F I 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
2023 Universal
Registration Document
The Next Frontier:
Industrial Tech for
Sustainable Impact
The Universal Registration Document was filed on March 28, 2024 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, 2023 and is available on the AMF’s website (www.amf-france.org)
and on the Company’s website (www.se.com).
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
Industrial Tech for the future
Our business model
A message from the Chairman of the Board of Directors,
Jean-Pascal Tricoire
A message from the CEO, Peter Herweck
An interview with Chief Financial Officer, Hilary Maxson
Financial Performance Highlights
Outlook and targets
Key Achievements of 2023
2023 Capital Markets Day
An “Impact Maker” for sustainability
Proud of 2023’s sustainability achievements
Governance
Our Stakeholders
Chapter 1
Group strategy
1.1 Strategy Overview
1.2 Megatrends and Opportunities
1.3 Our Vision
1.4 Key Focus Areas
1.5 Key Markers and Strength of Schneider Electric
1.6 Ambition to Impact
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4
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19
20
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30
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50
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58
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Chapter 2
Sustainable development
An introduction by our Chief Sustainability and Customer & Quality Officer 68
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
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
Vice-Chairman & Lead Independent Director’s introduction
4.1 Governance Report
4.2 Compensation Report
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337
357
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Chapter 5
Consolidated financial statements
at December 31, 2023 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, 2023
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, 2023
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, 2023
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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454
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457
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511
516
526
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529
540
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546
547
550
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558
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561
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566
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582
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583
586
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591
RFA Annual Financial Report elements are clearly identified in this table of contents with the sign RFA.
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R
T Our purpose
O
P
To empower all to
make the most of our
energy and resources
bridging progress and
sustainability for all.
At Schneider we
.
call this
E
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Integrated Report
Our performance
2023 was a year of strong growth; in revenues, profitability and cash generation
with a seamless transition to new governance structure. We delivered against
ambitious targets both financial and extra-financial, as we prepared the company
for the Next Frontier.
Financial KPIs
Revenues
€35.9B
+12.7% organic
Net Income (Group share)
Adjusted Earnings per Share
€4.0B
+15%
€7.26
+2%
Adjusted EBITA margin
Free Cash Flow
Proposed Dividend per Share
17.9%
€4.6B
+180bps organic
115% conversion rate
€3.50
+11%
Our Impact
Impact
revenues
74%
Tonnes of CO2 emissions
saved and avoided
People with access
to green electricity
553M
+16.6M
(+2pts vs. 2022)
to our customers since 2018
since 2020
Schneider Sustainability
Impact score
6.13/10
CO2 emissions
reduced
27%
outperforming 2023
6.00/10 target
from top 1,000 suppliers’
operations
People trained in
energy management
578,709
since 2009
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Integrated Report
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About Schneider
Our mission is to be
your digital partner for
Sustainability and Efficiency.
Our business
Revenue
€35.9bn
Revenue by geography in 2023
13%
25%
28%
34%
North America
Asia Pacific
Western Europe
Rest of the World
Employees
168,000+
Total employees by geography in 2023
What we offer
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 buildings, data centers,
infrastructure and industries.
See page 25 to find out more
about our end-markets.
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.
37%
Asia Pacific
Western Europe
North America
Rest of the World
See page 62 to find out more
about our multi-hub approach
13%
24%
26%
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Integrated Report
Our four hubs
We operate in
100+
Countries
N O R T H A M E R I C A
E U R O P E
I N D I A
C H I N A
Why we do it
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.
See page 48 to find out more
about our strategy.
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 66 to find out more
about our Sustainability strategy.
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Industrial Tech for the future
Transforming to be the “Industrial Tech”
leader as we embark upon The Next
Frontier for Schneider Electric
Our unique portfolio is best equipped for growth on themes enabling a sustainable future
We have curated our portfolio to become a powerhouse in electrification and digitization, driving sustainability and efficiency for customers
across end-markets.
#3
Unique and focused portfolio
of automation offers, from grids to
buildings to industrial processes
atio n
ific
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a
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Enabling a
Sustainable
future
Digitiza t i o n
Leading, end-to-end digital offers,
across the lifecycle of our customers
assets and operations
#1
#1
Clear #1 in electrification, globally
Megatrends driving The Next Frontier
We identify five megatrends that will drive the expansion of our addressable market and we believe that we are ideally positioned to thrive in
the end-markets we serve.
Digitization
and AI
Climate
Change
Energy
Transition
Evolution
of Wealth
New Global
Equilibrium
See Chapter 1 on page 48
to find out more.
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Well positioned on structurally growing markets
The end-markets we serve are in an
accelerated growth phase as a function of
the five megatrends. An addressable
market of around EUR 400 billion in 2023 is
set to grow at a compound annual growth
rate (CAGR) of between +6% and +7% in
the next four years, to reach in excess of
around EUR 500 billion by 2027.
Potential addressable market estimates
2023-27, in €bn
> €100bn growth
500
~€400bn
Integrated Report
~€500bn+
CAGR
+6 to +7%
0
2023
2027
Key markers and strength of Schneider Electric
Schneider Electric is characterized by a number of key markers and strengths which make us unique. These elements combine together to
allow us to successfully execute on our strategy and serve our customers.
1.
Ecosystem &
Partner model
2.
Multi-hub
model
A unique partner
ecosystem based on
trust and long-term
relationships
incorporating an
unparalleled network of
partners, including
distributors, panel
builders, system
integrators, and
electricians.
A decentralized
multi-hub operating
model driving
empowerment of our
people. Empowered
teams, closer to
customers, with quick
decision making, and
regionalized supply
chains.
3.
Global balanced
footprint
The most local of global
companies and a
reshoring champion.
4.
Focus on
sustainability
Going beyond the
scope of our own
operations in
sustainability.
5.
Culture &
empowered
workforce
A culture led and skills
first organization
enabling positive
IMPACT.
Focus areas give roadmap for maximizing shareholder value
Peter Herweck, Chief Executive Officer, identified five focus areas which, combined with a disciplined approach to governance, ethical
standards, and financial imperatives, are set to drive shareholder value in coming years.
Management priorities:
1.
Growth Culture
2.
Sustainability –
The Next Frontier
3.
Organic
expansion of
product franchise
4.
Software &
Prosumer
5.
AI everywhere
Coupled with:
Agile operating
model
Strong governance
& business ethics
Disciplined
capital allocation
Return on
capital employed
= Total shareholder returns
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Integrated Report
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T Our business model
O
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We have curated a unique portfolio that is best equipped
for growth on themes enabling a sustainable future
Our advantages and resources
We are advocates of open
standards and partnership
ecosystems that are passionate
about our shared values
enabling positive impact.
People
168k+
employees worldwide,
in 100+ countries
Our expertise
Our integrated approach allows us to provide our customers with a
complete plug and play integrated solution.
Innovation
1,000+
patent applications
filed globally in 2023
E L E C T R I F I C A T I O N
A U T O M A T I O N
D I G I T I Z A T I O N
#1
• Complete end-to-end offers
• Unparalleled network of partners
• Global leadership
•
Innovation leader
• Sustainability trusted partner
through consultancy
#3
#1
• Automation – Building, Grid, Process,
Discrete
• Process, safety & Cyber leader
• Software defined Open Automation
• Product leadership
• Native connectivity
• End to End lifecycle approach with
AVEVA, etap, RIB Software
• Data driven insight
• Artificial Intelligence
B U I L D I N G S
D A T A C E N T E R S
I N F R A S T R U C T U R E
I N D U S T R Y
Creating value
Creating value for all
our stakeholders.
For our
customers
553M
Partners
and suppliers
27%
tonnes of CO2 saved
and avoided since 2018
performance of the
Zero Carbon Project
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Integrated Report
Environment
101
Number of zero-CO2 sites
Partners and suppliers
Financial strength
650k+
service provider and
partner ecosystem
A-/A3
strong investment grade
credit rating
trification
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Enabling a
Sustainable
future
Digitizatio n
The planet and
local communities
46.5M
For our
employees
61%
For our
shareholders
+64%(1)
people provided access to
green electricity since 2009
of eligible employees benefitting
from 2023 share plan
3-year Total
Shareholder Return
(1) From January 1, 2021 to December 31, 2023
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A message from the Chairman of the Board of Directors, Jean-Pascal Tricoire
“We are more relevant now, than at any
point in the past, to our customers, our
people and our shareholders across the
world.”
Jean-Pascal Tricoire
Chairman
Dear shareholders,
I write to you in my new role as Chairman, following the flawless
transition in 2023 to a new governance model when we dissociated
the roles of Chairman and Chief Executive Officer. The new model
is in line with good corporate governance practice and the
transition has been meticulously planned and executed, with strong
involvement of the whole Board and intensive teamwork with Fred
Kindle, our Vice-Chairman and Lead Independent Director and
Peter Herweck, our Chief Executive Officer.
As I reflect on my twenty years at the helm of the company, we
have driven a meaningful transformation, making Schneider a
global leader in the fields of digitization, electrification and
sustainability. During this period our revenue has multiplied by
more than 4x, net income has grown by 10x and market
capitalization increased by 10x at the end of 2023. I am particularly
proud that we built a global leader in digital technologies - today
around 50% of our business - by leveraging the combined
accelerations of the Internet of Things (IoT), big data and cloud,
software and artificial intelligence (AI), and through building a deep
vertical knowledge of our customers’ applications. We have grown
EcoStruxure, our IoT and automation platform, and AVEVA, our
software and AI platform, to be references in energy and industrial
technology. We have also grown our electrification business to be a
true world leader, with integrated and digitized solutions from grid
to plug, and landmark positions in high tech segments like IT and
Data Centers, making Schneider ready for the AI economy and for
the ever-accelerating electrification of the world. We have
positioned ourselves to be the partner and advisor of our
customers for their agendas of digitization, electrification and
sustainability, at a time when the world moves fast to be all-digital
and all-electric, and more sustainable.
I am convinced that our company is uniquely placed to drive
positive impact and create technology to empower all to make the
most of their energy and resources, bridging progress and
sustainability, everywhere in the world. We have grown Schneider
into a company of significant scale, with a geographic footprint in
over 100 countries worldwide and a very balanced market
exposure focused on Buildings, Data Centers, Industry and
Infrastructure. We have constantly innovated our operating model
to be very local in every geography, and structured Schneider
across multiple hubs, creating technology, serving customers, and
growing and empowering talents at the most local level. We have
also integrated sustainability in every component of our company,
from our purpose and strategy to our operating model. We intend to
stay at the forefront of sustainability in both what we do and in how
we do business.
We are more relevant now, than at any point in the past, to our
customers, our people and our shareholders across the world. I
take this opportunity to thank all of them and acknowledge the role
of our investors who have supported, guided, and challenged us
through the transformation, demonstrating support and sometimes
patience.
On behalf of the Board of Directors, I would like to warmly thank
and congratulate each and every one of our employees who,
through their engagement, skills and creativity, build this great
company which is so well placed to face the next challenges.
Schneider’s solid governance is a tremendous asset thanks to the
trust and transparency that exists between the Group’s governance
bodies and within its Board of Directors, whose work benefits from
the broad international experience and diversity of its members. In
my new role and at the request of the Board, I continue to dedicate
a meaningful amount of my time to the future of Schneider, to
support Peter and the executive team in this next phase, and to
monitor the evolution of the company especially around key
strategic choices.
In particular, I am focusing my support on the following subjects
that the Board deems critical to Schneider’s future:
Innovation and technology;
•
• Our culture of diversity, equity, inclusion and care, and our Multi
Hub model;
• Our people, who are the source of Schneider’s strength, and
among them, the emergence of the next generation of leaders;
• Sustainability and ESG which remains at the core of what we do;
• High level relationships with customers and stakeholders,
established over many years, with a special focus in the Asia
Pacific region.
Many of these responsibilities relate to strategy, innovation and
people, which I have always considered the most important
ingredients of our Company success. I am excited at the future
prospects of Schneider Electric as all our megatrends are starting
powerful inflections and I join the Board in extending my full
support to Peter. Peter is the one navigating the company towards
the next frontier and I look forward to continuing my dialogue with
key Schneider stakeholders as we all work together to ensure the
future impact and success of this great Company.
Life Is On!
Jean-Pascal Tricoire
Chairman
See more about our governance
on page 358.
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A message from the CEO, Peter Herweck
Integrated Report
“2023 delivered numerous successes
and milestones for our company all in
support of accelerating the energy
transition and tackling climate change.”
Peter Herweck
CEO
Dear shareholders,
The year 2023 was a pivotal one for Schneider Electric. After two
decades at the helm of the company, Jean-Pascal Tricoire stepped
down as CEO in May, and handed the reins to me, while retaining
the role of Chairman.
Under Jean-Pascal’s visionary leadership, Schneider Electric
underwent a major transformation across all dimensions: our size,
footprint, portfolio, culture, purpose and impact all changed
beyond recognition during his tenure. Above all, we’ve become
stronger, more future-ready and more resilient.
Taking on the role of CEO is a huge honor and responsibility. I’ve
made a clear commitment to build on these strengths, to take
Schneider Electric even further into the future, and to support all
our stakeholders as we build a more sustainable and equitable
future for all.
Since the announcement in February 2023 and after two years at
AVEVA, I’ve spent much of my time meeting our customers, teams,
partners, suppliers, investors - in our labs and in the communities in
which we operate. It’s been a great experience that has reinforced
my understanding of the breadth and depth of our expertise and
impact, while also giving me insights on where we have further
potential.
Throughout the handover period and during the rest of the year,
business continued as usual, and 2023 delivered numerous
successes and milestones for our company: a strong business
performance; recognitions in the fields of innovation, R&D and
sustainability; and active engagements in high-level events such as
COP28 and the International Energy Agency’s energy efficiency
conference – all in support of accelerating the energy transition
and tackling climate change. Meanwhile, at our milestone Capital
Markets Day in November, we announced The Next Frontier of
Schneider Electric - the evolution of our strategy to become an
Industrial Tech leader.
Looking ahead, I see five megatrends shaping the world in which
we operate: ongoing rapid growth in digital technologies and
Artificial Intelligence (AI); an accelerated need for concrete
solutions to fight climate change; the energy transition; the evolution
of wealth; and the shift to a new global equilibrium, which will see
countries and companies alike rethink how they operate.
For Schneider Electric, these trends represent growth
opportunities, despite the tough global geopolitical and economic
backdrop. Our business model, with a distinct focus on
sustainability, our ecosystem of long-term partners, our multi-hub
structure, and our people and impact culture all position us well for
the opportunities ahead.
The next chapter of our journey has a focus on organic
development and execution of our strategy around the megatrends.
So our priorities are as follows: A pivot to specific growth
opportunities, toward ones that allow us to meet the new and
challenging needs that arise from the megatrends in a faster and
more agile manner; the championing of environmental, social and
governance (ESG) issues, becoming the trusted sustainability
partner for our customers’ on their journey whilst accelerating on
our own net zero commitments; the expansion of our portfolio to
meet market needs, developing further world-class and future-
ready products and solutions, with specific focus in the areas of
software and prosumers; and the maximization of the opportunities
presented by AI for ourselves and our customers, and through the
development of efficient and sustainable data centers.
Above all, our priorities are focused on creating a culture of impact,
inspiring and encouraging our ecosystem of customers, partners,
suppliers, and colleagues to be Impact Makers. Impact Makers are
those who chose to make a positive difference to society and the
environment with technology and innovation. It’s only by working
together, that we can harness our energy and resources to bridge
progress and sustainability for all.
2023 was another strong year for our company and is the basis for
our ambitions for the future: to become a €50bn revenue company,
with a €10bn adjusted EBITA (up from €6.4bn in 2023), and to
generate a Free Cash Flow conversion of around 100% across the
cycle. This is The Next Frontier for Schneider Electric.
I am excited to lead the way forward in these extraordinary times.
Peter Herweck
CEO
See more about our strategy on
page 48.
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An interview with Chief Financial Officer, Hilary Maxson
Control was up +10% organic and Field Services were up +13%
organic. Our combined Software and Digital Services reached EUR
3 billion revenues, up +18% organic. We are now at 70% recurring
revenue in our Agnostic Software businesses tracking toward our
target of 80% driven primarily by AVEVA’s accelerated transition to
subscription. We are well positioned as we start our four-year
journey as a leader in Industrial Tech.
You also hosted a Capital Markets Day in
November 2023, what were the key messages?
At our Capital Markets Day, we presented the key aspects of our
strategy and financial outlook while our shareholders had the
unique opportunity to see our solutions in action at Tottenham
Hotspur Stadium.
Peter talked about five megatrends supporting the growth of our
addressable market expanding from around EUR 400 billion in
2023 to around EUR 500+ billion by 2027, growing between +6%
and +7% CAGR during this four year period.
These five megatrends are driving a structural step-up in our
markets, and we remain well positioned to outperform. As a result,
we have shared our ambition for the Next Frontier of organic
revenue growth to be +7% to +10% CAGR, 2023-2027. We see
opportunities across all our business models and end-markets and
our largest geographies are set to lead growth in coming years.
We also talked about the Next Frontier of profitability through a
combination of strong Gross Margin and agile operating model. We
are targeting an expansion of adj. EBITA margin of c.+50bps
CAGR, 2023-2027. This includes targeted investments that will
support our ability to capture this unprecedented growth
opportunity.
We are set to deliver strong free cash flow and return on capital
employed: cash conversion ratio is expected to be around 100% on
average across the cycle and we are moving towards 15%+ ROCE.
Our capital allocation priorities are clear: strong investment grade
credit ratings as our first priority, continued focus on shareholder
return supported by a progressive dividend policy and the funding
of our organic growth. We will remain prudently opportunistic and
agile towards acquisitions that reinforce our unique portfolio
positioning in growth markets and will continue to regularly assess
our portfolio to ensure all of our businesses are well linked to our
long-term strategy.
We also reiterated our across-cycle ambitions of 5%+ organic
revenue growth on average while we want to consistently be a
company of 25(1).
As we close a year of record performance, I am excited to start the
first year of our next chapter towards the Next Frontier of Schneider
Electric. Transforming to be the “Industrial Tech” leader, we are
ideally positioned to capitalize on our technology and great people
while remaining committed to sustainability and increased value for
all our stakeholders.
Schneider Electric delivered a strong performance
in 2023, what were the highlights?
In 2023, strong execution has been the key to driving our revenues,
adjusted EBITA, net income and free cashflow to record levels.
Our revenues of EUR 36 billion were an all-time high, up +12.7%
organic driven by strong growth in our Systems business with good
traction from Data Center & Networks and Infrastructure end-
markets, and strong growth in our Software and Service
businesses. In Products, the Group saw volume growth year-on-
year while the carry-over impact from 2022 pricing actions has
been fading as expected. Consumer-led segments showed good
signs of stabilization towards the end of the year while the discrete
automation market began to normalize from supply constraint
driven highs in the second half.
We saw strong adjusted EBITA margin expansion in 2023 reaching
17.9%, up +180bps organic, due to price carry-over, good volume
growth and improvement in our Systems margin. In 2023, the Group
also returned to positive industrial productivity as the supply chain
environment returned to a more normative state. We continued to
invest in our strategic priorities: innovation through R&D, stepping-
up to 5.6% of sales on a cash basis, expansion of our commercial
footprint and continued digital transformation including some new
investments into Artificial Intelligence applications.
We delivered free cash flow of EUR 4.6 billion, primarily due to the
P&L performance driving record operating cash flow of EUR 5.5
billion and improvement in working capital in the second half of the
year. We retained a strong focus on shareholder returns, driving
ROCE improvement of +130bps in 2023, now reaching 13.5%, and
delivering on our progressive dividend policy for a 14th year as we
propose a dividend of EUR 3.50 per share, up +11%.
2023 was a milestone year for the future of your
digital portfolio, could you tell us more about it?
Indeed, in January 2023 we announced the completion of the
transaction to acquire the entire share capital of AVEVA with the
strategic intent to create the global leader in industrial software for
engineering and operations. AVEVA has been delivering well on its
accelerated transition to subscription in the year and we were
happy to report a +19% growth in Annualized Recurring Revenues
at the end of 2023.
Overall, our Digital Flywheel grew faster than the rest of the Group
in 2023, with revenues up +17% organic reaching 56% of Group’s
total revenues. Digital innovation has been driving strong double-
digit growth in connectable products, up +20% organic. Edge
Hilary Maxson
Chief Financial Officer
(1) Sum of organic revenue growth % and adj. EBITA margin %.
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Financial performance highlights
Integrated Report
2023 was a year of strong execution, driving record performance. The Group delivered record levels of
revenue, adjusted EBITA, net income and free cash flow, leaving it well positioned for the Next Frontier.
Revenue Performance
Consolidated revenue totaled EUR 35,902 million for the 12 months
ended December 31, 2023, up +12.7% organic and up +5.1% on a
reported basis. The Group saw strong growth across end-markets
supported by secular trends of electrification, automation, and
digitization, while consumer-linked areas were impacted by the
effects of higher interest rates, though stabilizing by the end of the
year. Discrete automation demand was weak after high demand in
the prior year associated with supply chain constraints in particular
impacting sales in Western Europe, China and East Asia. The
Group saw good volume expansion, with product growth
supported by backlog execution, while the carryover impact of
price actions taken in 2022 faded across the year, as expected. FX
impacts were -4.3% driven by the weakening of the Chinese Yuan
and U.S. Dollar against the Euro, combined with the significant
devaluation of several other currencies including the Egyptian
Pound, Turkish Lira and Argentinian Peso. There was a net negative
impact of -2.5% from acquisitions and disposals, primarily relating
to the Group’s exit from Russia along with the net impact of other
transactions.
Energy Management
Energy Management generated revenues of EUR 28,241 million,
equivalent to 79% of the Group’s revenues and was up +14%
organic. North America grew +19% organic with strong growth
across end-markets, including continued strong growth in Systems
as a consequence of strong demand across Data Center and
Infrastructure end-markets. Western Europe was up +12% organic
with double-digit growth in the U.K., Germany and Italy, while
France and Spain grew high-single digit. There was continued
good traction in Data Center and non-residential technical
buildings, though residential markets, particularly in the north of the
region, were impacted by pressures on consumer-spending.
Asia-Pacific grew +8% organic, with China delivering mid-single
digit growth for the year, with strong traction in transportation and
renewable power, while softness in construction markets continued.
India recorded double-digit growth, despite facing a high base of
comparison, with continued strong demand across end-markets.
There was good growth in Australia and across the rest of the
region. Rest of the World was up +20% organic, benefitting from
price actions taken in response to currency devaluation in
Argentina, Egypt and Turkey and with strong demand for systems
offers across the region.
Revenue (€ billions)
€35.9B
2
.
4
3
.
9
5
3
2
.
7
2
2
.
5
2
9
.
8
2
2019
2020
2021
2022
2023
12%
28%
37%
23%
North America
10,449 M€ (+19.5% org.)
Western Europe
6,658 M€ (+11.6% org.)
Asia Pacific
7,803 M€ (+8.3% org.)
Rest of the World
3,331 M€ (+20.1% org.)
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Financial performance highlights
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Industrial Automation generated revenues of EUR 7,661 million,
equivalent to 21% of the Group’s revenues and was up +7%
organic. Growth was led by sales into Process automation markets
while sales into Discrete automation markets also grew, though at a
slower pace due to weakness in OEM demand, particularly in
Western Europe, China and East Asia. The Group saw strong
growth in its industrial software offers through AVEVA, despite
headwinds from a transition from a perpetual license model to a
subscription model. North America grew +7% organic led by
growth in Discrete automation markets, supported by backlog
execution, while growth in Process & Hybrid markets was good
despite a high base of comparison from projects in Mexico.
Western Europe was up +7% organic, with strong growth in both
Process & Hybrid markets and industrial software at AVEVA, while
Discrete automation markets were impacted by the demand
weakness. Asia Pacific was up +1% organic, impacted by weaker
Discrete automation growth in China with weakness in OEM
demand, particularly among those tied to construction. There was
strong growth in several countries across the rest of the region,
notably India and Australia, while growth in Japan and South Korea
was muted due to OEM weakness. Rest of the World was up +20%
organic, benefitting from price actions taken in response to
currency devaluation in Argentina, Egypt and Turkey, while outside
of these countries there was strong growth in Discrete automation
markets and good growth in Process & Hybrid markets.
16%
23%
32%
29%
North America
1,762 M€ (+7.4% org.)
Western Europe
2,254 M€ (+6.6% org.)
Asia Pacific
2,444 M€ (+0.8% org.)
Rest of the World
1,201 M€ (+20.1% org.)
Summarised Financial Results
€ 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)
Adjusted EPS (€)
Free Cash Flow
2022 FY
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
2023 FY Reported change
Organic change
35,902
15,012
41.8%
(8,600)
24.0%
6,412
17.9%
(147)
98
6,363
(430)
4,003
4,066
7.26
4,594
+5.1%
+8.2%
+120bps
+9.4%
-100bps
+6.6%
+30bps
+19%
+15%
+2%
+2%
+38%
+12.7%
+18.1%
+200bps
+13.7%
-20bps
+24.5%
+180bps
+16.9%
+16.5%
Adjusted EBITA margin
17.9% +380 bps org. since 2019
.
6
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5
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3
7
1
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6
7
1
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9
7
1
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2020
2021
2022
2023
Adjusted EBITA margin at 17.9%, up +180 bps organic due to
strong price carryover, good volume growth and improvement
in systems margin.
Gross profit was up +18.1% organic with Gross margin up
+200bps organic, reaching 41.8% in 2023. The organic increase in
margin percentage was driven by a strong net price impact mainly
related to carryover from price actions taken in 2022, an
improvement of gross margin in systems business and improved
industrial productivity, particularly in H2.
2023 Adjusted EBITA reached €6,412 million, increasing organically
by +24.5% and the Adjusted EBITA margin expanded by +180bps
organic to 17.9% as a consequence of good volumes and the
strong gross margin improvement, combined with control over
support function cost growth while investing for the future.
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Integrated Report
The key drivers contributing to the earnings change were the following:
€ million
Adj. EBITA YoY change
Comments
Adj. EBITA FY 2022
6,017
Volume impact
Industrial productivity
Net price1
Gross pricing on products
Raw Material Impact
Cost of Goods Sold inflation
Production labor cost and
other cost inflation
R&D in Cost of Goods Sold
Support function costs
(SFC)
Mix
Foreign currency impact2
Scope and Others
1,135
Positive impact from higher sales volumes.
148
The Group’s industrial productivity level was +€148m with good acceleration in H2
as the supply chain environment returns to a more normalized state.
1,391
1,179
212
-152
-127
-25
-1,033
192
-573
-713
The net price impact was positive at +€1,391m in 2023. Gross pricing on products
was positive at +€1,179m slowing as expected in H2 as mostly due to carryover from
pricing actions taken in 2022. In total, RMI was a tailwind at +€212m.
Cost of Goods Sold inflation was -€152m in 2023, of which the production labor cost
and other cost inflation was -€127m, and an increase in R&D in Cost of Goods Sold
was -€25m. The overall investment in R&D, including in support function costs
continued to increase as expected and represented 5.4% of 2023 revenue.
Support Function Costs increased organically by -€1,033m, or +13.7% org. in 2023,
deteriorating as a percentage of sales by -20bps org. The Group was impacted by
inflation for -€376m and continued to focus on its strategic priorities with investments of
-€568m mainly linked to innovation through R&D, commercial footprint expansion and
digital transformation including AI projects. Despite completing its operational
efficiency plan in 2022, the Group delivered a further +€226m of cost savings. Other
increases of -€315m include impacts from bonus accruals and some one-time items
linked to technical accounting changes on employee share plans and marketing costs.
2023 performance resulted in a positive mix effect of +€192m where strong
improvement of Gross Margin in the Systems business was partly offset by impacts
from the relatively faster growth of Systems revenues compared to Products.
The impact of foreign currency decreased the adjusted EBITA by -€573m in 2023,
or around -100bps of margin, of which around -40bps related to impacts from
Argentina, Egypt and Turkey which saw significant currency devaluation in the year.
The impact from scope & others was -€713m in 2023, with net Scope impacts
representing a -50bps adj. EBITA margin headwind primarily due to the
reincorporation of Solar activities and the exit from Russia. Others represents
primarily the positive impact from inventory revaluation in H1 2022.
Adj. EBITA FY 2023
6,412
(1) Price on products and raw material impact.
(2) For those currencies meeting the criteria to be considered hyperinflationary under IAS 29, such as Argentina and Turkey, an IFRS technical adjustment for
hyperinflation impact is reflected as FX and therefore excluded from the organic growth calculation. The effect of operational actions taken in these countries such as
increased pricing to mitigate the inflationary impact is reflected as part of the organic growth
Energy Management
Industrial Automation
21.1%
17.0%
Adjusted EBITA margin, up +220 bps organic.
Adjusted EBITA margin, down -110 bps organic.
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Financial performance highlights
Net income up +15%
€ million
Adj. EBITA
Other operating income
and expenses
2022 FY
2023 FY
Comments
6,017
(433)
6,412
98
Restructuring costs
(227)
(147)
Other operating income and expenses had an impact of +€98m in 2023, consisting
mainly of +€265m gains on business disposal including from Telemecanique
Sensors, Gutor and VinZero, offset by M&A costs -€111m.
Restructuring costs were -€147m in 2023, €80m lower than in 2022 following
completion of the Group’s operational efficiency program and moving towards a
target of around €100m per year, as previously communicated.
Amortization and impairment
of purchase accounting
intangibles
(424)
(430)
Amortization and impairment of intangibles linked to acquisitions was -€430m in
2023, €6m higher than in 2022.
Net financial income/(loss)
(215)
(530)
Income tax expense
(1,211)
(1,285)
Profit/(loss) of associates and
non-controlling interests
(30)
(115)
Net Income (Group share)
3,477
4,003
Net financial expenses were -€530m in 2023, -€315m higher than last year. The cost
of debt was -€202m higher, as expected, due to higher interest rates and a higher
base following the acquisition of AVEVA minorities. Other financial income and
expenses were -€113m higher than in 2022, mainly attributable to impacts in
hyperinflationary economies and FX.
Income tax amounted to -€1,285m, higher than in 2022 by €74m as a consequence
of the higher pre-tax profit. The Effective Tax Rate was 23.8%, in line with the
expected range of 23-25% for FY2023, and slightly lower than 2022 when excluding
impacts of Russia exit.
Share of profit on associates increased to +€51m, up +€22m compared to 2022. The
net income from Delixi was stable year-on-year. Amounts attributable to non-
controlling interests increased to -€166m compared to -€59m in 2022.
Net Income (Group share) was €4,003m in 2023, up +15% on 2022, which included
losses associated with Russia exit.
Adjusted Net Income
(Group share)
3,968
4,066
Adjusted Net Income was €4,066m in 2023, up +2% vs. 2022.
Net Income (Group share) (€ millions)
€4,003m
4
0
2
,
3
7
7
4
,
3
3
1
4
,
2
6
2
1
,
2
Adjusted Earnings
Per Share (€)
Proposed Dividend
Per Share (€)
€7.26
3
0
0
4
,
€3.50
progressive dividend
for 14th year in a row
.
1
1
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6
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6
2
7
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5
5
2
.
2
3
5
.
2
7
4
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5
3
5
1
9 3
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6 2
2
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
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Integrated Report
Free cash flow reached €4.6 Billion
The Group delivered Free Cash Flow of €4,594 million, primarily
due to the P&L performance driving record operating cash flow of
+€5,529 million. This included R&D cash costs of €2,016 million,
which increased to 5.6% of 2023 revenue.
Net capital expenditure of -€1,313 million increased slightly to 3.7%
of revenue, in line with the Group’s plans to make capacity
investment to fuel future growth.
Trade working capital unwind boosted the free cash flow in 2023 by
+€173 million, with a strong rebound in H2 of +€1,065 million.
Inventory days were stable compared to December 2022, having
seen an increase in the middle of the year as the Group sought to
secure supply and prioritize deliveries to customers. For
receivables, DSO also remained broadly stable while in relation to
payables DPO increased slightly, helping working capital.
Non-trade working capital requirements were primarily impacted
by the level of bonus accruals.
Free Cash Flow (€ millions)
€4,594m
4
9
5
4
,
6
7
4
,
3
3
7
6
,
3
0
3
3
,
3
9
9
7
,
2
2019
2020
2021
2022
2023
Balance Sheet Remains Strong
€ million
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, 2023
Dec. 31, 2022
13,933
10,843
-4,696
9,237
130
9,367
10,463
8,627
-3,986
6,477
4,748
11,225
Schneider Electric SE issued bonds totaling €3,600 million during
2023.
The Group remains committed to retaining its strong investment
grade credit rating.
Schneider Electric’s net debt at December 31, 2023 amounted to
€9,367 million (down from €11,225 million at December 2022) after
payment of -€1.9 billion to fulfill the 2022 dividend and payment of
-€0.7 billion in relation to share buyback, offset by net acquisitions
of +€0.6 billion and the strong Free Cash Flow performance of
+€4.6 billion.
Financial Strength
A-
Standard & Poor’s
A3
Moody’s
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Financial performance highlights
Digital update
In 2023, the Digital Flywheel represented 56% of Group revenue, showing good progress towards a target range
of 60% - 65% by 2027. The growth of the Digital Flywheel outperformed the Group average, led by strong
performance in connectable products (which now represent 28% of Group revenues) and Software & Services
(which now represent 19% of Group revenues). Within its agnostic software businesses, around 70% of
revenues were classified as recurring, showing strong progress towards a target of around 80% by 2027.
Digital flywheel growing faster than Group, up +17% org. in 2023
Software & Digital Services
+ 1 8 % org. growth
9%*
€3.0bn
FY 2023
revenues
Edge
Control
+10%
org. growth
9%*
56%
of 2023 Group
revenues
10%*
Field
Services
+13%
org. growth
28%*
Connectable Products
+20%
org. growth
*of FY23 Group revenues
Moving towards 60% to 65% of Group revenues by 2027
Recurring revenue in Agnostic Software to increase to
c.80% by 2027
FY 2023 revenues
56%
% of Group revenues
60% to 65% by 2027
ambition
FY 2023 revenues
70%
% of agnostic software
revenues
c.80% by 2027 ambition
Key achievements of 2023:
• Flywheel at 56% of 2023 revenues (from 53% in 2022)
• Agnostic software 70% recurring (from 65% in 2022)
• Digital innovation driving strong double-digit growth in connectable products
• Double-digit growth in Software and Digital Services despite transition to subscription at AVEVA
• Good growth in Field Services supported by increasing installed-base and Systems growth.
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Integrated Report
Outlook and targets
Expected Trends In 2024
2024 Target
• Strong and dynamic market demand to continue on the back of
structural megatrends.
• Strong demand for System offers notably driven by trends in
Data Centers, Grid Infrastructure investment, and increased
investments across Process industries served by both
businesses.
• Continued focus on subscription transition in Software and
growth in Services.
• A gradual demand recovery for Product offers, weighted
towards H2, linked with a recovery in consumer-linked
segments, and Discrete automation.
• All four regions to contribute to growth, led by U.S., India and
the Middle East.
The Group sets its 2024 financial target as follows:
2024 Adjusted EBITA growth of between +8% and
+12% organic.
The target would be achieved through a combination of organic
revenue growth and margin improvement, currently expected to be:
• Revenue growth of +6% to +8% organic
• Adjusted EBITA margin up +40bps to +60bps organic
This implies Adjusted EBITA margin of around 18.0% to 18.2%
(including scope based on transactions completed to-date and FX
based on current estimation).
2024-2027 Financial targets and
longer-term ambitions as announced
in 2023 capital markets day
Based on its current view and assuming no major
changes to the macro-economic and geopolitical
environment, Schneider Electric announced its
medium-term financial targets as follows:
2024-27 Financial Targets:
• Organic revenue growth of between +7% to +10%, CAGR
2023-2027(1).
• Organic expansion of Adjusted EBITA margin of around +50
basis points, CAGR 2023-2027(1).
Longer-term ambitions:
• Organic revenue growth of 5%+ on average across the
economic cycle.
• To consistently be a Company of 25(2) across the economic
cycle.
• Cash conversion ratio(3) expected to be around 100%, on
average, across the economic cycle.
(1) 4-year CAGR.
(2) Sum of organic revenue growth % and adj. EBITA margin %.
(3) Free Cash Flow as a proportion of Net Income (Group Share).
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Key achievements of 2023
March
Schneider Electric launched
enhanced integration in EcoStruxure™
solutions to respond to rising energy
costs, escalating urgency for
sustainable and net-zero buildings.
Included are new integration
capabilities in EcoStruxure™ Building
Operation 2023, EcoStruxure™
Connected Room Solutions, and
EcoStruxure™ Power Monitoring
Expert, which will help simplify and
speed-up access to data that is
essential to manage energy use, help
reduce carbon emissions, and
enhance building value.
May
Peter Herweck became Schneider
Electric CEO effective May 4, 2023.
Having held several positions in fields
of Power Distribution, Building
Technologies, Strategy, Industrial
Automation and Software (as CEO of
AVEVA), Peter brings a diverse,
cross-cultural mindset, derived from
leading teams in both mature and
emerging markets. He is passionate
about technology and driving positive
progress in energy efficiency for the
world. His appointment as CEO was
unanimously approved by the Board.
January
Schneider Electric achieved
outstanding performance in four
corporate sustainability ratings
underlining its long-standing
sustainability leadership.
• 13th consecutive year on CDP’s
Climate Change A list
• 13th consecutive year on the Dow
Jones Sustainability World Index
• Top rating from EcoVadis: in the
top 1% of 85,000 corporates
assessed, achieving Outstanding
level
• #1 in the Electronic Components &
Equipment sector in Europe on the
Vigeo Eiris index
IMPACT
Company
February
Schneider Electric launched its
Industrial Digital Transformation
Services. This specialized global
service is designed to help industrial
enterprises achieve future-ready,
innovative, sustainable and effective
end-to-end digital transformation.
Services include discovery,
diagnosis, strategy, design,
implementation, and ongoing
customer success to achieve
demonstrable impact across
operational efficiency and workforce
empowerment, sustainability and
energy efficiency, asset optimization,
and cybersecurity.
April
Schneider Electric was recognized
by CRN with four prestigious five-star
ratings in its 2023 Partner Program
Guide. The mySchneider IT Partner
Program was awarded five-stars for
the fifteenth consecutive year, the
EcoXpert Partner Program earned
five-stars for a seventh consecutive
year, while the mySchneider Panel
Builders Program received a third
successive five-star rating. The
recognition reflects the Company’s
enduring commitment to nurturing
robust channel partnerships for a
more digitized and sustainable future.
June
IEA analysis shows that progress on
energy efficiency needs to be
doubled by 2030 as part of efforts to
improve energy security and
affordability while keeping the goal of
limiting global warming to 1.5°C
within reach. At the Global
Conference in Versailles, strategies
were defined to generate greater
energy efficiency, culminating in the
Versailles 10X10 Actions. The
discussions reaffirmed the critical
role that energy efficiency and
digitization play in tackling the global
energy crisis.
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July
Schneider Electric ranked 1st in the
Gartner Supply Chain Top 25 for
2023, climbing from second place in
2022 and achieving four consecutive
years in the top five. In recent years,
supply chains across the world have
been challenged by significant
disruption. During this time,
Schneider Electric has not only
navigated through the challenges but
continued to invest to make a more
resilient, agile, efficient, and
sustainable supply chain.
September
Schneider Electric unveiled its latest
manufacturing plant in Texas, part of
a US$ 300 million US manufacturing
investment contributing to the
advancement of the energy transition
and the build out of America’s
infrastructure. With more than 20
plants in its US manufacturing
network, the latest smart factory
opening makes Schneider Electric’s
El Paso campus the Company’s
largest manufacturing operation in
the US.
November
Schneider Electric announced a US$
3 billion multi-year agreement with
Compass Datacenters. The
agreement extends the companies’
existing relationship that integrates
their respective supply chains to
manufacture and deliver
prefabricated modular data center
solutions. Schneider Electric delivers
on the promise of scalable, modular
data centers that offer a simplified
design, streamlined manufacturing,
and the ability to be deployed easily
across many environments to meet
increased demand, driven by strong
growth of AI.
August
Schneider announced its plan to
launch EcoStruxure™ Resource
Advisor Copilot, a conversational AI
tool designed to help business
leaders interact with their enterprise
energy and sustainability data at
even greater speed. The copilot will
equip energy and sustainability
teams with enhanced data analysis,
visualization, decision support, and
performance optimization, and the
ability to seamlessly process intricate
industry knowledge and Resource
Advisor system information.
October
Schneider Electric marked the 60th
anniversary of the Company’s
operations in India, today having
37,000+ employees and 30
manufacturing sites in India. The
country is Schneider’s third largest
market and acts as one of four global
hubs for the Group. The Schneider
Electric Innovation Yatra is our new
carbon neutral “innovation hub on
wheels” to connect and engage with
over 20 million customers and make
India more sustainable, digital, and
energy-positive.
December
Schneider Electric launches the new
industrial intelligence software
platform CONNECT. Combining the
industrial ecosystem with data, AI,
and deep domain expertise for
sustainability and efficiency,
CONNECT is where our customers
can access all their software
applications and insights and benefit
from integrated intelligence that
enables them to operate with agility,
resilience, and sustainability.
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R
T 2023 Capital Markets Day
O
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November 9, 2023
Tottenham Hotspur Stadium, London
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Integrated Report
Attendees
2,700+
Attendees, in person and digitally
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2023 Capital Markets Day
Market trends – five megatrends driving
The Next Frontier of market growth
These
megatrends
reinforce
our strategic
vision
– creating
unprecedented
opportunities
in our
end-markets
through
the cycle.
Energy
Transition
Expansion of electrification and
energy demand, combined with a
need to decarbonize. Technologies
already exist to make companies
energy resilient and net zero.
70%
CO2 emissions can be
removed using existing
technologies
Digitization &
Artificial Intelligence
Climate
Change
The evolution of large language
models and AI has accelerated
market growth. Requirements for
“compute” have increased
dramatically and require power,
cooling, more data centers, and will
drive more usage of structured data,
applications, and connected
products. These are all parts of
Schneider’s broad offer, enabling us
to capitalize on this trend.
20GW
AI power demand to grow
by 2028
A decade of climate change with
imperative measures ahead. Our
generation and technology need to
help to resolve this challenge.
Replace energy
supply
Scope 1 & Scope 2
Reduce for efficiency
& circularity
Scope 3
Electrify
processes
Evolution of Wealth
New Global Equilibrium
Evolving horizons – a change in the
global landscape. We are well
positioned for the shift in paradigm
driven by supply chain evolutions and
reshoring that will drive needs for
more automation and electrification.
Investment
$516bn
“Manufacturing the future”
investments announced by
private companies under
present US administration
Source: whitehouse.gov
Increased electrification and data
provide opportunities in both mature
and emerging economies. We are
positioned to benefit from an
infrastructure refresh in mature
economies and new construction in
emerging economies.
India + MEA by 2050
Population
+1.4bn
Growth
+1.5bn
Urban
Buildings
+100bn m2
Growth
Size of what exists in Europe & China
today
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Data Centers and Networks end-market
Digitization and AI megatrends are driving unprecedented changes and opportunities to the Data Centers and
Networks end-market with increased needs for both Energy Management and software offers. Strong future
growth is expected, with critical needs for electrical content boosted by this turning point in technology. We
support data centers end-to-end across the lifecycle:
Building
a digital model,
with ETAP for electrical
design and simulation,
and RIB Software for
planning and scheduling
throughout the
construction process.
Source management
through our ASCO
Power Technologies
solutions.
Power distribution:
medium and low voltage
distribution that provides
power efficiently,
meeting increased
needs for power density.
Uninterruptible
Power Supply
which is the power at
the rack level as well
as the facility level.
Monitoring:
we ensure all of this is
monitored appropriately
with connectivity for
every asset.
End-markets exposure
Customer example – Compass Datacenters
21%
of 2023 orders
Market Position
#1
#1
in electrical distribution
Most complete portfolio
Market CAGR to 2027
>10%
Key Drivers
Artificial Intelligence
Market
Segments
• Cloud and Service providers
• Enterprise IT
• On-premise Enterprise Datacenter
• Commercial & Industrial
Business Models
1
100
Products
Systems
Software & Services
Key Data Points
From CPU to GPU technology
x3 to x4 kW
requirement per rack
Goal
The skyrocketing generation and consumption of data, in large part
due to the burgeoning AI market, requires a new breed of data
centers that can be standardized in their design, manufactured
efficiently, and delivered more quickly at a lower cost.
Challenge
Compass is a fast growing company with >100% growth in past
years and over 300% growth in 2023 supported by digitization and
AI megatrends. Compass needed to find a long-term partner to
secure multi-year supply and support the company’s scale-up
phase while remaining a sustainability flagship in their industry.
Solution
Agreement between the companies as an expansion of an existing
partnership to manufacture prefabricated modular data center
solutions. The integration of supply chains between companies will
deliver finished goods more quickly, with predictability, and at a
lower cost. The collaborative efforts will allow Compass to meet the
increasing demands from customers to deliver cutting-edge data
center solutions in an innovative manner.
Results
Schneider Electric and Compass Datacenters expand their
partnership with a $3 Billion multi-year Data Center technology
agreement. Since the inception of the initial agreement between the
companies, Schneider Electric has manufactured and delivered
about 150 modular data center solutions to Compass from its West
Chester, OH operation.
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Buildings end-market
Strong megatrends are driving growth for the Buildings end-market. On one hand, the growing population and
increasing urbanization in emerging economies is driving the need for construction with a rise in first time
demand together with increased digitization. On the other hand, there is a need for existing infrastructure
refresh, particularly in mature economies where radical acceleration with retrofit is required in order to meet
decarbonization commitments, supported by government investment.
Buildings
32%
of 2023 orders
Market Position
#1
1 in 4
in electrical distribution
Present within 25% of all
buildings
Market CAGR to 2027
+4% to +5%
Key Drivers
Decarbonization
Market
Segments
• Office & public buildings
• Healthcare
• Hotels
• Residential
• Commercial buildings
• Retails chains
Business Models
1
100
Products
Systems
Software & Services
Key Data Points
Strong renovation momentum
>85%
of today’s buildings are likely to still be in use in 2050
Customer example – Tottenham Hotspur
Goal
As the Official Stadium Energy Management Supplier for Tottenham
Hotspur Football Club. Schneider Electric installed its EcoStruxure
Platform to detect the energy consumption across all the stadium’s
operations and then use this data to become even more energy
efficient.
Challenge
In the UK, energy waste is the UK’s third-largest source CO2
emissions, with at least 117 million tonnes generated by lost or
wasted energy each year. Tottenham Hotspur Football Club is on a
mission to minimise their activities’ impact on the environment –
monitoring energy consumption is pivotal to this.
Solution
Schneider Electric’s EcoStruxure Building Operation, Power
Monitoring Expert, and Power SCADA Operations software
platforms on site and EcoStruxure Building Advisor cloud based
analytics was installed to allow continuous control and real-time
monitoring of the systems integral to the stadium’s smooth
operations.
Results
Tottenham Hotspur has been named the Premier League’s
greenest club for the past four successive years following a study
carried out by the UN-backed Sport Positive Summit.
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Industry end-market
Within the Industry end-market we target electro-intensive industrial companies in multiple segments including
Energies & Chemicals, Consumer Packaged Goods, and electric vehicle (EV) battery manufacturing. We bring
our complementary Energy Management and Industrial Automation offers together to fulfill the needs for energy
efficiency, increased automation, and sustainability. The Industry end-market is driven by the acceleration of
digitization and process electrification coupled with trends of reshoring and mega-projects.
Industry
34%
of 2023 orders
Market Position
#1
#1
in electrical distribution
in Industrial data and
safety
Market CAGR to 2027
+5% to +6%
Key Drivers
Reshoring & mega-projects
Market
Segments
• Energy & chemicals
• Consumer packaged goods
• Metals, mining & minerals
• Machine solutions / OEMs
• EV & battery manufacturing
Business Models
1
100
Products
Systems
Software & Services
Customer example – Nexans
Goal
Accelerate the transformation of Nexans into a business driven by
clear, rich and actionable data as the foundation for improved
business performance, safety and flexibility.
Challenge
The digitization of its factories will further improve the efficiency of
production lines, enable predictive maintenance and reduce
carbon emissions. It will also contribute to the Group’s commitment
to achieve carbon neutrality by 2030. Customers for Nexans’s cable
products and services will experience the benefits of the program
through enhanced products availability.
Solution
Nexans has partnered with Schneider Electric on a joint program to
take its digital journey to the next level after witnessing the
successful roll-out of its digital transformation program across more
than 115 sites worldwide. Today’s industrial innovation is driven by
powerful software and data analytics that increases both
productivity and sustainability. Schneider Electric’s EcoStruxure
platform gives industrial enterprises focused insights to understand
process and operational data and uniquely enables common
cross-function, live monitoring, and application data sharing.
Key Data Points
Results
Digitization drives performance
Accelerated software deployment
c.+10%
market CAGR
Deployment speed
45 sites across 16
countries in 3 years
(by 2025)
Data usage
capacity
From 10% to 70% in
just 3 years
Expected ROI
Less than 3 years
(investment costs,
IT/OT, OpEx of
licences vs.
material/energy/
productivity gains)
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Infrastructure end-market
Within the infrastructure end-market we primarily address the needs from grid, transportation, and water and
wastewater segments. The grid is going through a structural transformation as it represents a bottleneck to the
energy transition. Increased power requirement, resiliency, and safety needs are driving investments around
grid modernization, grid extension for extended power reach, and grid digitization for increased efficiency and
sustainability.
Infrastructure
13%
of 2023 orders
Market Position
#1
#1
in electrical
distribution
in industrial
data
#1
in Grid
Market CAGR to 2027
+5% to +7%
Key Drivers
Big government funding
Market
Segments
• Grid
• Transportation
• Water Wastewater
Business Models
1
100
Products
Systems
Software & Services
Key Data Points
Increase share of electricity
From 20% to 50%
of the energy mix by 2050
Customer example – Digitization of conEdison, 4th
largest utility in the US
Goal
Consolidation of five disparate Geospatial Referenced systems
in the New York City area to one continuous System of Record.
The System of Record is a cornerstone system for conEdison as
it delivers data to over 25 downstream applications and thousands
of end users.
Challenge
Building a consolidated model with standardized data and
processes into a seamless enterprise GIS to replace multiple
decades-old legacy systems. This includes the migration of the
existing solution and the conflation of the data to the New York City
land base.
Solution
As a market-leading technology provider, Schneider Electric has
the offers and expertise to modernize, automate and digitize
conEdison infrastructure. Through a combination of EcoStruxure
ArcFM™ offers Schneider supports conEdison as they strengthen
the network with enterprise business GIS intelligence solutions for
advanced asset and network management.
Results
As we deploy Schneider Electric solutions, conEdison are
experiencing the efficiencies brought by a modern architecture.
They are implementing our Designer XI tool which will eliminate
redrawing of designs into their System of Record. Through ArcFM™
Mobile they are delivering digital map books to the field as well
general visualization of their networks via ArcFM™ Web. This ability
to distribute this information to all aspects of the company improves
efficiency and safety to conEdison employees.
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Electrical and automation technologies
are converging with software and
sustainability as enablers for rapid
acceleration
Transforming to be the “Industrial Tech” leader
“We have over 100 individual software solutions today that
have been put together patiently and strategically by
Schneider over decades. We are now in the process of
bringing these together on one platform called
‘CONNECT’.
Delivering on our promise of holistic efficiency for
customers with one easy experience, we will provide a
combination of agnostic software that, together, gives one
intelligent digital twin. The one place where all data comes
together, where everything is true and is the exact
depiction of the asset, where operational data flows
through, and where you deploy not just generative AI to
ask questions, but industrial AI to let processes run and
self-optimize, and predict to drive savings.”
“That is what Connect is going to bring: the one place for
the industrial ecosystem to come together.”
Caspar Herzberg
CEO AVEVA and EVP
Schneider Electric Software
One User Experience
Going beyond the scope of operations in sustainability
We help our customers define their sustainability journey, strategize
with them through our Sustainability Consulting offer, then help
them to digitize so they have full visibility of their operations. Finally,
we help them to decarbonize through our equipment with PPAs,
managed services, and the rest of our broad offering. Today, 40%
of the Fortune 500 companies are our clients, and we additionally
help them in their decarbonization journey through networks where
we drive decarbonization in different industries such as
semiconductors or pharmaceutical supply-chains through our
Catalyze and Energize programs.
Find out more about our Catalyze and
Energize programs at www.se.com
Leading companies follow an integrated approach
Strategize
Decarbonize
Digitize
• MEASURE enterprise baseline
• CREATE decarbonization roadmap
• STRUCTURE program & governance
• ENGAGE ecosystem
• COMMUNICATE commitment
• REPLACE energy source
• ELECTRIFY operations
• REDUCE energy use
• MONITOR resource usage & emissions
• IDENTIFY saving opportunities
• REPORT and benchmark progress
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An “Impact Maker” 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 on 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
Business
Part of the solution
All ESG
Dimensions
Model & culture
Set up for global and local impact
All stakeholders
in the ecosystem
An Impact model recognized in external ratings
Corporate Knights:
A Global 100
Most Sustainable
Corporation
Schneider has been
featured on Corporate
Knights’ Global 100 list
of sustainability leaders
every year since 2012,
ranking 7th in 2023
Moody’s
ESG Solutions
Dow Jones
Sustainability Indices
Schneider is part of the
Euronext Vigeo World
120, Europe 120, Euro
120, France 20 and
CAC40 ESG indices
#1 among industry
peers, scoring 88 out of
100 in the latest S&P
Global Corporate
Sustainability
Assessment
In top 1% performance
among 100,000+
companies, achieving
Outstanding level
The only company in its
sector listed as A List 13
years in a row
See our recognitions on the
Awards page at www.se.com
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Our 2025 sustainability commitments
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.
Our unique transformation tool
Since 2005, Schneider Electric measures and demonstrates its
progress against sustainability goals with a unique transformation
dashboard today 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 2023, the Group
obtained a “reasonable” assurance for SSI #8.
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, on pages 71 to 75.
Read more about our contributions the
United Nations Sustainable Development Goals
on pages 76 and 77.
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T Proud of 2023’s sustainability achievements
O
P
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 2023, the SSI achieved a great score of 6.13/10, exceeding its 6.00/10 target for the year, and is on track to achieve its 2025 ambition.
This result represents the average progress of 11 SSI programs (excluding SSI #+1).
The Group’s solutions and services helped its customers save and avoid +110 million tons of CO2 emissions in 2023 alone (SSI #2), and The
Zero Carbon Project contributed to reduce the operational CO2 emissions of 1,000 top suppliers by 27% (vs. 10% in 2022). The Group also
progressed on its transition to sustainable packaging, with 63% of primary and secondary packaging now free from plastic-free, using
recycled carboard (SSI #5), versus 45% in 2022. The most significant progress was achieved by SSI #9 with 6.9 million people provided
with access to clean and reliable electricity in 2023 alone (vs. 5.5M in 2022). Lastly, progress against the nearly 200 local commitments
taken in all markets where Schneider operates under SSI #+1 can be consulted on a dedicated page on se.com.
6.13/10
vs. 4.91/10 in 2022 and outperforming 6.00/10
target for the year
Schneider Sustainability Impact
6 Long-term Commitments
11+1 targets for 2021-2025
Baseline(1)
2023 Progress(2)
2025 Target
Climate
1. Grow Schneider Impact revenues(3)
Resources
Trust
2.
3.
4.
5.
6.
7.
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
Strategic suppliers who provide decent work to their
employees
Level of confidence of our employees to report
unethical conduct
2019: 70%
2020: 263M
2020: 0%
2020: 7%
74%
553M
27%
29%
80%
800M
50%
50%
2020: 13%
63%
100%
2022: 1%
21%
2021: 81%
+1pt
100%
+10pts
Equal
8.
Increase gender diversity in hiring (50%), front-line
management (40%) and leadership teams (30%)
2020: 41/23/24
41/28/29
50/40/30
9. Provide access to green electricity to 50M people
2020: 30M
+16.6M
50M
Generations
10. Double hiring opportunities for interns, apprentices
2019: 4,939
x1.52
x2.00
and fresh graduates
11. Train people in energy management
2020: 281,737
578,709
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 2023), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 302). In addition,
SSI #8 received a “reasonable” assurance level in 2023. Please refer to page 266 for the methodological presentation of each indicator. The 2023 performance
is also discussed in more details in each section of this report.
(3) Per Schneider Electric definition and methodology. For the reporting requirements under the European Taxonomy Regulation, please refer to pages 277 to 293.
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Climate
Parterning to accelerate the adoption of renewable
energy
With the Catalyze Program, Schneider Electric Partners with
Intel, Applied Materials and Google to accelerate the
adoption of renewable energy and reduce CO2 emissions
throughout the global semiconductor value chain.
Resources
Products with sustainable packaging
Packaging transformation is making progressing apace, with
80% of all cardboard used in the primary and secondary
packaging made from recycled carboard. Our Wiser range is
notably completely free from single-use plastics, using only
recycled cardboard.
Trust
Sustainability School for Partners
To support its Partners in their Net-zero transformation,
Schneider Electric has launched an innovative program
specially designed to empower them with skills and
knowledge to capitalise on emerging business in
sustainability and digitization.
Equal
Clean electricity for health facilities
Schneider helped install solar solutions for more than 500
public health centers in South Asia and Africa. Previously
without access to reliable electricity, these facilities can now
guaranteed access to quality healthcare for over 1.5 million
people.
Generations
Go Green Winners
Celebrating Schneider team, Team Sun Devil Sparks, from
North America for its energy saving solution for space cooling
using “breathing” wall panels.
The challenge for students competing was to introduce a
solution helping building owners to motivate and empower
occupants to reduce their carbon footprint through
technology.
Local
Acting as a corporate citizen
Schneider Electric employees, with the support of Schneider
Electric Foundation and the Tomorrow Rising fund,
demonstrated an incredible spirit of solidarity following the
earthquakes in Türkiye, Syria and Morocco. Donations from
thousands of employees around the world have been
contributing to providing emergency kits, and maintaining
education supporting refugees and NGOs’ missions.
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T Governance
O
A new governance structure
Board expertise
Jean-Pascal Tricoire
Chairman of the Board of Directors
60 years, French
• Organizes and directs work of
Board, presides over Annual
General Meetings.
• Supports the Company in its
high-level relations with select
stakeholders (notably in Asia),
in coordination with the Chief
Executive Officer.
• Promotes the Company’s values
and culture, in particular in relation
to environmental, social and
governance (ESG).
• Advises CEO, notably on
strategic, human capital, and
leadership development matters.
Fred Kindle
Vice-Chairman &
Lead Independent Director
65 years, Swiss
• 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.
+
Peter Herweck
Chief Executive Officer
57 years, German
• Has sole authority to bind the
Company with third parties.
• Defines and proposes the
strategy.
• Manages the Company.
• Runs the business.
• Develops human capital and
leadership.
Our Board of Directors
As of March 28, 2024, the Board of Directors
consisted of 16 Directors. Mr. Philippe Knoche was
appointed as an Observer by the Board of Directors
on December 13, 2023, in effect from February 14,
2024, with the intent to propose his appointment
as a Board member to the Annual Shareholders’
Meeting to be held on May 23, 2024.
C
C
Jean-Pascal Tricoire
Chairman of the Board of
Directors
60 years, French
Fred Kindle
Vice-Chairman &
Lead Independent Director
65 years, Swiss
Léo Apotheker
Director
70 years, French & German
Nive Bhagat
Independent Director
52 years, British
Cécile Cabanis
Independent Director
52 years, French
Giulia Chierchia
Independent Director
45 years, Belgian & Italian
International markets (15)
Corporate finance (13)
Public company management (14)
Industry knowledge (9)
Accounting, audit & risk (5)
Sustainability (5)
Law, governance, ethics &
compliance (4)
Digital & Software (7)
Employee perspective &
Knowledge of the Group (4)
Board committees
Audit & Risks Committee
6 meetings**
4 members
100% independent
100% average attendance
Governance, Nominations &
Sustainability Committee
6 meetings**
6 members
67% independent
96% average attendance
Human Capital &
Remunerations Committee
4 meetings**
5 members
100% independent*
100% average attendance
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Rita Félix
Employee Director
41 years, Portuguese
Linda Knoll
Independent Director
63 years, American
Jill Lee
Independent Director
60 years, Singaporean
Xiaoyun Ma
Employee Shareholders
Director
60 years, Chinese
Anna Ohlsson-Leijon
Independent Director
55 years, Swedish
Abhay Parasnis
Independent Director
49 years, American
Anders Runevad
Independent Director
64 years, Swedish
Gregory Spierkel
Independent Director
67 years, Canadian
Investment Committee
3 meetings
8 members
67% independent*
90% average attendance
Digital Committee
5 meetings**
7 members
67% independent*
94% average attendance
C Committee Chair
C
Lip-Bu Tan
Independent Director
64 years, American
Bruno Turchet
Employee Director
50 years, French
Philippe Knoche
Observer
55 years, French & German
Directors
• 12 nationalities
from 3 continents
* Excluding the Director representing the employee shareholders and Directors representing the employees.
**
Including joint meeting with other committees.
• 3 Employee Directors
• 85% Independent
Directors*
• 46% women Directors*
• 81% non-French
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Activities of the Board in 2023
There were seven meetings (including a Strategy session of three days) with 94% average attendance.
Business and financial results
Ongoing business, financial statements and information delivered to
the market, and ESG strategy.
Risks and compliance
Risk mapping, business continuity plan, and ethics
and compliance framework.
Strategy and investment
Review of strategic priorities, including during the Strategy session,
and authorization of significant acquisitions and disposals (over EUR
250 million).
Corporate governance
Succession plan for Corporate Officers, composition of the Board and
its committees, compensation of Corporate Officers, long-term
incentive plan, preparation of the Annual General Meeting.
Our Executive Committee
As of December 31, 2023, the Executive Committee was chaired by the 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.
Our shareholders
Peter Herweck
Chief Executive Officer
57 years, German
Hilary Maxson
Chief Financial Officer
45 years, American
Charise Le
Chief Human Resources
Officer
51 years, Chinese
Chris Leong
Executive Vice-President
Chief Marketing Officer
56 years, Malaysian
Hervé Coureil
Chief Governance Officer
& Secretary General
53 years, French
Mourad Tamoud
Executive Vice-President
Global Supply Chain
52 years, French
Nadège Petit
Executive Vice-President
Innovation
43 years, French
Gwenaelle Avice-Huet
Executive Vice-President
Europe Operations
44 years, French
Peter Weckesser
Chief Digital Officer
55 years, German
Annette Clayton
Chairwoman of North
America
60 years, American
Laurent Bataille
Executive Vice-President
France Operations
45 years, French
Manish Pant
Executive Vice-President
International Operations
54 years, Indian
BlackRock, Inc. (7.8%)
Sun Life Financial, Inc. (5.7%)
Employees (3.7%)
Treasury shares (2.5%)
Public (80.3%)
• 41% women
• 65% non-French members
• 7 different nationalities
from 3 different continents
Key
Global functions
Operations
Business
Aamir Paul
President and Chief
Executive Officer North
America Operations
46 years, American
Zheng Yin
Executive Vice-President
China & East Asia Operations
52 years, Chinese
Barbara Frei
Executive Vice-President
Industrial Automation
53 years, Swiss
Olivier Blum
Executive Vice-President
Energy Management
53 years, French
Caspar Herzberg
CEO AVEVA & EVP
Schneider Electric Software
50 years, German
Our Stakeholder Committee
The primary mission of 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.
Peter Herweck
Chief Executive Officer
57 years, German
Bertrand Piccard
Chairman of Solar Impulse
Foundation
65 years, Swiss
Lan Xue (Dr.)
Cheung Kong Chair
Distinguished Professor and
Dean of Schwarzman College
in Tsinghua University
64 years, Chinese
Amani Abou-Zeid (Dr.)
African Union Commissioner
in charge of Infrastructure,
Energy, ICT and Tourism
62 years, Egyptian
Linda Knoll
Director of Schneider
Electric SE, Human Capital
& Remunerations Committee
Chair
63 years, American
Rita Félix
Employee Director of
Schneider Electric SE
40 years, Portuguese
Salvo Lombardo
Former Chief of Staff,
UNHCR
64 years, Italian
Emily Reichert (Dr.)
CEO, Greentown Labs
49 years, American
Michela Conterno
CEO, LATI
48 years, Italian
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Governance
Our Executive compensation
The general principles underlying the compensation policy for Corporate Officers and the analysis of their contribution to the Group’s
performance are reviewed and approved by the Board of Directors based on the recommendation of the Human Capital & 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
• 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.
Aligned with those principles, the compensation of the Chief
Executive Officer is made of the following components: for the
variable component of the compensation, the Board upon
recommendation of the Human Capital & 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 Chief Executive Officer and that of the 64,000 employees
benefiting from such compensation. In the same way, the Carbon
reduction targets criterion will be used for the long-term incentive
plan granted to 4,000 employees including the Corporate Officer.
(1) Estimated valued, in accordance with IFRS standards, of the LTIP to be granted
during 2024 fiscal year.
(2) Between 0% and 200%.
Balance between compensation elements
24%
Not linked to
performance
48%
Paid in cash
48%
Short-term
24%
Fixed
compensation
24%
Target annual
variable
compensation
100% of fixed(2)
52%
LTIP(1)
76%
Linked to
performance
52%
Paid in shares
52%
Long-term
(minimum
3 years +
presence
condition)
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
Carbon emissions
reduction targets
40%
35%
25%
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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, Operating Divisions,
or Global Functions who are responsible for deploying the central framework to manage their risks.
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 & Risks 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, help it 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
Key Risks
The key risks selected and
presented in the adjacent table
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 three levels (red,
orange, and green), with red
being the most likely to affect
the Group.
Key to symbols
High impact
Medium impact
Low impact
Categories and Risks
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)
Potential
net impact
1.2 Export controls
1.3 Product, project, system quality, and offer reliability
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 Technology evolutions (Generative AI)
2.2 Operational disruption due to global political and economical disruptions
2.3 New competitive landscape and business models in energy
2.4 Supply chain resilience
2.5 Evolution of software and digital services offers
2.6 Attracting and developing talent with a focus on critical skills
2.7 Failure to achieve our long-term sustainability commitments and comply with
regulatory requirements
2.8 Business disruption due to environment-related risks
3 Management practice risks
3.1 Inappropriate Data Management
3.2 IT systems management
3.3 Pricing strategy
3.4 M&A and integration
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Our Stakeholders
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 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 and 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 offering equal
opportunities to all its 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 six
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 levels 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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The Group has renewed its
commitment to the Solar
Impulse Foundation which
selects more than 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 and the CEO
Alliance of Climate Leaders
– and our Chairman a
member of the Community
of Chairpersons since 2023.
Schneider 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.
Committed with our partners
Schneider Electric is an
active member of the World
Business Council for
Sustainable Development
(WBCSD). The Group
participates in various
workstreams, such as
Equity and Human Rights,
PACT (Partnership for
Carbon Transparency) and
SOS1.5. In 2023, Schneider
Electric was also very active
in the Business for Inclusive
Growth (B4IG) initiative, a
coalition committed to
tackling poverty and
inequalities incorporated
into the WBCSD Equity
Action.
Schneider Electric joined
the Global Compact in
2002, and our Chairman
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.
Read more on our dialogue with
stakeholders on pages 78 and 91
Revenue breakdown by stakeholder
Every year for the last 18 years, Schneider Electric has published a diagram showing its revenue distribution and financial flow for its various
stakeholders.
2023 total revenue: €35,902M
Employees:
Wages
€10,133M
States:
Income taxes
€1,285M
Non-governmental
organisations:
Donations(1)
€24M
Shareholders:
Dividends
€1,767M
Bank:
Net bank fees
€308M
Procurement
and other
€19,983M
Investment capabilities
Net external financing(2) including capital change
€2,056M
Operating Cash Flow after dividend payment
€4,140M
Investments and
development
€1,313M(3)
Net financial
investments
€265M(4)
Change in cash
€792M
R&D: €2,016M
(1) Unaudited declarative amount.
(2) Borrowings, capital increases and treasury stock disposals.
(3) Of which €328 million in R&D.
(4) Of which €257 million for long-term pension assets.
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Our Stakeholders
Proud to be one of the most ethical
companies
Present in over 100 countries with diverse standards, values, and practices, Schneider Electric is committed to
behaving responsibly in relation to all its stakeholders. Convinced that its responsibility extends beyond
compliance with local and international regulations, the Group is committed to doing business ethically,
sustainably, and responsibly. Schneider’s business actions and decisions run on trust.
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 2023, 82% of employees surveyed answered “yes”, a 1 point
progress versus 2022. The Group’s ambition to raise its employee’s
confidence by 10 points by 2025 (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 2023, the trainings focused on Trust, Cybersecurity,
Sustainability and Quality, along with additional courses based on
function or location. Other trainings are provided to specific
businesses or service teams according to their roles and positions,
such as anti-corruption.
In 2023, a Trust Week was organized 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 1 global keynote and 13 webinars
gathering over 2,000 attendees.
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.
Read our Trust Charter on se.com
and on page 108 of this report
Access our Trust Line
on www.se.com
2023 achievements
30+
99%
languages in which the
Trust Charter is available
of all employees
completed the Schneider
Essentials training on
Trust
82%
of employees are
confident to report
unethical conduct
12
Ethisphere Institute – One
of the World’s Most
Ethical Companies for the
13th year in 2023
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Integrated Report
Schneider Electric’s vigilance plan
Schneider Electric started in 2017 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); and
• 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 17 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.
Read more on cybersecurity
page 127
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 138
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 149
Vigilance risks assessments
Project reviewed according to involvement and
mitigation capabilities
Read more on communities
page 151
Risk level: Low to Medium
Medium to High
High
Read more about our Vigilance Plan
on page 115
2023 achievements
Top 25%
in external ratings for
Cybersecurity performance
320,000
3,200+
employees of our suppliers with
better working conditions thanks
to the ‘Vigilance Program’ for
suppliers since 2017
suppliers assessed under our
Vigilance Plan since 2018
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Our Stakeholders
R
T Great people make a great company
O
P
As the changes to the world accelerate and transform its industry, Schneider Electric considers the Group’s
culture as a key business differentiator to achieve profitable and sustainable growth. Schneider is a people
company where employees come to work for a meaningful purpose and feel empowered to have an impact.
Our Employee Value Proposition
Meaningful
Inclusive
Our mission is to be your digital partner
for Sustainability and Efficiency.
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 want to be the most diverse,
inclusive, and equitable company,
globally.
We value differences, and welcome
people from all walks of life.
We believe in equal opportunities for
everyone, everywhere.
Empowered
Freedom breeds innovation.
We believe that empowerment generates
high performance, personal fulfillment,
and fun.
We empower our people to use their
judgment, do the best for our
customers, and make the most
of their energy.
2025 People Strategy
Committed to Schneider #SEGreatPeople
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.
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, in 2021 the Group launched 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 Schneider
Electric, stay, and remain engaged.
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.
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, 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.
Schneider assesses and refreshes its People Strategy from time to
time, to enable the Group to achieve the “Next Frontier” of Growth.
At Schneider, a culture led and skills first organization enables the
desired impact.
Read more about our people programs
on page 210.
2023 achievements
81%
x1.52
77%
61%
of employees feel they
have the flexibility to
modify their work
arrangements as needed
(stable since 2022)
hiring opportunities for
interns, apprentices, and
fresh graduates
employees’ received
digital upskilling thanks
to the Digital citizenship
program (stable since
2022)
subscription in our yearly
Worldwide Employee
Share Ownership Plan
(WESOP)
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Local sustainability commitments
As part of the 2021 – 2025 Schneider Sustainability Impact, Schneider promotes local initiatives and enable
individuals and its 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 the Group’s sustainability transformation. Close to 200 local programs have been deployed since
2021; here are a few examples of initiatives being implemented to drive local and impactful changes.
USA
More than 80 robotics teams have
been supported through mentor-
based programs that build STEM
skills, inspiring young people to be
leaders in science and technology.
France
Schneider Electric’s societal program
allows employees in France to join
non-profit associations at local,
national, or international levels. Over
25,000 days were devoted to
communities and associations
through volunteer activities
dedicated to tutoring and training.
China
Through the Schneider Learning
Institute, 35,000+ business partners
and customers have been trained in
courses that develop energy-
efficiency skills in energy
management products, solutions, and
services. Certified training courses
and a tailored program for VIP
partners and customers are also
available.
Brazil
In partnership with NGOs, Schneider
Electric is retrofitting electrical
installations in households and
community spaces such as schools
and medical centers, benefiting
more than 2,900 people.
Türkiye
In seven rural areas, Schneider
Electric gave 80,000 people access
to 90 kW of green energy through
holistic solutions, including solar
greenhouses with wastewater feeds,
fishponds, and solar chicken
incubators, increasing professional
opportunities for women.
India
More than 93,000 school students
have been trained as Green
Ambassadors by sensitizing them to
energy and environmental
conservation through activity-based
learning.
Check our local commitments on www.se.com
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Integrated Report
Our Stakeholders
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 supporting its partners to progress and embrace more sustainable social and
environmental practices.
Supply chain and procurement vision
Building a sustainable procurement strategy
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 focus on
the impact that the operations of our suppliers generate on the
environment and society.
• Competitive landed costs and optimized cash, driving a 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.
Read more about our sustainable relationships with
suppliers on page 138
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 day-to-day operational
procurement actions. The qualification process focuses on
people, social responsibility, and environmental management.
Sustainability criteria accounts for a significant part of the
evaluation. In 2023, these criteria were revised and enhanced,
in line with the latest and most demanding internal requirements.
• Has set ambitious targets for the suppliers as part of a five
year-engagement plan, based on their progress in each of the
following areas:
− Climate action, addressed by The Zero Carbon Project
(SSI #3), aiming to reduce operational emissions from 1,000
suppliers.
