long term. It represents an increase of 9% versus last year.
The distribution will be paid according to the following schedule:
May 9, 2023
• Dividend ex-date:
• Record date:
May 10, 2023
• Dividend payment date: May 11, 2023
For individual beneficiaries who are tax residents 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 2024, 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 2022 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 2022 fiscal year as presented, as well
as the transactions reflected in these statements or summarized in these reports showing a net profit of €1,744,408,093.62.
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 €7,042 as well as the
theoretical tax borne as a result of these charges amounting to €1,819.
Text of the second resolution
(Approval of statutory financial statements for the 2022 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 2022 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, 2022 closed with a net profit of €1,744,408,093.62 and, considering the retained earnings
amounted to €325,407,184.91, the distributable earnings amounted to €2,069,815,278.53, upon proposal of the Board of Directors, decides:
•
the distribution to the shareholders of a dividend of €3.15 per share, i.e., €1,761,214,530.60(1) on the basis of the number of shares ranking
for dividends at December 31, 2022 paid from the distributable earnings; and
the allocation of the balance of the distributable earnings after distribution to the retained earnings.
•
The ex-dividend date will be May 9, 2023 and the dividend will be payable from May 11, 2023. 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, 2022, the fraction of the dividend
relating to this variation will either increase or reduce retained earnings.
(1) This amount is calculated based on the number of shares ranking for dividends at December 31, 2022 and could therefore change if this number varies between
January 1, 2023 and the ex-dividend date.
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Chapter 8 – Annual Shareholders’ Meeting
For individual beneficiaries who are tax residents 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 2024, 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)
4th resolution: Regulated agreements
Explanatory statement
2019
2.55
2020
2.60
2021
2.90
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, 2022.
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, 2022.
5th and 6th resolutions: Approval of the information on the Directors’ and the
Corporate Officer’s compensation paid or granted for 2022 (Say on pay ex-post)
Explanatory statement
Under the 5th 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 2022 Universal Registration Document and in section
4.2 of the Notice of meeting.
Under the 6th 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 & Chief Executive Officer, Mr. Jean-Pascal Tricoire. They have been paid or awarded in
accordance with the compensation policy approved by the Annual Shareholders’ Meeting of May 5, 2022. These components are
detailed in section 4.2.2.2 of Chapter 4 of the 2022 Universal Registration Document and in section 4.2.1 of the Notice of meeting.
Text of the fifth resolution
(Approval of the information on the Directors’ and the Corporate Officer’s compensation paid or
granted for the fiscal year ending December 31, 2022 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 2022 Universal
Registration Document, Chapter 4, section 4.2.2.
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8.1 Explanatory comments & draft resolutions submitted to the Annual
Shareholders’ Meeting
Text of the sixth resolution
(Approval of the components of the total compensation and benefits of all types paid during the 2022
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 2022
financial year or awarded in respect of the 2022 fiscal year to the Chairman & Chief Executive Officer, Mr. Jean-Pascal Tricoire as stated in
the 2022 Universal Registration Document, Chapter 4, section 4.2.2.2.
7th, 8th, 9th, 10th and 11th resolutions: Approval of the 2023 compensation policy
applicable to the Corporate Officers and the Directors (Say on pay ex-ante) and
determination of the total annual compensation of the members of the Board of
Directors
Explanatory statement
Under the 7th, 8th and 9th resolutions, 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 Officers, i.e. the Chairman & Chief Executive Officer, the Chief Executive Officer
and the Chairman of the Board of Directors. These policies as well as the manner in which they serve the corporate interest, support
the Company strategy, and contribute to the sustainability of the Company are presented in section 4.2.3.1 of Chapter 4 of the 2022
Universal Registration Document and in section 4.3.1 of the Notice of meeting. Shareholders are called to approve separately:
the compensation policy for the Chairman & Chief Executive Officer as presented in detail in section 4.2.3.1.2 of Chapter 4
•
of the 2022 Universal Registration Document and in section 4.3.1.1 of the Notice of meeting. This policy would apply to
Mr. Jean-Pascal Tricoire for the period from January 1 to May 3, 2023, the end date of his office as Chairman & Chief Executive
Officer (7th resolution);
the compensation policy for the Chief Executive Officer as presented in detail in section 4.2.3.1.3 of Chapter 4 of the 2022 Universal
Registration Document and in section 4.3.1.2 of the Notice of meeting. This policy would apply to Mr. Peter Herweck as from May 4,
2023, the starting date on which he will assume the position of Chief Executive Officer of Schneider Electric SE (8th resolution);
the compensation policy for the Chairman of the Board of as presented in detail in section 4.2.3.1.4 of Chapter 4 of the 2022
Universal Registration Document and in section 4.3.1.3 of the Notice of meeting. This policy would apply to Mr. Jean-Pascal Tricoire
as from May 4, 2023, the starting date on which he will assume only the office of Chairman of the Board of Directors (9th resolution).
•
•
Under the 10th and 11th resolutions, we ask you to:
•
in accordance with Article L. 225-45 of the French Commercial Code, to increase the maximum of the total compensation that may
be awarded to members of the Board of Directors annually to €2,800,000, in view of the increase in the number of members of the
Board of Directors and the number of Board meetings (10th resolution);
in accordance with Article L. 22-10-8 II of the French Commercial Code, to approve the compensation policy of the Directors which
means allocation rules of this amount as presented in detail in section 4.2.3.2 of Chapter 4 of the 2022 Universal Registration
Document and in section 4.3.2 of the Notice of meeting (11th resolution).
•
Text of the seventh resolution
(Approval of the compensation policy for the Chairman & Chief Executive Officer,
Mr. Jean-Pascal Tricoire, for the period from January 1 to May 3, 2023)
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 Chairman & Chief Executive Officer as stated in the 2022 Universal Registration Document,
Chapter 4, section 4.2.3.1.2.
Text of the eighth resolution
(Approval of the compensation policy for the Chief Executive Officer, Mr. Peter Herweck, for the period
from May 4 to December 31, 2023)
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 Chief Executive Officer as stated in the 2022 Universal Registration Document, Chapter 4,
section 4.2.3.1.3.
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Chapter 8 – Annual Shareholders’ Meeting
Text of the ninth resolution
(Approval of the compensation policy for the Chairman of the Board of Directors, Mr. Jean-Pascal Tricoire,
for the period from May 4 to December 31, 2023)
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 Chairman of the Board of Directors as stated in the 2022 Universal Registration Document,
Chapter 4, section 4.2.3.1.4.
Text of the tenth resolution
(Determination of the total annual compensation of the Directors)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having heard the Board of
Directors’ report, decides to set, as from fiscal year 2023, the maximum amount of the annual fixed sum provided for in Article L. 225-45 of
the French Commercial Code to be allocated to the Directors as compensation for their activity, at €2,800,000.
Text of the eleventh 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 2022 Universal Registration Document, Chapter 4, section
4.2.3.2.
12th, 13th, 14th, 15th and 16th resolutions: Renewal of Mr. Léo Apotheker,
Mr. Gregory Spierkel and Mr. Lip-Bu Tan, appointment of Mrs. Giulia Chierchia
and Mr. Abhay Parasnis
Explanatory statement
As of March 28, 2023, the Board of Directors is composed of 14 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 4.1.2.4 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
individual performance assessment and contribution. The Board seeks above all to ensure that its composition is consistent with the
strategic needs of the Company and reflects the values that are essential to its proper functioning: independence of mind, richness of
perspective, competence, commitment, and complementarity of experience and people.
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 Mr. Léo Apotheker, Mr. Gregory Spierkel and Mr. Lip-Bu Tan, as well as search for
complementary profiles in line with the skillset highlighted by its Board skills matrix and the challenges of the Company (see section
4.1.2.4 of Chapter 4 of the Universal Registration Document describing the director recruitment process).
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8.1 Explanatory comments & draft resolutions submitted to the Annual
Shareholders’ Meeting
In that respect, the Committee has analyzed Mr. Léo Apotheker’s, Mr. Gregory Spierkel’s and Mr. Lip-Bu Tan’s situation with regards to
their relevance and performance, as well as their time commitment and availability to fulfill their duties as well as the value added by
each of them to the work of the Board.
• Mr. Léo Apotheker holds only one other position in a listed company (Director of NICE-Systems Ltd), and his attendance rate at Board
meetings in 2022 is 100%, while his attendance rate at meetings of the Committees in which he participates is 90%. The Committee
recommended to the Board that Mr. Léo Apotheker continues to participate in the work of the Board, particularly in the areas of
software and M&A, where his expertise as former Chief Executive Officer of SAP and Hewlett-Packard is essential, as well as his
excellent knowledge of the Group and the balance of the composition of the Board of Directors in terms of seniority. However, in view
of his age and his non-independence under the AFEP-MEDEF Code, considering he has been a member of the Board since 2008,
the Committee has proposed limiting his term of office to two years.
• Mr. Gregory Spierkel holds two other mandates in listed companies (Director of MGM Resorts International and PACCAR Inc.), his
attendance rate at the meetings of the Board and the committees in which he participates in 2022 is 100%. Mr. Gregory Spierkel
brings to the Board the benefit of his experience as former Chief Executive Officer of Ingram Micro, Inc. and a solid profile in digital
and technology matters, which leads the Board to propose to you the renewal of his mandate for a four-year term.
• Mr. Lip-Bu Tan holds three offices in listed companies in addition to his office at Schneider Electric: Chairman of Cadence Design
Systems, Inc., from which he retired as Chief Executive Officer in 2021 and will retire as Chairman in 2023 as he announced he will not
seek re-election to the Board at the 2023 Annual Meeting (https://d18rn0p25nwr6d.cloudfront.net/CIK-0000813672/cd2ef8b8-
abb5-4620-a08d-c5c49565fc6c.pdf), Chairman of the Board of Directors of Credo Technology Group Holding Ltd. and Director of Intel
Corporation. After the 2023 Cadence’s Annual Meeting planned on May 4, Mr. Lip-Bu Tan will therefore hold two offices in listed
companies in addition to his office at Schneider Electric. In view of his commitments, the Governance & Remunerations Committee has
carefully examined his situation. In particular, it has ascertained from him his willingness and commitment to devote sufficient and
necessary time to the Board of Schneider Electric, as Mr. Lip-Bu Tan has always done in the past, as evidenced by his level of
attendance at Board meetings in 2022 (100%) and at the meetings of the committees in which he participates (90%), as well as his
physical participation in several meetings, including the Strategy Session in August 2022. His average attendance rate at Board and
committee meetings over his term of office (2019 - 2022) was 94% and 97.5% respectively, reflecting his commitment and availability.
The Committee also took into consideration the assessment of Mr. Lip-Bu Tan’s effective contribution to the work of the Board that was
conducted among the Directors in October 2022 during the Board’s self-assessment, which concluded that
Mr. Lip-Bu Tan brings to the Board unique expertise in the areas of software and technology, particularly in the energy sector, venture
capital, and in-depth knowledge of the Asian and US markets. For all of these reasons, the Board has determined that his continued
service as a Director is in the best interests of the Company, its shareholders, and is consistent with the composition objectives
identified by the Board, and therefore invites you to reappoint Mr. Lip Bu-Tan for a four-year term.
The Governance & Remunerations Committee also identified the skills that would be useful 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 them. Following
these interviews, the Committee recommended two candidates to the Board of Directors, Mr. Abhay Parasnis and Mrs. Giulia
Chierchia, who were appointed as Observers respectively on July 27, 2022 and February 15, 2023 with the aim to propose their
appointment to the 2023 Shareholders’ Meeting.
Mr. Abhay Parasnis, a US citizen based in San Francisco and an entrepreneur, is Adobe’s former Chief Technology Officer and Chief
Product Officer and serves on the Board of Directors at Dropbox. He will bring to the Board his remarkable technology and digital
skills, especially his experience in shifting to the cloud and in SaaS transformation as well as his spirit of innovation and reinvention. He
will qualify as an independent Director with regard to all the criteria set by Article 10.5 of the AFEP-MEDEF Corporate Governance
Code and, if appointed, will join the Digital Committee.
Mrs. Giulia Chierchia, an Italian and Belgian dual citizen based in the United Kingdom, is currently Executive Vice-President Strategy,
Sustainability and Ventures of BP. She will bring to the Board her expertise in ESG and energy sector, in particular, her experience in
energy transition strategy in large companies with a global approach including strategy, sustainability, capital allocation and ventures.
She will qualify as an independent Director with regard to all the criteria set by Article 10.5 of the AFEP-MEDEF Corporate Governance
Code and, if appointed, will join the Investment Committee.