− Enhancement of circular supply chain by increasing the use
of green materials (SSI #4) and sustainable packaging (SSI
#5)
− Upholding of social commitment related to conflict minerals
and extended minerals (cobalt and mica)
− Upholding of 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 these controls in day-to-day operations.
Strategic suppliers are subject to the Group’s ambition to promote
continuous improvement based on the ISO 26000 standard
evaluation, and our Vigilance program aims at auditing 4,000
suppliers identified as high-risk, by 2025.
On their hand, suppliers can report any Group’s misconducts
through Schneider Electric’s alert system, the Trust Line, which will
be thoroughly and confidentially investigated.
2023 achievements
27%
+1.6pts
21%
operational CO2
emission reduction in the
Zero Carbon Project (vs.
10% in 2022)
increase of suppliers’
ISO 26000 score vs.
2022 (+7.1pts since 2019)
strategic suppliers
conform to Schneider’s
Decent Work
requirements (vs. 1% in
2022)
awarded 3 times by CIPS
in 2023 for our
sustainable procurement
programs
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Integrated Report
Sustainability for Customers
As the digital partner of its customers for Sustainability and Efficiency, Schneider Electric delivers products
and services, empowering customers 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 Premium™ offers
In 2008, Schneider Electric developed Green Premium™, its product
sustainability program, to provide transparent information on
hazardous substances, environmental impact, and end-of-life
instructions.
Green Premium™ label is an expression of our innate belief that
ambitious environmental considerations must be embedded in all
our value propositions. It 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.
In 2023, an overhaul of the Green Premium™ label was initiated to
further enhance transparency regarding environmental impact of
products and anticipate compliance with upcoming regulations.
Today, more than 80% of Schneider’s product sales originate from
Green Premium™ offers.
Strive for premium quality
Schneider Electric’s priority is to delight customers with an
outstanding end-to-end experience. Its ambition is to earn the
reputation as the safest supplier in its industry. This vision is built on
trust; the Group is committed to ensuring the safest experiences for
its customers and believes this is the personal responsibility of
every employee. Safety is at the heart of innovation at Schneider.
Industry standards are not the goal – they are the baseline.
Schneider innovates beyond standards and believes that
technology helps people work safer. Safety demands active
engagement of all, without exception. The Groups rises 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 offers recalled from
customers, by 2025.
From 2022, Schneider has introduced a Customer First
performance criteria in the incentive goals for Group executives,
measured with its Net Customer Satisfaction through real-time
digital customer surveys covering six critical touchpoints as part of
its customer operational interactions. In 2023, the Net Satisfaction
Score reached an historic record-level confirmed by a continuous
improvement performance in most of critical touchpoints. All results
are available in the Customer Feedback Management Platform
where all employees are engaged to act on the customer
experience.
Strive for resiliency
Resiliency is the capacity to quickly recover from difficulty.
Schneider uses a risk centric framework to reduce our exposure to
technological, environmental, process, geopolitical, and health
risks that might disrupt its 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.
Strive for trust in cybersecurity,
data privacy and protection
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 the 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 it handles data and
uses it in the products, systems, and services they deliver. In 2023,
the Group was awarded a Gold Medal in CyberVadis’ assessment
for the second year in a raw, underlining its commitment to
cybersecurity. By leveraging digital technologies based on human
centered design with a “do no harm” oversight, Schneider’s
solutions benefit customers’ sustainable future.
2023 achievements
553M
tonnes of CO2 saved and
avoided for customers
since 2018 (+106M vs.
2022)
80.6%
98%
Gold medalist during the
second participation to
CyberVadis
of our product revenue
covered by Green
Premium™
reduction of parts
quantity affected by
recalls vs. 2022
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Integrated Report
Our Stakeholders
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.
Improving lives through access
to green electricity
Empowering youth through education
and entrepreneurship
Today, around one and half billion people have little or no access to
electricity, representing one in four of the world’s population. For
Schneider Electric, 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, as it
can have a positive multiplier effect on all socio-economic
dimensions of the individual or community, including livelihood,
health, education, security, and empowerment of women, while
fighting against climate change by replacing fossil solutions.
At Schneider this is called “Electricity for Life” and “Electricity for
Livelihood”:
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, its expertise, volunteering its time, and
collaborating with its partners on the ground, Schneider is
empowering younger generations and the broader community to
achieve a better future through sustainable development.
“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, many farms, schools, and health centers in
rural areas currently depend on an intermittent grid and are in need
of quality energy with back-up solutions based on solar energy.
Schneider’s Access to Energy solutions already benefited more
than 46 million people between 2009 and 2023. Our ambition is to
support a cumulative total of 50 million people by 2025, and 100
million by 2030.
Its 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 80 delegates across 100 countries, that was renewed in
2023. Its role is to select local partners in the fields of vocational
training in the energy sector, to support entrepreneurship and
sustainability awareness. The Foundation also leverages its
“VolunteerIn” digital platform to empower employees to be local
actors and ambassadors of the Group’s societal commitments
through volunteering initiatives, particularly around social
mentorship.
Read more about our social impact on
page 242
2023 achievements
58,000+
578,009
46.5M
volunteering days since
2017 (+17,084 days vs.
2022)
young people trained in
energy related
professions since 2009
(+ 180,845 vs. 2022)
people connected to
green electricity since
2009 (+6.9M in 2023)
85.8M€
engaged by Schneider
Electric in Impact
Investing Funds since
2009
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Integrated Report
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 and resources strategy
Urgent action and a system-wide transformation are needed to
deliver the enormous emission 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 its scope 3
emissions by 25% 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
existing systems and 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 and preserve resources
Suppliers
Operations
Customers/Society
SSI #3 Reduce CO2 from suppliers
SSE #4
operations
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
SSE #8 Deploy local biodiversity programs
SSE #6 Product revenues covered by
product
SSI #5 Switch to sustainable packaging
SSE #9 Make waste a resource
SSE #11 Deploy water conservation
SSE #10 Avoid primary resource use
action plans
Green Premium™ eco-label
2023 achievements
74%
of our revenues are
impact revenues
(vs. 72% in 2022)
63%
Climate A
101
of our primary and
secondary packaging is
free from single-use
plastic and use recycled
cardboard (vs. 45% in
2022)
Part of CDP Climate A
List for the 13th year in a
row
Zero-CO2 sites helping
decarbonize Schneider’s
operations
(vs. 77 in 2022)
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1.1 Strategy Overview
50
1.2 Megatrends and Opportunities 51
1.2.1 Digitization and AI
1.2.2 Climate Change
1.2.3 Energy Transition
1.2.4 Evolution of Wealth
1.2.5 New Global Equilibrium
1.2.6 Trend-driven Opportunities
1.3 Our Vision
1.4 Key Focus Areas
1.4.1 Execute for Sustainable Growth
1.4.2 Expand Position as ESG Champion
1.4.3 Organic Expansion of Product Franchise
1.4.4 Expand Software and Prosumer
1.4.5 Artificial Intelligence Everywhere
1.5 Key Markers and Strength
of Schneider Electric
1.5.1 Ecosystem and Partner Model
1.5.2 Multi-hub Model
1.5.3 Global Balanced Footprint
1.5.4 Focus on Sustainability
1.5.5 Culture and Empowered Workforce
1.6 Ambition to Impact
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1.1 Strategy overview
R
T 1.1 Strategy Overview
O
P
Schneider Electric is a powerhouse of electrification
and digitization.
We are the global leader in creating holistic efficiency
for our clients, tailored to each customer’s needs.
And we are an industry-recognized ESG champion
with a world-leading portfolio of sustainability solutions.
Our strategy is informed by a comprehensive ten-year horizon market analysis. We believe
that five “megatrends” will impact our customers and consequently our offerings over the
next ten years. We refer to the convergence of these megatrends as “The Next Frontier”.
Digitization
and AI
Climate
Change
Energy
Transition
Evolution
of Wealth
New Global
Equilibrium
The Next Frontier
“
To prepare our company for The Next
Frontier, we’ve carefully considered the
macro-environmental factors that will shape
business conditions over the next decade.
During this time, there will be a flood of
generation-defining innovation that we plan to
channel into a resilient, sustainable, and
human-centric future for our customers.”
Dallal Slimani
Chief Strategy Officer
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Chapter 1 – Group strategy
1.2 Megatrends and Opportunities
Schneider Electric has thrived over the years because
we have always embraced a future resilient strategy.
This approach is even more important in today’s world,
where we are facing unprecedented changes in our
markets.
Every day we hear about the latest trends and predictions for the future. We have sorted through the noise and consolidated the trends that
are the most relevant to our business over the next decade. A megatrend is a powerful, long-term shift or pattern that has a significant
impact on various aspects of society, economy, and business. These trends have the potential to shape the future and create new
opportunities or challenges. In the context of Schneider Electric, megatrends are analyzed and considered to formulate a strategic
approach. They encompass a range of factors, including political, economic, social, technological, legal, and environmental implications.
By understanding and preparing for these megatrends, Schneider Electric can align its strategy with market demands, anticipate customer
needs, adapt to changing landscapes, and provide innovative solutions that address the challenges and opportunities arising from these
trends. This holistic approach enables Schneider Electric to stay ahead of the curve, deliver sustainable and efficient solutions, and
maintain a competitive edge in the market.
The five megatrends that have influenced our 2023 strategy:
Digitization
and AI
Climate
Change
Harnessing the power
of software-defined
everything,
automation, data
management, and
machine learning
Adapting to the reality
of greenhouse gas
emissions impacts,
while still working
towards a carbon-free
future
Energy
Transition
Securing and
modernizing the
world’s energy
infrastructure
Evolution
of Wealth
New Global
Equilibrium
Providing first time
electrification,
telecommunication,
and transportation
infrastructure to new
economies
Reimagining
manufacturing and
supply chains to be
resilient in the face of
political conflict,
materials shortages,
and pandemics
Schneider Electric has positioned itself as a leader in the Next Frontier. Through a proactive approach, Schneider Electric has been able to
anticipate trends, adapt our offerings, and stay at the forefront of industry, enabling us to deliver sustainable and efficient solutions for the
Next Frontier.
Let’s take a closer look at the impact and opportunities we see in these megatrends.
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1.2 Megatrends and opportunities
1.2.1 Digitization and AI
Advancements in artificial intelligence, robotics, quantum computing, and other digital
technologies will have profound consequences for the global economy and society. These
advancements have the potential to boost productivity everywhere, by making powerful
capabilities such as Large Language Models available to all. With this massive increase in
demand for data center services comes the equally massive responsibility and opportunity for
Schneider Electric to lead the deployment of sustainable data center solutions.
The convergence of AI, automation, big data, cloud computing, and cybersecurity is reshaping the global economy in significant
ways.
AI, and specifically the latest advancements in Generative AI, are
driving innovation and efficiency across industries, automating
tasks, and improving decision-making. This will lead to increased
productivity, cost savings, and new business opportunities.
Automation is transforming manufacturing, logistics, and service
sectors, streamlining processes, reducing errors, and improving
safety. It supports companies who suffer from significant talent
shortage.
Big data provides valuable insights for businesses, enabling
data-driven decision-making, personalized marketing, and
improved customer experiences.
Cloud computing allows businesses to access scalable computing
power and storage, enabling cost-effective solutions, remote work,
and collaboration. It accelerates digital transformation.
Cybersecurity becomes even more critical. Protecting people,
data, systems, and infrastructure from cyber threats is paramount
to ensuring trust, privacy, business continuity, and human safety.
“
AI presents a massive opportunity and disruption.
With its unparalleled adoption, it increases
productivity of people, machines, and processes with
immense scaling potential. Its ability to draw insights
from large amounts of data is key to successful
energy transition – no other technology can support
us in smarter usage of scarce resources through
relentless and continuous optimization. But its own
energy demand and carbon footprint must be
addressed with green solutions for data centers.”
Philippe Rambach
Chief AI Officer
Megatrend Customer Relevancy
• Massive data center capacity required
• Managing Big Data explosion
• Self-governing networks of hardware / software
• Digital twin technology for all segments
• Deploying next-gen power electronics
• Digital infrastructure
• Developing trustworthy AI Systems
• Conversational user interfaces that enable more natural
human-machine interaction
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Chapter 1 – Group strategy
1.2.2 Climate Change
Climate change refers to long-term shifts in temperatures and weather patterns. Such shifts
can be natural, due to changes in the Sun’s activity or large volcanic eruptions. But since the
1800s, human activities have been the main driver of climate change, primarily due to the
burning of fossil fuels like coal, oil and gas.
Climate change is having a profound impact on the globe, posing significant challenges to ecosystems, communities, and
economies worldwide.
Rising global temperatures are causing more frequent and intense
heatwaves, droughts, and wildfires, leading to water scarcity and
agricultural disruptions. Sea levels are rising, resulting in coastal
erosion, flooding, and the displacement of vulnerable populations.
Extreme weather events, such as hurricanes and storms, are
becoming more frequent and severe. Climate change also
threatens biodiversity, causing species extinction and disrupting
delicate ecosystems. Urgent action is needed to mitigate
greenhouse gas emissions, transition to renewable energy sources,
and implement sustainable practices to safeguard the planet for
future generations.
As we work to minimize the impact of climate change, there are
several clear areas of action for Schneider Electric, beyond acting
on our Scope 1, 2 and 3 emissions. We also can help our
customers become more energy efficient, as well as explore new
power generation concepts, including hydrogen, carbon capture,
utilization, and storage (CCUS), nuclear, and prosumerism.
Decarbonization activities pursued
most today
Replace energy supply
Scope 1 & 2
Reduce for efficiency & circularity
Scope 3
Electrify process
Navigating the New Energy Landscape
~€55bn
Combined new market
Hydrogen
Carbon Capture, Utilization,
and Storage (CCUS)
Nuclear
Prosumer
Prosumers market is the largest
Markets
Our offering
x2
Prosumer potential market to
double in the next 4 years
Residential
Building
Utilities
Megatrend Customer Relevancy
•
Incorporating climate-ready features into buildings and
power infrastructure
Increasing viability of carbon capture, utilization and storage
• Water desalination, filtering systems
•
• Growing demand for HVAC
• Lasting damage to ecosystems
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Chapter 1 – Group strategy
1.2 Megatrends and opportunities
1.2.3 Energy Transition
Low-emissions sources of electricity, led by renewables, are poised to overtake fossil fuels by
2030. Global electricity demand will rise, due to appliance electrification, rising global incomes,
electric vehicles (EVs), heat pumps, etc. In particular, the success of EVs is being driven by
multiple factors, but sustained policy support is the main pillar.
The energy transition is a fundamental shift in the way we produce and consume energy, driven by the need to mitigate climate
change and reduce greenhouse gas emissions. This transition involves significant changes in both the supply and demand sides
of the energy sector.
On the supply side, there has been a notable shift towards
renewable energy sources such as solar and wind. Advances in
technology and declining costs have made renewables more
economically viable, leading to increased adoption. Governments
and businesses are incentivizing renewable energy projects,
leading to a substantial growth in renewable capacity. This shift
towards clean energy sources helps reduce carbon emissions and
dependence on fossil fuels.
Simultaneously, there is a push for energy efficiency and
conservation, globally recognized as a major contributor to
decarbonization. Industries and households are adopting
energy-efficient practices and technologies to reduce energy
consumption. This demand-side shift is driven by the need to
optimize energy usage, reduce costs, and minimize environmental
impact. Energy-efficient appliances, smart grids, and building
management systems are being embraced to monitor and regulate
energy consumption. This is complemented by electrification (also
a vector of efficiency), across all sectors (EVs, Heat Pumps, etc.).
The energy transition also involves the integration of decentralized
and distributed energy systems. This includes the rise of
microgrids, where communities or buildings generate and manage
their energy locally. Decentralized systems allow for greater
resilience, energy independence, and the integration of intermittent
renewable sources.
Overall, the energy transition is reshaping the energy landscape,
moving towards a cleaner, more sustainable future. It requires
collaboration between governments, businesses, and individuals to
accelerate the adoption of renewable energy sources, promote
energy efficiency, and drive innovation in the energy sector.
70%
CO2 emissions can
be removed using
existing technologies
Energy Demand
Energy Supply
25%
30%
45%
Save
Digitalization as disrupter
Energy efficiency
Process efficiency
Circularity
Digital twin & metaverse
Electrify
Electricity 4.0
IT
EVs
Heat pumps
Decarbonise
Smart grid
Microgrid
Renewables
Storage
VPP, aggregation, contract &
demand management
Electricity as part of energy mix
20% in 2020
30% in 2030
50% in 2050
Sources: Schneider Electric™ Sustainability Research Institute IEA The untapped potential of energy efficiency.
Megatrend Customer Relevancy
• Huge expansion of electrification, with ever-increasing demand
• Energy efficiency initiatives
• Drive to decarbonize all industries
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Chapter 1 – Group strategy
1.2.4 Evolution of Wealth
As wealth increases, consumption patterns change. The growing global middle class have
expectations of access to energy, high-speed data services, reliable transportation, and of
course food. In parallel, global demographics are projected to shift significantly through 2050.
This trend necessitates advancements in automation and AI to support countries with aging
populations and lower birth rates.
World demographics continue to be a driver to change. Increasing population and growing wealth in new economies and aging
populations in mature economies, are creating new opportunities in electrification and automation.
In new economies, rising populations, increasing incomes, and
improving living standards are driving increased demand for basic
services, such as housing, electricity, medicine, and water. As people’s
purchasing power grows, there is a greater need for reliable and
affordable access to energy. This leads to significant opportunities for
investment in infrastructure that can be developed sustainably.
Moreover, as new economies strive to boost industrialization and
economic growth, there is a growing need for automation and
advanced manufacturing technologies. Automation can enhance
productivity, improve efficiency, and reduce costs in various
sectors, including manufacturing, agriculture, and transportation.
This presents opportunities for companies specializing in
automation technologies, software, and artificial intelligence to
expand their markets and cater to the growing demands of these
economies.
On the other hand, in mature economies, aging populations and
changing demographics are driving the need for increased
electrification and automation. As the proportion of elderly
individuals increases, there is a greater demand for technologies
that can assist with healthcare, independent living, and mobility.
This includes smart homes, remote healthcare monitoring systems,
and assistive robotics, which can improve the quality of life for an
aging population.
Additionally, automation technologies can help address labor
shortages resulting from demographic changes. Industries such as
manufacturing, logistics, and healthcare can benefit from the
implementation of robotics and automation systems to fill gaps in
the workforce and improve productivity.
New Economies
Mature Economies
Rise in new construction and
demand for first time electrification
Infrastructure refresh supported
by government investment
Population growth (India + MEA, by 2050)
+1.4bn
+1.5bn
Overall
Urban
Europe Today
75%
Buildings are
inefficient
0.5%
Current rate of
energy retrofit
>6x
Faster on retrofits
by 2030 to meet
EU climate target
Buildings growth (India + MEA, by 2050)
Versailles 10x10
+100bn m2
Size of what exists in
Europe and China today
10
10x
Actions To
accelerate energy
efficiency
Faster To
accelerate energy
efficiency
Sources: Schneider Electric Sustainability Research Institute.
Megatrend SE Customer Relevancy
• Greening of construction, transportation, and production
• Modernizing and decentralizing the grid
• Scaling the New Energy Landscape
• Reskilling workers to green jobs
• Strategic control points (i.e. Panel, Software, Architecture)
redefined
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1.2 Megatrends and opportunities
1.2.5 New Global Equilibrium
While the global supply chain remains intact, understanding the global political winds will be
critical in deciphering what path globalization will ultimately take. Populism, nationalism,
financial re-regulation, and national security concerns have usurped economics as the
priorities of international relations.
The world is experiencing a slowdown in the accelerated globalization witnessed in the last decades. This is evident through the
rise of protectionist trade policies, trade conflicts, and the reevaluation of global supply chains. The focus is shifting towards
national interests and self-sufficiency.
This has a significant impact on companies’ strategies. They must
reassess their global supply chains, diversify sourcing, and
consider regionalization. Trade barriers and supply chain
restrictions can disrupt operations and increase costs. Adaptation
to new regulations, market shifts, and localized production are
essential for maintaining competitiveness in a deglobalizing world.
This has brought a new focus on resilient supply chains. They are
crucial in today’s dynamic and uncertain business environment.
Disruptions like natural disasters, geopolitical tensions, and
pandemics highlight the need for flexibility and contingency
planning. Companies must diversify suppliers, invest in digitization,
and adopt agile strategies to ensure continuity, minimize risks, and
meet customer demands effectively.
Countries are also pushing for additional reshoring, bringing back
manufacturing and production to domestic or nearby locations.
This can reduce dependency on global supply chains, create jobs,
and enhance national security. However, it also entails higher costs,
potential loss of overseas markets, and disruption to existing supply
chains. A careful analysis of costs, market dynamics, and long-term
sustainability is essential when considering reshoring strategies.
Supply Chains
Reshoring
Trade Barriers
Rebuilt resilient and autonomous,
importance of electronics
Critical industries
Obstructs free trade, favoring
domestic production
$516bn
x2
investment
“Manufacturing the future” investments announced by
private companies under present US Administration
by 2030
European Union ambition to double its size in the global
semiconductors market
Megatrend Customer Relevancy
• Building resilient, autonomous supply chains
• Reshoring critical industries
• Cybersecurity for all segments, particularly energy, water, and
other civil infrastructure
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1.2.6 Trend-driven Opportunities
These Megatrends reinforce our strategic vision – creating unprecedented opportunities in our end-markets
through the cycle.
Why do these megatrends matter for Schneider Electric? The
explosion of digitization and AI, the accelerated need for concrete
solutions to fight climate change, the ongoing transition of our
energy landscape, the evolution of wealth, and the new global
equilibrium create unprecedented tailwinds, pushing us towards
The Next Frontier.
We anticipate that our markets will experience outsized growth in
the period 2024-2027 where we see an increase in market growth
CAGR to between +6% and +7%. This will impact our traditional
business areas, but will also open new opportunities, as new
technologies and business models come to maturity. We are
committed to leading the way to The Next Frontier.
Schneider Electric’s mission is to be the premier digital partner for
sustainability and efficiency. We provide energy and automation
solutions. 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 homes, buildings, data
centers, infrastructure, and industries.
“
The Next Frontier for Schneider Electric
is the evolution of our strategy, focused
on transforming our company to become
an industrial tech leader, supporting our four
end markets, Data Centers, Buildings,
Industry, and Infrastructure, to achieve new
levels of efficiency, sustainability and
resilience. This visibly reinforces our ability
to tackle an increasingly complex world.”
Peter Herweck
CEO
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What does the Next Frontier look like for our customers?
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
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.
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.
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.
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 the oil, gas, and
chemicals industries. We empower customers to manage
the entire lifecycle of capital projects, achieve
sustainability targets, and improve safety. Our strong field-proven
experience enables them to decarbonize their operations and
develop them into new energies businesses.
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 digitization
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.
Semiconductor: We enable the transformation of the
semiconductor industry through tailored energy
management solutions that integrate digital technologies
such as AI, IoT, and predictive analytics. Our offers can
help turn fabs into net-zero energy facilities and help set new
standards for responsible manufacturing. And our support extends
beyond the fabs, aiding customers in reducing the sector’s carbon
footprint while working to develop a self-sustaining energy hub.
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1.4 Key Focus Areas
1.4.1 Execute for Sustainable Growth
We are ideally positioned at this pivotal time, benefiting from significant market tailwinds.
Schneider Electric will continue to execute and grow our market
share in new geographies and customers. We are doubling down
on our new investments in India and increasing our efforts in the
Middle East to take advantage of growth markets and strong
investments.
We are also constantly examining new customer groups and
adapting our teams to best serve their needs. For example, we
recently set up a group to focus on the needs of home and electric
vehicle battery manufacturers, a segment that has only gained
significance in the past decade.
We continue to increase the share of service and software that we
sell together with our established hardware business and trying to
increase the proportion of recurring revenue that we have.
We continue to develop our growth mindset within our company to
ensure that we act quickly on local needs, raise issues and work to
solve them collaboratively, together.
1.4.2 Expand Position as ESG Champion
We lead clients on their journey to a carbon-free energy future.
Finally, Schneider can connect climate strategy with operational
carbon decreases, through reduction in energy consumption,
transition of energy to electricity, and the decarbonization of energy
supply. These actions include switching from gas to electric motors
in a plant (Scope 1), buying renewable electricity via a power
purchase agreement (Scope 2), and working with suppliers to
assess and reduce their scope 1 and 2 emissions (Scope 3).
Today, Schneider supports its customers bridge the definition of
climate strategies and their climate transition plans, as well as their
operational fulfilment. For most clients, the starting block is to
establish their current emissions footprint on all scopes (stemming
from their operations, their energy supply, and their value chain).
On this basis, Schneider Electric helps its customers to strategize
on their approach to net zero and to implement the operational
steps required to achieve their trajectory using all relevant levers,
including energy efficiency, electrification, renewable energy
sourcing, and more.
Schneider Electric also offers cutting edge managed services and
digital solutions to tackle climate change through digitization. The
Group helps its customers collect the data needed to both design
their strategy and then help show progress against emissions, both
for internal purposes and disclosure against prevailing
sustainability frameworks.
Sustainability Business
40%
of the Fortune 500
as clients
€40bn+
Energy spend under
management
16GW
Globally advised
corporate PPAs
3,000+
Sustainability experts
worldwide
Gigaton PPA program
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1.4 Key Focus Areas
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Our product franchise is second to none.
We have a robust set of products that add value to our customers
and our overall ecosystem. We are working to create even greater
impact by moving R&D investment towards 7% of Group revenues.
There are significant technological changes happening, e.g.
generative artificial intelligence, power electronics, etc. We must
make sure that we are appropriately tracking those changes, what
they mean for our product portfolio and when we need respond to
maintain our leading position. We are now in one of the most
dynamic phases of technological development in our history.
This may mean making hard choices about what to invest in, but
R&D efficiency is always a critical part of having a world class
products R&D organization. We will continue to focus on
appropriate returns on investment, with a strong eye on emerging
innovations.
1.4.4 Expand Software and Prosumer
Software is core to our digitization journey,
both for Schneider Electric and for our customers.
Our focus is on building a scalable portfolio, with our EcoStruxure
platform, for open and interoperable IoT digital solutions. Our
software businesses such as AVEVA, ETAP, and RIB, leverage
CONNECT, the industrial cloud platform for secure access to data
and applications. With EcoStruxure and CONNECT, we deliver
more value to our customers spanning the life of their assets.
This empowers the creation of a true digital twin from initial design,
build, operate, and optimize lifecycle phases, supporting both
sustainability and energy efficiency imperatives. Our software
portfolio integrates market leading technologies, deep domain
expertise, and an extensive partner ecosystem, resulting in a
unified user experience and seamless end-to-end set of
customizable solutions to specifically meet business challenges.
We are enabling a new flexible energy system
for prosumers.
We continue to evolve a broad portfolio of hardware and software
solutions for individual consumers as well as utility level customers.
We see 2x market growth in this area over the next five years.
Navigating the complex world of local regulations, local providers,
and solution sets can be quite difficult. Schneider Electric enables
our customers to control their own energy, while providing much
needed flexibility to the electrical grids of the future.
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1.4.5 Artificial Intelligence Everywhere
We are ideally positioned to lead in artificial intelligence.
The benefits of artificial intelligence will materialize across
Schneider Electric:
Artificial intelligence will be a key technology in the fight against
carbon emissions and for sustainability:
• Unprecedented demand for energy for datacenters due to the
• Reduce carbon emission thanks to the reduction of energy
•
•
new needs of generative AI
Increase our internal efficiency and the Schneider customer
experience through a transformation of our processes
leveraging AI
Improve our customer offering, embedded in our products and
through consulting, to help them be more sustainable
needs, in buildings, factories, data centers, etc. by being able to
model their processes through machine learning and therefore
enable their optimization
• Predict energy needs and optimize energy usage, AI will
recommend energy efficiency measures that shave the peak of
demand and its negative impact on carbon emissions
• Make the adoption of these new technologies easier by
reducing barriers to entry, thanks to the automatization by AI of
tedious adoption & deployment tasks
The acceleration of demand for AI services, such as Generative AI,
will greatly increase the need for compute power and therefore
energy in data centers, with a strong shift from CPU’s to GPU’s.
There will be growing importance of our ability to provide green
energy for those enhanced and new datacenters, and to make
those data centers more efficient through digitization.
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1.5.1 Ecosystem and Partner Model
We have a unique ecosystem based on long-term partnerships.
Our partnership model is one of our core strengths. Around 60% of
our group revenues go through our partners. This network includes
over 6,000 distributors and 120,000 points of sale around the world.
Our ecosystem includes over 4,000 panel builders and system
integrators and 20,000 partners. This ecosystem is the result of
decades of work and a strong level of intimacy with all the network
partners. We are fortunate to have a loyal group of partners and
work to make their interactions more frictionless and value-adding.
One of our key customer groups is electricians. We have 300,000 in
our global network and all of them are trained in our products,
including the digital aspects. This will help them continue to meet
the needs of customers in an increasingly digitized world.
1.5.2 Multi-hub Model
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
live and work in the regions where we operate and are close to our
customers. Our model reflects our decentralized governance
model and empowers our people where they need it – close to the
customers.
Our multi-hub approach continues to be a key part of 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, conflict, trade
and regulatory differences, this characteristic of Schneider
Electric’s model has proven its strategic value.
Four hubs serve our different markets (China, Europe, India and
North America). Each hub has its own capabilities, while
coordinating globally to meet customer needs.
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1.5.3 Global Balanced Footprint
#1 Gartner Top 25 Supply Chain 2023
We are the most local of global companies.
Schneider Electric is balanced to leverage the global scale and
proximity to customers. We simultaneously work to ensure we drive
value and high quality from our suppliers, while shortening supply
chains for greater agility, resilience, and sustainability outcomes.
We are crafting an integrated supply chain to support our growth
aspirations. We are moving our sourcing and manufacturing to be
90% within the region the products and solutions are sold aligned
across our supply chain hubs: North America, China, India, Europe,
and “Rest of World”. We have announced significant investments in
North America and “Rest of World” markets to meet the anticipated
demand and build greater autonomy of these two fast-changing
regions. We more than doubled our investment run rate in North
America with a focus on enhancing Made in America compliance
for government regulated markets, and significantly expanded our
presence in India. We will continue to scale our smart factories
program to be best positioned for today and the future.
A global network that ensures the resilience of our end-to-end value chain
Source
Make
Deliver
Customer
18,500 suppliers,
€11.0 billion purchases*
153 factories in
38 countries
79 distribution centers in
44 countries
17 segments and personas,
164,000 order lines a day,
228,000 references
*Production parts procurement
1.5.4 Focus on Sustainability
We are going beyond the scope of operations in Sustainability.
The foundation of Schneider’s sustainability strategy is the belief
that investing in the transition to a more sustainable world is not
only the right thing to do, but it also drives the company’s
competitiveness, innovation and resilience. This approach 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 to bring
tangible added value by being more attractive to stakeholders,
while boosting innovation.
However, we are not stopping at improving our own sustainability
posture or even that of our value chain. We are actively leading
organizations globally to reach their sustainability goals via our
Sustainability Business.
On this journey for a better planet, the Group is convinced that no
one should be left behind, and businesses should strive for a just
transition.
See page 66 to find out more about our sustainability
strategy.
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1.5 Key Markers and Strength of Schneider Electric
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O
Our People and Culture lead us into The Next Frontier.
Our commitment to our people and growing their skills is truly what
allows us to create impact. We continue to invest in critical skills,
including services, software, sustainability, and electronics, to build
competencies that we will need to be successful in the future. This
is in addition to our ongoing commitment to build digital skills,
where we now have 77% of our workforce involved.
Our culture is a strength, a differentiator. We are intentional about it
and shape it with design and care with our focus on leadership.
Leaders at Schneider play an active role in shaping culture, in
setting high ambitions for growth and transformation, by delivering
impact. We are also focused on making sure we have the right
talent in the right locations. We cannot fulfill our vision as the most
local of global companies without a balanced approach to
geographies.
The impact this makes for our people is easy to see in our
increasing engagement level and decreasing turnover rates. Our
people are critical to our success, and they believe in our vision, as
you can see from our high level of employee ownership.
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1.6 Ambition to Impact
The only constant in life is change. Schneider Electric has been a
trailblazer in every industrial revolution during its 187-year long
history. From the first revolution powered by steam, to the second
with electricity, and the third with automation, we have constantly
adapted and innovated. In the fourth revolution of digitization, we
continue to lead in energy management and automation solutions.
Industry 5.0, also known as the human-centric revolution,
represents the integration of humans and advanced technologies in
the manufacturing sector. It emphasizes collaboration between
humans and robots, focusing on tasks that require creativity,
problem-solving, and emotional intelligence. Industry 5.0 aims to
create safer, more sustainable, and socially responsible
manufacturing environments, promoting a harmonious relationship
between humans and machines. We are committed to also leading
into this revolution.
The underlying megatrends offer terrific opportunities for growth,
particularly in a potentially volatile short-term environment. We are
uniquely positioned to capitalize on the opportunities in front of us:
our distinct focus on electrification, automation and sustainability, a
unique ecosystem of long-term partnerships, an empowered
multi-hub model, a balanced global footprint, and our people and
culture.
We have set big ambitions that capitalize on our strengths, with
concrete plans and targets that empower our teams to act. We are
excited to lead the way forward in these extraordinary times to what
we call “The Next Frontier”.
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development
2.1 Sustainability for all
2.1.1 Strategic vision towards long-term
positive impacts
2.1.2 6 long-term commitments and progress
measurement tools
2.1.3 Contribution to the United Nations
Sustainable Development Goals
2.1.4 Open dialogue with stakeholders
2.1.5 Materiality assessment
2.1.6 Main sustainability risks, opportunities, and impacts
Integrated and transverse governance of sustainable
2.1.7
development
2.1.8 Global and local external partnerships to move
forward collectively
2.1.9 Schneider Electric contribution to standardization
2.1.10 Measuring our contribution to a more
sustainable world
2.1.11 Key external frameworks and ESG ratings
69
70
71
76
78
79
81
88
91
95
97
103
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2.2 Driving responsible business
with Trust
106
2.2.1 Trust, Foundation of Schneider Electric’s business
2.2.2 Vigilance plan
2.2.3 Responsible Workplace
2.2.4 Employee health and safety
2.2.5 High standards for the quality and safety
of our products
2.2.6 Digital trust and security
2.2.7 Zero-tolerance for corruption
2.2.8 Compliance with Competition Law
2.2.9 Compliance with tax regulations
2.2.10 Export Control and Sanctions
2.2.11 Human rights
2.2.12 Sustainable relationships with suppliers
2.2.13 Vigilance with project execution contractors
2.2.14 Ethical relations with downstream stakeholders
108
115
120
121
124
127
130
133
134
134
136
138
149
151
2.3 Leading on decarbonization 154
2.3.1 Climate risks, opportunities and impact management 156
161
2.3.2 Schneider Electric’s greenhouse gas footprint
2.3.3 Schneider Electric’s Net-Zero Commitment
164
2.3.4
Investing to achieve the Group’s climate
strategy and vision
2.3.5 Decarbonizing the Group’s operations by 2030
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 through
efficiency and digitization
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2.4 Being efficient with resources 184
2.7 Methodology and audit
2.4.1 Governance and Environment policy
2.4.2 Minimize the Group’s impacts
and dependencies on nature
2.4.3 End-to-end Circularity
2.4.4 Source better
2.4.5 Manufacture better
2.4.6 Use longer and use again
186
187
190
196
201
207
2.5 Great people make Schneider
Electric a great company
210
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
2.6 Delivering social impact
for a just transition
Improving lives through access to green electricity
Investing for high social impact
2.6.1
2.6.2
2.6.3 The Schneider Electric Foundation
2.6.4 The Next Gen Academy
2.6.5 Future Ready Program
244
246
251
257
264
of indicators
266
2.7.1 Methodology elements on the published indicators
266
2.7.2 Methodology elements on EU Taxonomy indicators 277
2.7.3 Sustainability Accounting Standard (SASB)
Correspondence table
2.7.4 Task-Force on Climate Related Financial
Disclosures (TCFD) correspondence table
2.7.5 Report of one of the Statutory Auditors, appointed
as independent third party, on the verification
of the consolidatead non financial statement
2.7.6 Reasonable assurance report from one of the
Statutory Auditors on a selection of Schneider
Electric’s non-financial performance indicators
as for the year ended December 31, 2023
2.8 Indicators
212
216
226
234
239
242
2.8.1 Environmental and climate indicators
2.8.2 Social indicators
2.8.3 Societal indicators
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296
302
304
306
306
312
321
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An introduction by our Chief Sustainability and Customer & Quality Officer
“Companies that
want to do well,
must also be good –
and vice versa.”
Agustin Lopez Diaz
Chief Sustainability and Customer & Quality Officer
I took on the role of overseeing sustainability matters at Schneider
Electric at the end of the hottest summer in recorded history. The
climate crisis was – and is – leaving a trail of destruction across the
globe, and the window to address it is rapidly closing.
The good news is that readily available and cost-effective solutions
exist, and can be deployed now by every one of us to deliver on
common sustainability ambitions.
At Schneider Electric, we have worked hard for many years to do
so. And by the summer of 2023, we’d reached the midterm point of
our current five-year Schneider Sustainability Impact (SSI)
program. SSI initiatives act as our sustainability roadmap, tracking
our environmental, social, and inclusion transformation in line with
six long-term commitments to climate, resources, trust, equality,
people of all generations, and the local stakeholders with whom we
work.
Engaging for impact with all stakeholders
As an Impact Company, we are committed to bringing everyone
along – employees, customers, and suppliers – and to working
closely with local communities to make a difference. And I couldn’t
be prouder of the impact we made in 2023.
We continued to support our customers on their journey toward
Net-Zero with digital, electrification, and automation technologies.
As of December 2023, we were already more than halfway towards
meeting our target of helping our customers save and avoid 800
million tonnes of CO2 emissions by 2025.
Part of the work to get to Net-Zero across our end-to-end value
chain involves maintaining the highest standards of quality. And as
we continue to encourage our top suppliers to switch to cleaner
energy and run more energy-efficient operations, we’re also
tackling our own Scope 3 emissions.
We’re taking a similar approach to also ensure that our partners
protect their employees’ rights and provide access to decent work.
And we’re making good progress in eliminating single-use plastic
from packaging and increasing the green material content in our
products.
Our long-standing efforts to address energy poverty and transform
lives with affordable, reliable, and clean electricity also continued
apace in 2023. We’re well on our way to meeting our 2025 goal to
expand energy access to 50 million people worldwide.
Maintaining our sustainability commitments over the
long run
Continued recognition from external rating agencies including the
Dow Jones Sustainability World Index, Euronext Vigeo, Ecovadis
and CDP Climate Change, and many others, underlines our
progress; none of which would be possible without the commitment
of our employees.
Meanwhile, the Schneider Electric Foundation celebrated its 25th
anniversary in 2023. That’s a quarter of a century of creating
educational and entrepreneurial opportunities and greater access
to energy, and supporting the energy needs of local communities.
The Foundation also provides vital support and disaster relief –
most notably in 2023 sending donations and essential goods to
earthquake victims in Turkey, Syria, and Morocco.
Sustainability initiatives are transformative, and not always quick
wins. They’re about continuously building on prior achievements
and striving for long-lasting, positive impact. And that’s what we will
do – for the rest of the 2021-2025 SSI program, and beyond.
Agustin Lopez Diaz
Chief Sustainability and Customer & Quality Officer
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Chapter 2 – Sustainable development
2.1 Sustainability for all
In this section
2.1.1 Strategic vision towards long-term positive impacts
70
2.1.7
2.1.2 6 long-term commitments and progress
Integrated and transverse governance
of sustainable development
measurement tools
71
2.1.8 Global and local external partnerships
2.1.3 Contribution to the United Nations
Sustainable Development Goals
2.1.4 Open dialogue with stakeholders
2.1.5 Materiality assessment
2.1.6 Main sustainability risks, opportunities, and impacts
to move forward collectively
2.1.9 Schneider Electric contribution to standardization
2.1.10 Measuring our contribution to a more
sustainable world
2.1.11 Key external frameworks and ESG ratings
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81
88
91
95
97
103
Distinctions 2023
Moody’s
ESG Solutions
Dow Jones
Sustainability Indices
Corporate Knights:
A Global 100
Most Sustainable Corporation
2023 highlights
6.13/10
63%
553M
46.5M
Schneider Sustainability
Impact score,
outperforming 2023
target (6.00/10)
Sustainable packaging
for our products
(vs. 45% in 2022)
Tonnes of saved and
avoided CO2 emissions
for our customers since
2018 (+112 MT vs. 2022)
People have access
to green electricity in
2023, since 2009
(+6.9M vs. 2022)
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2.1 Sustainability for all
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T 2.1.1 Strategic vision towards long-term positive impacts
O
The world is changing
The world is facing multiple challenges that require a significant
and rapid response from businesses. 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 millions 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.
In the past years, multiple geopolitical crisis 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
(ESG) 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 the strategy around an Impact
Company model
While everybody – governments, NGOs, investors, and individual
citizens – has an important role, companies can be crucial players.
They can be both developers and users of new solutions with 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 €35.9 billion in revenues in 2023.
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.
A purpose 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 74% of the Group’s total revenues in 2023. 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 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 (UN 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.
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.
Our tools to measure progress
Long-term commitments and tools
The execution of the Group’s 2021–2025 sustainability strategy is
tracked through quantitative key performance indicators (KPIs),
under two complementary tools: the Schneider Sustainability
Impact (SSI) and the Schneider Sustainability Essentials (SSE).
Collectively, the 11 SSI Global and Local Impact programs, as well
as the 25 SSE programs, are the Group’s short-term sustainability
roadmap and our contribution to the 17 UN 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 (STIP) for more than 64,000
employees.
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 and scope on
the next page and throughout the report.
The SSE reflects continuous improvement actions taken by the
Read more on the local commitments on www.se.com
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.
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2.1 Sustainability for all
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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 the
“Schneider Sustainability Impact” (SSI). Schneider uses this tool to
address its sustainability challenges and to improve each of the
pillars of its strategy identified through its materiality matrix. Each
SSI mobilizes the whole Company around holistic sustainability
goals impacting its ecosystem, shares the Group’s improvement
plans with stakeholders, and creates system value.
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 2023, SSI #8 obtained a reasonable assurance level, as well as
other energy, CO2 and safety KPIs (SSE #3, SSE #5 and SSE #14).
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 objective translates in 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). In 2023, the SSI achieved a great score of
6.13/10 (vs. 4.91/10 in 2022), exceeding its 6.00/10 target for the
year, and is well on track to achieve its 2025 ambition. The 2024
objective is to keep accelerating and reach 7.40/10.
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 (previously known as Group
Sustainability Committee), which makes decisions on any
corrective actions that may be necessary to reach objectives. The
Governance, Nominations & Sustainability Committee (previously
known as 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 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 Results page
on www.se.com
See Independent verifier’s report on page 302.
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 2023,
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 section 2.5.4. “Compensation
and benefits” on page 234.
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). In 2022, Schneider Electric signed €2.7 billion Syndicated
Sustainability-Linked Revolving Credit Facilities with a margin
indexed on the annual performance of the SSI.
Find 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, and 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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Chapter 2 – Sustainable development
Three scenarios may emerge from one SSI to the next:
2.1.2.2 Schneider Sustainability Essentials
Notable SSI achievements and challenges in 2023
•
• 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 Governance, Nominations & Sustainability Committee,
which reports on its work to the Board of Directors, and to the
Function Committee, for validation. This latter Committee includes
seven members, who each have functional responsibilities and
report directly to the CEO: the Chief Sustainability and Customer &
Quality Officer; Chief Strategy 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.
SSI #2 delivered +112MTCO2e saved and avoided for customers, a
continuous improvement compared to 2022 (+93MTCO2e), driven
by good progress in Power Purchase Agreements services and
Variable Speed Drives sales.
The Zero Carbon Project (SSI #3) recorded a 27% progress (vs.
10% in 2022) thanks to CO2 emissions efficiency gains in the
operations of 1,000 top suppliers.
The Group kept progressing on its transition to sustainable
packaging, with 63% of primary and secondary packaging now
free from single-use plastic, using recycled carboard (SSI #5),
compared to 45% in 2022. This progress was possible thanks to
the mobilisation of the teams worlwide, and particularly in Europe
and North America.
SSI #6 significantly progressed in 2023, with 85% of strategic
suppliers committed to the Decent Work program, of which 21%
are meeting the Decent Work expectations set by Schneider
Electric. This represents an increase of 20 pts since its launch in
2022, but reaching the 2025 target remains a challenge due to the
shorter timeframe to achieve it.
The most significant progress was achieved by SSI #9 which
delivered access to clean and reliable electricity to 6.9 million
people in 2023 alone (vs. 5.5M in 2022), thanks notably to the
solarization of Health Centers in South Asia and Africa, and the
delivery to Impact Investment Funds.
One of the most challenging 2025 objectives will be to train 1 million
people in energy management (SSI #11). Major progress was
delivered in 2023 with close to 180,850 new people trained, more
than twice than in 2022 (close to 70,000 people). However, 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 is
opening trainings to more OECD countries and supporting new
types of programs for the youth.
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. All SSE KPIs are
externally assured each year like for the SSI.
Notable SSE achievements and challenges in 2023
Schneider is committed to accelerating sustainable transformation
in its own operations:
•
In 2023, 24 new sites were certified Zero-CO2 sites (SSE #1), for
a total of 101 sites contributing to the Group’s GHG emissions.
• Corporate vehicle fleet transformation (SSE #7) accelerated by
10 points in 2023, driven by a strong performance in Europe
and a growing market maturity.
• The Group’s ambition is to deploy local biodiversity
conservation and restoration programs at 100% of its sites (SSE
#8), and to deploy a water conservation strategy and related
action plan at 100% of its sites in water-stressed areas by 2025
(SSE #11). In 2023, 66% of sites have put biodiversity programs
in place (vs. 18% in 2022), and 73% of sites in scope have
adopted and implemented water conservation action plans
(vs. 48% in 2022).
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.
With SSE #23, Schneider aims to provide access to meaningful
career development programs for its employees during later stages
of their career. 67% benefited from these programs in 2023 (vs.
43% in 2022).
Finally, 1,165 new suppliers were assesed in 2023 under
Schneider’s “Vigilance Program” (SSE #17), notably thanks to the
increase of remote Vigilance assessments.
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.
Local Sustainability Commitments
A significant element of the 2021-2025 program is the local
dimensions, which deploys 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 transformation. Close to 200 local programs have
been deployed since 2021.
In 2024, the local programs will be renewed or extended by setting
more ambitious targets, with the aim of increasing local impact
through employee engagement. All local sustainability leaders
were involved in 2023 to prepare for the launch.
Discover Schneider’s local sustainability commitments
on the Empower local communities page on
www.se.com
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2.1 Sustainability for all
2023 score:
6.13/10
vs. 4.91/10 in 2022 and outperforming 6/10
target for the year
Schneider Sustainability Impact
6 Long-term Commitments
11+1 targets for 2021-2025
Baseline(1)
2023 Progress(2)
2025 Target
Climate
1. Grow Schneider Impact revenues(3)
Resources
Trust
2.
3.
4.
5.
6.
7.
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
Strategic suppliers who provide decent work to their
employees
Level of confidence of our employees to report
unethical conduct
2019: 70%
2020: 263M
2020: 0%
2020: 7%
74%
553M
27%
29%
80%
800M
50%
50%
2020: 13%
63%
100%
2022: 1%
21%
2021: 81%
+1pt
100%
+10pts
Equal
8.
Increase gender diversity in hiring (50%), front-line
management (40%) and leadership teams (30%)
2020: 41/23/24
41/28/29
50/40/30
9. Provide access to green electricity to 50M people
2020: 30M
+16.6M
50M
Generations
10. Double hiring opportunities for interns, apprentices
2019: 4,939
x1.52
x2.00
and fresh graduates
11. Train people in energy management
2020: 281,737
578,709
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 2023), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 302). In addition, SSI
#8, SSE #3, SSE #5 and SSE #14 received a “reasonable” assurance level in 2023. Please refer to page 266 for the methodological presentation of each indicator. The
2023 performance is also discussed in more details in each section of this report.
(3) Per Schneider Electric definition and methodology. For the reporting requirements under the European Taxonomy Regulation, please refer to pages 277 to 293.
Read more about the SSI indicators methodology
on pages 266 to 272
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Chapter 2 – Sustainable development
Schneider Sustainability Essentials
6 Long-term Commitments
25 targets for 2021-2025
Baseline(1)
2023 Progress(2)
2025 Target
Climate
1. Decarbonize our operations with Zero-CO2 sites
2.
Substitute relevant offers with SF6-Free medium
voltage technologies
3.
Source electricity from renewables
4.
Improve CO2 efficiency in transportation
Resources
5.
Improve energy efficiency in our sites
6.
Grow our product revenues covered
with Green Premium™
2020: 30
2020: 26%
2020: 80%
2020: 0%
2019: 0%
2020: 77%
7. Switch our corporate vehicle fleet to electric vehicles
2020: 1%
8.
9.
Deploy local biodiversity conservation and
restoration programs in our sites
2020: 0%
Give a second life to waste in
‘Waste-to-Resource’ sites
2020: 120
137
101
60%
88%88%
1.6%
13%
81%81%
24%
66%
150
100%
90%
15%
15%
80%
33%
100%
200
10. Avoid primary resource consumption through
2020: 157,588
311,229
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%
73%
100%
Trust
12. Deploy a ‘Social Excellence’ program through multiple
--
In progress
--
tiers of suppliers(3)
13. Train our employees on Cybersecurity
2020: 90%
97.3%
100%
and Ethics every year
14. Decrease the Medical Incident rate to 0.38 or below
2019: 0.79
15. Reduce total number of safety recalls issued to 0
2020: 25
23
0.51
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
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%
2019: 53%
3,248
3,248
-1.00%-1.00%
0.67%0.67%
61%
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
x1.5
interactions on the Open Talent Market
Generations
22. Support the digital upskilling of our employees
23. Provide access to meaningful career development
programs for employees during later stages
of their career
2020: 41%
2022: 43%
78%
67%
x4
90%
90%
24. Increase our employee engagement level
2020: 69%
Local
25. Increase the number of volunteering days since 2017
2020: 18,469
73%
75%
58,177
58.177
50,000
(1) See note (1) under the SSI table on the left page.
(2) See note (2) under the SSI table on the left page.
(3) SSE #12 “Social Excellence” program is under development.
Read more about the SSE indicators methodology
on pages 272 to 277.
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2.1 Sustainability for all
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T 2.1.3 Contribution to the United Nations Sustainable
O
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 (SSI) and Essentials (SSE) programs contribute to those global goals,
either directly or indirectly, 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 (UNGC), notably with its Chairman being a member of the global Board. Schneider discloses each year
its Communication on Progress, and was one of the 850 participants in the UNGC Early Adopters program in 2022. The following mapping
of the Group contribution by SDG and stakeholder was realized by reviewing all 169 targets and leveraging the SDG Compass tools.
Suppliers
Operations
Customers
Communities
s
n
o
i
t
u
b
i
r
t
n
o
c
G
D
S
y
e
K
SDG
Stakeholders
Schneider’s contribution to SDGs
Suppliers
Communities
Communities
As a responsible employer, manufacturer, and buyer, Schneider
Electric committed to ensuring the well-being of employees
throughout its value chain. Through sustainable procurement, fair
compensation and development opportunities, the Group ensures
all its stakeholders can live fulfilling and thriving lives.
Food is a basic need and a necessity for livelihood. Schneider
contributes to strengthen food security by improving access to
energy in rural areas, through better irrigation, food storage, and
processing.
SSI #9
Key programs
SSI #9; SSI #10;
SSI #11; SSE #20
Operations
Schneider’s holistic view of well-being translates into programs that
support the physical, mental and emotional well-being of its people,
but also across its operations, safeguarding the reliability of the
healthcare sector by powering their facilities.
SSI #6; SSE #12;
SSE #14; SSE #17
Operations
Communities
Learning is a Core Value of Schneider Electric. The Group actively
promotes a mentoring culture, connecting generations together to
help tomorrow’s energy leaders to grow and build a sustainable
future.
SSI #10; SSI #11;
SSE #25
Operations
Schneider Electric believes in equality between all genders. 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
diversity, equity and inclusion benefit all.
SSI #8; SSE #18
Communities
Schneider takes great care in ensuring its operations have no
impact on biodiversity and water quality. The Group protects water
on its sites, with a specific conservation strategy and solutions in
water-stressed areas to limit the impact on local communities.
SSE #6; SSE #11
Operations
Customers
Communities
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.
SSI #1; SSI #2;
SSI #3 SSI #9;
SSE #1 SSE #3;
SSE #5; SSE #6,
SSE #7
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Chapter 2 – Sustainable development
SDG
Stakeholders
Schneider’s contribution to SDGs
For Schneider Electric, protecting workers’ rights, guaranteeing
their dignity and creating work opportunities is essential to enable
all its stakeholders to thrive. Its Decent Work program aims to
improve working conditions for its employees and for workers
across its supply chain.
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 #6; SSI #10;
SSE #12; SSE #14;
SSE #17; SSE #18;
SSE #20; SSE #22;
SSE #23
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.
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 provide access to sustainable energy to all,
turning our global commitments into local realities.
SSI #1; SSI #12;
SSE #1; SSE #4;
SSE #9
Schneider Electric considers that circularity is key for sustainability.
Using fewer resources and producing higher-quality products is
the ideal combination to ensure safety for employees, consumers,
and the environment.
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. Its strategy focuses on acting for climate
protection, preserving resources, and maintaining ethical practices
to fight for the planet.
SSI #2; SSI #3;
SSE #1; SSE #3;
SSE #4
Resources are essential to our business; preserving them not only
makes 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.
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.
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.
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.
SSI #3; SSI #6;
SSI #11; SSI #12;
SSE #2; SSE #11;
SSE #12; SSE #17;
SSE #24; SSE #25
Suppliers
Operations
Operations
Customers
Suppliers
Operations
Customers
Suppliers
Operations
Customers
Suppliers
Customers
Suppliers
Customers
Suppliers
Operations
Customers
Communities
Suppliers
Operations
Customers
Communities
Consult Schneider Electric’s commitments to SDGs on
the Sustainability page on www.se.com
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O
Schneider Electric engages in open and continuous dialogue with each of its stakeholders. In particular, the Sustainable Development
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, new improvement plans, and during the design
of the SSI programs, which takes place every three to five years.
Stakeholder
How we create value
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 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.
Distributors
and end-
customers
To enable a more sustainable future we ensure our customers are
provided 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 deliver strong customer experience.
Financial
partners
Our more than 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,
offering our financial partners attractive returns.
Institutions
and technical
bodies
The Group is involved with various local and international organizations
supporting sustainability, working with key players from all levels of
society. Schneider Electric makes it its priority to maintain a transparent
and 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 investments supporting high social and environmental
impact, the Group hopes to have a positive impact on its ecosystem.
Key achievements
27%
CO2 emissions
reduction from our
top 1,000 suppliers’
operations
82%
of our employees are
confident to report
unethical behavior
553M
tonnes of CO2
emissions saved and
avoided for our
customers
74%
Impact revenues
300+
associations and
organizations we
take part in
worldwide
200+
local commitments
that positively impact
communities
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Chapter 2 – Sustainable development
The main identified risks, opportunities, and impacts are quantified
based 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 337 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, the Internal Audit team, the Group Risk
Management function and presented to Governance, Nominations
& Sustainability Committee and to the Function Committee at least
every 3 years, in coherence with the SSI calendar.
Six main risk categories were identified in 2023 and are presented
in detail in the following pages:
• Corporate governance
• Ethical business conduct
• Cybersecurity and data privacy
• Sustainable supply chain
• Product, projects, system quality, and offer reliability
• Responsible workplace
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 transformative programs
under the 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
described above, as well as best practice benchmarks.
Zoom on the latest materiality analysis
In 2020, Schneider Electric built its third materiality matrix by
consulting 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 change is the main trend identified externally and
•
internally. It includes the move towards energy transition and
electrification, on which external stakeholders expect Schneider
Electric to take the lead.
Inclusion and deploying a just transition benefits all equally,
covering the Company’s extended responsibility to its
ecosystem, in particular in the supply chain, to ensure the
low-carbon transition. Stakeholders also mentioned the growing
expectations in providing ethical and sustainable products.
2.1.5 Materiality assessment
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 and 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 Sustainability team, the
Strategy team, the Group Risk Management function and the Duty
of Vigilance Committee play a key role. Other topic-specific
committees contribute to the assessments and oversee the Group’s
strategy on those issues, such as the Carbon Committee, Human
Resources Committee, and 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 SSI 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 business activity,
its image, its financial performance, its results, or the
achievement of its objectives. For more details about the
Enterprise Risk Management (ERM) please consult Chapter 3,
pages 326 to 357.
• The Vigilance risks matrix, which is presented and described in
chapter 2.2.2 “Vigilance Plan” on page 117, 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 are conducted regularly,
dedicated among others to Ethics & Compliance (including Anti-
Corruption and Conflicts of Interest), Climate, Water and
Biodiversity, supplier, and cybersecurity risks.
Internal tools are complemented with external inputs, such as:
• Regulatory frameworks: for instance, the key topics listed under
Article R. 225-105 of the French Commercial Code (Extra-
Financial Performance Declaration), the European Taxonomy
Regulation or European Sustainability Reporting Standards
(ESRS);
International Finance Corporation’s (IFC) Performance
Standards on Environmental and Social Sustainability;
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 Taskforce on Nature-related
Financial Disclosures (TNFD), and various other frameworks
(SASB, GRI, etc.).
The assessment covers the entire value chain of the Group and
its stakeholders: suppliers and subcontractors, financial
transactions, customers, as well as Schneider Electric’s scope –
on cross-functional, environmental, social, and societal topics,
including human rights and anti-corruption.
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• 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 of it, the potential opportunities and dangers
of Artificial Intelligence (AI), as well as people’s well-being and
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.
Schneider Electric 2020 Materiality matrix
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, and corruption).
− Key transformational topics – those which have the potential
to transform markets and differentiate Schneider Electric
from others (e.g., climate change adaptation and mitigation,
the circular economy, and human engagement).
4. The SSI is a renowned and transformative program which is a
source of pride internally, with external recognition, but which
needs a new lease of life: simplified, with increased internal
buy-in and awareness.
3.5
3.0
2.5
l
s
r
e
d
o
h
e
k
a
t
s
l
a
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t
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E
Ensuring exemplary
tax practices
2.0
1.5
1.5
Becoming a key player for a net zero carbon built environment*
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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Schneider Electric Universal Registration Document 2023 | www.se.comBecoming a leader of the circular economy and rethinking our resource footprintBeing a role model in the effective reduction Decarbonizing our supply chain Guaranteeing cybersecurity of products and solutionsGuaranteeing a 100% responsible offerGuaranteeing quality and safety of productsActively contributing to the rise of the industry 4.0Guaranteeing optimalworking health andsafety conditionsfor our employeesDeveloping regionalvalue chainsAiming for zero corruption at all levels, in the whole value chainPromoting diversity and inclusion in all our professions, countries and operationsAdvocating an all electric and all digital worldFacilitating renewable energy productionEnsuring an expert and representative governance for long term sustainable valueBeing exemplary in the managementof our customers and partners dataEnsuring customer due diligence Becoming a key playerin electric mobilityAiming for environmental excellence at our sitesEnsuring our employees well-being in and out of the workplaceSupporting our employees in the transformation of their professionBeing a recognized access to energy playerEnsuring an exemplary influence policyContributing tothe fight againstenergy povertyEnsuring fair pay forour employeesEnsuring digital sobrietyContributing to training and education in energy & digital professions Ensuring social dialogue Limiting global impact on biodiversity,in our whole value chainof our own CO2 emissionsGuaranteeing high social and environmental standards for subcontractors and suppliers
Chapter 2 – Sustainable development
In 2023, Schneider Electric started to perform its double materiality
assessment in line with the European Sustainability Reporting
Standards (ESRS) as a first step to comply with the Corporate
Sustainability Reporting Directive (CSRD). This assessment
involves the collaboration of various teams, especially the
Sustainability team, the Group Risk Management function, and the
Duty of Vigilance Committee.
The double materiality assessment leverages various internal
analyses and external inputs, including stakeholders’ consultations,
to determine the materiality of relevant sustainability topics for the
Group, both from a financial and/or impact perspective. Material
risks, impacts, and opportunities across the value chain will be
validated by the Company’s highest governance bodies. The
results of this assessment will be disclosed in Schneider’s
Universal Registration Document 2024.
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. For more details about risk management at Schneider Electric, see Chapter 3 on page 324.
Risk description and impact
Ethical business conduct
Competition law
Non-compliance with
competition laws and
regulations could result in:
• Fines
• Brand and reputational
impact
• Other consequences
Policies and systems
Main actions and 2023 performance
Opportunity created
Trust Charter
Competition Law Policy
• New Competition Law Guidelines
and Processes issued
• Competition law e-learnings
Increase trust among our
customers, partners and
larger community
Competition Law Guidelines
issued
Channel Contract Review and
Approval Policy
Conflict of Interest Policy
E-learnings
Trust Line whistleblowing system
• Commercial Compliance Program
• Refreshed channel contract
templates
• SSI #7: 82% achieved in 2023
(stable since 2022)
Increase business
opportunities
Increase employee risk
awareness
Corruption and bribery
Corruption links to B2B and
project business may occur
through third parties’ activities
(partners, suppliers,
intermediaries, companies to
be acquired, public officials,
public-private partnerships,
and extractive industries) and
cause various impacts:
• Legal proceedings,
prosecutions, and sanctions
• Subverting local social
interests and/or harming
local competitors
•
• Debarment from public
tenders or public funds
Increasing costs for
companies, and further
down the chain, their
customers
• Public relations backlash
Trust Charter
Anti-Corruption Policy
Whistleblowing Policy
Case Management &
Investigation Policy
Conflict of Interest Policy
Business Agents Policy
Third Party Due Diligence Policy
Gifts & Hospitality Policy
Philanthropy Policy
Sponsorship Policy
Specific Marketing guidlines
Specific M&A guidelines
Dedicated Trust Standards
Risk mapping dedicated to
“Ethics & Compliance” risks
• New and updated policies
• Anti-corruption e-learning and ad
hoc anti-corruption learnings
• Communication campaigns
• Third-party management
processes enhancement
• Anti-corruption controls
enhancement
• Dedicated Key Internal Controls
and central monitoring process
• SSI #7: 82% achieved in 2023,
aiming for 10 pts increase by
2025
• SSE #13: 97% of employees
trained on Cybersecurity and
Ethics in 2023 (vs. 96% in 2022)
Increase employee
satisfaction
Improve workplace
culture
Strengthen legal
compliance and public
reputation
Reinforce customer,
partner, supplier, and
local communities’
engagement and loyalty
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Risk description and impact
Export Controls
Non-compliance with export
controls and sanctions, lack
of third-party screening,
could result in:
• Criminal penalties and fines
• Brand and reputational
impact
• Business disruptions
• Denial of export privileges
Policies and systems
Main actions and 2023 performance
Opportunity created
Export Control Policy
Export Control Directive
• Export Control program
• Export Control Center of Excellence
Building trust with
customers and partners
Global Export Control Program
• Global Export Control awareness
(CoE) transformation project
and training
• Global Export Control Network of
806 Single Point of Contact
(SPOC) sharing standards and
best practices
• About 2,250 hours of training
delivered to SPOC Network
• 3rd Party Screening
• Created a Global regulation
change advisory board (GCAB)
created to review impact of new
and updated global regulations,
manage change, internal
communications, and training
• SSI 2023 performance reached
6.13/10, above the 6.00/10 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 17% vs.
2021
Ensure compliance to
global export controls
and sanctions
Transparency and
traceability in the supply
chain, reducing the risk
of disruptions and
enabling smoother
operations
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 and
transformation
Corporate governance
Sustainability Commitments and Regulatory Requirements
Failure to deliver on
Internal governance in place
long-term public
from Board to operational levels
sustainability commitments
to monitor performance and
progress, ensure compliance
such as the SSI
with regulatory requirements,
and the Group Net-Zero
commitment, as well as failure
and oversee Sustainability risks
to comply with regulatory
through a global Sustainability
requirements, may result in:
Committee
• Brand and reputational
impact
• Distrust from stakeholders
and loss of attractivity to
investors, customers, or new
talents
SSI performance embedded in
managers’ and leaders’
short-term incentives
ESG performance in four
external ratings linked to
attribution of performance
shares for leaders (Schneider
Sustainability External and
Relative Index, or SSERI)
M&A and divestment
assessments
Risk mitigation systems
Trust Standards
Integration Task Framework
• Trust Standards and Integration
plan status reviewed twice a year
in Function Committee
• Compliance with applicable
Trust Standards across less
than 3 years majority owned
acquisitions: 45% in 2023
Trust Standards as
opportunity for business
enabler and integration
standardization
M&A and Integration
Insufficient due diligence
when acquiring new
companies and implementing
controls post-acquisition
could result in:
• Suboptimal acquisition
strategies or flawed
selection of acquisition
targets, overestimating
an acquisition’s future
performance or potential,
revenue or cost synergies
with Schneider Electric
• Post-M&A risks may include
failure in:
− Acquisitions’ strategic
intent realization
− Acquisitions’ value
creation
− Acquisitions’ integration
process
− Divestiture strategy
execution
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Chapter 2 – Sustainable development
Risk description and impact
Cybersecurity and data privacy
Cybersecurity
Risk of cybersecurity on
Schneider Electric
infrastructure and its digital
ecosystem (including
connected products used as
a gateway to attack Groups’
customers and partners) may
result in a risk of a malicious
exploitation or a risk of intrusion
into the infrastructures of
Schneider Electric production
and distribution centers, the
potential consequences of
which are:
•
Impacts on productivity,
data privacy, and operations
• Financial cost, and loss of
confidence from
stakeholders
Policies and systems
Main actions and 2023 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
• 220+ 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
Product and System Security
Policy
Source Code Security Policy
Cyber Badge Principles
Third-Party Security Principles
Malicious Software Policy
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
• For customer-facing employees:
deployment of Cyber Badges
across 20,000+ employees
(compliance monitoring)
• For customer-facing suppliers:
Cybersecurity and Privacy Terms
& Conditions developed for all
suppliers
• OT network, monitoring and threat
•
detection, incident response
process
IT/OT network segmentation
secured industrial Personal
Computers (PCs), secure remote
access, backup restore for PCs,
and Programmable Logic
Controllers (PLC)
• SSE #13: 97% of employees
trained on Cybersecurity and
Ethics in 2023 (vs. 96% in 2022
• SSE #16: top 25% in external
ratings for Cybersecurity
performance achieved
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Risk description and impact
Compliance
Non-compliance
with data laws could result in:
• Endangerment,
modification, and exfiltration
of data from Schneider
Electric’s data systems
• Potential fines
• Brand and reputational
impact
Policies and systems
Main actions and 2023 performance
Opportunity created
Trust Charter
Global Data Privacy Policy
Data Classification Policy
Global Data Retention and
Disposal Policy
Record Creation
Backup and Recovery Policy
Log Management & Monitoring
Policy
Acceptable Use of Assets Policy
Digital Certification Policy
• 30+ Data Protection Officers and
Correspondents at country level
• Data Risk Resource scale up
• Data Risk Maturity assessment
• Mandatory Cybersecurity & Data
Privacy annual training sessions
• 40+ Data Privacy Champions
appointed globally
• Annual review of all policies
• Data Retention
• Sensitivity label feature enabled
on Microsoft Office 365 Suite for
all employees
Increase trust among our
customers, partners, and
larger community
Prove alignment to
regulations and devotion
to ESG requirements
Data Management
Inappropriate Data
Management could result in:
• Breaches in data security
and privacy, leading to
reputational damage, legal
consequences, and
financial losses
• Non-compliance with data
protection regulations
leading to regulatory
penalties and compliance
issues
•
Ineffective decision-making
• Hinder innovation and digital
transformation
Sustainable Supply Chain
Supply Chain Disruption
Lack of Supply Chain
flexibility and resilience due
to increase of climate-related
risks as well as the evolution of
international trade and market
barriers may result in:
• Delays in production and
•
delivery, incurring important
costs
Impact on customer
experience if delays are
too long
Data Classification Policy
• 20+ Data Risk Managers and
Global Data Security Policy
Global Data Privacy Policy
Schneider Electric Data Charter
Global Data Retention and
Disposal Policy
Data Security Leaders
• 30+ Data Officers globally Data
Classification Enforcement
• Data Classification Education
• Data Risk Resource scale up
• Data Risk Maturity assessment
Increase trust with
customers and partners
Maintain excellence and
drive business
performance
Drive innovation
Improve operational
efficiency
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
•
•
Introduction of CO2 simulations to
compare alternative supply chain
strategies and footprints, and
network models
Implementation of deliberate
redundancies of both dual
factories for same products, and
dual suppliers (“Power of Two”)
for all critical parts and
components
Strong local presence
Deepening Strategic
Supplier Relationship
with greater C-Level
engagement
Shorter lead times and
low logistics costs and
CO2 from deliveries
Improving component
lifecycle visibility and
taking the opportunity to
standardize electronic
components
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Chapter 2 – Sustainable development
Main actions and 2023 performance
Opportunity created
Growing demand for
green, low-carbon
product and services
Increasing interest in
decarbonization and
digitization
Accelerate the adoption
of circular business
models and
technological solutions
Increased cooperation
with suppliers
Increased trust with our
customers
• Performed a forward-looking
climate risk and vulnerability
assessment
• Scenario-based analysis of direct
and indirect climate physical and
transition risks
• SSI #3: 27% CO2 emissions
reduction from top 1,000
suppliers operations
• SSI #4: 29% of green material
content in our products
• Suppliers assessed through
EcoVadis / ISO 26000 evaluation.
Score 2023: 61.9 (vs. 60.3 in
2022)
• Deployed a full business
continuity plan process
• On-site supplier audits with
Responsible Business Alliance
(RBA) protocol
ISO 26000 assessment
•
• SSI #6: 21% of strategic suppliers
conform to Schneider’s Decent
Work requirements (vs. 1% in
2022)
‘Social Excellence’ program
through multiple tiers of suppliers
in progress (SSE #12)
• SSE #17: 3,248 suppliers
•
assessed under our ‘Vigilance
Program’ since 2018 (+1,165 vs.
2022)
Policies and systems
Risk description and impact
Sustainable value chain transition failure
Sustainable value chain
transition failure due to
climate transition and
adaptation failure over the
value chain, may threaten
business continuity:
Logistic nodes monitoring
system
Third-party critical sites
assessment
Power of two in Manufacturing
EcoDesign resource parameters
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
• Access to critical raw
materials
• Transportation and
distribution disruption
• Damage to assets
• Logistic bottlenecks
Human Rights
Violations of human rights
and fundamental freedoms,
in particular in supply chain
and off-site projects, linked to
the 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
Resources
Scarcity of resources
used in the products or in
their manufacturing, due to
volatile prices and availability of
materials and resources
could lead to:
• Cost increase of primary
materials and energy
• Disruption of supply
Supply chain resiliency
• SSI #4: 27% green material
Raw material productivity and
hedging strategy
Project risk controversy
management
Water stewardship in water-
stressed areas
Proactive product returns and
take-back policies for a range of
offers
content in our products (vs. 18%
in 2022)
• SSI #5: 63% of our primary and
secondary packaging is free from
single-use plastic and uses
recycled cardboard (vs. 45% in
2022)
• SSE #11: 73% of sites in water-
stressed areas have a water
conservation strategy and related
action plan (vs. 48% in 2022)
• Resilience management :
short-term by business impact
prioritization; medium-term by
de-risking portfolio; long-term
through re-design
Differentiation through
greater environmental
performance
Access to demanding
green markets
Superior resiliency to
face potential decrease
in availability of virgin
raw materials
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2.1 Sustainability for all
Policies and systems
Risk description and impact
Product, project, system quality and offer reliability
Deficient product safety
Product malfunctions or
failures could result in:
All our sites are certified ISO
9001
New Quality Strategy
Implemented Advanced Product
Quality Planning
Deploy 10 Fundamentals of
design assurance, liability,
training, and implementation
Main actions and 2023 performance
Opportunity created
Work in collaboration
with customers
Challenging innovation
and research &
development (R&D) to
seek perpetual
improvement
Increase brand
reputation and value
• 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: 23 safety units recalled
in 2023
• 98% reduction in the number of
parts affected by recalls
compared to 2022
Increase confidence of
current and prospective
employees.
Continuous Safety
improvement
Improved talent
attractivity and retention
Safety strategy
• SSE #14: 0.51 Medical Incident
rate (vs. 0.58 in 2022)
Global safety directives
Serious Incident Investigation
Process (SIIP)
GlobES reporting, Global Safety
Alerts, EHS assessment
Global Family Leave Policy
Career development and
learning
Flexibility@Work hybrid policy
Well-being practices and
training
• 99% of countries deployed the
new Flexibility@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 97% of employees
(vs. 98% in 2022), and by 76% of
new hires
•
• 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
Well-being and mental health
Lack of focus on well-being
and mental health, by not
providing ideal working
conditions may lead to:
• Absenteeism
• Cost of turnover
• Disengagement
• Poor company image in the
marketplace
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Risk description and impact
Talent acquisition and retention
Talents and skills attrition
linked to the failure to attract,
develop and retain the best
talent on the market, especially
for critical skills, leads to:
• Cost of recruiting and
onboarding
• Gaps in critical skills
• Succession pipeline for
critical expert and
leadership positions
• Less positive brand
perception by talent pool
Chapter 2 – Sustainable development
Policies and systems
Main actions and 2023 performance
Opportunity created
Recognized as an
employer of choice and
market leader for talent
development for
everyone, everywhere,
leading to greater talent
attractivity
• Global Career Days in over 100
countries and >100 events
• SSE #21: x1.55 employee-driven
development interactions in 2023
vs 2020 on the Open Talent
Market platform
• SSE #22: 78% performance in
digital upskilling through the
Digital Citizenship program
• SSE # 23: 67% of employees
having access to meaningful
career development programs
during later stages of their career
(vs. 43% in 2022)
• Launched global candidate
feedback tool to track recruitment
experience
• SSI #10: Created more
opportunities by hiring x1.52 early
career talents vs. 2019
• Digital Boost was completed by
almost 50K employees
• Functional and digital skills
program (CoMET) deployed
(>40K employees)
New talent acquisition platform
to simplify the application
process and track the candidate
journey by stages
Annual performance and
development approach, with
fair, transparent and competitive
rewards and development
A robust talent management
system to review annually the
development plans for all
employees, identify key talent
such as experts and high
potentials, prepare key
successions and developments
Grow the early talent pipeline
through global program and
country-specific initiatives
Learning and Development
programs for employees at
different stages of their
professional career and specific
talent segments and critical
skills
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
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2.1 Sustainability for all
R
T 2.1.7 Integrated and transverse governance of
O
sustainable development
At Schneider Electric, sustainability is integrated in the processes and bodies that design and execute the Group’s strategy at Board,
management, 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 & CSRD Committee. In
2023, this Committee was renamed Governance, Nominations &
Sustainability Committee. It meets at the initiative of its Chairperson
or at the request of the Chairperson of the Board or CEO. The
agenda is drawn up by the Chairperson, after consultation with the
Chairperson of the Board. The Committee meets at least three
times a year (6 meetings in 2023). 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
Governance, Nominations & Sustainability
Committee are provided in Chapter 4, page 390.
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 2023, this committee met 7 times. The Committee may seek
advice from any person it feels will help it with its work.
Coordination and monitoring
The Group Sustainability department
The Sustainability department was created in 2002. 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;
• Organize and drive the work of Global Sustainability Committee
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 SSI, and
external ESG reporting;
• Sustainability Transformation, in particular driving the
ENGAGE and INVENT programs.
Territory Sustainability Leaders (TSL)
In 2021, Schneider’s Country and Zone Presidents worldwide made
200 local commitments that impact their communities, in line with
the Group’s 6 long-term commitments. To manage these programs
and to better answer the needs of local stakeholders, a new internal
sustainability governance model was created with a network of +60
TSL. This new network meets once a month 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
Main responsibilities:
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 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.
• Decides the sustainability agenda;
• Sounding board for Functions;
• Escalation body for highly transversal programs, such as the
Schneider Sustainability Impact (SSI);
• Informs the Board Governance, Nominations & Sustainability
Committee.
The Stakeholders Committee
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 Peter Herweck, CEO of Schneider Electric,
while Agustin Lopez Diaz, the Chief Sustainability and Customer &
Quality Officer of Schneider Electric, acts as its secretary.
More details about the Stakeholder Committee are
provided on page 35.
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Chapter 2 – Sustainable development
Sustainability governance at Schneider Electric
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Board of Directors
Executive Committee
Stakeholders Committee
Governance, Nominations &
Sustainability Committee
Function Committee
• Approve the sustainability
strategy and SSI
• Approve LTIP and STIP
for the 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 Global Sustainability Committee
• Coordinates and monitors the sustainability strategy and performance
• Manage innovation projects
• Lead the relationships between internal and external stakeholders
360-degree ESG
implementation
360-degree ESG
vision
Network and expert
committees
Businesses, operations,
and corporate functions
•
Implement strategy and
Company programs
and policies
• Execute sustainability
objectives (SSI, variable
compensation)
• Support awareness
•
Innovate
SSI Pilots and 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
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.
Invest in Sustainability talents
Engage Employees in Sustainability
To drive its Sustainability strategy, Schneider Electric has been
investing for the past years in the development of its talents across
ESG fields.
While its talent pool continues to flourish, the Group redefined in
2023 its organization strategy to best harness its collective
potential, resulting in the launch of the INVENT program and a
Sustainability Academy. This latter acts as a key enabler to deploy
the INVENT program and push the needle further on talent
management and allow continuous growth across the organization.
In 2022, the Group launched the ENGAGE initiative, with the
ambition to make every employee an advocate for sustainability,
thereby accelerating the Group’s transformation and contribution to
the UN SDGs.
In complement, the Sustainability School was launched the same
year to help employees and partners understand how they can act
personally and professionally on sustainability through different
learning paths covering a large range of environmental and social
topics, including challenges of our decade and Schneider’s
detailed Sustainability strategy.
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Chapter 2 – Sustainable development
2.1 Sustainability for all
The ENGAGE program builds on other initiatives already underway:
Human rights and corporate citizenship
• 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 employees since 2012
to participate in volunteering missions through partnerships with
NGOs from all around the world.
Internal governance model and policies
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 108.
Discover Schneider’s Trust Charter on www.se.com
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 136). 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 and well-being, safety,
security and travel, employee engagement, family leave, anti-
harassment, recruiting, international mobility, training, human
capital development, talent identification, total remuneration, social
benefits, and COVID-19. These apply to the Group and are
accompanied by global processes.
Ethical business conduct
In addition to the Trust Charter, 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.
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Chapter 2 – Sustainable development
Products 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
lifecycle; from creation to supply, manufacturing, and 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.
2.1.8 Global and local external partnerships 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. The Group confirms its commitment to and participation in discussions on
challenges related to climate change, social equity and ethics. The main memberships are presented in the following table.
Organization
Description
Key actions with Schneider
Access to Energy
Alliance for rural
electrification
Solar Impulse
Foundation
Alliance for rural electrification advocates
for a decentralized, sustainable and
inexpensive renewable energy sector that
generates local employment and inclusive
economic growth.
The Foundation relies on innovation to
propose solutions helping decision makers
harness the economic opportunities of the
ecological transition whilst reducing their
environmental footprint.
In 2023, Schneider strengthened its sponsorship and took part
in several events such as the Energy Access Investment Forum
2023 (Abidjan), panels, webinars and newsletters, and
collaborated on a position paper about Microgrid in Africa.
Schneider 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. In 2023, they partner to
host the exhibition ‘1000+ Solutions for Cities’ in Schneider’s
Grenoble site “Intencity”. The Group also works with the
Foundation for its products certification.
All digital topics
Information
Technology Industry
(ITI) Council
ITI Council is the trusted leader of innovation
policy that drives sustainable, ethical, and
equitable growth and opportunity for all.
Information
Technology and
Innovation
Foundation (ITIF)
ITIF is a non profit think tank whose mission
is to formulate, evaluate, and promote policy
solutions that accelerate innovation and
boost productivity to foster growth,
opportunity, and progress.
Circular Economy and product environmental performance
Through ITI, Schneider Electric contributes to provide inputs
and influence national governments about global digital policy
and regulations. ITI, in coordination with its members, submit
feedback reflecting their input on various topics such as
digitization, cybersecurity, data privacy, IT supply chains, and
public procurement.
In 2023, Scheider Electric collaborated closely with ITIF on
various topics such as clean energy and data education for
policy makers.
Ellen MacArthur
Foundation
Membership
Product
Environmental
Profile (PEP)
ecopassport
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.
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.
PEP ecopassport® program 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.
Schneider is a founder of the association, chairing the Steering
Committee and Technical committee to ensure the rules to
perform PEP are compliant with international standards and use
in a consistent manner. In 2023, Schneider supported PEP
methodology through the Ecoplatform association and
participated to the Lifecycle Management Conference, among
other events. In 2023, 80.6% of Schneider’s products were
covered by PEP-Green Premium™.
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2.1 Sustainability for all
Organization
Description
Key actions with Schneider
Climate
Energy Transition
Commission
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.
Entreprises pour
l’Environnement
(EpE)
French association that brings together
some sixty major French and international
companies committed to lead their
own and society’s ecological transition.
Cybersecurity and Data
ISA Global
Cybersecurity
Alliance (ISAGCA)
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.
Confederation of
Europe Data
Protection
Organizations
(CEDPO)
CEDPO contributes to promote the role of
data protection officer, provide advice on
balanced, workable and effective data
protection, and contribute to better
harmonization of data protection law and
practice in the EU/EEA.
Diversity, Equity and Inclusion
Valuable 500
The Valuable 500 is a worldwide corporate
alliance of 500 CEOs and their organizations
that collaborates on innovations for disability
inclusion.
International Labour
Organization Global
Business and
Disability Network
(ILO GBDN)
The ILO GBDN is a platform dedicated to
ensuring that the employment policies and
practices of companies of all types are
inclusive of people with disabilities
worldwide.
Education
HEC Paris -
Movement for Social
and Business
impact
The goal of HEC Specialization “Movement
for Social and Business” is to achieve a
more inclusive economy, in which
companies seek to maximize their social
impact alongside their economic
performance.
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. The Group
contributed to the publication of several reports, notably on
energy productivity, and the supply chain in the new energy
economy. It also organized expert workshops and participated
in major events such as the COP 2023.
Schneider worked closely with EpE in 2023, notably on several
publications such as the report “2030 Milestone for the
Ecological Transition”, a report on Climate dialogue with
stakeholders. and a joint tribune published ahead of the COP28
asking to accelerate the Climate transition.
In 2023, the ISAGCA and Schneider worked with the
Cybersecurity and Infrastructure Security Agency (CISA) to map
ISA/IEC 62443 to CISA Cross-Sector Cybersecurity
Performance Goals. Through ISA/CEI, Schneider contributed to
several publications and to the development of standards
(primarily through ISA/IEC and aided by ISA GCA), and
defended ISA/IEC 62443 cyber standard as the reference for
OT cybersecurity.
Schneider works closely with CEDPO, through working groups,
contributing to the writing of documents such as “Ten questions
at the intersection of AI/ML and data protection”, and by
commenting on EU privacy laws.
Schneider Electric is committed to ensure that disability
inclusion is on its senior leadership agenda, and that its
commitment is shared with the business and the world. The
Group is committed to reporting on the following 5 criteria:
Workforce representation, objectives, training, ERNs, Digital
accessibility.
Schneider signed the ILO Charter on Business & Disability and
has committed to applying these principles in its organization.
In November 2023, the Group participated in a panel discussion
during the ILO GBDN Summit “No social and environmental
sustainability without disability inclusion”. With a view to
continuous improvement, Schneider also benefits from
peer-to-peer sharing on a quarterly basis.
In 2023, HEC and Schneider have worked very actively
together. They co-founded « The Impact Company Lab », a new
experimentation platform that harnesses the power of
companies and the expertise of HEC Paris researchers to
amplify the impact of business leaders’ just transition agendas.
Furthermore, Schneider has engaged with climate
entrepreneurs/innovators, as part of the Creative Disruption
Lab, to support and promote technological start-ups with high
growth potential.
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Chapter 2 – Sustainable development
Organization
Description
Key actions with Schneider
Energy Efficiency/Electric mobility/Digital Renewables
European Alliance
to save Energy
(EU-ASE)
This coalition actively advocates to advance
the European energy efficiency agenda, in
particular through more stringent legislation
on energy efficiency and buildings.
EU-ASE 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 aims to turn the energy
transition into an opportunity for
reindustrialization, by combining the efforts
of the Government, industrial companies,
and trade union players under a common
roadmap.
In 2023, Schneider participated in the definition of the new
organization’s roadmap (2024-2027) and led the “I decarbonize”
initiative, which consists in decarbonizing French industry and
offer decarbonation solutions with a significant local content.
Ethics
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.
Schneider is actively involved in defining the challenges of
Ethics and Compliance in France, and to exchange with its
peers to better meet those challenges. In 2023, Schneider
focused on ethical challenges in artificial intelligence, internal
speaking and inquiry, gift management and hospitality.
Mouvement des
Entreprises de
France (MEDEF)
MEDEF is the leading employers’
association acting in the interests of
businesses. It takes part in social
negotiations and intervenes in tax and
regulatory decisions affecting companies.
Schneider engages to establish private sector’s position in all
matters related to Ethics & Compliance within the dedicated
Committee, particularly with regard to laws and regulations on
anticorruption, Human rights and whistleblowing, at French and
European levels.
Human rights
Entreprises pour les
droits de l’Homme
(EDH)
UN Global Compact
(UNGC)
EDH aims to promote the understanding
and integration of human rights within
companies through the deployment of
vigilance approaches.
In 2023, Schneider worked in collaboration with the association
and participated in the organization of several events such as
workshops, learning and awareness sessions about Human
rights.
Global Compact is a voluntary initiative
based on CEO commitments to implement
universal sustainability principles and to
take steps to support UN goals.
Schneider is Patron of the UNGC Labour and Decent Work
program as well as Sponsor on Climate. In September 2023,
Schneider committed to take action as an early mover of the
UNGC Forward Faster initiative in the area of the living wage.
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.
OPC and Schneider continued to work together in 2023, through
several technical working groups 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 2023, Schneider supported FDT Group technical work in
various project groups and contributed to the maintenance and
evolution of the international industry standard (“FDT - Field
Device Technology”, IEC 62453 / ISA 103).
FieldComm Group
FieldComm Group is in charge of industrial
protocols implemented in Process
Automation Systems (HART, FieldBus, FDI).
FieldComm and Schneider have been working together in 2023
to reduce gap between Process automation and Factory
Automation networks.
Philanthropy
Alliance pour le
Mécénat de
compétences
Coalition of French companies involved in
volunteering of big companies employees.
The group has participated in the creation of a multi-enterprise
impact study about the social impact of skills-based
sponsorship.
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2.1 Sustainability for all
Organization
Description
Key actions with Schneider
Smart Grids and Sustainable Cities
T&D Europe
T&D Europe is a grid technology providers
association. It represents electricity
transmission and distribution equipment
and services providers in Europe.
T&D and Schneider have published a joint report on IEC 62443
adoption and promoted its representativeness in sectorial
regulations.
Smart Energy
Europe (smartEn)
SmartEn integrates consumer-driven clean
energy transition solutions. It aims to create
opportunities for companies to integrate
increasingly renewable energy system.
Schneider and SmartEn have worked hand in hand to publish
different position papers on renawable energy systems
efficiency and other related topics.
Sustainable governance and crossfunctional topics
World Business
Council for
Sustainable
Development
(WBCSD)
World Economic
Forum (WEF)
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 Equity & Human
Rights; PACT (Partnership for Carbon transparency) on carbon
accounting and avoided CO2 emissions; and SOS1.5, a
cross-sectoral framework designed to assist businesses in
modernizing their processes and preparing for a 1.5°C
scenario.
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.
Schneider worked jointly with the WEF on various subjects such
as transforming energy demand, through public-private
collaboration and presenting use cases of Schneider buildings,
Net Zero Industry, Zero Carbon Project, Smart Factories, via the
WEF Global Lighthouse Network. Schneider also collaborated
with peers on the AI Governance Alliance launched in 2023, the
Urban Decarbonization roadmaps of San Diego and the Global
Parity Alliance and the Good Work Alliance.
GIMELEC
GIMELEC is a trade association grouping
digital electronics companies in France
promoting efficiency and electrification,
supported by digitization. It has 4 Market’s
Committees: Smart Building, Industry 4.0,
Smart Grid & Infrastructures, Datacenters.
Schneider and GIMELEC work hand in hand on different topics
such as Energy Efficiency, Decarbonization, Digitization,
Flexibility, Circular Economy, SF6-free, and 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.
Schneider has been working closely with the NEMA to update
the National Electric Code in the US. In 2023, 8 US States
adopted this new Electric Code standard (NEC2023).
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Chapter 2 – Sustainable development
2.1.9 Schneider Electric contribution to standardization
With many experts actively participating in international and
national standardization bodies, Schneider Electric is making a
decisive contribution to the creation and distribution of standards
that ensure the safety and reliability of electric facilities and
equipment. These standards address environmental impacts
throughout lifecycles 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.
At National level
Schneider’s experts are involved in National Committees in the 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.
European Commission DG Grow (Internal Market) decided to
create a High-Level Forum for Standardisation to be launched in
January 2024. Schneider Electric, through T&D Europe (European
Association of Transmission & Distribution manufacturers) will
represent the European Power System stakeholders, together with
Grid Operators, Manufacturers, national Electricty Associations.
The workstream is dedicated to propose strategic topics and
standardisation moves, to better activate Energy Transition across
Europe through Digitalization, Green and Resilience.
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, and solar (photovoltaic)
electricity systems.
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 through specific joint technical
committees and joint working groups.
At international level
IEC – International Electrotechnical Commission
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.
Schneider’s 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).
•
•
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2.1 Sustainability for all
Circular economy and product
environmental performance
Standardization to accelerate
environmental transformation
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.
They are developing standards around:
• Terminology and catalogue data;
• Product Category Rules for Life Cycle Assessment (LCA)
dedicated to electrotechnical products;
• Product Specific Rules for high and low voltage equipment,
low voltage switchgear and controlgear, and power electronics;
• Extension of Product Specific Rules and Environmental
conscious design to cover material efficiency or digital format;
• Quantification of greenhouse gas (GHG) 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,
repairability, reusability, recyclability, and ability to be
remanufactured, which fall within the scope of the EcoDesign
Directive and the new Ecodesign for Sustainable Products
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.
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. At the same time, Schneider Electric is
actively present in ACTAD (Advisory Committee for Transmission
and Distribution) to ensure electricity and environment are closely
considered.
• Schneider is particularly heavily involved in the working groups
on sustainability (chairing environment and circular economy
groups, participating in working groups in product technical
committees (TC) dealing with environmental aspects (IEC
TC121, IEC TC17, CLC TC22X) and in the work on the rational
use of energy.
• The Group 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).
• The Group is the secretary of IEC SC23K on Energy Efficiency
•
Products, Systems and Solutions.
In 2018, Schneider 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.
• The Group chairs ISO/TC 184 (Automation systems and
integration).
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).
• The Group 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).
• Schneider chairs Industrial Digital Twin Association (IDTA) to
deep dive and deploy the Asset Administration Shell as
standardized digital twin.
• The Group also chairs UniversalAutomation.org association to
address a more functional and distributed approach for the
orchestration of industrial systems.
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Chapter 2 – Sustainable development
2.1.10 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 bringing higher efficiency and sustainability to
customers, and excluding revenues from carbon intensive
segments and equipment with SF6. The Group uses this indicator to
measure progress towards a low-carbon transition. In 2020, the EU
adopted the Taxonomy Regulation aimed at driving investments
towards environmentally sustainable activities, which the Group
applauds and supports. Both methodologies are progressively
converging (for example on the exclusion of revenues from fossil
fuel industries and equipment that utilizes SF6), but currently differ
in the scope of activities covered or in applicability of specific
criteria. These methodological differences may be changed or
reduced in the future, as new economic activities are gradually
included in the EU Taxonomy framework.
Early-adopter of transparent disclosures
on sustainable revenues
For nearly 20 years, Schneider Electric has led by example and
transparently presented its ESG performance, and worked to
develop new market practices, such as its saved and avoided CO2
methodology and biodiversity footprint assessment.
In 2019, the Group was one of the first companies to proactively
disclose information on the share of its Impact revenues, i.e.,
revenues coming from offers bringing energy, climate, or resource
efficiency to customers. 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 Schneider Sustainability Impact (SSI)
program. The performance of the SSI impacts short-term incentive
plans for 64,000 employees.
Schneider Impact revenues can be split into four categories:
1. Energy efficiency architectures bringing energy and/or resource
efficiency to customers.
Climate
SSI #1
Our 2025 Commitment
Grow our Schneider Impact
revenues to 80%
As the data center industry has grown to keep pace with
increasing digitization, major data center operators have
made sustainability central to their strategy, setting bold
targets for efficiency, waste, and decarbonization.
Schneider Electric is proud to partner with its customers to
realize their growth and sustainability ambitions
simultaneously. Schneider provides digital solutions,
efficient equipment, and expert consulting to address
every part of the data center sustainability challenge.
Digital Realty, a global provider of data center, colocation
and interconnection solutions, is supported by Schneider
Electric for renewable energy procurement in numerous
global markets. It also uses EcoStruxure™ Resource
Advisor to track the production and emissions associated
with these investments, along with the energy use and
expenditure in its facilities. Connected Schneider
equipment gives Digital Realty the ability to optimize its
efficiency in real time. Additionally, the two companies
collaborated on a circularity pilot at one of Digital Realty’s
campuses in France, in which the companies conducted a
joint inventory of Schneider’s portfolio of equipment in the
data center to evaluate and execute opportunities to extend
equipment life, take back equipment at end-of-life, and
maximize reuse and recycling.
2. Grid reinforcement and smart grid architectures contributing to
electrification and decarbonization.
Our progress
3. Products with differentiating green performance, flagged thanks
to our Green Premium™ program.
2019 Baseline
2023 Progress
2025 Target
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).
Schneider Impact revenues exclude revenues derived from
activities with fossil sectors. These encompass oil & gas, coal
mining, and fossil-power generation, in line with prevailing
corporate responsibility reporting and sustainable finance
practices, even though Schneider’s technologies deliver resource
and carbon efficiency here as well.
70%
74%
80%
In line with the Group’s strategy to gradually substitute SF6 with air
in its offers, SF6-containing switchgears for medium voltage
applications are also excluded, as well as neutral technologies
such as signaling, racks and enclosures, access control, or
emergency lighting.
(1) Schneider Impact revenues are calculated using Schneider’s own consistent methodology and are distinct from revenue eligible or aligned under the EU Taxonomy.
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2.1 Sustainability for all
2019
EU Taxonomy Regulation
adopted
2021
The Group reports on eligibility and
alignment with all six EU Taxonomy
environmental objectives, one year
ahead of regulatory requirements
First disclosure of Schneider
“Green Revenues”
2020
Schneider Green Revenues renamed
“Impact revenues”
2023
The Group commits to reach 80%
Impact revenues by 2025
First reporting of EU Taxonomy
indicators
As a sustainability leader, the Group is committed to
communicating transparently and consistently on its sustainable
economic activities and preparing for upcoming requirements from
the Corporate Sustainability Reporting Directive (CSRD).
Disaggregated data is disclosed in section 2.7.2 on pages 277 to
293.
Importantly, the phased application of reporting requirements as
well as their evolving nature means that the KPIs disclosed in this
report may evolve in line with changing regulatory and reporting
requirements. Regular revisions of the Delegated Acts are
expected in order to include missing activities and strengthen the
technical screening criteria and DNSH requirements for existing
activities, in line with technological developments, EU policy
priorities, or usability challenges. This means that the share of
eligible and aligned revenues of Schneider Electric is expected to
gradually increase, as the EU Taxonomy framework gets closer to
full maturity and companies improve their data collection and
reporting capabilities.
Notably, some provisions of the text are subject to differing
interpretations, while the data needed to evaluate certain criteria
remains unavailable or challenging to obtain; for example, the
Group is unable to assess alignment of its remote monitoring and
predictive maintenance systems with technical screening criteria
for activity CE 4.1 (provision of IT/OT data-driven solutions and
software), as it does not have granular data on whether its systems
or software are being used by customers to manage engines
powered by fossil fuels. While the Group is in the process of
collecting the relevant information, in such cases the Group has
taken a conservative approach to interpreting and calculating its
activities’ Taxonomy alignment. As such, the reported proportion of
Taxonomy-aligned revenues may be lower than if full granularity on
usage data had been available.
Read more on Schneider’s EU Taxonomy assessment
methodology and the full list of activities eligible under
the current EU Taxonomy on pages 277 to 293
Out of all revenues of Schneider (as published in the financial
statements), the total share of Schneider Impact revenues is 74% in
2023 vs. 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 includes 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 capital expenditure (CapEx) and operating
expenditure (OpEx) eligible or aligned under the EU Taxonomy.
Reporting requirements under the
EU Taxonomy Regulation
The adoption of the Taxonomy Regulation(1) in 2020 establishes a
EU-wide classification system to identify economic activities that
are considered as environmentally sustainable as part of the EU’s
long-term plan to connect finance with its sustainability goals.
Dedicated Delegated Acts (DA) specify for six identified
environmental objectives(2), which economic activities are included
in the EU Taxonomy (eligibility), as well as 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, corruption, fair competition,
and taxation (alignment).
Pursuant to Article 8 of the regulation, the proportion of turnover,
CapEx and OpEx resulting from products, systems, software, or
services associated with economic activities considered
sustainable is due to be reported progressively over the fiscal
years (FY) 2021 to 2024. In FY 2023, large undertakings are
required to disclose those three KPIs for eligible and aligned
activities for climate environmental objectives according to the EU
Climate Delegated Acts published prior to 2023, as well as the
eligible activities for “new” climate change activities and non-
climate environmental objectives according to the amended
Climate Delegated Act(3) and new Environmental Delegated Act(4)
published in 2023. Schneider Electric is proactively going beyond
this requirement and already reporting the eligibility and alignment
of its economic activities under all six environmental objectives in
its FY 2023 reporting, which is expected of large undertakings only
from 2025 (FY 2024).
(1) Regulation (EU) 2020/852.
(2) The six environmental objectives include two climate environmental objectives (climate change mitigation (CCM) and climate change adaptation (CCA)), and four
non-climate environmental objectives (sustainable use and protection of water and marine resources (WTR), transition to a circular economy (CE), pollution prevention
and control (PPC), and protection and restoration of biodiversity and ecosystems (BIO)).
(3) Regulation (EU) 2023/2485 amending Regulation (EU) 2021/2139.
(4) Regulation (EU) 2023/2486.
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Chapter 2 – Sustainable development
2023 EU Taxonomy reporting covers all 6 environmental objectives
Climate change mitigation
(CCM)
Climate change adaptation
(CCA)
Protection of water and
marine resources (WTR)
Transition to a circular
economy (CE)
Pollution prevention and
control (PPC)
Biodiversity and ecosystems
protection (BIO)
Climate environmental objectives
Non-climate environmental objectives
Energy efficiency
equipment and
services in buildings
1. Illustration of Schneider Electric’s eligible activities
• Energy efficient building automation and control systems
• Smart monitoring and regulation of electricity or heating systems
• Zoned thermostats and devices for the smart monitoring of electricity loads or heat loads
• Energy efficient cooling systems
• Service plans related to building management and power metering systems
• Technical consultations such as energy audits, simulations, and trainings
Low CO2 mobility
end segment
• Electric vehicle charging stations and 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
Medium and low
voltage equipment
for electrical
transmission and
distribution
• Low voltage electrical products equipment, systems and services increasing energy efficiency
• SF6-free medium voltage switchgears and control gears
• Communication and control technologies for the controllability and observability of the electricity system
• Demand response and load shifting equipment, systems and services that increase flexibility of the electricity system and
support grid stability
• Transmission and distribution wiring devices that improve energy efficiency and Tier 2 transformers
Electrical and
electronic equipment
• Manufacture of electrical and electronic equipment
IT/OT data-driven
solutions and
software
• Asset performance management
• Remote monitoring and predictive maintenance systems
• Lifecycle performance management software
• Design and engineering software
Services and
activities supporting
the circular economy
• Repairing, refurbishing, or remanufacturing products that have already been used
• Sale of spare parts beyond legal obligations
• Product-as-a-service and other circular use- and result-oriented service models
89% of revenue
Eligible activities
| 86% of CapEx
| 48% of OpEx
Alignment criteria
Conclusions of the assessment
Reference for details
2. Evaluation of eligible activities against alignment criteria
1. Substantial contribution to environmental objectives?
(Technical Screening Criteria)
47% of revenue not compliant with technical criteria
5% of revenue not compliant due to exclusions
(revenues from fossil sector, products with SF6)
Section 2.7.2 page 277
2. Compliance with DNSH?
• Climate change mitigation (CCM)
• Climate change adaptation (CCA)
• Sustainable use and protection of water and marine resources (WTR)
• Transition to a circular economy (CE)
• Pollution prevention and control (PPC)
• Protection and restoration of biodiversity and ecosystems (BIO)
Compliant
Compliant
Compliant
22% of revenue not compliant(1)
Compliant
Compliant
3. Compliance with minimum safeguards?
Compliant
Section 2.3 page 154
Section 2.3.1 page 156
Section 2.4.5.4 page 203
Section 2.4.6 page 207
Section 2.7.2 page 277
Section 2.4.2 page 187
Section 2.7.2 page 277
Aligned activities (complies with all 3 criteria)(2)
| 35% of CapEx
| 48% of OpEx
31% of revenue
(1) 16% of revenue are double counted due to non-compliance with the requirements of both Technical Screening Criteria and the DNSH
(2) 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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2.1 Sustainability for all
Schneider Electric’s support to the
EU Taxonomy
Schneider Electric supports the purpose of the EU Taxonomy.
When fully developed, it will act as a tool for decision-making on
sustainable investments and channel funding where it is needed to
accelerate the transition to a sustainable economy.
Schneider Electric has experienced both the value as well as the
challenges of conducting a mapping of sustainable business
activities early on and is leveraging this know-how to support the
development of the EU Taxonomy. 2023 saw the addition of over
35 new economic activities across various sectors to the EU
Taxonomy framework, an evolution that the Group has actively
supported. Schneider Electric has engaged with the European
Commission as well as with the Platform for Sustainable Finance
directly and via trade associations. The Group joined the latter to
help draft the technical screening criteria for the new activity CCM
3.20 on low, medium, and high voltage electric equipment for
transmission and distribution.
Schneider Electric will continue active involvement in the discussions
to improve the framework on two fronts: speeding up the completion
of the framework with missing sustainable technologies; and
improving the usability and practical implementation of the technical
screening criteria. Going forward, the Group will also continue to
engage with its peers, through industry bodies, to discuss
interpretation of the technical screening criteria.
Calculation of Taxonomy-eligible and
-aligned revenue
Schneider Electric identified several Taxonomy-eligible business
activities, contributing to at least one of the six environmental
objectives defined in the corresponding Delegated Acts. The list of
those activities is provided in our methodological notes on pages
277 and 293.
In 2023, Taxonomy-eligible and -aligned revenues amounted to
89% and 31% respectively, representing EUR 32,099 million and
EUR 11,240 million respectively out of EUR 35,902 million total 2023
consolidated revenue, as disclosed in the consolidated statement
of income on page 452. Schneider Electric’s Taxonomy-eligible
revenues increased significantly compared to 2022, leveraging on
the publication of additional activities complementing the climate
objectives, and the new Environmental Delegated Act detailing the
four non-climate environmental objectives.
There are four reasons for the difference between Schneider
Electric’s Taxonomy-eligible and -aligned revenue.
Firstly, challenges in assessing the alignment of economic activities
with the technical screening criteria for manufacturing of electrical
and electronic equipment (CE 1.2) led to a conservative disclosure
whereby all revenues eligible under this activity have been
declared as non-aligned (39% of total revenues). Challenges
encountered include a lack of clarity of some terms used (e.g.,
“superior recyclability”), and lack of applicable requirements of
some criteria (e.g., no clarifications on how hardware can qualify as
being designed for long lifetime).
Schneider Electric is continuously reviewing and improving its
circular practices via its EcoDesign Way™ process and Green
Premium™ program to further reduce the environmental impact of its
products. See more details in section 2.4, on page 184.
Secondly, SF6-insulated switchgears are eligible but not aligned
due to non-compliance with technical screening criteria for activity
CCM 3.20 (manufacture of high, medium, and low voltage electrical
equipment for transmission and distribution aimed at GHG
emissions reductions). Notably, the exclusion of SF6 switchgears
from Taxonomy-aligned revenues is in line with the Group’s
methodology for calculating Schneider Impact revenues (SSI #1).
Thirdly, eligible revenues derived from activities with fossil fuel
sectors are not aligned. This affects alignment under activities
including but not limited to CCM 3.20 (manufacture of high,
medium, and low voltage electrical equipment for transmission and
distribution aimed at GHG emissions reductions). This exclusion is
also in line with the Group’s Schneider Impact revenues
methodology.
Finally, non-compliance with some of the requirements listed in the
generic criteria for DNSH to pollution prevention and control
regarding use and presence of chemicals accounts for non-
alignment of 22% of Schneider Electric’s total revenues. This
comprises exclusions on two grounds.
• 9% are related to non-compliance with the EU Restriction of
Hazardous Substances (RoHS) Directive or in the list of
restricted substances (Annex XVII) to the Regulation concerning
the Registration, Evaluation, Authorization and Restriction of
Chemicals (REACH).
• 13% are related to products with substances identified in the
candidate list for inclusion in the list of substances subject to
authorization from Annex XIV of REACH regulation and for which
no exemption could be applied, i.e., when no other suitable
alternative substances or technologies were available.
In both cases, substances that have been granted exemptions
under the requirements of the RoHS Directive are not excluded.
•
• Schneider has deployed tremendous efforts to be able to
measure and improve its proactive compliance to REACH and
RoHS even outside of the EU, as part of its environmental
programs. The Group is continuously working on substituting
hazardous chemicals from its products, processes, and supply
chain, and when substitution is not technically possible, ensures
that risks posed by such chemicals are under control at all
lifecycle stages to minimize any potential harm towards the
environment and people’s health.
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 the
respective Delegated Acts.
Read more about the calculation method of Taxonomy-
eligible and -aligned revenue on pages 277 to 293.
Read more about the DNSH checks performed on
page 279.
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Chapter 2 – Sustainable development
To determine the Group’s Taxonomy-eligible and -aligned OpEx,
only non-capitalized costs related to R&D are analyzed for the
establishment of the numerator of the OpEx KPIs. This includes
non-capitalized costs relative to product-related R&D projects but
also, among others, costs incurred in relation with support and
platforming, costs of IT global applications dedicated to R&D, and
costs relative to continuous engineering costs for quality,
productivity, and obsolescence. As mentioned for CapEx, each
product-related R&D project of the Group demonstrates a
substantial carbon footprint saving and therefore 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 activity CCM 3.6 (manufacture of low carbon
technologies).
Read more about the calculation method of Taxonomy-
eligible and -aligned capital and operating expenditures
on pages 278 to 279.
Calculation of Taxonomy-eligible and
-aligned CapEx and OpEx
In 2023, Taxonomy-eligible and -aligned CapEx amounted to 86%
and 35% respectively, representing EUR 1,444 million and
EUR 592 million respectively out of EUR 1,675 million total 2023
consolidated CapEx, as per EU Taxonomy definition.
To compute the Group’s Taxonomy-eligible and -aligned CapEx,
CapEx related to assets, processes, and business combinations
associated with Taxonomy-eligible and aligned activities were
calculated with a high level of granularity using allocation keys of
eligible and aligned revenue 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. The allocation keys methodology is considered a
conservative approach as it is based on the current activity of each
product line, which does not consider transformations driven by the
product lines’ investments in the calculation of Taxonomy-eligible
and -aligned CapEx KPIs. Meanwhile, CapEx associated with
product-related R&D projects are considered Taxonomy-eligible
and -aligned under the activity CCM 3.6 (manufacture of other low
carbon technologies). This is because each product-related R&D
project of the Group enables a substantial carbon footprint saving
through more efficient products and systems. Those improvements
are measured with a lifecycle assessment (LCA) shared publicly in
the Product Environmental Profile, aligned with ISO 14067 and
verified by an independent third party. This is described more
exhaustively in section 2.3.4, on page 166.
The difference between eligibility and alignment in revenue, as
explained in the previous section, also applies to CapEx. In
addition, the fact that CapEx based on IFRS 16, related to
long-term leasing of buildings, is fully eligible but not aligned also
contributes to the difference between the Group’s Taxonomy-
eligible and -aligned CapEx.
In 2023, Taxonomy-eligible and -aligned OpEx amount to 48%,
representing EUR 844 million out of EUR 1,758 million total 2023
consolidated OpEx, as per EU Taxonomy definition.
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2.1 Sustainability for all
Spotlight on EcoStruxure™ Microgrid Advisor:
empowering efficient grids
While the influx of decentralized renewable power (such as rooftop solar) is integral to both mitigating
climate change and providing for growing electrification to customers and utilities, electricity grid
operators must find ways to balance the hourly fluctuations of renewable electricity generation without
compromising reliability and stability. To this end, microgrids can be leveraged, either by installation both
in front of and behind the meter to incorporate these energy resources and maintain electricity service in
case of wider grid outages.
Schneider Electric’s EcoStruxure™ Microgrid Advisor provides
optimization of distributed energy resources and on-site energy
demand alongside the grid through automatic and intelligent
orchestration and control of when to consume, produce, or store
energy on a single interface, thereby optimizing on-site energy
usage. The software delivers energy cost efficiency by using
electricity when it is lowest in cost and emissions, and on-site
renewable energy when the cost is high. Optimization is made
possible by leveraging behind-the-meter flexibility provided by
battery storage or other flexible applications. In addition to
greater energy efficiency and smooth integration of renewable
energy, EcoStruxure™ Microgrid Advisor enables the facility to
participate in demand response programs, helping to reduce
strain on the grid in times of peak electricity demand. This
qualifies the activity under EU Taxonomy activity CCM 3.20 for
the provision of services essential to the functioning of microgrid
management systems.
For example, EcoStruxure™ Microgrid Advisor is deployed for
customers as part of full microgrid solutions via Faith
Technologies Incorporated (FTI), a leader in engineering,
construction, manufacturing, and clean energy solutions. By
implementing integrated microgrid solutions, FTI facilitates
reduced energy usage and costs and increased resiliency to
grid events, whilst supporting growing electrification needs such
as EV charging infrastructure.
Through their work to date, FTI has saved and avoided over 90
thousand metric tons of carbon emissions across industries. For
enabling smarter and lower-carbon energy for customers, FTI
was recognized as one of 6 winners of the Schneider Electric
Sustainability Impact Awards for Partners, chosen from 241
award submissions.
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Chapter 2 – Sustainable development
2.1.11 Key external frameworks and ESG ratings
External guidelines
The United Nations Global Compact and
Sustainable Development Goals (SDGs)
Parties signing the UN 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 201; ISO 45001, page 122; ISO
9001, page 124; ISO 27000, page 336; and ISO 14025 and
14021, page 194.
The Global Reporting Initiative (GRI)
Schneider Electric has reported in accordance with the GRI
Standards for the period from January 1 to December 31, 2023.
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 294 to 295
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 296 to 301.
The Science Based Targets 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 4,700+ companies globally that have committed to
reduce GHG emissions in alignment with prevailing climate
science through and get their targets approved by the SBTi. The
Group’s GHG footprint is calculated following the World
Resources Institute (WRI) Greenhouse Gas Protocol (see page
301). The Group’s Net-Zero commitment was validated with the
Corporate 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 Trust Charter was 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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ESG ratings and awards
Dow Jones Sustainability Index (DJSI)
In 2023, Schneider Electric ranked 1st among industry peers in
S&P Global’s Corporate Sustainability Assessment (CSA) with a
score of 88/100 (top 1%). The Group was included in the DJSI
World Index for the 13th year in a row, which is comprised of
321 corporate leaders in sustainability, representing the top 10%
from among around 2,500 companies worldwide.
CDP Climate A List and Supplier
Engagement Leader
In 2023, Schneider Electric was among just 353 Climate Change
A List companies out of 21,000+ companies assessed by CDP,
and the only one in its sector to achieve this 13 years running.
Schneider Electric also scored A in CDP’s Supplier Engagement
Rating (SER) in 2023. 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, and Global ESG
Environmental Leaders indices.
CDP Water
In 2023, Schneider Electric received an A- score for its
participation in CDP’s Water Security questionnaire, a significant
improvement on its 2022 score of B.
Moody’s Analytics
Following assessment in June 2023 by Moody’s Analytics
(formerly Vigeo Eiris), Schneider Electric achieved an overall
rating of 73/100, with an Energy Transition Score at the highest
level (Advanced). Thanks to this score, as of January 2024, 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.
EcoVadis Outstanding level and Platinum medal
In 2024, Schneider Electric has achieved Outstanding level with
a rating of 88/100 (a significant increase from 79 in 2023) and
obtained a Platinum medal (top 1% of all companies assessed)
for the 4th 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 2024, Schneider Electric was recognized as an
Industry Top-Rated ESG Performer, ranking 1st out of 289
companies in its industry group with a 10.5 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
In 2023, Schneider Electric is at Prime level on ISS-ESG with an
absolute B rating, the best rating in its industry (Electric
Components) out of 187 companies.
Global 100 Most Sustainable Corporations
Schneider Electric has been featured on Corporate Knights’
Global 100 list of corporate sustainability leaders every year
since 2012 and ranked top 10 for the 4th consecutive year,
ranking 1st in 2021, 4th in 2022, and 7th in 2023 and 2024.
Terra Carta Seal
In January 2023, the Group was one of 19 companies awarded
the Terra Carta Seal, which recognizes global companies who
drive innovation and demonstrate their commitment to the
creation of genuinely sustainable markets.
FTSE4Good
Schneider Electric is part of the FTSE4Good Developed,
FTSE Environmental Opportunities, and FTSE EO Energy
Efficiency indices.
TIME’s World’s Best Companies of 2023
In September 2023, Schneider Electric was ranked 39th in
TIME Magazine’s World’s Best Companies of 2023 list, with
a sustainability ranking of 34th.
Sustainability external ratings
DJSI
CDP Climate
Change
Vigeo Eiris
Moody’s Analytics
EcoVadis(1)
MSCI ESG
Ratings
Sustainalytics
2023 Schneider score
Industry average score
88/100
21/100
A
C
73/100
39/100
88/100
47/100
AAA
BBB
Low risk
Low risk
Progress vs. 2022
-2 pts
Unchanged
Unchanged
+9 pts
Unchanged
Unchanged
Highlights
13th year in
world index
13th year
in A List
World 120 and
Europe 120
Indices
Platinum
medal for
4th year
AAA for
13th year
1st in industry
Assessed universe (# companies)
9,400+
21,000+
4,800
90,000
8,500
15,100
(1) 2024 score
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Chapter 2 – Sustainable development
Other awards in 2023
Workforce Disclosure Initiative (WDI)
In 2024, Schneider obtained a disclosure score of 80% (up
from 79% in 2023), above the industry average of 65%, in the
investor-backed WDI survey, which aims to improve corporate
transparency and accountability on workforce issues.
Impak Finance
Since 2022, the independent, B-Corp Certified, impact rating
agency, has ranked Schneider Electric 1st in CAC 40 for its
contribution to the UN SDGs. The Group obtained a score of
495/1000, way ahead of the CAC 40 average of 216/1000.
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 2024, the Group
ranked 7th worldwide.
Supply Chain
Gartner 2023 Supply Chain Top 25
Schneider ranked 1st in 2023 in the Gartner Supply Chain Top
25, and 1st in the Europe Top 15 for the fourth consecutive year,
recognizing the exemplary management of its value chain.
2023 CIPS Excellence in Procurement Awards
In 2023, Schneider Electric was awarded “Best Commitment
to Carbon Reduction in Supply Chains” and “Sustainable
Procurement Champion” for its The Zero Carbon Project and
sustainability leadership.
Equileap Global Gender Equality Report
and Ranking
In February 2024, Schneider Electric ranked 56th globally out of
3,795 publicly listed companies assessed based on 21 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.
Forbes World’s Top Companies for Women 2023
Forbes teamed up with market research firm Statista and ranked
the “World’s Top Companies For Women 2023”, and Schneider
Electric was included in the list.
Brandon Hall Group HCM Excellence Gold Award
In September 2023, Schneider Electric was recognized by
Brandon Hall Group with an HCM Excellence Gold Award
in the Diversity, Equity and Inclusion category for its Global
Family Leave Policy.
Ethics and Governance
Ethisphere
In 2024, 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 one other French company was included in this
year’s ranking.
Grand Prix de la Transparence
In 2023, Schneider Electric received a Transparency Award in
the “ESG information” category, and was included in the Top 20
most transparent companies with an overall ranking of 7th out of
125 French companies.
World Sustainability Leaders 2023 Sustainable
Supply Chain Award
Employer awards
Schneider Electric received the Sustainable Supply Chain Award
at the World Sustainability Awards 2023 in recognition of its
engagement efforts through The Zero Carbon Project.
Universum Top 50 World’s Most Attractive
Employers
CPOstrategy Sustainable Procurement
Champions Index 2023
In 2023, the Group’s leadership in sustainable procurement
was recognized by CPOstrategy magazine’s Sustainable
Procurement Champions Index.
Diversity & Inclusion
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. 2022 and well above the index average of 73%.
Financial Times Top 50 Diversity Leader
In November 2023, the Group was recognized as a Top 50
Diversity Leader by the Financial Times in their Diversity Leaders
2024 rankings, for the 5th year in a row, ranking 8th among
850 companies and 2nd in its industry.
In 2023, Schneider Electric was recognized by students
worldwide as one of the World’s Most Attractive Employers
ranking 24th in Engineering. Over 172,000 respondents from
the Universum Talent Surveys participated in the ranking.
Fortune’s World’s Most Admired Companies
In 2023, Schneider Electric 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.
Forbes World’s Best Employers 2023
In 2023, Schneider Electric was included the Forbes World’s
Best Employers 2023 ranking.
Glassdoor
Schneider Electric received a score of 4.3/5 from Glassdoor as
of January 2024. Based on more than 10,000 reviews, 89% of
surveyed participants would recommend the Group to a friend,
and 95% approve of the CEO.
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2.2 Driving responsible business
with Trust
In this section
2.2.1 Trust, Foundation of Schneider Electric’s Business
2.2.2 Vigilance plan
2.2.3 Responsible Workplace
2.2.4 Employee health and safety
2.2.5 High standards for the quality and safety
of our products
2.2.6 Digital trust and security
2.2.7 Zero-tolerance for corruption
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120
121
124
127
130
2.2.8 Compliance with Competition Law
2.2.9 Compliance with tax regulations
2.2.10 Export Control and Sanctions
2.2.11 Human rights
2.2.12 Sustainable relationships with suppliers
2.2.13 Vigilance with project execution contractors
2.2.14 Ethical relations with downstream stakeholders
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134
136
138
149
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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.
Present in over 100 countries, Schneider Electric is committed to
behaving responsibly with all its stakeholders. As our responsibility
extends beyond compliance with local and international
regulations, the Group is committed 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, sustainability, and quality. The Trust
Charter 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 2023 under the
Trust pillar of our Schneider Sustainability Impact (SSI) and
Schneider Sustainability Essentials (SSE) programs.
“ The Trust Charter, Schneider Electric’s Code
of Conduct, provides us with a framework to
help us foster trust with all our stakeholders.
It underpins every aspect of our business –
fostering integrity, transparency, and resilience
– and serves as a compass in a complicated and
volatile world where even with the best risk
management systems in place, setbacks can
still occur.”
Hervé Coureil,
Chief Governance Officer & Secretary General
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Chapter 2 – Sustainable development
Progress of the Trust commitments
Schneider
Sustainability
2021 - 2025 programs
#
Baseline(1)
2023 progress(2)
Impact
(SSI)
Essentials
(SSE)
6.
7.
12.
13.
14.
15.
16.
17.
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
Decrease the Medical Incident rate to 0.38 or
below
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’
These programs
contribute to UN SDGs
2025
Target
100%
2022: 1%
21%
2021: 81%
+1pt
+10pts
--
In progress
--
2020: 90%
97.3%
100%
2019: 0.79
0.51
0.38
2020: 25
23
0
2020: Top 25%
Top 25%
Top 25%
2020: 374
3,248
3,248
4,000
(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 andSSE
indicators (except SSI #+1 and SSE #12 in 2022), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 300). In addition,
SSE #14 received a “reasonable” assurance level in 2023. Please refer to page 264 for the methodological presentation of each indicator. The 2023 performance is
also discussed in more details in each section of this report.
(3) 2023 performance is in progress for SSE #12 ‘Social Excellence’ because the program is still in development.
2023 Highlights
Schneider was named by
Ethisphere’s as one of the “most
ethical company in the world” in
2023, for the 13th consecutive year
Schneider received the ESG
Information Award, and ranked 7th
among the winners of the
Transparency Awards 2023
Triple recognition in UK and
Ireland, for demonstrating
excellence in safety, health, and
environmental impact
#1 of Gartner Supply Chain Top 25
for 2023, and in the top five for the
4rd consecutive year
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Chapter 2 – Sustainable development
2.2 Driving responsible business with Trust
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O
2.2.1.1 Context
2.2.1.2 Risks, impacts, and opportunities
Trust is a foundational value, core to Schneider Electric’s
Environment, Sustainability and Governance (ESG) commitments.
Schneider Electric has earned the trust of stakeholders through
quality products and sustainability commitments. Business integrity
is equally important. Trust powers interactions with customers,
shareholders, employees, and communities. It is manifested
through trusted teams, customer/partner relationships, investor
trust, and community engagement. Leaders set the tone and
exemplify the Trust culture, prioritizing equality, well-being, and
safety. Schneider Electric upholds high standards in cybersecurity,
anti-corruption, fair competition, and responsible supplier
management, and remains mindful of the responsibility to prevent
insider trading, deliver accurate financial statements, and protect
intellectual property. The Company acts for a climate positive
world, efficient resource use, and responsible citizenship.
Cybersecurity
C ustomers an
C ustomers an
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s
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Investor
Discover our Trust Charter on www.se.com
Resilience is a cornerstone in building and maintaining stakeholder
trust. Schneider Electric’s commitment to effective risk
identification, assessment, and management, coupled with a
thorough understanding of potential impacts illustrates the Group’s
strategic approach to building resilience in a robust and proactive
manner.
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. 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. See Chapter 3 on page 324, for specific risk factors.
2.2.1.3 Governance
The Trust Programs are managed through a dedicated governance
framework:
• Board level: Schneider Electric’s Board of Directors oversees
the maturity level and effectiveness of the governance and
organization, risk management systems, processes and
controls, and communication and training through the Audit &
Risks Committee.
• Executive level: Schneider Electric’s Executive Committee
decides the Trust agenda, acts as a sounding board for
corporate departments in charge of Trust topics, and
coordinates highly transversal programs such as the Schneider
Sustainability Impact.
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• Corporate level: Schneider Electric has created a standalone
Ethics & Compliance department, chaired by a Chief
Compliance Officer, and reporting to the Chief Governance
Officer & Secretary General, to drive the strategy of the Ethics &
Compliance program. The department works closely with the
Legal, Human Resources, Finance, Digital, Strategy, Quality &
Sustainability departments, as well as Internal Control and
Audit; which are directly responsible for managing certain
specific risks.
• Operational level: Regional committees may ensure
implementation of the Trust programs (such regional Ethics &
Compliance Committees for the Ethics & Compliance Program)
in alignment with risks identified. Operationally, they may rely on
Regional Teams who drive the implementation in the zone, with
the support of Trust Ambassadors and relevant subject matter
experts at local levels.
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Board – Audit & Risks Committee
Executive Committee – Function Committee
Define, explain, and disseminate priorities
Speak-Up Supervision
Corporate departments
Group Operational
Compliance Committee
Group Disciplinary
Committee
Detect and monitor
the Trust Programs
Detect and manage
non-compliance
Disciplinary review of
non-compliances and levy
sanctions
Regional, Zone, Cluster,
and Country Committees
Regional Teams
Trust Ambassadors
Ensure implementation of Trust
Programs accordingly to risks
Support employees in
navigating with Trust Programs
Support awareness of
employees about Trust topics
in Schneider Electric
Speak-Up Supervision
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 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.
Ethics Delegates, one
of Schneider Electric’s
Trust 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 2023, the community had 400+
members.
“I have been an Ethics Delegate for two years in
Mexico. I serve as a listening ear, allowing
individuals to share their concerns, worries, or any
topic they feel the need to discuss. Through this
role, I can provide accurate information to
effectively manage situations, offer support, peace
of mind, and instill hope for positive change”
Paulina Gomez
Ethics Delegate in Mexico
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Chapter 2 – Sustainable development
2.2 Driving responsible business with Trust
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2.2.1.4 Trust Charter, Schneider Electric’s
Code of Conduct
The Trust Charter (available in more than 30 languages on
Schneider’s website), acts as the Group’s Code of Conduct and
demonstrates the Group’s commitment to ethics, safety,
sustainability, quality, and cybersecurity. It serves as a compass,
showing the true north in an ever more complex world. Trust is a
foundational value of Schneider Electric, and it is core to its
environmental, social, and governance (ESG) commitments.
All Schneider Electric employees are expected to comply with
Schneider’s Trust programs. They are 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.
Through its Trust programs, 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, tax law,
quality, cybersecurity, as well as data privacy and protection. The
program design and operation are influenced by the Group’s risk
profile, business model, organizational structure, and culture.
Each section of the Trust 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.
Discover our Trust Charter on www.se.com
2.2.1.5 Actions and resources
Management
Commitment
Monitoring
& Audit
Risk
Assessment
Corrective
actions
Whistle
blowing
Trust
Programs
Code of
conduct
& Policies
Training &
Awareness
Third parties
integrity
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. 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.
Top management regularly expressed its commitment through
statements and extensive communication (called “tone from the
top”), such as during the Trust Week organized in June 2023. Its
launch was supported by the 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 Electric’s Chairman 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).
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Chapter 2 – Sustainable development
Awareness
Several specific trainings are also delivered:
Internal communication provides employees with essential baseline
information on Schneider Electric’s integrity commitment while also
raising awareness and understanding of the Trust programs. To do
this, the Group created a dedicated intranet page: the Trust Portal,
which gives access to resources (policies, useful contacts, sites,
guidelines, templates, etc.) to all employees when they face
situations in which they need support. The portal aims at giving
employees the confidence to alert any unethical behavior they
witness and stay informed of new Trust programs or policies.
Schneider Electric also regularly distributes videos and other
communication assets on integrity-related subjects to its
employees.
In 2023, the Trust Week, the largest global internal communication
campaign, combined all the pillars of Trust into a single event. The
campaign consisted of one keynote and 13 webinars with over
2,000 attendees. By offering different activities and involving all
employees in the events the Group noticed a very high level of
engagement and impact. Additionally, Schneider Electric
communicated all year long on Speak Up mindset, in particular
through a video from the CEO and awareness sessions.
As a testimony of rising awareness and engagement to Trust, the
Group saw an increase of global policy views of +19% in 2023
compared with 2022, with 21,800 unique views recorded on the
Trust Portal, and over 14,000 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.
External communication informs stakeholders of Schneider’s
integrity and implementation of the Trust programs. The Group
communicates through a dedicated webpage and specific external
communications. Schneider Electric also responds to several
questionnaires from extra-financial rating organizations related to
Trust. In 2023, 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.
Training
Each year a global campaign of mandatory training is run for all
employees, called Schneider Essentials, from March to the end of
September aiming at ensuring that all employees are trained on the
most important topics covered by the Trust Charter. The training is
available in 18 languages in the Group’s Learning Management
System. In 2023, Schneider Essentials focused on Trust,
Cybersecurity, Sustainability, and Quality, along with additional
courses based on function or location. For employees exposed to
corruption risks, an Anti-Corruption training is required each year
as a functional essential training. The course dedicated to Trust
was completed at more than 99% overall.
• A dedicated module on Ethics & Compliance was prepared for
Country Presidents raising their awareness of their role and
responsibility in supporting integrity at Schneider Electric.
• The Trust Programs include trainings for leaders of acquired
companies, as a part of the integration process. The training
entails a specific focus on what is expected from the leadership
teams, including endorsing the programs and actively following
up employees’ completion of mandatory trainings.
In 2023, ad hoc learnings were organized for all employees and
managers as part of the Trust Week in June 2023 (e.g, Speak-
Up) in sensitive geographic areas (e.g, Brazil and 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). At the end of 2023 SSE #13 achieved a 97.3% completion
rate.
Trust
SSE #13
Our 2025 Commitment
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: “Great Experiences and
Knowledge.”
Trust at Schneider Electric training: “Very useful set of
information, makes me aware of how to act when facing
dilemmas, or witness a situation that can compromise the
ethics of the Company.”
Anti-Corruption training: “Excellent training. Proud to work
for a company that operates within strict guidelines to
protect the longevity of the business.”
Our progress
2020 baseline
2023 Progress
2025 target
90%
97.3%
100%
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2.2 Driving responsible business with Trust
Third-parties integrity
Whistleblowing
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 compliance, regulations and
reputation issues. In 2023, the Group strengthened its due
diligence programs for third parties (suppliers, customers,
intermediaries, as well as donation and sponsorship operations).
For more details on Third Parties Due Diligence,
please refer to page 132
Schneider Electric is also a third party for its clients and is subject to
evaluation as such. The Group regularly responds to questionnaires
and other additional requests regarding the Company’s compliance
policies, programs, trainings, governance, and audit controls.
In 2023, the Group has launched a dedicated internal platform –
called Trust Center – to respond to those requests.
Additionally, M&A operations represent risks for the Company. A
specific process and guidelines were put in place to ensure full
compliance of M&A operations with anti-corruption, export control
regulations and human rights risk. In 2023, they were updated to
identify, manage, and mitigate those risks at the earliest possible
stage. Guidelines aim to cover the very first steps of identifying
potential targets, what to look out for in data-rooms, when and how
to interview personnel at the target entity, and finally how the Group
plans to integrate the acquired entity through dedicated Trust
Standards.
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. To voluntarily
report a potential violation of laws and regulations, and/or of the
Group’s Trust Charter and Group policies, whistleblowers can use
all reporting channels available, regardless whether they are
employees, contractors, or external stakeholders (suppliers,
subcontractors, customers, business agents, etc.)
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.
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Chapter 2 – Sustainable development
Case management: a structured process led by Ethics & 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 Ethics &
Compliance
Facts finding process,
interviews, data
analysis
• Allegations
confirmed or not
• Root cause
analysis
By assigned
investigator(s)
Remediation and/or
disciplinary measures
By Ethics &
Compliance and
management
Check implementation
of actions decided
and non-retaliation
In 2023, Schneider Electric updated its Whistleblowing Policy, and
therefore 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 was implemented, in particular:
• 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
during 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
North America
Rest of the World
Europe
China
France
India
5%
4%
9%
9%
1291
concerns
received
27%
46%
Status of concerns
received* through our
whistleblowing system
Distribution of
confirmed alerts
by type of issue
23%
3%
14%
24%
20%
16%
21%
5%
3%
9%
7%
55%
Valid alerts confirmed after
investigation
Valid alerts not confirmed after
investigation
Valid alerts under investigation
Not valid alert
Ongoing assessment
Inconclusive & insufficient information
* as of January 1st, 2024
Discrimination, Harassment,
Unfair treatment
Fraud
Conflict of interest
Bribery & Corruption
Health & Safety
Other
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2.2 Driving responsible business with Trust
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”. In 2021, 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 2023, 82% of employees
surveyed answered “yes” which constitutes an improvement of +1
point over a two-year period.
Corrective actions
Deficiencies in 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 Trust Charter and programs are an integral part of the Group’s
Key Internal Controls (KICs). In effect since 2022, this KIC
framework has been enhanced by increasing the number of KICs
for the Trust programs aligned with new policies and processes.
Furthermore, the Group’s Internal Audit program includes specific
tasks related to the Trust programs, 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 2023 resulting in recommendations related to the improvement of
the Trust programs.
For more details on Key Internal Controls and Group
Internal Audit, please refer to sections 3.2 and 3.3 on
pages 327 to 336
Trust
SSI #7
Our 2025 Commitment
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 India in 2023.
“Throughout the process, I felt extremely supported by the
Ethics & Compliance Department. They listened patiently to
my concern and assured me of the confidentiality of our
discussions and guided me on my behavior and actions
with the concerned employee. This really helped during the
process of the investigation. It was a long process but there
is nothing to get discouraged about. I recommend anyone
at Schneider Electric to report any concern and let the
Ethics & Compliance Department guide you. Once
finalized, you will recognize that you took the right step.”
Our progress
2021 Baseline
2023 Progress
2025 target
81%
+1pt
+10pts
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Chapter 2 – Sustainable development
2.2.2 Vigilance plan
2.2.2.1 Context
Schneider Electric seeks to be a role model in its interactions with
customers, partners, suppliers, and communities on ethics and the
respect and promotion of human rights. The Group strives to have
a positive impact on the planet and the environment by contributing
to limit climate change, being 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 and has been adapted to comply with the Norwegian
Duty of Vigilance Law and the German Law of 2023 as well. The
plan includes:
• a risk analysis specific to vigilance risks that Schneider Electric
poses to the ecosystem and environment (i.e, externalities);
• a review of the key actions implemented to remediate or mitigate
these risks;
• an alert system and
• governance specific to vigilance.
Risk categories
For a granular assessment of the risk level and the magnitude of the
impact on Schneider Electric’s ecosystem, the Group has identified
more than 60 natures of risks relating to different risk areas such as
Decent workplace, Ethical business conduct, or Offer safety.
However, to simplify the reading, they have been grouped into four
risk categories that are synthesized as below.
Human rights:
• Decent workplace
• Health and safety
Environment:
• Pollution and specific substances management
• Waste and circularity
• Energy, CO2, and greenhouse gases (GHG)
Business conduct:
• Ethical business conduct
• Alert system, protection, and non-retaliation
In this Universal Registration Document, Schneider Electric reviews
the risk analysis and describes the related mitigation actions.
Readers are also directed to other sections of the report for relevant
and detailed 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.
Offer safety and cybersecurity:
• Offer safety
• Cybersecurity and data privacy
Risk location
Consult and download Schneider Electric’s Vigilance
report on www.se.com
2.2.2.2 Risk, impacts, and opportunities
Risk assessment methodology
Schneider Electric has developed a specific vigilance risk matrix,
using a methodology consistent with other risk evaluations
performed 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. These interviews are conducted every year, to take
evolutions of the risk levels into account. Since 2021, Schneider
includes the risk to local communities living close to Schneider
locations and customer project sites. Since 2022, Schneider runs
specific workshops that include members of the European Work
Council. The conclusions of these workshops have been integrated
in the 2023 risk assessment.
The scope of work covers Schneider Electric and its subsidiaries,
joint ventures, suppliers, and subcontractors. A review of the
downstream supply chain is performed on a sample of customer
projects.
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, research and development (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.
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Risk evaluation and scale
Medium to high risk: Contractors
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:
0 – Non-existent; 1 – Low; 2 – Medium; 3 – High; 4 – Very high.
In this 2023 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 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, GHG, etc).
For more information on actions taken, please see
section 2.2.12 on page 136.
Among Schneider’s 53,000 tier 1 suppliers, 12,000 are off-site
contractors (or otherwise called solutions suppliers), working on the
construction sites for customer projects.
• 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.
For more information on actions taken, please see
section 2.2.13 on page 147.
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.
• 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.
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Chapter 2 – Sustainable development
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. For more information
on actions taken, please see section 2.2.14 on page 151.
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 154.
Schneider Electric 2023 vigilance risk matrix
The risk matrix below summarizes Schneider Electric’s risk analysis:
Very high risk
High risk
Medium risk
Low risk
Human Rights Decent
Environment
workplace
Health and
Safety
Pollution and
specific substances
management
Waste, water, 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
Schneider Electric sites
Suppliers
Contractors
Communities
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Chapter 2 – Sustainable development
2.2 Driving responsible business with Trust
Comparison of the 2023 analysis with 2022:
The following items have evolved:
•
In the Decent Workplace section, the level of Human Rights
risks for migrant workers has been re-evaluated, as a
consequence of the increased migration flows. The origins of
these displacements are multiple, from climate change to
conflicts or economic hardship. They are not a consequence of
Schneider Electric’s policies, however, Schneider, like other
companies is confronted to that reality. Although the lack of data
and measurement does not allow to precisely assess the risk,
and Schneider, throughout its field audits has not come across
specific cases, temporary workers are more likely to be
exposed to this kind of risk, both within Schneider and
throughout our supply chain.
• Psycho-social risks remain high and with perhaps a still
increasing trend. 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.
• Fighting all types of harassment has been the object of specific
programs for several years, including awareness actions, a
“Speak Up” program, and a reinforcement of our alert system
Trust Line. Over the last two years, the analysis of data from the
alert system and other alternative tools such as Workers Voice
have allowed a much better qualification of the risk level, mainly
on sexual harassment and work harassment. The risk level is
considered stable, but the actions and the Speak Up program
are now better focused on prevention.
• Globally in 2023, the overall Business Ethics risk remains
unchanged from 2022, except for Raw Materials where pressure
from customer industries results in a higher risk for corruption or
conflict of interests. To better qualify this risk, a specific study
has been launched in 2023 and will carry on throughout 2024.
This study is focused on our key raw materials.
• Schneider’s focus on data privacy has allowed to better evaluate
the level of risks. In some areas like biometric access control
and video surveillance security, our level of awareness has
improved and the risk matrix has been updated accordingly. In
the global context of an increased digitization at all levels,
Schneider’s focus on data privacy, as well as cybersecurity is a
top priority.
•
In the Waste, Water and Circularity section, given the events of
2023 related to water scarcity and droughts, the level of risk has
been increased for specific types of factories. Although
Schneider is not a massive user of water in its operations, we
have decided to increase the focus on operations located in
water stressed areas.
2023 German Law on Supply Chain Due Diligence
(Lieferkettensorgfaltspflichtengesetz): Schneider Electric has
significant operations in Germany and is subject to the new
vigilance law that came into force in January 2023. The Vigilance
plan of Schneider Electric was already compliant with most
requirements before the German law came into force, and
additional actions required by the law have been implemented in
2023, such as a training program for German employees, specific
communication to local partners and stakeholders, the appointment
of a dedicated expert within Schneider Electric’s Germany
organization, etc.
2.2.2.3 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, 17 Committee meetings
have been held (five in 2017 and twice per year in 2018, 2019,
2020, 2021, 2022, and 2023). The Committee’s objective is to
provide a discussion on strategic orientation and prioritize
initiatives and the resources allocated to their implementation. This
Committee also reviews the actions in progress and their results
and defines decisions on next steps for action.
Composition of the Duty of Vigilance Committee
Chairman:
Executive Vice-President, Global Supply Chain (Executive
Committee member)
Management:
• 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
2.2.2.4 Group policy
The Group has designed a Vigilance plan that covers all areas
specified by the soft laws (UN Guiding Principles on Business and
Human Rights, OECD, International Labor Organization (ILO)) and
by the existing hard laws (2017 French Law, UK and Australia
Modern Slavery Acts, 2023 German Law, etc.). This plan is also
fully consistent with Human Rights major actions included in our
Decent Work program.
The ambition of our Vigilance plan is to be at the forefront of all
these important topics, and from one single corporate program,
being able to answer the different requests from all laws and
regulations.
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Chapter 2 – Sustainable development
2.2.2.5 Actions and resources
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 (i) section “2.2.11 Human Rights” and (ii) section “2.2.4 Employee health and
safety” 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 136;
(ii) page 121
page 154
Business
Ethics
Ethical business
conduct
Alert system,
protection, and
non-retaliation
See (i) section “2.2.1 Trust, Foundation of Schneider Electric’s Business ” and (ii)
section “2.2.7 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 108;
(ii) page 130
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 “2.2.5 High standards for the quality and safety of our products” for more
details on the deployment of offer safety actions. It covers, notably:
• Sustainability Quality Excellence;
• Reliability.
See section “2.2.6 Digital trust and security” for more details on the deployment of
data privacy and cybersecurity actions. It covers, notably:
• Cybersecurity by design approach;
• Personal data protection;
• Training and awareness on cybersecurity.
See section “2.2.12 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;
• The Zero Carbon Project.
page 124
page 127
page 138
See section “2.2.13 Vigilance 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 149
See section “2.2.14 “Ethical relations with downstream stakeholders” 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 151
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Chapter 2 – Sustainable development
2.2 Driving responsible business with Trust
2.2.3 Responsible Workplace
2.2.3.1 Context
2.2.3.3 Governance
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 requires
everyone to be treated fairly, to acknowledge and value
differences, and everyone feeling free from any type of
harassment, victimization, and discrimination.
2.2.3.2 Risks, impacts, and opportunities
Not creating a responsible workplace may expose Schneider
Electric to liability for harassment or discrimination claims from the
person who has allegedly been harassed or discriminated or the
alleged perpetrator for failure to protect employees against such
conduct. 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, to
capture operational risk exposure at zone level, based on local
interviews led by the Regional Compliance Officers and the Legal
teams. In 2023, 59% of the substantiated valid alerts, reported
through whistleblowing, concerned Discrimination, Harassment or
Sexual Harassment(1).
The process at regional level is 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.
Fighting harassment and discrimination in the workplace has
several positive impacts, including creating a positive work
environment which promotes collaboration and productivity,
retaining talent, enhancing Company reputation, fostering diversity,
and reducing legal risks.
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 on page 210.
Schneider Electric has “zero tolerance” for any kind of workplace
misconduct. This commitment is a key focus of the Ethics &
Compliance program which is led by a dedicated HR Compliance
team in the Ethics & Compliance department, under the authority of
the Chief Compliance Officer.
HR Compliance defines and deploys measures to prevent
harassment and discrimination and other workplace-related
conducts at Schneider Electric and manages the most severe
compliance cases. Locally, it is operationalized by Regional
Compliance Officers under the supervision of their regional Ethics
& Compliance Committees defining the local strategy. They are
supported by a network of HR Compliance Champions to align with
HR roadmap for each function, business, and operation, and Ethics
Delegates to raise awareness on Responsible Workplace.
2.2.3.4 Group policy
Schneider Electric implemented in 2018 an Anti-Harassment Policy,
serving as an employee manual to address and prevent
misconduct violating the dignity of employees. In 2023, Schneider
has deployed a new Anti-Harassment & Anti-Discrimination Policy
which reinforces Schneider Electric’s zero tolerance for any kind of
harassment (sexual, physical, discriminatory, psychological, etc.) or
discrimination (direct or indirect) in the workplace and sets forth
clear rules and processes. It also reinforces employees’ rights and
responsibilities, notably regarding anti-retaliation. Managers and
Human Resources Business Partners’ roles have been highlighted
as well as the possible reporting mechanisms.
2.2.3.5 Actions and resources
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
in 2022 and 2023. In addition, some specific trainings were
deployed in line with local initiatives to prevent sexual harassment
in specific countries (e.g, India.).
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 HR internal investigators which has been expanded
in 2023. This aims to ensure full impartiality and fair common
practices everywhere. More than 250 HR investigators were
trained. In addition, workshops have been conducted for internal
investigators in many geographies, and a pilot mediation program
was launched in France.
In 2023, a dedicated communication plan was carried out,
promoting the new Anti-Harassment & Anti-Discrimination Policy
and raising awareness. Schneider Electric also organized specific
communication actions promoting a responsible workplace as part
of the Trust Week that took place in June 2023. 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.
(1) As of January 1st, 2024
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Chapter 2 – Sustainable development
2.2.4 Employee health and safety
2.2.4.1 Context
2.2.4.3 Governance
The world in which Schneider Electric operates is changing fast with
many drivers such as digitization, new technologies, connectivity of
data, and ESG giving opportunities to positively impact Health and
Safety. At Schneider Electric, Health and Safety is a value that will
not be compromised, as it is one of the five Schneider Electric Trust
Charter pillars. In addition, the Group has set ambitious 2025 Health
and Safety targets.
As a pillar of corporate social responsibility, providing a safe
workplace for employees, customers, and contractors is
fundamental. In a world where the Group relies on contractors to
deliver its solutions, it becomes important that contractors comply
with the Schneider Electric’s Health and Safety program and
standards.
Schneider Electric’s ambition is to provide a safe and healthy
environment for all its employees and contractors, so they can
perform to their full potential, positively impact the safety of our
customers, and return home safely.
Schneider Electric has a strong Health and Safety governance in
place with several instances of control to ensure the Health and
Safety strategy is fully deployed.
Steering Committees
Quarterly Health and Safety Report to Executive level: A report is
created each quarter by the VP, Global Health and Safety and
presented to the Executive level. The report includes Health and
Safety performance vs. targets and Health and Safety program
deployment update.
Monthly Global Health and Safety Steering Committee: Each month
the Global Health and Safety team share Health and Safety
performance vs. targets and Health and Safety program
deployment, with the Regional and Organizational Health and
Safety VP’s.
2.2.4.4 Group policy
The ambition is to enhance the safety maturity level by leveraging
the employee engagement through our safety culture program,
digitization, visualization of data, and contractor Safety Qualification
program.
Schneider Electric is committed to invest in its people and its
workplace as stated in its Group Health and Safety Policy, which is
reviewed each year and is fully aligned with ISO 45001 standard.
Each employee 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 Health and Safety as
defined in the Global Safety Strategy (see details below);
• empowers employees to take ownership, for themselves and
their team of Health and Safety;
• gathers 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;
• recognizes employees who propose Health and Safety
innovations or implement solutions;
• 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 Health
& Safety vision and goals;
• complies to external legal requirements and internal directives.
• embeds Health and Safety into its business practices and is
an integral part of all major decisions, from acquisition,
product development, the launch of a businesss and
;change management.
is determined to eliminate hazards and reduce risks.
•
2.2.4.2 Risks and opportunities
Health and Safety is one of the risk drivers of the Enterprise Risk
Management (ERM) model, which is part of a formal risk
assessment, identifying Key Risk Indicators and implementing
action plans to reduce risk. The focus of this model is to
concentrate at global level, on risks that can result in serious or
fatal accidents. This involves looking beyond the top 5 hazards and
analyzing the controls preventing accidents from occurring and
connects to Schneider Electric’s High Potential Severity (HiPoS)
program. Those hazards that have the potential to result in serious
accidents have a deeper analysis by global experts, and the
learnings are then shared with the full organization.
As well as driving specific actions, the ERM and HiPoS programs
also contribute to the annual global Health and Safety Improvement
program.
Regarding legal compliance risk, all Schneider Electric sites
prepare a Health and Safety legal register, audit themselves
against the required regulations and implement actions to close the
gaps. The full process is audited as part of the ISO 45001
Occupational health and safety management systems external
certification.
Injuries based on the Top Hazards
3%
16%
32%
4%
15%
14%
16%
Fig. Last 5 years
Electrical
Falls
Machines
Road/driving
Powered Industrial Trucks
Material Handling
Other
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countries in 2023. The next step will be to deploy it in the rest of the
countries.
Communication, through webinars, safety intranet, and internal
social media, 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 enhance risk prevention.