Acting upon recommendation of the Governance & Remunerations Committee, the Board of Directors proposes to shareholders:
• in the 12th resolution, to renew the term of office of Mr. Léo Apotheker for a two-year (2) term;
• in the 13th resolution, to renew the term of office of Mr. Gregory Spierkel for a four-year (4) term;
• in the 14th resolution, to renew the term of office of Mr. Lip-Bu Tan for a four-year (4) term;
• in the 15th resolution, to appoint Mr. Abhay Parasnis as a Director for a four-year (4) term; and
• in the 16th resolution, to appoint Mrs. Giulia Chierchia as a Director for a four-year (4) term.
Should these resolutions be approved, the Board of Directors would consist of 16 members (including one Director representing the
employee shareholders and two Directors representing the employees), with an independence rate of 85% and 46% of women
(excluding the three Directors who are also employees) and 81% being of non-French origin or nationalities.
Mr. Léo Apotheker’s, Mr. Gregory Spierkel’s, Mr. Lip-Bu Tan’s, Mrs. Giulia Chierchia’s, and Mr. Abhay Parasnis’ biographies are
provided in section 2.2.3 of the Notice of meeting and section 4.1.2.2 of Chapter 4 of the 2022 Universal Registration Document.
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Chapter 8 – Annual Shareholders’ Meeting
Text of the twelfth resolution
(Renewal of the term of office of Mr. Léo Apotheker)
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. Léo Apotheker as a Director expires at the closing of this Shareholders’ Meeting
and decides to renew it for a two-year (2) term expiring at the closing of the Annual Shareholders’ Meeting to be held in 2025 to approve the
financial statements for the 2024 fiscal year.
Text of the thirteenth resolution
(Renewal of the term of office of Mr. Gregory Spierkel)
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. Gregory Spierkel 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 2027 to approve the
financial statements for the 2026 fiscal year.
Text of the fourteenth resolution
(Renewal of the term of office of Mr. Lip-Bu Tan)
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. Lip-Bu Tan 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 2027 to approve the
financial statements for the 2026 fiscal year.
Text of the fifteenth resolution
(Appointment of Mr. Abhay Parasnis 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 Mr. Abhay Parasnis as a Director for a four-year (4) term expiring at the closing of the Annual
Shareholders’ Meeting to be held in 2027 to approve the financial statements for the 2026 fiscal year.
Text of the sixteenth resolution
(Appointment of Mrs. Giulia Chierchia 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. Giulia Chierchia as a Director for a four-year (4) term expiring at the closing of the Annual
Shareholders’ Meeting to be held in 2027 to approve the financial statements for the 2026 fiscal year.
17th resolution: Opinion on the Company Climate strategy
Explanatory statement
Under the 17th resolution, the Board wishes to consult the Shareholders’ Meeting on Schneider Electric’s Climate strategy as
described in section 2.3 of Chapter 2 of the 2022 Universal Registration Document and summarized in section 3 of the Notice of
meeting.
The sustainability strategy including Climate is overseen by the Board of Directors with the assistance of the Human Resources & CSR
Committee. Schneider Electric was one of the first companies to address this topic at the Board level with the creation of the Human
Resources & CSR Committee in 2014. Schneider Electric further addressed the topic by deciding that the annual variable
compensation of both the Chief Executive Officer and of the more than 64,000 employees (who benefit from a variable compensation),
includes ESG criteria, part of which relates to Climate. The long-term incentive plan is also correlated with ESG criteria (for more detail
on compensation, please refer to section 4.2 of Chapter 4 of the 2022 Universal Registration Document).
Several other governance bodies are involved in this matter: the Executive Committee and its Function Committee, the Stakeholder
Committee and the Sustainability department. At Group level, the Chief Strategy & Sustainability Officer, who is part of the Executive
Committee, helps determine and enforce the Group’s environmental goals and underlying transformations. Three Committees involving
Group Executive Vice-Presidents and Senior Vice-Presidents are dedicated to oversee the implementation of the Group’s
decarbonation roadmap, respectively focusing on the supply chain, low-carbon product design and the decarbonization of Schneider
Electric’s operational emissions.
Upon a joint recommendation from the Human Resources & CSR Committee and the Governance & Remunerations Committee, the
Board decided to offer its shareholders an opportunity to express their views on Schneider Electric’s Climate strategy.
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8.1 Explanatory comments & draft resolutions submitted to the Annual
Shareholders’ Meeting
• Scientifically validated Climate roadmap
Schneider Electric, as an Impact Company, wants to be both a sustainability enabler, supporting partners and customers with its
decarbonation and digital solutions and services, and a sustainability practitioner committed to becoming Net-Zero across its
end-to-end value chain. Schneider Electric considers itself part of an end-to-end ecosystem and reviews its progress along three
dimensions: first aligning the Group and its supply chain with a 1.5°C Climate trajectory; second helping customers to do the same
through Schneider Electric’s offers; and third helping Schneider Electric communities accelerate Climate action. As a result, the
Group’s Climate strategy addresses all of its stakeholders and shows there are ways for companies to “do good while doing well”. In
line with the ambition to contribute to limiting global temperature rise to 1.5°C, Schneider Electric is committed to reach the targets
described below as validated by the Science Based Targets initiative.
Carbon neutral in
our operations
25% absolute reduction across
our entire value
chain and “net-zero ready” in
our operations
Carbon neutral across
our entire value chain
Net-zero CO2 emissions
across our entire
value chain
2025
2030*
2040
2050*
2021 – 2025 initiatives to act for climate & preserve resources
Suppliers
Operations
Customers/Society
SSI #3
Reduce CO2 from suppliers
operations
SSE #4 Improve CO2 efficiency in
transportation
SSE #1 Transition to Zero-CO2 sites
SSE #3 Source renewable electricity
SSE #5 Improve energy efficiency
SSE #7 Switch to electrical vehicles
SSI #1 Grow our impact revenues
SSI #2
Save and avoid CO2 emissions
for customers
SSE #2 Substitute products using SF6
SSI #4 Use green materials in our product
SSE #8 Deploy local biodiversity programs
SSE #6 Product revenues covered by
SSI #5
Switch to sustainable packaging
SSE #9 Make waste a resource
SSE #10 Avoid primary resource use
SSE #11 Deploy water conservation
action plans
Green Premium™ eco-label
*
Concrete actions and investment plans to reach those targets are described in section 2.3 of Chapter 2 of the 2022 Universal
Registration Document.
• Consultation process
Investors’ consultation on Schneider Electric’s Climate strategy is part of the continuous and strong shareholder engagement
conducted each year. The goal is that shareholders express their views on our Climate transition plan to be able to take into
consideration their feedback.
However, shareholders are not asked to take responsibility for Schneider Electric’s Climate strategy, which remains the exclusive
responsibility of the Board of Directors and Chief Executive Officer. Therefore, in order to comply with the respective specific powers of
each of the corporate bodies, the nature of this resolution is purely consultative, and this vote will not be binding.
The Board invites shareholders to support this strategy, which will influence every aspect of the Group’s actions over the long-term. A
widespread approval of Schneider Electric’s Climate strategy will comfort the Company in its leading and ambitious Corporate Social
Responsibility (CSR) roadmap and is essential to bolster the Company’s efforts to further accelerate its decarbonization journey in a
transparent way.
The Board will take into account the level of support received on this resolution and continue engaging with its shareholders. Should
the level of dissent reach 50% or more, the Board will seek information on the reasons for which some investors may not have
supported the proposed resolution to be able to propose a revised Climate strategy.
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Chapter 8 – Annual Shareholders’ Meeting
• Transparency
As the transparency of the implementation of the Climate strategy is decisive in maintaining a relationship of trust between the
Company and the various stakeholders, all the actions carried out and the associated key indicators are detailed annually in the
Extra-Financial Performance Statement (DPEF) audited by an independent third party and included in the Universal Registration
Document. In addition, the key indicators are part of the Schneider Sustainability Impact, from which results are shared transparently
quarterly in the financial and non-financial communication of the Company. The Company also details the risks and opportunities linked
to Climate change as well as the associated governance, in accordance with all the recommendations of the Task Force on Climate-
related Financial Disclosures (TCFD).
• Next vote on the Climate strategy
The Board intends to repeat this consultation at the 2026 Annual Shareholders’ Meeting in order to allow shareholders to express their
views on the progress made on the implementation of the strategy and the strategy itself. It will correspond to the launch of the new
cycle of the Schneider Sustainability Impact, the current plan ending in 2025.
Text of the seventeenth resolution
(Opinion on the Company Climate strategy)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having heard the
Company’s Climate strategy as described in section 2.3 of Chapter 2 of the 2022 Universal Registration Document, issues a favorable
opinion on this Climate strategy.
18th resolution: Share buybacks
Explanatory statement
As the pre-existing authorization comes to its term in November 2023, it is hereby proposed, in the 18th 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 buyback 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 buyback program. These
buybacks are part of a policy to neutralize the dilution resulting from capital increases reserved for employees or from 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 restarted at the end of July
2021. On May 5, 2022, the proposal to raise the cap on purchase price to €250 per share (from the previous €150 per share) was
approved at the Annual Shareholders’ Meeting. Schneider Electric did not further progress the buyback in the second half-year
primarily due to restrictions on account of the proposed transaction with the AVEVA minority shareholders that was in progress during
the period. Schneider Electric remains committed to the completion of the existing share buyback program.
Since the beginning of the program in 2019, a total €796,969,443 of share buyback corresponding to 7,601,716 shares bought back by
the Company had been completed including €219,470,200 of share buyback in 2022 corresponding to 1,659,933 shares bought back
by the Company pursuant to the last authorizations.
All the 11,977,197 treasury shares held on December 31, 2022 (representing 2.10% 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 this Annual Shareholders’ Meeting (27th 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, 2022: 57,109,292 shares). The maximum purchase price of the
shares would be set at €250 and the total amount allocated to the share repurchase program would not exceed €14.3 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 buyback programs can be found in section 7.2.5 of Chapter 7 of the 2022 Universal
Registration Document.
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Chapter 8 – Annual Shareholders’ Meeting
S H A R E H O L D E R I N F O R M A T I O N
8.1 Explanatory comments & draft resolutions submitted to the Annual
Shareholders’ Meeting
Text of the eighteenth 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 buyback or arrange for the buyback 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 27th resolution of this Annual Shareholders’ Meeting.
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 buyback program should not exceed 10% of the
Company’s share capital at any time (i.e. for information purposes, 57,109,292 shares, on the basis of the share capital as of December
31, 2022), 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
the number of shares that the Company can hold at any time may not exceed 10% of the Company’s share capital.
(ii)
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 €14.3 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
May 5, 2022 in its 14th resolution and is granted for an eighteen (18)-month period as from this Annual Shareholders’ Meeting.
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Chapter 8 – Annual Shareholders’ Meeting
8.1.2 Extraordinary Shareholders’ Meeting
19th, 20th, 21st, 22nd, 23rd and 24th resolutions: Delegations of authority to the Board
of Directors to increase the share capital with or without shareholders’ preferential
subscription rights
Explanatory statement
As it is the case every two years, you are requested to approve a set of resolutions, giving the Board of Directors authority to increase
or reduce the share capital, immediately or in the future, with preferential subscription rights or without, through the issuance of shares
and/or equity-linked securities, for a limited period.
These resolutions involve financial delegations that will give the Board of Directors the authority to select, at any moment and from
among a broad range of securities providing access to the share capital, the transaction most suited to Schneider Electric’s needs and
growth, based on market characteristics at the time.
Under the 19th resolution, you are requested to delegate to the Board of Directors the authority to issue, in France and abroad, with
shareholders’ preferential subscription rights, ordinary shares and/or equity-linked securities. The maximum nominal amount of the
capital increases that may be carried under this resolution shall not exceed €800 million in aggregate, i.e. 200 million shares
representing 35.02% of the capital as of December 31, 2022. The capital increases that may be realized in accordance with the 20th,
21st, 22nd, 23rd and 24th resolutions shall be counted against this aggregate ceiling.
For the 20th and 21st resolutions, you are requested to cancel the preferential subscription rights to shares. Indeed, depending on
market conditions, the types of investors involved and the type of securities issued, it may be preferable, or even necessary, to cancel
the preferential subscription rights in order to carry out a securities placement under optimal conditions, particularly when the speed of
transactions is a prerequisite to success, or when the issuances are carried out on overseas financial markets. The cancellation of the
preferential subscription rights can facilitate the Company’s access to capital due to more favorable issuance conditions. Capital
increases without preferential subscription rights may take the form of a public offering (other than those referred to in Article L. 411-2-1°
of the French Monetary Code in which case a priority period for shareholders can be established (20th resolution) or of an offering in
accordance with Article L. 411-2-1° of the French Monetary and Financial Code (21st resolution). In compliance with the French
Commercial Code (Code de commerce), the issue price of shares issued without preferential subscription rights will be at least equal to
the lowest price provided for according to the regulatory provisions applicable on the date of issue (currently, the average market price
of the shares in the three (3) trading days on the regulated market Euronext Paris preceding the setting of the price, reduced by a
discount of 10%). Regarding the issuance of securities giving access, immediately or in the future, to the Company’s share capital, the
issuance price of these securities will be so that the amount received by the Company, immediately or in the future, for each share to
which such securities give the right, is at least equal to the minimum issuance price of the shares as defined above. The maximum
nominal amount of the capital increases that may be carried under these resolutions shall not exceed €224 million, i.e. 56 million shares
representing 9.81% of the capital as of December 31, 2022.