Each quarter, Schneider Electric focuses on key topics “Quarterly
H&S Spotlights” to raise awareness of both workplace Health and
Safety and human factors, promoting the importance of safety
globally, through training materials, posters, employee videos, and
a quarterly video message from Schneider Electric’s top leaders.
Schneider Electric engages employees by using the internal social
media tool, Yammer, to post Health and Safety updates, interact
with the community, and collect feedback from employees.
Schneider Electric also encourages employees to report safety
opportunities, which are translated into risk reduction actions to
engage employees in the Health and Safety program. In 2024, the
completion rate of improvement actions connected with the safety
opportunities will be measured.
Audits and 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 external certification
is in place for 211 locations, including 176 manufacturing and
logistics sites and the headquarters.
Annual Environmental Health and Safety Assessments (EHSA):
To ensure successful implementation of the Schneider Electric
Health & Safety strategy, annual EHSA’s are performed in industrial
and customer facing sites worldwide, by the site Health & 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.
Global Risk Consultants (GRC) perform loss prevention audits for
industrial sites to ensure that the required standards for fire
prevention and emergency planning are in place.
Externally published Health & Safety KPI’s are audited by an
independent third party as part of our non-financial performance
reporting.
Chapter 2 – Sustainable development
2.2 Driving responsible business with Trust
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The Group communicates in an open and transparent manner and:
• continually improves its Health and Safety 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 shares with all potentially
impacted employees to prevent incident (re)occurrence;
• sets Safety and Occupational Health goals and objectives,
monitors performance, and reports progress internally and
externally.
Consult and download Schneider’s Health and Safety
Policy on www.se.com
2.2.4.5 Actions and resources
The fundamentals of the Health and Safety 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, regularly reviewed to prevent serious
accidents.
• Five guiding principles, set the expected Health and Safety
behaviors.
• Four strategic priorities, which have been identified as strong
levers to deliver the Schneider Electric Policy.
Technical
qualifications
and safe
behaviors
G u i d i ng principles
We report
opportunities
Unsafe?
We stop
work
We resolve
and share
solutions
Operational
discipline
and execution
We are
qualified
Driving
We care for
each other
Powered
Industrial
Trucks
S.A.F.E.
First
Electrical
Machines
Falls
Top 5 haz a r d s
Safe
workplace
for everyone
Leading
as role
models
The 2025 vision is connected to the four pillars of the Health and
Safety strategy – Technical qualifications and Safe behaviors,
Operational disciplineand and execution, Leading as role models,
and Safe Workplace for Everyone.
Each year a global action plan is generated by the Health and
Safety corporate team to implement the 2025 vision. In 2024 the
plan will cover a safe driving program, reducing cut accidents,
machine safety, office and R&D safety, and Health and Safety
leadership training for Managers and safety professionals. A local
action plan, managed by each region, complements the global
plan and includes the improvements identified by the Environment
Health and Safety Assessment (EHSA) deployment, the ISO 45001
implementation, and the safety culture assessment. The safety
culture assessment has evolved into a program called “Safer
Future”, which includes a safety climate tool (NOSACQ50) that is an
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Chapter 2 – Sustainable development
Health and Safety performance results
Recognition and awards
In 2020, Schneider set a five-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 more than 24
hours, are classified as Serious.
Trust
SSE #14
Our 2025 Commitment
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 one 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.
95 locations won the Operational Excellence award including
several GSC sites. This represents 78% of all North America (NAM)
locations.
Schneider NAM has also won the Corporate Culture of Safety
award given to organizations with 50 or more locations achieving
Occupational Excellence. Schneider Electric UK & Ireland has
been awarded the RoSPA Gold Medal (6 consecutive Golds)
Award for health and safety performance and the RoSPA Fleet
Safety Gold Medal (7 consecutive Golds) Award for managing
occupational road risk.
Schneider Electric Canada has been awarded a partnership in
injury reduction. Schneider Electric Perú received an award from
the insurance company RIMAC for its excellence in the category
“Best Comprehensive Occupational Risk Management.”
Employee safety participation trend
MIR historical trend
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2019 baseline
2023 Progress
2025 target
LTIR historical trend
2019
2020
2021
2022
2023
2025 Target
0.79
0.51
0.38
The MIR performance has reduced to 0.51 in 2023, meaning that
we are at 2% off target, which represents a 68% progress of the
2021- 2025 program. 2023 was the best performance ever showing
a MIR reduction of 12% compared to 2022, this translates to 154
medical incidents, of which 2 were classified as serious, without
any employee fatalities.
As a result of all the Health and Safety 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 been reduced by 56%,
and the severity of incidents (Lost Time Incident Rate (LTIR)) by
55%.
9
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2020
2021
2022
2023
2025 Target
Future evolutions
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 two-year
improvement plan aligned with the 2025 vision:
•
•
•
•
•
to strengthen Health and Safety knowledge, skills, and abilities
of all employees and contractors.
to equip all leaders to role model Health and Safety at every
opportunity and encourage employees to speak up and engage in
Safety program.
to accelerate transformation with digitization and data analytics,
and promote local innovation to accelerate Health and Safety
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.
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2.2 Driving responsible business with Trust
2.2.5 High standards for
the quality and safety of
our products
2.2.5.1 Context
Schneider Electric holds dear the trust customers and employees
place in its products and services to protect themselves and their
property. Moreover, Schneider recognizes from events in other
industries the value that customers place on quality and the
significant damage to the brand loss of customer trust and
perception of quality can bring. Therefore Schneider raised it’s
already high expectations to include setting a new standard for
quality in our industry. 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 continues
and accelerated its Company-wide quality transformation.
2.2.5.2 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 with new or
more stringent standards or regulations could result in capital
investment.
Risks identified by Schneider Electric about product, project,
system quality, and offer reliability can be:
• Design-related safety and quality concerns
• Manufacturing and logistic problems
• Field execution and services related
• Software security and quality
• Supplier and supply chain related
The above-mentioned risks could significantly impact the Group’s
financial performance. 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).
2.2.5.3 Governance
The Group policy is realized through a robust Quality Management
System (QMS), 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 ISO 9001 standard: 230 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 by creating the role of
Chief Sustainability and Customer & Quality Officer reporting
directly to the CEO. Together they and the Executive Committee
hold regular operating rhythms to review 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 regular leadership reviews of Schneider
operations worldwide. During the process reviews, visiting
leadership personally compares the current standard to actual
conditions and to industry best practice to identify necessary
corrections and opportunities for improvement.
2.2.5.4 Group policy
In 2023, under the leadership of the new CEO, the Group elevated
our commitment to quality though a new quality policy, stating:
“We rise to a new challenge! Meeting quality, product safety, and
reliability requirements is our baseline at Schneider Electric; but we
aim for more! Our customers expect nothing less than continuous
improvement and innovation beyond expressed needs, to set new
industry standard. Quality, product safety, and reliability demand
the active engagement of all, without exception because the quality
of our solutions is the safety of our customers.”
The policy of Schneider is to only propose products, solutions, and
services which are safe when properly used for their intended
purpose or for other reasonably foreseeable purposes which also
contribute 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
lifecycle. 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.
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2.2.5.5 Actions and resources
In support of the new Quality Policy, Schneider continues its company-wide transformation as illustrated hereafter.
Quality strategy
1.
Quality
Care
2.
S&R-0
Compromise
3.
Strict & efficient
change mgmt.
4.
Highest applicable
standards
5.
Enhanced Audits
6.
Situation-specific
problem solving
7.
Leverage Lessons
Learnt
8.
Governance
& Acceleration:
obeya/gen(m)ba
/ kaikaku
Design phase
Launch
Mass Production
Field Execution & Reliability
QMS / Excellence Roadmaps
Hardware
/ Systems
Software
Parts
Quality
Program Launch
Production &
Distribution
Projects & Field
Execution
Service/Field
Reliability Prod.
Parts
Planning & Assurance
Quality Control
Quality strategy
Schneider’s Quality strategy seeks to embed quality throughout
each value stream from the earliest moments of design, through
industrialization and launch, in production and supply chain, and in
the field. In each of those lifecycle phases, the key principles are
applied. In 2023 the Group made significant progress in the quality
transformation.
Building Quality culture, the Group emphasizes the role and
responsibility of every employee from the front line to the CEO for
Quality as highlighted in the new Quality Policy. A Quality Academy
was created with the mission to enable employees throughout the
Company with learning and development. The Group also
launched Quality Fundamentals across the value stream and held
hundreds of radical week-long Quality Improvement workshops
wherein thousands of employees learned the Quality Fundamentals
through hands-on kaizen-style implementation.
Quality Management System and Internal Audit
Strengthening and simplifying the QMS processes and Internal
Audit. To ensure complete implementation and disciplined
adherence to processes, the Group is significantly strengthening
the quality of the internal audit program. This program will now
cover both system audits and process audits simultaneously,
evolving internal audits into valuable tools for continuous
improvement and risk mitigation. Furthermore, Schneider Electric
has enhanced collaboration with certification bodies to ensure
adherence to globally recognized quality standards and to
increase the value of audits beyond mere compliance.
The scope of audits within the QMS has expanded to encompass
compliance, strategic alignment, process optimization, and
continuous improvement. This approach adds value by uncovering
insights that drive meaningful changes and contribute to the overall
success of the organization. In highlighting the Group’s
commitment to continuously improving the QMS, fostering
collaboration with external stakeholders, and leveraging audits as
powerful instruments for driving positive change, we demonstrate
our dedication to excellence.
Quality in design phase
The Group accelerated its commitment to Safety, Reliability, and
Robustness with the launch of a brand-new Design for Safety and
Reliability Standard with new mandatory Quality Fundamentals for
Design domain, to increase both safety, robustness, and reliability
of new offers; the Customer Satisfaction and Quality (CS&Q)
function puts a strong focus on stopping any launches that do not
comply to quality standards. In addition, roles and responsibilities
were better defined and the number of resources focused on
design quality has greatly increased.
Recognizing the importance of software and firmware, Schneider
established a new Software Quality Leader position and created
Software Quality Fundamentals based on Development, Security,
Operations and Agile development principals.
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Quality in industrialization and launch
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.
Therefore, the Group reinforced quality in Industrialization by
adding Quality Fundamentals, based on APQP from the Automotive
Industry Action Group, for prototypes, pre-series, and launch.
Roles and responsibilities were redefined, and the resources
refocused on industrialization quality will continue to expand. This
adoption of the highest applicable standard positions Schneider
Electric for even more proactive identification, prioritization, and
mitigation of product and process risks. This “zero-defect” and
data-driven program aims to ensure our products achieve 100%
first time right and on-time flawless launches. The resulting safety,
robustness, quality, and cost optimization strives to exceed our
customers’ expectations.
Quality throughout the Supply Chain
Demonstrating its zero compromise on safety and regulatory
requirements, the Group rigorously sustains a living Potential
Failure Mode and Effects Analysis process whereby the most
important risks are identified, and in 2023 a breakthrough level of
risk elimination or mitigation actions were taken across the Supply
Chain.
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 deploy the quality basics special radical change events
(kaikaku) were held to immediately implement quality basics in all
regions and products, implementing the basics on hundreds of
manufacturing and distribution center lines across the Company.
The radical change events serve to build quality capability in
participants and organizations, further strengthening the Group
quality culture.
To further the quality culture and accelerate transformation, the
Group developed a Quality Index to measure quality-centric
behaviors and outcomes for all plants and distribution centers. The
new Quality Index provides transparency and focus to the quality
transformation; recognizing leading plants for their quality and
identifying any lagging plants in order to allocate regional or global
resources for success.
Shifting from reactive to proactive quality, the Group has
strengthened its change management processes wherein changes
to the supply chain are now evaluated early and at key milestones,
their potential risk and quality gaps are closed before the start of
production, preventing potential problems from ever occurring.
Three major initiatives were launched with our supply base in 2023.
First, the Supplier Qualification process was analyzed and updated
for efficiency and robustness including the addition of the Quality
Fundamentals, addition of software supplier qualifications, and
counterfeit component programs. Second, the Group is
standardizing on widely known APQP process with external
suppliers for new project offers. In addition to new offers, the Group
launched a program to apply Production Part Approval Process
(PPAP) to legacy critical parts and changes of suppliers. In 2023
the Group executed over 1000 new PPAPs. Finally, in support of the
strategy, the Group continues to invest in building quality expertise,
most recently expanding battery and electronics competencies.
Continued implementation of digital solutions for real time process
control and statistical process control, traceability, and other digital
capabilities to over 500 manufacturing lines. Leveraging
Schneider’s formidable Smart Factory capabilities, the Group is
innovating ways to digitally build-in quality. From process quality
assurance and control to reducing administration, the Group has
identified hundreds of applications for Artificial Intelligence (AI) and
Machine Learning.
Quality in projects and Field Services
The Group enhanced the efficiency of service and project
execution by incorporating risk management and mitigation
strategies throughout the entire process, from offer definition to
maintenance. The Group also so integrated Quality Fundamentals
for Project and Service into daily activities to strengthen processes
and establish standardization for proactive identification,
prioritization, and mitigation of risks. By implementing this
approach, we seek to improved safety, robustness, quality, and
cost optimization, surpassing our customers’ expectations while
ensuring their safety. Additionally, this will help us establish
consistent standards across the Company.
Quality improvement
Schneider Electric’s “Issue to Prevention” process continues to
deliver valuable insights to root causes of problems and their
responding 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. Through the combined effects of the
Quality Strategy, the Group made progress setting a new standard
for the industry by declaring and driving toward zero recalls.
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Trust
SSE #15
Our 2025 Commitment
Reduce total number of safety
recalls issued to 0
In 2023, the Group issued 23 product recalls as approved
by the OSAC, vs. 24 in 2022. In addition to Safety, the
Group understands the significance of recalls for their large
environmental footprints consisting of reproduction of the
recalled units and multiplications of packaging and
transportation.
While the count of recalls has not changed significantly
year-on-year, the quantity of parts affected reduced 98%
vs. prior year, and the cost of poor-quality materially
declined. The radical improvement is attributable to earlier
detection and significant progress implementing the
Quality Strategy throughout the value stream.
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 through
the adoption and rigorous execution of a quality system
consisting of the highest available standards.
Our progress
2020 baseline
2023 Progress
2025 target
25
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Chapter 2 – Sustainable development
2.2.6 Digital trust and
security
2.2.6.1 Context
Schneider Electric commits to provide solutions to achieve a
greener low-emissions future, a shift mostly driven by digitalization
and fueled by innovation. Data and cloud driven digital solutions
play a key role in that endeavor supporting optimization and
efficiency initiatives for organizations.
While this hyperconnectivity and subsequent digital enablers
provide transformative business and operational value, they also
increase the attack surface, thus cyber risks, in an already dynamic
threat landscape. This is compounded by the fact that the Group is
aggressively developing software, firmware, and digital services,
operating in 5 continents and in more than 100 countries with
complex regulations, sourcing goods and services from more than
50,000 unique suppliers.
Cybersecurity, product security, and data protection are essential
business imperatives for Schneider Electric. The Group takes a
risk-based and threat-informed approach for its cybersecurity
strategy, managing cyber risks holistically for its operations,
customers, its supply chain and its subsidiaries, working to shape a
Company-wide cybersecurity culture while partnering with experts
to reach the highest cyber standards.
2.2.6.2 Risks, impacts, and opportunities
Schneider Electric recognizes that the security of its offerings and
its ability to safeguard its customers’ data while complying with
regulations is key to building sustainable relationships. To reach the
highest level of trustworthiness, the Company continuously
enhances its security posture through five core pillars:
1. Cybersecurity fundamentals and awareness.
2. An enterprise-wide, risk-based approach.
3. Cyber defense, threat intelligence, and incident response
and recovery.
4. Supply chain and installed-base security.
5. Customer and authority relationship and expectations.
By diligently implementing these pillars throughout everyday
operations, Schneider Electric aims to continuously build resilience
and nurture Trust, while mitigating risks over its digital and
operational landscapes.
Schneider Electric works collaboratively with the ecosystem sitting
along its value chain (suppliers, authorities, customers, etc.
especially those in critical infrastructure) to build trust so to raise
the defense level of the industry at large and strengthen digital
trust.
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As a result, the Group is:
• 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 works with
partners towards addressing supply chain security.
• an active contributor to the World Economic Forum’s
Cybersecurity Center, sitting at the advisory board of its Oil and
Gas group to strengthen resilience across the industry,
leveraging collective intelligence and expertise. Public reports
are an output of this strong collaboration, as well as tighter
connections with leaders from other companies.
2.2.6.3 Governance
Cybersecurity, product security, and data protection are integral to
the Group’s corporate strategy and digital transformation journey,
and at the core of our 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 Company-wide cybersecurity portfolio,
coordinating the execution of strategic and operational initiatives,
and orchestrating a broader community of security practitioners
distributed across businesses and territories.
For all security practices and initiatives, monthly updates on
projects and reports on metrics are orchestrated centrally to allow
continuous improvement of all capabilities.
Schneider Electric is committed to doing business responsibly,
earning and sustaining trust by relying on mechanisms, not just on
intentions. Therefore, the Group aim to apply objective, transparent,
and data-backed decision-making processes.
2.2.6.4 Group policy
Cybersecurity policies are foundational to the Group’s security
posture as they are compulsory for all employees and contractors.
They set management’s tone and provide requirements for secure
behaviors (people), practices (processes), and environment
(technology) throughout the Company.
The Company’s overarching General Information Security Policy
and all supporting security policies are in line with broadly
recognized standards and regulations such as ISO 27001, NIST
Cybersecurity Framework, ISA/IEC 62443, and General Data
Protection Regulation (GDPR).
Our public security-related policies can be found
in the Cybersecurity and Data Protection Posture page
on www.se.com
Requests
Maturity
Training
Schneider received and handled 1,400 requests related to cybersecurity, product security, and data protection in 2023, stemming from
customers and authorities.
The Group averaged a score of 800 with BitSight during the course of 2023.
It have 4 sites ISO 27001 certified(1).
Our global product penetration testing labs are CREST certified(2).
10 internal audits were conducted in 2023.
Schneider received a score of 3.2 in a 2023 annual NIST maturity assessment by a top consultancy.
Its mandatory training has been performed by 99% of employees in 2023.
On top of the annual mandatory training, the Group deploys role-based cybersecurity training for its Admins, HR, R&D, and customer-
facing employees.
95% of the customer-facing employees obtained their “Cyber Badge” in 2023.
Industrial
security
1 Cyber Leader per site monitors alerts and vulnerabilities and supports incident response.
100% of sites are monitored in real-time for physical and digital penetration.
Since 2022, every new line is ISA/IEC 62443-3-3 & 2-4 Security Level 2 compliant.
Supplier risk
management
Out of ~52,000 unique suppliers tiered, ~5,000 are monitored, according to their criticality and exposure.
~50% of critical risk profile suppliers went through C-level security discussions.
Exposure-based cybersecurity and data privacy Terms & Conditions for all new suppliers.
Vulnerability
management
Throughout 2023, the Group’s Vulnerability Management process has been certified ISO/IEC 30111:2019.
Security notifications are published, in response to vulnerabilities reported, on Schneider Cybersecurity Notification Portal(3).
Cyber
defense
Security Operations Center (SOC) operates 24/7 across Schneider’s worldwide digital and operational landscape.
In 2023, the Group did not experience any cybersecurity incident impacting materially its financial statement.
100% of high severity incidents are contained and debriefed at the highest level of the Company.
Schneider leads periodical crisis simulations with its critical infrastructure clients and authorities.
(1) For more information, visit the “Cybersecurity and Data Protection Posture” page on www.se.com
(2) Read the press release “Schneider Electric’s Global Security Labs receive CREST pen-test accreditation” on www.se.com
(3) Acces Schneider Cybersecurity Notification Portal from www.se.com
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2.2.6.5 Actions and resources
Schneider Electric seeks to align with broadly recognized
standards and has received several recognitions for its
cybersecurity, product security, and data security performance.
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).
ISO 27001 demonstrates our ongoing
commitment to manage our high value assets
securely in compliance with regulations.
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
Our global Secure Development Lifecycle
process and central office is certified to
Maturity Level 4 of the TÜV Rheinland Cyber
Security Management (CSM) certification, as
well as the ISASecure® SDLA certification.
See the TÜV Rheinland Cyber Security
Management certification
See the ISASecure® SDLA certification
Schneider Electric’s Vulnerability Handling &
Disclosure process is certified with ISO/IEC
30111:2019 and ISO/IEC 29147:2018
standards. This affirms our commitment to
address vulnerabilities affecting our products
and protecting our customers.
See the certification
Schneider Electric was certified mature
based on international information security
standards such as ISO 27001, NIST
Cybersecurity Framework and Cybersecurity
for ICS, PCI-DSSs and GDPR.
See the certification
Trust
SSE #16
Our 2025 Commitment
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 these 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 800 for the year 2023. Schneider Electric’s external
rating since 2018 has risen by +56%.
Our progress
2020 baseline
2023 Progress
2025 target
Top 25%
Top 25%
Top 25%
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2.2.6.6 Data privacy and protection
Schneider Electric implemented the 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.
•
• 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 the People’s Republic of China’s Personal
Information Protection law and the California’s Privacy Rights Act. A
new data protection addendum has been deployed, including the
new Standard Contractual Clauses of the European Commission.
2.2.7 Zero-tolerance for
corruption
2.2.7.1 Context
Corruption is illegal and refers to the abuse of entrusted power for
private gain. It damages ecosystems by eroding trust and
confidence, which are crucial for sustainable economic and social
relationships. Additionally, corruption poses threats to the rule of
law, democracy, and human rights. It undermines good
governance, fairness, and social justice, distorts competition,
hampers economic development, and jeopardizes the stability of
democratic institutions and the moral fabric of society. In recent
years, global anti-corruption regulations have been strengthened.
Many countries now have stricter controls and impose sanctions for
misconduct to combat corruption effectively.
2.2.7.2 Risks, impacts, and opportunities
Engaging in corruption exposes organizations 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.
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;
• 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. In 2023, 11% of the
substantiated valid alerts, reported through whistleblowing,
concern a potential violation of the Anti-Corruption Policy(1).
(1) As of January 1st, 2024
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The process at regional level was as follows:
2.2.7.4 Group policy
• 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.
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.
All action plans were implemented in 2021 and 2022. In 2023,
Schneider Electric established risk maps for newly acquired
entities currently being integrated.
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.
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.
2.2.7.3 Governance
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 strong and continuously developing Anti-
Corruption actions, which are part of the Ethics & Compliance
program. The Ethics & Compliance program is led by the Ethics &
Compliance department, under the authority of the Chief
Compliance Officer, to ensure its efficiency through a dedicated
Compliance Program team in close collaboration with the Anti-
Corruption Controls and the Fraud Examination teams.
The Compliance Program team is made of a central team, covering
Policy, Awareness, Learning & Change Management; Compliance
Operations; and Risk & Control, and is locally operationalized by
Regional Compliance Officers under the supervision of their
regional Ethics & Compliance Committees defining the local
strategy, and supported by a community of Ethics Delegates.
To reinforce the Anti-Corruption Policy, Schneider Electric has
established specific policies and procedures on Conflict of Interest
and Gifts & Hospitality. Both policies were updated in 2023,
accompanied by extensive digitalization, simplification, and
clarification of the processes. These enhancements were made
with a particular focus on providing practical examples to facilitate
comprehension. To ensure that employees grasp the modifications
effectively, a range of informative and explanatory resources have
been made readily accessible.
2.2.7.5 Actions and resources
Management commitment
Group management demonstrates unwavering commitment to
anti-corruption efforts through their actions and initiatives. The
Anti-Corruption Policy was updated in 2021 and signed by the
Chairman and CEO. Management regularly releases informative
videos, which are extensively communicated to all employees, and
which highlight the Company’s zero-tolerance policy towards
corruption, emphasizing the importance of integrity and ethical
decision-making at all levels of the organization.
The program is supervised at Board level, by the Executive
Committee through the Group Function Committee, and through
dedicated committees, notably for the anti-corruption controls
program. These committees also approve certain program actions,
including risk mapping. Management has also made some call for
actions to all middle- and first-line managers through dedicated
communication channels.
Awareness
In 2023, several communication campaigns on anti-corruption were
organized within the Company, with specific focus on third-party
management and anti-corruption controls, gifts and hospitality, as
well as conflict of interest to support the 2023 Annual Conflict of
Interest Disclosure Campaign for targeted employees exposed to
corruption risks. The objective was to effectively communicate
updates on the anti-corruption program, enhance employee
awareness of corruption risks, and equip them with the necessary
tools to address it, encouraging them to seek help whenever
needed.
Schneider Electric organized a live event on December 7, 2023, to
raise awareness about combating corruption. The event aimed to
educate employees on preventing unethical conduct. An external
speaker shared his personal experience with corruption – including
time spent in prison – and provided practical advice to avoid similar
situations. Schneider Electric reiterated its anti-corruption policies
and processes, ensuring employees were well-informed. The event
saw over 5,000 employees actively participating and engaging in
discussions. A recording of the session will be available throughout
2024.
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Training
Schneider Electric has developed a suite of anti-corruption
e-learnings, providing guidance on real life risk scenarios,
designed to meet the trainees’ needs and expectations. Trainings
are supported by videos from top leaders demonstrating the “tone
at the top”, are available in 14 languages, and is mandatory for
targeted employees exposed to corruption risks, as identified by
the corruption risk mapping. In 2023, those e-learnings were rolled
out to more than 40,000 employees, with a completion rate of
98.5%.
Moreover, the year saw ad hoc anti-corruption learnings delivered
to specific audience in functions deemed to be priorities (e.g.
Services).
Third-Parties Due Diligence
Schneider Electric has established procedures to prevent, detect,
and manage corruption risks in business relationships. These
procedures involve steps such as risk assessment, screening,
investigation, review, and audit. They ensure that adequate actions
are taken to mitigate risks effectively.
Customers & Suppliers: When forming relationships with
customers and suppliers, Schneider Electric employs a meticulous
screening and continuous monitoring process to assess the risks of
anti-corruption and export control.
Business Agents: Schneider Electric updated its policy on
intermediaries in 2023. It aims to minimize their use, except for
specific exceptions.
Sponsoring & Donations: To ensure legal and ethical operations
in sponsorship activities and mitigate corruption and reputational
risks, comprehensive risk screenings are conducted. Additionally,
Schneider Electric’s Philanthropy program is governed by strong
practices, including thorough due diligence to assess donation-
related risks in compliance with laws and local contexts.
Anti-Corruption Controls
Schneider Electric implemented enhanced accounting control
procedures to prevent corruption. In 2022, a cross-functional
program was launched, involving Accounting, Internal Control,
Digital, Ethics & Compliance, Procurement, Sales, and Marketing
teams. The program focused on digitizing preventive and detective
controls, with sponsorship from Executive Committee members.
Priorities were determined based on the 2021 Ethics & Compliance
risk assessment, covering areas like Gifts & Hospitality, Travel &
Expenses, Sponsorship, Donations, Business Agents, Marketing
Development Funds, and Performance Bonuses. Most entities have
implemented the designed controls in 2023.
In addition, Schneider Electric continued to execute in 2023 – like in
2022 – the central monitoring of key processes of the Anti-
Corruption program such as Business Agents, Conflict of Interest
and Anti-Corruption training results. The outcome of these controls
is regularly shared with key stakeholders to ensure continuous
process and design improvements.
2.2.7.6 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 influence
activity, and donations. As a global 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
2023, 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 the 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 2023, the Group discloses membership fees
expenses towards trade associations, business coalitions, and
think-tanks that are dedicated by those organizations to lobbying or
advocacy. Generally, the budget allocated to lobbying in these
organizations is small as these associations mostly organize
business workshops, peer-learning groups, or work on
standardization. Schneider Electric updated its reporting
methodology compared to previous years and since 2022
discloses the budget allocated to lobbying or representation rather
than total membership fees. The data collected covers the main
Group geographies, in particular Europe, and also including, North
America, China, India, Indonesia, and or the Philippines.
Total contributions globally amounted to about €0.5 million in 2019,
€0.6 in 2020, €1.2 million in 2021, €1.1 million in 2022 and €1.4
million in 2023.
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 business and
climate opportunities related to the new energy landscape.
Contributions and expenditures on this topic amounted about
€0.9 million in 2023 (€0.6 million in 2022) 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 €0.3 million in 2023 (€0.2 million in 2022) globally.
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2.2.8 Compliance with Competition Law
2.2.8.1 Context
2.2.8.3 Governance
As outlined in Schneider Electric’s Trust Charter, upholding fair
competition and complying with applicable antitrust and
competition laws is a core business principle for Schneider Electric
and governs our activities across the world.
Competition law sets out the legal framework to ensure that markets
remain open and competitive and to protect customers from market
arrangements where competitors agree not to compete with each
other. Although the scope and content of competition law may vary
from jurisdiction to jurisdiction, it is generally prohibited for
companies to (i) enter into agreements with its competitors which,
for example, seek to fix prices or otherwise limit competition, and
(ii) abuse a dominant position on a given market.
Schneider Electric has a strong brand and is present in many
markets and at many levels of the supply chain. The activities of
Schneider Electric are subject to a variety of competition laws and
regulations on both national and supranational levels, affecting all
aspects of Schneider Electric’s business strategies and day-to-day
operations. Any violation can cause severe consequences for
Schneider Electric, and the individuals involved in such activities,
including substantial fines and a serious loss of reputation.
2.2.8.2 Risks, impacts, and opportunities
Schneider Electric’s Competition Law Compliance Program is an
integrated and essential part of Schneider Electric’s commitment to
trust and serves to:
•
identify and assess risk areas where the Group may be
exposed to anti-competitive behavior;
• manage potential risks through internal procedures, escalation
routes, and controls;
• prevent potential anti-competitive behavior through training and
communication;
• detect early violations of competition law through a strong risk
awareness throughout the business and accessible reporting
mechanisms;
• manage any exposure to violation of competition law.
To raise awareness about applicable competition laws and manage
areas of risk, Schneider Electric’s Competition Law Compliance
Program is based on:
• Policies, guidelines, and procedures.
• E-learnings and in person trainings.
•
•
Internal controls and audits.
Internal reporting mechanisms including local management,
HR, Regional Compliance Officers, Legal, and Schneider
Electric’s whistleblowing tool Trust Line.
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.
Schneider Electric’s Competition Law Compliance Program is
endorsed by the Board of Directors and has backing from
Executives and Senior Managers.
The Competition Law Compliance Program is managed by a Global
Competition Law team with full support from the Global Legal team.
It is continuously assessed and adapted to developments in
applicable antitrust and competition laws and the interpretation of
such laws as well as the development of Schneider Electric’s
activities and market presence.
2.2.8.4 Group policy
Schneider Electric published and deployed an updated and
enhanced Group Competition Law Policy in 2022. In addition, nine
topic specific Competition Law Guidelines were also launched in
2022 including topics related to information exchange,
procurement, distribution, e-commerce, and mergers and
acquisitions.
Both the Group Competition Law Policy and the Competition Law
Guidelines have been translated into over 30 languages and are
accessible to all employees via Schneider Electric’s internal policy
platform.
2.2.8.5 Actions and resources
During 2023, Schneider Electric continued the work started in 2022
to strengthen our Competition Law Compliance Program. This work
included:
• A continued deployment of the updated Group Competition Law
Policy and the nine topic specific Competition Law Guidelines
that were launched in 2022.
• The development and launch of 16 topic specific e-learning
modules accessible to all employees globally via Schneider
Electric’s internal learning platform.
• The development of guidance documents and template
agreements.
• Targeted in-person Competition Law trainings to employees in
identified risk teams and roles.
One of the key cornerstones to a successful Competition Law
Compliance Program is continuous efforts to train employees and
communicate the Group Competition Law Policy, the accompanying
Guidelines, and other internal rules and recommendations. During
2023, a focus has been on providing targeted in person competition
law trainings to employees in identified risk teams and roles. Raising
awareness of competition law risks and providing various forms of
trainings to the business will continue to be an essential part of our
program in the years to come.
Considering the size and scope of Schneider Electric as a global
company, another cornerstone to a successful Competition Law
Compliance Program is to reinforce the Program across the Group,
including:
• strengthening connections with other internal functions,
including marketing, purchasing, data, HR.
• determine and coordinate existing compliance efforts in other
areas, including commercial compliance, ethics and
compliance.
• reinforcing compliance network across the entire geographic
scope of the Group, including local legal teams and regional
channels.
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2.2.9 Compliance with tax
regulations
2.2.9.1 Context
The current international tax system in which the Group operates is
made of multiple complex international and local tax regulations
since all the countries in the world have their own set of tax rules.
To operate responsibly, ethically and efficiently in this complex and
uncertain environment the Group believes that a fair and
sustainable Group tax policy is a fundamental requirement. It aims
at preventing operational, transactional, and reputational risks.
2.2.9.2 Group policy
The Group’s global Tax Policy focuses on four key principles:
Governance and Control
• The Tax Policy is endorsed by the Tax Department and the
Group CFO and validated by the Audit and Risks Committee.
• The tax department reports to the Group CFO and is a global
function which allows consistency and standardization wherever
possible. In addition, dedicated tools and processes, as well as
a strong presence of tax experts in the most significant
countries, ensure strong and consistent decision process.
• Regular reports are done on noteworthy new tax regulations and
risks to the Audit and Risks Committee.
Compliance with national and international tax
regulations
The Group and the Tax department are committed:
•
•
•
to comply with the national and international tax laws, rules and
regulations as the ones set out by the OECD regarding notably
the minimum 15% taxation implemented under the Pillar 2 set of
rules;
to respect in good faith both the letter and the spirit of the law;
to align the tax strategy with the Group’s commercial strategy
and operational activity, to challenge the in-house reading and
interpretation of the law, with external tax advisors as required to
ensure correct analysis and treatment are conducted.
Transparency and Trust
All employees with tax responsibilities or activities are committed:
•
•
to cooperate openly and transparently with the tax authorities on
the Group’s tax affairs and to disclose relevant information in a
timely, positive and professional manner for them to carry out
their audits;
in the event a tax discussion arises, to work proactively to seek
a consensual agreement, where possible, and reach solutions.
Last and whenever necessary, the Group discusses issues and
raises questions to the tax authorities to obtain clarifications in a
preventive manner. As an example, the Group made the election for
the “Trust relationship” (“Relation de confiance”) regime existing in
France.
Preserve value and competitiveness
The Group strives to preserve the value created by its operations.
The Tax Department assists operational business by providing tax
advice and determining the tax positions best suited to operational
reality.
The Tax Department thus contributes to creating value and
protecting shareholders’ assets by limiting tax risks while remaining
compliant with national and international tax regulation.
The Group’s detailed Tax Policy can be consulted
on our website at www.se.com
2.2.10 Export Control and
Sanctions
2.2.10.1 Context
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,
products, and end-uses.
Schneider Electric, being a multi-national corporation 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.
2.2.10.2 Risks, impacts, and opportunities
The key risks for export controls and sanctions are related to
conducting business with restricted parties, sharing restricted
software, technology, products, or services without a license, and
ensuring those we do business with abide by applicable export
control and sanctions regulations. These risks create opportunities
for Schneider Electric to develop and automate processes related
to third-party party screening, export control classification for
products, software and technology, and ensuring we obligate our
third-parties through contractual commitments to comply with
applicable export controls and sanctions regulations.
Schneider Electric’s robust Export Control Program increases our
competitive advantage by demonstrating our commitment to ethical
business practices and compliance with international regulations
and sanctions.
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2.2.10.3 Governance
2.2.10.5 Actions and resources
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 Global Export
Control Center of Excellence team continuously monitors and
reviews export control activities to identify potential risks.
Schneider Electric has established mechanisms for reporting any
suspicious or non-compliant activities and takes appropriate
corrective actions via the Trust Line and Trust Center.
The Schneider Electric Export Control Program includes, 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/
classroom training sessions for all relevant Schneider Electric
employees.
The Global Export Control Center of Excellence team conducts
regular training programs to educate all Schneider Electric
permanent and temporary employees about export control
regulations, their responsibilities, and the potential risks and
consequences of non-compliance. The goal is to foster a culture of
compliance by promoting awareness and providing resources for
employees to seek guidance.
The Schneider Electric Export Control Program will continue to
evolve to meet the requirements of the ever-changing regulatory
global landscape.
2.2.10.4 Group policy
Schneider Electric’s export control approach is articulated around
our mission to provide education, advisory, business operations
support, and enforcement of the Export Control Policy and strategy.
The policy outlines our commitment to prevent the unauthorized
export of goods, services, technologies, and information that could
pose risks to national security, international trade, or other
regulatory concerns. The roles and responsibilities of businesses,
functions, and employees to ensure export control compliance are
clearly defined. The responsibilities include designating individuals
or teams responsible for overseeing export control activities and
implementing necessary controls. The policy, signed by the Group
Chief Executive Officer, sets the tone from the top, and is
applicable to all Schneider Electric employees.
The Schneider Electric Export Control Center of Excellence has
streamlined and standardized export control and sanctions
processes globally. A change management process with a
supporting communications and training plan has been developed
and executed transversally across Schneider Electric. This includes
but is not limited to a change review board to review regulations,
impact, and give guidance to ensure compliance. A key initiative
has been the automation of third-party screening. In 2023,
Schneider Electric has developed a new capability to automatically
screen all legacy and newly created/modified third-parties for risks
of anti-corruption and export control. The Group integrated
authoritative data sources of third parties with a best-in-class
external screening engine which is updated with the latest
regulatory and sanction lists in real-time. A dedicated screening
team was formed to independently review potential matches arising
and flag entities by risk level with a new screening flag attribute.
Third-party master data systems synchronize the screening flag
values with major business systems in real time to ensure
consistency. Screening flags are used to develop upstream and
downstream processes needed to mitigate risk as explained in the
relevant sections of this document.
Additionally, the Export Control Center of Excellence is subject to
periodic internal compliance reviews and audits to assess the
effectiveness of export control measures, identify any areas of
non-compliance, and implement corrective and preventive actions.
In parallel, the topic of export control is also part of Schneider
Electric’s KICs program applicable to all Schneider Electric Entities
and their subsidiaries. This helps ensure ongoing compliance to
current export control regulations and continuous improvement.
In 2024, the Global Export Control Center of Excellence team aims
to evolve with data-driven program, quantitative performance
improvement objectives that allow for predictive analysis and are
aligned to Schneider Electric’s export control strategy.
All existing and new export control risks will be continuously
monitored and managed with mitigation plans. The Export Control
Center of Excellence team and its extended network will continue to
evolve.
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2.2.11 Human rights
2.2.11.1 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 AI. 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.
The Group is also patron of the Global Compact “Labour and
Decent Work” working group. In September 2023, Schneider
Electric has committed to take action as an early mover of the
Forward Faster initiative of the United Nations Global Compact in
the area of the living wage. Lastly, Schneider Electric is part of the
Equity Action platform of the World Business Council for
Sustainable Development (WBCSD).
2.2.11.4 Group policy
2.2.11.2 Risks, impacts, and opportunities
Schneider Electric’s Human Rights Policy is articulated around
three principles:
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 2023, 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 115).
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.
2.2.11.3 Governance
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 and Global Supply Chain
Departments as well as countries, Internal Audit team and
Compliance functions.
Human Rights Global Policy has been validated in 2022 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
(Businesses for Human Rights), a leading French association of
businesses providing its members with tools and advice on
implementing the UN Guiding Principles on Business and Human
Rights (UNGPs). In 2018, Schneider Electric also joined the
Responsible Business Alliance (RBA), a non-profit coalition of more
than 120 companies from various 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.
Partner of Ressources Humaines sans Frontières since 2017,
Schneider Electric joined in 2023 the action-research project “Lab
8.7” that gathers pioneer companies to work on preventing the risks
of child labor, forced labor, and more broadly indecent labor in
supply chains.
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.
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.
In 2022, Schneider published the second version of its Global
Human Rights Policy. The Company intends to increase its
commitments by stating clearly its position on new challenges such
as migrant workers and AI. 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 was finalized in 2023 and the creation of an e-learning
is planned for 2024. The Policy is available in 9 languages.
In 2023, as part of the deployment of the Human Rights policy and
in line with Schneider Electric’s vision, the Group decided to go
include a focus on migrant workers. Guided by the “Dhaka
Principles for migrating with dignity”, Schneider Electric published
internal guidelines for migrant workers. The document provides a
frame that will help Schneider Electric’s teams, as well as partners
such as recruitment agencies, ensure that any migrant worker
related to Schneider Electric is protected from any abuse or
malpractices.
Find Schneider’s Global Human Rights Policy
on www.se.com
(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
• The 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 Institute for Human Rights and Business Dhaka Principles
for migrations with dignity
The procedures implemented by Schneider Electric, notably its
Vigilance plan and Ethics & Compliance program, ensure that the
Group adhere to the EU Taxonomy “minimum safeguards”
requirements referred to in Article 18 of Regulation (EU) 2020/852.
Alignment with international standards
and frameworks
Schneider Electric endorses 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.
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:
Policies
Policy description
Reference in this URD and online
Human resources
Diversity, Equity
& Inclusion
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.
Pages 216 to 225
Consult and download the Policy:
https://www.se.com/ww/en/about-us/
diversity-and-inclusion/
Family Leave
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.
Page 221
Anti-Harassment &
Anti-Discrimination
States Schneider Electric’s commitments to have zero-tolerance for any kind of
harassment or offensive behavior.
Page 219
Consult and download the Policy: https://www.
se.com/fr/fr/download/document/GAHP/
Flexibility@Work
Defines global Flexibility@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.
Page 220
Employee Benefits
Defines the global principles, standards, and governance for the provision of
employee benefits at Schneider Electric.
Pages 237 to 239
Health & Safety
Health & Safety
Travel
Security
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”.
Pages 121 to 123
Consult and download the Policy:
https://www.se.com/ww/en/download/
document/SE-Health-Safety-Policy/?ssr=true
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.
Page 336
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2.2.11.5 Actions and resources
In front of the risks described in section 2.2.10.2, the Group
engaged into several programs that span across its supply chain
and its workforce.
Internal actions
Schneider Electric entities and subsidiaries are monitored through
the implementation of KICs. 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 on
page 210.
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 on page 226.
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 2.2.4 on page 121.
External actions
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 workers and protecting their rights. This
program is being rolled out to the Group’s employees and strategic
suppliers. For more information, please see section 2.2.12.12 on
page 146.
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. For more information, please see section 2.2.12.6 on
page 141.
Incubation of a Social Excellence Program. For more information,
please see section 2.2.12.13 on page 147.
2.2.12 Sustainable
relationships with
suppliers
2.2.12.1 Context
Maintaining a sustainable relationship with suppliers is crucial for
ensuring ethical sourcing, minimizing environmental impact, and
fostering long-term business resilience. By prioritizing sustainable
practices and open communication with suppliers, companies can
enhance supply chain transparency, reduce risks, and contribute to
overall industry sustainability goals.
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 2023, Schneider Electric sourced goods and
services from more than 53,000 suppliers, across more than 60
categories, amounting to approximately €17.5 billion. This diverse
supply base represents a unique combination of mature companies
operating on a global scale, from small and medium scale
enterprises serving local or niche markets and categories which
require simple assembly to complex manufacturing activities.
Deeply committed to advance all United Nations Sustainable
Development Goals (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.
2.2.12.2 Risks, impacts, and opportunities
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 are estimated to be 25
times higher than its operations emissions.
Key risks identified by the Vigilance risk assessment include human
rights (in particular safety at work, decent workplace, and labor
standards), GHG emissions (especially coming from the
transformation of raw materials into components and their
transport), and pollution risks linked with some specific purchases
categories.
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 the impacts on its business
resilience and increases its attractivity to customers, investors, or
new talents.
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Supplier collaboration steps
Schneider Electric deploys a fourth-step process comprising of a
Supplier Qualification process (SAM), Parts / Products Qualification
process (SQM) , Supplier Performance Process (SPM), and
Supplier Development Process (SDP) to qualify new and legacy
suppliers for continued business association, where sustainability
performance is a key evaluation criteria.
Supplier Qualification (Supplier Assessmement Module
(SAM))
The journey of a new supplier starts with the SAM, when a
supplier’s capabilities are assessed to assure alignment with
Schneider’s expectations. This process has a dedicated evaluation
on labor, ethics, environment, and occupational Health and 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 the next stage of functional and
technical audits required for business qualification.
Part/Product Qualification Process (Supplier
Qualification Module (SQM)
Post the successful approval module the suppliers undergo supply
qualification, 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 Process (SPM)
During the commercial stage the performance of the 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).
Supplier Development Process (SDP)
Also during the commercial stage there is a collaborative process
to drive systemic and sustained improvements on identified gaps to
reach specifics expectations.
2.2.12.3 Governance
Vigilance plan
For many years, Schneider Electric has measured its sustainability
performance through a dashboard called 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 disruptive changes The SSI is
completed by a second level of programs called SSE to keep focus
on other long-lasting programs. The Vigilance plan corresponds to
SSE #17. For this particular program, Schneider Electric
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. The plan is governed by a
Steering Committee, set up in 2017, chaired by the Executive
Committee member in charge of the supply chain, and composed
of senior leaders. The Steering Committee objective is to provide
decisions on strategic orientation, prioritize initiatives and allocated
resources, review actions in progress, and define decisions on next
steps for actions.
2.2.12.4 Group policy
The Group’s global procurement mission is aligned with our
strategy of delivering customer value through transformation of
energy management. Schneider Electric does this by contributing
to top line and bottom line growth, while establishing a leadership
position in sustainable sourcing. Key priorities of quality, innovation,
cost, cash, and sustainability are 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 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
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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’s 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 sustainability
performance as a key criteria of evaluation.
General Procurement Terms & Conditions
All Schneider Electric suppliers must abide by the General
Procurement Terms & Conditions: each supplier undertakes to
apply the principles and guidelines of the ISO 26000, and the rules
defined in the ISO 14001 standard.
Suppliers also commit to respect all national legislation /
regulations, Registration, Evaluation, Authorization and Restriction
of Chemicals (REACH) regulation, Restriction of Hazardous
Substances (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 & 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,
andoccupation 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
Supplier Screening Program
Before entering a relationship with a supplier, all Schneider Electric
legal entities must ensure that the supplier is adequately evaluated,
screened, and approved. Schneider Electric must carefully select,
appropriately monitor, and continuously manage its suppliers’
relationships throughout the entire course of a business
relationship. Clear boundaries and efficient processes ensure that
risks are taken to avoid any form of bribery, corruption, or export
control sanction and regulation violations.
All suppliers are subjected to due diligence involving risk
assessment, screening, investigation, review, or audit to verify facts
and information about a particular subject.
To find out more about our Third-Party Screening in
relation to Export Control and Corruption, please refer to
sectio 2.2.10 on page 134
2.2.12.5 Sustainable Procurement
framework and strategy
Schneider Electric has deployed a Sustainable Procurement
framework, which institutionalizes mechanism to proactively
screen, identify, and mitigate sustainability risk from suppliers and
embed preventive controls into the procurement processes. 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,
and human rights, and challenging status-quo allows us 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 correlate 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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Chapter 2 – Sustainable development
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
Minerals/Cobalt
Decent Work
Social
Excellence
Reduce CO2
emissions
from top 1,000
suppliers’
operations by
50%
Increase green
material content
in products to
50%
100% packaging
uses recycled
cardboard and
no single-use
plastic
Continued adherence and compliance
to regulations governing hazardous
materials and conflict minerals
100% of strategic
suppliers provide
decent work to
their employees
Deploy a “Social
Excellence”
program through
multiple tiers of
suppliers
(SSI #3)
(SSI #4)
(SSI #5)
(SSI #6)
(SSE #12)
• Supplier Approval
Module (SAM) &
Quality Mgt (SSQM)
• Sustainable
Development,
Environment, Ethics &
Compliance Terms &
Conditions
• Quarterly Business
Review
• Trust Line
• Sustainability
throughout our
Procurement
Excellence System
ISO 26000:
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
1,400 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’
2.2.12.6 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 (RBA methodology, 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 its 3-year
schedule with 374 audits.
From 2021 to 2025, Schneider Electric has defined an objective as
part of its sustainability strategy 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 SSE #17 and progress is externally assured and
published each year
For the Group’s 2023 plan, about 1,400 “high risk” suppliers have
been identified; this number varies depending on the year.
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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
2.2.5 on page 124.
•
• Business Conduct: 11 questions
• Cybersecurity: non-applicable in RBA framework. More details
about Schneider’s end-to-end cybersecurity approach are
provided in section 2.2.6 on page 127.
In 2023, the Group conducted 212 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 found in 2023 were related to health and
safety, labor standards, and management systems (34%, 26%, and
21% 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. An analysis of the 114 “top
priorities” raised in 2023 shows the following issues are the most
recurring:
• Labor standards (60% of top priority non-conformance issues):
lack of respect of working time and resting days (time
measurement systems are often insufficient); and wages for
regular and overtime hours correctly calculated and paid to all
workers.
• Health and safety (25% of top priority non-conformance issues):
insufficient fire alarm and protection systems; and appropriate
controls for worker exposures to chemical, biological, and
physical agents.
• Environment and management systems (15% of top priorities):
insufficient waste management and pollution prevention
systems.
As of end of 2023, Schneider Electric has closed 97% of 2022 and
36% of 2023 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 2023, one business relationship with a
supplier was decided to be stopped due to Vigilance plan. In 2023,
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; only one case was
identified, due to the complete change of supplier management
team, and later closed.
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.
During 2023, 953 suppliers submitted answers. Procurement teams
reviewed the answers and identified some suppliers where on-site
audits will be conducted in 2024.
Trust
SSE #17
Our 2025 Commitment
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 320,000
employees.
• Labor: during an audit, Schneider Electric identified a
small-sized company active in assembling that made
employees’ payment delayed. Payroll records were
reviewed and indicated that monthly wages had been
delayed for more than one month. The supplier realized
the situation and proceeded to correct it. Five months
after the audit, the situation was corrected. During the
on-site closure-audit, Schneider Electric validated the
resolution, and the non-conformance was closed. The
supplier now manages its payments properly and
assures employees’ monthly wages are paid on time.
• Health and Safety: During an audit at a large panel
builder’s site, Schneider Electric’s auditor identified 2
non-conformities. Operators were found to be working
without appropriate Personal Protective Equipment (PPE)
which could have long-term effects on their health.
Supplier had not taken any action before implementing
the process, and thanks to the audit, immediately
ensured that the workers had the required masks,
gloves, and full body protection. Subsequently, a PPE
deployment, usage, and management system was set,
and stakeholders were identified to manage this process
on the long term. Secondly, the fire alarm/fire detection
system was not in operation due to a faulty control panel.
An analysis of the root cause showed that the contract
for the maintenance of the emergency system had
lapsed a year ago, leading to a failure of the system. 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.
2020 baseline
2023 Progress
2025 target
374
3,248
4,000
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% Risky suppliers identified in 2023 by geography – Graph 1
% Non-conformances in 2023 by topic – Graph 3
100
80
60
40
20
0
%
1
%
7
%
1
1
%
7
%
8
3
%
7
3
China
India
EAJP*
EMEA**
North
America
South
America
100
80
60
40
20
0
%
4
3
Health
& Safety
%
2
1
%
7
%
1
2
%
6
2
Labor
Management Environment
Ethics
% Audits carried out in 2023 by geography – Graph 2
% Non-conformances in 2023 by geography – Graph 4
%
1
1
%
1
%
7
%
1
%
1
3
%
0
5
China
India
EAJP*
EMEA**
North
America
South
America
100
80
60
40
20
0
%
1
1
%
4
%
1
1
%
6
%
7
2
%
0
4
China
India
EAJP*
EMEA**
North
America
South
America
100
80
60
40
20
0
* EAJP: East Asia Japan Pacific
** EMEA: Europe Middle East Africa
Impact
From the beginning of the program in 2017 to the end of 2023,
about 1,000 suppliers had been audited on site, and 12,000+
non-conformances were raised, and subsequently remediated. The
212 on-site audits performed in 2023 have allowed Schneider to
raise 2,100+ non-conformances. Out of these non-conformances,
110+ 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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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.
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 & 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. is the Group is committed to contribute to this
responsible sourcing initiative as well as responding to its
customers’ potential concerns, even though this represents a
long-term effort, namely on data collection.
Chapter 2 – Sustainable development
2.2 Driving responsible business with Trust
2.2.12.7 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/ ISO 26000 evaluation is a key element of the sustainable
development strategy and Supplier Risk Management 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.
Strategic suppliers are identified based on several criteria (quality,
productivity, delivery, innovation, sustainability, etc.) and represent
the supply base with the best overall performances, to whom
Schneider Electric is allocating business. This supply base is
regularly reviewed by Procurement Commodities teams (minimum
once per year) so to update strategic business decisions. This
dynamic process allows highest-performing suppliers to become
or remain our “strategic” suppliers, while worst performing ones are
demoted from this status.
The Group has set out to engage all its strategic suppliers in a
process of continuous improvement in sustainability. At the end of
2023, strategic suppliers represented c. 56% of Schneider
Electric’s purchases volume. Strategic suppliers who have passed
the third-party evaluation process cover approx 90% of total
strategic purchasing volume.
In 2018, the Group took on the ambitious target of achieving +5
points out of 100 in the average ISO 26000 assessment score of its
strategic suppliers up to end of 2020 as part of the SSI. 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.
Both in 2022 and 2023, targets were achieved with an increase of
1.6 points each year, ending 2023 with 61.9 points as result.
Overall, since end 2017 the average ISO26000 score of
Schneider’s strategic suppliers has increased by almost 11 points.
ISO 26000 Program Progress
8
.
4
5
4
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7
5
7
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7
5
3
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0
6
9
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1
6
0
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5
6
2019
2020
2021
2022
2023
2025
Average EcoVadis score
Target
Note that average score of 100,000 companies assessed by
EcoVadis is approximately 46 points. It means Schneider’s strategic
suppliers’ sustainability position is much more mature than the
global average.
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2.2.12.9 REACH and RoHS
Schneider Electric is rolling out several eco-responsible initiatives
with its suppliers.
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.
Furthermore, the team in charge of supplier environmental data
collection has extended its scope, and by increasing the coverage
of FMD (full material disclosure) in the collected data, it is able to
gain information on compliance against additional regulations such
as Persistant Organic Pollutants, The Toxic Substances Control Act,
Proposition 65 and more.
2.2.12.10 The Zero Carbon Project (SSI #3)
The Company aims to achieve 25% absolute reduction in carbon
emissions across its entire value chain by 2030 and Net-Zero
emissions across the entire value chain by 2050. This means that
all Schneider upstream suppliers need to transition towards clean
energy. Reaching this ambitious target is a long-term transformative
process. As a first step and to onboard the suppliers, Schneider
Electric launched The Zero Carbon Project in 2021, which aims to
cut 50% of operational carbon emissions from the top 1,000
suppliers by 2025 (SSI #3). At the end of 2023 SSI #3 achieved a
27% 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 on page 154, and in chapter 2.7 on
page 266.
Consult our webpage dedicated to The Zero Carbon
Project in the Sustainability section on www.se.com
At the end of 2023, more than 75% of relevant suppliers have
replied. 94% of the identified smelters and refiners in Schneider
Electric’s supply chain were designated as compliant (low- or
medium-risk) with a recognized third-party validation scheme or
actively engaging in same approach (equivalent to approximately
69% of the relevant spend being compliant). The Conflict Minerals
campaigning period starts in June and ends with issuing our Final
CMRT in next March. The campaign includes all the 5 due diligence
steps recommended by the OECD. 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
benefited armed conflict in the covered countries, nor supported
illegally operating or sanctioned entities.
Where are 3TGs used?
Tin – Used in electronics and batteries, wire, cable coatings,
resistors, solder, and more; often used to coat other metals to
prevent their corrosion and to create alloys.
Tantalum – used in electronics, capacitors and resistors, and
wires; galvanized, hardened, heavy duty, tempered or heat-treated
steel.
Tungsten – commonly used in heat-resistant and wear-resistant
alloys; in hardware, wires, joints and filaments.
Gold – not highly corrosive and highly conductive to electricity, it is
commonly used in electronics, connectors, switch and relay
contacts, soldered joints, wires, and more.
Consult the page dedicated to Conflict Minerals
Program 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 an
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.
Mica and Cobalt usage:
Mica – in electronics it is used in transistors, capacitors, and
resistors, ideal for high-speed applications as it can withstand
incredibly high temperatures.
Cobalt – used in the cathode of the rechargeable lithium-ion and
nickel cadmium batteries.
The program focuses on the responsible cobalt sourcing, used as
a key element for lithium-ion batteries in Schneider Electric’s supply
chain. At the end of 2023, with 91% data collected (that is relevant
to 99% of the spend of selected suppliers), 97% of the identified
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 benefited armed
conflict in the covered countries, nor supported illegally operating
or sanctioned entities.
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2.2.12.11 Green materials (SSI #4) and
sustainable packaging (SSI #5)
Green Materials (SSI #4)
An important element of Schneider Electric’s Net-Zero
transformation is the elimination of the embedded carbon in
purchased materials. This is a challenging undertaking as
low-impact raw materials would often need to be co-developed.
This requires strategic collaboration between suppliers, R&D,
engineering, environment, and business teams, to ensure critical
criteria are met. Schneider Electric launched a green material
program to increase the proportion of “green material” in Schneider
products to 50% by 2025 (SSI #4).
The scope of this initiative includes about 30% of Schneider’s
procurement volume and includes the following materials:
• thermoplastics (direct and indirect purchase);
• steel (direct purchase) and
• aluminum (direct purchase).
Other materials such as fabricated steel components, other
non-ferrous metals (such as copper, silver or brass), and thermoset
(direct and indirect), will be considered for the next phases. At the
end of 2023, 29% of materials in scope were qualified as “Green”,
following specific criteria.
Sustainable Packaging (SSI #5)
Since 2021, Schneider Electric is implementing a Sustainable
Packaging program, which aims at ensuring all cardboard used in
the packaging of Company products are recycled and all single-
use plastics are phased out by 2025 (SSI #5). To achieve this
transformation, a two-pronged approach is deployed. On one
hand, a cross-functional team is deployed across business units to
review the packaging design, and explore and authorize the use of
alternate materials for packaging; on the other hand, Procurement
teams across regions engage with suppliers to ensure the
deployment of the roadmap by the suppliers to meet the prescribed
requirements.
Dedicated categories of packaging material were included,
resulting in 63% of the packaging spend in scope attributed to
sustainable packaging at the end of 2023, vs. 45% in 2022.
Read more details on the Green Materials and
Sustainable Packaging programs in section 2.4
on page 186, and in section 2.7 on page 266.
2.2.12.12 Decent work
Supply chains help companies leverage global capabilities and
benefit from collective genius; at the same time, 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 inequality is prominent is
the working conditions and rights available to the workers in their
workplace. 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 extent and severity of the crisis requires a systematic,
preventive approach and not mere 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 aims to ensure that any opportunity of
work, extended to the employees is, productive and delivers a fair
income, and provides security in the workplace and social
protection for families, better prospects for personal development
and social integration, freedom for people to express their
concerns, organize, and participate in the decisions that affect their
lives, and equality of opportunity and treatment for all individuals.
The program takes inspiration from principles of decent work
promulgated by the ILO and also leverages concurrent issues, to
make it comprehensive.
Implementation
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 who will need support with capacity building, and
constant engagement throughout implementation. To facilitate the
execution by suppliers in a gradual way, the program is split in two
stages.
The evaluation of supplier performance is 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. Specially equipped reviewers
assess the supplier responses, including the evaluation of the
accompanying documentation. The reviewers come from within
Schneider Electric as well as third-party agencies who specialize in
similar evaluations. 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 better engage suppliers and identify the common areas of
improvement for deploying more effective supplier capacity
building initiatives, the responses were analyzed. Below is the
summary of the most frequent gaps identified during the year.
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Chapter 2 – Sustainable development
Trust
SSI #6
Our 2025 Commitment
100% of our strategic suppliers
provide decent work to
their employees
As of December 2023, 802 strategic suppliers are invited to
participate in the Decent work program, out of which 683
suppliers are successfully onboarded and invited to
respond to the questionnaire, which has been shared with
them. 536 suppliers responded to the survey. It takes
multiple rounds of review, engagement, clarification and
capacity building with each and every supplier to ensure all
the parameters are successfully met. By end of 2023 over
168 suppliers were classified as conforming to the stage 1
requirements of the program..
Our progress
2022 Baseline
2023 Progress
2025 target
1%
21%
100%
As of end of December 2023, the Group is on target to spend more
than 7% of its total US Procurement spend with uniquely diverse
businesses. This represents an increase of nearly 3% vs. 2022.
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 2023, Schneider Electric enhanced its Supplier Diversity
program in the following ways:
• 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.
Most frequent Non-conformances
No policy on Living Wage
Missing policy OR remediation plan for Child Labor/Modern Slavery/Human Traficking
91%
Policy on free employment not shared with workforce providers
No policy and remediation plan on free employment
85%
83%
80%
No structured control to prevent slavery/trafficked labor in operations
No gender neutral child care/family care leaves
70%
68%
Missing structured control to check/detect child labor in contract workforce
67%
Safety management systems not evidenced in 100 locations
64%
Missing structured control to check/detect slavery/trafficked labor in operations
No policy on notice period
No supplier code of conduct
64%
56%
54%
Missing structured control to regulate working hours in operations
No policy on weekly off
Missing criteria in the inclusion policy
51%
50%
47%
Missing structured control to check/detect child labor in operations
No policy on collective bargaining
46%
41%
Social security not extended to 100 employees
Owing to the dynamic nature of the supplier categorization,
24%
Schneider Electric reviews the list of eligible suppliers on an annual
basis and ensures inclusion of relevant suppliers in the program. In
addition to English, the program requirements are also translated
into Mandarin, including trainings to ensure adequate coverage for
suppliers.
2.2.12.13 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);
• Disabled-Owned Business Enterprise (DOBE);
• Minority-Owned Business Enterprise (MBE);
• Women-Owned Business Enterprise (WBE);
• Historically Underutilized Business Zone (HUBZone), and
• LGBTQ+-Owned Enterprise (LGBTBE).
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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, and adequate child care). Work
environment should act as a leveler/equalizer and not augment the disparity.
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2.2.12.14 Social Excellence program
In its efforts to strive towards more social excellence in its supply
chain, Schneider Electric is relying on the Duty of Vigilance and
Decent Work programs. In addition, the Group is also
experimenting other means to go further and expand its coverage
beyond tier 1 suppliers.
To that purpose, in 2023, Schneider Electric has initiated three
other pilot initiatives as part of the Social Excellence program:
• Upstream mapping of suppliers: identifying suppliers beyond
tier 1 and using a tool allowing a more direct communication,
and a monitoring of crucial business, environment, and Human
Rights parameters. In 2023, 170 suppliers are being processed.
• “Workers Voice” in sensitive geographies: in collaboration with
16 suppliers located in Vietnam, with the help of an expert
company in digital stakeholder engagement, Schneider Electric
has reached out directly to the workers employed by these
suppliers, to assess the situation for a specific number of
Human Rights. The first results are conclusive, as more than
1330 workers participated to the survey, which represents more
than three times the minimum threshold of statistical
significance.
As this is a first pilot approach, results need to be taken with
caution as we are still on a learning curve. However, to share our
first obervations, we can note the following:
- On the positive side, observed that 88% of workers reported
that they feel treated with respect, 92% that they are entitled to
pay leave when sick, and 91% understand and have a clear
copy of their work contracts.
- Regarding areas that require additional attention, 20% of
workers reported that they have already witnessed sexual
harassment, 19% reported that the stress from their jobs affects
their personal life, and 16% reported that they have already
been unfairly treated or discriminated against. These areas will
be followed carefully and actions will be taken in 2024 to
mitigate the risks identified through this survey.
• Raw material mapping initiative: Schneider Electric has selected
8 raw materials to be studied, starting from the extraction level,
and then moving along the transformation cycles. The objective
is to better understand and map potential Human Rights issues
present in these industries, how these may affect our portfolio of
products, and what actions the Group could take to mitigate any
negative impact.
Chapter 2 – Sustainable development
2.2.13 Vigilance with
project execution
contractors
2.2.13.1 Context
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 co-
ordinating several project contractors (panel manufacturers,
system integrators, building contractors, etc.), usually on the
premises of the end-customer. These projects are primarily off-site
(mostly on customer premises, existing or future), and they involve
several different parties, global or local.
Therefore, relationships with contractors are specific to a contract,
and not necessarily recurrent. In 2023, Schneider Electric worked
with approximately 12,000 solution suppliers (with a total spend of
approximately €1.2 billion).
2.2.13.2 Risks, impacts, 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 policies recommended by
Schneider Electric on Health and Safety, as well as decent
workplace, may not be properly implemented. The main risks are
physical accidents and injuries, or the unfair 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.
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2.2.13.3 Governance
2.2.13.4 Actions and impacts
Out of the 12,000 solutions suppliers, Schneider Electric has
identified about 140 solution suppliers categorized as “high risk”.
Since 2018, around 90 of those suppliers have been audited, with
12 audits performed in 2023 leading to Schneider raising 121
non-conformances. Out of these non-conformances, 12 were
assessed as “top priority” for 4 suppliers.
The most recurring non-conformances with high-risk solution
contractors are related to management systems, in particular in
terms of establishing adequate management reviews and defining
responsibilities for implementation of management systems.
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.
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.
2.2.13.4 Group policy
In 2021, the Group introduced an evolution of its project decision-
making process. From the moment a business opportunity is
identified to the moment it becomes an official offer from Schneider
Electric to the customer, a project goes through several selection
milestones that ensure its technical, operational, legal, and financial
feasibility. Crucial milestones have been added over the last years
to that process, to reinforce its compliance to the highest ethical,
environmental and human rights standards. Among the elements
reinforced:
• Detection and management of any corruption or export control
regulation violations during business relationships with our
contractors and customers through automated third-party
screening. In 2023, Schneider Electric has developed a new
capability to automatically screen all legacy and continuous
screening of new and modifications of Third-Parties for risks of
anti-corruption and export control. A specific focus is put on
third-party due diligence implying several steps to ensure that
any risk identified is met with an adequate risk mitigation action.
For more information, please see sections 2.2.10 on page 134,
and 2.2.7 on page 130.
• Early identification of the environmental and Human Rights risks
that the project may create for the ecosystems and communities
potentially affected. This risk assessment can be reinforced by
an expert third-party report whenever needed. The risks are
prioritized and escalated through the selection process to
ensure that any decision is consistent with the highest ethical
and Human Rights standards, and that any project execution
plans for the adequate prevention and mitigation actions to be
implemented. In 2023, around 80 projects have been subject to
this process as part of the test pilot. In 2024, this process will be
applied to a larger number of projects.
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Chapter 2 – Sustainable development
2.2.14 Ethical relations with downstream stakeholders
2.2.14.1 Context
2.2.14.4 Group Policy
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.
2.2.14.2 Risks, impacts, 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 (18 formally reviewed so far) 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.
2.2.14.3 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.
Vigilance with local communities complements other actions aimed
at building ethical relationships with downstream stakeholders,
such as:
Customer Screening Program
Schneider Electric performs automatic risk-based due diligence on
its clients and projects, involving risk assessment, screening,
investigation, review, or audit to verify facts and information. This
covers export control and compliance risks (sentences or adverse
media hits related to act of corruption, bribery, fraud, money
laundering, or unethical practices). The due diligence implies
several steps, which form an end-to-end process ensuring that
adequate risk mitigation actions are handled, including but not
limited to terminating the relationship and blocking any related
payment.
Business Agents Process
Before entering into a relationship with a Business Agent, all
Schneider Electric entities must ensure that the designated
Business Agent is adequately evaluated, screened, and approved
in accordance with the process set forth in the Business Agent
Policy. Management must carefully select, appropriately monitor,
and continuously manage its Business Agents throughout the entire
course of a business relationship.
Sponsoring & Donations Screening
Compliance due diligence is the process that involves risk and
compliance check and conducting a review to verify facts and
information about a particular subject or entity. Specific policies
were deployed regarding Donations (Philanthropy Policy) and
Sponsoring (Sponsorship Policy).
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2.2 Driving responsible business with Trust
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2.2.14.5 Vigilance with 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, due to
the fact that Schneider is usually located in large, urban, or
peri-urban areas. Factories 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 risks can also have positive impacts, as it is
part of Schneider Electric’s policy to include local parameters in its
Sourcing Policy: providing employment, including using a
percentage of local companies and contractors for services
(catering, maintenance, etc.).
2.2.14.6 Vigilance with 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, and
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 40 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
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.
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Chapter 2 – Sustainable development
As of end 2023, 18 projects have been reviewed and results can be
summarized as follows:
Although this analysis is done on a limited sample, it points to the
following conclusions:
Breakdown of projects by type
11%
39%
50%
Type 1
Type 2
Type 3
Type 1: 2 projects – Schneider operating as the
main contractor
• Renovation of Medium Voltage electrical substations.
• Very large city, dense urban area.
• Sites already existing, limited surface (1 building).
• Limited civil work (refurbishing) in a closed area.
• Almost no impact on population living nearby (2 days street
closing).
Type 2: 9 projects – Schneider as one of the
suppliers to a large contractor or customer
• 4 projects are Medium Voltage equipment ex-works
delivery: no presence on customer site.
• 2 projects are reinforcements of safety systems on existing
mining sites.
• 3 projects are very large new projects on land.
− 2 are for a customer expanding a refinery
• Large civil work on previously unoccupied land.
• End-customer and local authorities are in charge
on site.
− 1 is for a customer building an irrigation network for
agriculture.
• Location in a semi-desertic area – no population
living on site.
Type 3: 7 projects
• Projects are mostly software systems, that do not involve
any on-site work as there is no hardware to deliver and
install.
• A large majority of Schneider projects are having limited impact
on local communities as they are either:
− Not located close to any populated area;
− Taking place on already built facilities;
− Delivered ex-works to the client, with no on-site involvement
from Schneider;
− Involving software offers only, that are entirely delivered
remotely.
− A minority of projects involve large civil works on-site, that
may affect the local environment or local communities. This
almost only happens when the end-customer is conducting a
complex and highly specialized project (refinery, factory,
extraction site, etc.). In these instances, Schneider is only
one of the several vendors, and does not handle relations
with local population. In such cases however, Schneider
wishes to apply the highest level of ethical and responsible
commitment in its relations with the end-customer to ensure
that the project complies with high sustainable and ethical
standards.
Focus on EACOP project
EACOP (East Africa Crude Oil Pipeline), along with the Tilenga
project, is operated by a joint venture between two states (Uganda,
Tanzania), and two private companies (CNOOC, TotalEnergies). It
consists of several extraction sites, and a pipeline to connect these
sites to a port on the Indian Ocean coast.
The Group provides equipment for the supervision and safety of
the infrastructure and contributes to the integration of renewable
energy sources to reduce the CO2 emissions.
Schneider has commissioned an independent third-party expert, to
conduct a risk assessment based on the International Finance
Corporation performance standards on Environmental and Social
Sustainability. The assessment has been updated with the status of
discussions with the EACOP joint venture, local stakeholders
(Individuals or NGOs) and Total Energies. In addition Schneider
Electric organized a field visit on the project site (in Uganda and
Tanzania), led by its Chief Compliance Officer.
Based on these assessments and observations, Schneider Electric
estimates that EACOP joint venture, local authorities and local
stakeholders are addressing the Environmental and Human Rights
concerns raised by certain local stakeholders and media oulets. As
the project continues, Schneider Electric will continue to engage
with stakeholders and to monitor relevant remediation actions.
Overall, Schneider Electric is confident that the work with EACOP is
consistent with its ethical and sustainability standards.
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2.3 Leading on decarbonization
In this section
2.3.1 Climate risks, opportunities and impact management
2.3.2 Schneider Electric’s 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
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161
164
166
2.3.5 Decarbonizing the Group’s operations by 2030
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 through
efficiency and digitization
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Context and Group’s commitments
2023 was the hottest year on record, and this time, by a lot.
The European Union’s Copernicus Climate Change Service
announced that January 2024 marked the first time that the global
average surface temperature exceeded 1.5°C above pre-industrial
levels during a 12-month period. The breach of 1.5-degrees may be
temporary, but it shows the unprecedented challenge required to
keep warming to the 1.5°C Paris Agreement target. The
Intergovernmental Panel on Climate Change (IPCC) AR6 Synthesis
Report(1) also pointed out in March 2023 that the pace and scale of
what has been done so far, and current plans, are insufficient to
tackle climate change. Urgent and more ambitious action and a
commitment to work together to enable system-wide transformation
are needed to deliver the enormous cuts in emissions and the
innovation necessary to limit GHG emissions by 2030. If we act now,
the report underscores, we can still secure a livable sustainable
future for all.
We all need to do more within an increasingly limited amount of time.
It is encouraging to see now over 4,500 companies with reduction
targets approved by the Science Based Targets initiative (SBTi). For
Schneider Electric, it’s been more than one year since the company
Net-Zero targets, were validated by the SBTi, in line with their
“Corporate Net-Zero Standard”. And as one of the first companies
with targets aligned with science, it requires to work through the
challenges, while celebrating the successes, learning, and sharing
lessons learned to contribute to the broader understanding of what
it will take to accelerate progress. By working with its stakeholders
across all areas of influence, the Group is accelerating its action to
reduce its environmental footprint across its entire value chain, and
beyond.
Schneider Electric works with its partners to inspire change through
the communities it works in, through helping push scientific and
technological progress and innovation, and using its voice with
governments, institutions and NGOs to inspire meaningful change
through policy evolution and ultimately driving together the broad
societal transformation the world needs in order to tackle climate
change.
2023 is the first year in which Schneider Electric achieved a
year-over-year reduction in its CO2 emissions across all Scopes.
The granular numbers tell an interesting story about the levers
for progress, from individual actions to innovations implemented by
the company, the influence it exerts, the commodities it purchases,
to the speed at which the world is making the transition to clean
energy and the improvement in the data used for carbon
accounting.
Starting 2024, Schneider Electric looks to accelerate progress
across all of these dimensions: continue to speed actions to further
slash emissions in operations, accelerate support for suppliers in
scaling the opportunities for high-integrity green materials, advance
the work with external stakeholders to accelerate grid
decarbonization and drive deeper emissions reductions from the
use of the products the company sells, and use the company voice
and expertise to support efforts aimed at tackling remaining carbon
accounting and measurement challenges. Creating certainty in
carbon measurement, paired with enhancing data availability and
standardization will allow companies to count carbon accurately
and consistently, and will ultimately give everyone the foundation
needed to accelerate progress.
“At Schneider Electric, we take full measure of the
incredible challenge posed by climate change, as well
as the urgency and responsibility to accelerate action,
to innovate, and to transform our economies and societies.
As we approach the middle of this crucial decade, we will
deepen our work with others across and beyond our value
chain to push the boundaries of what’s possible, to slash
carbon and to accelerate the conditions for progress.”
Xavier Denoly,
SVP Sustainable Development
(1) IPCC. 2023. Synthesis Report of the Sixth Assessment Report of the Intergovernmental Panel on Climate Change.
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Chapter 2 – Sustainable development
Progress of our Climate commitments
Schneider
Sustainability
2021-2025 programs
#
Baseline(1)
Impact
(SSI)
Essentials
(SSE)
1.
2.
3.
1.
2.
3.
4.
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
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
These programs
contribute to UN SDGs
2023 progress(2)
74%
553M
27%
101
2025
Target
80%
800M
50%
150
2019: 70%
2020: 263M
2020: 0%
2020: 30
2020: 26%
60%
100%
2020: 80%
2020: 0%
88%88%
1.6%
90%
15%
(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 2023), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 302). In addition, SSE
#3 received a “reasonable” assurance level in 2023. Please refer to page 266 for the methodological presentation of each indicator. The 2023 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
277 to 293.
2023 Highlights
Schneider Electric is on the CDP Climate Change
A-List for the 13th year in a row.
The Zero Carbon Project won the CIPS Excellence
in Procurement Award as the Best Commitment to
Decarbonization in Supply Chain.
In October 2023, The Zero Carbon Project won
the Sustainable Supply Chain Award at the World
Sustainability Congress by Sustainability Leaders
with special focus on Accelerate Zero Carbon
Workshops.
Long-term roadmap
2025
• Carbon neutral
operations
2030
2040
2050
• 25% absolute GHG
emissions reduction
across the entire value
chain from a 2021
baseline
• Carbon neutral across
the entire value chain
(Scopes 1, 2, and 3),
including carbon
removals
• Net-Zero CO2
emissions across
the entire value chain
• “Net-Zero ready”
operations
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2.3 Leading on decarbonization
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management
The Intergovernmental Panel on Climate Change (IPCC) indicates
the last decade has witnessed temperatures higher than any in the
past 125,000 years. This is affecting every region of the world,
manifesting as rising sea levels, increasingly extreme weather
events, rapidly melting sea ice, and declining biodiversity and
natural resources. The changes in climate are unprecedented
when compared to patterns observed in past centuries and
millennia, and further warming will continue to amplify these
changes(1).
Beyond environmental consequences, climate shifts also impact
society, contributing to the loss of livelihoods and businesses,
escalation of health emergencies, and displacement of
populations. Schneider Electric has embedded climate-related
risks reviews into its decision making, to mitigate risk exposure
and ensure resilience.
2.3.1.1 Risks, opportunities, and impact
assessment and adaptation measures
Schneider Electric proactively identifies and measures climate-
related risk and opportunity to assess existing and potential
impacts to its business, operations, and value chain. This approach
encompasses enterprise risk management and climate risk, and
vulnerability assessments leveraging on scenario analysis.
The enterprise risk management of climate-related risk and
opportunity is a domain specific review led by environmental
experts, overseen by the Group Risk Management department
and the Internal Audit department. The risk and opportunity
assessment covers acute and chronic climate physical risks,
legal and regulatory risks and opportunities linked to current and
emerging climate regulations, as well as market, technology, and
reputational risks and opportunities linked to changes in customer
behaviors.
More details in Chapter 3, section 3.4 Key risks and
opportunities, on page 324
In 2023, the Group performed a forward-looking climate risk and
vulnerability assessment with an independent third party to identify
and price the materiality of physical and transition climate risks that
may affect the Group’s 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. In this study, climate risks are quantified under different
emissions pathways between 1.5°C and >4°C temperature rise by
2100. Five emissions pathways were considered: SSP5-8.5,
SSP3-7.0, SSP2-4.5, SSP1-2.6, and SSP1-1.9 by 2025, 2030,
and 2050.
The Group identifies climate-related risks and opportunities and
devise measures for management and mitigation. Schneider
references guidance from the Task Force on Climate-related
Financial Disclosures (TCFD) to classify its climate-related risks
and opportunities into two major categories:
• transition: risks and opportunities related to the transition to a
lower-carbon economy, and
• physical: risks and opportunities related to the physical impacts
of climate change.
Transition risks and opportunities
Governments, public institutions, and society are responding to
this climate crisis in implementing more stringent regulations and
redirecting investments toward low-carbon alternatives. Regulatory,
legal, and behavioral changes, and the evolving competitive
landscape can present risks for companies delaying their transition
to a low-carbon economy or companies highly exposed to sectors
slowing down this transition.
Policy: As climate urgency intensifies, regulation appears to be a
key lever in driving a faster and more co-ordinated transition. While
the EU is framing its transition through the European Green Deal,
with policies aimed at driving faster carbon reduction through Fit for
55, enhancing its capability for high-quality carbon removal
through the Carbon Removal Certification Framework (CRCF), and
enhancing manufacturing and digital capacity in industries,
through the proposed Net Zero Industry Act, the Inflation Reduction
Act (IRA) in the USA aims to steer capital towards clean energy,
transportation, and industry, mainly through tax credits. A number
of governments have introduced or are contemplating regulatory
changes to address climate change. For example, emissions
trading systems, which establish a market price for emissions, are
now implemented or scheduled for implementation in multiple large
emitting countries including China, Australia, EU member states,
Canadian provinces, and several states within the USA. Carbon
taxes, which represent tax rates on greenhouse gas (GHG)
emissions, are also implemented or scheduled in many countries,
including Mexico, Columbia, Argentina, South Africa, and Japan.
The outcome of climate regulations may result in additional
requirements and fees or restrictions on certain activities or
materials, impacting primarily companies slowing down this
transition but creating as well opportunities for companies leading
this transition towards a low-carbon economy.
Schneider Electric anticipates possible financial impacts of future
carbon emission costs by working to address both its operational
and value chain footprints. Given the relatively low level of
Schneider’s Scope 1 and 2 emissions in its carbon footprint,
carbon pricing mechanisms primarily present the potential for
indirect impacts. Among others, it could result in higher raw
materials and manufactured components costs, and increasing
costs incurred by consumers during the use of sold products.
(1) IPCC. 2022. Climate Change 2022: Impacts, Adaptation, and Vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental
Panel on Climate Change.
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Chapter 2 – Sustainable development
Reputation: Customer sentiment can be influenced by companies’
actions or inaction to mitigate and adapt to climate change.
Schneider has been working to reduce its own GHG emissions
for over 15 years and continues to raise the bar, setting ambitious
targets for both its operations and its value chain. The Group
actively manages this risk by building and executing detailed
roadmaps for its targets and collaborating with its stakeholders
through initiatives such as The Zero Carbon Project.
In addition, the Group remains diligent in protecting brand
reputation through accurate and transparent communication
and marketing. In 2023, as litigation and legislative developments
surrounding green claims rose, and public focus on greenwashing
heightened, Schneider Electric sharpened its focus on
environmental claims and language used regarding sustainability
(see details in section 2.4.3.5 on page 193).
Although additional measures were implemented in 2023 in
response to emerging green claims and greenwashing regulations,
reputation management has always been a focus, through:
• continuously monitoring Schneider’s sustainability
performance and revising strategy to adapt to regulations,
and customer demand;
• maintaining robust internal and external controls to ensure
information verification and accuracy such as third-party
assurance of emissions data and internal audits of sustainability
information and processes;
• consistently and transparently disclosing sustainability
performance to our stakeholder, across all environmental,
social, and governance topics, and
• collaborating with relevant stakeholders to develop and
strengthen regulatory frameworks, advance standards to create
common methodologies to measure the environmental footprint
of products, and improve corporate carbon accounting.
Technology: As the global economy transitions towards a
low-carbon future, technological innovation will accelerate the
impairment of fossil-fuel intensive assets.
Schneider Electric is committed to be “Net-Zero ready” in its
operations by 2030 (see details in section 2.3.5 on page 167),
launching several transformations to deliver on this target:
• 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), and
• shift one-third of corporate vehicle fleet to electric vehicles (EVs)
by 2025 (SSE #7), and 100% by 2030 (EV100).
The EU Taxonomy, as a cornerstone of the EU’s sustainable finance
framework, helps direct investments to the economic activities most
needed for the transition. In 2023, 89% of the Group’s revenues
came from economic activities listed in the EU Taxonomy as able to
contribute substantially to at least one of the six environmental
objectives listed in the regulation. Although Schneider’s proportion
of revenues aligned with the EU Taxonomy is at 31%, its high share
of revenues eligible demonstrates the prominence of Schneider
Electric’s markets in the transition towards a sustainable economy.
This transparency tool represents an opportunity for the companies
of the sector who are leading on sustainability, to reinforce trust
with stakeholders, to ensure access to green financing with
potentially favorable terms and finally to attract and retain
environmentally conscious customers, partners, investors, and
employees(1) (see details in section 2.7.2 on page 277).
As a sustainability-leading company, Schneider Electric supports
shaping climate policies that can move industries and the world
forward. The Group monitors policy risk and is committed to keep
its position as a company leading in sustainability to
capture associated opportunities through various strategies.
Several examples include but are not limited to the following:
• Achievement of Schneider Electric’s climate goals, which in turn
•
reduces risk exposure to future changes in carbon prices.
Incorporation of an internal or shadow price for carbon to
understand the potential impact of external carbon pricing on its
portfolio’s resilience to climate scenarios. The Group internal
shadow price is meant to inform the Group’s climate strategy
and incentivize low-carbon innovation. Also the Group assesses
marginal abatement costs (additional cost per ton of CO2) of
some specific decarbonization actions or programs, in order to
determine what are the most cost-efficient ones. Schneider uses
different carbon price scenarios, varying from EUR 50 - 130/ton
(depending on time horizons).
• Management of the legal and regulatory environment to
stay abreast with regulatory developments and anticipate
future changes, including Corporate Sustainability Reporting
Directive (CSRD), Corporate Sustainability Due Diligence
Directive (CSDDD) and the EU Taxonomy.
• Climate policy advocacy to advance the world’s carbon
reduction efforts. Read more about this page 180.
Market: The growing demand for low-carbon products and
services generally presents a significant business opportunity for
Schneider Electric. The Group already explores ways to improve
the efficiency and emissions profile of existing products with
innovations, such as SF6-free medium voltage switchgears (read
more on page 173). The low-carbon transition can present risks
with potential financial impacts for companies delaying the change,
as well as opportunities for sustainability leaders. For example,
consumer preferences may change and further veer toward
environmentally sustainable alternatives. This is a critical element
of the Group’s sustainability impact goals and ecodesign strategy.
In 2023, 74% of the Group revenues qualify as Impact revenues.
Additionally, maintaining industry-leading offers for more efficient,
low-emission products and services that support the transition to
a low-carbon economy requires adapted investments in research
and development (R&D). Schneider Electric invests about 5% of its
annual revenues in R&D each year and as outlined during its 2023
Capital Markets Day, expects a step-up in strategic R&D
investments over the coming years towards 7% of turnover in R&D.
This also includes sharp focus on product quality and performance
to prevent potential trade-offs associated with our products’
enhanced sustainability profile.
(1) EY. 2023. Why organizations should stay the course with their EU taxonomy reporting.
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2.3 Leading on decarbonization
Physical risks and opportunities
The immediate effects of climate change, known as acute physical
risks, can manifest as more frequent and severe natural hazards,
such as intensified hurricanes or floods. These incidents are clear
examples of how climate-related factors can cause financial
impacts on companies. Extreme weather events not only
directly affect the Group’s operations but also impact crucial
infrastructures like power plants, electrical grids, data centers,
and transportation networks.
In the long term, the severity of physical impacts will vary based
on society’s ability to reduce human-induced climate change.
However, even with mitigation efforts, the IPCC is highly confident
that climate change will lead to numerous risks for natural and
human systems beyond 2040(1). It’s crucial to prepare for
potential intensifying impacts by considering various scenarios,
understanding that some degree of impact is inevitable despite
efforts to combat climate change.
Schneider Electric has over 300 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.
In addition, impacts from chronic environmental changes like
average temperature increase could expose some of our sites to
drought and increased water stress. These impacts could result in
damage to assets, disruption to business operations, as well as
human and environmental consequences.
Damage to property and assets: Physical risks resulting from
climate change can have financial implications for the Group such
as direct damage to property and assets. As a result, climate and
weather-related risks are part of the Group’s Business Continuity
& Risk Management program, leading to preventive investment to
secure assets and adapt to material climate and weather risks.
The Group’s management method consists of risks quotations.
Climate-related physical risks, such as floods, are part of the risk
assessments and standard practice reviews made by independent
global risk experts Global Risk Consulting (GRC), thereby defining
potential financial impacts as well as the cost of response.
GRC measures and weighs:
• passive (exogenous) threats relating to floods, hurricanes
(windstorms), earthquakes, construction, occupancy, and
• active (endogenous) risks relating to physical protection, human
exposure, natural hazards, and business continuity plan.
Schneider’s industrial and logistics sites worldwide are evaluated
every three years. Risk profiles of each site are then regularly
updated, and recommendations of adaptation measures are made
to mitigate identified risks.
The Group deploys protection measures to mitigate or avoid the
risks. For example, Schneider committed for 100% of its sites in
water-stressed areas to have a water conservation strategy and
related action plan by 2025. In addition, action plans are developed
for sites with potential flood exposure. 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 more.
In 2023, several factories in France were identified with
exposure to riverine flooding. As a result, the Group took the
appropriate adaptation measures to mitigate risk exposure and
enhance resilience:
• Development of a flood emergency response plan.
•
Implementation of a flood warning protocol, including the
monitoring of local weather forecast and river levels.
• Assignment of responsibilities, including designations for safe
de-energization and shut-down procedures should an event
occur.
• Development of a recovery and clean-up plan with personnel
designated responsibilities in co-ordinating post-flood salvage
and arranging emergency utility equipment.
The Group maintains robust protocols and response measures if a
weather incident should occur. Through its Property Damage and
Business Interruption program, aligned with the ISO 22301
standard, Schneider Electric outlines substantive risks on the
business and ensures crisis management, from the initial phase
following an incident all the way to the recovery of activities.
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
EUR 28 million in 2023.
Supply chain disruption: Extreme weather events and changing
climate patterns also present potential risks for the Group’s supply
chain; in particular, material shortages and logistics bottlenecks in
the upstream and downstream. Climate-related supply chain
disruptions could translate directly into revenue losses, higher
costs, and increased working capital requirements. Delays in
production and delivery could impact customer experience.
(1) IPCC. 2022. Climate Change 2022: Impacts, Adaptation, and Vulnerability. Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental
Panel on Climate Change.
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The Group monitors and tracks vulnerability to supply chain
disruption through various strategies:
• Monitor events across 10,000 nodes (such as ports and critical
supplier locations) to shorten reaction time should events occur,
and thereby minimizing business impact.
• Analyze the criticality of industrial sites. This is performed by
independent experts, covering areas such as interdependency
analyses, alternative supply, and time to recover in case
of damage.
• The Group’s Supply Chain uses a resiliency index that includes
natural and climate-related hazards to assess and mitigate
business interruption risks.
Results from the 2023 vulnerability assessment indicate that more
than a third of the raw material streams assessed are sourced from
countries with high risk of hurricanes. Schneider anticipates and
responds to these types of risks with adaptation measures focusing
on supply chain resilience.
Notably, the supply chain strategy called STRIVE, launched in
2021, includes an increased focus on resilience to continuously
improve supply chain flexibility and agility. More than 80% of
selected CapEx is engaged in the “Power of Two in Manufacturing”
project, whereby Schneider 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,
it can dual-source critical components from partners in different
geographies to help ensure availability regardless of potential
business disruptions, such as natural disasters. The STRIVE
strategy aims at securing top manufacturing risks with strategic
stocks, and top supply risks under a specific multi-sourcing
project. In term of logistics, the Group have deployed a full
business continuity plan process, moving from 20% of business
securization in 2021 to 70% at the end of 2023, with the ambition to
reach 80% in 2024.
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.
2.3.1.2 Climate-related governance
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.
Chapter 2 – Sustainable development
Each program of the Schneider Sustainability Impact 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.
Schneider was one of the first companies to address this topic at
the Board level with the creation of the Human Resources and
Corporate Social Responsibility Committee in 2014. The
sustainability strategy, including climate, is overseen by the Board
of Directors with the assistance of the Governance, Nominations &
Sustainability Committee (renamed as such in 2023). 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 linked to ESG criteria (for more
details on compensation, please refer to section 2.5.4 on page
234).
Several other governance bodies are involved in this matter: the
Executive Committee and its Function Committee, the Stakeholders
Committee and the Sustainability department. At Group level, the
Chief Sustainability, Customer Satisfaction and Quality Officer, who
is reporting directly to the Chief Executive Officer, 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
overseeing the implementation of the Group’s climate strategy
and decarbonization roadmap, respectively focusing on the supply
chain, low-carbon product design, and the decarbonization of
Schneider’s operational emissions.
Schneider Electric’s Chief Sustainability, Customer Satisfaction and
Quality 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 program, which identifies,
assesses, and prioritizes risks and, through regular reporting and
discussion, assists senior management and the Board on the
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 (ecodesign,
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 co-ordinate a network of more than 600 managers
responsible for the environmental management of sites, countries,
product design, and marketing.
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2.3.1.3 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 four
years ago, by setting up a dedicated organization, the Schneider
Electric™ Sustainability Research Institute. This team, the Company
think-tank on the Climate and Energy Transition, reports to the Chief
Strategy Officer. A large part of its research is made publicly
available on www.se.com.
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.
Those scenarios have been regularly updated since. For instance,
in 2020, the COVID-19 short-term impact assessment was also
reviewed, including the importance and feasibility of climate-
compatible recovery plans.In 2021, a set of global scenarios
exploring the feasibility of a 1.5°C trajectory was published
externally. Since 2022, a number of regional scenarios have also
been released. Key findings are regularly cross-checked with new
publications, particularly the ones from the International Energy
Agency, Bloomberg New Energy Finance, and the International
Renewable Energy Agency (IRENA), among others, as well as
shared and discussed with these organizations.
In addition, further research efforts on decarbonization pathways
per sector, policy and socio-economic implications are also
published regularly to contribute to inform the debate on global
decarbonization. In 2023, a dedicated analysis of climate risks
interactions at Schneider Electric was also released.
The effort of this team helps to both contribute to the public debate
on global decarbonization as well as inform strategic priorities
across businesses and operations.
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2.3.2 Schneider Electric’s greenhouse gas footprint
2.3.2.1 Schneider Electric’s 2023 carbon
footprint
The Group calculates its end-to-end carbon footprint (Scopes 1, 2,
and 3) in alignment with the Standards from the Greenhouse Gas
Protocol: the Corporate Accounting Standard and the Corporate
Value Chain (Scope 3) Standard.
In 2023, we obtained “reasonable” assurance from an independent
third-party verifier on our Scopes 1 and 2 reported Greenhouse
Gas (GHG) emissions, and “limited” assurance on our Scope 3
reported GHG emissions.
The charts below represent Schneider’s 2023 carbon footprint
for Scopes 1, 2, and 3, including all relevant upstream and
downstream GHG emissions from suppliers and products sold.
Suppliers
Scope 3
upstream
14%
Schneider’s
Operations
Scopes 1 and 2
<1%
Customers
Scope 3
downstream
86%
Purchased goods
and services
6.8 MtCO2e
Freight
Other (e.g., business
travels, commuting,
upstream emissions
from the energy sector)
0.6 MtCO2e
0.5 MtCO2e
Energy consumption
at sites (market-based
approach for
electricity)
0.13 MtCO2e
Use-of-sold products
44.2 MtCO2e
End-of-life
(mostly SF6)
4.3 MtCO2e
0.4 MtCO2e
Company cars
0.06 MtCO2e
Freight
SF6 leakage
<0.01 MtCO2e
• 8% are a result of end-of-life treatment of products, and
particularly end-of life treatment of SF6 (Category 12 of
Scope 3 in GHG Protocol). These emissions primarily reflect
the SF6 gas used by Schneider in products sold in the reporting
year, and that may be released at the end of products’ life, a few
decades after the reporting year. 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.
Emissions from Scopes 1 and 2 are primarily from the use of
electricity and natural gas at our sites and from our Company fleet
(respectively 40%, 21%, and 31% of total Scopes 1 and 2).
Scope 3 emissions represent more than 99% of the Group’s carbon
footprint, of which:
• 78% are due to the use phase of products (Category 11 of
Scope 3 in GHG Protocol). These emissions derive from the
electricity consumption of Schneider Electric’s products,
primarily due to heat dissipation (Joule effect). As per the GHG
Protocol standard, these emissions are not the volume of CO2
emitted in the reporting year from the use of products sold in
previous years and currently in use by customers; it is rather a
forward-looking view based on sales occurring in the reporting
year, and the corresponding electricity consumption of the
products during their full useful life. It is worth noting that
Schneider Electric’s products generally have long life spans,
which can be up to 30 years in calculations. The methodology is
based on a lifecycle approach, leveraging the Product
Environmental Profiles (PEPs) of our products.
• 12% are associated with purchase of goods and services
(Category 1 of Scope 3 in GHG Protocol). These are the
upstream emissions (i.e., cradle-to-gate) from the production
of products and services that the Company is purchasing in the
reporting year, with the notable exception of freight services
that are accounted in a different Scope 3 category. These
emissions are coming from very diverse sources, given 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).
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2.3.2.2 CO2 reduction performance
Since 2021, emissions from Schneider Electric’s operations
(Scopes 1 and 2) have decreased by 31% in absolute, and Scope 3
emissions have decreased by 17%.
Direct emissions from Scope 1 have decreased by 20% since
2021, largely due to energy efficiency initiatives and electrification
of the Group’s on-site processes and fleet. In addition, targeted
efforts to reduce SF6 have yielded measurable results. On Scope 2,
emissions have decreased by 42% between 2021 and 2023 ,
primarily due to the outstanding progress on sourcing more and
more renewable electricity. All in all, on Scopes 1 and 2 collectively,
the emissions have decreased by 31% since 2021.
From 2022 to 2023 more specifically, key drivers of the emission
reduction (-12%) on Scopes 1 and 2 included:
• consumption behavior changes linked to the energy crisis which
was drastic in 2022, but had some long-lasting effects (with gas
consumption at sites in the energy reporting perimeter
decreasing by 18% as compared to 2022);
•
• energy efficiency (SSE #5): 6.6% in 2021, 7.8% in 2022, and
13.2% in 2023; an additional modeled savings of 58 GWh
compared to 2022;
the switch to more renewable electricity consumed by the
Group’s facilities (SSE #3), whether directly, via on-site
renewable energy or green tariffs from the utilities serving
Schneider’s operations, or indirectly, via unbundled and
bundled market mechanisms; the share of global renewable
electricity has increased from 85% in 2022 to 88% in 2023
(on the scope of ISO 14001 sites, as per the scope of SSE #3).
Scope 3 emissions decreased by 7% from 2022 to 2023:
• Upstream emissions have decreased by 10%, due to the
reduction of volume of commodities being purchased, and the
efforts of the decarbonization programs in the supply chain:
Green Materials program which contributes to source materials
with low carbon footprint, and The Zero Carbon Project which
supports the decarbonization of suppliers.
• Downstream emissions, the majority of which come from the use
of sold products, have decreased by 6% between 2022 and
2023. This is due to both the decarbonization of the grids that
the Group’s consumers rely on, and the evolution of the
geographic split of sales, with a higher growth in geographies
where the current and projected electricity mixes are less
carbon-intensive as compared to last year. As explained in the
section above, when calculating these emissions, the Group
considers the products’ lifetime and the projected carbon
intensity of the grids where consumers are located.
The rate that Schneider can implement emission reductions is
dependent on many factors that can change over time; these
include our business growth and geographic distribution, supplier
mix and suppliers’ decarbonization journeys, and the rate of
decarbonization of the grids that power the Group’s products.
2.3.2.3 Evolving calculation methodology
and data constraints
Carbon accounting is an evolving discipline where the granularity
of calculation changes as new mechanisms for data collection
and specifications become available. Schneider Electric regularly
assesses data collection and calculation methodology for
opportunities to expand data availability and enhance accuracy.
Especially, Scope 3 calculation presents an opportunity for
continuous improvement for many organizations, as calculation
depends on indirect, value stream emissions which are sources
not owned or controlled by the Group. As specifications and
availability of both activity data and secondary data change,
continuous evolutions and improvements in Scope 3 methodologies
can be expected.
In this context, the Group continues to support efforts that enhance
data standardization and transparency. There are calculation
decisions companies make with consideration to their unique
circumstances, such as data type used, data collection method,
and emission factors, among other choices. These variables can
materially impact the calculation, and as a result, compromise the
comparability and standardization of emissions data. Recognizing
the opportunity for additional guidance on calculation methods,
Schneider Electric has participated in 2023 in the update process
of the GHG Protocol standards, and the Group is willing to engage
further in this ongoing process.
Schneider Electric remains committed to transparency in disclosing
how GHG emissions calculations and methodology evolve. In 2023,
key evolutions in calculation methodologies included the following:
• The Group continues to work to use more granular or higher
quality emission factor datasets as this is critical to support
greater accuracy and reliability of GHG measurement and
reporting. For instance on Scopes 1 and 2, in 2023 emission
factors were updated in EcoStruxure™ Resource Advisor, the
Schneider Electric solution that is used to manage
environmental reporting of all ISO 14001 certified sites, in order
to better take into account the various types of fossil fuels that
are used. Also, it is noteworthy to mention the carbon footprint is
using the latest Global Warming Potential (GWP) value of SF6, as
published by the IPCC in its 6th Assessment Report available in
January 2024. This change impacts emissions sources under
Scope 1 and Scope 3
In 2023, there was an improvement of calculations for emissions
under Scope 3, Category 1: Purchased Goods and Services.
The Group incorporated data collected from suppliers, and
particularly from plastics suppliers, to leverage both the Green
Materials program and The Zero Carbon Project. Also there is
growing momentum about supplier specific carbon footprints of
products, and the Group is supporting this trend by proactively
engaging in the PACT Pathfinder initiative from the World
Business Council for Sustainable Development (WBCSD). This
is described in the section below.
•
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Product emissions data directly from suppliers is what the Group is
striving to receive at scale, but most suppliers are not able to
calculate a PCF, nor a broader environmental lifecycle assessment
(LCA) today. While Schneider Electric captures some PCFs,
specifically from some plastics suppliers and will work to expand
the number of PCFs that are received.
Yet capturing product-level emissions data for most of the
procurement is pivotal to addressing Scope 3 upstream emissions.
To support this endeavor, Schneider Electric joined a pilot from the
World Business Council for Sustainable Development (WBCSD) to
partner with select suppliers, understand their challenges in
providing product data, and accelerate carbon reduction efforts.
The pilot involved creating a partnership with select suppliers,
selecting an IT tool for data exchange, getting PCF data aligned
with the WBCSD Pathfinder Framework from the suppliers and
learning about a variety of issues that inhibit the scaling of data
exchange. The first phase of the pilot is in its final stages, and it is
anticipated to receive the first batch of supplier data in early 2024.
Phase two of the pilot will involve even deeper collaboration with
suppliers and exploring ways to support them in capturing primary
data from their own suppliers.
The pilot program has provided valuable insights. Key areas on
which valuable experience was gained include:
• Understanding the challenges faced by suppliers in computing
and providing product environmental data. Not all suppliers
currently calculate product emissions, emphasizing the
significance of this collaboration.
• Gaining further insight on confidentiality and data utilization,
which can present significant barriers to widespread data
exchange. Through the pilot, the Group have undertaken the
necessary due diligence and familiarized itself with the
technological underpinnings facilitating this exchange, including
insights from WBCSD’s Pathfinder Framework.
• Deepening partnerships with suppliers. The exchanges
Schneider is engaged in are opening other sustainability
opportunities to collaborate and enabling peer-to-peer
discussions to accelerate progress together.
The need for product environmental data from suppliers continues
to increase due to accelerating needs to decarbonize along with
regulatory and customer demand. The widespread calculation and
sharing of PCFs is an important step towards the eventual
calculation and sharing of LCAs and Schneider Electric is proud to
be a leading company exploring how to achieve scale. More about
our efforts can be read about on the WEF webpage.
• In terms of digital tools, in 2023 carbon accounting was
migrated to new systems for two Scope 3 categories, Category
4: Upstream Transportation and Distribution, and Category 6:
Business Travel. The shift to new systems for these aspects of
the emission footprint enhanced calculation coverage and
accuracy. For instance, the vast majority of freight paid by
Schneider Electric is now incorporated in a dedicated CO2
reporting tool called Sightness. The Sightness system provides
a more robust data collection and analytical capability, as well
as the integration with the EcoTransIT World emissions
calculation engine to determine GHG emissions. This calculation
engine is a globally recognized calculator, conformant with the
accounting framework from the Global Logistics Emissions
Council (GLEC). Into Sightness, granular shipment-by-shipment
data are consolidated, directly from the shippers themselves
and GHG emissions are calculated on the full well-to-wheel
perspective of transportation (while the Greenhouse Gas
Protocol standard requires the tank-to-wheel emissions to be
reported)
• Also, the Group is keen to support demand for low-carbon
commodities and products, and hence explores ways to
reflect the corresponding CO2 savings in the GHG inventory.
For instance, with Sustainable Aviation Fuel (SAF): as part of the
decarbonization approach to air transportation, the Group is
committed to replace at least 5% of conventional jet fuel use
with Sustainable Aviation Fuel (SAF) by 2030, as per the World
Economic Forum (WEF) First Movers Coalition. In 2023 the
Group started to source SAF and explored ways to source
maritime biofuels as well, while the GHG Protocol does not
explicitly allow, nor forbid, to reflect the corresponding CO2
savings in the Scope 3 emissions. This will be one very
desirable outcome of the ongoing update of GHG Protocol
standards to bring clarity and guidance on how to factor in the
decarbonization effects of sound market-based mechanisms.
2.3.2.4 Collaborating with suppliers to
tackle Scope 3 upstream emissions
through Product Carbon Footprints (PCF)
The calculation of Scope 3 Category 1: Purchased Goods and
Services, involves integrating both volume-based activity data
and expenditure records. Indeed, volume-based activity data is
leveraged as much as possible, but procurement spend is used
when volume is not available or does not have enough global
coverage. In the 2023 reporting period, 43% of emissions from
procurement were derived from volume activity data, particularly
for materials like steel and plastics. The remaining 57% relied on
spend-based calculations, notably for complex product categories
like electronics and services, encompassing diverse
subcomponents. Emissions factors are based on detailed analyses
at the commodity level, utilizing databases like the French
Environment and Energy Management (ADEME) or Environmental
Improvement Made Easy software (EIME) to identify suitable
factors. When calculating spend-based emissions, adjustments are
made to neutralize the inflationary effects, since inflation itself does
not directly contribute to additional indirect emissions.
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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 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 balance residual
emissions with high-quality and high-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. It is not representative
of year over year targets. Yet, what is important to note is that
between 2040 and 2050, the areas above and below the horizontal
line are symmetrical, meaning the emissions that are not reduced
are to be balanced with an equivalent amount of carbon removals
credits of high-quality and high-durability by 2050 at the latest.
2025
Carbon
neutral
operations
2030
“Net-Zero ready” operations
25% GHG absolute reduction
across the value chain
2021
Baseline
2040
Carbon neutral
value chain
2050
Net-Zero
value chain
Scope 3
Scopes 1&2
Scope 1&2
Scope 3
Carbon credits
Decarbonizing our
operations with:
• Energy conservation measures
• Sites and vehicle fleet electrification
• Sourcing and generation of
renewable power
Decarbonizing our
upstream value chain in:
• Engaging and supporting suppliers
Progressively balance residual
emissions with high-quality carbon
removals
to decarbonize
• Ecodesigning safe and high-quality
products with lower lifecycle CO2
footprint
• Sourcing of low-carbon materials
Decarbonizing our
downstream value chain by:
Influencing for global
•
decarbonization
Innovating with more efficient
products and SF6-free medium
voltage equipment
•
The more GHG emissions are reduced,
the less residual emissions there are.
Residual emissions must be balanced
with high quality and high durability
removals.
From 2040 onwards, carbon removals
credits shall equal residual value chain
emissions
Scopes 1&2 emissions
Scope 3 emissions
Carbon removals
The diagram above is for illustrative purposes.
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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 balance residual Scopes 1 and 2 GHG emissions which have
not been reduced with high-quality carbon removal credits, aiming
for like for like balacing in terms of both origin and gas lifetime, in
which only high-durability carbon removal can be used to balance
residual fossil fuel emissions. Similarly, by 2040, the Group aims to
balance its residual emissions with high quality removals. high
quality removals will be determined by regulation, as the concept of
like for like is emerging in the EU.
Since 2011, Schneider has invested in the Livelihoods Carbon Fund
(LCF) and renewed its engagement with the LCF2 and LCF3 funds.
These funds invest into three kinds of projects generating both
avoidance and removal credits and 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 balance the Group’s GHG
emissions, but some reflected contribution investments connected
to the Schneider Electric Paris Marathon.
Read more about Livelihoods in section 2.6,
on pages 242 to 265
To fulfill Schneider’s Net-Zero targets, solely carbon removal will be
used to balance the Company’s residual emissions. Any avoidance
credits are part of Schneider beyond the value chain contribution.
The past year has seen important developments related to policies
clarifying standard definitions regarding high-quality criteria for
carbon removal (e.g. EU Carbon Removal Certification Framework),
guidance related to the use of credits for balancing residual
emissions (proposed Green Claims Directive), as well as updates
to voluntary guidelines from SBTi and Oxford Principles on Beyond
the Value Chain Mitigation and scaling carbon removal in line with
the latest science, all of which will help guide and advance our
work to define the nature and composition of the Company’s
carbon removal portfolio.
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 SAF by 2030 (WEF First Movers Coalition), and
• 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 and 2 by 76% from a
2021 base year (equivalent to a 90% reduction compared to 2017)
and balance 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), and
• shift one-third of corporate vehicle fleet to EVs 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 balance its residual emissions with high quality carbon
removal, 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.
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 Premium™ offers, are enablers to lead
to the decoupling of company activity from absolute emissions.
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2.3 Leading on decarbonization
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. It is noteworthy to
mention that emissions from use phase of software are not
modelized specifically in the Group’s GHG inventory.
2. 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. 5.6% of turnover (about EUR 2.0 billion) was invested
in 2023, and the Group announced a step-up in strategic R&D
investments in the coming years up to 7%, as communicated to
the capital markets.
3. The decarbonization of the Group’s own operations, by investing
progressively in energy efficiency, site electrification, renewable
energies, and electric chargers for company vehicles. In 2023,
the Group has communicated to the capital markets that the
remaining cumulative investments needed until 2030 would be
about EUR 400 million.
4. The decarbonization of the Group’s upstream supply chain:
during 2023, long-term capital expenditures have been
assessed for the main transformation programs on Climate
(SSI #3) and Resources (SSI #4 and #5). As a result of this
assessment, no significant capital expenditures are foreseen
on these areas.
Mergers and acquisitions
In 2023, Schneider Electric acquired EcoAct. This acquisition is in
line with the Company’s ambition to bring digitization and
sustainability together. EcoAct’s portfolio of net-zero and nature-
based products and services, including consulting, climate data
tools, and carbon offset project development, will expand and
accelerate Schneider Electric’s capabilities to provide end-to-end
solutions that lead organizations through the net-zero
transformation and beyond.
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, and
• monitor investments to decarbonize its own operations, notably
for Zero-CO2 sites (SSE #1).
This process has improved 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 is 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 16 years, since the creation of
its internal Green Premium™ label. In 2023, the Group continued to
revamp its EcoDesign Way™ process to better manage the
environmental impact throughout the lifecycle of products, and
to co-ordinate 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, 5.6% in 2023 and, as
outlined during its 2023 Capital Markets Day, expects a step-up in
strategic R&D investments over the coming years towards 7% of
turnover in R&D. In 2023, this represented an investment in R&D of
approximately EUR 2.0 billion. The Group estimates that about 90%
of its innovation is either contributing to climate change mitigation
or neutral in its contribution to climate change mitigation, according
to its Impact revenues methodology. More details on Schneider’s
Impact revenues are provided in section 2.1.10 on page 97.
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 EUR 170M have already been
invested in both R&D and CapEx in factories, and a total future
spend (2024 - 2027) close to EUR 60M more is already planned.
Decarbonizing operations
For the past years, the Group has invested between EUR 5 million
and EUR 15 million each year in energy efficiency, deploying its
own solutions in its sites, which enabled equivalent savings on
energy costs, and for the purchase of renewable energy
certificates, to a reduction of 71% of Scopes 1 and 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, it is estimated that around EUR 400
million will be invested by 2030, in technologies such as heat
pumps to substitute comfort gas or such as EV 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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Chapter 2 – Sustainable development
2.3.5 Decarbonizing the Group’s operations by 2030
2.3.5.1 Schneider Electric’s GHG emissions
from operations
2.3.5.2 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, and
• adopt Schneider’s own Energy Management and Automation
EcoStruxure™ solutions, wherever feasible, to help the Group’s
customers and partners to embark on an energy excellence
journey, showcasing the Schneider Electric’s solutions.
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 2023, 128 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 and 2 of the Group’s
carbon footprint, representing 202,232 tonnes of CO2e in 2023, 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 EVs.
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.
This strategy has delivered an absolute reduction of 496,361
tonnes of CO2e emissions on Scopes 1 and 2 (compared to 2017),
which is a 71% decrease, as presented in the chart below, and a
26,945 tonnes CO2 reduction vs. 2022.
Schneider’s operations Scopes 1 and 2 annual GHG emissions
(Mt CO2e)
Operations
Scope
1 & 2
-12% GHG emissions
reduction in Scopes 1
& 2 vs. 2022
Induced: 0.2 MtCO2e in 2023
0.4% of total carbon footprint
0.6M
0.5M
0.4M
0.3M
0.2M
0.1M
0
2019
2020
2021
2022
2023
2030
Electricity & heat
Energy fuels
Company cars
SF6 leaks
Target
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SSE #5
Our 2025 Commitment
15% energy efficiency in our sites
SEIP Bukowno is a Schneider Electric factory in Poland.
In order to reduce their energy usage, improve energy
efficiency, reduce CO2 emissions and deploy intelligent/
smart solutions, SEIP Bukowno has deployed energy usage
monitoring system, building management system, lighting
control, and infrastructure monitoring on-site as a
comprehensive package.
Energy monitoring system:
• 37 metering points installed
• 7 communication gateways pushing real-time energy data
• EcoStruxure™ Power Monitoring Expert
• Building management system
• EcoStruxure™ Building Operation as a BMS platform
• Heating control system implemented with over
30 temperature sensors and 28 automatic valves
• Ventilation centrals monitoring
• Environmental conditions monitoring (humidity, CO2)
• Lighting control
• Infrastructure monitoring
• Compressors, water usage, etc.
With all of these measures implemented, since the beginning
of 2023, SEIP Bukowno has gained EUR 35.6k in electricity
savings and EUR 8.6k in heating oil savings: energy efficiency
factor increased from 1.5% in 2021 to 9.0% in 2023.
Our progress
2020 baseline
2023 Progress
2025 target
0%
13%
15%
Chapter 2 – Sustainable development
2.3 Leading on decarbonization
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2.3.5.3 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 2023, the Group achieved
157% energy productivity compared to 2005 (against a 2030 target
of 100%). This improved success compared to 2022 performance
(129%) is a result of continually strong business performance and
ongoing energy savings efforts. By achieving its EP100
commitment 8 years early (in 2022), 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.
Annual energy productivity progress (in %) against 2030
EP100 target (vs. 2005)
200%
150%
100%
50%
0%
%
7
5
1
%
9
2
1
%
0
0
1
%
2
7
%
9
6
%
6
7
2019
2020
2021
2022
2023
2030
Annual progress
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. 13.2% were achieved in 2023, totaling over 50%
reductions between 2009 and 2023.
The Group measures energy efficiency in its 200+ largest
energy-consuming sites, which account for over 90% of the total
measured energy consumption of the Group. At the end of 2023,
this program enabled the following achievements:
• Around EUR 6.0 million and 133.7 million kWh were saved in
2023 compared to the 2019 baseline.
• Around EUR 5.8 million were invested, of which EUR 5.5 million
were capital expenses and EUR 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 WEF,
located in India, China, France, the US, and Indonesia. Additionally,
the Le Vaudreuil plant in France and the Lexington facility in the US
are two of only 13 Sustainability Lighthouse designated 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 distribution centers 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.
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2.3.5.4 RE100: switch to 100% renewable
electricity by 2030
In 2023, electricity consumption in Schneider Electric’s sites
generated 81,499 tonnes of CO2e emissions, i.e. 61% 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).
The Group will continue to focus on additionality where feasible
and prioritize on-site 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, an expert
in sourcing renewable electricity with additionality benefits. The
Sustainability Business 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).
SSE #3: Annual share of global renewable electricity(1) (in %)
CLIMATE
SSE #3
100%
80%
60%
40%
20%
0%
%
0
8
%
2
8
%
5
8
%
8
8
%
0
0
1
%
0
9
Our 2025 Commitment
90% of electricity sourced
from renewables
%
0
5
2019
2020
2021
2022
2023
20252
20302
Since 2019 SEEE in China deployed on-site solar project
and solar power generation which accounts for 30% of total
electricity consumption every year.
In 2022, SEEE was the first batch of power users in Shaanxi
Province in China to purchase renewable electricity. Total
purchase of green electricity is 159,000 kWh.
In 2023, total renewable electricity rate reached more than
98.3%. It is expected to reduce carbon dioxide emissions
by 1,600 tons at the end of 2023.
Contracted unbundled
renewable energy credits 3
Contracted bundled renewable
energy credit 3
Onsite renewable electricity
Target
SEEE will continue to increase the share of renewable
electricity to 100%.
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 on-site 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 on-site 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 on-site
renewable generation and bundled renewable electricity sourcing.
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2.3.5.5 EV100: shift 100% of company fleet
to electric vehicles
Company cars generated 63,642 tonnes of CO2e emissions in
2023, 31% of Schneider Electric’s Scope 1 and 2 emissions.
To reduce these emissions, Schneider looks at opportunities to limit
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 EVs and making electric transport
the new normal by 2030. At the end of 2023, EVs represented 24%
of the Group’s corporate car fleet.
Chapter 2 – Sustainable development
CLIMATE
SSE #7
Our 2025 Commitment
One-third of corporate vehicle fleet
comprised of electric vehicles
(100% by 2030)
Schneider Electric in France embarked on an exciting
journey towards a greener future by initiating the green fleet
transition in late 2021. Despite challenges posed by the
current market situation, including supply chain shortages
and cost increases, encouraging progress was made,
knowing that commitment to sustainability will ultimately
lead the company to success.
The introduction of a 100% EV car list for benefit vehicles
and specific actions aimed at leasing companies and
carmakers made possible to accelerate the transition. The
change was also supported by important investments of
280 charging stations in 41 sites, the company contribution
to the employees to install chargers in their premises, as
well as agreements with two operators to guarantee a
digitalized energy charging throughout the national territory
and neighboring countries.
In parallel, the Mobility Budget project was also launched,
with the target to satisfy the flexible mobility needs, the
expectations of the young generations, and reduce
carbon emissions.
Our progress
2020 baseline
2023 Progress
2025 target
1%
24%
33%
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2.3 Leading on decarbonization
2.3.5.6 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 2023, emissions from energy consumption at sites accounted
for 134,536 tonnes of CO2e, which is 67% of Scopes 1 and 2
emissions, of which 43,104 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.
In 2023, the Group achieved 101 Zero CO2 sites. 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 2023,
10 out of 101 Schneider’s Zero-CO2 sites qualified for this
exception);
• digital energy monitoring;
• no SF6 leaks, and
• 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 2023, thanks to the Zero-CO2 sites, Schneider reduced it CO2
emissions by 102,000 tonnes.
CLIMATE
SSE #1
Our 2025 Commitment
150 Zero-CO2 sites
In November 2023, Schneider Electric China’s Distribution
Center Beijing (DCBJ) achieved the status of a Zero-CO2 site.
DCBJ serves as the second major distribution hub in China,
focusing on deliveries across Northern China. On May 1,
2023, DCBJ moved to the New Beijing Industrial Park,
merging its operations with two critical Schneider Electric
facilities: Schneider Beijing Medium Voltage and Schneider
Beijing Low Voltage. This strategic consolidation on the same
campus has created significant supply chain efficiencies,
customer satisfaction, and enhanced sustainability.
To realize it’s sustainability goals, DCBJ has implemented a
blend of digital solutions and innovations, which can
reduce carbon emissions and balance productivity at the
same time, including deploying EcoStruxure™ Power
Operation and EcoStruxure™ Building Operation,
digitalization of energy monitoring, technical innovations,
and process optimizations. In DCBJ’s new warehouse,
intelligent sensor-based lighting systems have been
installed to improve efficiency and save CO2. Additionally,
eco-friendly practices such as replacing plastics with
paper tape, paper envelops, and recycled plastic cartons
have been introduced.
Lastly, DCBJ is also supplied with 100% renewable
electricity to meet its power load through mid-to-long-term
power purchase agreement in China.
Our progress
2020 baseline
2023 Progress
2025 target
30
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2.3.5.7 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 GHG with a global warming potential 24,300 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, on page 179), SF6 is used in 13 of the
Group’s manufacturing sites. Handling this GHG can result in
leakages despite having good practices in place. Converted into
CO2-equivalent, these leakages represented 4,054 tonnes of CO2e
in 2023, which is 2% of emissions from Scopes 1 and 2. The GHG
emissions from SF6 at end-of-life is 4,157,353 tonnes of CO2e, which
is 7.3% of total GHG emissions of 2023.
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 and 2023, an advanced and digital system of emission
monitoring has been designed, to be deployed at the Group’s
biggest manufacturing sites in 2024. 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
2023, exceeding the 0.11% target set for 2023 and systematically
decreasing from 0.26% since 2018. This SF6 leakage reduction
enabled the avoidance of 900 tonnes of CO2e in 2023 vs. 2022.
2.3.5.8 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. This crisis had
repercussions, to a lesser extent, during 2023.
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 GHG emissions.
Chapter 2 – Sustainable development
In this context, Schneider Electric implemented in 2022 an energy
sufficiency plan to adapt quickly to the fast-changing energy
situation. During first year of implementation, great achievements
were delivered: 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. In the second year
of this plan, not only the previous savings were maintained by
continuous discipline, but even more energy savings were
achieved, with a reduction of 13% on gas and 5% on electricity
consumption in 2023 versus 2022.
Spotlight: sufficiency actions at “The Hive”,
Schneider Electric’s Paris headquarters
Schneider Electric responded to the energy crisis with a plan that
supports France’s EcoWatt charter, an initiative from French
national network operator RTE. The purpose is two-fold:
• Sufficiency plan: reduce energy consumption at any time.
• Flexibility plan: consume at the right time by shifting loads to
avoid demand peaks when required.
For the second year in a row, measures have been implemented,
leveraging integrated EcoStruxure™ solutions. For instance, 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. The facility can also automate
responses to EcoWatt peak period alerts by controlling heating and
ventilation, and limiting or shifting EV charging. And all employees
have been encouraged to take additional steps.
As a result, electricity consumption has been reduced by 13% in
the first four months of 2023, which represents 130 MWh in
absolute terms. More specifically, when simulating four EcoWatt
peak period alerts, the site is able to reduce power demand by
more than 50%.
“The Hive”, Schneider Electric’s Paris headquarters
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2.3 Leading on decarbonization
2.3.6 Decarbonizing the Group’s supply chain by 2050
In 2023, upstream emissions in Scope 3 accounted for 7.8 million
tonnes of CO2e, which is 14% of the total carbon footprint of the
Company. Purchases are the predominant source of 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 intensity from operations of the top 1,000 suppliers.
This intensity corresponds to the overall Scopes 1 and 2
emissions of the supplier, divided by the overall revenue.
• Sourcing 50% of green materials, including materials such as
steel and plastics with lower carbon footprints (SSI #4), and
increasing the CO2 efficiency of transportation of goods
(SSE #4).
•
Suppliers
Scope 3
upstream
-9.8% CO2e emissions in
Scope 3 upstream
vs. 2022.
Induced: 7.8 MtCO2e in 2023
14% of total carbon footprint
10M
8M
6M
4M
2M
0
2019
2020
2021
2022
2023
2030
Purchases
Freight
Target
Employee
commuting
Other Scope 3
upstream
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 6.8 million tonnes of CO2e in 2023, 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, launched
in April 2021, is the first step of a journey to reduce the GHG
emissions from Schneider Electric’s suppliers.
The ambition of The Zero Carbon Project is to collaborate with
1,000 suppliers and reduce their operational (Scopes 1 and 2)
GHG emissions intensity by 50% by 2025 (SSI #3).
The participating suppliers are required to quantify their operational
carbon footprint (Scopes 1 and 2; Scope 3 is optional), make public
commitments for their reduction targets, implement action to
achieve reduction, and share the emission reduction progress with
Schneider Electric. The participating companies in the program are
based in more than 50 countries, cover more than 65 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 and 2 are
mandatory and Scope 3 is optional for now);
• establishing an ambitious emission reduction target, and
•
implementing an action plan to achieve the target.
As of 2023, more than 1,000 suppliers are participating in the
program, achieving an overall operational emission (Scopes 1 and
2) reduction of 27%.
The GHG emission reduction reported in 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 2023, 993 suppliers
out of 1,015 participating suppliers have calculated their
CO2e emissions.
• Strong supplier actions, resulting in 27% GHG reduction for
1,000 suppliers vs. 10% reduction at the end of 2022. 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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Chapter 2 – Sustainable development
Capacity building and on-site support
The intensive capacity building efforts implemented in 2021 and
2022 ensured the suppliers gained maturity on decarbonization.
They are now familiar with the process of quantifying their carbon
footprints and identifying the major sources of emissions. However,
as most of the suppliers are just starting on their
decarbonization journey, they are learning the approaches and
possible actions. As a result, Schneider Electric has extended
support and collaboration beyond the quantification of the GHG
emissions to the implementation of decarbonization actions as well.
As part of this support, Schneider Electric works closely with
suppliers to assess the most promising emissions reduction levers
specific to the supplier’s products and manufacturing approach.
Then there is additional support to define the actions the supplier
could take and the resulting impact of those actions.
Additionally, 4 sustainable procurement experts were deployed in
major regions China, East Asia, Europe, and North America to
provide locally relevant, customized, and on-time support to the
suppliers. These experts conducted close to 100 on-site visits to
the supplier premises across regions to advise on the
decarbonization implementation, often conducting walk through
assessments, reviewing the existing energy efficiency measures,
providing technical assistance in implementation, and when
required, helping identify the local solution providers who can
support the suppliers in deployment of these actions.
Accelerate Zero Carbon workshops
To drive and scale up the adoption of emission reduction levers by
suppliers, Schneider Electric continued to roll out the innovative
“Accelerate Zero Carbon” workshop across regions. Building upon
the success of workshops in India, Middle East, Africa, Japan and
Asia Pacific, Schneider Electric rolled out new workshops in China,
Europe, and North America. These workshops were led by the
Sustainable Procurement team in collaboration with local
Procurement leadership teams, customizing to the local
requirements.
The biggest strength of Accelerate Zero Carbon workshops is the
focus on locally relevant approaches, solutions, and partners.
Region-specific diagnostic tools are developed and shared with
suppliers to analyze their own operations and identify their most
relevant actions. These diagnostic tools include:
1. Low-hanging energy efficiency self assessment checklist
2. Solar energy calculator
3. Digital emission calculator
Climate
SSI #3
Our 2025 Commitment
Reduce CO2 emissions from top
1,000 suppliers’ operations by 50%
Schneider Electric launched a case study series to
consolidate successful decarbonization actions of the
participating suppliers. The purpose of this series is to
spread awareness on the actions that companies can take
to achieve emission reduction, celebrate early adopters of
decarbonization, and encourage other companies to
emulate the experience.
Shubhada Polymers Products Pvt. Ltd., achieved 58%
reduction in their operational carbon intensity compared
to the base year of 2019.
The company achieved this by implementing below levers:
• On-site solar installation replaces over 10% of groups
electricity requirements.
• Power factor improvement using fine range capacitors.
• Upgrading old underground air compressor system
to overhead Pneumatic Piping for Compressed air
Handling airline, reducing 10% of energy consumption.
• Replacing conventional lighting with energy efficient
LEDs lighting; enhanced use of natural lights to eliminate
the use of electrical lighting during day time.
• Operational efficiency improvement by installing
variable frequency drives, motion sensors, and other
operational measures.
Watch the video “The Zero Carbon Project in
Action: Shubhada Polymers Products Pvt
Ltd.” on YouTube
Our progress
2020 Baseline
2023 Progress
2025 target
0%
27%
50%
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Two-thirds of global suppliers participating in The Zero Carbon
Project are small and medium scale enterprises, with lower energy
load than the threshold required to access renewable instruments
like PPAs, etc. To ensure wider adoption of renewable energy
solutions, Schneider developed a new program, which aims to
aggregate suppliers with lower energy load to create a cohort that
can then qualify for access to renewable energy solutions. The
Group launched a series of capacity building programs and
sessions to raise supplier awareness and so far more than 20
training sessions were organized (including repeat sessions).
These sessions go a long way in building the understanding of
suppliers and various departments about the scope and actions
required to access renewable experts. The trainings are topical
and cover various topics:
• Renewable Electricity 101
• Energy Attribute Certificates 101
• Onsite Solar 101
• Power Purchase Agreements 101
• VPPAs: Financial Considerations
• VPPAs: Treasury Considerations
• VPPAs: Accounting Considerations
• VPPAs: Legal & Risk Considerations
• VPPAs: Executive Debrief (EMEA/APAC)
Learn more about The Zero Carbon Project in
the Sustainability section on www.se.com
Chapter 2 – Sustainable development
2.3 Leading on decarbonization
In addition to the above material, local subject matter experts are
identified from within the Schneider Electric or external ecosystem,
including regulatory experts and departments explaining various
incentives provided by governments in different regions. 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 Accelerate
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 Accelerate Zero Carbon workshops 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 outcome of the Accelerate Zero Carbon events resulted in
the increased awareness and strong acceleration in the
decarbonization commitment from the supplier partners.
Digital support
To ensure that participating suppliers have access to all the latest
knowledge, research, trainings, and tools for decarbonization,
Schneider developed a dedicated web portal on decarbonization,
which is exclusively available to The Zero Carbon Project 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, standardizing and improving the
quality of the data reported by suppliers. Additionally, to support
small and medium scale enterprises, Schneider Electric launched
Zeigo Activate. This tool helps suppliers create a customized
emission reduction roadmap, adjust the timeline to deploy various
actions to meet desired reduction targets and also help connect
with the solution providers who can help them implement it. 400
suppliers were given complementary access to Zeigo Activate to
advance their decarbonization actions.
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2.3.6.2 Buying more Green Materials
Schneider Electric is committed to increase 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 2023, 29% of materials in scope were qualified
as “Green”.
Read more details on the Green Materials and
Sustainable Packaging programs in section 2.4
on page 184, and in section 2.7, on page 266.
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.
For 2023, the Company replaced its existing CO2 emissions
reporting application with a new solution providing for more robust
data collection, emissions calculation, and analytical capabilities.
The solution utilizes the industry leading EcoTransIT World
emissions calculations solution providing tighter alignment to
evolving global reporting standards and allows for greater
specificity in the emissions calculations. As part of the migration,
the decision was made to also adjust baseline year for reporting
from 2020 to 2021 to align to accepted reporting recommendations
to avoid 2020 due to the impact on freight transport flows from the
global pandemic in 2020.
Chapter 2 – Sustainable development
In 2023, emissions from the transportation of goods represented 1
million tonnes of CO2, which is 2% of the Scope 3 emissions
Company-wide. The transportation that is directly paid by the
Group (about 54% of the freight CO2 emissions) is closely
monitored, with primary data coming from detailed shipment
information from the top 70% of transport suppliers by spend.
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 SSE 2021 - 2025, the
Group aims to further reduce CO2 intensity in transportation by 15%
compared to 2021 (SSE #4).
In 2023, the Company saw a return to a more normalized operating
environment resulting in a reduction in the use of expedited
modes of transport. As well, there was continued move towards
regionalization of manufacturing and optimization of the associated
supporting freight transport. A specific area of focus was on
reduction of air freight resulting in a 9% reduction in tonnage
shipped by air through mode conversion as well as expanded use
of multi-modal solutions. Together, these initiatives resulted in a
1.6% decrease in the freight transport emissions intensity
compared to 2021.
2023 freight CO2e emissions by mode (%)
0.1%
41.3%
52.7%
5.9%
Rail
Air
Ocean
Road
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2.3 Leading on decarbonization
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CLIMATE
SSE #4
Our 2025 Commitment
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.
Globally in 2023, the Group set an aggressive target to
reduce the total tonnage of air freight shipped for the year.
Through cross-functional engagement internally, and in
collaboration with key transport providers, the Company
was able to realize a 9% reduction in tonnage shipped by
airfreight with a continuing ambitious target set for 2024.
Our progress
2020 baseline
2023 Progress
2025 target
0%
1.6%
15%
In 2023, Schneider continued its engagement with the 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 WEF can be
found on the organization’s website
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. In 2023, Schneider
partnered with one of its air freight providers to make its first
purchases of SAF in support of this commitment. While SAF are
critical to decarbonizing transportation, their conformance in
carbon accounting methods from the Greenhouse Gas Protocol is
still uncertain. Hence the emissions savings are not incorporated
into the Group’s GHG inventory at the moment. The Group is
investigating how to incorporate decarbonization from SAF in the
future GHG inventories, and is seeking guidance from carbon
accounting bodies, especially in the context of the ongoing update
of GHG Protocol standards.
Beyond efforts on sourcing SAF, 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:
•
•
•
in several regions, analysis of customer delivery routes and the
introduction of milk runs to optimize delivery distances traveled;
in Europe and Middle East, introduction of multi-model solutions
based on rail for intra-company shipments;
in all regions, ongoing pilots, and implementation of EVs for final
mile customer deliveries;
• continued global focus on optimization of ocean freight from
FCL (Full Container Load) to LCL (Less than Container Load)
and increases in container utilization rates, and
• with the Group’s key transport providers, identifying and piloting
opportunities to use sustainable fuel options where zero-
emission options are not available.
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Chapter 2 – Sustainable development
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 ecodesigning in product development:
ecodesign 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 section 2.4.3.4 on page 191,
and the decarbonization of customers with Schneider
Electric’s products in section 2.3.8 on page 181.
Customers
Scope 3
downstream
-6.1% CO2e emissions
reduction in Scope 3
downstream vs. 2022
Induced: 49 MtCO2e in 2023
86% of total carbon footprint
80M
60M
40M
20M
0
2019
2020
2021
2022
2023
2030
Use of products
End-of-life products
Freight
Target
2.3.7.1 Developing SF6-free offers and SF6
recovery services
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)
24,300 times higher than CO2, making it one of the most potent
GHGs. Schneider is therefore innovating its offers to move away
from SF6 gas, as part of SSE #2: 100% substitution with SF6-free
medium voltage technologies. 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, fluorinated gases (F-gas), and operating on a
cutting-edge combination of pure air and vacuum technology, 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. In
2023, new functions for SM AirSeT and RM AirSeT were launched,
thus opening options for new markets and applications.
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 and any other F-gas, the equivalent of over
72 tonnes of CO2.
In view of the regulation recently adopted by the European Union
on F-gas (fluorinated gases), the transition to SF6-free and F-gas
free electrical distribution in grids and buildings will accelerate. The
new regulation dictates a detailed timeline (starting January 1,
2026) and conditions to move the electricity industry away from the
use of fluorinated greenhouse gases like SF6. It acknowledges the
crucial role of eliminating F-gases as a fundamental and time-
sensitive step towards achieving truly green electricity.
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”. 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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2.3 Leading on decarbonization
CLIMATE
SSE #2
Our 2025 Commitment
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.
Our progress
2020 baseline
2023 Progress
2025 target
26%
60%
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 and carbon removal 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 section 2.1.8, on page 91, and on Schneider Electric
lobbying activities in section 2.2.7.6,
on page 132.
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 and remove
carbon dioxide, modernize and digitize the grid, accelerate clean
energy, and strengthen resilience to the impacts of a changing
climate. In the US, 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 a fast-paced digital and sustainable
transformation of Europe where electrification would play a critical
role. Schneider Electric has contributed to policy discussions
around the European green deal through its role in trade
associations and business coalitions and by bringing expertise to
the EU institutions and national governments.
For instance, Schneider Electric actively contributed to an open
letter about the Energy Performance in Building Directive, launched
a new forum with Eurelectric aiming to accelerate the electrification
rate and the smartness in the building sector, and wrote a paper
about the need for the digital transformation of the energy
eco-system in Europe in order to achieve Europe’s decarbonization
objectives together with the association DigitalEurope.
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 understand the potential impact of external carbon
pricing on its portfolio’s resilience to climate scenarios. The Group
internal shadow price is meant to inform the Group’s climate
strategy and incentivize low-carbon innovation. Also the Group
assesses marginal abatement costs (additional cost per ton of CO2)
of some specific decarbonization actions or programs, in order to
determine what are the most cost-efficient ones. Schneider uses
different carbon price scenarios, varying from EUR 50 - 130/ton
(depending on time horizons).
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 modeling 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
2.3.8 Enabling customers to decarbonize through
efficiency and digitization
2.3.8.1 Schneider Electric helps customers decarbonize and aims to avoid 800 million
tonnes of CO2 emissions by 2025
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: 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
Connected
products
Connected products are ecodesigned
to improve their efficiency and deliver
electricity savings.
CO2 savings at product level
Examples: high efficiency uninterruptible
power supply (UPS), variable speed drives
What are the climate benefits of Schneider
Electric’s offers
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:
Avoided CO2 emissions arise from the difference between the
induced emissions of using Schneider Electric’s offer compared to
the induced emissions of the reference situation, which reflects the
most realistic market situation in the absence of the use of this, or a
similar, offer. 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).
• 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: PPAs or microgrids lead to the
Avoided emissions are a complementary indicator to the GHG
inventory of the company, meant to illustrate that Schneider’s
climate strategy is two-fold: reducing company-wide carbon
footprint, while increasing our avoided emissions.
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.
In the fight against climate change, companies need to both act on
reduction of their carbon footprints, while increasingly contribute to
reducing the emissions of the global economy, and this second
part can be captured by avoided emissions, since it’s not captured
in the reporting company’s carbon footprint. These two dimensions
are equally important and progress on avoided emissions is not
meant to divert efforts on reducing the company carbon footprint.
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a well-established reporting discipline
To demonstrate the avoided emissions from offers, a new indicator
was launched and communicated externally in 2018. Since then, the
Group has set a quantified target, aim to reach a cumulated
800 million tonnes of CO2 of saved and avoided emissions by
its customers between 2018 and 2025 (SSI #2). As part of the
SSI targets, avoided emissions are quarterly disclosed and
independently audited once a year. 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.
To transparently measure these avoided emissions, the Group
developed a methodology which 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, ISO 14021 and
the World Business Council for Sustainable Development (WBCSD)
guidance.
The reference situations for each and every of the offers in scope
of SSI #2 are carefully defined and transparently described in order
to reflect the most realistic market situation in the absence of the
sale of the offer. In fact, Schneider’s methodology makes a
distinction between “saved” and “avoided” emissions (but both
“saved” and “avoided” emissions are referred to as “avoided” for
the sake of simplification in this section). Saved and avoided
emissions can be described as follows:
• Saved emissions come from sales in a “brownfield” context
of existing assets and infrastructure, e.g., selling a building
management system for an existing building, or doing
maintenance and repair on existing equipment. Saved
emissions represent the actual reduction of global CO2
emissions compared to emissions in the past.
• Avoided emissions come from sales in a “greenfield” context of
new assets and infrastructure, e.g., selling an energy-efficient
cooling equipment for a data center that is newly built, or selling
a variable speed drive for a new industrial equipment. Avoided
emissions represent a limitation of the increase of global
emissions (i.e., emissions are “less increasing” as compared
to reference situation).
Chapter 2 – Sustainable development
2.3 Leading on decarbonization
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Overall, from 2018 to 2023, Schneider Electric helped customers
save and avoid 553 million tonnes of CO2e, over the full lifecycle of
the products sold during this period of time.
Cumulative saved and avoided CO2e emissions since 2018
(MtCO2e)
Customers’
saved &
avoided
emissions
+113M
CO2e emissions
saved and
avoided for our
customers in 2023
800M
600M
400M
200M
0
2019
2020
2021
2022
2023
2025
Saved
Avoided
Targets
Climate
SSI #2
Our 2025 Commitment
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.
Our progress
2020 Baseline
2023 Progress
2025 target
263M
553M
800M
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Chapter 2 – Sustainable development
Schneider Electric’s saved and avoided methodology, “CO2 Impact
Methodology” is available for download on se.com. The detailed
calculation rules and assumptions for each offer covered by the SSI
#2, and the report of the independent review, are also available.
There is currently a big momentum on the topic of avoided
emissions, with the initiatives from the WBCSD and standardization
bodies. For instance, WBCSD and The Net Zero Initiative released
in March 2023 a guidance on avoided emissions. This guidance
drives some attention: it has been acknowledged in G7 Climate,
Energy and Environment Ministers’ Communiqué in April 2023,
and promoted later during COP28 in December 2023.
These initiatives are very welcome and needed, to bring
harmonization of practices among companies.
During 2023, Schneider Electric has been actively engaged with
WBCSD, as part of the practitioners’ sprint and practitioners’ forum,
and as a co-convenor of International Electrotechnical Commission
(IEC) standardization work on avoided emissions. This work
towards harmonization is important, because it’s key to make
avoided emissions something more valuable as a metric, well-
established and effective for their end-users, especially the
financial sector. For instance, sectorial rules on how to calculate
avoided emissions will allow to make like-for-like comparisons
between companies from the same sector. Also, methodological
alignment is key to have guardrails in place for a robust practice of
avoided emissions and prevent the corresponding risks of
greenwashing criticism: for instance, with key principles such as
transparency (as much as data sensitivity and confidentiality can
allow), lifecycle thinking, and being rather conservative in the
approach than the opposite.
Read more about Schneider’s saved and avoided methodology on www.se.com
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2.4 Being efficient with resources
In this section
2.4.1 Governance and Environment policy
186
2.4.4 Source better
2.4.2 Minimize the Group’s impacts and dependencies
2.4.5 Manufacture better
on nature
2.4.3 End-to-End Circularity
187
190
2.4.6 Use longer and use again
196
201
207
Context and the Group’s commitment
Biodiversity is declining faster than at any time in human history: an
urgent and aggressive action is imperative to prevent further
damage to nature and resources. This large loss of biodiversity
and nature threatens the livelihoods of communities worldwide and
poses significant risks to economic activities and financial assets
reliant on nature’s resources, directly impacting businesses and
their value chains(1).
While land-use change remains the biggest threat to nature, climate
change is expected to be the main cause of biodiversity loss in the
coming decades if global warming cannot be limited to 1.5°C(2).
The environmental crises we face today are interrelated. This
underscores the importance of taking a systems approach to
problem solving that considers the synergies among challenges
like resource scarcity, biodiversity decline, and climate change.
At Schneider Electric, we believe the transition to a circular economy
presents the greatest opportunity to safeguard biodiversity and
natural resources while also combating climate change.
Companies are taking a look at their entire value chain and
readily innovating to identify better ways of working and creating that
can be sustained in the long-term, embracing end-to-end circularity.
We believe Schneider Electric is uniquely positioned to be a leader in
the transition to a circular economy, both externally with customers
and internally in our operations. Our value propositions have long
delivered resource efficiency, enabling customers to “do more with
less” without compromising on performance, while also considering
the impact of our products and services on nature.
We have over the years adopted an approach looking at the end-to
end lifecycle impact of our products, with the aim to decouple
business growth from resource extraction. More recently, we
adopted a circularity framework.
“At Schneider Electric, we approach supply chain
sustainability holistically, electrifying our sites and
processes, reducing our energy consumption through our
offers, working in partnership with our suppliers to
decarbonize, and through end-to-end circularity. Taking
this approach to circularity means assuming full
responsibility for our products’ lifecycles – from design
and production, to end-of-life. This requires a multi-year
transformation across our business, identifying ways to
keep resources in circulation for as long as possible to
maximize efficiency and preserve biodiversity while
delivering long-term value to our customers, partners,
and stakeholders.”
Mourad Tamoud
Chief Supply Chain Officer
(1) “Biodiversity as a Material Financial Risk: What Board Directors Need to Know.” Climate Governance Initiative, March 6, 2023.
(2) “Six charts that show the state of global biodiversity loss.” World Economic Forum, October 17, 2022.
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Chapter 2 – Sustainable development
Progress of our Resources commitments
Schneider
Sustainability
2021 – 2025 programs
Baseline(1)
#
Increase green material content in our products
2020: 7%
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
2023 progress(2)
29%
63%
13%
81%81%
24%
2025
Target
50%
100%
15%
80%
33%
66%
100%
2020: 13%
2019: 0%
2020: 77%
2020: 1%
2020: 0%
2020: 120
137
200
2020: 157,588
311,229
420,000
2020: 0%
73%
100%
Impact
(SSI)
Essentials (SSE)
4.
5.
5.
6.
7.
8.
9.
10.
11.
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 2023), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 302). In addition, SSE
#5 and SSE #14 received a “reasonable” assurance level in 2023. Please refer to page 266 for the methodological presentation of each indicator. The 2023
performance is also discussed in more details in each section of this report.
2023 Highlights
Schneider Electric launched PanelSeT SFN, the 1st decarbonized steel
enclosure in the market.
Schneider Electric ranked 1st in the Gartner Supply Chain Top 25 and was
listed in the top five for the fourth consecutive year.
Long-term roadmap
2030 • No net biodiversity loss in Schneider Electric direct operations by 2030
• 100% deforestation-free wood in our operations and supply chain by 2030
• Double energy productivity vs. 2005 (EP100)
• Shift 100% of Company fleet to electric vehicles (EV100)
• 100% waste recovery by 2030
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2.4 Being efficient with resources
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O
• Electrifier program: Formerly known as “Edison”, this program
aims to recognize employees with remarkable achievements,
expertise and leadership. Offering them opportunities to
contribute to strategic busness drivers across different realms.
Read more in Section 2.5.3.8 on page 230.
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.
2.4.1.2 Group policy
Schneider Electric’s operational environment strategy aligns with its
broader sustainability 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 Electric 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 2.4.5 on page
201).
• Continue protecting the environment, preventing pollution,
limiting emissions, and promoting biodiversity (see section 2.4.2
on page 187).
• Decouple our supply chain from natural resource consumption
(see section 2.4.4 on page 196).
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.
2.4.1.1 Environmental 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 to minimize the environmental impact of
how it designs, manufactures, delivers, and maintains its products.
The Group also 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.
Schneider’s environmental performance is delivered with the
involvement of its strategy, Research & Development (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, the Governance, Nominations
and Sustainability Committee, and with the 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.
• 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 China Restriction of Hazardous
Substances (RoHS); the proactive management of local
environmental initiatives; and finally, relations with local
stakeholders.
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Chapter 2 – Sustainable development
2.4.2 Minimize the Group’s impacts and dependencies
on nature
2.4.2.1 Context
2.4.2.2 Risks and opportunities
A sustainable future for people and economies will only be possible
if nature, climate, and people are valued in an integrated way.
Climate change is among the main drivers of biodiversity loss,
while nature is part of the climate solution. 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 Planet Report 2022”(1) points out that rising
temperatures are already driving mass mortality events, as well as
the first extinctions of entire species: it shows an average 69% drop
in monitored vertebrate wildlife populations between 1970 and
2018. Every degree of warming is expected to increase these
losses and the impact they have on people.
In 2020, analysis by the World Economic Forum (WEF)(2) revealed
that out of 163 industry sectors and their supply chains, more than
half of the world’s Gross Domestic Product – USD 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.
The urgency to accelerate corporate action on biodiversity
management is reflected in the increase in disclosure
requirements. Following COP15 in 2022, the Global Biodiversity
Framework (GBF) established a global goal to halt biodiversity loss.
Target 15 outlined by the GBF requires corporations to disclose
their risks, impacts, and dependencies on nature. With increased
expectations from investors and stakeholders for companies to be
aligned with the GBF, the Taskforce on Nature-related Financial
Disclosure (TNFD) was officially launched in Q3 2023 to facilitate
transparency and consistency in disclosures.
The Group anticipates new requirements under the Corporate
Sustainability Reporting Directive (CSRD) in its next reporting year
and will be taking necessary measures to remain compliant. While
the Group has aligned its targets with the GBF, it will stay on top of
evolving international standards and best practices especially as
the Science-Based Target Network continues to mature. The Group
have designed a robust program that is guided by science and
follows the mitigation hierarchy – prioritizing actions to avoid,
reduce, and minimize impacts across its value chain.
Schneider Electric will continue to grow its Biodiversity program
with strong governance and commitment across the business.
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 the
global stocks of nature. The Group used the TNFD framework to
conduct a double materiality assessment: impacts and
dependencies; and 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 Electric assesses periodically its 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.