In the 22nd resolution, we are asking you to authorize the Board of Directors to increase the number of securities to be issued under
the 19th, 20th and 21st resolutions in the event of an over-subscription (greenshoe). An additional capital increase could thus be carried
out within the timeframe and limits provided for by the legislation applicable as of the date of issue (currently, within 30 days of the
closing of the subscription period and up to 15% of the initial issuance).
The 23rd resolution concerns the issuance of share and/or securities giving immediate or deferred access to the Company’s capital
with a view to remunerate contributions in kind granted to the Company. This resolution allows the Board of Directors to carry out
external growth operations with a consideration in shares within a limit of €224 million, i.e. 56 million shares representing 9.81% of the
capital as of December 31, 2022.
If granted, these delegations would be valid for 26 months. The Board of Directors may not use this delegation from the date of filing of
a takeover bid for the shares of the Company by a third party and for the duration of the bid period.
Under the 24th resolution, we are asking you to authorize the Board of Directors to increase the share capital by incorporating
premiums, reserves or profits. The rights of shareholders would not be affected by this transaction, which results in free shares
allotment, increase in the nominal value of the existing shares, or a combination of both. This transaction does not change the
Company’s shareholders’ equity.
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Chapter 8 – Annual Shareholders’ Meeting
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8.1 Explanatory comments & draft resolutions submitted to the Annual
Shareholders’ Meeting
Summary of proposed financial authorizations and delegations
Individual ceiling
Global ceiling
Resolution
number
Financial delegations
Possibility
of use during
a takeover
period
Maximum
nominal
amount for
equity-linked
securities
Maximum
ceiling in euros
or as % of the
share capital
Duration and
expiration
Issuance with shareholders’ preferential subscription right
19th
24th
Delegation of authority to the Board of
Directors to increase the capital by issuing
ordinary shares or securities giving access
to share capital of the Company with
shareholders’ preferential subscription
right
26 months
(July 2025)
No
€7B
Delegation of authority to the Board of
Directors to increase the capital by
capitalizing additional paid-in capital,
reserves, earnings or other
26 months
(July 2025)
Yes
Issuance without shareholders’ preferential subscription right
20th
21st
23rd
Delegation of authority to the Board of
Directors to increase the capital by issuing
ordinary shares or securities giving access
to share capital of the Company without
shareholders’ preferential subscription
right through a public offering other than
those referred to in Article L. 411-2 1° of the
French Monetary and Financial Code
Delegation of authority to the Board of
Directors to increase the capital by issuing
ordinary shares or securities giving access
to share capital of the Company without
shareholders’ preferential subscription
right through an offering in accordance with
Article L. 411-2 1° of the French Monetary
and Financial Code (private placement)
Delegation of authority to the Board of
Directors to increase the capital by issuing
ordinary shares or securities giving access
to share capital of the Company without
shareholders’ preferential subscription
right in consideration for contributions in
kind to the Company
26 months
(July 2025)
No
€7B
26 months
(July 2025)
No
€7B
26 months
(July 2025)
No
€7B
€800M
(200 million
shares) i.e.
35.02% of the
share capital
€800M
(200 million
shares) i.e.
35.02% of the
share capital
€224M
(56 million
shares)
i.e. 9.81% of
the share
capital
€120M
(30 million
shares)
i.e. 5.25% of
the share
capital
€224M
(56 million
shares)
i.e. 9.81% of
the share
capital
In the event of an over-subscription
22nd
Delegation of authority to the Board of
Directors to increase the number of shares to
be issued in the event of a capital increase
with or without shareholders’ preferential
subscription right (greenshoe)
26 months
(July 2025)
No
€7B
+15%
Issuance
of shares:
€800M
(200 million
shares) i.e.
35.02% of
the share
capital
Equity-
linked
securities:
€7B
Issuance
of shares:
€224M
(56 million
shares)
i.e. 9.81%
of the
share
capital
Equity-
linked
securities:
€7B
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Chapter 8 – Annual Shareholders’ Meeting
Resolution
number
Financial delegations
Issuances reserved for employees
Individual ceiling
Global ceiling
Possibility
of use during
a takeover
period
Maximum
nominal
amount for
equity-linked
securities
Maximum
ceiling in euros
or as % of the
share capital
Duration and
expiration
25th
26th
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
26 months
(July 2025)
No
Delegation of authority to the Board of
Directors to undertake capital increases
reserved for employees of certain non-
French subsidiaries (outside of a
group savings plan), without shareholders’
preferential subscription right
No
18 months
(November
2024)
Cancellation of shares bought back by the Company under the share buyback programs
27th
Authorization to the Board of Directors to
cancel shares of the Company bought back
by the Company under the share buyback
programs
24 months
(May 2025)
Yes
€46M
(11.5 million
shares)
i.e. 2.01% of
the share
capital
€46M
(11.5 million
shares)
i.e. 2.01% of
the share
capital
€24M
(6 million
shares)
i.e. 1.05% of
the share
capital
€224M
(56 million
shares)
i.e. 9.81% of
the share
capital
Text of the nineteenth resolution
(Delegation of authority to the Board of Directors to increase the capital by issuing ordinary shares or
securities giving access to share capital of the Company with 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,
L. 225-129-2 to L. 225-129-6, L. 225-130, L. 225-132, L. 225-134, L. 228-91 to L. 228-93, L. 22-10-49 and L. 22-10-50 of the French
Commercial Code:
1.
2.
delegates to the Board of Directors the authority, with the power to subdelegate in accordance with applicable law and regulations,
to decide one or several capital increases through the issue, in the proportions and at the times it deems appropriate, in France and/
or abroad, either in euros or in any other currency or unit of account set by reference to several currencies, of (i) ordinary shares of
the Company, (ii) securities governed by Article L. 228-91 et seq. of the French Commercial Code, which are equity securities of the
Company, giving access to other equity securities of the Company and/or giving the right to the allocation of debt securities of the
Company and/or (iii) debt securities governed or not by Article L. 228-91 et seq. of the French Commercial Code, giving access or
likely to give access to equity securities to be issued by the Company, which securities may, where applicable, also give access to
existing equity securities and/or debt securities of the Company and/or (iv) securities which are equity securities of the Company giving
access to existing equity securities or securities to be issued by, and/or to debt securities of companies in which the Company holds
directly or indirectly, at the time of issue, more than half of the share capital, and/or (v) securities representing debt securities governed
or not by Article L. 228-91 et seq. of the French Commercial Code, giving access or likely to give access to equity securities to be
issued by companies in which the Company holds directly or indirectly, at the time of issue, more than half of the share capital, and
which may also give access to existing equity securities and/or debt securities of said companies; it is specified that (i) the subscription
of shares and other securities may be carried out either in cash or by offsetting debts, and (ii) the shares to be issued shall confer the
same rights as the existing shares; it being specified that the issue of any shares or securities giving access to preference shares is
excluded;
decides that the nominal amount of the capital increases which may be undertaken immediately and/or in the future on the basis of this
resolution may not exceed €800 million representing on an indicative basis 35.02% of the capital as of December 31, 2022, it being
specified that:
a.
this amount would be increased by the nominal amount of the capital increase resulting from the issuance of shares to be carried
out as the case may be, in accordance with legal and regulatory provisions, and, where applicable, relevant contractual provisions
providing for other adjustments, in order to preserve the rights of holders of securities giving access to the share capital, and
the maximum aggregate nominal amount of capital increases that may be undertaken immediately or in the future on the basis of
this resolution and the 20th, 21st, 22nd, 23rd and 24th resolutions of this Annual Shareholders’ Meeting, is set at €800 million;
b.
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Chapter 8 – Annual Shareholders’ Meeting
S H A R E H O L D E R I N F O R M A T I O N
8.1 Explanatory comments & draft resolutions submitted to the Annual
Shareholders’ Meeting
3.
4.
5.
decides that the maximum nominal amount of issuances of debt equity-linked securities which could be carried out pursuant to this
delegation, shall not exceed a nominal amount of €7 billion (or the equivalent in any other currency or monetary unit), it being specified
that the maximum aggregate nominal amount of debt equity-linked securities that may be issued on the basis of this resolution and the
20th, 21st, 22nd and 23rd resolutions of this Annual Shareholders’ Meeting, is set at €7 billion;
should the Board of Directors make use of this delegation:
a.
b.
c.
d.
e.
decides that the issuance(s) of shares shall be reserved in priority to shareholders who may subscribe as of right (à titre
irréductible) under the conditions provided by law,
grants to the Board of Directors the power to provide shareholders with a prorata subscription right (à titre réductible) for the
number of shares in excess of those to which they could subscribe as a matter of right, in proportion to the number of shares to
which they have the right to subscribe and, in any case, up to the number of shares requested,
decides that, if the subscriptions as of right (à titre irréductible) and, as the case may be, on a prorata basis (à titre réductible), do
not absorb the entirety of the share issuance, the Board of Directors may use, under the conditions set by law and in such order as
it shall determine, either one of the options provided under Article L. 225-134 of the French Commercial Code, listed below: (i) limit
the capital increase to the amount of the subscriptions, provided that they reach at least three-quarters of the initially approved
increase, (ii) freely distribute all or part of the issued and unsubscribed securities among persons it may choose, (iii) offer to the
public, on the French market or the international market, all or part of the issued and unsubscribed shares,
decides that any issuance of share subscription warrants of the Company may be carried out either pursuant to a subscription
offer under the conditions described above, or by granting free shares to owners of existing shares,
takes note and decides, as necessary, that this delegation of authority automatically entails by operation of law, in favor of holders
of equity-linked securities issued pursuant to this delegation giving access or which may give access to shares of capital of the
Company, the express waiver by the Company’s shareholders’ of their preferential subscription rights to the shares to be issued to
which such issued securities shall give right;
decides that the Board of Directors shall have all powers, with the power to subdelegate under the conditions provided by law, to
implement this delegation, in order, in particular, to:
a.
b.
set the terms and conditions of the capital increase(s) and/or the issuance(s) of shares or securities,
determine the number of shares and/or securities to be issued, the issue price and the premium payment, of which, as the case
may be, may be requested upon issuance,
determine the dates and conditions of the issuance, the nature and form of the securities to be issued, which may be subordinated
or unsubordinated securities, with or without a specific maturity date, and, in particular, with respect to issuances of debt equity
linked securities, their interest rate, maturity, their fixed or variable redemption price, with or without premium and the conditions for
redemption,
c.
d. decide how shares and/or securities are to be paid for,
e.
set, if necessary, the terms of the exercise of the rights attached to the shares or securities issued or to be issued and, in particular,
set the date, even if retroactive, from which the new shares to be issued would bear dividend rights, as well as all other terms and
conditions for completing the issuance(s),
set the terms and conditions under which the Company would have the right, as the case may be, to purchase or exchange, at any
time or during fixed periods, securities issued or to be issued,
g. provide the ability to suspend the exercise of rights attached to such securities,
h.
establish, as required, the conditions for preserving the rights of holders of equity-linked securities with future rights to shares of
the Company, in accordance with applicable laws and regulations, and, where applicable, applicable contractual provisions,
off-set the costs, fees and expenses of the capital increase(s) against the amount of the premium related thereto and, where
applicable, deduct from this amount the amounts required to bring the legal reserve to one-tenth of the new share capital after
each capital increase, and
generally, enter into any agreement, in particular to ensure the successful completion of the contemplated issuance(s), take all
measures and carry out all formalities necessary for the financial servicing of the securities issued pursuant to this delegation as
well as the exercise of rights attached thereto, to acknowledge the completion of each capital increase and modify the Articles of
Association accordingly;
f.
i.
j.
6.
decides that the Board of Directors may not use this delegation from the filing of a takeover bid by a third party and for the duration of
the offer period.
This delegation (i) supersedes, for the portion not yet used, the previous delegation given to the Board of Directors by the General
Shareholders’ Meeting of April 28, 2021 in its 16th resolution and (ii) is granted for a twenty-six (26)-month period as from this Shareholders’
Meeting.