The Group’s biodiversity impacts are indirectly caused by its
carbon emissions, and its dependencies are concentrated
upstream of the Group’s supply chain. Specifically, water-related
ecosystem services, due to metals and resources processing.
It remains a priority for the Group to understand how its impacts
and dependencies will translate to physical and transition risks that
are material to the business. As the Group expands its efforts to
manage its impacts along its value chain, it also recognizes
significant opportunities to enhance the resilience of its supply
chain through better partnership with suppliers and enhancing
visibility on environmental measures. The Group’s commitments
and early actions on biodiversity management continues to support
its reputation as a leader in its sector.
2.4.2.3 The Group’s commitment
In 2021, Schneider Electric committed to no net biodiversity loss in
its own operations by 2030. This was underpinned by the following
five actionable commitments. Internal guidelines define the rules
applicable for the SSE targets and best practices are shared
across sites for continuous improvement.
Schneider Electric’s commitments 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. (Refer to section
2.4.5.6 on page 205 for more details on Schneider Electric’s site
level actions)
Consult Schneider’s commitments to Act4Nature
international on www.se.com
(1) Living Planet Report 2022, WWF
(2) Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy, WEF
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2.4 Being efficient with resources
Circularity is the biggest gear to pull
for a net zero, nature positive future
NATURE
Toward
nature
positive
CLIMATE
Toward
net zero
CIRCULARITY
End-to-end
circularity
When products and materials are circulated in the economy at
their highest value, the need for virgin materials is reduced. This
leads to a reduction in with metal and mineral extraction, fewer
resource needs for manufacturing. This in turn leads to lesser
environmental emissions and more space for nature regeneration
and wilderness preservation.
The reduction in environmental emissions links directly to
Schneider achieving its SSI #1 to #5 by 2025 and its Net-Zero
target by 2030. Circularity is a non-negotiable for Net Zero
because most efforts to tackle the crisis have focused on a
transition to renewable energy, complemented by energy
efficiency, but these measures can only address 55% of
emissions. The remaining 45% of emissions come from the
production and consumption of products. Beyond this corporate
level, circularity principles also guide product sustainability, for
example eco-design and Green Premium; efficient manufacturing,
for example, waste to resource sites; and component and material
securitization, for example, copper circularity.
Schneider has committed to net-zero biodiversity loss from its
operations by 2030. Analyzing Schneider’s end to end
biodiversity footprint, a significant share (85%) comes from
downstream activities (mainly electrical consumption); the
second most significant source of impact is upstream activities
(15%) represented by sourcing of metals, timber and minerals.
By incorporating the concepts of circularity i.e., use better, use
longer, and use again, Schneider can drastically reduce its
upstream and downstream biodiversity footprint. Schneider has
the ambition of having 100% of sites with biodiversity
conservation and restoration programs.
2.4.2.4 Biodiversity footprint measurement
Schneider Electric’s 2022 terrestrial dynamic footprint by
scope (in MSA.km²)
The quantification of the Group’s impacts on biodiversity is an
essential first 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 Biodiversité.
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.
In 2023, Schneider Electric concluded its second BFA to evaluate
the progress of its sustainability programs on its biodiversity
footprint. The latest results illustrate the Groups’ terrestrial dynamic
biodiversity impact across its value chain, with data from 2022.
250
200
150
100
50
0
232
49.5
1.0
Upstream
Direct Operations
Downstream (Excl.
avoided and saved)
Climate Change
Metals and Minerals
Woodlogs
Others
The findings of the second BFA are aligned with the previous study,
indicating that climate change continues to be the primary driver of
Schneider Electric’s impacts on biodiversity loss. This is particularly
significant downstream in the Group’s value chain, resulting from
the use of its products.
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More details on Schneider’s climate programs and achievements
are presented in section 2.3 on pages 154 to 183.
• 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, etc.). 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).
2.4.2.5 Using the Group’s voice to share
learnings
During the UN Biodiversity Conference (COP15), Schneider Electric
supported the ambitious Target 15, a collective commitment which
requires business and financial institutions to assess and disclose
dependencies and impacts on biodiversity, and to accelerate
business action to reduce negative impacts.
Schneider Electric remains committed to Target 15 as
demonstrated by aligning its no net loss target to the GBF and
disclosing impacts, risks, and dependencies.
In February 2023, the Schneider Electric Research Institute
published the first in a series of research into corporate action on
biodiversity. This whitepaper “The why, what, and how of corporate
biodiversity action” provides an introductory overview of corporate
biodiversity action. It can support companies, especially
manufacturing ones, in recognizing the imperative for such action,
understanding key concepts and developments, identifying
priorities with the right frameworks and tools, and ultimately
realizing some of the opportunities that a nature-positive economy
can bring for all. A second white paper was published in October
2023, “Green Digital Solutions for Corporate Biodiversity Action”
exploring how new technologies help in biodiversity conservation.
The study also highlights land-use change driven impacts are
mostly material upstream of the Group’s supply chain, with raw
materials of concern being copper, steel, and aluminum, and
packaging – timber, card, and plastic. This underscores the
importance of the interconnections with green materials, circular
economy, and elimination of single-use-plastics programs to
effectively manage biodiversity throughout the entire value chain.
Schneider Electric’s upstream dynamic terrestrial impacts
2019 vs 2022 (in MSA.km²)
60
50
40
30
20
10
0
2019
2022
2.0
1.6
1.2
0.8
0.4
0
Climate Change
Metals and Minerals
Woodlogs
Others
Impact Intensity
The report also highlighted important trade-offs for consideration,
for instance the phasing out of single-use plastics has led to a
higher consumption of cardboard in packaging and therefore,
impacts related to wood log. More efforts, and particularly the
commitment to zero-deforestation wood by 2030, are underway
to better mitigate this impact.
Schneider Electric’s dynamic terrestrial impacts 2019 vs 2022
in its direct operations (in MSA.km²)
2.0
1.6
1.2
0.8
0.4
0
2019
2022
0.10
0.08
0.06
0.04
0.02
0
Climate Change
Others
Impact Intensity
Based on the outcome of the second BFA, Schneider Electric is on
track to achieve its target of “no net loss in its direct operations by
2030”.
The study also allowed Schneider Electric to further identify and
reiterate the main levers of action to reduce its biodiversity footprint
across its value chain:
• Reduce greenhouse gas (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 (over 70%). Therefore, Schneider’s
Net-Zero commitment will have a significant impact on reducing
the Group’s pressure on biodiversity.
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2.4.3 End-to-end circularity
2.4.3.1 Context
Circularity is a greenfield growth opportunity for Schneider Electric.
Today, 80% of product revenues are covered by GreenPremium™
(see section 2.4.3.5 on page 193), ~19% revenue comes from
software and services, and through continued growth of our ranges
covered by the repacked and refurbished label, 22% of our product
families have at least one circular option available. This expansion
into new markets is driven by innovation such as artificial
intelligence-based maintenance which enables customers to
maximize the value of their assets and provides recurring revenue
to Schneider.
Schneider Electric was recognized as a Circularity Lighthouse by
the World Economic Forum and McKinsey for its end-to-end
circular approach across a broad portfolio of its energy and
building automation solutions. Through ecodesign, Waste-to-
Resource sites, lifetime extension services, and a global network of
refurbishment centers, Schneider Electric has saved and avoided
553 million tonnes of CO2 to customers since 2018.
The Company also uses 27% green materials across its products
with the ambition to reach 50% by 2025. 22% of Schneider
Electric’s product families have a circularity option, and more than
half of Schneider Electric’s manufacturing sites recover more than
99% of waste.
One example is how Schneider Electric gives its MasterPact MTZ
circuit breakers a second life. Refurbished at the MasterTech plant
in France, these circuit breakers are collected from customers at
end-of-life, disassembled, diagnosed, upgraded, and tested before
being put back on the market.
Beyond Schneider Electric, various industries have started to
launch circular offers such as lighting as a service, equipment
End-to-end circularity at Schneider Electric
0. Design and Innovate for circularity
• Eco-Design to use better, longer and again
• Business model innovation: develop bundled offers with
financing and retained ownership where applicable
leasing, and circular IT pay-per-use models. On the flip side, the
cost of doing nothing signals not only overlooking the opportunity
to stay relevant but also compromising the Company’s license to
operate amidst critical raw material shortages and growing
pressure from regulations like the EU Taxonomy and CSRD.
The goal of circularity is to design out waste and pollution, keep
products and materials in use, and regenerate natural systems. It
proposes a framework in which outputs from every stage of the
lifecycle become inputs to another, offsetting the need for new
materials and energy-intensive manufacturing activities. A circular
economy is also a non-negotiable for a net-zero, nature-positive
future. Schneider’s circularity vision is to decouple business growth
from the extraction of natural resources while meeting its net-zero,
nature-positive target.
2.4.3.2 Our Vision
Our approach
Vision: to decouple business growth from resource extraction
while meeting our net-zero nature positive targets.
Mission: adopt end-to-end circularity to (1) drive circularity
concepts as a core part of offer creation, product design, and
manufacturing; and (2) keep products, parts, and materials in
circulation at their highest functional value as long as possible.
Strategic layers:
• Design innovation: (1) applying eco-design principles to
product development, e.g. designing for reliability and lifetime
extension, and (2) business innovation to offer development,
e.g. deciding a go to market strategy between transactional
sales to as a service.
6. Recycle raw
material & substances
• Recover SF6 gas service
• Material recycling
5. Repack and refurbish
• Take back and buy back
services
• Repack and refurbish
• Harvest spares
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INNOVATE
4. Modernize & upgrade
Retrofit and upgrade solutions
to avoid replacing by new
equipment.
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1. Source better
• Use sustainable materials,
packaging.
2. Manufacture better
• Waste to resource sites
• Zero waste management
• Optimized logistics
• Local biodiversity actions
• Single-use plastic free sites
• Net-zero ready operations
• Water action plans in
water-stressed sites
3. Maintain & repair
Condition-based maintenance
powered by analytics and
artificial intelligence.
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Chapter 2 – Sustainable development
• Use better: is about sourcing the best-in-class sustainable
materials and manufacturing products efficiently. Example
measures include sourcing materials with high recycled content
and minimizing manufacturing scrap.
• Use longer: involves providing services to keep products in use
for as long as possible. On-site repair and maintenance, as well
as equipment modernization services.
• Use again: relates to recirculating products, parts, and
materials in the economy. For example, take back,
refurbishment, and resale of retired assets.
One such client is New York City’s JFK International Airport’s New
Terminal One. Its EaaS microgrid achieves several superlatives.
It’s the largest airport microgrid in the US, featuring a revolutionary
federated design (i.e., four microgrids in one) that can power 100%
of the terminal’s critical operations. Its 11.34 MW of decarbonized
electrical capacity is sourced from fuel cells, battery storage, and
the largest rooftop solar array in NYC. AlphaStruxure’s careful
planning and service excellence will prolong asset longevity,
minimize resource use, and propel decarbonization. That’s how
AlphaStruxure’s EaaS drives circularity.
2.4.3.3 Innovating through business models
2.4.3.4 EcoDesign for circularity
Offering “Everything as a Service” is a crucial component of
end-to-end circularity. By retaining ownership of the product and
extending our responsibility beyond the point of sale, Schneider is
incentivized to design the most efficient, long-lasting products with
service support throughout its use and optimal management at the
point of retirement.
Most of Schneider’s new products are digital, connectable, ensure
full product life cycle management and predictive maintenance,
and guarantee optimum performance, hence enabling the Group to
move towards customer-intimate models like subscription,
performance contracting, and leasing.
Schneider is exploring innovative circular offers, notably in
Electrification as a Service and Energy as a Service through its
Alphastruxure joint venture with Carlyle.
AlphaStruxure, Schneider Electric’s joint venture with Carlyle, offers
resilient and decarbonized energy with “Energy as a Service”
(EaaS). EaaS is a financial and technical solution for deploying
transformational on-site energy infrastructure projects – without the
CapEx or complexity for the customer. AlphaStruxure finances and
owns the system, taking on capital costs in exchange for
predictable monthly payments, giving clients guaranteed pricing
and performance outcomes. AlphaStruxure assumes the design,
delivery, operation and maintenance of the system over the entire
lifecycle. AlphaStruxure’s deep expertise and long-term
accountability enables a right-sized, waste-minimizing, and
service-optimizing approach that drives circularity for clients.
At Schneider Electric, every product or solution fulfills 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 across the value chain – innovative design,
materials, service business models, reuse and redistribution
processes, collection, and more.
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.
The circular journey of Schneider Electric starts with the design
phase, to ensure that every product and offer is using the better
materials and processes, are used longer, and are used again once
they reach their first end-of-life: this is EcoDesign for Schneider
Electric. Ecodesign is defined in standards, International
Electrotechnical Commission (IEC) 62430:2019 – Environmentally
conscious design – as 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 footprint, and to embed circular
principles in its products and offers, Schneider Electric adopted
EcoDesign Way™, a process to understand and manage the
environmental impact throughout the lifecycle of products, and
to coordinate efforts across the value chain, as shown with the
five EcoDesign categories below.
EcoDesign Circularity
Recirculation
Ensure products, parts and
materials have multiple lives.
Life time Extension
Extend lifetime of products, parts
through design and services.
Energy Efficiency
Optimize Energy Efficiency during
product use. Ability to deliver
energy efficiency for customers.
Materials & Substances
Optimize: Focus on using less.
Focus on alternative materials
acting for circularity, low carbon
and people and ecosystem
safety.
Packaging & Operations
Focus on alternatives packaging
solutions to optimize resources
and minimize waste generation.
Other benefits occuring at
SE operations.
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EcoDesign allows businesses to implement Schneider Electric
environmental global commitments into new product development
processes and therefore ensuring that Schneider Electric offers
participate actively to its long-term commitments.
While the EcoDesign Way™ Scorecard is still being used in projects,
Schneider Electric has revamped the EcoDesign assets in 2023 to
further accelerate positive impacts products and services could
have on the environment.
In 2023, the Group structured the EcoDesign strategy while
developing multiple assets to better support all Design and
R&D teams.
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.
The Group has implemented EcoDesign metrics into the Offer Life
Cycle Management to ensure all projects are incentivized to track
the environmental footprint of their projects and report their
performance on carbon and materials footprint. Mandatory
deliverables at key milestones of the Offer Life Cycle Management
have been updated to strengthen the EcoDesign requirements.
EcoDesign Training Path Overview
EcoDesign Training Path Overview
Basic
• EcoDesign principles
• Life Cycle Analysis
Principles
Introduction
• The EcoDesign
BOOST
to define the list of your
most recommended
learnings according
to your role and your
knowledge.
• Sustainable
communication
EcoDesign assets:
•
• The Group has launched in 2023 the EcoDesign Training Path, a
set of 20 training modules, accessible for all the R&D community
to raise awareness, train and upskill the engineer in charge of
new product development. The EcoDesign Training Path
includes several training levels, from basic to expert and covers
a wide range of topics such as the EcoDesign principles,
lifecycle assessment (LCA), green materials, communication
rules, and standards. The central team of the different business
units are tracking the deployment of the different EcoDesign
Training Path modules to ensure a good appropriation by the
R&D team and therefore building a common knowledge to foster
Sustainable Innovation DNA across the company.
In 2023, the Group has developed the EcoDesign Carbon
Calculator, an online tool based on LCA methodology and
datasets to allow non-environmental experts to model their
projects’ environmental footprint, identify hotspots, and estimate
their first reduction potential. The EcoDesign Carbon Calculator,
focusing on a Climate Change indicator at first (other
environmental indicators could be activated at a later stage),
intends to be used at an early stage of the Offer Life Cycle
Management. It relies on available Product Environmental Profile
(PEP) and allows users to simulate different scenarios by using
extrapolation function. Multiple scenarios can be compared
to identify the best design opportunity for the project team.
The EcoDesign Carbon Calculator has been built thanks to
a partnership with start-up, Altermaker, specialized in the
development of IT solutions for LCA, with support of pilot project
teams who tested the tool. The EcoDesign Carbon Calculator
certainly does not intend to replace a full LCA tool but rather to
educate the whole project team on the order of magnitude of the
carbon footprint of their product or service, raising their
awareness on the environmental footprint accountability,
developing their ownership toward Schneider Electric’s
environmental commitments, and thereby actively contributing
to identify more opportunities.
Expert
• How to perform &
verify a Product
Environmental Profile
(PEP)?
• Life Cycle Analysis
(LCA) & Product
Environmental Profile
(PEP) advanced
• How to anticipate
regulations &
standards?
• How to perform
conformity
assessment?
Advanced
• Environmental data
• Overview of external
labels & certifications
• EcoDesign calculator
• How to design a
sustainable
packaging?
• How to design
products with
Sustainable Materials?
• How to achieve
recyclability
performance?
• How to optimize
product energy
consumption?
• How to extend lifetime
of our products?
• Green supply chain
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Chapter 2 – Sustainable development
2.4.3.5 Leading with transparency: Green
Premium™ and Product Environmental
Profiles
Green Premium™
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:
•
is compliant with RoHS and REACH regulations;
• has an estimated lifecycle assessment (LCA); and
• has clear end-of-life instructions.
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 2023, this service collected more than
16,000 tonnes of batteries globally for recycling.
RoHS
PEP
EoLI
EcoDesign Way™
RoHS
REACH
RoHS
REACH
External labels
EcoDesign
Sustainable
performance
by design
2003
2007
European Union
adopts RoHS
European Union
adopts REACH
2008
Green Premium™ introduced
to provide transparent
information on regulated
substances and to share the
environmental information of
our products
2015
EcoDesign Way™, our
internal ecodesign
approach, launched and
embedded in the offer
creation process
2018
Upgraded Green
Premium™ program to
include green claim
differentiation
2023
Data Digitization
acceleration
The program encompasses 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 remains 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
(e.g., Mercury- , Lead-, and PVC-free,
sustainable packaging)
Lower-impact
materials
Energy
efficiency
SF6-free
Recyclability
Durability
Repairability
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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 producs they want according to
environmental features. New online features such as environmental
claims badges have been added to every Schneider product page
in 2023. This helps customers to understand the environmental
benefits.
Customers can consult digital conformity declarations,
PEPs, 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
In 2023, more than one million downloads have been made from
the “Check a Product” application. This is a testimony of customer
demand for product environmental information.
Some flagship Green Premium™ offers have been launched over
the year:
• The Smart-UPS Modular Ultra series, which delivers all the
sustainability features one expects. Built with circularity in mind
from the design phase and meeting the highest levels of energy
efficiency in the market today. This new series is 35% lower in
embodied CO2, 40% improvement in emissions, 3x longer
battery life, and 2.5x power density. The Smart-UPS Modular
Ultra series are certified Energy Star 2.0 in the US. The result is
a family of UPS devices that have the lowest embodied carbon
footprint of any comparable model in the market today.
• The Mureva range, a collection of durable, waterproof
enclosures designed to protect people, property, and
installations. The Mureva line includes at least 20% recycled
plastic content, and the packaging has been changed,
consisting of 70% recycled fiber. These changes reduce water
consumption, chemical effluents, and dust emissions.
To continue to lead by example in the field of transparent and
responsible communication and avoid greenwashing, Schneider
Electric has been driving significant marketing activities.
First, a full audit of Schneider ‘s marketing process has been
conducted by a third-party company in order to strengthen the way
Schneider speaks about product sustainability.
Second, all Schneider web content has been scanned to assess
the use of specific words to use with caution.
Third, practical anti-greenwashing guidelines have been
released to all employees with specific communication for the
marketing population. More than 1,000 marketing people have
been trained on how to use those guidelines.
Resources
SSE #6
Our 2025 Commitment
80% of product revenues covered
by Green Premium™
In 2023, 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 Environmental Experts of
the Group generated more than 440 new PEP documents.
This has enabled the certification of a larger number of
products through the Green Premium™ program to deliver
even more transparent information.
Our progress
2020 Baseline
2023 Progress
2025 target
77%
81%
80%
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 (EPDs).
An environmental footprint is a product or solution-related
measurement that provides quantitative information based on 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 assessment is a mandatory requirement in
the Green Premium™ program.
Schneider Electric relies on PEPs 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), as specified by the ISO 14025 standard related to EPD.
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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 2023, more than 2,000 valid PEPs were publicly available online,
covering all of Schneider’s product lines, and more than 80% of
product lines are covered by an ISO 14025 type III declaration.
Digitization of PEP data
Since 2008, when the Green Premium™ program incorporated the
mandatory requirement related to the availability of a PEP,
Schneider Electric has published PEPs at product family level.
In 2021, the Group launched a pilot project to extrapolate PEP
data from product-family level to product-level, to produce more
granular PEP data and start sharing them with a few strategic
customers. Sharing more granular PEP data enabled those few
customers to enhance the accuracy of their respective carbon
accounting and develop services for their own customers to help
them purchase more sustainable products based on quantitative
environmental impact data. With this initiative, Schneider Electric
strengthened the relationship with strategic clients, being
positioned in the top suppliers thanks to sustainability.
Over 2023, the PEP digitization program has been deployed,
using artificial intelligence (AI) and a dedicated software, enabling
the Group to extrapolate and digitize quality data on more than
30,000 products.
Thanks to the Group’s investment in those dedicated tools and
processes and a strong project coordination involving central
functions and all divisions, it is now possible to share PEP data at
product level with more customers, external databases, and design
firms and software, to position Schneider Electric as a key player
of the sustainable transformation of building, infrastructure, and
industry, and drive this transformation with quantitative data
issued from LCAs.
The Group has advocated for LCA since then, to comply with
existing, recent, and future regulations (e.g. the EU CSRD and
Taxonomy, and the Netherlands Environmental performance of
buildings regulation), to meet customers’ demand for LCA data and
to deploy wise ecodesign strategies assessing and avoiding
environmental impact tradeoffs.
The Group also advocates for strategies to improve the supply
chain representativeness in LCA and the comparability of LCA
among industry, at various levels from EU and International
standardization to cross-industry initiatives such as the PACT
(Partnership for Carbon Transparency) Pathfinder Framework
project led by the WBCSD (World Business Council for Sustainable
Development), and the need for a single and public LCA database,
to ensure LCA practitioners in the industry can leverage their
individual supply chain data and at the same time use identical
LCA datasets (LCA raw data for materials, processes, energy
supply, etc.).
PEP Ecopassport PCRed4
In 2021, Schneider Electric made a major contribution to the
development of the new Product Category Rules (PCR) 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, 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 (TC 111 Working Group, ZVEI
initiative) and regulations (Sustainable Product Initiative of the
European Commission, Green Taxonomy).
Schneider Electric position on LCA and Product
Carbon Footprinting (PCF)
Officially from 2023, all PEPs published by the Group are compliant
with PCRed4.
Schneider Electric embarked on the LCA journey more than
20 years ago, with the aim of being transparent to its stakeholders
on the environmental impacts of its offers, considering the full
lifecycle and a wide set of environmental impact indicators, beyond
product carbon footprint.
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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2.4 Being efficient with resources
2.4.4 Source better
2.4.4.1 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 fiftyfold by 2040 and
the demand for cobalt and graphite thirtyfold, according to the
International Energy Agency (IEA).
Evolving economic trends, 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 considered in the STRIVE initiative of the Group’s Global
Supply Chain and covered by the Property Damage and Business
Interruption program at site level.
Schneider Electric approaches access to resources at different
time horizons to ensure supply resilience both now and in the
future by:
• 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; and
• 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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Green materials in the Group’s products
Schneider has committed to increase green materials in its
products to 50% by 2025, as part of its SSI 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; and
• differentiate Schneider’s products by using low-CO2, circular,
and safer materials.
According to Schneider Electric, a green material has a lower
environmental and social footprint, meaning low GHG emission,
high recycled content, and minimized 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 2023, 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 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)
23
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Thermoplastics
Aluminum
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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 2023,
“copper” and “thermoset” draft definitions have been deployed
internally and performance is being tracked to prepare for inclusion
in future phases.
Additionally, in 2023, Schneider Electric has initiated work to define
criteria for “green electronics”. Criteria with matching key
performance indicators (KPIs) are being tested with pilots and are
expected to be scaled in 2024.
Partnerships to accelerate the sourcing of
green materials
A critical point to accelerate the uptake of green materials in
Schneider products is to be able to plan well in advance the
different steps of qualification of the materials, the components,
and the products; this is particularly true for thermoplastics. In
2023, Schneider Electric has been able to accelerate the volumes
of thermoplastics qualified as green, mainly due to the business
units’ roadmap execution having an impact since the materials
have been qualified. The qualification period could span from eight
to 18 months depending on the materials and the product
specificities, hence Schneider Electric commits to plan well in
advance the offer roadmap,to factor in this incompressible
lead-time and ensure our target is achieved by 2025.
Schneider Electric has already identified the risk of qualification
bottleneck due to the increasing demand on the market. In the
future Schneider Electric aims to optimize and mutualize the
qualification needs. In 2023, the Group accelerated its
engagement with suppliers regarding their sustainable
transformation by building stronger connections and by
securing the first volume of certified green steel.
Notably, Schneider Electric has partnered with ArcelorMittal, a
global player in the steel and mining sector, to source recycled and
environmentally produced steel called XCarb. The steel is made in
ArcelorMittal’s factory in Sestao, Spain, using a high percentage of
recycled steel and processed in an electric arc furnace powered
by 100% renewable electricity. Schneider Electric is using this steel
to build electrical cabinets with significantly lower CO2 emissions
(see example). This example is a clear business case on how
joining hands with suppliers to foster circular solutions could
support Schneider Electric’s decarbonation journey.
Definitions of “green thermoplastics” and “green metals”
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
and additives
For flame retardant
plastic only (5)
(1) Persistent Organic Pollutants (POP)/Latest versions.
(2) According to IEC 63355.
(3) According to ISO 14021 and 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)
(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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Schneider Electric also continued to engage with industry-wide
organizations and contributes actively to the development of those
to be seen as a catalyst of change across the supply chain. The
Group continues to participate in Responsible Steel working
groups, the world’s first global scheme for responsibly sourced
and produced steel.
Schneider Electric is 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.
Resources
SSI #4
Our 2025 Commitment
Increase green material content
in our products to 50%
In 2023, Schneider Electric became a pioneer in universal
enclosure activity, launching a premium range of products,
decarbonized thanks to better design, industrial process,
and raw material.
PanelSeT SFN, the first decarbonized steel enclosure of the
market, is a new floor standing enclosure manufactured
with certified decarbonized steel, made from recycled raw
materials, and using renewable energy sources such as
solar and wind. This innovative approach helps us to
reduce CO2 emissions by up to 34%.
In addition, our customers will have a better user
experience with a new design that is more robust and
simpler to use, with an easy mounting system. The
enclosure is available as pre-assembled, as a kit or
customized to the customer’s specific needs and targeted
markets.
Our progress
2020 Baseline
2023 Progress
2025 target
7%
29%
50%
2.4.4.2 Eliminating hazardous substances
Since 1950, chemical production has increased fiftyfold and is
expected to triple from 2010 to 2050, with only a small number of
the 350,000 chemicals in use fully assessed for safety(1). Beyond
being a health concern, substances can contribute to climate
change as they emit GHG throughout their lifecycle.
To minimize the potential harm to the environment and human
health, Schneider Electric continues to prioritize the management
and substitution of hazardous chemicals from our products,
processes, and supply chain. In 2023, the Group updated its
definition of green products to align with the EU Taxonomy
Appendix C that was released in 2023. It also updated its
Substance in Products Directive giving the main orientations and
strategy to follow for products in our portfolio. The previous version
was published in 2015. The updated directive reflects among
others, the different criteria of the EU Taxonomy Appendix C. It will
be deployed in 2024 with the objective to maintain our leadership
in terms of transparency and control of substances of concern.
The Group has tackled substance management for many years
as part of our environmental programs reducing and managing
its waste, emissions- and water-related risks, including pollution.
It constantly substitutes substances or substance groups of
concern targeted by regulations; when not technically possible,
Schneider Electric ensures that the chemical risk is under control
at all lifecycle steps. The recent development of the new medium
voltage switchgears without SF6 (one of the most potent and
persisting GHGs) is an example. As reflected in SSE #2, the Group
aims for 100% substitution with SF6-free medium voltage
technologies.
The Group operates in different jurisdictions with evolving
regulations on environmental, health, safety, and product
compliance. The regionalization of environmental regulations (e.g.,
California Proposition 65, China RoHS and UAE RoHS) creates
complexity, with thousands of suppliers. Therefore, Schneider
maintains strong governance, relying on a global approach of
environmental product stewardship directives fed by a regional and
local environmental steward network. As substance presence
identification and traceability are key, the Group is investing in
robust digital systems to perform and report the environmental
compliance of its wide product portfolio, across several hundreds
of thousands of commercial references.
(1) “New Study Underscores Dangerous Levels of Chemical Pollution.” Human Rights Watch, January 21, 2022.
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Chapter 2 – Sustainable development
RoHS and REACH
WEEE
Since 2015, Schneider Electric has adopted a proactive
implementation of the European RoHS Directive, which restricts the
use of chemicals in electric and electronic equipment, many of
which are also restricted under the REACH (Registration,
Evaluation, Authorization and Restriction of CHemicals) regulations.
The Group designs and manufactures all its products to be
compliant with RoHS and REACH substances restriction, even if it
is not in the directive’s legal or geographical scope. This includes
all Schneider offers, whether local or independent name brands,
manufactured in its plant facilities or only labeled.
Related to RoHS is WEEE (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.
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; and
• 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.
Schneider Electric is committed to fulfilling its legal obligation and
pursuing product compliance coverage to the largest possible
extent making business sense. The Group continues to work
towards reducing the number of products under the RoHS
Directive exemptions and the number of global exceptions to
REACH and RoHS. 81.8% of products globally (93.6% of revenue)
are compliant with RoHS restrictions, among which, 45.2% are
without directive exemptions.
In anticipation of future possible restrictions, research programs
are conducted to find alternative solutions to the presence of lead
in some metallic alloys, brominated flame retardants in
polychlorinated biphenyls and cobalt in surface treatments. Per-
and polyfluoroalkyl substances is a wide family of substances
targeted by both Europe and the US in coming regulations. After
the first identification of the different uses, the Group participated in
the public consultation, describing the situation of each use case in
term of exposure, alternative solutions availability, risk, and
requiring temporary derogation only when relevant. Following
this consultation, a new restriction proposal will be proposed in
2024, and Schneider will engage a large substitution program
where needed.
Compliance system
A strong data management system is key to ensuring product
compliance and anticipating substitution actions. Internal IT
processes are continuously adjusted to identify a more proactive,
safe approach to material and substance use, and more efficiently
fulfill the declaration requirements of the European Substances of
Concern in Products database through direct link or IEC 62474/IPC
1752 structured data exchange formats.
In addition to IT tools, supplier compliance data collection is
continuously improved with a new workflow and a wider scope
of requests. This enables the Group to push for a more complete
material disclosure, increasing the visibility of all chemicals
present in its products for better transparency and chemical
exposure management.
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Chapter 2 – Sustainable development
2.4 Being efficient with resources
2.4.4.3 Sustainable packaging
Packaging is the first visible asset seen by customers and it is
associated with major environmental challenges such as resource
depletion, waste generation, and marine pollution. Schneider
Electric’s Sustainable Packaging program aims to foster innovative
packaging solutions to ensure a safe and quality packaging
experience with 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’s 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% recycled fiber by weight, if legally
accepted (according to FTD 00976). 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. Schneider Electric defines single-use plastics 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”.(1)
Schneider packaging teams work to:
• Ensure the recyclability of our packaging to reduce the Group’s
overall environmental footprint.
• Establish partnerships with key suppliers to identify sustainable
alternatives to replace current single-use plastics in our
packaging.
• Build up traceability in the supply chain by collecting suppliers’
declarations and certificates for recycled cardboard.
Resources
SSI #5
Our 2025 Commitment
100% of our primary and secondary
packaging is free from single-use
plastic and uses recycled cardboard
Packaging transformation is making progressing apace,
with 80% of all cardboard used in the primary and
secondary packaging made from recycled carboard. Our
Wiser range is also completely free from single-use
plastics, using only recycled cardboard.
Our progress
2020 Baseline
2023 Progress
2025 target
13%
63%
100%
(1) Source: Directive 2019/904/EC of 5 June 2019 on the reduction of the impact of certain plastic products on the environment.
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Chapter 2 – Sustainable development
2.4.5 Manufacture better
2.4.5.1 Context
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.
Nonetheless, the Group is committed to minimizing its impacts on
natural resources by operating with sustainability principles at its
core. This allows the Group to continue manufacturing into the
future, helping its customers deliver on their sustainability and
business objectives. In the process, still preserving the
environment and its limited resources.
Schneider Electric aims to move towards closed-loop systems in
its operations and with its partners to prolong the life and use of the
resources it depends on.
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 three-fourths
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 55% 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, i.e., those with the most material impacts.
2.4.5.2 Risks and opportunities within
manufacturing operations
Environmental risks related to manufacturing include the potential
for soil, soil gas, surface water, groundwater, and air contamination.
For instance, the release of hazardous substances can be harmful
to human health and the environment. It can also disrupt continuity
of operations and tarnish reputation. As Schneider Electric’s
factories and distribution centers are spread across dozens
of countries and different national environmental regulatory
frameworks, risks of non-compliance exist. These risks are
related to potential mismanagement of the use, handling,
storage, discharge, emission, and/or disposal of hazardous
substances and their related wastes as well as GHG-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 financial harm.
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 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.
During 2023, no new material environmental impacts were
identified. See section 2.4.5.5 on page 205 for more information.
Furthermore, no Schneider Electric sites are Seveso-classified.
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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234 sites were certified ISO 14001 as of the end of 2023,
representing approximately 79% 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(1).
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 301 and include energy consumption, Scopes
1 and 2 CO2 emissions, waste generation, water usage, and VOC
emissions.
With the Safety, 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”, and documented and shared within SERE and
CS&Q networks.
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.
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, and surveys new
and existing selected manufacturing sites each year.
• 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; and
• 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.
2.4.5.3 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 recent years, global challenges with supply chains, material
shortages, and increased visibility towards waste pollution such
as ocean plastics have reinforced Schneider’s longstanding
prioritization of its circularity strategy and the importance of
engaging all stakeholders across the value chain to drive progress.
The Group’s 2021 – 2025 “Waste-to-Resource” (SSE #9) program,
an evolution of its 2018 – 2020 Towards Zero Waste to Landfill
program, takes its waste recovery program even further: sites must
achieve 99% recovery for all waste not classified as hazardous
while also achieving 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.
(1) Exclusions mainly include AVEVA, RIB Software and Larsen & Toubro E&A division and to a limited extent other small non-integrated entities.
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2.4.5.4 Water withdrawal, discharge,
and stress
Schneider Electric regularly assesses water-related risks. In 2022
the Group conducted corporate water footprint across the full 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;
18% was allocated to raw materials and 81% to the use phase of its
products.
Schneider Electric’s direct operations are not water intensive with
industrial processes consisting of mainly manual and automatic
assembly. However, without water the facilities cannot operate and
as such, Water remains a continued focus of the business with
increased focus on sites located in the most water-stressed areas.
In 2023, water management and performance information were
disclosed in the CDP Water Security program, and Schneider was
scored a A-.
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 and
paint lines.
In 2021, Schneider Electric set the target to reduce water intensity
(in cubic meters of water withdrawn per milliom EUR of turnover) by
35% in 2025 vs. 2017, with a focus on sites with high water
withdrawal and within water-stressed areas. In 2023, water
withdrawal intensity was 53 cubic meters per million EUR of
revenue, an evolution of -51% against the 2017 baseline.
Annual water withdrawal intensity* (m3/€M)
120
100
4
9
7
7
2
7
0
7
6
5
3
5
80
60
40
20
0
2019
2020
2021
2022
2023
2025
Water intensity
Target
* Scope of sites is GED 001 scope; Scope of total revenues is the Group’s revenue
In 2023, the Group did make progress towards its target of 200
Waste-to-Resource sites by achieving 137 sites, a net of +10 sites
from last year, but continues to be impacted by the ongoing
evolution of its real estate footprint. Since the start of the program,
19 sites classified as Waste-to-Resource have been closed,
divested, or transferred to third parties, impacting the ability to
deliver on the Group’s commitment of 200 sites. This real estate
evolution also impacts the number of sites that can be targeted
before 2025 with further site consolidations and third-party
transfers expected in order to support business needs and deliver
further efficiencies. Despite the challenges on this site-based KPI,
overall performance on waste reduction, reuse, recycling, and
diversion from the landfill remain strong in 2023. Schneider
generated around 124,000 tons of waste in 2023, most of it being
solid waste. Continuous improvement plans have been deployed to
manage this waste, in line with the ISO 14001 certification. The
Group achieved 97.0% recovery of reported waste, and a 91.3%
recycling rate without energy recovery in 2023. The recovery ratio
has increased from 81% to 97% since 2009, thanks to site-by-site
waste management action plans.
In 2021, the Group set the ambition to reduce hazardous waste
intensity by 30% in 2025 against the 2017 baseline. In 2023,
hazardous waste generation intensity was 0.21 tonnes/million EUR
of revenue, which represents an evolution of -50% vs. 2017.
Resources
SSE #9
Our 2025 Commitment
200 “Waste-to-Resource” sites
SSLVTA, a low voltage manufacturing site located
in Shanghai, China produces low voltage electrical
appliances such as circuit breakers and dual power
supply products on site.
Due to the nature of the electrical manufacturing process,
Volatile organic compounds (VOCs) are produced as a
byproduct in the plant’s exhaust gas. In addition, activated
carbon is produced as waste on site and its classified
hazardous which needs to be outsourced for disposal.
The local team identified the potential of creating a close
loop – by utilizing activated carbon produced as an
absorbent to reduce its VOCs emission. Not only does
this promote waste as a resource, its also an economical
way to address the site’s environmental impact.
Through this project, 1.5 tons of hazardous waste are
eliminated annually.
Our progress
2020 Baseline
2023 Progress
2025 target
120
137
200
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Focus on water-stressed areas
The Group recognizes the importance of water to our operations
and local communities, especially those that are located in
water-stressed areas. The Group monitors the water stress level
of all ISO 14001 sites (including factories, distribution centers, and
large offices) using the World Resources Institute’s Aqueduct Water
Risk Atlas. Sites identified as “high” or “extremely high” using the
tool are classified as water-stressed, regardless of the amount of
water withdrawn.
76 sites are classified as water-stressed, accounting for about
46% of total water withdrawals. 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). The action
plans require sites to conduct a water use assessment to identify
opportunities for water efficiency improvements. This covers good
practices associated with metering, both water-related technical
and general water training for employees, and loss analysis as well
as deep dives into process-related activities, heating and cooling,
sanitation and canteens, and irrigation where relevant. In 2023, the
Group achieved 73% of its 2025 target.
Water discharge
Most of the water discharged by Schneider Electric is sanitary
and canteen wastewater and is sent to a third party, often a public
entity, for treatment without requiring additional pre-treatment in
Schneider’s facility.
In some cases, wastewater does require treatment before leaving
the site boundary (as is often the case when using water for
industrial processes like surface treatments). On-site wastewater
treatment reduces pollutants and monitoring plans align with
regulatory requirements. Increasingly, sites with process water are
adopting closed loop systems to eliminate wastewater, minimize
freshwater withdrawal, and recover valuable raw materials.
An example of this is the Coimbatore site in Tamil Nadu, India
where Schneider produces Low Voltage Switch Boards. High-
quality water is required for the powder coating process used for
covering panels. During 2023, the site began operating the
upgraded wastewater recycling process which includes a reverse
osmosis system and solar evaporator, at an investment of
approximately EUR 30,000. This initiative recovers over 880 cubic
meters of water annually. It has also improved the quality of the
returned water which in turn has reduced the number of defects,
whilst also reducing site carbon emissions by 10t CO2e per year, a
vital part of our zero carbon site program. This, together with the
installation of a 2,500 cubic meters rainwater harvesting system
have reduced water withdrawal by almost 15%.
Resources
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Our 2025 Commitment
100% of sites in water-stressed
areas have a water conservation
strategy and action plan
Schneider Electric has three sites in the water-stressed
area of Nuevo Leon, Mexico. Recent water shortages
have highlighted the importance of water security both for
our employees and their families, and operational business
continuity. It is especially important to be efficient with
water at these sites. The sites’ water action plans have
implemented the following initiatives across the
three operations:
1. Engaged and trained employees on the importance
of water and efforts to reduce demand.
2. Upgraded the water metering system.
3. Process improvements to the paint lines and
coatings operations.
4. Retrofitting of low flow taps, toilets, and urinals.
5. Xeriscaping is being introduced to replace site
landscape with native species which require
no irrigation.
Over the last 12 months, the Monterrey sites have reduced
water demand by 24%. Beyond the factory boundaries,
the team has worked with NGOs including Fondo Unido,
Sociedad Sostenible (SOSAC), and REMARE, and
governmental organizations in the Santa Catarina River
basin to support water security through the removal of
invasive species, reforestation, and river clean-up
activities. The sites continue working to improve efficiency
and tackle water insecurity in the area.
Our progress
2020 Baseline
2023 Progress
2025 target
0%
73%
100%
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Chapter 2 – Sustainable development
2.4.5.5 Pollution mitigation
2.4.5.6 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 2023, 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 2023.
Hazardous materials and their related wastes are managed
in compliance with regulations and with appropriate pollution
prevention mechanisms. As examples, this includes storage on
impervious surfaces and ensuring stormwater is isolated from
chemicals and wastes.
Discharge into the water and the air
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 BirdLife 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.
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 local regulations and the ISO 14001
certification. Discharges are tracked locally as required by current
legislation. No spills or discharges causing water or air pollution
occurred in 2023.
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:
Emissions of NOx (nitrogen oxides), SOx (sulphur oxides), and
particles into the air are monitored, where appropriate, 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 VOC emissions, and for this reason, the Group
works to reduce VOC emissions from industrial activities by 10%
every three years. VOC emissions(1), which are primarily linked to
production, decreased from 29 kilograms per million euro in 2017
to 8.5 kilograms per million euro in 2023. 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 and hydrochlorofluorocarbon 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.
• 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 six sites are in
proximity of a category-1-protected area);
− 29% are in category 3 or 4;
− 31% are in category 5 or 6; and
− 32% are not applicable, not assigned or not reported.
• 3% of the Group’s sites are in proximity of a key biodiversity area
(defined by IBAT as either “Alliance for Zero Extinction” or
“Important Bird and Biodiversity Areas”).
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.
All 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
biodiversity actions previously described.
Find our IBAT Multi-site Report generated under
license 26614-25299 from the Integrated Biodiversity
Assessment Tool on 15 December 2021 on
www.ibat-alliance.org
(1) Scope of sites is GED 001 Scope, Scope of revenue is the total Group revenues.
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In 2021, as part of the Group’s Biodiversity Pledge, Schneider
Electric committed to act locally, engaging employees and partners
to deploy biodiversity conservation and restoration programs in
100% of sites (>2000 SQM). To meet this target, 400 Schneider
sites have to define and deploy a Biodiversity program that aims to
eliminate single-use plastics (relating to non-production such as
office and catering) and includes at least one local action which
addresses locally-specific ecological risks, and incorporates
structured governance and wider stakeholder involvement.
The scope of the single-use plastics ban for the Biodiversity
program is non-operational single use plastics (e.g., cups, cutlery
and gifts/souvenirs). Operational single use plastics (e.g., primary/
secondary packaging, and products) are covered in Schneider
Electric’s SSI #4 and SSI #5 programs.
The program was launched in 2021 and whilst 2022 focused on
education and training, 2023 focused on action – tackling the
complexities of biodiversity, assessing their impact, and working
with local stakeholders and employees in direct action to preserve
or restore biodiversity in and around the sites. The Group achieved
66% performance in 2023, up from 18% in 2022.
The program empowers employees to understand the local
environment and priority ecological risks and take appropriate
action on and around the Schneider Electric sites. This has resulted
in a range of initiatives, for example: Monarch butterfly waystations
in Mexico and the US; creation of miniature forests in India, Saudi
Arabia, Canada and Algeria; mangrove restoration in Vietnam and
China; river and ocean clean-ups in Egypt and Italy; and creation of
ecological corridors in Brazil.
Action on Biodiversity represents a unique way to engage with
employees and communities on issues which are important to
them, building an empowered workforce that recognizes the value
of nature in tackling climate change and that many small actions
can make a big difference.
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Our 2025 Commitment
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 local action to tackle locally
relevant ecological risks.
For example, the team at the Edmonton facility in Canada
were concerned about the decline of pollinators and the
impact on flowering plants and food production in the area.
Populations of key pollinators in the area have declined by
about 40%.
Over the last year the team have been working with a local
beekeeper to install a bee hive and train employees. This is
one of several actions that the team is taking to support
pollinators; others include installation of bat houses, and
working together with Root for Trees Canada to support
local reforestation, planting over 500 native trees and
shrubs in local parks in the last two years.
Similar projects are also happening in the UK, France,
and the Netherlands.
Schneider takes the responsibility to protect, and wherever
possible improve, the biodiversity around its work place.
Our progress
2020 Baseline
2023 Progress
2025 target
0%
66%
100%
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Chapter 2 – Sustainable development
2.4.6 Use longer and use again
Resources
SSE #10
Our 2025 Commitment
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 PEPs 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.
Our progress
2020 Baseline
2023 Progress
2025 target
157,588
311,229
420,000
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.
The first focus, before considering end-of-life, is to prolong to
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.
To ensure products are correctly used, maintained, repaired,
collected, sorted, and recycled, circularity has to be embedded
in the offer design stage (see EcoDesign approach in Section
2.4.3.4 on page 191).
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”.
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.
• 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 the condition that concerned product
categories are adequately maintained and serviced by qualified
and certified experts.
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2.4.6.1 Maintain and Repair
Extended equipment lifespan and resiliency
through Condition-Based Maintenance
The experience of recent times has accelerated the adoption of IoT
as a technological advancement that enhances the resilience of
installations. Furthermore, the pressing challenges of the energy
and climate crisis have underscored the need to decarbonize
installations, adding an additional layer of complexity.
Condition-Based Maintenance is a powerful solution that
addresses both challenges, enhancing equipment uptime and
prolonging its lifespan. By constantly monitoring equipment health
and tracking stress, wear, and aging parameters, it allows one to
proactively prevent failures that accelerate equipment aging. This
approach not only helps avoid the need for equipment replacement
but also contributes to avoiding carbon emissions by eliminating
the manufacturing of new equipment.
In new CapEx projects, Condition-Based Maintenance can be
implemented by leveraging native connected equipment. Whereas,
for older installations, Condition-Based Maintenance can be
enabled by upgrading the installed base with sensors.
Refurbished ranges in 2023
Refurbished Products
Low Voltage
UPS
Customers can adopt Schneider’s Condition-Based Maintenance
approach with EcoCare Membership, a next generation
services plan:
• 24/7 remote monitoring from Schneider Electric experts and
on-site intervention in case of emergency.
• Unique Assets health indexes powered by advanced analytics.
• 45,000+ events monitored and manages.
• 25 million data points daily.
• 24,000+ recommendations every year.
2.4.6.2 Refurbished Offers
Schneider Electric creates shared value for its customers through
local models of take-back, refurbishment and resale of retired
assets.
As a continuation of Schneider Electric’s development of the
refurbished models, extended capabilities are developed in order
to:
• Expand the coverage and value creation for take back and
recovery services
• Enlarge the basket of product ranges with a refurbished offer
•
guaranteed by Schneider Electric, and
Industrialize processes, systems, and operations to deliver
a simple customer experience
Schneider Electric puts its expertise as a manufacturer at the
service of providing manufacturer-level circular solutions, following
strict guidelines, ensuring traceability, guaranteed performance,
and Schneider Electric usual service support on site.
Get credentials by using
refurbished products guaranteed
by Schneider Electric
• A label dedicated to the sale and
promotion of products from the
circular economy, launched by
Schneider Electric.
• The warranty of a circular
product is identical to a new
product
• Refurbished products have a
higher environmental value, by
reducing carbon footprint &
resource consumption
Take back service
Take back and recycling of your
ageing equipment and all related gas
like SF6.
MasterPact MTZ
UPS 1phase
Industrial Automation & Control
Variable
Speed
Drives
HMI
PLC
Motion
System
Drives
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In addition to delivering tangible sustainability benefits (positively
contributing material resilience and our customers’ scope 3),
leveraging circular offers brings new benefits to customers,
not only financially, but also operationally – among which faster
availability, ability to better manage Capex / Opex decisions,
provide prolonged access to spare parts, ensure continuity of
operations with manufacturer-level refurbished products.
In the evolving regulatory context encouraging all circular loops,
Schneider Electric continue to broaden its offerings to support this
circular transition and create new business opportunities to both
partners and end customers, with the primary intent to maximize
the reuse of products, equipment, spares.
2.4.6.3 Recycle raw materials and
substances
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 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.
Chapter 2 – Sustainable development
Case study: Bouygues Energies
& Services: Supply of refurbished
electrical equipment for the Six
Degres project
“Six Degres” is an environmentally friendly real estate project
covering 39,000 square meters. Designed to offer flexible
offices tailored to new ways of working, as well as a full range
of services including co-working, auditorium, restaurants,
shops, nursery, sports hall, and wellness center. The project
also includes 7,000 square meters of terraces forming
suspended gardens that can accommodate up to 2,900
people. Located in the Val-de-Marne area near Paris, France,
it is scheduled for delivery in 2024.
To reduce the environmental footprint, the architects and
Bouygues have chosen innovative solutions: low-carbon
concrete for the infrastructures and foundations, wooden
floors and posts for the superstructure, algae-based paints,
and numerous materials and equipment from the circular
economy. From low-voltage equipment to medium-voltage,
including building management systems, all products must
contribute to reducing the carbon footprint.
From a circular economy perspective, Schneider Electric has
made significant contributions through various initiatives:
1. Refurbished MasterPact MTZ circuit breakers at the
MasterTech center near Granoble, France. Products that
have been taken back undergo dedicated refurbishment
and re-testing processes, ensuring manufacturer-level
performance and warranty.
2. Repacked products (Mureva and Unica) from redistribution
flows are given a second chance, thereby avoiding waste
and carbon emissions.
3. The AirSeT range provides SF6-free medium voltage
equipment using AirSeT technology, offering a lower CO2
solution and environmentally safer end-of-life management.
“This demand for low-carbon emission products is a real
underlying trend in all tenders”, notes Santiago Rivero, key
account manager for Bouygues Energies et Services. “And
France is a pioneer in the field, with legislation pushing is in
this direction and a growing awareness”.
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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
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2.5.4 Compensation and benefits
2.5.5 Social dialogue
234
239
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 sustained high performance and greater employee
engagement, through best-in-class people practices that are
enabled by its 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 innovative and 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,
learning and development, and rewards.
The Human Resources function plays a key role in enabling
performance and people 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 unique multi-hub model; a
leaner organization structure; leadership and culture
transformation; widely acknowledged diversity, equity, and
inclusion practices including flexibility at Schneider; and setting up
a transformation of skills to enable growth and innovation.
By 2025, Schneider Electric has committed to creating equal
opportunities for all 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 everyone. This report shares the progress on
the key transformations under the Equal and Generations pillars of
the Schneider Sustainability Impact (SSI) and Schneider
Sustainability Essentials (SSE) programs.
“
Through our People Strategy, we aim to unleash
the potential of all, drive impact and innovate for
our customers and society. Our people culture,
leadership and technologies enable us to
position our Company as a company of choice.”
Charise Le,
Chief Human Resources Officer
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Chapter 2 – Sustainable development
Progress of our Equal and Generations commitments
Schneider
Sustainability
2021 – 2025 programs
2023 progress(2)
Baseline(1)
#
2025
Target
Impact
(SSI)
8.
10.
Increase gender diversity in hiring (50%),
front-line management (40%) and leadership
teams (30%)
Double hiring opportunities for interns,
apprentices and fresh graduates
18.
Reduce pay gap for both females and males
2020: 41/23/24
41/28/29
50/40/30
2019: 4,939
x1.52
x2.00
2020: F: -1.73%
2020: M: 1.00%
2019: 53%
-1.00%-1.00%
0.67%0.67%
61%
<1%
<1%
60%
Essentials
(SSE)
19.
20.
21.
22.
23.
Increase subscription in our yearly Worldwide
Employee Share Ownership Plan (WESOP)
Pay our employees at least a living wage
2019: 99%
100%
100%
Multiply the number of employee-driven
development interactions on the Open
Talent Market
2020: 5,019
x1.5
Support the digital upskilling of our employees
2020: 41%
Provide access to meaningful career
development programs for employees during
later stages of their career
2022: 43%
x4
90%
90%
78%
67%
24.
Increase our employee engagement level
2020: 69%
73%
75%
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 2023), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 302). In addition,
SSI #8 received a “reasonable” assurance level in 2023. Please refer to page 266 for the methodological presentation of each indicator. The 2023 performance is also
discussed in more details in each section of this report.
2023 Highlights
In November 2023, the Group was
recognized as a Top 50 Diversity
Leader by the Financial Times in
their Diversity Leaders 2024
rankings, for the 5th year in a row,
ranking 8th among 850 companies
and 2nd in its industry
In 2023, Schneider Electric
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. 2022 and well above the
index average of 73%
Schneider Electric was included in
the “World’s Top Companies For
Women 2023”, list published by
Forbes
Schneider Electric recognized by
Brandon Hall Group with an HCM
Excellence Gold Award in the
Diversity, Equity, and Inclusion
category for its Global Family Leave
Policy
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2.5 Great people make Schneider Electric a great company
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2.5.1.1 Context
The world is moving fast and is at an inflection point: the desire for
climate neutrality and energy transition are driving Schneider
Electric’s business strategy and pushing the Group towards
sustainable growth. At the same time, Artificial Intelligence (AI),
digitization, and changing societal needs demand greater
inclusion.
The post-pandemic world with ever increasing supply chain
constraints due to geopolitical issues is 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 of the
Company. Comprising Employee Value Proposition (EVP), Core
Values and Leadership Expectations, the People Vision is a strong
anchor to the People Strategy.
The People Vision consists of the following:
1 Our EVP is our commitment to engage existing and
future talent. It’s the reason why people join, stay, and
remain engaged and shows how we differentiate
ourselves as an employer.
2 Our Core Values determine who we are, what we do,
and define the way we work together and deliver on
our EVP promises. Our values guide our choices
and illustrate the behaviors we expect our employees
to demonstrate.
3 Our Leadership Expectations show how we expect
leaders to drive the Company for the future. They
emphasize how our leaders will transform Schneider
Electric by stepping up individually and collectively.
Employee Value Proposition
The Group is also looking to establish a strong name as an
employer and communicate around its EVP, which is its promise to
current and future employees.
The Group believes that great people make Schneider Electric a
great company. They are driven by their meaningful purpose and
continuously create an inclusive environment where employees are
empowered to be at their best and innovate.
Its EVP 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
Our mission is to be your digital partner
for Sustainability and Efficiency.
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 want to be the most diverse,
inclusive, and equitable company,
globally.
We value differences, and welcome
people from all walks of life.
We believe in equal opportunities for
everyone, everywhere.
Empowered
Freedom breeds innovation.
We believe that empowerment generates
high performance, personal fulfillment,
and fun.
We empower our people to use their
judgment, do the best for our
customers, and make the most of their
energy.
Over 2023, Schneider Electric launched a special project to revisit and evolve its EVP and Core Values, in alignment with the evolving
business context of the Company. Its new EVP and Values will be released and communicated during 2024.
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Core Values
CUSTOMER
FIRST
Above and beyond
for our customers.
DARE TO
DISRUPT
Constantly in beta.
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.
Innovation is our middle name. Good is never good enough, and that’s why we are constantly
experimenting, taking risks, and disrupting the status quo. We think fast, and we act even faster.
Setbacks don’t hurt us. They motivate us. That’s why we are not afraid to make our bets bigger and our
decisions bolder to power the digital economy through energy management and automation. We, at
Schneider, ensure Life Is On.
EMBRACE
DIFFERENT
Different is beautiful.
We are 100% committed to inclusion. “Exclusion” is not even in our vocabulary. We believe in equal
opportunities for everyone, everywhere. This means welcoming people from all walks of life, ages, and
cultures, embracing different perspectives and calling out bias when we see it, so that every person
feels uniquely valued and safe to be at their best. To us, a stranger is simply a friend we haven’t met yet.
LEARN EVERY
DAY
#Whatdidyoulearntoday?
To stop learning is to stop growing. We are genuinely curious, never done with learning. To us, there is
no such thing as knowing it all or having all the answers. We believe in life-long learning. Every minute of
every day brings a new chance to listen, open up our minds, and widen our horizons. We are never too
experienced to learn.
ACT LIKE
OWNERS
All in. Together.
Entrepreneurs at heart, we take responsibility and ownership of everything we do. This is not somebody
else’s company. It’s ours! We are individually empowered and collectively driven to collaborate and beat
the competition together. In the end, we do what is right for Schneider first – always with integrity and
honesty.
Our Leadership Expectations
SHAPE OUR
FUTURE
Disrupt ahead
of the curve
FREE UP
ENERGY
Accelerate and Simplify
BUILD THE
BEST TEAM
Coach and Care
ACHIEVE
TOGETHER
Collaborate to Win
USE YOUR
JUDGMENT
Empower and Trust
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.
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.
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.
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.
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.
Read more about our on Leadership Expectations on the Trust Charter, available on www.se.com
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2.5.1.3 2025 People Strategy
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.
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, 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.
Schneider Electric assesses and refreshes its People Strategy from
time to time, to enable the Group to achieve the “Next Frontier” of
Growth. At Schneider Electric, a culture led and skills first
organization enables the desired impact.
2.5.1.4 Governance
At Schneider Electric the three 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 in their respective entities. They
provide strategic support and deliver day-to-day local support
towards operational activities for managers and employees.
HR Centers of Excellence 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 critical people and HR programs.
HR Services manage HR operations, standardize programs and
systems, ensure data quality and compliance, 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 its 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.
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 2023
• High survey response rate of 87%, with a 3-point increase vs.
2022 in engagement score at 73%.
• Employees continue to feel empowered in their work, with
opportunities to renew their skills through learning and flexibility
to enable how they work, while remaining connected to
Schneider Electric’s purpose in an inclusive environment.
• Gains observed in critical area of effectiveness at 70%, however
continued attention needed on recognition and collaboration.
Participation
87%
Engagement
73%
Action plans
77%
Managers
42%
113,901 responses
(+5,985 since 2022)
+3 points of employee
engagement since 2022
of employees agree on
the positive impact of the
action plans
of managers have access
to a customized report
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Regionally, East Asia teams were empowered to implement actions
at the country level to best respond to local feedback. Themes from
across the region included recognition activities, in person
cross-departmental interactions and employee team building
events. As one highlight, teams in Thailand focused on improving
recognition by celebrating achievements in monthly team meetings,
encouraging appreciation through #WhoDidYouThankToday
reminders, and providing opportunities for public recognition.
Thanks to these focused actions, Thailand’s recognition score
increased to 81%, up 16 points since 2022.
Generations
SSE #24
Our 2025 Commitment
75% employee engagement score
Attributable to a continued high participation rate, the
results of the survey are robust and representative,
empowering leaders to focus on the right topics. 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.
With an engagement score +3pts vs. 2022, and +5pts vs.
the 2023 Global Average benchmark, the enthusiasm 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 a focus on well-being.
Our progress
2020 Baseline
2023 Progress
2025 target
69%
73%
75%
1. OneVoice Survey
As an inclusive company, all employees are invited to provide their
honest feedback through the annual OneVoice survey, which
evaluates their engagement and measures ten 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.
Schneider’s ambition is to achieve 75% engagement score by the
end of 2025 (SSE #24).
The Top 5 Drivers of Engagement from the 2023 results
demonstrate that employees feel empowered (80%) in their
work, benefitting from flexible work arrangements (81%) and
opportunities to renew their skills through learning (75%),
while drawing inspiration from Schneider Electric’s purpose
and goals (76%) in an inclusive (76%) environment.
2. Turning insight into action
Supported by a global network of engagement partners, each year
leaders communicate results to their teams, followed by formulating
impactful action plans to drive change.
A holistic approach is taken to guide leaders on next steps
following survey closure:
• Communicating the high priority of the topic.
• 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.
Beyond acting at the team level, steps taken globally and regionally
are also important to reinforce the listening lifecycle. Responding to
effectiveness feedback, 2023 saw the global roll out of a newly
refreshed intranet, Spice+, the digital home base for employees,
built to simplify life at work and help optimize energy. Spice+ goes
further than a traditional intranet by providing employees the ability
to customize their experience, ensuring they always have what they
want, while reducing noise from what they don’t need. From
accessing well-being resources, to catching up on the daily news
or managing calendars and tasks, Spice+ is a one stop shop for all
things Schneider.
81%
feel they have flexibility
to modify their work
arrangements when
needed
80%
feel empowered to
choose how best to
complete their work
61%
61%
find the collaboration is
good between entities
say they receive
appropriate recognition
for their contributions
and accomplishment
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2.5.1.6 Recognition and awards
The Company’s Glassdoor rating is
steadily increasing, recognizing Schneider
Electric as one of the Best Places to Work
for 2023.
Schneider Electric is one of Universum’s
Top 30 World’s Most Attractive Employers
according to students.
Schneider Electric is recognized by
Equileap as one of the Top 100
Companies for Gender Equality Globally.
Schneider Electric is awarded by Golden
Peacock Awards 2023 under “Golden
Peacock Innovative Product/Service
Award” category for its Competency
Management tool (CoMET).
Schneider Electric recognized by Brandon
Hall Group with an HCM Excellence Gold
Award in the Diversity, Equity, and
Inclusion category for its Global Family
Leave Policy.
Schneider Electric recognized as Global
Parity Alliance DEI Lighthouse by the
World Economic Forum (WEF).
In November 2023, the Group was
recognized as a Top 50 Diversity Leader
by the Financial Times in their Diversity
Leaders 2024 rankings, for the 5th year in
a row, ranking 8th among 850 companies
and 2nd in its industry.
In 2023, Schneider Electric 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. 2022
and well above the index average of 73%.
Schneider Electric was included in the
“World’s Top Companies For Women
2023”, list published by Forbes.
Schneider Electric achieved Global Living
Wage Employer Certification from Fair
Wage Network, valid from January 1,
2023, to December 31, 2023.
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 and Well-being (DEI&W). With continuous global and
local political, economic, and social challenges in the post-
pandemic era, inclusion and care is needed more than ever. This
paired, with the rising importance of Environmental, 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
mentioned in a Forbes(1) article found that companies with a higher
level of DEI initiatives’ integration and alignment with business
strategy can enhance their competitive performance, agility,
innovation, and brand performance. 75% of the companies with
higher levels of DEI initiatives integration saw a very positive impact
on their business’s competitive position. The lack of care has also a
high cost. For example, a 2022 study from the World Health
Organization mentioned an estimated 12 billion working days are
lost every year to depression and anxiety at a cost of US$ 1 trillion
per year in productivity. 83% of employees(1) on sick leave linked to
stress, anxiety, or physical pain considered that their stoppage is
directly linked to work conditions as per Salaries & Absenteeism
Study by Diot-Siaci.
Well-being is our number one driver of employee engagement.
Verbatim are teaching that if employees appreciate welfare and
well-being activities that celebrate key events, our successes and
service anniversaries, they are concerned about high workload
and tight deadlines that may affect quality and work life balance. It
is an opportunity to extend training for first-time managers on
psychosocial risks and workload evaluation.
Regarding mental health, identifying and collecting significant data
points per region, function, generation such as absenteeism, PTO
usage, sick leaves will help the Group better understand root
causes and address them efficiently.
Taking all of this into context, Schneider Electric is keenly aware of
the ever-increasing need to focus on well-being and mental health.
The pandemic has accentuated existing vulnerabilities. According
to Mercer Marsh Benefits Health on Demand 2023 research almost
half (47%) of employees feel stressed in their everyday lives and
more than half (52%) have worked in the past year while feeling
mentally unwell. Companies must make mental health a priority and
integrate it into their overall inclusion and care efforts.
(1) The business Impact of Diversity, Equity & Inclusion, Forbes, April 2023.
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2.5.2.2 Risks and opportunities
2.5.2.3 Governance
DEI and Well-being can be a unique competitive advantage if
tackled properly and genuinely. Schneider has identified three
main risks around those topics:
The implementation of Schneider Electric’s DEI strategy involves
several different bodies and stakeholders, working hand in hand
with the global DEI team.
• Lack of representations of different diversities: this leads to less
innovation, more turnover and difficulties to attract and retain
talents with diverse backgrounds, skills, or identities if they do
not feel represented.
• The lack of equity in our processes than can have negative
consequences on engagement, attrition, performance,
compliance, and even reputation.
• The risk of fatigue or burnouts is higher and higher in a
post-COVID, constantly changing world.
On the flip side, the opportunities are huge when inclusion and
care are by design in all processes and behaviors:
• Companies with more diverse management teams have
reported 19% higher revenues due to innovation(1).
• Employees reporting a feeling of belonging, where they feel
included and cared for are 3.5 times more engaged(2).
• For every EUR 1 invested in well-being prevention programs
and practices, a company saves 2.2 EU(3).
• Overall, DEI and well-being are strong drivers of attraction and
retention among all generations, especially the younger ones(4).
Schneider Electric defines its strategy taking into consideration
those risks and opportunities, internal and external trends, insights
and feedback from leaders and employees, and its desire to
become the most inclusive and caring company in the world.
Schneider Electric believes this leads to greater engagement,
performance, and innovation and access to the best possible talent
pools around the globe.
The Global DEI team, led by the Chief Diversity Officer reporting to
the SVP, Talent, Inclusion & Culture, 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 (Human Capital and
Remunerations Committee and Governance, Nominations and
Sustainability Committee) on an annual basis. The team works in
close collaboration with the HR Centers of Excellence (Talent
Acquisition, Talent Management, Learning and Rewards),
Sustainability, Compliance and Risk Management, 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. In
2023, the DEI Board met four times to discuss topics such as
gender and pay equity, inclusive and caring practices in meetings,
discrimination and harassment, and accessibility.
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 needs.
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.
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.
(1) How Diverse Teams Boost Innovation, Boston Consulting Group, January 2018.
(2) The Surprising Power of Simply Asking Co-workers How They’re Doing, Harvard Business Review, February 2019.
(3) Figures on stress and psychological risks, In Summary, Ecole du Stress 2023.
(4) The Future of Work Depends on Supporting Gen Z, Forbes 2022.
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Partnering inside and outside of the organization
Board’s Human Capital &
Remunerations Committee
Diversity, Equity
& Inclusion Board
External Partners
(WEF, UN, and others)
• World Economic Forum
• The Valuable 500
• Business for Inclusive Growth
• United Nations
• ILO
Oversee
Exchange/
influence
Global Diversity, Equity &
Inclusion & Well-Being Team
Implement
Local Human Resources
Local Country &
Entity “Inclusion
+ Care” Network
Co-design & implement
Inclusion and
Care Steering
committee
(major geographies,
global process
owners)
Global center of expertise and entities
• Global Marketing, Employer Branding
& Communications
• HR Centers of Excellence:
Reward, Talent Acquisition, Talent
Management, Learning & Reward
• Ethics & Compliance
• Sustainability
• Investor relations
• Corporate Citizenship
Co-design & implement
Sponsor &
collaborate
Local Compliance, Employer
Branding, Communications,
HR Center of Excellence
Local ERNs
Global ERNs
(LGBT+)
Teams in countries/regions
Teams at global level
External partners
Groups with senior stakeholders
2.5.2.4 Group policy
In its Trust Charter, Schneider Electric articulates that its DEI
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, socio-economic background, life experience, location, and
more, depending on local adaptations. In 2023, the Group’s DEI
Policy was revised and translated into 15 languages.
Read more about our DEI Policy on the Diversity and
Inclusion page on www.se.com
On top of the global DEI Policy, Schneider Electric has targeted
global polices around inclusion and care, including Global Family
Policy Leave, Flexibility @ Work, Global Anti-Harassment and
Discrimination, and Pay Equity.
Looking ahead with the United Nations Sustainable Development
Goals (UN SDGs) as a compass, Schneider’s strategy has been
extended to embrace DEI 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 (WEF). Schneider
is committed to becoming the leading inclusive and caring
company in the world.
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2.5.2.5 Schneider Electric’s “Inclusion and
Care by Design” Strategy
How we get there
The Group’s new DEI strategy is known as Inclusion and Care by
Design. With this strategy the Group’s ambitions are:
In all processes
• Thriving individuals and teams: Schneider Electric is
committed to making sure every individual feel respected and
safe to be their unique self. Leaders coach and care with
respect, empathy ,and well-being in mind.
• Diversity and equity, 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.
Impact the planet and society: Schneider Electric is
committed to driving change within its broader ecosystem and
society at large, through advocacy and role-modeling. The
Group works closely with its strategic partners and suppliers
and invests in local actions through the Schneider Electric
Foundation.
ALL
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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.
• Schneider hardwires inclusion and care in all its processes.
• End-to end, with clear accountability.
• From employee to customer interaction and business
process.
In our behaviors
• Schneider leads with Respect and extend Trust.
• Living its EVP, Core Values and Leadership Expectations.
• Demonstrating empathy, care, and openness.
2.5.2.6 Thriving individuals and teams
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.
Building a culture of inclusion and respect
Zero tolerance for harassment and discrimination
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 – ethnicity,
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. The policy is
reviewed regularly and a revised and expanded Anti-Harassment
and Discrimination Policy was launched for all employees globally
in 2023.
Read more about our anti-harassment policy on
the Ethics and Compliance page on www.se.com
For more information on Core Values,
please see page 213
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Creating a standard of inclusion and care for all
The Group’s Core Values, 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.
Supporting employees’ well-being, mental health,
and unique lives and work
The worldwide context with climate change challenges, geopolitical
issues and technology has accelerated the need for employee care
to make all stronger and more resilient. Schneider Electric firmly
believes that well-being generates performance and performance
generates well-being.
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 2023, these
campaigns reached than 3 million people through external social
networks.
Inclusion and respect building programs:
• Uncomfortable Conversations: In 2023, a global series of
webinars was conducted to have open conversations on topics
such as ageism at workplace, LGBTQ+ community, equity at
workplace, amongst others to create awareness, and educate
our employees.
• “Overcoming Hidden Bias” and “Building a Culture of
Respect” e-Learnings: These e-Learnings help employees
understand what hidden bias means, explore clear steps to
keep decision-making objective, and how to call out bias when
seen and 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.
• 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.
In 2020, the Trust Charter included a chapter on well-being and
new ways of working, highlighting behavior expected from
managers and employees.
In 2023, the Group revisited and enlarged its definition of well-
being: “A subjective state of health, happiness, and satisfaction
where individuals thrive and contribute their best for their own
benefit, and that of Schneider Electric, the society, and our planet.”
In 2023, Schneider also reintroduced a specific well-being question
to the annual OneVoice engagement annual survey. Results
showed that 74% of our employees agree that “Schneider Electric
actively looks after the well-being of its employees” (vs. 73%
external global average) and is the top employee engagement
driver.
Built on a foundation of trust and respect, Schneider Electric
continuously implements and improves its policies, education, and
practices to support employees and respect their unique lives and
ways of working.
Flexibility @ 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
also 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. In
2023, the Executive Committee reaffirmed its commitment to
flexible and hybrid work for employees, while also reinforcing the
value of being on-site to generate teamwork, innovation, and
human connection. Leaders were especially encouraged to role
model the hybrid work mode and bring their teams and customers
together in person whenever possible.
(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, and Field services engineers, due to role specifications are excluded from this two-day WFH policy.
Recognizing that many critical roles need to be on site, this policy was adjusted to one day for the eligible Plant & Distribution Center specific roles.
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Other examples of global and local practices
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.
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.
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 Schneider Electric’s compensation
and benefits are provided page 234 of this report.
Local examples:
• East Asia: Holistic Framework of Flexi-Work, Well-being and
Flex Benefits
• Singapore: Well-being Recreation Club
• Schneider Oman: Medical Health Campaign
• Dubai: Positive Emotions and moods
• Germany, Austria and Switzerland: Well-being webinars lead
by internal speakers: HR Business Partners, HR Specialists,
Sales Manager, and WB-Champion
• France: launch of a game “the village of allies”
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 UK, and the US, 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 on page 234.
Support employees with cancer and chronic diseases
In 2023, Schneider Electric joined the #WorkingwithCancer
foundation launched at the WEF in Davos, on January 17. An
internal pledge was published in March with sponsorship from the
CEO, in addition to participation in best-practice survey and data
collection. In 2024, Schneider plans to internally launch the initiative
and to support employees and managers to define minimum
standards of practice to support #workingwithcancer for
employees and families and to break the overall stigma of
discussing and addressing the topic.
Mental health support
Mental health is a vital aspect of Schneider’s overall DEI and
well-being program. 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 2023, 76% of new hires completed “We All have Mental Health,”
an e-learning module focused on what mental health means, and
how to recognize the signs of mental health challenges and take
action. Nearly 3,800 employees shared mental health tips and
personal commitments on Schneider Electric’s internal social media
platform reaching many through the #MentalHealthMatters. In
2023, 83 mindfulness practice sessions were organized, in English,
Spanish and French by internal trainers.
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While significant progress has been made in the representation of
women, especially on the Board and Executive Committee level
(respectively, 46% and 41% female as of end of 2023), the Group
recognizes that there is more work to do at all levels in the
organization.
Equal
SSI #8
Our 2025 Commitment
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.
Our progress
2020 Baseline
2023 Progress
2025 target
41/23/24
41/28/29
50/40/30
2.5.2.7 Diversity and equity 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 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.).
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 the Group’s compensation and
benefits are provided on page 235 of this report.
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.
89%
55%
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12
of Country Presidents
are either Local or
Regional
of employees are in new
economies, of which
30% in leadership roles
nationalities represented
in our global workforce
across 109 countries
countries with data for
people with a disability
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6%
12%
32%
50%
Gen Y (Millenials)
Gen X
Gen Z
Baby Boomers
Silent
Note: percentage rounded
up to the unit; the silent
generation represents 0.01%
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
Days, upskilling, coaching, development plans, and mutual
mentoring the Group is harnessing the power of all generations.
With this, Schneider Electric is equally 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 section 2.5.3 on page 226.
Generation breakdown
Breakdown of women in our workforce
Total new hires(1)
0
41%
2025 Target: 50% female
Frontline management(2)
28%
0
2025 Target: 40% female
Leadership(3)
29%
2025 Target: 30% female
Board of Directors
59%
100
46%
54%
Executive Committee
72%
100
0
41%
Overall workforce
71%
34%
Management position
Non-management position
27%
Female
Male
73%
35%
Female
Male
(1) Total new hires – all new hires in 2023.
(2) Frontline management – junior and mid-level management whose direct reports are individual contributors only.
(3) Leadership – Vice-Presidents and above, excluding direct reports to the CEO.
For more data points on our representation and hiring
of sales, IT, revenue producing, and engineering roles,
see page 315.
59%
100
66%
65%
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2.5 Great people make Schneider Electric a great company
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 (recruitment, procurement), platforms and tools.
3. Brand and Communication: For all events and communication
– internal and external, digital, physical, and virtual.
4. Physical Workplace: Accessible buildings and workplaces
applying Universal Design principles, local legislation, and the
International Accessibility Standards.
In 2023, the Disability Inclusion and Accessibility Office announced
their C-Suite governance consisting of two Executive Sponsors, the
Chief Human Resources Officer and the Chief Digital Officer, along
with a Steering Committee of six Executives covering all aspects of
the Groups aforementioned pillars.
Building awareness and education on disability, inclusion and
accessibility is a key element to moving the needle. Schneider
Electric ran two global campaigns in 2023. Global Accessibility
Awareness Day in May, with the presence of the CEO, Peter
Herweck, and UN International Day of Persons with Disabilities in
December whereby our two Executive Sponsors shared their
stories and advocacy during a live global webinar.
Additional Partnerships
• 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.
• Business Disability Forum (BDF), the leading business
membership organization in disability inclusion. Trusted
partners working with business, government, and disabled
people to improve the life experiences of disabled employees
and consumers, by removing barriers to inclusion.
• Disability:IN, empowering leading companies to achieve
disability inclusion and equality.
Origin, 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.
Inititatives in the US – NSBE
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,
Schneider Electric US is proudly an active member of the National
Society of Black Engineers (NSBE) and the Board of Corporate
Affiliates. The Group’s SExNSBE organization has 240 dedicated
employees who put in over 500 volunteer hours this year. Employee
Resource Networks (ERNs) in the US include Black, Hispanic, and
Asian professionals, and play a vital role in our diversity and
inclusion initiatives. These employee-led networks celebrate
equality and inclusion for all individuals, advocate for the
recruitment, development, and retention of their specific affinity
groups, and provide opportunities for allies to gain exposure to
cultural learning.
Disability inclusion and accessibility
Since January 2021, Schneider Electric has been a member of the
International Labour Organization (ILO) Global Business and
Disability Network (GBDN), 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 established the Global Disability Inclusion and 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.
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LGBT+ inclusion
2.5.2.8 Impact the planet and society
Schneider recognizes and celebrates the Lesbian, Gay, Bi, Trans
and Intersex People (LGBT+) community and its members. 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.
Schneider Electric is committed to the United Nations Free and
Equal Standards of Conduct for Business on Tackling
Discrimination against LGBT+ 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.
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 2023, the ERN established a global leadership
team and secured Executive Sponsorship by our Chief
Marketing Officer.
• Focus on Mexico: In 2023, for the second year in a row,
Schneider Electric was ranked as best place to work for the
LGBTQ+ community by Human Rights Campaign Corporate
Equality Index in Mexico. The Human Rights Campaign’s
Equidad Mexico is the national leading benchmarking tool on
corporate LGBTQ+ inclusive policies and practices.
• Focus on France: Schneider Electric France within it’s
agreement with the unions, includes a new “Agreement on
Professional Equality Between Women and Men” and included
an amendment of its Global Family Leave Policy to be inclusive
to all family types. In the updated policy, all types of families and
welcoming of a new child are included and benefits are the
same. This means that no matter the gender of the parents, or
the way the baby joined the family (including adoption and
surrogacy), the leave benefit for the parent is the same.
Schneider Electric is committed to driving change within its broader
ecosystem and society at large, through advocacy and role-
modeling. 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 2.2.12.13
“Supplier diversity program in the United States” on page 147).
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, and WEF 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 Disability Forum (BDF), trusted partners, working with
business, government, and disabled people to improve the life
experiences of disabled employees and consumers, by
removing barriers to inclusion.
• Disability:IN, a leading nonprofit resource for business disability
inclusion worldwide.
• 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 is on a mission to achieve 50/50 gender parity at the
top of the world’s largest companies.
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2.5 Great people make Schneider Electric a great company
2.5.3 Talent attraction
and development
2.5.3.1 Context
In today’s landscape, the ability to attract, develop, and retain
talent is paramount for ensuring the sustained success of
companies. Business growth in markets around the globe, in
conjunction with the rapidly evolving world, requires focused
acquisition and accelerated skill development, especially in
technical and digital areas, of the workforce. Schneider is
committed to preparing and executing a robust build, buy, borrow
workforce and talent plan to optimize our human capital assets and
overall work culture for employees and leaders.
2.5.3.2 Risks and opportunities
Due to the current talent scarcity in the market, the current VUCA
(volatile, uncertain, complex, ambiguous) world and the
unprecedented changes in the future of work, Schneider is not
immune to talent and skills attrition risk.
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 drive growth and innovation and to stay
ahead of the competition;
• Succession pipeline for critical expert and leadership positions;
• Schneider’s employer brand.
At the same time, with the right policies and programs in place,
these risks become opportunities for the Group to strengthen its
brand as a leading employer and talent developer for everyone,
everywhere. Signature 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 joining Schneider.
• A robust talent management system to review annually the
development plans for all employees, identify key talent such as
experts and high potentials, prepare key successions and
developments via local and global talent reviews, and make
talent selections in people committees (including for executive
positions).
• 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).
• Learning and Development programs for employees at different
stages of their professional career and specific talent segments
(e.g,, Digital, AI, Software, Services, Electronics, Supply Chain,
and Sustainability), with a strong focus on digital skills,
commercial excellence, leadership, technical, 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, creating equitable
opportunities and the environment for employees to learn and
grow, while empowering them to own their career. In this line,
Schneider Electric has reflected its commitment to its long-term
sustainability goals to create equitable opportunities and harness
the power of all generations in its Trust Charter.
2.5.3.3 Governance
The Executive Committee regularly discusses the overall health of
the global workforce, 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 Chief Human Resources Officer. 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.
2.5.3.4 Group strategy
Schneider Electric believes that all employees are talent and
empowers people to grow to their fullest potential, developing new
skills and building careers for today and tomorrow, enabled by the
Group multi-hub organization. Establishing a strong brand as an
employer, the promise to current and future employees is
communicated in their EVP (Meaningful, Inclusive, Empowered),
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.
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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 skill
acquisition and development programs to support Schneider
Electric’s 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 key talents including high potential and technical and
digital expert talent, is identified, recognized, and supported
with targeted development paths and actions.
Schneider also places strong emphasis on the role and
accountability of leaders and people managers in the company. In
today’s uncertain and volatile world, the role of leaders is to deliver
results, shape culture, and drive transformation, starting with the
values and behaviors they demonstrate every day. 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
evolution of the Leadership Driver Score in OneVoice results shows
an exciting 14-point increase from 61% in 2012 to 75% in 2023.
The Group strives to provide a meaningful end-to-end experience
for all employees from talent attraction and onboarding to
performance management, rewards, and development. Schneider
empowers all employees to grow their fullest potential, deliver with
impact based on the “what” and the “how”, build sustainable
careers, and refresh and learn new skills for today and tomorrow.
2.5.3.5 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.
Schneider Electric builds talent pipelines through their Brand to
Hire strategy, deepening the connection from the top of the funnel
attraction phase all the way through to hire to deliver the talent
needed to deliver on the business strategy. To deliver on this
strategy Schneider Electric is transforming the function across
People, Process, Technology, and Branding. In 2023, the focus has
been on these key areas:
• People: Updated Talent Acquisition’s structure to recognize skill
specialization in strategic sourcing, employer branding,
recruitment, recruitment co-ordination, and business consulting,
allowing for upskilling and re-skilling opportunities across the
function.
• Process: Continued deployment of simplified candidate centric
End to End process in which Schneider Electric was recognized
through the Talent Board in North America and Latin America in
delivering a best-in-class candidate experience.
• Technology: Deploying a global standardized tech stack to
optimize the experience for both candidates and colleagues
involved in the Brand to Hire process.
• Market: Transforming from awareness campaigns to targeting
strategic talent segments to grow the talent in our pools most
critical to the business and to foster an Always On approach to
build a sustainable pipeline of talent in our talent pools.
In recognition of this transformation, Schneider Electric was invited
to several stages to share the thought leadership in global forums
such as LinkedIn Talent Connect, Gloat LIVE, Josh Bersin
Irresistible Talent Management Summit, iCIMS Inspire, and Survale
Customer Symposium, as well as numerous local forums. This
recognition validates our thought leadership and approach to our
brand to hire transformation.
In today’s competitive job market, connecting with candidates at an
early stage is critical to building an engaged talent pipeline and a
robust employer brand for Schneider Electric. By keeping its brand
top of mind through regular engagement, the Group increases its
chances of attracting the best talent when they are ready to decide
about their future.
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As part of SSI #10, the five-year ambition is to achieve a doubling of
growth in the early-career “next generation” pipeline. This is
delivered through Schneider Electric’s Brand to Hire strategy,
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 an updated University strategy balancing its
flagship global programs, strategic university partnerships, and
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 e-learning modules and
on project simulations.
• Schneider Go Green: an annual global competition for
business and science, technology, engineering, and
mathematics (STEM) students around the world to find
innovative solutions for energy management and automation. In
2023, Schneider Go Green has had over 19,500 students
registrations submitting ideas from all key regions.
• 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 and mentoring
relationships.
Generations
SSI #10
Our 2025 Commitment
2x number of opportunities for
interns, apprentices, and fresh
graduate hires
Schneider Electric is doubling its commitment to the Next
Generation of talent. During 2023, the Company recruited a
diverse mix of 63% students and 32% recent graduates
and engaged brand ambassadors on campus through
global programs and partnerships as well as by enhancing
its development program offers. To build a sustainable flow
of talent, the Company continues to invest in student
programs such as interns, co-ops, apprentices, and VIEs
(Volunteers for International Experience). Moreover, the
company is prioritizing the development of recent
graduates across critical functions including Sustainability,
Supply Chain, Technical, Leadership, and Sales.
Our progress
2019 Baseline
2023 Progress
2025 target
4,939
x1.52
x2.00
2.5.3.6 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 2023, 97%
of eligible employees(1) completed a performance and development
review.
E m b r a ce Different
GOALS
Set clear
expectations
to drive high
performance
D
a
r
e
t
o
D
i
s
r
u
p
t
Performance
and
Development
CHECK-IN
Regular review
of progress
and feedback
e r y D ay
v
n E
r
L e a
er First
m
o
t
s
u
C
REVIEW
Summarize
achievements
and learnings
A
c
t
L
i
k
e
O
w
n
ers
2.5.3.7 Enabling sustainable careers
The Group believes its people are its most valuable asset to
support Schneider’s profitable growth and empowers them to grow
to their fullest potential by developing new skills and building
careers for today and tomorrow. In line with the conviction that all
employees are talent and the aim to provide equitable development
opportunities for all, Schneider Electric considers that all
employees should take ownership of their own unique career
development, supported by their managers and enabled by digital
tools. The Group encourages employees to build a sustainable
T-shaped career by striking the balance between deepening their
expertise in different domains and broadening their skillset through
experiences in diverse contexts to increase their impact. This will
help them keep themselves relevant and marketable in a rapidly
changing world.
(1) This includes employees whose employment status is active (or suspended, which is country specific), who are on permanent fixed term contract type, who are
information workers, and those who were hired on or before 30 September 2023, in addition to country or entity specific conditions.
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Chapter 2 – Sustainable development
Generations
SSE #23
Our 2025 Commitment
Access to meaningful career
development programs for >90%
employees during later stages of
their career
China started their pilot in 2022 under the name of
“Galaxy”, chosen locally to reflect the program’s long-
lasting positive impact. Based on pilot feedback, in 2023
“Galaxy” pivoted into a more compelling approach
involving not only senior talents but also their managers,
who play a key role in driving talent empowerment and
continuous development. Through joint learning that “thinks
ahead” while “starts now”, with open conversations and
targeted action plans, senior talents and their managers
are equipped to develop growth mindset, overcome hidden
bias, and integrate diverse ideas together to benefit both
business and talents. As a result, senior talents feel more
valued and become more proactive in their roles;
managers are more empowered to drive sustainable talent
development, and overall engagement improves with all
stakeholders appreciating this meaningful program.
“Galaxy goes beyond the scope of regular work by
facilitating stronger connections with senior talent in my
team and amplifying my efforts to motivate them. Now I
think frequently about how I can collaborate with these
experienced team members to develop and make their
long-term goals a reality, taking effective actions in the
present that can truly make a difference.”
LIU Hao, Senior Marketing Manager
Our progress
2022 baseline
2023 Progress
2025 target
43%
67%
90%
To empower and engage employees with this approach, Schneider
Electric held its third edition of “Career Days” for all employees in
2023. More than 100 events took place with employees
participating from over 100 countries: getting inspired by diverse
career stories, unleashing the power of networking and mentoring,
having career check-in conversations, 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, highlighting that it helped them to reflect
about their own career aspirations, encouraged them to own their
career, and inspired them to build a more sustainable career.
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.
In addition to career programs for early talent, in 2021 Schneider
launched its Senior Talent program with the firm belief that
employees who are near or at the later stages of their professional
careers (“senior talent”) bring unique expertise, experience, and
wisdom to the business. The Senior Talent program recognizes this
contribution and empowers them to continue making an impact on
the company while taking ownership and designing the next stage
of their careers. 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 opportunities, upskilling, knowledge transfer, pivoting,
recognition, care, and personal planning among others.
The program was well received not only by this segment of talents,
but also by the rest of the organization. Since its launch, the Group
has started to observe the positive impact of the program, which is
being progressively deployed and scaled globally by waves.
France facilitated several workshops with senior talents and their
managers to help them reflect about their career aspirations.
Based on the results, they developed a portfolio of targeted offers
to support them.
India supported senior talents interested in transitioning to prepare
the journey ahead of them. Through a series of career transition
workshops Senior Talent were equipped with strategies to make
healthy adjustments, financial planning and be mentally ready.
Similarly, Germany, Switzerland, and Austria engaged their Senior
Talent interested in leaving a meaningful legacy in a coaching
certification process which will allow them to keep on developing
while helping others’ people growth.
The commitment and progress are measured through SSE#23
which aims at providing meaningful development program for at
least 90% of their people in the latest stages of their career by
2025.
To learn more about how Senior Talent program connects with the
Future Ready program please see section 2.6.5 on page264. And
to learn more about how it connects with Diversity, Equity, Inclusion
and Well-being, please see 2.5.2 on page 216.
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2.5 Great people make Schneider Electric a great company
2.5.3.8 Boosting expertise and knowledge
across the organization
The average training hours by all Schneider Electric employees is
24 hours in 2023. Some of the key upskilling programs are
highlighted below:
Generations
SSE #22
Our 2025 Commitment
>90% of employees undergo digital
upskilling through the Digital
Citizenship program
Schneider Electric accelerates digital upskilling for their
employees with a holistic approach by:
- Ensuring foundational digital skills for all through initiatives
like:
• Digital Boost, a “check & learn“ diagnostic designed to
support all employees’ digital upskilling on the six digital
skills most critical for Schneider and on digital mindset.
Digital boost provides personalized results on strengths
and areas to develop that can be addressed with
dedicated learning paths.
• Digital Open Days: with more than 350 live virtual
sessions and key notes on a variety of digital topics such
as AI, Data, Digital Engineering and Digital Citizenship.
• Digital upskilling for workers committing to deliver at
least two hours per year on digital transformation such as
Smart factory program, Cybersecurity, Digital knowledge
• Offering targeted development programs for key digital
roles in domains like data and AI or cybersecurity among
others.
• Enabling digital experts to build the necessary skills to
thrive in today’s rapidly competitive and changing
business digital world, through specific digital expert
offers and certifications partnering with top notch
learning platforms.
• Embedding digital transformation at the core of the
different streams and domains of expertise of its newly
revamped expert program Electrifier.
Our progress
2020 Baseline
2023 Progress
2025 target
41%
78%
90%
Schneider Electric strongly believes that its position as a global
technology company and leader in providing digital energy and
automation solutions for efficiency and sustainability is driven by
the innovative contributions of its skilled and expert employees. In
2023, the Group has revamped their renowned expert program
now called Electrifier (formerly “Edison”).
The Electrifier program recognizes employees with remarkable
achievements, expertise, and leadership, offering them
opportunities to contribute to strategic business drivers in realms
such as technology, innovation, strategy, supply chain, and digital,
while empowering them to make the most of their careers. The
refreshed program evolves around four business streams and is
articulated around three levels of expertise: Electrifier, Senior
Electrifier, and Fellow Electrifier. This set up was designed with the
objective of bolstering the core of our business, while pioneering
advancements on Electricity 4.0, Industry 4.0, and our
Sustainability Solutions.
The Electrifier program introduces a streamlined application
process along with new opportunities, career prospects, and an
evolving reward system in tune with market dynamics. A design
that cultivates a vibrant, glocal community dedicated to
transforming innovation into influential business outcome.
The Group actively promotes a learning and teaching culture by
developing its internal trainer capability. The purpose of the
community is to equip internal trainers with the right best practices
and tools to develop and facilitate training, including digital tools 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’s two-day conference theme was “Transforming the way
people learn”, and the speakers were exclusively internal experts,
which generated a positive outcome for both the audience and
speakers as there was extensive learning and sharing among
peers. There are currently over 3,700 identified internal trainers
who collectively delivered over 11,000 sessions in 2023, accounting
for 58% of formal training.
Schneider Electric’s Communities at Work (C@W) program is a
powerful network of 300+ communities of practice. They serve as
thriving hubs/platforms that foster knowledge sharing, personal
growth, and increased productivity within the organization,
exemplifying Schneider Electric’s commitment to cultivating a
vibrant and supportive work environment.
2.5.3.9 Upskilling for today and tomorrow
at scale
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 acceleration 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). The aim is to
support our workforce to upskill and reskill with focus, speed, and
scale through a mix of internal and external training and
development offers that are relevant to each employee’s role,
interests, and skill sets.
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Chapter 2 – Sustainable development
Key programs focused on critical skill upgrading include:
Program
title
Consultative
Selling
Approach
(CSA) and Skill
Up @Scale
CoMET
– Competency
Management
for Global
Supply Chain
Target audience
Objectives and business
benefits of the program
Impact of
business benefits
All sales employees
(~17,000 sales
employees)
Completion rate:
CSA: 54% of Sales
employees
Skill UP: Launched
in October 2023 with
7,000 people
connected by
year-end
• Customer-centric commercial transformation is a
key pillar of Schneider Electric to drive
sustainable and profitable growth, and the
development of High Impact Sales Skills is a
crucial element of this transformation.
• Consultative Selling Approach (CSA) is a
blended digital learning curriculum to enable
sales teams to build trusted advisor relationships
with business decision makers.
• Eight programs are covered under the newly
launched Skill UP digital learning program, to
expand the sales skills curriculum and deliver
training in a more effective manner via the
business CRM tool.
~ 40,000+ Global
Supply Chain
employees for
assessment and or
development plans
creation
Completion rate:
Global Supply Chain
employees:
~97% assessment
completed
~80% with
development action
plans in place
The Global Supply Chain competency
management program is an end-to-end system for
managing skills and competencies designed to
meet business needs by helping employees
develop the skills they need to be successful in
their roles using a variety of tools and resources.
CoMET aims at:
• Globalizing competency management (creating
a global system for managing skills and
competencies that are specific to the business);
• Digitizing competency management (creating an
intuitive and user-friendly tool to manage
assessment and development plans creations);
• Personalizing development planning and
learning;
• Leveraging on expert networks (maximizing SEM
networks);
• Creating insights on expertise pool to support
business processes.
CSA since its launch in 2021 has been widely
adopted and well received.
• The Net Promoter Score for CSA rated 83 in
2023, with a cumulative average between
2021 - 2023 of 66 (>50 is excellent).
• Sales employees participating in the CSA
program have demonstrated increased
understanding of the following skills:
- Understanding of customer needs, up by
14 points;
- Connecting with customers, up by 16
points;
- Resolving objections, up by 10 points.
The intended business impact of the Skill UP is
to upskill sales learners to best position topics
such as Digitization, Sustainability, and
Services.
Direct business impact will be monitored in
2024.
• 39,000+ Global Supply Chain employees
from 200 sites have been assessed
globally, with 3,000+ employees having
development plans created (achieving
80.7% completion rate),
- From the competency gaps identified,
critical programs were launched (digital,
technical, product knowledge, logistics,
planning and manufacturing) that have
boosted learning engagement:
~750,000+ total learning hours (68% are
digital).
- More than 90% of workers have spent a
minimum of 2 hours of upskilling.
• CoMET and its generated action plans
helped identify and develop domain
experts. The creation of the Expertise
Network enabled active community
engagement and animation, contributing
to 4,500 employee certifications across all
skill sets.
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2.5 Great people make Schneider Electric a great company
Key programs focused on critical skill upgrading include:
Target audience
Objectives and business
benefits of the program
Impact of
business benefits
Program
title
Coaching for
Impact
Employees and
Leaders for whom
coaching has been
identified as a
valuable resource to
enhance their skills
and address
specific areas of
development.
Completion rate:
1,326 individuals
worldwide
In an uncertain environment, fostering a culture of
coaching and care is crucial for employee and
leader’s success amidst disruption. The program
aims at cultivating a mindset shift, with external
coaching services provided by Schneider Electric to
support employees in achieving their professional
development goals. Trusted and dedicated
professional coaches create a safe space,
challenging and supporting individuals to find their
own effective solutions, resulting in proven
effectiveness in transforming behaviors, habits, and
mindsets over time.
Digital
Upskilling
Digital Upskilling
for All Employees:
All white-collar
employees (92,000+
employees)
The “Digital Upskilling” program aims at preparing
Schneider Electric’s workforce for its digital
transformation. It is supported by two major
programs:
• “Digital Upskilling for All Employees” enabling
Completion rate:
49,3% completed
assessment
Digital Upskilling
for Digital Experts:
2,000 employees
Completion rate:
average of 9.5 hours
learning
engagement since
program launch
Digital Citizenship (SSE #22 commitment) which
consists of three key elements:
1. Digital Skills assessment - knowledge check
for employees to discover individual strengths
and development areas around six critical
digital skills.
2. Digital Skills dedicated learning path linked to
the individual assessment result to facilitate
individual upskilling.
3. Digital Skills dashboard for HR and Managers
to visualize collective digital skill assessment
results supporting data-driven actions to
accelerate talent readiness.
• “Digital Upskilling for Digital Experts”, a program
targeted to employees on digital jobs requiring
in-depth knowledge of a digital domain with the
purpose of supporting them to upskill critical
skills. These skills are key for Schneider Electric,
to fully leverage technology investments and
realize our digital strategy.
• This program was newly launched in 2023 and
introduced a new collaboration with Coursera
offering access to over 10,000 courses from
renowned universities and Institutions and
providing a great depth of knowledge areas in
data and technology.
Since the launch of this program from
mid-2021:
• 1,326 employees have completed or are
completing a formal coaching engagement
with a CoachHub coach.
• In 2023, over 7,200 sessions have been
conducted, with an average satisfaction
rate of 4.9 out of 5.
• As the coaching is integrated in the flow of
work, on average, Coachees are having
1.7 sessions per month with a coach.
• Coachees report that colleagues have
noticed a positive change as a result of
coaching (average rating 8 out of 10).
In 2023, the Group also started to establish
advanced analytics to measure the impact on
employee’s engagement, well-being,
performance, and turnover rate.
In 2024, CoachHub adds the Co-
Development Hubs sessions to the existing
offer, a new coaching by groups and peers
modality.
Strong learning engagement:
• From the Digital Upskilling for All
Employees program: post assessment,
11,051 employees completed 26,929
training programs around the 6 digital
skills and digital mindset.
• From the Digital Upskilling for Digital
Expert program: >20,156 hours of learning
and >2,884 courses completed in first
eight months of program launch in critical
areas of data, AI, cybersecurity,
architecture, and software development.
• The Digital Skills Dashboard created value
for line managers and leadership, assisting
in developing actions plans.
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Chapter 2 – Sustainable development
Equal
SSE #21
Our 2025 Commitment
4x the number of employee-driven
development interactions on the
Open Talent Market
Schneider Electric has democratized development through
an OTM, and by 2025 will grow the skills in the workforce
through digitally enabled engagements. These
engagements include 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 2023, Schneider Electric has over 85,000
employees on the OTM and has created 7,875 employee
development interactions which is 39% of the 2025
ambition to grow by 4x since 2020.
Our progress
2020 Baseline
2023 Progress
2025 target
5,019
x1.5
x4
2.5.3.10 A digital ecosystem to enable
development opportunities for all
Schneider Electric invests in its people, providing equal
opportunities and a supportive environment for all employees to
learn and advance their careers. The Open Talent Market (OTM)
platform empowers employees to drive their own careers by
discovering opportunities for mentoring, new positions, and
part-time projects, as well as potential career paths. Launched
globally in 2020, the platform is available to all globally connected
employees and leverages AI to match our internal supply of talent
with the business demand of “gig” projects, positions, and
mentorships through a transparent skill-centric digital and
borderless approach.
Read more from CIO on Schneider Electric’s AI Centric
Employee Development
The ambition is to increase 4x the number of employee-driven
development interactions in the OTM by 2025 (SSE #21). At the end
of 2023, more than 85% of the employee base are in the OTM
achieving 34,000 digital development opportunities since
launching in 2019. Through OTM in 2023, employees were given
visibility to over 15,000 open positions, ~4,000 mentoring
relationships were formed, and ~3,000 employees worked on
internal “gig” projects. An average of ~20,000 employees visit the
platform each month.
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 2023:
• More than 340,000 training completions every month. The most
popular topics include Health&Safety, Products, Solutions &
Services, Digital, and Sales skills.
• More than 45,000 modules of learning content were available in
more than one language.
• Digital learning consumption was at 69%, which has remained
stable since 2020.
Schneider Electric also offers a broad catalogue of online courses
and webinars that provides customized learning experiences with
targeted contents to partners and customers. It is accessible via
free registration at mySchneider Partner Portal (an extranet). The
mySchneider Partner Portal is deployed worldwide with more than
1.4 million registered users who consumed more than 380,000
trainings in 2023.
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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 Group policy
To ensure employees feel valued and respected in their workplace,
companies are increasingly expected to provide all employees with
attractive, fair, and equitable compensation and benefits to
facilitate aspects of their unique lives. In the post-pandemic era,
people (specifically younger generations) expect more work and
life balance and rely on their employer to ensure this expectation
is met.
In the face of the tight labor market and post-pandemic era,
organizations are leveraging robust compensation and benefits
programs as strategic tools to stand out as employers of choice.
Flexibility and customization in compensation and benefits is
paramount. Companies are tailoring packages to accommodate
diverse workforce preferences, acknowledging that one size does
not fit all. Flexible work arrangements, personalized benefits
choices, and recognition programs contribute to a more inclusive
and adaptable approach. This shift reflects an understanding that
employees value autonomy and personalized experiences,
influencing their satisfaction and commitment to the organization.
Additionally, compensation and benefits are characterized by a
holistic, health-focused, and flexible approach, reflecting the
evolving needs and expectations of the modern and global
workforce.
It is within this context that Schneider Electric reinforces its position
as a caring and responsible employer by ensuring the diverse
global workforce is treated in a fair and ethical way. The Group’s
inclusive Reward portfolio (which includes Compensation and
Benefits) is designed to support employees to be their best by
offering a meaningful mix of programs to support each unique
individual.
2.5.4.2 Risks and opportunities
Schneider Electric is committed to delivering best-in-class
compensation and benefits to its employees in a fair and equitable
way with the objective of attracting, motivating, and retaining great
talents. Without this commitment, Schneider Electric risks its ability
to achieve their objective. The Group mitigates this risk by
providing a meaningful mix of rewards programs to support the
unique needs of employees.
2.5.4.3 Governance
The implementation of Group policies on compensation and
benefits is overseen by the highly experienced global, regional,
and local reward organizations.
To support Schneider Electric’s mission to create a great place to
work and cater to the diverse needs of its current and future global
workforce, the Company is committed to providing a competitive,
caring, and inclusive compensation and benefits offering which
attracts, motivates, and retains talent.
Schneider Electric ensures its diverse global workforce is treated in
a fair and ethical way which affirms its position as a leading
employer. Its inclusive Reward portfolio expands beyond pay and
is a meaningful mix of Compensation, Benefits, Development, and
Workplace Environment which are all designed with a basis of care
for employees, enabling them to be at their best. Additionally, 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 believes in fair rewards, recognition, and
differentiation for 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, differentiated rewards, incentive programs,
employee shareholding, and opportunities to grow careers within
Schneider Electric.
Schneider Electric ensures that all compensation and benefits
decisions and policies are based on the principles of Inclusion and
Care and follow local statutory and collective agreements.
The Group offers a portfolio of benefits to care for employees’
needs at each life stage. Its diverse and multi-generational
workforce is provided with meaningful choices covering a holistic
range of well-being, flexibility, and financial protections to provide
peace of mind to employees and their dependents.
2.5.4.5 Compensation
Job architecture and compensation process
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.
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Pay competitively and pay-for-performance
Employees are empowered to receive ongoing feedback,
recognition, and coaching from their managers. Individual
performance is assessed in a fair manner based on their goals
(what they achieve) and behaviors (how they achieve). For most
employees, compensation structures include fixed and variable
(incentive) elements. Compensation programs and decisions are
based on individual performance and behaviors, Company
performance, and competitive market positioning in alignment with
the Group’s pay-for-performance philosophy.
Equal pay for equal work
The 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
successfully transformed the Pay Equity framework covering all
employees across all countries of operation.
As part of the Schneider Sustainability Essentials for 2025, the
company committed to attain and maintain a pay gap below 1% by
2025 for both females and males. At of the end of 2023, the pay
gap was -1% for females and 0.67% for males. The Group is
externally audited on Pay Equity to ensure year-over-year progress
toward closure of pay equity gaps.
To enable achievement of the SSE for 2025 ambition, the company
executes a holistic Pay Equity strategy to improve and maintain pay
equity while preventing creation of new pay gaps.
In execution of the holistic Pay Equity strategy, the Group closely
monitors the salary offers of new recruits, salary adjustments from
employee promotions, and other employee career movements.
Continuous monitoring of pay equity status is made possible by the
Group’s Pay Equity Dashboard and its resulting analytics.
Additionally, managers and HR professionals are trained to be
mindful and unbiased of every pay decision they make.
Creation of new pay gaps is prevented by the Group’s “Fair Pay
Simulator” which was deployed to HR in 2023. The simulator
provides visibility to pay equity positioning, enabling better pay
decisions for new recruit offers, promotions and other salary
adjustments. Pay Equity advocacy is another key aspect of the
Group’s Pay Equity strategy. Schneider Electric leaders advocate
internally and externally for fair and equitable pay which further
reinforces the Group’s commitment to fair pay.
Equal
SSE #18
Our 2025 Commitment
<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.
Our progress
2020 Baseline
2023 Progress
2025 target
Female
-1.73%
Male
1.00%
-1.00%
100
<1%
0.67%
100
<1%
Holistic Pay Equity strategy
DEI Ambition
Rewards Ambition
To become the most Inclusive and Caring company in the world,
by providing equal opportunities to everyone, everywhere,
and to ensure all employees feel uniquely valued and safe
to contribute their best.
To be fair and equitable in our reward practices;
reward everyone for the skill set they possess
and value their contribution on an equal basis.
Pay Equity Commitment
Attain and maintain a pay gap below 1% by 2025 for both females and males.
(Included in Schneider Sustainability Essentials 2021 - 2025)
Our Holistic Strategy
Process
Education and
Awareness
Tools and
Analytics
Governance
Advocacy
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Living wage
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, clothing,
transport, and communication, 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 the scope of the annual gap
analysis. Third parties such as suppliers or contractors or interns
are out of scope.
The Group conducts living wage gap analysis formally since 2018.
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 is externally audited annually by 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. 100% of in-scope
employees, i.e., all Schneider employees treated as permanent
workforce, were paid at least a living wage as of 2022. Following an
extremely rigorous process the Group has been granted Living
Wage Certification in May 2023, by Fair Wage Network; being
qualified as a “Living Wage Employer” for the first time.
As of 31 December, 2023, living wage gap analysis was conducted
again by Fair Wage Network covering all in-scope employees
worldwide, and identified living wage gaps were closed by
corrective actions 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.
Equal
SSE #20
Our 2025 Commitment
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.
Our progress
2019 Baseline
2023 Progress
2025 target
99%
100%
100%
Short-term incentive
For employees, the annual short-term incentive is linked with the
overall Company performance and individual objectives. It is
designed to encourage and motivate employees to deliver on
collective ambitions through accountability and collaboration,
driving better performance collectively and individually. With a
strong sustainability component included, the annual short-term
incentives for the Group’s executives and around 64,000 eligible
employees help 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. From 2015, SSI has also been included in all other French
entities (27 entities in 2023). The reduction in the occupational
accidents severity rate is also considered in the profit-sharing
incentive plans of Schneider Electric Industries, Schneider Electric
France and 25 other French entities.
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Chapter 2 – Sustainable development
2.5.4.6 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 access to 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”, on page
220). It also provides 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. Schneider Electric joined
#WorkingWithCancer pledge movement in 2023 to provide a more
supportive, open, and recovery-forward workplace culture.
Global Family Leave Policy
As a caring, inclusive, 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” to enable them to be at their
best. The Group applies a continuous improvement approach to all
employee benefits and policies and has made several notable
improvements with employee input. While countries have flexibility
to define eligibility and policy details per statutory and/or market
requirements, the policy establishes a global minimum standard for
paid leave.
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 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 (LTIP) 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 LTIP 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. See more details in section 4.2 of “Compensation
Report”, on page 408.
Recognition is in the company DNA
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” - first
launched in 2016 - 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 Step Up program and
relaunched the platform for recognition with a new partner.
Throughout 2023, the recognition culture remained strong, with
many employees across the globe continuing to utilize the
dedicated platform to appreciate and recognize colleagues. The
Step Up program became available to non-connected as well as
connected employees with a healthy increase of activation rates
and overall sent and received coverage across the employees.
As the way of working has become more remote and more digital,
gratitude for acknowledging and sharing our appreciation has
become more important; being grateful for bringing the element of
empathy and being human. Hence a new award reason was
introduced in 2023 “Grateful for” which turned out to be a popular
choice of recognizing each other.
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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 for the purpose of enhancing the policy and implemented
an early deployment of the enhanced policy in the US. In 2023, the
Group enhanced and globally deployed the Global Family Leave
Policy for all employees.
Parental and Care leave were significantly enhanced and although
the duration for Bereavement leaves remained unchanged at 1
week, the local adaptation was enhanced by adopting a flexible
definition of “Immediate Family” in acknowledgment of the diverse
cultures and religions observed by the global workforce.
During the first year of the enhanced policy, the Group saw over
24,000 family leaves requested globally with Care leave being the
most utilized representing 62% of the leaves requested. Care leave
utilization is followed by Bereavement at 23%, secondary parent
leave at 9%, and primary parental leave at 6%. It is important to
note that 86% of women who took parental leave in 2022 remained
employed 12 months after their return to work.
Schneider Electric’s Global Family Leave Policy was recognized by
the Brandon Hall Group in September 2023 receiving a Gold Award
for Diversity, Equity, and Inclusion – affirming the Group’s position
as a caring, inclusive, and responsible employer.
Additional to the Group’s Global Family Leave Policy and, in
support of Global Standards and Local Empowerment, back-up
family care benefits are offered in some countries to assist
employees with family care needs when they experience disruption
in regular care arrangements. In the absence of a Group-level
back-up family care policy, the Group highlight examples of
back-up family care benefits that are offered at the country level.
An example of this is the “Care@Work” program which is offered in
the US. Under this program, US employees are offered a care.com
premium membership (at no cost to the employee) through which
they can access back-up care for children, elders, and pets. The
program includes a subsidy for up to five back-up days per year.
US employees also have access to the Group’s “Schneider Electric
Employee Discount Portal” which provides discounts on childcare
centers. Additionally, the Group offers employees a Dependent
Care Flexible Spending Account to which employees can
contribute up to USD 5,000 (pre-tax). In the UK, the Group offers
employees a “My Family Care” program which offers employees
access to back-up care, advice, and community networking based
on life stage. In India, the Group offers employees access to
childcare facilities and monthly allowances for childcare.
Globally, the Group also offers an Employee Assistance Program
with coverage in over 80% of its operating countries which provides
additional support and resources for family care.
Beyond the Global Family Leave Policy and Employee Assistance
Program, some countries were Schneider Electric operates provide
support in the form of on-site childcare facilities, childcare
contributions, and breast-feeing and lactation benefits as noted in
the following examples:
•
•
In addition to the Dependent Care Flexible Spending Account,
parenting support is offered in the US via an app which delivers
real-time, personalized parenting guidance. Further, the US
offers employees breastfeeding support and supplies such as
milk transportation services (when a breastfeeding employee
needs to travel upon their return to work), breast pumps, and
supplies at no cost the employee, as well as breastfeeding
counseling and support.
In India, the Group partners with local vendors that provide
childcare facilities near its offices. Monthly childcare
reimbursements are also offered to employees in India, Sri
Lanka, and Bangladesh.
• Southeast Europe countries cluster offers employees a one-time
monetary contribution upon birth of a child and employees in
Greece are provided childcare financial support for
kindergarten.
• Further, several Schneider Electric offices around the globe
provide dedicated private spaces for breast feeding and
pumping.
Global Family Leave
Care for employees and supporting their unique work and life
Parental
(primary)
From 12 weeks paid
to 20 weeks paid
Parental
(secondary)
From 2 weeks paid
to 4 weeks paid
Care
Bereavement
From 1 week paid
to 2 weeks paid
Enhanced local
empowerment to support
each employee’s
unique situation
Establishing Global Minimum Standards and Local Empowerment
Local adaptability is possible! Proofpoint: the definition of Immediate Family
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Chapter 2 – Sustainable development
2.5.5 Social dialogue
2.5.5.1 Context
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 all
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 Governance
At Schneider, social dialogue is managed at country level by HR
leaders with the employee representative bodies and/or 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 process, thus reaffirming its intention to provide
regular, efficient, multi-cultural, and innovative social dialogue at
the European level, taking into account the voice of Schneider
Electric’s employees in the transnational projects of the company.
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 2023, the Group successfully offered WESOP in 47 countries,
achieving 58.5% subscription rate, down slightly compared to 2022
which was at 60.5%. As of 31 December, 2023, 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.
Equal
SSE #19
Our 2025 Commitment
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 SSE. Scope
covers 29 recurring participating countries, among the 47
participating countries representing 87% of the eligible
headcount.
From 53% subscription rate in the recurring countries in
2019, WESOP has reached 61.1% in 2023 over the 2025
target since 2021. 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 2023 capital increase, together
representing around 28% of the 2023 total subscription.
Our progress
2019 Baseline
2023 Progress
2025 target
53%
61%
60%
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2.5 Great people make Schneider Electric a great company
2.5.5.4 Group policy
Schneider Electric considers freedom of association,
representation, and social dialogue as fundamental rights that must
be respected everywhere and therefore in its Trust Charter
(Schneider Electric’s Code of Conduct), Schneider commits to
follow all the requirements to build and sustain fruitful and mutually
beneficial relationships between labor organizations and
management, in accordance with local regulations, in every
country where it operates.
In its Human Rights Policy, renewed in 2022, Schneider reaffirms
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,
which promotes social dialogue and sound industrial relations, as
effective means for achieving decent work and inclusive growth.
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 by
signing with European Employee Representatives an agreement on
the information, consultation, and participation of Schneider
Electric Employees in Europe. This channel for dialogue aims to
enable management to make more efficient decisions by giving
employee representatives the opportunity to be informed of such
projects or decisions and to understand context, as well as to
express proposals to supplement or improve them.
In this respect, new spaces for discussion and expression 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 whistleblowing system, for the revised approach to the duty of
vigilance, and also for the reflection on the Company Core Values’
evolution.
The benefits of these workshops were several, starting with a better
awareness of these topics by the members of the EWC, and an
opportunity to impact upstream on strategic decisions.
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EWC members, during the 2023 Plenary meeting at the
Headquarters in Rueil Malmaison, with special guest, an employee
representative from Morocco.
Social dialogue in France
Schneider Electric is organized in France through more than 25
legal entities. However, with 75% 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 2023, Schneider Electric
negotiated the implementation of the new collective agreement for
the Metallurgy branch, the largest branch in France, effective from
1 January, 2024, including negotiations on classification, working
time, and leaves policies. At the same time, all the members of
unions have received specific training the new collective
agreement and its deployment.
Schneider Electric negotiated, in 2023, a new collective agreement
for the France territory regarding apprenticeships, to develop its
practices of sourcing and welcoming newcomers and retaining
former apprentices inside the Group.
France Group Committee, visiting Angoulême site.
Social dialogue in the United States
In the US regular two-way communication takes place with both
union and non-union teams to provide key business updates and
gather feedback from employees to promote continuous
improvement and increased employee engagement. Ongoing
communication is provided to employees through daily short
interval meetings and monthly town hall meetings on key
competitive issues impacting the company, focus areas, and
priorities, as well as updates on improvements made from
employee feedback.
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 strategic focus areas relevant to
contract negotiations. In both union and non-union sites, priorities
continue to be growing key competencies, enhancing digital
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• Well-being, a topic on which unions are much involved in China,
remains as a priority for enhancing employee experience
continuously. In terms of physical well-being, health check
options are enriched, and critical illness insurance is upgraded
with 100% coverage increase. For mental health, the Employee
Assistance Program was renewed with more holistic services
including 24/7 online counseling and regular webinars.
Furthermore, beyond employees themselves, the company also
considers the wellness of staff families – the Flexible Benefit
Platform is now accessible to over 9,000 employees and their
16,000+ family members; Care leave is also extended from five
to ten working days to offer better support in family illness
situations.
Externally, for technical students, Schneider Electric has
established a Sustainability Development learning platform and
conducted vocational education both on site and virtually,
benefiting over 10,000 students every year country-wide. Thhe
Group is also starting “Sustainability School for Kids” in 28 local
primary schools across five cities, to plant the seeds of
sustainability awareness and mindset among our society’s future
talent.
Social dialogue in India
Schneider Electric in India is organized through 16 different legal
entities, with a strong culture of social dialogue with all employees
(unionized and non-unionized) engaged 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 (e.g., salary related issues, medical
insurance, or benefits are discussed with unions/work committees).
In some of the plants where there are no recognized unions, this
bargaining process is conducted with the elected representatives
from within the workforce who forms 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, the 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 management, and actions are initiated
based on the recommendations of these committees. 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, engaging employees in various cultural events, and
health talk series, and encouraging them to participate in adventure
activities and go-green initiatives (tree plantation activities, green
Yodha initiatives).
acumen, and fostering a safe and respectful workplace through
initiatives, such as:
• Learning Corners that provide training to employees on a variety
of topics including digital upskilling, cybersecurity, company
values, etc. The Learning Corner provides a place for
employees to explore additional training courses that interest
them individually and/or help further grow their competencies.
• Enhanced communication for employees through digital
channels including Microsoft Teams to grow digital
competencies while promoting deeper and more efficient
communication in each site and across the company.
Intentional campaigns, on-site events, discussion groups, and
training focused on well-being and DEI.
•
Social dialogue in Mexico
In 2023, in addition to regular communications and in accordance
with Mexican law, Schneider Electric concluded Collective
Bargaining Agreement negotiations with the union and employees
through the country, including the voting process to close of 7,000
unionized employees. During union negotiations, the union and
employees had the opportunity to express aspects to be improved,
as well as to highlight those good practices in each of the sites.
Committee and union leader of Reynosa plant.
Social dialogue in China
Schneider Electric in China has a strong culture of social dialogue
across 30 legal entities in 100 locations. Regular communications
take place in diverse ways to reinforce collaborations and drive
optimal relations between the organization and all employees. The
company also creates impact externally through future-generation
development to accelerate sustainable growth together.
In 2023, China has progressed active dialogue to further listen and
empower people on topics related to learning and development,
and individual well-being:
• Upskilling continues to be a key growth enabler and is enriched
with mobile and AI-embedded learning experiences for all and
targeted job roles such as Sales, Offer Marketing, Research &
Development, and Supply Chain. Average learning hours and
digital learning ratio rose to over 22 and 70% respectively.
Employees are also able to shape a broader career future by
leveraging the OTM platform for internal opportunities (90%
usage, 300+ projects, and 500+ mentorship pairings), and by
driving open career conversations with managers.
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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
2.6.4 The Next Gen Academy
2.6.5 Future Ready Program
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Context and goals
Schneider Electric has been building a sustainable development
approach since the early 2000s thanks to the Schneider
Sustainability Impact (SSI). This barometer measures the
Company’s objectives and progress every quarter, on all
dimensions of responsibility, encompassing all the Group’s
stakeholders on a global scale.
The success of the SSI further inspired the Group to do even more
and to think about the world of tomorrow, both in the environmental
and climate fields – without forgetting the social and territorial
dimensions. If the transition is not inclusive and equitable, if it does
not involve citizens, if it does not allow young people to build their
future and create their businesses, it will not happen. 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 and its
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.
After updating its Human Rights Policy in 2022, Schneider Electric
published internal guidelines to protect, respect, and guarantee
dignity for Migrant Workers. The Group also implemented new
ways of engaging with its suppliers’ employees, through a pilot in
Vietnam to identify human rights issues.
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, to accelerate the just transition. After defining the
Group’s roadmap through the Future Ready program, the Senior
Talent program deployment started in 2023 with two waves that
included 60% of Schneider Electric’s footprint. Two other waves are
planned for 2024. The full program encompasses 25,000 seniors
with the objective of powering their talent and aspirations.
The third priority focuses on young people. They have never been so
many on the planet, but lots of them have no access to education.
The Company has a role to play in supporting them. In 2023,
Schneider has reinforced its actions towards gender equality in the
energy sector with the support of the Schneider Electric Foundation
and employees through mentorship. The Group wants to empor girls
and demonstrate that access to education can challenge the status
quo. This mission is carried out in collaboration with around 400 local
partners including F’SASEC in South Africa and ElectroMisr in Egypt.
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.
“Schneider Electric understands that the
energy transition will only be possible if it is a
just transition. On one hand, digital innovation
brings solutions to decarbonize and save the
planet. On the other hand, social innovation
saves its inhabitants by taking care of
everyone. We bring everyone along through
various actions including designing solutions
for people in difficulty or without access to
energy, transfering skills to today’s youth and
building solidarity initiatives for people in
disaster areas.”
Gilles Vermot Desroches,
Chief Citizenship Officer & Senior Vice President Institutional Affairs
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Chapter 2 – Sustainable development
Progress of our Social Impact commitments
Schneider
Sustainability
2021 – 2025 programs
Baseline(1)
#
2023 progress(2)
2025
Target
50M
Provide access to green electricity
to 50M people
2020: 30M
+16.6M
Train people in energy management
2020: 281,737
578,709
1M
Increase the number of volunteering days
since 2017
2020: 18,469
58,177
58.177
50,000
Impact
(SSI)
Essentials (SSE)
9.
11.
25.
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 2023), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 302). Please refer
to page 266 for the methodological presentation of each indicator. The 2023 performance is also discussed in more details in each section of this report.
2023 Highlights
New Altivar Solar Drive is a smart solar powered
drive for irrigation and livelihood applications. It
was launched in 2023, as was Villaya Flex, a
packaged microgrid solution for off-grid
communities to maximize clean energy while
reducing pollution from genset usage and
reducing the carbon footprint.
Tomorrow Rising Fund supporting Türkiye, Syria,
and Morocco: strong mobilization after the
earthquakes, with a first priority on emergency
help and a strong focus on youth education.
Schneider Electric has committed EUR 20 million
in Gaia Energy Impact Fund II in 2023. This new
venture capital impact fund will support
entrepreneurs with high environmental and social
impact in the field of energy transition in Africa.
The ambition: 20,000 jobs created, four million
people with access to energy, and four million tons
of CO2 avoided emissions.
The Schneider Electric Foundation draws on a
brand new network of around 80 Foundation
Delegates, covering 100 countries, with an
increasing engagement of employees on
mentorship.
In 2023, the Schneider Electric Foundation has
reached the bar of 578,709 young people trained
in energy-related professions thanks to historical
partnerships such as UCEP in Bangladesh. With
the launch of the Empowering Girls and Women
program, the Foundation will accelerate its
objective to reach one million people trained by
2025.
In 2023, Schneider Electric Initiatives launched in
Belgium, offering employees innovative pathways
to diversify their career development; one
employee (shown in the picture) is becoming an
entrepreneur thanks to the Creation Pass! These
programs were also launched in Germany,
Switzerland, and Austria in connection with the
Senior Talent program as part of their multi-
generational strategy.
Our long-term commitment
2030 Provide access to green electricity to 100 million people
cumulatively since the beginning of the program in 2009
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2.6.1.1 Context
Today(1), around one and half billion people have little or no access
to electricity.
In 2021(2), 675 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, more than 560 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.
• Based on the pace of electrification vs. population growth, in
2030, around 560 million people would remain without
electricity, which would be 85% of the unelectrified world
population. This number is expected to be similar to the number
of people without access to electricity in Sub-Saharan Africa in
2021.
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, clean, affordable, reliable, and
sustainable energy offer. At Schneider, this is called Electricity for
Life and Electricity for Livelihood.
2.6.1.3 Actions and impacts
Electricity for Life means providing access to green electricity to
off-grid communities. 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, thus
allowing people to be the agents of their own transformation.
The Access to Energy social business works in synergy with the
Youth Education & 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
Our 2025 Commitment
Provide access to green electricity
to 50 million people by 2025 and
100 million by 2030
Schneider Electric is providing solar solutions for more than
500 health centers in South Asia and Africa. These facilities
previously did not have electricity or 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 1.5 million people.
Our progress
2020 Baseline
2023 Progress
2025 target*
30M
+16.6M
50M
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.
* Cumulated since 2009.
(1) Source: Tracking SDG 7: The Energy Progress Report 2023, 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).; Off-Grid Solar Market Trends Report 2022 by Lighting
Global/ESMAP, the International Finance Corporation, Efficiency for Access Coalition,GOGLA and Open Capital Advisors.
(2) Source: Tracking SDG 7: The Energy Progress Report 2023, 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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Chapter 2 – Sustainable development
2.6.1.4 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.
Case Study: Schneider Electric has
provided around 4,000 Mobiya Original
solar lanterns impacting around 19,000
people in rural and peri-urban areas
across Africa.
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.
With a focus on circular economy, Mobiya’s recycled
plastic and recycled packaging material promote
durability, reusability, and recyclability.
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
3 products
Domestic electrification for
access to quality, affordable,
and uninterrupted power
Homaya Hybrid: solar hybrid home system,
specifically designed for versatile applications
including clean cooking.
Homaya Hybrid PAYG: solar hybrid home system with
Pay-As-You-Go function.
Homaya Pro: smart hybrid inverter powered by solar
with an inbuilt MPPT controller and compatible with
grid charging.
Case Study: More than 100 schools and
health clinics in remote and rural areas of
Senegal have been equipped with access
to clean and reliable electricity through
Schneider Electric’s Homaya Hybrid and
Homaya Pro solutions, benefiting students
in schools, and medical staff and patients
in health clinics.
Villaya
2 solutions
Collective electrification
solutions in remote sites,
either 100% solar or hybrid
Villaya Community: solar or hybrid microgrid to
power rural communities.
Villaya Water: Villaya solution embedded with new
Altivar Solar Drive for irrigation and agro processing
applications.
Case Study: In remote areas of
Bangladesh, reliable irrigation is being
enabled via Schneider Electric’s Villaya
Water solutions, helping farmers irrigate
their farms using clean energy solutions
and impacting the lives of over 1700 rural
people.
EcoStruxureTM
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 and remote
connect/disconnect, to build local tariff plan and
better manage peak load.
Case Study: Around 16,000 students in
remote villages in India have better
access to education due to reliable
electricity provided by Schneider
Electric’s solar systems and
EcoStruxureTM digital platform.
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•
In some cases, an investment vehicle can also rely on an
Advisory Committee, a Strategic Committee, or an Impact
Committee to help them setting up and managing their
investment and impact 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 Investment 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 five vehicles targeted at:
1. Contributing to an inclusive economy with 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 Energy Access Venture (EAV)).
4. Supporting entrepreneurs with high environmental and social
impact in the field of energy transition in Africa with Gaia Energy
Impact Fund II.
5. 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.
2.6.2.1 Context
Impact Investments are investments made with the intention of
generating a positive, measurable social and environmental impact
alongside a financial return, as defined by the Global Impact
Investing Network (GIIN).
Based on this definition, impact investing is an innovative way for
organizations to address social needs, contribute to people’s
well-being, and help them access development opportunities.
Hence many companies are building partnerships with local and
international players 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;
• 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.
2009
Launch of SEEA
2011
Investment in
Livelihoods
Carbon Fund #1
2015
Launch of EAV
2017
Investment in
Livelihoods
Carbon Fund #2
2020
Launch of
SEEAA
2021
Investment in
Livelihoods
Carbon Fund #3
2023
Launch of GEIF
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Chapter 2 – Sustainable development
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 2023, 6,287
(past or present) Group employees in France had invested EUR
42.2 million in the Schneider Energie SICAV Solidaire fund.
Since 2009, SEEA has invested in 26 companies and exited from
ten. In 2023, SEEA invested in one new company (Wall’up) and
reinvested in one company (Envie Rhône-Alpes).
As of December 2023, SEEA portfolio included 16 companies, of
which 12 in France, one operating in Europe, and three operating in
Africa, South-East Asia and Latin America, and managed the
following amounts:
• EUR 3 million in capital invested by Schneider Electric;
• EUR 3.2 million 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:
− Six invested companies for a total of EUR 2.25 million
(Foncière du Possible, LVD Energie/HomeBlok, Soliha BLI,
Dorémi, Réseau Eco-Habitat, Wall’up).
• Promote digital and financial inclusion:
− Two invested companies for a total of EUR 430,000 (SIDI,
Kajou).
• 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).
• Promote job creation, income generation and inclusion:
− Four invested companies for a total of EUR 640,000 (Talendi,
Incubethic, Envie Rhône Alpes, Fabrik à Yoops).
Okra Solar
Goparity
Okra closed a new fundraising in 2023, confirming the
feasibility of the business model, and enabling a strong
deployment in Nigeria and Haiti.
The investment of SEEA in Goparity (2022) was a first step
towards expanding SEEA’s activities to Europe.
Project description
Project description
Okra is an Australian-Cambodian social and innovative
enterprise with operations in Southeast Asia and Africa.
It promotes access to affordable, clean, and sustainable
energy to precarious populations.
The mesh grid technology developed by Okra drastically
reduces installation costs and enables access to electricity to
off-grid communities.
It consists of an intelligent plug and play controller that
connects individual solar panels paired with a SaaS
technology that remotely monitors and controls networks
and manages payments.
Impact assessment
From the launch of the project to November 2023, Okra Solar’s
projects represented:
• +31MWh of renewable electricity produced.
• 14,700 beneficiaries impacted who have now access to
electricity.
Goparity is a Portuguese enterprise that has developed a
crowdlending platform/service that connects companies
seeking alternative financing for their environmental and social
businesses with individuals and companies who want to invest
in impactful projects. It operates mainly in Europe, with some
financed projects in Africa and South America.
Between 40 - 50% of the projects are in the sustainable energy
sector. Their mission is to democratize access to sustainable
finance, controls networks and manages payments.
Impact assessment
From the launch of the project to November 2023, Goparity
represented:
• 90,000 beneficiaries impacted by financed projects.
• > EUR 30 million invested in 321 projects with a high
environmental and/or social impact.
• > 25,000 tCO2 avoided per year.
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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 2019 to help the region tackle these challenges and advance
towards SDG 7 “Ensure access to affordable, reliable, sustainable
and modern energy for all”. Three other investors joined forces with
Schneider: the European Development Finance Institution
Management Company (EDFI MC), the Norwegian Investment Fund
for Developing Countries (Norfund), and Amundi (Finance et
Solidarité fund), committing a total of EUR 20.9 million.
SEEAA, through its dedicated Schneider management team based
in Singapore, invests primarily in equity and quasi-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 2023, SEEAA had
invested in 11 start-up companies (Freyr, Frontiers Markets, Xurya,
Oorja, ATEC, Carbon Masters, SMV, Agros, Selex, Biofuels
Junction, Solarkita), for a total of EUR 7.7 million.
SEEAA’s goals are 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.
• Accelerate the transition towards renewable energy and
net-zero:
− The goal is to invest in projects that enable the transition of
economies to clean renewable energy sources and provide
solutions to reduce CO2 emissions.
Agros
Freyr
Project description
Project description
Agros is a start-up company pioneering in the sustainable
agriculture in South-East Asia. The company provides a one
-stop solution for crop farmers to switch to sustainable farming.
Their solution includes a combination of hardware, inputs,
financing, and advisory with the ambition to allow farmers to
double their income while making their farm climate-resilient for
generations to come.
Agros’ solar water pumps help farmers reduce fuel cost for and
provide clean water for year-round irrigation, enabling them to
grow additional crop cycles. Paired with soil advisory solutions
to improve soil fertility and reduce chemicals dependence,
Agros enables farmers to increase their yields. All these
solutions are backed with tailored financing.
Impact assessment
Since the launch of the project, Agros has:
• Sold 2,559 solar water pumps in Myanmar and Cambodia,
directly impacting 13,780 beneficiaries.
• Created 121 direct jobs (employees and farmers), allowing
them to earn decent income.
Freyr is an Indian tech-enabled company that designs,
procures, and installs rooftop solar systems for private
homes and small businesses.
The rooftop systems are sold via Freyr’s proprietary technology
platform, that streamlines the process from sales and financing
to installation, ultimately offering services as the one stop
platform.
Freyr brings together an ecosystem of stakeholders and third
party vendors to make solar affordable and accessible for
more people, as part of the global push for clean energy and
decarbonization
Impact assessment
Since the launched of the project, Freyr has:
• Supported the installation of 2,600 rooftop solar panels
• Deployed a total capacity of 27.4 MWp.
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Chapter 2 – Sustainable development
3. Enabling green energy access in Africa with E3
Capital impact fund (formerly EAV)
E3 Capital invests primarily in equity and quasi-equity in start-ups
that:
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 Entrepreunarial
Development Bank), FISEA-PROPARCO, OFID, and AFD-FFEM.
At the end of 2023, E3 Capital had invested in 15 companies and
exited one. 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.
• Provide access to affordable, clean, and sustainable energy
solutions:
− Five invested companies for a total of EUR 17.1 million (Zola
Electric in Tanzania, BBoxx (Solar Impact Holdings) in
Ghana, Nuru in Democratic Republic of Congo, Zonful Solar
Energy in Zimbabwe, and ZIZ Energy in Chad).
• Provide access to clean productive use energy:
− Six invested companies for a total of EUR 24.5 million
(ManoCap Energy in Ghana, Candi Solar in South Africa,
SolarX in Mali, Greenlight Planet (formerly PayGo Energy),
SunCulture, and InspiraFarms in Kenya).
• Promote digital and financial inclusion:
− Three invested companies for a total of EUR 12.5 million
(Mawingu, Solarise Africa, and Palgo in Kenya).
Nuru
SunCulture
Project description
Project description
Nuru is the leading smart distributed utility in Democratic
Republic of Congo (DRC).
It develops, finances, and operates profitable solar powered
“metrogrids” for businesses, industries, SMEs, and
households. Nuru focuses on urban zones with high levels of
commercial and residential activity that are geographically
clustered around dense metrogrid ready zones. Nuru
deployed Congo’s first solar-based mini-grid in 2017 and has a
1.3 MW solar hybrid site in Goma, the largest off-grid mini-grid
in Sub-Saharan Africa. In total, Nuru manages four solar-based
grids across DRC.
Impact assessment
From the launch of the project to November 2023, Nuru
represented:
• > 120,000 beneficiaries impacted who have now access
to electricity.
• 13.7 MWp of operating capacity.
• > 15,000 tCO2 avoided per year.
SunCulture is a Kenyan-headquartered company that uses
off-grid solar technology to provide customers with
reliable access to water, irrigation, lighting, and mobile
charging. It operates through both direct operations and
distribution partners in several markets in East, West, and
Southern Africa.
The products combine solar water pumping technology with
high-efficiency drip irrigation so smallholder farmers can grow
more while spending less. SunCulture offers comprehensive
solutions, combining market-leading technology with Pay-As-
You-Grow financing and value-add services (advisory,
installation, training).
Impact assessment
• 89% of beneficiaries reported an improved quality of life.
• 87% of smallholder farmers report increased farming
incomes due to the SunCulture system.
• Drip irrigation saves up to 80% of water compared to
current practices.
Photo: © Grace Ruboneka for Nuru Marketing & Communication Department
Photo: © SunCulture – Smallholder farmers hold the key to global food security. Here, a
SunCulture engineer demonstrates one of their products in action.
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4. Supporting entrepreneurs with high
environmental and social impact in the field of
energy transition in Africa with Gaia Energy Impact
Fund II (GEIF II)
In September 2023, Schneider Electric, Capelan, Capital
Croissance, and Investisseurs & Partenaires joined forces with the
Gaia Impact team to launch GEIF II. This new venture capital
Impact fund is specialized in the energy transition in Africa and the
support of entrepreneurs with high environmental and social
impacts. The fund is managed by Capital Croissance. Gaia Impact
acts as exclusive advisor both to the fund manager and the
portfolio companies. Schneider Electric and Capelan are two
cornerstone investors. Investisseurs & Partenaires provides its
expertise regarding African countries and technical assistance to
the Gaia Impact team. Schneider Electric committed a total amount
of EUR 20 million and has seats at the Advisory Board, the
Consultative Investment Committee, and the Impact Committee.
GEIF II will invest tickets between EUR 500,000 and EUR 5 million (in
equity or quasi-equity) in around 25 early-stage (Seed and Series A)
companies and follow on up to growth phase (Series B). Most
investments will be made in companies operating in African countries
(with a maximum of 15% in other emerging countries). Investments
will support six sectors within the distributed renewable energy value
chain: minigrids, decentralized energy systems, commercial and
industrial energy systems, productive use of energy, new renewable
energies, and enabling technologies (tech innovations).
SureChill
Over summer 2023, GEIF II closed their 1st deal with a
US$1 million investment in SureChill.
Project Description
SureChill is a Kenyan-based company whose goal is to
improve the living conditions and healthcare of vulnerable
populations all around the world.
The company has developed a revolutionary water-based
cooling technology that powers autonomous refrigerators when
electricity is missing. The technology addresses the issue of
providing reliable cooling with an intermittent or erratic power
supply. SureChill provides medical refrigerators for
temperature-sensitive drugs and vaccines, and robust fridges
for homes and businesses.
Impact Assessment
This new technology allows vaccine refrigerators to operate
without the need for a constant power source and avoids
the use of costly and unreliable solar rechargeable batteries.
As an example, SureChill is working closely with GAVI, the
Vaccine Alliance, UNICEF, PAHO Ministries of Health and other
to help make a positive impact on the Cold Chain.
Half of the team’s carried interest is tied to the achievement of
Impact objectives that will be measured by accredited third-party
organizations and monitored by an independent Impact
Committee. GEIF II’s goals are to bring energy to four million
people, to create 20,000 jobs, while enabling the avoidance of four
million tons of CO2.
The fund has reached its first target of an initial closing of EUR 40
million for summer 2023. The goal is to raise another EUR 40 million
in the first half of 2024 to reach a final target amount of EUR 80
million. At the end of 2023, the fund has deployed EUR 6 million,
and the portfolio comprises six companies, of whom four were
transferred from the fund GEIF I.
5. 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 230 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 one million people and avoided or sequestered
over four million tons of CO2. Carbon Fund #2 (2017) aims to benefit
two 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 two 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 has been carbon-neutral since
2019.
As of December 2023, the total carbon credits accumulated since
2011, corresponding to Schneider Electric’s participation in
Livelihoods Funds, was 499,743 tons, of which 119,945 tons have
been used to offset Schneider Electric’s Paris Marathon carbon
emissions.
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Chapter 2 – Sustainable development
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 non-governmental
organizations (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 UN 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. The Schneider Electric Foundation’s goal, under the
aegis of Fondation de France, 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. The Foundation goes about fulfilling this objective
each and every day, all over the world, through concrete initiatives
and programs.
The Group’s first Philanthropy Policy was implemented in 2023. The
objective is to define Schneider Electric’s position on philanthropy,
its priorities, and its principles of action, in line with the 17 UN
SDGs. It provides a coherent and consistent framework enabling
Schneider Electric entities and employees to contribute and act.
In 2023, the EUR 4 million annual budget of the Schneider Electric
Foundation was invested in more than 140 projects, supporting
180,845 youth with a key engagement of the Schneider Electric
community, contributing with 17,083 days of volunteering.
This commitment is being amplified with an additional EUR
21 million from the Schneider Electric’s entities and employees
giving back in their communities. In total, more than EUR 25 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 (977 in 2023)
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:
• Ten members: five from Schneider Electric (including the
Chairman and two representatives of the employees) and five
external experts.
• One 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; and
• Social Impact Assessment Leader.
Lastly, the Foundation’s Selection Committee is composed of:
• General Delegate;
• Corporate Philanthropy Director; and
• Program Director, Training & Entrepreneurship.
2.6.3.4 Key actions driven by the Schneider
Electric Foundation
Schneider Electric’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. Six
main actions are driven by the Schneider Electric Foundation:
1. Developing access to education and entrepreneurship for the
youth with the Youth Education & Entrepreneurship program
deployed globally.
2. Developing volunteering and social mentorship as a key
contribution to the success of youth projects and initiatives.
3. Acting as a corporate citizen by supporting international causes
with the Tomorrow Rising Fund.
4. Strengthening its impact thanks to Schneider Electric Sister
Foundations (North-America, India, Australia).
5. Support innovation with emblematic projects.
6. Measuring the impact of all the programs.
More information on these actions are given in the next sections.
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2.6 Delivering social impact for a just transition
2.6.3.5 Youth Education &
Entrepreneurship program deployed
Actions
The program is divided into three main areas:
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.
Group policy
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, the program is evaluated every six
months 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 on a regular basis. 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 co-ordinator sets regular
meetings to support the zone representatives and guarantee the
progress of the program in each zone. 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.
For years, the Schneider Electric Foundation has broken new
ground in measuring social impact, aiming to enable its partners to
better fulfill their missions. After different independent social impact
evaluations carried out in previous years, the Foundation has taken
a step further in 2023; based on an innovative approach, it started
co-creating with its partners and experts an evaluation framework
applicable to different programs. It will allow both partners and the
Foundation itself to measure the social impact of the missions,
autonomously, iteratively, and within a continuous improvement
perspective. This will guarantee that the actions are focused on
bringing a real positive for the beneficiaries.
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, linked to
the energy transition, 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
Our 2025 Commitment
Train one million people in energy
management
The Youth Education & Entrepreneurship program has
supported the training of 578,709 people worldwide since
2009. More than 8,500 trainers and 8,200 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.
Schneider Electric and its Foundation’s partnership with
SENATI marks a significant investment in advancing
technical education in Peru, South America. SENATI, an
institution established by the National Society of Industries,
plays a crucial role in providing professional training across
various industrial sectors. The collaborative project focuses
on enhancing SENATI’s training laboratory for Industry 4.0
by investing in 11 benches. These advanced tools
empower SENATI teachers with the skills to diagnose and
operate systems remotely, aligning with the demands of
modern industries. The Industrial Electricity and Industrial
Mechatronics programs are the primary beneficiaries,
impacting a total of 4,002 students over five years. In 2023,
all training sessions with teachers have been successfully
concluded, and Schneider Electric is looking forward to
witnessing the positive impact of this initiative in 2024.
Our progress
2020 Baseline
2023 Progress
2025 target*
281,737
578,709
1M
* Cumulated since 2009.
To learn more on the actions developed in 2023, please
see section 2.6.4 page 257.
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The delegates manage a digital platform known as VolunteerIn, that
brings together all the missions proposed by the Foundation locally
and internationally. Available in 27 languages for Schneider Electric
employees with the potential to be increased to 37 languages, the
platform can be accessed from anywhere in the world with one
click (Single Sign-On) 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 2023, these included the Tomorrow Rising fund and the
Giving Tuesday to Empower the Next Generation for Impact
dedicated for Mentoring scheme as well as the International
Volunteer Day which focused on solidarity and local mobilization
through volunteering and mentoring and will continue for the next
years. These campaigns showcase local initiatives to a global
audience. Delegates also participate in campaigns following
natural or other disasters. For example, in 2023, employees
responded enthusiastically to the launch of the Tomorrow Rising
Fund for the earthquakes that happened in Türkiye, Syria and in
Morocco.
Generations
SSE #25
Our 2025 Commitment
50,000 volunteering days since 2017
In 2023, employee participation in the activities of the
Schneider Electric Foundation greatly increased.
Schneider Electric employees show a high level of
commitment to give back. Mainly through in person 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 17,083 volunteering
days in 2023, the 2025 target has already been reached.
Our progress
2020 Baseline
2023 Progress
2025 target
18,469
58,177
100
50,000
2.6.3.6 Volunteering and social mentorship
for successful youth projects and initiatives
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
youth education, planet, poverty, and communities. In particular:
• Employees volunteer their time, energy, and lifelong learnings
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 Electric 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.
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 and
Well-Being;
• Member, volunteer representative;
• Member, Chief Citizenship Officer and Senior Vice-President
Institutional Affairs.
One to two Executive Board meetings are organized each year.
The Schneider Electric Foundation draws on a network of around
80 delegates, covering 100 countries. This community was
renewed in 2023. Its 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 social 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 are
monitored by the delegates.
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2.6 Delivering social impact for a just transition
Employee engagement, cumulated per region since 2018
Total 58,177
volunteering days
7,157
12%
Voluntering days
Distribution
18,723
32%
17,396
30%
1,626
3%
Global*
1,623
3%
7,504
13%
* Days in global/multi-country initiatives
2.6.3.7 Acting as a corporate citizen:
Tomorrow Rising Fund
Context and goals
Since its creation in 1998, the Schneider Electric Foundation has
proposed 22 specific emergency and rebuilding campaigns. It acts
as a relay and amplifies the mobilizations of local Schneider
Electric entities following natural disasters or emergency situations
in the concerned countries.
Actions and impacts
Schneider Electric employees have always demonstrated an
incredible spirit of solidarity in the face of crisis. Through the
Tomorrow Rising Fund, Schneider Electric employees contributed
to campaigns following the earthquake in Türkiye, Syria, and
Morocco.
For each campaign, a special Steering Committee was established
to take charge of organizing the appropriate release of funds to
support the communities affected by the earthquake. Donations of
Schneider Electric employees from around the world are already
contributing by providing emergency kits, maintaining education,
and supporting refugees and NGOs’ missions.
2,058
3.5%
2,090
3.5%
Türkiye and Syria
Initial donation from the Schneider Electric Foundation.
Financial donation campaign from employees with
matching.
• To face emergency:
− In-kind donations organized in Türkiye (blankets,
clothes, tents, etc).
− 7,000 solar lamps.
− Support to SOS Attitude & ESF
• To contribute to rebuilding the education system and
professional training:
Türkiye
− 5 scholarships to female university students for
four years with Turkish Education Fund.
− 100 scholarships to female university students for
one year with Turkish Education Fund.
− Volunteering and mentoring initiatives in place to
support impacted communities.
Syria
− 6 scholarships to female university students in
Science, Technology, Engineering and
Mathematics for four years with Muslim Hands.
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3. Disaster Relief: As natural disasters are occurring at an
increasing rate, the Foundation’s goal is to ensure its partners,
such as Footprint Project and American Red Cross, are
prepared to respond sustainably.
4. DEI and well-being: The Foundation is committed to supporting
the health, well-being, and equity of all communities by
partnering with organizations like NSBE (National Society of
Black Engineers) and ACP (American Corporate Partners).
In 2023, the North America Foundation contributed over USD
7 million in cash and product donations to over 1,900 charitable
organizations and participated in 25,000 employee hours.
India
During 2023, Schneider Electric India Foundation (SEIF), which is
the corporate social responsibility (CSR) arm of all Schneider
Electric business entities in India, focused on following programs:
1. Skill development in the field of energy management: 34,292
unemployed youth were provided training in the field of
electricity, solar energy and automation including 1,750 females.
363 trainers were also trained through “train the trainers”. In
addition, 323 youth were provided entrepreneurship training to
start their entrepreneur journeys in the energy profession
through SEIF’s Skill Development program.
2. Clean Energy for sustainable Livelihood: 2,633 indigenous
farmer families were supported to have access to irrigation
through solar powered pumps and grow two or three crops in a
year under the “Clean Energy for Sustainable Livelihood”
project. The project impacted the community by doubling the
annual income of women smallholder farmers and ensured food
and nutrition security in remote villages of Jharkhand, Odisha,
and West Bengal.
3. Conserve My Planet: 7,680 school children from 70 schools
trained on conservation of energy and environment across
seven metro cities under the Conserve My Planet program.