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Chapter 8 – Annual Shareholders’ Meeting
Text of the twentieth resolution
(Delegation of authority to the Board of Directors to increase the capital by issuing ordinary shares
or securities giving access to share capital of the Company without shareholders’ preferential
subscription right through a public offering other than those referred to in Article L. 411-2-1° of the
French Monetary Code)
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,
L. 225-129-2 to L. 225-129-6, L. 225-135, L. 225-136, L. 228-91 to L. 228-93, L. 22-10-49, L. 22-10-51, L. 22-10-52 and L. 22-10-54 of the
French Commercial Code:
1.
2.
3.
4.
5.
delegates to the Board of Directors the authority, with the power to subdelegate, in compliance with applicable laws and regulations,
to decide, by public offer with the exception of offering provided for by Article L. 411-2-1° of the French Monetary Code, one or several
capital increases through the issue, in the proportions and at the times it deems appropriate, in France and/or abroad, either in euros
or in any other currency or unit of account set by reference to several currencies, of (i) ordinary shares of the Company, (ii) securities
governed by Article L. 228-91 et seq. of the French Commercial Code, which are equity securities of the Company, giving access
to other equity securities of the Company and/or giving the right to the allocation of debt securities of the Company and/or (iii) debt
securities governed or not by Article L. 228-91 et seq. of the French Commercial Code, giving access or likely to give access to equity
securities to be issued by the Company, which securities may, where applicable, also give access to existing equity securities and/
or debt securities of the Company and/or (iv) securities which are equity securities of the Company giving access to existing equity
securities or securities to be issued by, and/or to debt securities of companies in which the Company holds directly or indirectly, at the
time of issue, more than half of the share capital, and/or (v) securities representing debt securities governed or not by Article L. 228-91
et seq. of the French Commercial Code, giving access or likely to give access to equity securities to be issued by companies in which
the Company holds directly or indirectly, at the time of issue, more than half of the share capital, and which may also give access to
existing equity securities and/or debt securities of said companies; it is specified that (i) the subscription of shares and other securities
may be carried out either in cash or by offsetting debts, and (ii) the shares to be issued shall confer the same rights as the existing
shares; it being specified that the issue of any shares or securities giving access to preference shares is excluded and that shares and/
or securities giving access to the Company’s share capital could be issued in consideration for shares which may be tendered to the
Company as part of public exchange offers initiated by the Company in compliance with the conditions set forth in Article L. 22-10-54
of the French Commercial Code;
decides that the nominal amount of the capital increases which may be undertaken immediately and/or in the future on the basis of
this resolution may not exceed €224 million representing on an indicative basis 9.81% of the capital as of December 31, 2022, it being
specified that:
a.
this amount would be increased by the nominal amount of the capital increase resulting from the issuance of shares to be carried
out as the case may be, in accordance with legal and regulatory provisions, and, where applicable, relevant contractual provisions
providing for other adjustments, in order to preserve the rights of holders of securities giving access to the share capital,
the maximum aggregate nominal amount of capital increases that may be undertaken immediately or in the future on the basis of
this resolution and the 19th, 21st, 22nd, 23rd and 24th resolutions of this Annual Shareholders’ Meeting is set at €800 million, and
the maximum aggregate nominal amount of capital increases that may be undertaken immediately and/or in the future on the basis
of this resolution and the 21st and 23rd resolutions of this Annual Shareholders’ Meeting is set at €224 million;
b.
c.
decides that the maximum nominal amount of issuances of debt equity-linked securities which could be carried out pursuant to this
delegation, shall not exceed a nominal amount of €7 billion (or the equivalent in any other currency or monetary unit), it being specified
that the maximum aggregate nominal amount of debt equity-linked securities that may be issued on the basis of this resolution and the
19th, 21st, 22nd and 23rd resolutions of this Annual Shareholders’ Meeting, is set at €7 billion;
decides to cancel the shareholders’ preferential subscription rights to the Company’s shares and/or other equity-linked securities to
be issued pursuant to this resolution, and to offer such shares or securities in the framework of a public offering with the exception
of offering provided for by Article L. 411-2-1° of the French Monetary Code, while allowing the Board of Directors, under the terms of
Article L. 22-10-51 of the French Commercial Code, sole discretion to grant the shareholders, for a period of time and under the terms
to be determined by the Board of Directors in accordance with applicable laws and regulations and for some or all of the issuance, a
priority subscription period which does not constitute a negotiable right and which must be exercised in proportion to the number of
shares held by each shareholder and which may be supplemented by an application to subscribe for shares on a prorata basis (à titre
réductible); it being specified that securities which are not subscribed by virtue of this right shall form the object of a public placement
in France and/or abroad, and/or on the international market;
decides that, should the Board of Directors make use of this delegation, if the subscriptions to the capital increase, including, if any,
those of the shareholders, have not absorbed the aggregate capital increase, the Board of Directors may use, as permitted by law
and in such order as it may determine, either one of the options described by Article L. 225-134 of the French Commercial Code, listed
below:
a.
limit the capital increase to the amount of the subscriptions, provided that they reach at least three-quarters of the initially
approved increase, and/or
freely distribute all or part of the unsubscribed securities among persons it may choose.
b.
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Chapter 8 – Annual Shareholders’ Meeting
S H A R E H O L D E R I N F O R M A T I O N
8.1 Explanatory comments & draft resolutions submitted to the Annual
Shareholders’ Meeting
6.
acknowledges and decides, if applicable, that any decision taken by virtue of this delegation of authority will automatically entail, in
favor of the holders of equity-linked securities giving access to the Company’s share capital or may give access to Company’s shares
to be issued, express waiver by shareholders of their preferential subscription rights to securities to be issued to which equity-linked
securities entitle their holders;
7. acknowledges that, in accordance with Article L. 22-10-52 of the French Commercial Code:
a.
b.
the issue price of shares issued directly will be not less than the minimum price set by applicable regulations on the date of
issuance (as of the date hereof, the weighted average of the quoted market prices during the last three trading sessions on the
regulated market of Euronext Paris preceding the beginning of the offer to the public, less a discount of 10%) after correction, if
any, to take into account the difference dates of entitlement to dividend of the shares,
the issue price of the equity-linked securities will be such that the cash amount received immediately by the Company plus any
cash amount to be received subsequently by the Company will, for each ordinary share issued as a consequence of the issuance
of such securities, be not less than the minimum issue price defined in the previous paragraph;
8.
decides that the Board of Directors shall have all powers, with the power to subdelegate under the conditions provided by law, to
implement this delegation, in order in particular to:
a.
b.
set the conditions of the capital increase(s) and/or of the issuance(s) of shares or securities,
determine the number of shares and/or securities to be issued, their issuance price as well as the amount of the premium that may
be requested upon issuance, if any,
determine the dates and conditions of the issuance, the nature and form of the securities to be issued, which could be
subordinated or unsubordinated securities and may or not have a specific maturity date, and in particular, for issuances of debt
equity-linked securities, their interest rate, their maturity, their fixed or variable redemption price, with or without premium and the
redemption methods,
c.
d. decide how shares and/or securities are to be paid for,
e.
set, if necessary, the terms of the exercise of the rights attached to the shares or securities issued or to be issued and, in particular,
set the date, even if retroactive, from which the new shares to be issued would bear dividend rights, as well as all other conditions
and specifics of implementing the issuance(s),
set the terms and conditions under which the Company would have the right to purchase or exchange, at any time or during fixed
periods, securities issued or to be issued immediately or in the future,
g. provide an option to suspend the exercise of rights attached to such securities,
h.
establish, if required, the conditions for preserving the rights of holders of equity-linked securities with future rights to shares of the
Company, in accordance with applicable laws and regulations, and, where applicable, relevant contractual provisions,
offset the costs, fees and expenses of the capital increase(s) against the amount of the premium related thereto, and, where
applicable, deduct from this amount the amounts required to bring the legal reserve to one-tenth of the new share capital after
each capital increase, and
generally, enter into any agreement, in particular to ensure the successful completion of the contemplated issuance(s), take all
measures and carry out all formalities necessary for the financial servicing of the securities issued pursuant to this delegation as
well as the exercise of rights attached thereto, to acknowledge the completion of each capital increase and modify the Articles of
Association accordingly;
f.
i.
j.
9.
decides that the Board of Directors may not use this delegation from the filing of a takeover bid by a third party and for the duration of
the offer period.
This delegation (i) supersedes, for the portion not yet used, the previous delegation given to the Board of Directors by the Shareholders’
Meeting of April 28, 2021 in its 17th resolution and (ii) is granted for a twenty-six (26)-month period as from this Shareholders’ Meeting.
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S H A R E H O L D E R I N F O R M A T I O N
Chapter 8 – Annual Shareholders’ Meeting
Text of the twenty-first resolution
(Delegation of authority to the Board of Directors to increase the capital by issuing ordinary shares
or securities giving access to share capital of the Company without shareholders’ preferential
subscription right through an offering in accordance with Article L. 411-2 1° of the French Monetary
and Financial Code)
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,
L.225-2 to L. 225-129-6, L. 225-135, L. 225-136, L. 228-91 to L. 228-93, L. 22-10-49 and L. 22-10-52 of the French Commercial Code and
Article L. 411-2 1°of the French Monetary and Financial Code:
1.
2.
3.
4.
5.
6.
delegates to the Board of Directors the authority, with the power to subdelegate, in compliance with applicable laws and regulations, to
decide, through an offer in accordance with Article L. 411-2 1° of the French Monetary and Financial Code, on one or more occasions,
in the proportions and at the times it deems appropriate, in France and/or abroad, either in euros or in any other currency or unit of
account set by reference to several currencies, to increase the share capital by issuing (i) ordinary shares of the Company,
(ii) securities governed by Article L. 228-91 et seq. of the French Commercial Code, which are equity securities of the Company,
giving access to other equity securities of the Company and/or giving the right to the allocation of debt securities of the Company
and/or (iii) debt securities governed or not by Article L. 228-91 et seq. of the French Commercial Code, giving access or likely to give
access to equity securities to be issued by the Company, which securities may, where applicable, also give access to existing equity
securities and/or debt securities of the Company, and/or (iv) securities which are equity securities of the Company giving access to
existing equity securities or securities to be issued by, and/or debt securities of, companies of which the Company holds directly or
indirectly, at the time of issue, more than half of the share capital, and/or (v) securities representing debt securities governed or not
by Article L. 228-91 et seq. of the French Commercial Code, giving access or likely to give access to equity securities to be issued by
companies in which the Company holds directly or indirectly, at the time of issue, more than half of the share capital, and which may,
where applicable, also give access to existing equity securities and/or debt securities of said companies; it is specified that (i) the
subscription of shares and other securities may be carried out either in cash or by offsetting debts, and (ii) the shares to be issued shall
confer the same rights as the existing shares; it being specified that the issue of any shares or securities giving access to preference
shares is excluded;
decides that the nominal amount of the capital increases which may be undertaken immediately and/or in the future on the basis of
this resolution may not exceed €120 million representing on an indicative basis 5.25% of the capital as of December 31, 2022, it being
specified that:
a.
this amount would be increased by the nominal amount of the capital increase resulting from the issuance of shares to be carried
out as the case may be, in accordance with legal and regulatory provisions, and, where applicable, relevant contractual provisions
providing for other adjustments, in order to preserve the rights of holders of securities giving access to the share capital,
the maximum aggregate nominal amount of capital increases that may be undertaken immediately or in the future on the basis of
this resolution and the 19th, 20th, 22nd, 23rd and 24th resolutions of this Annual Shareholders’ Meeting is set at €800 million, and
the maximum aggregate nominal amount of capital increases that may be undertaken immediately and/or in the future on the basis
of this resolution and the 20th and 23rd resolutions of this Annual Shareholders’ Meeting is set at €224 million;
b.
c.
decides that the maximum nominal amount of issuances of debt equity-linked securities which could be carried out pursuant to this
delegation, shall not exceed a nominal amount of €7 billion (or the equivalent in any other currency or monetary unit), it being specified
that the maximum aggregate nominal amount of debt equity-linked securities that may be issued on the basis of this resolution and the
19th, 20th, 22nd and 23rd resolutions of this Annual Shareholders’ Meeting, is set at €7 billion;
decides to cancel the shareholders’ preferential subscription rights to the Company’s shares and/or other equity-linked securities to be
issued pursuant to this resolution, and to offer such shares or securities s by way of an offering provided for in Article L. 411-2 1° of the
French Monetary and Financial Code in accordance with applicable laws and regulations;
decides that, should the Board of Directors make use of this delegation, if the subscriptions to the capital increase, including, if any,
those of the shareholders, have not absorbed the aggregate capital increase, the Board of Directors may use, as permitted by law
and in such order as it may determine, either one of the options described by Article L. 225-134 of the French Commercial Code, listed
below:
a.
limit the capital increase to the amount of the subscriptions, provided that they reach at least three-quarters of the initially
approved increase, and/or
freely distribute all or part of the unsubscribed securities among persons it may choose;
b.
acknowledges and decides, if applicable, that any decision taken by virtue of this delegation of authority will automatically entail, in
favor of the holders of equity-linked securities giving access to the Company’s share capital or may give access to Company’s shares
to be issued, express waiver by shareholders of their preferential subscription rights to securities to be issued to which equity-linked
securities entitle their holders;
7. acknowledges that, in accordance with Article L. 22-10-52 of the French Commercial Code:
a.
b.
the issue price of shares issued directly will be not less than the minimum price set by applicable regulations on the date of
issuance (as of the date hereof, the weighted average of the quoted market prices during the last three trading sessions on the
regulated market of Euronext Paris preceding the beginning of the offer to the public, less a discount of 10%) after correction, if
any, to take into account the difference dates of entitlement to dividend of the shares,
the issue price of the equity-linked securities will be such that the cash amount received immediately by the Company plus any
cash amount to be received subsequently by the Company will, for each ordinary share issued as a consequence of the issuance
of such securities, be not less than the minimum issue price defined in the previous paragraph;
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Chapter 8 – Annual Shareholders’ Meeting
S H A R E H O L D E R I N F O R M A T I O N
8.1 Explanatory comments & draft resolutions submitted to the Annual
Shareholders’ Meeting
8.
decides that the Board of Directors shall have all powers, with the power to subdelegate under the conditions provided by law, to
implement this delegation, in order in particular to:
a.
b.
set the conditions of the capital increase(s) and/or of the issuance(s) of shares or securities,
determine the number of shares and/or securities to be issued, their issuance price as well as the amount of the premium that may
be requested upon issuance, if any,
determine the dates and conditions of the issuance, the nature and form of the securities to be issued, which could be
subordinated or unsubordinated securities and may or not have a specific maturity date, and in particular, for issuances of debt
equity-linked securities, their interest rate, their maturity, their fixed or variable redemption price, with or without premium and the
redemption methods,
c.
d. decide how shares and/or securities are to be paid for,
e.
set, if necessary, the terms of the exercise of the rights attached to the shares or securities issued or to be issued and, in particular,
set the date, even if retroactive, from which the new shares to be issued would bear dividend rights, as well as all other conditions
and specifics of implementing the issuance,
set the terms and conditions under which the Company would have the right to purchase or exchange, at any time or during fixed
periods, securities issued or to be issued immediately or in the future,
g. provide an option to suspend the exercise of rights attached to such securities,
h.
establish, if required, the conditions for preserving the rights of holders of equity-linked securities with future rights to shares of the
Company, in accordance with applicable laws and regulations, and, where applicable, relevant contractual provisions,
offset the costs, fees and expenses of the capital increase(s) against the amount of the premium related thereto, and, where
applicable, deduct from this amount the amounts required to bring the legal reserve to one-tenth of the new share capital after
each capital increase, and
generally, enter into any agreement, in particular to ensure the successful completion of the contemplated issuance(s), take all
measures and carry out all formalities necessary for the financial servicing of the securities issued pursuant to this delegation as
well as the exercise of rights attached thereto, to acknowledge the completion of each capital increase and modify the Articles of
Association accordingly;
f.
i.
j.
9.
decides that the Board of Directors may not use this delegation from the filing of a takeover bid by a third party and for the duration of
the offer period.
This delegation (i) supersedes, for the portion not yet used, the previous delegation given to the Board of Directors by the Shareholders’
Meeting of April 28, 2021 in its 18th resolution and (ii) is granted for a twenty-six (26)-month period as from this Shareholders’ Meeting.
Text of the twenty-second resolution
(Delegation of authority to the Board of Directors to increase the number of shares to be issued in the
event of a capital increase with or 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. 225-135-1
of the French Commercial Code:
1.
2.
3.
4.
delegates to the Board of Directors, with the power to subdelegate under the conditions provided by law, should it notice an
oversubscription when issuing shares or equity-linked securities giving access to the capital, with or without preferential subscription
rights pursuant to the 19th, 20th and 21st resolutions, its capacity to decide to increase the number of securities to be issued at the same
price as that used for the initial issuance, within the deadlines and limits specified in the applicable regulations as of the date of the
issuance (as of the date hereof, within thirty (30) days following the closure of subscriptions and up to 15% of the initial issuance), with a
view to grant an over-allotment option in accordance with market practices;
decides that in the event of an issuance, immediately and in the future, of ordinary shares, the nominal amount of capital increases
decided upon pursuant to this resolution will be charged on the ceiling applicable to the initial issuance stipulated in the relevant
resolution of this Shareholders’ Meeting;
acknowledges that, in accordance with Article L. 225-135-1 of the French Commercial Code, the limit of three-quarters of the issuance
provided by 1° of the I of Article L. 225-134 of the French Commercial Code will be increased in the same proportions if the Board of
Directors decides, pursuant to this resolution, to increase the number of shares to be issued;
decides that the Board of Directors may not use this delegation from the filing of a takeover bid by a third party and for the duration of
the offer period.
This delegation (i) supersedes, for the portion not yet used, the previous delegation given to the Board of Directors by the Combined
Shareholders’ Meeting of April 28, 2021 in its 19th resolution and (ii) is granted for a period of twenty-six (26) months as from this
Shareholders’ Meeting.
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S H A R E H O L D E R I N F O R M A T I O N
Chapter 8 – Annual Shareholders’ Meeting
Text of the twenty-third resolution
(Delegation of authority to the Board of Directors to increase the capital by issuing ordinary shares or
securities giving access to share capital of the Company without shareholders’ preferential subscription
right in consideration for contributions in kind to the Company)
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. 225-147,
L. 228-91 to L. 228-93 and L. 22-10-53 of the French Commercial Code:
1.
2.
3.
4.
delegates to the Board of Directors authority, on one or more occasions, both in France and abroad, either in euros or in any other
currency or unit of account set by reference to several currencies, to remunerate contributions in kind granted to the Company and
consisting of equity securities or securities giving immediate or future access to the capital of third-party companies, when the
provisions of Article L. 22-10-54 of the French Commercial Code are not applicable, to issue (i) ordinary shares of the Company,
(ii) securities governed by Article 228-91 et seq. of the French Commercial Code, which are equity securities of the Company, giving
access to other equity securities of the Company and/or giving the right to the allocation of debt securities of the Company and/or
(iii) debt securities governed or not by Article L. 228-91 et seq. of the French Commercial Code, giving access or likely to give access
to equity securities to be issued by the Company, which securities may, where applicable, also give access to existing equity securities
and/or debt securities of the Company and/or (iv) securities which are equity securities of the Company giving access to existing equity
securities or securities to be issued by, and/or debt securities of, companies of which the Company holds directly or indirectly, at the
time of issue, more than half of the share capital; it is specified that the shares to be issued shall confer the same rights as the existing
shares and that the issue of any shares or securities giving access to preference shares is excluded;
decides that the nominal amount of the capital increases which may be undertaken immediately and/or in the future on the basis of
this resolution may not exceed €224 million representing on an indicative basis 9.81% of the capital as of December 31, 2022, it being
specified that:
a.
this amount would be increased by the nominal amount of the capital increase resulting from the issuance of shares to be carried
out as the case may be, in accordance with legal and regulatory provisions, and, where applicable, relevant contractual provisions
providing for other adjustments, in order to preserve the rights of holders of securities giving access to the share capital,
the maximum aggregate nominal amount of capital increases that may be undertaken immediately or in the future on the basis of
this resolution and the 19th, 20th, 21st, 22nd and 24th resolutions of this Annual Shareholders’ Meeting is set at €800 million, and
the maximum aggregate nominal amount of capital increases that may be undertaken immediately and/or in the future on the basis
of this resolution and the 20th and 21st resolutions of this Annual Shareholders’ Meeting is set at €224 million;
b.
c.
decides that the maximum nominal amount of issuances of debt equity-linked securities which could be carried out pursuant to this
delegation, shall not exceed a nominal amount of €7 billion (or the equivalent in any other currency or monetary unit), it being specified
that the maximum aggregate nominal amount of debt equity-linked securities that may be issued on the basis of this resolution and the
19th, 20th, 21st and 22nd resolutions of this Annual Shareholders’ Meeting, is set at €7 billion;
acknowledges that this delegation of authority entails, by operation of law, (i) the waiver by shareholders in favor of the holders of
securities, in respect of which the contributions in kind are made, of the preferential subscription rights to the shares and/or securities
giving access to the share capital that will be issued pursuant to this delegation and (ii) the waiver by shareholders of their preferential
subscription rights to Company shares to be issued, to which the equity-linked securities that may be issued pursuant to this delegation
may give right, for the benefit of holders of securities giving access to the share capital or that may give access to shares issued by the
Company pursuant to this delegation;
5.
specifies that, in accordance with applicable law, the Board of Directors is to approve the statutory auditors’ report, referred to in
Articles L. 225-147 and L. 22-10-53 of the French Commercial Code;
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Chapter 8 – Annual Shareholders’ Meeting
S H A R E H O L D E R I N F O R M A T I O N
8.1 Explanatory comments & draft resolutions submitted to the Annual
Shareholders’ Meeting
6.
set the conditions of the capital increase(s) and/or of the issuance(s),
decides that the Board of Directors shall have all powers, with the power to subdelegate under the conditions provided by law, to
implement this delegation, in order and in particular to:
a.
b. determine the number of shares and/or equity securities to be issued, their issue price and the amount of the premium,
c. approve appraisals of the contributions and their consideration and acknowledge the completion of said contributions,
d.
determine the dates and conditions of the issuance, the nature and form of the securities to be issued, which could be
subordinated or unsubordinated securities and may or not have a specific maturity date, and in particular, for issuances of debt
equity-linked securities, their interest rate, their maturity, their fixed or variable redemption price, with or without premium and the
redemption methods,
e. decide how shares and/or securities are to be paid for,
f.
set, if necessary, the terms of the exercise of the rights attached to the shares or securities issued or to be issued and, in particular,
set the date, even if retroactive, from which the new shares to be issued would bear dividend rights, as well as all other conditions
and specifics of implementing the issuance(s),
set the terms and conditions under which the Company would have the right to purchase or exchange, at any time or during fixed
periods, securities issued or to be issued immediately or in the future,
h. provide the ability to suspend the exercise of rights attached to such securities,
i.
off-set all costs, fees and expenses against the premium account, the balance of which will be allocated by the Board of Directors
at its discretion,
establish, if required, the conditions for preserving the rights of holders of equity-linked securities with future rights to shares of the
Company, in accordance with applicable laws and regulations, and, where applicable, relevant contractual provisions,
generally, enter into any agreement, in particular to ensure the successful completion of the contemplated issuance(s), take all
measures and carry out all formalities necessary for the financial servicing of the securities issued pursuant to this delegation as
well as the exercise of rights attached thereto, to acknowledge the completion of each capital increase and modify the Articles of
Association accordingly;
g.
j.
k.
7.
decides that the Board of Directors may not use this delegation from the filing of a takeover bid by a third party and for the duration of
the offer period.
This delegation of authority (i) supersedes, for the portion not yet used, the delegation granted to the Board of Directors by the Combined
Shareholders’ Meeting of April 28, 2021 in its 20th resolution and (ii) is granted for a period of twenty-six (26) months as from this
Shareholders’ Meeting.
Text of the twenty-fourth resolution
(Delegation of authority to the Board of Directors to increase the capital by capitalizing additional paid-in
capital, reserves, earnings or other)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary shareholders’ meetings, having
heard the Board of Directors’ report and in accordance with the provisions of Articles L. 225-129, L. 225-129-2, L. 225-130 and L. 22-10-50
of the French Commercial Code:
1.
2.
3.
4.
delegates to the Board of Directors its capacity to carry out, in such proportions and for such periods as it may deem appropriate, one
or more capital increases by successive or simultaneous incorporation into the capital of premiums, reserves, profits or other amounts
for which capitalization is legally and statutorily possible, in the form of raising the nominal amount of existing shares or assigning free
new shares or by the joint use of these two procedures, said shares having the same rights as the old shares subject to the date of their
entitlement to dividends;
decides that the maximum nominal amount of the capital increases that may be carried out pursuant to this delegation may not exceed
€800 million, it being specified that this amount would be increased by the nominal amount of the capital increase resulting from the
issuance of shares that may be carried out, where applicable, in accordance with the legal and regulatory provisions;
decides, in accordance with the provisions of Article L. 225-130 of the French Commercial Code that in case where the Board of
Directors makes use of this delegation, the rights forming fractional amounts will not be negotiable or transferable and that the
corresponding Company’s shares will be sold; the amounts arising from the sale will be allocated to the holders of rights within the
deadline specified by the regulations;
decides that the Board of Directors will have full powers, with the power to subdelegate, to implement this delegation, and more
generally, to take all measures and carry out all formalities required for the successful completion of each capital increase, to
acknowledge the completion of each capital increase and modify the Articles of Association accordingly.
This delegation of authority (i) supersedes, for the portion not yet used, the delegation granted to the Board of Directors by the Combined
Shareholders’ Meeting of April 28, 2021 in its 21st resolution and (ii) is granted for a period of twenty-six (26) months as from this Shareholders’
Meeting.
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Chapter 8 – Annual Shareholders’ Meeting
25th and 26th 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, 2022, employees held 3.8% of the capital either directly or through the corporate mutual funds (FCPE).
The Company carried out capital increases reserved for Group employees in 2022 (WESOP 2022). These transactions are presented
in section 7.1.2.2 of Chapter 7 of the 2022 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 2023. As part of the 16th and the 17th resolutions of the Annual Shareholders’ Meeting of May 5, 2022, the Board of
Directors, at its meeting of December 14, 2022, decided to renew the annual employee shareholder plan in 2023, within a limit of 3.7
million shares (approximately 0.65% of the capital). This plan, which does not include a leveraged offer, is open to 47 countries
representing more than 90% of the Group’s employees. The shares are 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 2024, you are requested to approve:
•
the 25th resolution which will grant the Board of Directors the authority to carry out capital increases reserved for employees
participating in a 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 May 5, 2022 in its 16th resolution shall cease to be effective as from August 1,
2023(1));
the 26th 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 member of a
company savings plan (this authorization will be valid for a period of eighteen (18) months and may only be used on or after August
1, 2023(2)).
•
(1) The maximum amount of subscription applicable to the employee share ownership operations carried out before July 31, 2023 will be the ceiling applicable to
the 16th resolution of the Annual Shareholders’ Meeting of May 5, 2022.
(2) The maximum amount of subscription applicable to the employee share ownership operations carried out before July 31, 2023 will be the ceiling applicable to
the 17th resolution of the Annual Shareholders’ Meeting of May 5, 2022.
Text of the twenty-fifth 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:
1.
2.
3.
4.
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 1, 2023;
set the maximum discount to be offered in connection with the 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;
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;
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;
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Chapter 8 – Annual Shareholders’ Meeting
S H A R E H O L D E R I N F O R M A T I O N
8.1 Explanatory comments & draft resolutions submitted to the Annual
Shareholders’ Meeting
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,
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,
determine the conditions, in particular those relating to seniority, which shall have to be met by the beneficiaries of the capital
increases,
b.
c.
d. set the opening and closing dates of the subscription periods,
e.
f.
g.
h.
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,
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,
acknowledge the completion of capital increases in the amount of the shares that are subscribed (after possible reduction in the
event of over-subscription),
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.
This delegation (i) cancels, effective August 1, 2023, the authorization given by the Annual Shareholders’ Meeting of May 5, 2022, in its
16th 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 twenty-sixth 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. 228-91 et seq. of the French Commercial Code:
1.
2.
3.
4.
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 25th resolution of this Annual Shareholders’ Meeting, and (ii) this delegation may be used only from and after August 1, 2023;
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 Labor Code
and the head office of which is located outside France; and/or (ii) 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; and/or (iii) 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;
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;
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 thereof 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
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Chapter 8 – Annual Shareholders’ Meeting
5.
6.
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 25th 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;
decides that the Board of Directors may provide for the allocation, to the beneficiaries indicated in point 2 above, free of charge or at
an additional discount, of shares to be issued or already issued, by way of a matching and/or a discount, provided that the taking into
account of their pecuniary countervalue, evaluated at the subscription price, does not have the effect of exceeding the ceiling provided
for in this resolution; and
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, payment, 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 providing access to the
share capital of the Company, 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, 2023, the authorization given by the Annual Shareholders’ Meeting of May 5, 2022, in its 17th
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.
27th resolution: Cancellation of treasury shares
Explanatory statement
Under the 27th resolution, shareholders are invited to grant the Board of Directors authority to undertake share cancelations up to a
limit of 10% of the capital, over a period of 24 months from the date of the Annual Shareholders’ Meeting, to reduce the dilutive effect of
capital increases undertaken or to be undertaken due mainly to capital increases reserved for employees and Long-term incentive
plans, and to put in place, where applicable, share buyback programs for own shares with the aim of reducing the capital.
Text of the twenty-seventh resolution
(Authorization to the Board of Directors to cancel shares of the Company bought back by the Company
under the share buyback programs)
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. 22-10-62 of
the French Commercial Code:
1.
authorizes the Board of Directors, in accordance with Article L. 22-10-62 of the French Commercial Code, to cancel, on one or more
occasions, up to 10% of the total amount of the shares comprising the Company’s share capital on the date of the transaction, within
a twenty-four (24)-month period, some or all the shares that the Company holds or could hold, to reduce its share capital accordingly
and charge the difference between the purchase price of the canceled shares and their par value against premiums and reserves,
including the legal reserve up to a maximum of 10% of the canceled capital;
2.
grants all powers to the Board of Directors, which may further delegate as permitted by law, to implement this authorization, carry out
all actions, formalities and declarations, including amending the Articles of Association, and, in general, do whatever is necessary.
This authorization supersedes the previous delegation given to the Board of Directors by the General Shareholders’ Meeting of April 28,
2021 in its 24th resolution and is granted for a period of twenty-four (24) months as from this Shareholders’ Meeting.
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Chapter 8 – Annual Shareholders’ Meeting
S H A R E H O L D E R I N F O R M A T I O N
8.1 Explanatory comments & draft resolutions submitted to the Annual
Shareholders’ Meeting
28th resolution: Power for formalities
Explanatory statement
Finally, under the 28th resolution, we request that you grant us the powers necessary to carry out the formalities.
Text of the twenty-eighth 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 issuance of
shares and various securities with and/or without
preferential subscription rights
Shareholders’ meeting as of May 4, 2023 - resolutions n°19, 20, 21, 22 et 23
To the Shareholders of the company Schneider Electric SE,
In our capacity as statutory auditors of your company and in compliance with articles L. 228-92 and L. 225-135 et seq. as well as article L.
22-10-52 of the French Commercial Code (Code de commerce), we hereby report on the proposed authorizations allowing your board of
directors to decide on whether to proceed with various issues of shares and/or marketable securities, operations upon which you are called
to vote.
Your board of directors proposes, on the basis of its report, that:
•
it be authorized, with the right of subdelegation, for a period of twenty-sixth months, to decide on whether to proceed with the following
operations and to determine the final conditions of these issues and proposes, where applicable, to cancel your preferential subscription rights:
− issue, without cancellation of preferential subscription rights (nineteenth resolution), of (i) ordinary shares of the Company, (ii)
securities governed by articles L. 228-91 et seq. of the French Commercial Code which are equity securities of the Company, giving
access to other equity securities of the Company and/or giving the right to the allocation of debt securities of the Company, and/or (iii)
debt securities governed or not by articles L. 228-91 et seq. of the French Commercial Code, giving or likely to give access to equity
securities to be issued by the Company, which securities may also give access to existing equity securities and/or debt securities of
the Company;
− it being specified that, in accordance with Article L. 228-93 paragraph 1 of the French Commercial Code, the securities to be
issued may give access to equity securities to be issued by any company in which the Company directly or indirectly owns more
than half of the share capital;
− it being specified that, in accordance with Article L. 228-93 paragraph 3 of the French Commercial Code, the securities which are
equity securities of the Company may give access to other existing equity securities or give the right to the allocation of debt
securities of any company of which the Company directly or indirectly owns more than half of the share capital;
− issue, with cancellation of preferential subscription rights through a public offering other than those referred to in Article L. 411-2-1° of
the French Monetary and Financial Code (twentieth resolution), of (i) ordinary shares of the Company, (ii) securities governed by
articles L. 228-91 et seq. of the French Commercial Code which are equity securities of the Company, giving access to other equity
securities of the Company and/or entitling their holders to the allotment of debt securities of the Company, and/or (iii) debt securities
whether or not governed by articles L. 228-91 et seq. of the French Commercial Code, giving access or likely to give access to equity
securities to be issued by the Company, which securities may also give access to existing equity securities and/or debt securities of
the Company;
− it being specified that, in accordance with Article L. 228-93 paragraph 1 of the French Commercial Code, the securities to be
issued may give access to equity securities to be issued by any company in which the Company directly or indirectly owns more
than half of the share capital;
− it being specified that, in accordance with Article L. 228-93 paragraph 3 of the French Commercial Code, the securities which are
equity securities of the Company may give access to other existing equity securities or give the right to the allocation of debt
securities of any company of which the Company directly or indirectly owns more than half of the share capital;
− it being specified that these securities may be issued as consideration for securities contributed to the company in connection
with a public exchange offer for securities meeting the conditions set out in Article L. 22-10-54 of the Commercial Code;
− issue, with cancellation of preferential subscription rights through a public offering referred to in Article L. 411-2-1° of the French
Monetary and Financial Code (twenty-first resolution), of (i) ordinary shares of the Company, (ii) securities governed by articles L.
228-91 et seq. of the French Commercial Code which are equity securities of the Company, giving access to other equity securities of
the Company and/or giving the right to the allocation of debt securities of the Company, and/or (iii) debt securities governed by
articles L. 228-91 et seq. of the French Commercial Code, giving access or likely to give access to equity securities to be issued by
the Company, which securities may also give access to existing equity securities and/or debt securities of the Company:
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− it being specified that, in accordance with Article L. 228-93 paragraph 1 of the French Commercial Code, the securities to be
issued may give access to equity securities to be issued by any company that directly or indirectly owns more than half of the
company’s capital or in which the company directly or indirectly owns more than half of the share capital;
− it being specified that, in accordance with Article L. 228-93 paragraph 3 of the Commercial Code, the securities which are equity
securities of the company may give access to other existing equity securities or give the right to the allocation of debt securities of
any company which directly or indirectly owns more than half of its capital or of which it directly or indirectly owns more than half of
the share capital;
•
it be delegated, with the right of subdelegation, for a period of twenty-six months, the powers necessary to issue (i) ordinary shares of
the Company, (ii) securities governed by articles L. 228-91 et seq. of the French Commercial Code which are equity securities of the
Company, giving access to other equity securities of the Company and/or giving the right to the allocation of debt securities of the
Company, and/or (iii) debt securities governed or not by articles L. 228-91 et seq. of the French Commercial Code, giving access or
likely to give access to equity securities to be issued by the Company, which securities may also give access to existing equity securities
and/or debt securities of the Company and/or (iv) securities which are equity securities of the Company giving access to existing equity
securities or to securities to be issued by, and/or debt securities, of companies in which the Company holds directly or indirectly, at the
time of issue, more than half of the share capital, with a view to remunerating contributions in kind granted to the Company and
consisting of equity securities or securities giving access to the capital (twenty-third resolution), up to a limit of 9.81% of the capital.
The overall nominal amount of increases in capital that can be implemented immediately or at a later date may not exceed M€ 800 in respect
of the nineteenth, twentieth, twenty-first and twenty-third resolutions, it being specified that:
•
the overall nominal amount of the increases in capital may not exceed M€ 224 in respect of the twentieth, twenty-first and twenty-third
resolutions;
•
the maximum nominal amount of the increases in capital may not exceed M€ 120 in respect of the twenty-first resolution.
The overall nominal amount of debt securities that can be issued may not exceed Bn€ 7 in respect of the nineteenth, twentieth, twenty-first
and twenty-third resolutions.
These ceilings reflect the additional number of securities to be created as part of the implementation of the delegations referred to in the
nineteenth, twentieth and twenty-first resolutions, in accordance with article L. 225-135-1 of the French Commercial Code (Code de
commerce), if you adopt the twenty-second resolution.
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 operations 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 directors’ 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 directors’ report in respect of the twentieth
and twenty-first resolutions.
Moreover, as the methods used to determine the issue price of the equity securities to be issued in accordance with the nineteenth and
twenty-third resolutions are not specified in that report, we cannot report on the choice of constituent elements used to determine the issue
price.
As the final conditions in which the issues would be performed have not yet been determined, we cannot report on these conditions and,
consequently, on the proposed cancellation of preferential subscription rights for the twentieth and twenty-first resolutions.
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 these authorizations in case of the issue of marketable securities that are equity
securities giving access to other equity securities or giving entitlement to the allotment of debt securities, in case of the issue of marketable
securities giving access to equity securities to be issued and in case of the issue of shares with cancellation of preferential subscription
rights.
The Statutory Auditors
Mazars
Paris La Défense on March 20, 2023
PricewaterhouseCoopers Audit
Neuilly-sur-Seine on March 20, 2023
Juliette Decoux Guillemot
Mathieu Mougard
Jean-Christophe Georghiou
Séverine Scheer
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Chapter 8 – Annual Shareholders’ Meeting
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
Shareholders’ meeting as of May 4, 2023 - resolution n°25
To the Shareholders of the company Schneider Electric SE,
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 your board of directors to decide whether to
proceed with an issue of shares or securities giving access to the share capital of your 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 the 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 this issue is 2% of the share capital on the date of this
shareholders’ meeting.
This operation is submitted for your approval in accordance with articles L. 225-129-6 of the French Commercial code (Code de commerce)
and L. 3332-18 et seq. of the French Labor code (Code du travail).
Your board of directors proposes that, on the basis of its report, it be authorized, with the right of sub-delegation, 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 issues.
This delegation cancels, effective August 1, 2023, the authorization given by the annual shareholders’ meeting of May 5, 2022 in its
sixteenth resolution for its amounts unused by the board of directors.
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.
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.
The Statutory Auditors
Mazars
Paris La Défense on March 20, 2023
PricewaterhouseCoopers Audit
Neuilly-sur-Seine on March 20, 2023
Juliette Decoux Guillemot
Mathieu Mougard
Jean-Christophe Georghiou
Séverine Scheer
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S H A R E H O L D E R I N F O R M A T I O N
8.2.3 Statutory auditors’ report on the issuance
of shares or securities reserved for a category of
beneficiaries
Shareholders’ meeting as of May 4, 2023 - resolution n°26
To the Shareholders of the company Schneider Electric SE,
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
right, an operation upon which you are called to vote.
This resolution is reserved to the following classes of beneficiaries:
(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 (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, 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.
The maximum nominal amount of the increase in capital that may result from this issue is €24 million (i.e. 1,05% of the share capital on the
date of this annual shareholders’ meeting), it being specified that this amount shall be deducted from the overall ceiling common to the
twenty-fifth and twenty-sixth resolutions of €46 million (i.e. 2,01% of the share capital on the date of this annual shareholders’ meeting) set
out in the twenty-fifth resolution of this annual shareholders’ meeting.
Your board of directors proposes that, on the basis of its report, it be authorized, with the right of sub-delegation, 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 securities to be
issued. If applicable, it shall determine the final conditions of this operation.
This delegation cancels, effective August 1, 2023, the authorization given by the annual shareholders’ meeting of May 5, 2022 in its
seventeenth resolution for its amounts unused by the board of directors.
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 issue 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.
Subject to a subsequent examination of the conditions for the issue 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 issue 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 ordinary shares with cancellation of
preferential subscription right or securities giving access to other equity securities and of the issue of securities giving access to equity
securities to be issued.
The Statutory Auditors
Mazars
Paris La Défense on March 20, 2023
PricewaterhouseCoopers Audit
Neuilly-sur-Seine on March 20, 2023
Juliette Decoux Guillemot
Mathieu Mougard
Jean-Christophe Georghiou
Séverine Scheer
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Chapter 8 – Annual Shareholders’ Meeting
8.2.4 Statutory auditors’ report on the reduction
of capital
Shareholders’ meeting as of May 4, 2023 - resolution n°27
To the Shareholders of the company Schneider Electric SE,
In our capacity as statutory auditors of your company and in compliance with article L. 22-10-62 of the French Commercial Code (Code de
commerce) in the event of a capital reduction by cancellation of acquired shares, we have prepared this report in order to inform you of our
opinion on the causes for and the terms and conditions of the proposed capital reduction.
Your board of directors proposes that you delegate to the board, for a period of twenty-four months, all powers to cancel, up to 10% of
company capital on the date of the transaction, per twenty-four months period, the shares purchased under the implementation of an
authorization of purchase by your company of its own shares under the provisions of the aforesaid article.
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
examining whether the causes for and the terms and conditions of the proposed capital reduction, which is not likely to adversely affect the
equality of shareholders, are in order.
We have no comment to make on the causes for and the terms and conditions of the proposed capital reduction.
The Statutory Auditors
Mazars
Paris La Défense on March 20, 2023
PricewaterhouseCoopers Audit
Neuilly-sur-Seine on March 20, 2023
Juliette Decoux Guillemot
Mathieu Mougard
Jean-Christophe Georghiou
Séverine Scheer
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Chapter 9 – Persons responsible for the Universal
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S H A R E H O L D E R I N F O R M A T I O N
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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
and audit of the
financial statements
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
Glossary
568
569
570
573
574
575
576
578
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Chapter 9 – Persons responsible for the Universal
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S H A R E H O L D E R I N F O R M A T I O N
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 28, 2023
Chairman & 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 4 of the Universal Registration
Document for the year ended December 31, 2020, registered with the Autorité des Marchés Financiers (AMF) under number
D.21-0178 on March 23, 2021;
the consolidated financial statements and corresponding auditors’ reports provided in Chapter 5 of the Universal Registration
Document for the year ended December 31, 2021, registered with the AMF under number D.22-0171 on March 29, 2022;
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 parent company financial statements and corresponding auditors’ reports provided in Chapter 6 of the Universal Registration
Document for the year ended December 31, 2021, registered with the AMF under number D.22-0171 on March 29, 2022;
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;
the management report provided in the Universal Registration Document for the year ended December 31, 2021, registered with the
AMF under number D.22-0171 on March 29, 2022;
• 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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S H A R E H O L D E R I N F O R M A T I O N
Chapter 9 – Persons responsible for the Universal
Registration Document and audit of the financial statements
Persons responsible for the
audit of the financial statements
Statutory auditors
PricewaterhouseCoopers Audit – 63 rue de Villiers – 92200 Neuilly-sur-Seine
Represented by Séverine Scheer and Jean-Christophe Georghiou
Mazars Tour Exaltis – 61, rue Henri-Regnault – 92400 Courbevoie
Represented by Juliette Decoux-Guillemot and Mathieu Mougard
Date
appointed
Appointment
expires
2022
2004
2028
2028
PricewaterhouseCoopers Audit and Mazars are members of the Auditors’ Regional Company of “Versailles et du Centre”.
569
Life Is On | Schneider Electric | www.se.comCH5CH6CH7CH8INTEGRATED REPORTCH1CH9CH2CH3CH4 Chapter 9 – Persons responsible for the Universal
Registration Document and audit of the financial statements
S H A R E H O L D E R I N F O R M A T I O N
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
Chapter 9
Chapter 9
N/A
N/A
Inside front cover
Chapter 9
N/A
568
568
N/A
N/A
N/A
569
N/A
Chapter 3, section 3.4
304–318
Chapter 7, section 7.3
Chapter 7, section 7.3
Chapter 7, section 7.3
Chapter 7, section 7.3
527
527
527
527
5.1.1
Nature of transactions made by the Company and its principal activities
Integrated Report
6–9, 24–29
5.1.2 New products/services launched on the market
Integrated Report
Chapter 1, section 1.3
Integrated Report
Chapter 3, section 3.4
Integrated Report
Chapter 1, section 1.3
24–29
60
22–29
318
2–9
59–68
Principal markets
Exceptional events
Strategy and objectives
5.2
5.3
5.4
5.5
5.6
5.7
Dependence on patents, licenses, contracts, or new manufacturing processes
Chapter 3, section 3.4
306, 312
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
Integrated Report
Chapter 5, section 5.7
5.7.2 Major investments planned by the issuer and for which the management bodies
N/A
18–19
489–490
N/A
have already taken a firm commitment
5.7.3
Information on significant shareholdings in companies
Chapter 5, section 5.5
476–482
5.7.4
Environmental issues potentially affecting the use of the tangible fixed assets
N/A
6.
6.1
ORGANIZATIONAL STRUCTURE
Brief description of the Group
Integrated Report
Chapter 7, section 7.3
N/A
8–9
527
6.2
List of main subsidiaries
Chapter 5, section 5.5
476–482
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Chapter 9 – Persons responsible for the Universal
Registration Document and audit of the financial statements
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
488–495
7.1.2
Future expected development of the activities and R&D activities
Integrated Report
34
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
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
13–17
488–494
13
491–492
425
457–460
422
494–495
465–472
507–509
Restrictions on use of capital resources that have materially affected, or could
materially affect, directly or indirectly, the operations
Chapter 3, section 3.4
309–310
Expected sources of financing
REGULATORY ENVIRONMENT
TREND INFORMATION
Integrated Report
N/A
12, 34
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
Integrated Report
Known trends, uncertainties, demands, commitments, or events that might have a
material effect on prospects for the current fiscal year
Integrated Report
34
34
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
35–37
334–351
350
Chapter 4, section 4.2
376–417
Chapter 4, section 4.2
385–386
Chapter 4, section 4.1
334–345
Chapter 4, section 4.1
350, 374
Chapter 4, section 4.1 330–331, 336,
356–359,
370–372
Declaration – corporate governance applicable in the home country of the issuer
Chapter 4, section 4.1
324
Potential material impacts on corporate governance
Chapter 4, section 4.1
345–346
EMPLOYEES
15.1
Number of employees
15.2
Profit sharing and stock options
Chapter 2, section 2.8
Chapter 5, section 5.5
Chapter 4, section 4.2
Chapter 7, section 7.1
280–288
473
413–417
523
15.3
Agreements for employees’ equity stake in the capital of the issuer
Chapter 7, section 7.1
522–523
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.
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16.
16.1
16.2
16.3
16.4
17.
18.
18.1
18.2
18.3
Chapter 9 – Persons responsible for the Universal
Registration Document and audit of the financial statements
S H A R E H O L D E R I N F O R M A T I O N
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 7.4
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
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
19.1.4 Convertible securities, exchangeable securities, or securities with warrants
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
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
Chapter 5, section 5.5
Chapter 6, section 6.3
Integrated Report
Chapter 8, section 8.1
2, 12, 15
538–539
19.1.5 Terms of any acquisition right and/or commitment in respect of authorized but
Chapter 4, section 4.2
non-issued capital
19.1.6 Information about the capital of any group member which is under option or
Chapter 7, section 7.2
524–525
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
522
525
2
527
19.2.2 Rights, privileges, and restrictions attached to shares
Chapter 7, section 7.4
528–530
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
528
N/A
527
533
522
522
528–529
523
523
474
518
N/A
483–487
512–514
270–273
374
561–565
N/A
N/A
458
518
307
474
510–511
N/A
524
524
460
507
515
458, 466
507–508
413–417
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Chapter 9 – Persons responsible for the Universal
Registration Document and audit of the financial statements
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
Page no.
568
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
2–3, 13–17, 32
299–303
304–318
488–495
Chapter 7, section 7.2
526
Chapter 6
Chapter 6, section 6.4
Chapter 5
Chapter 5, section 5.6
498–511
512–514
420–482
483–487
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S H A R E H O L D E R I N F O R M A T I O N
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.
2–16
2–16
476–482
515
34
318
476
511
22–29
431, 445
274–279
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
280–288
Financial key performance indicators (Article L. 225-100-1 of the French Commercial Code)
Integrated Report
2–16
Financial risks linked to climate change and what has been implemented to reduce them
(Article L. 22-10-35 of the French Commercial Code)
Chapter 2 section 2.3.1
151, 152
Characteristics of internal control procedures and risk management (Article L. 22-10-35 of
the French Commercial Code)
Chapter 3, sections 3.1–3.3
295–303
Main risks and uncertainties (Article L. 225-100-1 of the French Commercial Code)
Chapter 3, section 3.4
304–318
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)
Chapter 3, section 3.4
Transactions executed by the Executive Officers on the shares of the Company
(Article L. 621-18-2 of the Monetary and Financial Code)
Chapter 4, section 4.1.2
310
351
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 4, sections 4.1.2, 4.2.5
351, 413–417
N/A
N/A
Shares held by employees (Article L. 225-102 of the French Commercial Code)
Chapter 7, section 7.1
522, 523
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
524
Chapter 7 sections 7.1.1–7.4.5
522, 529
Chapter 8, section 8.1
Chapter 6, section 6.7
Chapter 6, section 6.3
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
539
517
509
522
N/A
476
538
N/A
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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 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)
Corresponding sections and chapters
of the Universal Registration Document
Page no.
Chapter 4, section 4.2
Chapter 4, section 4.2.3.2
Chapter 4, section 4.2.2.1
376
411
378
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
393, 406
Directors’ commitments of any kind (Article L. 22-10-9, I, 4° of the French Commercial Code)
Chapter 4, sections 4.1.2.5, 4.1.7
350, 374
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)
Chapter 4, section 4.2.2.4
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
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
378
390
391
376
378
393
389
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
337–345
Regulated agreements (Articles L. 225-37-4, 2° and L. 22-10-10 of the French Commercial
Code)
Chapter 4, section 4.1.7
371
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
524, 525
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 4.1.1.2
324–333
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)
Limits to the powers of the Chief Executive Officer (Article L. 22-10-10, 3° of the
French Commercial Code)
Chapter 4, sections 4.1.2-4.1.3
334–355
Chapter 4, section 4.1.2
346, 347
Chapter 4, section 4.1.1
332, 333
Corporate Governance Code to which the Company adheres, including comply or explain
detail (Article L. 22-10-10, 4° of the French Commercial Code)
Chapter 4, section 4.1.1.1
Participation in 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 7, section 7.4.1
Chapter 4, section 4.1.7
Chapter 7, section 7.4.8
324
528
374
530
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S H A R E H O L D E R I N F O R M A T I O N
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.
ARTICLES L. 225-102-1 AND R. 225-105
Company business model
Main CSR risks linked to the Company’s business
SOCIAL INFORMATION
Employment
Corresponding sections and chapters
of the Universal Registration Document
Chapter 1, section 1.2.1
Chapter 2, section 2.1.6
Total workforce and breakdown of employees by gender, age, and geographical region
Chapter 2, section 2.8.2.2
Hiring and layoffs
Compensation and its evolution
Work organization
Worktime organization
Absenteeism
Labor relations
Chapter 2, section 2.8.2.2
Chapter 2, section 2.5.4
Chapter 2, section 2.8.2
Chapter 2, section 2.8.2
Page No.
54
87–91
281–283
283–284
218
281
281
Organization of concertation, notably information and consultation procedures
for personnel and negotiation with the latter
Chapter 2, sections 2.5.5 and
2.8.2.3
222 and 285
Summary of collective bargaining agreements signed with trade unions or workers’
representatives regarding occupational health and safety
Chapter 2, sections 2.5.5 and
2.8.2.3
222 and 285
Health and safety
Health and safety conditions
Chapter 2, sections 2.2.9 and
2.8.2.4
127 and 286
Work accidents (including frequency and severity rates) and occupational illnesses
Chapter 2, section 2.8.2.4
286
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
Chapter 2, sections 2.5.3.5 and
2.8.2.5
212 and 287
Chapter 2, section 2.8.2.5
Chapter 2, sections 2.5.2.7
Chapter 2, sections 2.5.2.7
Chapter 2, sections 2.5.2.3
Chapter 2, section 2.3.1
Chapter 2, section 2.4.1
Chapter 5, section 5.5.1.21
287
207
209
204
150
176
437
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Chapter 9 – Persons responsible for the Universal
Registration Document and audit of the financial statements
Pollution
Measures for prevention, reduction, or repair of emissions in the air, water, and ground
with serious environmental effects
Chapter 2, sections 2.4.1 and 2.8.1
178 and 275
Consideration of any form of pollution specific to an activity, particularly noise and light
pollution
Chapter 2, sections 2.4.1 and 2.8.1
178 and 275
Corresponding sections and chapters
of the Universal Registration Document
Page No.
Circular economy
Waste prevention and management
Measures relative to waste prevention, recycling, reuse, and other forms of recovery
and disposal
Chapter 2, section 2.4.2
180
Measures for combatting food waste
Sustainable usage of resources
N/A
Water consumption and supply adapted to local constraints
Chapter 2, sections 2.4.4 and 2.8.1
191 and 277
Consumption of raw materials and measures implemented for more efficient use
Chapter 2, section 2.4.3
186
Energy consumption and measures implemented to improve energy efficiency
and the use of renewable energy
Chapter 2, sections 2.3.5 and 2.8.1
159 and 277
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 2.3.2 and 2.8.1
154 and 278
Measures taken to adapt to the consequences of climate change
Chapter 2, section 2.3.3
155
Reduction targets set voluntarily in the medium and long term to reduce greenhouse
gas emissions and means implemented for this purpose
Chapter 2, sections 2.3.2 and 2.8.1
154 and 278
Biodiversity protection
Measures implemented to protect or develop biodiversity
Chapter 2, sections 2.4.1 and 2.8.1
176 and 276
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 2.6.2
Chapter 2, section 2.2.13
Chapter 2, section 2.1.4
Chapter 2, section 2.6.3
Consideration within the Company’s purchasing policy of social and environmental issues
Chapter 2, section 2.2.12.4
Consideration within relations with subcontractors and suppliers of their social and
environmental responsibility
Chapter 2, section 2.2.12
Fair operating practices
Measures implemented to promote consumer health and safety
Chapter 2, section 2.2.6
COMPLEMENTARY INFORMATION
Actions implemented to prevent any kind of corruption
Chapter 2, section 2.2.3
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
Chapter 2, section 2.5.5
regarding elimination of discrimination in respect of employment and occupation
Chapter 2, section 2.5.2
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 2.2.8
Chapter 2, section 2.2.8
Chapter 2, section 2.2.8
N/A
Actions implemented to prevent tax evasion
Chapter 2, section 2.2.5
ARTICLE L. 225-102-4
Vigilance plan
Chapter 2, section 2.2.10
228
146
84
233
137
136
119
117
222
204
124
124
124
119
130
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S H A R E H O L D E R I N F O R M A T I O N
Glossary
Adjusted EBITA Adjusted EBITA (Earnings Before Interest, Taxes,
Amortization of Purchase Accounting Intangibles). Adjusted EBITA
corresponds to the operating income before amortization and
impairment of purchase accounting intangible assets, before
goodwill impairment, other operating income and expenses, and
restructuring costs.
ADMS Advanced Distribution Management Systems
AFEP-MEDEF Code Corporate Governance Code of listed
corporations developed by the French Association of Private
Enterprises – Association française des entreprises privées (AFEP),
and the Movement of the Enterprises of France – Mouvement des
entreprises de France (MEDEF).
AGM Annual General Meeting. The annual meeting of Schneider
Electric shareholders. The next meeting will be held on May 4,
2023.
EcoXpert Schneider Electric Partner Program to share our
expertise, stimulate growth in a new customer base, and together
deliver best-in-class services to our valued customers.
Edge computing Decentralized data processing as close to its
source as possible to improve network bandwidth and response
times.
EHS Environment, Health, and Safety
Energy transition The energy transition replacing fossil fuels with
low-carbon energy sources.
Enterprise Metaverse Real machines, factories, buildings, and
grids systems are mirrored in the virtual world to create a digital
environment, where problems can be found, analysed, and fixed
quickly. Leveraging a single data-hub, problems can be discovered
before they arise and collaboration between off-site and on-site
support can be improved.
AI Artificial Intelligence
AMF French Financial Market Authority – Autorité des Marchés
Financiers
ESG Environmental, Social and Governance
EPS Earnings Per Share
CapEx Capital Expenditure: company expenditure on major,
long-term assets such as buildings, machinery, and vehicles.
Carbon neutral A state in which the greenhouse gas (GHG)
emissions released into the atmosphere have been reduced or
avoided and the remaining ones are compensated with carbon
credits. To achieve carbon neutrality, carbon credits from projects
that reduce, avoid, or temporarily capture GHGs are accepted.
GHG Green House Gas
Green Premium™ Our Green Premium™ label was created to
provide our customers with more sustainable products and
transparency with environmental information. In 2022, more than
80% of Schneider’s product sales came from Green Premium™
products. We expect this figure to reach 80% by 2025.
IEC International Electrotechnical Commission
Circular Certified Schneider Electric label to give products a
second life (unsold or obsolete stock, commercial returns).
IIoT Industrial Internet of Things
COP26/COP27 United Nations Climate Change Conference –
Glasgow 2021 (COP26) and Sharm El-Sheikh 2022 (COP27)
CSR Corporate Social Responsibility
DEI Diversity, Equity, and Inclusion
Digital Twin A near-real-time digital image of a physical object or
process that helps optimise business performance.
EcoDesign Way™ Schneider Electric embraces circular principles
all along the lifecycle of products and offers. The keystone of
circularity is EcoDesign Way™, a process that is applied to the
development of all new products.
EcoStruxure™ EcoStruxure™ is Schneider Electric’s IoT-enabled,
plug-and-play, open, interoperable architecture and platform, used
in homes, buildings, data centers, infrastructure, and industries.
EcoStruxure™ enables enhanced safety, reliability, efficiency,
sustainability, and connectivity with “Innovation at Every Level” from
connected products to edge control, and apps, analytics, &
services.
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”.
Impact revenues Schneider Impact revenues are offers that bring
energy, climate, or resource efficiency to customers while not
generating any significant harmful impact to the environment.
Industry 4.0 Refers to the fourth industrial revolution; combining
physical production and operations with smart digital technology
such as cloud computing, Internet of Things (IoT), Artificial
Intelligence (AI), and machine learning to create a bigger impact
and greater productivity.
IPCC Intergovernmental Panel on Climate Change
KPI Key Performance Indicator
Living wage 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.
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LTIP Long Term Incentive Plan
STIP Short Term Incentive Plan
TCO Total Cost of Ownership – Quantifies the cost of the purchase
across the product’s entire lifecycle from purchase to
decomissioning.
Trust Charter The Trust Charter acts as the Group’s Code of
Conduct, demonstrating its commitment to ethics, safety,
sustainability, quality, and cybersecurity.
TZCP The Zero Carbon Project: Actions to reduce the greenhouse
gas emissions from Schneider’s suppliers. 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).
UPS Uninterruptable Power Supply
VOC Volatile Organic Compounds – Organic substance which can
be vaporized by small changes in temperature or pressure. VOCs
are a category of air pollutant mainly from industrial processes and
automobiles. Schneider Electric does everything to reduce them as
much as possible.
VolunteerIn Schneider Electric’s VolunteerIn programme was
created in 2012 to organize volunteer missions benefiting the
Schneider Electric Foundation’s partners. Wherever the Company
is based, 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.
WEEE Waste Electrical and Electronic Equipment
WESOP Worldwide Employee Share Ownership Plan
Microgrid Local, self-contained electrical network which allows to
generate electricity on-site and use it when needed.
Multi-hub Four hubs now serve the Group’s different markets
(Europe, North America, China, and India). Each hub has its own
capabilities, while operating and contributing together toward the
same Group objectives.
Net-zero As per the SBTi’s “Corporate Net Zero Standard”, it
means reducing emissions at a pace that is in line with the latest
climate science and balancing any remaining essential residual
emissions through carbon removal credits (rather than carbon
credits).
OEM Original Equipment Manufacturer
OpEx Operational Expenditure: costs which are incurred through a
company’s day-to-day business operations (like salaries, rent,
energy costs etc.)
R&D Research & Development
REACH Regulation on Registration, Evaluation, Authorization and
Restriction of Chemicals.
RoHS Restriction of Hazardous Substances
SaaS Software as a Service
SBTi Science Based Targets initiative
SCADA Supervisory control and data acquisition
SDG United Nations’ Sustainable Development Goals
SF6 Sulfur hexafluoride; one of most potent greenhouse gases.
Schneider Electric launched SF6-free green and digital MV
switchgear with GM AirSeT™ in 2020.
SRI Socially Responsible Investment
SSE Schneider Sustainability Essentials 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 Schneider Sustainability
Impact (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, as well as additional qualitative programs.
SSERI Schneider Sustainability External & Relative Index;
measures the long-term sustainability performance of the Group in
terms of relative performance, through a combination of external
indices (including DJSI World, Euronext Vigeo, Ecovadis, and CDP
Climate Change).
SSI Schneider Sustainability Impact is the translation of our six
long-term commitments (climate, equal, resources, generations,
trust, and local) 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.
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Financial Calendar
Investor Relations
May 4, 2023
Annual Shareholders’ Meeting
Financial Releases
February 16, 2023
April 27, 2023
July 27, 2023
October 26, 2023
2022 Annual Results
Q1 2023 Revenues
2023 Half Year Results
Q3 2023 Revenues
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SchneiderElectric
Investor Relations
Amit Bhalla
Tel.: +44 (0) 20 7592 8216
Corporate Communications
Raphaële Hamel
Tel.: +33 (0) 6 75 29 51 55
se.com
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 2,284,371,684
Registered in Nanterre, R.C.S. 542 048 574
Siret no.; 542 048 574 01791
© 2023 Schneider Electric. All Rights Reserved. Life Is On Schneider Electric is a trademark and property of Schneider Electric
SE, its subsidiaries and affiliated companies. All other trademarks are the property of their respective owners. 998-22385455