4. Scholarship: SEIF will provide scholarships to 40 meritorious
students from financial disadvantaged backgrounds to pursue
higher study in the field of engineering.
5. Environment: More than 300,000 trees have been planted for
conservation of environment and carbon sequestration.
6. Volunteering: SEIF encourages employees to participate in all
the above initiatives, and during 2023 more than 400 volunteers
contributed 500 volunteering days. Approximately 300
Schneider employees shared their knowledge with
underprivileged youth under the SE Teacher’s Mission Initiative.
Australia
In 2023, Schneider Electric Pacific Fund contributed to AU$
375,000 to major Australian charity partners – Raise Foundation,
Beacon Foundation, Australian Torres Strait Islander Maths Alliance
(ATSIMA), and Centre for Appropriate Technology (CfAT). In New
Zealand, NZ$ 40,000 has supported Puhoro and Graeme Dingle
Foundation Through our Giving@SE program, a total of more than
AU$ 72,000 was donated to charities thanks to individual
employees and matched donations from Schneider Electric (up to
AU$ 5,000/employee/year).
Morocco
Launch of the communication campaign and of the
online donation campaign.
• Phase 1: Facing emergency:
− In-kind donations organized in Morocco (tents,
sleeping bags, solar lamps, kitchen devices, etc).
− 8,000 solar lamps given in five districts.
− Support to SOS Attitude.
• Phase 2: Education will be deployed beginning of
2024 with a focus on professional training.
2.6.3.8 Strengthening its impact thanks to
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.
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. The Foundation drives change in its communities. It
also offers employee programs to support efforts in their
communities:
• Matching Gift provides a dollar match on employee donations to
the non-profit of their choice.
• Dollars for Doers provides financial grants to organizations
where employees volunteer their time.
• Sponsorship Grants offer financial and product donations to
sponsor events, capital projects, and employee missions.
• New Hire program welcomes new employees with a gift to
donate to a non-profit of their choice.
• Service Days and Volunteer Events enables employees to
donate time during their working hours.
The Schneider Electric North America Foundation has strategic
partnerships that focus on supporting the Schneider Electric
Foundation areas:
1. Energy Equity: energy is a basic human right and to make it
available and affordable to everyone, the Foundation partnered
with Habitat for Humanity and Inherent Homes.
2. STEM Education: preparation of the next generation for
STEM-related careers is done with partners like TryEngineering
and FIRST Robotics.
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2.6 Delivering social impact for a just transition
2.6.3.9 Support innovation with emblematic
projects
2.6.3.10 Measuring the impact of all the
programs
Social Impact is part of the DNA of Schneider Electric Foundation:
we want to bring a real positive change for the beneficiaries of our
programs. Social Impact assessment is the compass guiding the
Foundation and its partners in the best direction to guarantee that
the actions and energy are focused on offering real added value.
For years, different evaluations have been conducted by experts in
the domain. These evaluations underlined different challenges.
Therefore, the Foundation decided to go one step further with an
innovative approach to address them - the creation of a new global
and common Social Impact framework for the Schneider Electric
Foundation initiatives. This new framework considers one key
mindset shift empowering the partners to be autonomous on
evaluating the impact of their initiatives.
To develop this program, the Schneider Electric Foundation
partners with highly advanced experts in the domain, Impact Track
company, in partnership with the E&MISE Social Impact Lab from
ESSEC Business School. The framework is supported by a tool
responding to decisive aspects such as the possibility to launch
assessments on regular/systematic basis as well as on demand, or
to have aggregated data at different levels (partners, countries,
foundation).
To develop this plan, the Schneider Electric Foundation has
adopted an incremental approach in two main phases:
• A pilot phase, with first focus being in the training program, with
a co-creation process with partners, domain experts, and
internal teams of the Theory of Change, applied in concrete and
diverse scenarios. The participation of the foundation partners,
ACTEC (Association for Cultural, Technical and Educational
Cooperation), IECD (Institut Européen de Coopération et de
Développement) and the SRF Foundation, is key in this phase,
allowing piloting a deployment: Ecuador, Egypt, India, and
Cameroon.
• A scale phase, globally deploying the methodology to other
countries and partnerships and, later, starting to involve new
programs of the Foundation.
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:
• 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.
Atelier 21, a Foundation partner, has been granted two Solar
Impulse Efficient Solution 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 Réunion, the US, 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.
Building on the success of the exhibition on cities in 2022 at
Schneider Electric premises Intencity (Grenoble, France), the
Schneider Electric Foundation contributed to the exhibition “Cities
of Tomorrow” inaugurated in September 2023 at La Cité des
Sciences in Paris (France). It was also the opportunity to develop
conferences for different stakeholders such as decision makers,
and students. At the occasion of COP23, the partnership has been
renewed for twi years with a strong focus on advocacy, education,
and promotion of solutions
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2.6.4 Next Gen Academy: the workforce of tomorrow
2.6.4.1 Context and goals
The three key priorities are the following:
• Basic training over a few months (minimum three months): 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.
• Single or multi-year trainings leading to a diploma, 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.
The program focuses on equipping training laboratories and
encouraging Schneider Electric offices to donate training
equipment, training the trainers with the support of the VolunteerIn
association, renewing curriculum and promoting training programs.
With the new methodlogy, the Schneider Electric Foundation
programs are systematically audited following global guidelines
and standards.
To take a step further, Schneider Electric intends to supplement its
training offer with digital learning curricula. For more information,
see section 2.6.4.3.
Schneider Electric and its Foundation, in collaboration
with the Ministry of Education of France and the Ministry
of Education and Culture of Indonesia, have established
the Center of Excellence in Bandung, Indonesia. This
initiative is dedicated to providing specialized training in
electricity, automation, and renewable energy to
vocational teachers and laboratory technicians. The
main focus of the Center of Excellence is the “training
the trainers”, which aims to empower educators with the
necessary knowledge and skills to effectively impart
their expertise to students. As of 2023, this program has
already made a significant impact, reaching 27,109
students. In addition, 291 teachers and 163 assistants to
teachers have undergone training, further enhancing
their skills and expertise.
For over a decade, Schneider Electric with the support of its
Foundation has partnered with more than 850 local and global
stakeholders, in over 46 different countries, to create programs
covering the latest technological developments, and tailored to
local job market needs.
The objective is to contribute to provide quality vocational training
courses culminating in qualifications that address local
employment markets. Young people can acquire skills, find work or
become entrepreneurs in the energy sector. These trainees can
change not only their own lives but also the direction of their
communities, contributing to the development of their countries, by
bringing in new, safe, reliable, and sustainable energy solutions.
In addition, Schneider Electric also supply training centers with its
products and solutions and train young people and teachers in its
technologies; thus, helping raise the brand’s image among future
users and customers.
Schneider Electric is becoming an actor for today’s pedagogical
issues to prepare workforce for tomorrow. All these programs –
from the Schneider Electric School to Youth Education &
Entrepreneurship, from digital learning to the education equipment
service - are grouped under the umbrella “Next Gen Academy”.
Schneider Electric has also developed the “Next Gen Campus”
program for its own employees (apprentices, Go Green, and young
talents). See more section 2.5.3.5 on page 227.
2.6.4.2 Youth Education &
Entrepreneurship Program
1. Support access to qualitative jobs through
technical and vocational education training (TVET)
in the energy sector
Training in the energy field provides an inclusive answer to several
challenges of the UN SDGs. For more than then years, the Group
has been supporting 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 and its Foundation through 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, Ministries of Education,
International Agencies) and with Schneider Electric’s local
subsidiary.
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Supporting training of trainers in the energy field
The Youth Education & Entrepreneurship program ensures
education quality by supporting trainers at partner training centers.
This assistance helps trainers understand the approach and
materials, facilitating effective knowledge transfer to students in
short, and long-term courses. The program aids trainers in
updating curricula and adding market-relevant modules, aiming to
expand dedicated training centers. This approach, backed by the
VolunteerIn association, focuses on the training of trainers for the
long-term transmission of quality, up-to-date knowledge. The
Institute of Electricity and Energy Management (IEEM) in
Bengaluru, Karnataka, India, is an example, 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-day training
program. This intensive training covers the latest technologies and
practices in electricity, including safety, domestic and industrial
distribution, energy quality, renewable energies, and energy
management. To date, 1,764 trainers have benefited from this
comprehensive training, ensuring the effective and long-term
transmission of quality, up-to-date knowledge in the energy sector.
2. Learn new skills for the future linked to the
energy transition
Since 2022, the Youth Education & Entrepreneurship program
supports the spread of the skills to unlock current and future
opportunities for the youth linked to the energy transition.
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
knowledge on the energy transition, 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. Schneider believes 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. The Youth Education & Entrepreneurship
program supports the development of training contents online and
offline, implementation of activities and follow-up of students,
development of concrete solutions by the students, competitions
and volunteering actions supported by the VolunteerIn association
of the Schneider Electric Foundation.
Testimony of a trainee in Pakistan
The Youth Education and Entrepreneurship program, in
collaboration with Muslim Hands has implemented actions
for Women Empowerment in Pakistan, to foster gender
inclusivity in the energy sector. This strategic partnership
has a specific focus to enhance female enrollment,
disseminate skills in the energy domain, and champion
equal access to training and education. By catalyzing
action, the initiative aims to expedite progress in gender
equality and contribute to the empowerment of women,
fostering an inclusive and sustainable energy transition.
“The Youth Education and Entrepreneurship
program shattered barriers and empowered me as a
young woman to discover my potential, embrace my
passions, and proactively shape my future in the
electrical field. It has instilled in me the belief that
my gender should never constrain my aspirations or
hinder me from realizing my dreams. My goal is to
become an electrical engineer and help my
community with sustainable energy solutions. This
program provides me with essential knowledge and
skills. It will contribute to my success by building a
strong foundation and teaching problem-solving. I
want to make a positive impact in remote areas.”
Hani Baig, 1st Year student Govt. College of
Technology, Karimabad, Karachi.
Educando Brazil
In collaboration with Educando, Schneider Electric and
its Foundation are actively enhancing STEM education in
Brazil. As a non-profit organization dedicated to
improving STEM courses, Educando is preparing 12
STEM learning activities linked to residential and
industrial electricity, and solar energy. This initiative
serves as a catalyst for change in 35 schools across
São Paulo state, offering courses in Industrial
Automation, Electronics, Electromechanics,
Mechatronics, and first and second-year STEM
programs. The primary aim is to address learning gaps
and reduce the number of students abandoning their
technical careers. By the end of 2023, 100% of STEM
benches have been implemented, positively impacting
30,000 students who have benefited from Energy and
STEM courses.
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3. Spread entrepreneurial spirit and encourage
innovation for the energy transition
Promoting self-employment initiatives in the
energy sector
The Youth Education & Entrepreneurship program, with 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 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. Schneider encourages them to
work in groups and participate in collective thinking.
The projects deliver support to young people over a period of three
months minimum.
New Skills for The Future, Mexico
Schneider Electric and its Foundation, in collaboration
with Enactus Mexico for the New Skills for The Future
program, has left a lasting impact. In 2023, across 400
universities and colleges in Mexico, the initiative
reached 60,000 students, with 50% being young women
empowered with essential entrepreneurial and
leadership skills. This program, which promotes social
entrepreneurship, goes beyond conventional models. It
not only equips students with tools for success in the
market but also fosters a commitment to positive change
in local communities. Schneider Electric’s dedication to
empowering young women aligns with its broader vision
of nurturing youth entrepreneurship, contributing to a
more sustainable and inclusive future.
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.
Economic and Social Development of Women
through Renewable Energies in the Sahel with Plan
International
Since 2019, in collaboration with Plan International, the Youth
Education & Entrepreneurship program has been actively
supporting the DESFERS (Economic and Social Development of
Women through Renewable Energies in the Sahel) initiative,
fostering economic and social development for women in the Sahel
region of West Africa. The program’s core objectives involve
training 7,000 women in solar energy, promoting the renewable
energy revolution, and facilitating economic activities through
improved energy access.
This transformative initiative addresses gender inequality in the
region by focusing on the renewable energy sector. It incorporates
community awareness, technical and soft skills training,
entrepreneurship support, and job creation within sustainable
energy. By introducing decentralized renewable energy solutions,
the program seeks to empower women to lead income-generating
activities, potentially transforming traditional gender roles.
The DESFERS initiative aims to facilitate access to entrepreneurship
in the sustainable energy sector for 4,500 small and medium-sized
enterprises owned by women. This includes creating a supportive
environment, providing access to credit and solar energy, and
strengthening capacities.
The project is already making strides in facilitating access to credit
for energy infrastructure, providing quality energy services, and
promoting women’s entrepreneurship in renewable energy.
Infrastructure projects, including solar installations, are underway in
Senegal, Mali, and Niger. Plan International plays a crucial role by
organizing workshops, awareness campaigns, and advocating for
the indispensable role of women in the renewable energy sector.
The project aims to break down socio-normative constraints and
create a more sustainable and inclusive future in the Sahel region.
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In 2023, the second cohort of students from the
ElectroMisr School in Egypt achieved a momentous
milestone by successfully graduating, underscoring the
school’s role in preparing a generation of skilled youth
for the workforce. This accomplishment is the result of
collaborative efforts between Schneider Electric and its
Foundation, in partnership with IECD (Institut Européen
de Coopération et de Développement). Pioneering in
Egypt as the first institution of its kind, the ElectroMisr
School stands as an exemplary model of innovation and
progress in the realm of TVET. Where conservative
norms and traditions often chart one’s destiny, stands
Shahd, an Egyptian girl who shines as a catalyst for
empowerment. Alongside her mother, she has assumed
the role of a promoter of TVET within their community.
Their home has become a haven for numerous girls’
parents, offering not only reassurance but also the
motivation to pursue electrical education.
Shahd Aly – 17 years old Egyptian girl – former student
at ElectroMisr School, and a current Schneider Electric
employee
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4. Gender strategy in the energy transition:
empowering women through education and
entrepreneurship
Since the inception of the Youth Education & Entrepreneurship
program, female participation in energy training has faced
challenges due to the male-dominated nature of the sector and
societal norms discouraging women from pursuing technical paths.
Schneider Electric and its Foundation are committed to breaking
these barriers by actively including women across the entire energy
value chain. Traditionally, women have been limited to non-
technical and administrative roles in the energy sector, but
Schneider Electric’s program supports local organizations focusing
on skills development and female empowerment.
These organizations specialized in creating inclusive ecosystems,
providing training, mentoring, and funding to empower women in
the energy sector and foster entrepreneurship. Simultaneously,
Schneider Electric and its partners engage in community
awareness, advocating gender equality from the grassroots level.
The Youth Education & Entrepreneurship program thus plays a dual
role, championing economic inclusion and gender equality.
Schneider Electric’s innovative gender strategy is designed to
support girls at all stages of their lives and careers. Starting with
STEM education initiatives for school-age girls, the Company
emphasizes capacity building, soft skills development, and
exposure to opportunities in the energy transition. The strategy
extends to TVET, addressing gaps in education and encouraging
girls to pursue technical fields.
Through skills-based programs, mentorship, and networking
opportunities, Schneider Electric and its Foundation actively
upskills girls and women, particularly in sustainability and green
energy. Mentorship and networks along with the provision of
funding and resources are crucial for nurturing leadership and
entrepreneurship. In the later stages of their careers, Schneider
Electric supports women in becoming successful entrepreneurs
and attaining leadership positions, completing the holistic
approach of the gender strategy. Schneider Electric’s commitment
is to empower girls and women to be the driving force behind the
progress of the energy transition and climate justice.
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Youth Education & Entrepreneurship program: key figures and 2025 targets
Youth trained
578,709
Trainers trained
8,511
2025 target:
1M
2025 target:
10K
Entrepreneurs
supported
8,236
2025 target:
10K
Equipment Donation
3,026,255k
16,322
youth trained
3% of total
6,413
youth trained
1% of total
63,255
youth trained
11% of total
94,604
youth trained
16% of total
133,895
youth trained
23% of total
37,771
youth trained
7% of total
226,449
youth trained
39% of total
Americas
Africa
Middle East
China
Asia & Indonesia (excl. China, India)
India
OECD Countries
2.6.4.3 Digital training to expand number of
learners
To promote training beyond usual partners and channels, the
content will also be distributed via other online learning platforms.
To take a step further, Schneider Electric intends to supplement its
training offer with digital learning curricula. This is fully in line with
the Group’s strategy, with the digitalization of its solutions and the
integration of artificial intelligence (AI) into its entire offering.
Additionally, it provides means to expand the number of learners,
allowing more people to train and pursue careers in energy and
automation, thanks to Schneider Electric’s digital learning courses.
The goal is to impact more than ten million people with training, by
2030, and make them ready for the energy transition.
Young people, all around the world, can learn about and contribute
towards the energy transition by training on the most innovative and
efficient Schneider Electric technologies. To achieve it, particular
attention is planned for disadvantaged populations, with adapted
courses on the basics of electricity, safety, and automation, and
with technological feasibility of offline digital trainings; translated
into local languages. A special focus to impact female population
will be organized through mentorship, role models, and learning
modules to increase awareness about industrial professions.
Digital learning offers a range of unique additional benefits. It
allows Schneider Electric to be more agile in the content offered; to
focus on courses that contribute to the energy and digital transition,
and to rapidly distribute content to partner training centers and
beyond the walls of conventional institutions. It appeals to the new
generation, already active on many online platforms, and offer them
innovative content that inspires them to join industrial professions.
Digital learning is also innovative. Immersive technologies allow
Schneider Electric to develop practical exercises using virtual,
augmented, or mixed reality. Embedding AI into conventional
pedagogical methods help create personalized learning courses
and adaptive learning to match the needs and progress of each
learner.
In 2023, Schneider Electric has designed and developed the first
digital learning course for Electrical Assistants to teach them how to
wire a house. This path will be available in 2024 on Schneider
University platform. Schneider also experimented with Schneider
Electric’s EcoStruxureTM Operator Advisor software practical
exercises in virtual and augmented reality. All exercises will
complement the digital learning path.
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Training young individuals through practical exercises for the jobs
of the future and allowing them to visualize what is possible today
will not only make a difference in their lives but will enrich Schneider
Electric’s communities now and for the future. They are the people
at the heart of energy transition; the future professionals who will
have to juggle multiple technologies: digital skills, information
technology (IT), and operational technology (OT) integration
together with energy efficiency, renewable energy, electric
vehicles, smart grids, robotics, cybersecurity, Industry 4.0, and
many more.
In 2023, Schneider Electric implemented more than 50 projects
which will impact more than 10,000 youths per year.
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To promote industry, and energy-related jobs, Schneider launched
three virtual tours of Schneider Electric’s factories in France,
focused on: circular economy, women in industry, and industry 4.0.
Schneider Electric, the International Trade Centre (ITC), a UN
agency, and the French NGO Atelier 21, developed an online
training module about the energy transition. Titled “Become a
Player in the Energy Transition”, the course is free to access and is
available to everyone in English. It aims to raise public awareness
and understanding of the political and technological challenges
and the benefits of the transition. Encompassing a variety of case
studies from rural and urban settings marked by differing levels of
development, the module also encourages participants to consider
professional opportunities in the clean energy sector by directing
them to more technical courses on solar power, wind power, and
other specialized areas.
For the 2 sessions already launched more than 800 people from
more than 60 countries registered, with a quarter earning
certification.
2.6.4.4 Didactic solutions for developing
digitally competent technicians and
engineers
On June 1, 2023, the first education equipment design
and experience center was inaugurated at the research
and development (R&D) facility in Bangalore. The key
focus is to design, develop and introduce new solutions
for the education segment. The center showcases
Schneider Electric’s existing technologies in Smart
Energy, Smart Buildings, and Smart Factory and is a
dedicated experience and learning center for in-
classroom and remote training for Schneider Electric’s
channel partners, authorized training partners, and for
the training of trainers in the education segment.
Schneider Electric is enlarging its training offer by designing and
equipping education centers to help youths to be digitally
competent technicians and engineers. It is a scalable, self-
sustaining business model. Building on its experience, the Group is
actively working with various education providers, vocational
training centers, engineering colleges, and universities in the fields
of electricity, automation, and energy management.
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2.6.4.5 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, smart home, smart
buildings, energy management, as well as Industry 4.0.
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).The Schneider Electric School now includes a high
school and a CFA (Apprentices Training Center).
The training offer of the CFA is focused on technical training of
excellence; it covers training on Schneider domains of expertise. It
combines academic education and practical experience gained
through professional activity within a company, resulting in a
professional certification, diploma, or title.
Throughout their training, the CFA provides support to apprentices
for various administrative tasks (registration, apprenticeship
contract, assistance with obtaining a driving license or housing,
etc.), ensuring a smooth journey towards professional integration.
Chapter 2 – Sustainable development
In September 2023, 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
Schneider Electric School continued its development:
• A new electrical engineering training path was launched at two
levels with the BAC and BTS in High School which now trains a
total of 160 students.
• The CFA took also new steps forward and expanded its range of
training courses both geographically and in terms of content by
forging new partnerships. In addition to the BTS “Fluids
Energies Home Automation” and the Licence professionnelle
“Connected Buildings and Intelligent Energy Management”
courses, offered by the CFA there are now new partnerhips to
increase its footprint in France:
− The vocational baccalaureate MELEC (Electrical Trades and
Connected Environments) with the Lycée Pablo Neruda in
Saint-Martin-d’Hères.
− The BTS CRSA (Design and Production of Automatic
Systems) with six partner schools : Vaucanson High School
in Grenoble, Gustave Monod and Leonard de Vinci High
Schools in Paris area, Louis Delage in Cognac, Leonce
Vieljeux in La Rochelle and Nelson Mandela in High Schools
in Poitiers.
− The BTS FED Home Automation and Communicating
Buildings, with three partner schools in Grenoble and Pays
de La Loire, extended to a new geographical area, with
Maximilien Perret High School in Alfortville and Gustave Eiffel
High School in Paris area.
− Professional licence in building, smart cities, and global
smart energy management in partnership with the Grenoble
University of Alps.
2023 was a successful year for the Schneider Electric School with:
• 100% success with honors in the baccalaureate diploma
• 100 apprentices with 90% graduating, 50% continuing studies,
and 50% gaining employment.
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2.6.5.1 Context and goals
Actions for multi-generational empowerment
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. 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.
2.6.5.2 Risks, impacts, and opportunities
There is an increasing risk of a worker shortage that must be
addressed. Globally, the gap between the skills and competencies
needed to drive the just energy transition and the existing ones is
growing due to two main reasons: technological advancements
and demographic shifts of an aging population. 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 the result of 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 skills gap during
a worker shortage and give everyone the opportunity to take
control of their professional future. The Group’s workforce, as well
as its external communities, must be supported and trained in
order to accomplish our common goal.
2.6.5.3 Empowering all generations to learn
and design their professional journey
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. Schneider Electric believes all
employees are talent and deserve equitable career development
opportunities to reach their fullest potential and create their
desirable professional future, at all stages of their career. The
Group leverages actions led by the Future Ready program to
enable employees, and even youth outside of the Company
primarily from disadvantaged backgrounds, design and build their
career path. To learn more about Schneider Electric’s actions for
harnessing the power of all generations, see section 2.5.2.7 on
page 222.
To accompany employees in creating a future based on their
individual aspirations, Schneider Electric Initiatives (which regroups
Creation Pass, Solidarity Pass, Competencies Pass, and Education
Pass) offers four innovative pathways to support employees in
designing their professional future while having a positive impact
on the local community.
1. The Creation Pass: an internal support system to help
employees start their own business. In the past ten years, 741
(42 in 2023) projects have been supported and 367 (18 in 2023)
of them have resulted in the creation or takeover of a business.
These businesses have created more than 498 (nine in 2023)
jobs in a range of sectors including electrical, organic trades,
restaurants, consultancy, asset management, and tech
start-ups.
2. The Solidarity Pass: a skill sponsorship which allows employees
to offer their skills, energy, and dedication to an NGO for a
certain period of time. In the past ten years, 114 (30 in 2023)
employees have benefited from a Solidarity Pass.
3. The Competencies Pass: a skill sponsorship where employees
offer start-ups/SMEs their knowledge and skills to enable local
economic development for a certain period of time. In the past
ten years, 12 (two in 2023) employees have benefited from a
Competencies Pass.
4. The Education Pass: a newly created opportunity where
employees can offer their knowledge and skills to an
educational body (e.g. partner universities and educational
ministries). This Pass envelops the already known IPE
(Ingenieurs pour l’école or Engineers for Schools) with 20
employees participating in 2023 and a new option where
employees can benefit from a skill sponsorship as a professor
or training project leader in the Schneider Electric School or with
a partner of the Schneider Electric School. In 2023, one
employee benefitted from this new format.
In 2023, the initiatives were deployed in Europe, starting in
Belgium, Germany, Austria, and Switzerland. In the coming years,
the ambition is to continue extending these meaningful career
opportunities to more employees. In France, Schneider Initiatives is
connected to, represented in, and supports local business
networks (e.g. Chambre de commerce et d’industrie, Réseaux
Entreprendre, DIESE), local public stakeholders (e.g. Direction du
Travail et de la Solidarité and different Préfectures) and local NGOs
(e.g. Emmaus Connect, Chemins d’Avenir, Energie Jeunes and La
Cravate Solidaire).
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Chapter 2 – Sustainable development
Actions for youth empowerment
Actions for senior empowerment
Today’s youth is the future, however, many young people are in
situations of low education or unemployment and therefore have
lower access to resources to build their skills. To support the
Group’s 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. The first two, “PaQte”
and Les Entreprises s’engagent, are sponsored by the French
Government. The third, Le Collectif d’Entreprises pour une
Économie plus Inclusive, gathers 38 major French companies
deploying collective actions concerning youth employment
(particularly in 14 French cities), inclusive offers, and procurement.
The actions on youth employment are being led by Schneider
Electric and Engie.
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. Within this
journey to further develop talent and enable all to take control of
their career path, the Senior Talent program was launched in 2021
connecting Schneider’s people and sustainability strategies with a
strong focus on meaningful career conversations, career
development opportunities, recognition, and knowledge transfer. In
2023, the Group accelerated the program from a pilot phase to a
global deployment via a strategic wave approach (beginning with
France, India, China, Germany, Switzerland, Austria, North
America, Pacific, UK, Ireland, and East Asia) to reach over 90% of
Schneider’s senior population by the end of 2025 (as measured
through SSE#23). To learn more about this program, see section
“Talent attraction and development” on pages 226 to 233.
Almost 20 years after having created it, Schneider Electric still
strongly supports the NGO 100 Chances 100 Emplois (100
Opportunities 100 Jobs) to help all young people find their own
path and develop their talents in all their diversity. This initiative
(focused on coaching, mentoring, and networking) has already
helped more than 10,000 young people make progress towards
employment when they were previously facing difficulties and
roadblocks, such as discrimination and/or a lack of network. 100
Chances 100 Emplois is now engaged in an ambitious expansion
plan (launched in early 2022) aiming at providing its benefits to
more young people (1,500+ in 2023) in more territories (50 in 2023).
The Senior Talent program
Powering the talent and aspirations
of our experienced #SEGreatPeople
“The Senior Talent program gave me clarity on my
path to transitioning, dispelled myths, and eased
fears. It empowered me to decide on a better
direction for my career, directly linked to my
personal aspirations.”
Srikanth Chappidi
Senior General Manager - Engineering
Schneider Electric is also focusing on its mission of empowering
young adults by offering more opportunities for professional
integration to apprentices, interns, and doctoral students. See
section 2.5.3.5 on page 227.
These actions complement the wider ecosystem of youth as part of
the NextGen Academy strategy.
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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
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2.7.5 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 a selection of Schneider
Electric’s non-financial performance indicators
as for the year ended December 31, 2023
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2.7.1 Methodology elements on the published indicators
In conformity with regulations in place and in the spirit of
transparency with its stakeholders, Schneider Electric regularly
publishes corporate social responsibility (CSR) data, which
notably includes:
• 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, i.e. 2023 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)
(ii)
Schneider Electric reports CSR data at Group level for all
financially consolidated entities over which it has operational
control.
New acquisitions are included in the reporting scope within
2 years, meaning that data is consolidated into Group
reporting 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 full-time equivalent (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 thus be recorded with
respect to the scope of financial consolidation.
Notable exclusions in 2023 (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 306 for each
topic and are generally well above 85%.
The Group has set a plan to increase its reporting coverage
progressively to at least 95%, as described above. The main non-IT
integrated entities will be integrated into the CSRD reporting as of
2024.
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Chapter 2 – Sustainable development
Company
AVEVA
(including
OSIsoft)
Acquisition
year
% Group
employees
2018
(2021)
4.2%
% Turnover
Comments
3.9% In 2023, Schneider Electric announced the completion of the transaction to
acquire the entire share capital of AVEVA. The full integration of AVEVA is in
progress.
Larsen & Toubro
2020
3.1%
Read more in AVEVA’s 2023 Sustainability Report (https://sustainability-report.
aveva.com/). AVEVA is excluded from all KPI calculations except SSI #1.
3.2% Larsen & Toubro’s integration is in progress. HR statistics are included in Group
results, which include SSE #13, SSE #16, SSE #18, SSE #20, SSE #23 and SSE
#24 in 2023. An exception is made for SSI #8, which is calculated on a constant
scope.
RIB Software
2020
1.9%
1.4% RIB Software’s integration is in progress. RIB Software is excluded from all
KPI calculations except SSI #1.
Other exclusions
–
3.5%
4.5% 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.
–
12.7%
13.0%
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.
Total maximum
exclusions
Internal control
Schneider Electric has drawn up a frame of reference with
dedicated reporting protocols for SSI and SSE indicators, and for
other HR, safety and environmental data. This frame of reference
includes the scope, collection and consolidation procedures and
definitions for these indicators.
The HR, safety and environmental data comes from our HR
Analytics for HR data, EcoStruxure™ Resource Advisor for
environmental data and GlobES (Global Environment and Safety)
for safety data. Its consolidation is placed respectively under the
Global Human Resources, Global Environment, and 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 SSI, SSE
and other Human Resources, Safety and Environmental indicators
(see independent verifier’s report on page 302). This external
assurance practice has been 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).
2.7.1.1 Indicators from the Schneider
Sustainability Impact
SSI #1: Grow Schneider Impact revenues to 80%
Schneider Impact revenues are defined as offers that bring energy,
climate, or resource efficiency to our customers. 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, electric vehicles
charging infrastructure, 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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3. Products with differentiating green performance, flagged
thanks to our Green Premium™ program. Green Premium™
products offer environmental transparency (with digital lifecycle
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 down 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 tonnes 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 vs. 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 International Energy Agency
(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 on 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 The Zero Carbon Project, the
Group partners with 1,000 of its suppliers, who commit to reduce
their company’s CO2 emissions (mandatory Scope 1 and 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, the 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, Schneider calculates 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 and 2
CO2 emissions 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; or
• a material that is the output of an industrial technology which is
a key enabler for a 1.5°C climate scenario and/or a more circular
economy.
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 tonnes.
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 tonnes of CO2
per ton of aluminum, is using a minimum of 90% of recycled content
in its product, or that the mill of origin has a green certificate such
as the ones delivered by the Aluminium Stewardship Initiative.
The scope will be reassessed annually as the program matures
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, with both tools
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. Prism and Puma enables the two levers mentioned
above by allowing Schneider Electric to track suppliers and
material grade.
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 North
America, 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 not 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 malpractices, 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 the International
Labour Organization (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 proactive
policy and provide a safe, attractive, inclusive workplace to their
employees, and treat all workers as the Group treat its own
workforce. Criteria defined for each Decent Work pillar may overlap
with ISO 26000 standard and are validated by the Global
Procurement, Human Resources, Supply Chain, and Sustainability
teams.
The suppliers will be assessed through remote questionnaires
supported by relevant documentation, as well as on-site visits and
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 was launched in 2022, and its was
integrated to the SSI score computation in the same year.
This indicator was audited by PricewaterhouseCoopers.
SSI #7: Measure the level of confidence of our
employees to report behaviors against our
principles of Trust
Our “Speak Up” mindset 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 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 in the OneVoice survey. 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. This KPI is integrated to the SSI score
computation since 2022.
This indicator was audited 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 Schneider operates. This indicator
measures female representation within Schneider, at the hiring,
front-line manager, and leadership levels.
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-President and Vice-President positions.
This is a composite indicator: the progress of each metric (new
hires, front-line 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 of new hires that are
women divided by total new hires in the current year x 100%.
• Percentage of female frontline managers: count of front-line
managers that are women divided by total front-line manager
population x 100%.
• Percentage of female leaders: count of women leaders
divided by count total leaders x 100%.
• Blended achievement percentage: weighted 1/3, based on
annual percent progression from base year to total five-year
achievement.
− 50% new hires progression: subtract current period percent
of women who are new hires from 2020 baseline and divide
by targeted 5-year progression target (9%).
− 40% front-line managers progression: subtract current
period percent of women who are front-line managers from
2020 baseline and divide by targeted five-year progression
target (15%).
− 30% leaders progression: subtract current period percent of
women who are leaders from 2020 baseline and divide by
targeted five-year progression target (6%).
− Calculate blended progression achievement percent: 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 Asia-Pacific, 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, EAV and GEIF II): 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, Schneider
applies the percentage of its participation 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 (such as 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. Its 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., interns, learning event about Schneider
and sustainability).
• Recent graduate hires are recent graduates or early career
professional hires from a formal education program whose
relationship with Schneider has a defined start date but
open-ended end date (i.e., open ended contract, fixed term
contract).
Chapter 2 – Sustainable development
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 include (cumulative
possible):
•
funding of electrical and didactic equipment, donation of
requested first generation equipment 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 the SSI), 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 KPIs.
The assessment of this objective goes as follows: KPIs are
validated by Zone/Country Presidents, and a local SSI lead is
designated and communicated to the Sustainability team. This local
SSI lead is in charge of consolidating KPI performance on an
annual basis.
For the calculation, as an example, 1 RM AirSet = 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 GHG emissions
related to energy consumption and has in place Digital Energy
Monitoring. Additionally, the site must have no SF6 leaks. Exclusions
for energy-related GHG 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,
EcoStruxure™ 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
EcoStruxure™ 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
and secondary switchgears up to 40.5 kV, indoor only:
A SF6-free ranges ready in 2020: Vacuum components, Premset,
primary AIS with vacuum 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 40.5 kV (WI, CBGS-2, Kite), outdoor equipment
such as pole mounted, reclosers, sectionalizers, and 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 ranges available for order (A+C above) compared to
the total quantity of the current ranges sold in the 2019 reference
base (for both medium voltage switchgears and components). The
current range for 2019 reference base is defined as the sum of the
current SF6 and non-SF6 (Air, Vacuum) 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 on-site and consumed on-site;
• 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 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 vs. a baseline year (2019) for the
whole duration of the program. In order to ensure a fair calculation
of the savings, the actual consumption of a site is normalized vs.
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 modeled is taken into account and converted into MWh.
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 of all
countries to eventually correct, complete, or complement the
information (considering for instance vehicles under local leasers).
This indicator was audited by PricewaterhouseCoopers.
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 resource-efficient products (energy at
usage, low CO2, material efficiency) whose footprints are fully
available through the “Product Environmental Profile” relying on
lifecycle 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 Electric
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 the 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 support of countries in the transition. As a
mid-term objective, by 2025, Schneider commits to switch a third
(1/3) of its fleet to EVs.
Schneider Electric uses the definition by the Climate Group for EVs,
including:
• Battery Electric Vehicle (BEV);
• Plug-in hybrids (PHEV): Extended Range Vehicle (EREV) and
Fuel Cell Electric Vehicle (FCEV) - with at least 50 km of
electrical autonomy.
Vehicles’ spot count is taken on 31st December. The share of EVs in
fleet is calculated by dividing EV count by total vehicle count.
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” (two required for large ISO 14001 sites, one 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 tonnes 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 and energy
consumption, CO2 emissions, and/or water depletion.
Activities in this KPI will enrich on the basis of Schneider Electric’s
increasing focus on circularity business models, and are currently
constituted of:
• Batteries take back and recycling;
• Volume of devices refurbished and repaired in our repair
centers (e.g., 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 the 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 our Ethics & Compliance and Cybersecurity programs,
training of employees on ethics, corruption risks (for eligible employees),
and cybersecurity is mandatory. To ensure this, 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
(replaced in September 2021 by the Trust Charter, Schneider’s
Electric Code of Conduct) and Anti-corruption.
• 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 fixed-term contracts (FTC)
are included), present in the Group on December 31st and hired
before December 1st.
• Anti-corruption 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.
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SSE #14: 0.38 or below Medical Incident Rate
Safety is one of the five pillars of Schneider Electric’s 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 and Safety management and performance
before they engage and continue to do business with Schneider
Electric.
Moreover, at Schneider Electric our mission is to ensure the
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 well-being 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 counseling; 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 a customer satisfaction level: by producing and delivering
back orders impacted by component shortages, by serving new
customer orders, and on Sustainability level by anticipating
upcoming regulation compliance (anti-waste laws), reducing
carbon footprint of our supply chain, and reducing the cost of poor
quality due to product recalls.
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 reducing the total number of
safety recalls issued to 0.
This KPI covers customer notification and containment actions from
any suspected condition in Schneider Electric’s offer that may
cause customer bodily injury or property damage with 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: the
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. Impacts are
therefore quite varied: reputational impacts, legal impacts, people
health and safety, environmental pollution, etc.
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 third-party
methodology, RBA, or other) with on-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 or past years.
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
months 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, Organisation for Economic
Co-operation and Development (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 the
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 four in
the next five years.
Interactions are tracked in the tool for each feature of OTM. At the
start of 2021, current features available to employees are:
• positions;
• projects; and
• mentorships.
These three 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 (i.e., plant),
contractors, and interns/apprentices.
This indicator was audited by PricewaterhouseCoopers.
SSE #22: >90% of employees undergo digital
upskilling
The Group is committed to growing employee digital citizenship
and aims to achieve digital upskilling for >90% of employees by
2025. The progress combines white collar and worker populations’
KPIs.
• For white collars, the Group aims to achieve >90% eligible
employees reaching Intermediate, Advanced, or Expert Digital
Citizenship level by 2025. The Digital Citizenship level of all
employees will be assessed by their managers each year.
Eligible employees in 2021 are active employees hired before
January 31st 2021, open-ended and fixed-term contracts, and
excludes employees in non-integrated entities and further
exclusions defined by country.
• For workers, the Group aims to achieve >90% of workers
complete 2 hours of training per year offered by the GSC
Academy on digital transformation, such as the Smart Factory
program, Cybersecurity, and Digital knowledge. The scope
covers active workers populations and plant team leaders
defined by specific job codes and hired before January 31st
2021, Open-ended and fixed-term contracts (China only) in
relevant operating units, and excludes workers on extended
leave of more than six 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 percentage based on the percent of
employees meeting the target defined for white collars and workers
to the total employee population in scope (white collars and
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
were launched fully in 2022. As such, the baseline year for this
indicator is 2022.
The indicator is calculated as the 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 standards for a program
include:
• Training, coaching, or one-to-one support available for
employees (and their managers) in the later stages of their
professional career enabling them to have a career check-in/
next-step conversation that results in a meaningful career
development plan.
• A selection of support options available in the employees’
country that may include flexible work, upskilling and career
growth options, career pivot options, personal planning options,
or workplace adjustments.
The methodology for this indicator was reviewed by
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 the Group employees, and serves a starting point to adapt
its 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-point
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, and 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
was not organized in 2021 for safety reasons. Only missions lasting
a minimum of 0.5 days are considered.
This indicator was audited by PricewaterhouseCoopers.
Chapter 2 – Sustainable development
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 revenue, capital expenditure (CapEx), and operating
expenditures (OpEx), Schneider Electric provides the following
additional details:
Calculation of Taxonomy-eligible and -aligned
revenue
This calculation is using two combined approaches, including an
offer-based approach (i.e., by nature of technology), whereby each
line of business’ offers are reviewed against the definition of
economic activities of the EU Climate and Environmental 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) is reviewed. There is no double-
counting between the two approaches as the revenues from the
offers assessed under the end-segment approach are not included
in the revenues assessed under the offer-based approach.
As detailed in Annex 1 of the Delegated Act on Article 8, the
denominator of Taxonomy-eligible revenue is equal to the net
revenue recognized pursuant to IAS 1.82(a) after removal of
intra-group transactions. At Schneider Electric, this represents EUR
35,902 million, as disclosed in the first line of the consolidated
statement of income in this Universal Registration Document
(page 452).
For 81% of revenues (excluding entities having their own reporting
framework), eligibility calculation combines two approaches:
• For 80% of revenues, eligibility and alignment calculation is
using an offer-based approach (by nature of technology),
whereby workshops are conducted with sustainability,
marketing, and offer management teams for each line of
business to define whether products are in line with the
definition of economic activities included in the Delegated Acts.
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 accounting
for only 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 Delegated Acts and provide with
the related amount of revenues generated from Taxonomy-
eligible end-segments (Green Transport and Renewables).
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 80% of revenues
(excluding entities having their own reporting framework).
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For the remaining 19% 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.
Calculation of Taxonomy-eligible and -aligned
capital expenditure (CapEx)
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 is not allocated per product category. The
ratio of eligibility and alignment used for the rest of the product
line is applied to those revenues, contributing to less than 5% of
the total eligible 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.
• Activity CCM 3.5 (manufacture of energy efficiency equipment
for buildings): Schneider’s eligible revenues are split across
eight technical screening criteria such that only the most
efficient cooling systems qualify under CCM 3.5.i (cooling and
ventilation systems rated in the highest two populated classes of
energy efficiency) and only UPS with power chute capability
qualify under CCM 3.5.m (energy-efficient building automation
and control systems).
• Activity CCM 3.6 (manufacture of low carbon technologies):
GHG emission savings are calculated using Schneider’s saved
and avoided emissions methodology. This calculation method
was audited by an independent third-party in accordance with
ISO 14067:2018 standard.
• Activity CCM 3.20 (manufacture, installation, and servicing of
high, medium and low voltage electrical equipment for electrical
transmission and distribution that result in or enable a
substantial contribution to climate change mitigation): revenues
from medium voltage switchgears with SF6 gas, as well as
revenues from fossil power generation and the fossil fuel value
chain are eligible but not aligned.
• Activity CE 1.2 (manufacture electrical and electronic
equipment): challenges in assessing the alignment of economic
activities with the technical screening criteria led to a
conservative disclosure whereby all revenues eligible under this
activity have been declared as non-aligned. Schneider Electric
is continuously reviewing and improving its circular practices via
its EcoDesign Way™ process and Green Premium™ program to
further reduce the environmental impact of its products. See
more details in section 2.4 on page 184.
• Activity CE 4.1 (provision of IT/OT data-driven solutions and
software): revenues from predictive maintenance systems and
software are eligible but not aligned due to the impossibility to
assess if those systems and software are used to monitor any
type of fossil fuel engine.
See detailed proportion of turnover from Taxonomy-eligible and
-aligned activities in the template required by EU Taxonomy
Delegated Act on Article 8 on page 284.
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 2023 (including IFRS 16 rights of use), considered
before depreciation, amortization, and any remeasurement,
including those resulting from revaluations and impairments for the
financial year 2023 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 2023.
At Schneider Electric, total tangible assets resulting from the above
definition represents EUR 912 million over 2023, including EUR 910
million from additions, as disclosed in note 11 of the Group financial
statements, and EUR 2 million from business combinations.
The total covered IFRS 16 rights of use over 2023 represents EUR
305 million, as disclosed in note 11 of the Group financial
statements (page 480).
The total intangible assets resulting from the above definition
represents EUR 457 million over 2023. This amount is split as
follows: EUR 451 million from additions, as disclosed in the note 10
of the Group financial statements (page 478) – this includes EUR
328 million of capitalized Research and Development (R&D)
projects, as disclosed in the note 10 of the Group financial
statements, and EUR 6 million from business combinations.
As per specification of CapEx as detailed in Annex 1 of the
Delegated Act on Article 8, all CapEx 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 activity
CCM 7.7 (acquisition and ownership of buildings). CapEx related to
assets, processes, and business combinations associated with
Taxonomy-eligible and -aligned activities were calculated with a
high level of granularity using allocation keys of eligible, and
respectively aligned, revenue per business and operations, except
for R&D and IFRS 16 CapEx. The allocation keys methodology is
considered as a conservative approach as it is based on the
current activity of each product line, which does not consider the
transformations driven by the product lines’ investments in the
calculation of Taxonomy-eligible and -aligned CapEx KPIs.
As described more exhaustively in section 2.3.4 on page 166,
product-related R&D projects of the Group aim at and demonstrate
a substantial carbon footprint saving through more efficient
products and systems. Those improvements are measured with a
life cycle assessment shared publicly in the Product Environmental
Profile, aligned with ISO 14067 and verified by an independent
third party. Thus, 2023 R&D capitalized expenditures directly linked
to capitalized product-related R&D projects are considered both
eligible and aligned according to activity CCM 3.6 (manufacture of
other low carbon technologies).
See detailed proportion of CapEx from Taxonomy-eligible and
-aligned activities on page 288.
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Chapter 2 – Sustainable development
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.
Read more about the Group climate risk management and
adaptation measures in the section 2.3.1 on page 156.
This applies to activities belonging to objectives:
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 2.4.5.4 on page 203.
This applies to activities belonging to objectives:
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 2.4.3, page 190.
This applies to activities belonging to objectives:
Calculation of Taxonomy-eligible and -aligned
operating expenditure (OpEx)
To determine the Group’s EU Taxonomy-eligible and -aligned
operating expenditure, only non-capitalized costs related to 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 1,758 million over 2023, corresponding mainly to
non-capitalized R&D costs of the Group for EUR 1,688 million
presented before offsetting with the R&D Tax Credit for EUR 58
million, as disclosed in note 4 of the Group financial statements
(page 474). This includes non-capitalized costs relative to product-
related R&D projects but also, among others, costs incurred in
relation with support and platforming, and costs of IT global
applications dedicated to R&D, costs relative to continuous
engineering costs for quality, productivity, and obsolescence. 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 71
million and is therefore considered non-material for Schneider
Electric’s business, and thus excluded from the OpEx analysis and
OpEx KPIs numerators.
As described more exhaustively in section 2.3.4 on page 166 and
mentioned for CapEx, product-related R&D projects of the Group
aim at and demonstrate substantial carbon footprint savings.
Taxonomy-eligible and -aligned OpEx KPIs numerator corresponds
to operating expenditure directly associated with the Group’s
product-related R&D projects: these OpEx are therefore both
Taxonomy-eligible and -aligned under activity CCM 3.6
(manufacture of other low carbon technologies).
See detailed proportion of OpEx from Taxonomy-eligible and
-aligned activities is available on page 292.
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 environmental
objectives.
Schneider Electric’s activities are subject to the specified DNSH
requirements where the objective it belongs to is shown:
Climate change mitigation (CCM)
Protection of water and marine resources (WTR)
Transition to a circular economy (CE)
As the Group’s activities are linked to only 3 of the 6
environmental objectives, icons for the 3 remaining objectives
are not shown.
For activities belonging to environmental objectives as shown by the
icons below, this means that they must not do significant harm to:
Climate change mitigation:
Schneider Electric has developed strategies to account for and
reduce the GHG emissions of its activities along the value chain.
Read more about Schneider Electric’s strategies and actions for
GHG emissions reduction in section 2.3 on page 154, section 2.4
on page 184, as well as the Group’s GHG footprint in section 2.8.1
on page 310.
This applies to activities belonging to objectives:
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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.
In cases where Schneider Electric intends to build a new site, the
Group may need to complete an EIA. However, due to the nature of
the activities performed on Schneider Electric’s sites, those
projects are not likely to have significant effects on the environment
and are not listed in the Annex I nor in the Annex II of the Directive
2011/92/EU, for which an EIA is needed.
Schneider Electric has defined a process to conduct Environmental
Site Assessments (ESA) as part of its due diligence phase of new
mergers and acquisitions, primarily to detect contamination of soil,
ground water surface, water sediment, and soil vapor from known
or unknown releases of chemicals, petroleum, or related wastes.
The VP Safety Environment & Real Estate accountable for the EHS
compliance of the entity under due diligence has established an
assessment framework and conducts the necessary check in all
due diligence process as part of the due diligence team.
Schneider Electric requires a Phase I ESA to be performed on all
global real estate transactions involving manufacturing properties
and, other potentially higher risk sites including factories,
distribution centers, or properties with prior industrial activity. The
ESA is performed by an independent environmental consultant.
Schneider’s assessments and actions on biodiversity are detailed
in section 2.4.2 on page 187.
This applies to activities belonging to objectives:
Chapter 2 – Sustainable development
2.7 Methodology and audit of indicators
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 the Group do not use
mercury in its products nor in its manufacturing activities.
• Regarding the directive on the restriction of the use of certain
hazardous substances in electrical and electronic equipment
(RoHS) and the Regulation concerning the Registration,
Evaluation, Authorization and Restriction of Chemicals (REACH),
9% of Schneider Electric’s revenues are coming from products
with substances either listed in either the Annex II to RoHS or
the list of restricted substances (Annex XVII) to REACH. 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)
1907/2006 and identified in accordance with Article 59(1) of that
Regulation, and except if it is assessed and documented by the
operators that no other suitable alternative substances or
technologies are available on the market, and that they are used
under controlled conditions, Schneider declared as non-aligned
all revenues coming from such products, amounting to 13% of
eligible revenues.
• Regarding substances laid down in Article 57 of Regulation (EC)
1907/2006, and not identified in accordance with Article 59(1) of
that Regulation, 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
gradually improve the traceability of the components of each
products beyond tier 1, and to make this information digitally
available to its customers.
• RoHS application scope in the EU Taxonomy can be seen as
ambiguous. As such, RoHS exemptions, which are granted
when there is no alternative solution available and no exposure
for humans and the environment, were used as a proxy for
exemptions to criteria (f) of the generic criteria for DNSH on
pollution and prevention and control.
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 solutions provider in those projects.
This applies to activities belonging to objectives:
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Chapter 2 – Sustainable development
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 four 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 Schneider Electric’s Vigilance Plan as well as section 2.2.2 on page 115.
Corruption
The Company has anti-corruption processes in place. For details, see section 2.2.7 on page 130.
Taxation
The Company treats 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 2.2.9 on page 134.
Fair competition
The Company promotes employee awareness of the importance of compliance with all applicable competition laws and regulations.
For details, see section 2.2.8 on page 133.
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2.7 Methodology and audit of indicators
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 2023, a number of activities have been added (activity 3.20 supporting climate change mitigation,
activities 1.2, 4.1, 5.1, 5.2, and 5.5 supporting the transition to circular economy, and activities 1.1 and 4.1 supporting the protection of water
and marine resources) compared with 2022. Revenues related to the manufacture, installation, and servicing of high, medium, and low
voltage electrical equipment for electrical transmission and distribution in support of climate change mitigation, previously classified under
activity 4.9, have been transferred under activity 3.20.
Activity name and code as specified in
the EU Climate, Environmental and
Disclosure Delegated Acts
Activity definition as specified in the EU Climate
and Environmental Delegated Acts
Corresponding business activities
of Schneider Electric
CCM 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 technologies that are essential
parts of the systems producing electricity from
renewable energy sources: inverters, mounting
frames, solar panels, other solar equipment,
wind farm microgrid, and others
CCM 3.5 Manufacture of energy
efficiency equipment for
buildings
CCM 3.6 Manufacture of low
carbon technologies
CCM 3.20 Manufacture, installation,
and servicing of high,
medium and low voltage
electrical equipment for
electrical transmission
and distribution that
result in or enable a
substantial contribution
to climate change
mitigation
CCM 6.14 Infrastructure for rail
transport
CCM 6.15 Infrastructure enabling
low-carbon road
transport and public
transport
CCM 6.16 Infrastructure enabling
low-carbon water
transport
CCM 6.17 Low carbon airport
infrastructure
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
• Insulating products
• UPS with an audited methodology to calculate
GHG emission reductions
• Transmission and distribution wiring devices
for wiring electrical circuits
• Low voltage electrical products, equipment,
and systems
• SF6-free medium voltage switchgears and
control gears that increase the controllability
of the electricity system
• Demand response and load shifting equipment,
systems, and services
• Communication, software and control
equipment, products, systems, and services
for energy efficiency
• Manufacture of variable speed drives
• Equipment, projects, as well as modernization
and maintenance services for rail transport
infrastructure
• Equipment, projects, as well as modernization
and maintenance services for zero-emissions
road transport, as well as infrastructure
required for operating urban transport
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.
Manufacture, installation, maintenance, or service of
electrical products, equipment, or systems, or
software aimed at substantial GHG emission
reductions in high, medium, and low voltage electrical
transmission and distribution systems through
electrification, energy efficiency, integration of
renewable energy, or efficient power conversion.
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.
Construction, modernization, maintenance, and
operation of infrastructure that is required for zero
tailpipe CO2 operation of zero-emissions road
transport, as well as infrastructure dedicated to
transshipment, and infrastructure required for
operating urban transport.
Construction, modernization, operation, and
maintenance of infrastructure that is required for zero
tailpipe CO2 operation of vessels or the port’s own
operations, as well as infrastructure dedicated to
transshipment and modal shift and service facilities,
safety and traffic management systems.
• Equipment, projects, as well as modernization
and maintenance services for low-carbon port
infrastructure
• Equipment, projects, as well as modernization
and maintenance services for electrification
and efficiency of ports’ operations
Construction, modernization, maintenance, and
operation of infrastructure that is required for zero
tailpipe CO2 operation of aircraft or the airport’s own
operations, and for provision of fixed electrical ground
power and preconditioned air to stationary aircraft as
well as infrastructure dedicated to transshipment with
rail and water transport.
• Energy management equipment, projects, as
well as modernization and maintenance
services for low-carbon airport infrastructure
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Chapter 2 – Sustainable development
Activity name and code as specified in
the EU Climate, Environmental and
Disclosure Delegated Acts
CCM 7.5
Installation, maintenance
and repair of instruments
and devices for
measuring, regulation
and controlling energy
performance of buildings
CCM 8.2 Data-driven solutions for
GHG emissions
reductions
CCM 9.3 Professional services
related to energy
performance of buildings
WTR 1.1 Manufacture, installation
and associated services
for leakage control
technologies enabling
leakage reduction and
prevention in water
supply systems
WTR 4.1 Provision of IT/OT
data-driven solutions for
leakage reduction
CE 1.2
Manufacture of electrical
and electronic
equipment
CE 4.1
Provision of IT/OT
data-driven solutions
CE 5.1
Repair, refurbishment,
and remanufacturing
Activity definition as specified in the EU Climate
and Environmental Delegated Acts
Corresponding business activities
of Schneider Electric
Installation, maintenance, and repair of instruments
and devices for measuring, regulation, and controlling
energy performance of buildings.
• Service plans related to building management
and power metering systems in buildings
Development or use of ICT solutions that are aimed at
collecting, transmitting, storing data and at its
modeling and use where those activities are
predominantly aimed at the provision of data and
analytics enabling GHG emission reductions.
Professional services related to energy performance
of buildings.
Manufacture, installation, or provision of associated
services for leakage control technologies that enable
leakage reduction and prevention in water supply
systems.
• Software and data-driven solutions aiming at
improving efficiency in building design,
planning, and construction
• Technical consultations such as energy audits,
simulations, and trainings
• Energy management services
• Energy performance contracts
• Leakage control technologies for water supply
systems
Manufacture, development, installation, deployment,
maintenance, repair, or provision of professional
services for IT or OT data driven solutions to control,
manage, reduce, and mitigate leakage in water supply
systems.
• Real-time network modeling and optimization
• Leakage calculation, control, and reporting
Manufacture of electrical and electronic equipment for
industrial, professional, and consumer use.
• Electrical and electronic equipment
Manufacture, development, installation, deployment,
maintenance, repair, or provision of professional
services for design or monitoring of software and/or IT/
OT systems, built for: remote monitoring and predictive
maintenance; providing identification, tracking, and
tracing of materials, products, and assets to support
circularity of material flows or other objectives of the
Taxonomy; lifecycle performance management
software supporting the monitoring and assessment of
circularity performance.
Repair, refurbishment, and remanufacturing of goods
that have been used for their intended purpose before
by a customer.
• Remote monitoring and predictive maintenance
systems
• Lifecycle performance management software
• Repairing, refurbishing, or remanufacturing
products that have already been used
CE 5.2
Sale of spare parts
Sale of spare parts beyond legal obligations.
• Sale of spare parts
CE 5.5
Product-as-a-service
and other circular use-
and result-oriented
service models
Providing customers with access to products through
service models, which are either use-oriented or
result-oriented services.
• Software as a Service offers
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2.7 Methodology and audit of indicators
Proportion of turnover from Taxonomy-aligned activities
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic Activities
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Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
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A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
Manufacture of renewable energy technologies
CCM 3.1
129
Manufacture of energy efficiency equipment
for buildings
CCM 3.5
1,035
Manufacture of other low carbon technologies
CCM 3.6
121
0%
3%
0%
Manufacture, installation, and servicing of HV, MV and
LV electrical equipment for electrical transmission
and distribution that result in or enable a substantial
contribution to climate change mitigation
CCM 3.20
6,703
19%
Transmission and distribution of electricity
Infrastructure for rail transport
Infrastructure enabling low carbon road transport
and public transport
CCM 4.9
CCM 6.14
-
52
CCM 6.15
183
Infrastructure enabling low carbon water transport
CCM 6.16
Low carbon airport infrastructure
CCM 6.17
50
32
-
0%
1%
0%
0%
Installation, maintenance and repair of instruments
and devices for measuring, regulation and controlling
energy performance of buildings
CCM 7.5
494
1%
Professional services related to energy
performance of buildings
CCM 9.3
1,157
3%
Y
Y
Y
Y
N/EL
Y
Y
Y
Y
Y
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
Manufacture, installation and associated services for
leakage control technologies enabling leakage
reduction and prevention in water supply systems
Provision of IT/OT data-driven solutions
for leakage reduction
Provision of IT/OT data-driven solutions
Repair, refurbishment and remanufacturing
Sale of spare parts
Product-as-a-service and other circular use- and
result-oriented service models
Turnover of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
WTR 1.1
WTR 4.1
2
9
CE 4.1
1,003
CE 5.1
CE 5.2
51
215
CE 5.5
3
0%
N/EL
N/EL
Y
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
0%
3%
0%
1%
0%
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
4%
3%
N/EL
N/EL
N/EL
N/EL
-
-
Of which enabling
10,970
31%
28%
Of which transitional
-
-
-
= not relevant. N/A = not applicable.
11,240
31%
28%
-
-
0%
0%
-
-
Proportion of
Taxonomy-
aligned (A.1.) or
-eligible (A.2.)
turnover, year N-1
Category
enabling
activity
Category
transitional
activity
(18)
Percent
(19)
E
(20)
T
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
g
e
(12)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
W
a
t
e
r
(13)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
P
o
l
l
u
t
i
o
n
(14)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
C
i
r
c
u
l
a
r
E
c
o
n
o
m
y
(15)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
B
i
o
d
i
v
e
r
s
i
t
y
(16)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
S
a
f
e
g
u
a
r
d
s
M
i
n
i
m
u
m
(17)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
0%
2%
1%
N/A
12%
0%
1%
0%
0%
1%
3%
N/A
N/A
N/A
N/A
N/A
N/A
20%
20%
-
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
T
Continued on next page
T
R
O
P
E
R
C
I
G
E
T
A
R
T
S
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Proportion of turnover from Taxonomy-aligned activities
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic Activities
C
o
d
e
(
s
)
T
u
r
n
o
v
e
r
T
u
r
n
o
v
e
r
,
y
e
a
r
N
P
r
o
p
o
r
t
i
o
n
o
f
M
i
t
i
g
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
W
a
t
e
r
P
o
l
l
u
t
i
o
n
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Million Euros Percent
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
C
i
r
c
u
l
a
r
E
c
o
n
o
m
y
(9)
B
i
o
d
i
v
e
r
s
i
t
y
(10)
Y; N;
N/EL(1)
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
g
e
(12)
Y/N
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
Manufacture of energy efficiency equipment
for buildings
Manufacture, installation, and servicing of HV, MV and
LV electrical equipment for electrical transmission
and distribution that result in or enable a substantial
contribution to climate change mitigation
Manufacture of renewable energy technologies
CCM 3.1
129
N/EL
N/EL
N/EL
N/EL
N/EL
Manufacture of other low carbon technologies
CCM 3.6
121
N/EL
N/EL
N/EL
N/EL
N/EL
CCM 3.5
1,035
N/EL
N/EL
N/EL
N/EL
N/EL
CCM 3.20
6,703
19%
N/EL
N/EL
N/EL
N/EL
N/EL
Transmission and distribution of electricity
Infrastructure for rail transport
CCM 4.9
CCM 6.14
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
Infrastructure enabling low carbon road transport
and public transport
Infrastructure enabling low carbon water transport
CCM 6.16
Low carbon airport infrastructure
CCM 6.17
Installation, maintenance and repair of instruments
CCM 6.15
183
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
and devices for measuring, regulation and controlling
CCM 7.5
494
N/EL
N/EL
N/EL
N/EL
N/EL
leakage control technologies enabling leakage
WTR 1.1
0%
N/EL
N/EL
N/EL
N/EL
N/EL
energy performance of buildings
Professional services related to energy
performance of buildings
Manufacture, installation and associated services for
reduction and prevention in water supply systems
Provision of IT/OT data-driven solutions
for leakage reduction
Provision of IT/OT data-driven solutions
Repair, refurbishment and remanufacturing
Sale of spare parts
Product-as-a-service and other circular use- and
result-oriented service models
Turnover of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
= not relevant. N/A = not applicable.
CCM 9.3
1,157
3%
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
WTR 4.1
N/EL
N/EL
N/EL
N/EL
N/EL
CE 4.1
1,003
CE 5.1
CE 5.2
51
215
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
CE 5.5
3
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
4%
3%
N/EL
N/EL
N/EL
N/EL
-
-
Of which enabling
10,970
31%
28%
Of which transitional
-
-
-
11,240
31%
28%
-
-
0%
0%
-
-
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
0%
3%
0%
-
0%
1%
0%
0%
1%
0%
3%
0%
1%
0%
-
52
50
32
2
9
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
W
a
t
e
r
(13)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
P
o
l
l
u
t
i
o
n
(14)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
C
l
i
r
c
u
a
r
E
c
o
n
o
m
y
(15)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Chapter 2 – Sustainable development
Proportion of
Taxonomy-
aligned (A.1.) or
-eligible (A.2.)
turnover, year N-1
Category
enabling
activity
Category
transitional
activity
i
i
B
o
d
v
e
r
s
i
t
y
S
a
f
e
g
u
a
r
d
s
i
i
M
n
m
u
m
(16)
Y/N
(17)
Y/N
(18)
Percent
(19)
E
(20)
T
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
0%
2%
1%
N/A
12%
0%
1%
0%
0%
1%
3%
N/A
N/A
N/A
N/A
N/A
N/A
20%
20%
-
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
T
Continued on next page
(1) Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective;
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective;
N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective.
(2) This figure is less than EUR 0.5 million
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Chapter 2 – Sustainable development
2.7 Methodology and audit of indicators
Proportion of turnover from Taxonomy-aligned activities continued
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic Activities
C
o
d
e
(
s
)
T
u
r
n
o
v
e
r
T
u
r
n
o
v
e
r
,
y
e
a
r
N
P
r
o
p
o
r
t
i
o
n
o
f
M
i
t
i
g
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
W
a
t
e
r
P
o
l
l
u
t
i
o
n
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
C
l
i
r
c
u
a
r
E
c
o
n
o
m
y
(9)
i
i
B
o
d
v
e
r
s
i
t
y
(10)
(13)
(14)
(15)
(16)
(17)
(19)
(20)
Million Euros Percent
EL; N/EL(3) EL; N/EL(3) EL; N/EL(3) EL; N/EL(3) EL; N/EL(3) EL; N/EL(3)
A.2. Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities)
Manufacture of renewable energy technologies
CCM 3.1
33
Manufacture of energy efficiency equipment
for buildings
CCM 3.5
409
Manufacture of low carbon technologies
CCM 3.6
441
0%
1%
1%
EL
EL
EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
Manufacture, installation, and servicing of HV, MV and
LV electrical equipment for electrical transmission and
distribution that result in or enable a substantial
contribution to climate change mitigation
CCM 3.20 5,484
15%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
Transmission and distribution of electricity
Infrastructure for rail transport
CCM 4.9
CCM 6.14
-
1
Infrastructure enabling low carbon road transport and
public transport
CCM 6.15
31
Infrastructure enabling low carbon water transport
CCM 6.16
Low carbon airport infrastructure
CCM 6.17
Data-driven solution for GHG emission reductions
CCM 8.2
0(2)
8
88
-
0%
0%
0%
0%
0%
N/EL
EL
EL
EL
EL
EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
Manufacture, installation and associated services for
leakage control technologies enabling leakage
reduction and prevention in water supply systems
Provision of IT/OT data-driven solutions for leakage
reduction
WTR 1.1
4
0%
N/EL
N/EL
EL
N/EL
N/EL
N/EL
WTR 4.1
293
1%
N/EL
N/EL
EL
N/EL
N/EL
N/EL
M
i
t
i
g
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
(11)
A
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
(12)
W
a
t
e
r
P
o
l
l
u
t
i
o
n
C
i
r
c
u
l
a
r
E
c
o
n
o
m
y
B
i
o
d
i
v
e
r
s
i
t
y
S
a
f
e
g
u
a
r
d
s
M
i
n
i
m
u
m
Proportion of
Taxonomy-
aligned (A.1.) or
-eligible (A.2.)
turnover, year N-1
Category
enabling
activity
Category
transitional
activity
(18)
Percent
0%
2%
2%
N/A
4%
-
-
-
-
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
8%
29%
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
EL
EL
EL
EL
EL
39%
43%
N/EL
N/EL
N/EL
N/EL
N/EL
-
-
CE 4.1
CE 5.1
CE 5.2
CE 5.5
161
21
59
0(2)
0%
0%
0%
0%
Manufacture of electrical and electronic equipment
CE 1.2
13,825
39%
Provision of IT/OT data-driven solutions
Repair, refurbishment and remanufacturing
Sale of spare parts
Product-as-a-service and other circular use- and
result-oriented service models
Turnover of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
A. Turnover of Taxonomy-eligible activities (A.1 +
A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities (B)
Total (A+B)
= not relevant. N/A = not applicable.
20,860
58%
18%
32,099
89%
46%
-
-
1%
1%
-
-
3,803
11%
35,903
100%
T
R
O
P
E
R
C
I
G
E
T
A
R
T
S
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Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic Activities
C
o
d
e
(
s
)
T
u
r
n
o
v
e
r
M
i
t
i
g
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
W
a
t
e
r
P
o
l
l
u
t
i
o
n
C
i
r
c
u
l
a
r
E
c
o
n
o
m
y
(9)
B
i
o
d
i
v
e
r
s
i
t
y
(10)
M
i
t
i
g
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
(11)
A
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
(12)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Million Euros Percent
EL; N/EL(3) EL; N/EL(3) EL; N/EL(3) EL; N/EL(3) EL; N/EL(3) EL; N/EL(3)
W
a
t
e
r
P
o
l
l
u
t
i
o
n
C
l
i
r
c
u
a
r
E
c
o
n
o
m
y
i
i
B
o
d
v
e
r
s
i
t
y
Chapter 2 – Sustainable development
Proportion of
Taxonomy-
aligned (A.1.) or
-eligible (A.2.)
turnover, year N-1
Category
enabling
activity
Category
transitional
activity
S
a
f
e
g
u
a
r
d
s
i
i
M
n
m
u
m
(13)
(14)
(15)
(16)
(17)
(18)
Percent
(19)
(20)
0%
2%
2%
N/A
4%
-
-
-
-
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
8%
29%
Proportion of turnover from Taxonomy-aligned activities continued
EL
EL
EL
EL
EL
EL
EL
EL
T
u
r
n
o
v
e
r
,
y
e
a
r
N
P
r
o
p
o
r
t
i
o
n
o
f
0%
1%
1%
-
0%
0%
0%
0%
0%
0%
0%
0%
0%
A.2. Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities)
Manufacture of renewable energy technologies
CCM 3.1
33
N/EL
N/EL
N/EL
N/EL
N/EL
Manufacture of energy efficiency equipment
for buildings
CCM 3.5
409
N/EL
N/EL
N/EL
N/EL
N/EL
Manufacture of low carbon technologies
CCM 3.6
441
N/EL
N/EL
N/EL
N/EL
N/EL
CCM 3.20 5,484
15%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
Manufacture, installation, and servicing of HV, MV and
LV electrical equipment for electrical transmission and
distribution that result in or enable a substantial
contribution to climate change mitigation
Transmission and distribution of electricity
Infrastructure for rail transport
Infrastructure enabling low carbon road transport and
public transport
CCM 4.9
CCM 6.14
-
1
CCM 6.15
31
Infrastructure enabling low carbon water transport
CCM 6.16
Low carbon airport infrastructure
CCM 6.17
Data-driven solution for GHG emission reductions
CCM 8.2
0(2)
8
88
Manufacture, installation and associated services for
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
leakage control technologies enabling leakage
WTR 1.1
4
0%
N/EL
N/EL
EL
N/EL
N/EL
N/EL
Manufacture of electrical and electronic equipment
CE 1.2
13,825
39%
reduction and prevention in water supply systems
Provision of IT/OT data-driven solutions for leakage
reduction
Provision of IT/OT data-driven solutions
Repair, refurbishment and remanufacturing
Sale of spare parts
Product-as-a-service and other circular use- and
result-oriented service models
Turnover of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
A. Turnover of Taxonomy-eligible activities (A.1 +
A.2)
Total (A+B)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities (B)
= not relevant. N/A = not applicable.
WTR 4.1
293
1%
N/EL
N/EL
EL
N/EL
N/EL
N/EL
CE 4.1
CE 5.1
CE 5.2
CE 5.5
161
21
59
0(2)
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
20,860
58%
18%
32,099
89%
46%
-
-
1%
1%
-
-
EL
EL
EL
EL
EL
39%
43%
N/EL
N/EL
N/EL
N/EL
N/EL
-
-
3,803
11%
35,903
100%
(2) This figure is less than EUR 0.5 million
(3) EL – Eligible, Taxonomy-eligible activity for the relevant environmental objective;
N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective.
287
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Chapter 2 – Sustainable development
2.7 Methodology and audit of indicators
Proportion of CapEx from Taxonomy-aligned activities
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic Activities
C
o
d
e
(
s
)
C
a
p
E
x
C
a
p
E
x
,
y
e
a
r
N
P
r
o
p
o
r
t
i
o
n
o
f
M
i
t
i
g
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
W
a
t
e
r
P
o
l
l
u
t
i
o
n
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
C
l
i
r
c
u
a
r
E
c
o
n
o
m
y
(9)
Million Euros Percent
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
i
i
B
o
d
v
e
r
s
i
t
y
(10)
Y; N;
N/EL(1)
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
Manufacture of renewable energy technologies
CCM 3.1
2
Manufacture of energy efficiency equipment
for buildings
CCM 3.5
64
0%
4%
Manufacture of other low carbon technologies
CCM 3.6
264
16%
Manufacture, installation, and servicing of HV, MV and
LV electrical equipment for electrical transmission
and distribution that result in or enable a substantial
contribution to climate change mitigation
CCM 3.20
200
12%
Transmission and distribution of electricity
Infrastructure for rail transport
Infrastructure enabling low carbon road transport
and public transport
CCM 4.9
CCM 6.14
-
1
CCM 6.15
16
Infrastructure enabling low carbon water transport
CCM 6.16
Low carbon airport infrastructure
CCM 6.17
1
1
Installation, maintenance and repair of instruments
and devices for measuring, regulation and controlling
energy performance of buildings
CCM 7.5
12
-
0%
1%
0%
0%
1%
Professional services related to energy
performance of buildings
CCM 9.3
9
1%
Y
Y
Y
Y
N/EL
Y
Y
Y
Y
Y
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
Manufacture, installation and associated services for
leakage control technologies enabling leakage
reduction and prevention in water supply systems
Provision of IT/OT data-driven solutions
for leakage reduction
Provision of IT/OT data-driven solutions
Repair, refurbishment and remanufacturing
Sale of spare parts
Product-as-a-service and other circular use- and
result-oriented service models
CapEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
Of which enabling
Of which transitional
= not relevant. N/A = not applicable.
Y
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
WTR 1.1
0(2)
0%
N/EL
N/EL
WTR 4.1
CE 4.1
CE 5.1
CE 5.2
0(2)
18
1
3
CE 5.5
0(2)
0%
1%
0%
0%
0%
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
1%
1%
N/EL
N/EL
N/EL
N/EL
-
-
592
588
-
35%
34%
35%
34%
-
-
-
-
0%
0%
-
-
Proportion of
Taxonomy-
aligned (A.1.) or
-eligible (A.2.)
CapEx, year N-1
Category
enabling
activity
Category
transitional
activity
(18)
Percent
(19)
E
(20)
T
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
g
e
(12)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
W
a
t
e
r
(13)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
P
o
l
l
u
t
i
o
n
(14)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
C
i
r
c
u
l
a
r
E
c
o
n
o
m
y
(15)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
B
i
o
d
i
v
e
r
s
i
t
y
(16)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
S
a
f
e
g
u
a
r
d
s
M
i
n
i
m
u
m
(17)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
0%
1%
15%
N/A
6%
0%
4%
0%
0%
0%
0%
N/A
N/A
N/A
N/A
N/A
N/A
27%
27%
-
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
T
Continued on next page
T
R
O
P
E
R
C
I
G
E
T
A
R
T
S
288
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Proportion of CapEx from Taxonomy-aligned activities
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic Activities
C
o
d
e
(
s
)
C
a
p
E
x
C
a
p
E
x
,
y
e
a
r
N
P
r
o
p
o
r
t
i
o
n
o
f
M
i
t
i
g
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
W
a
t
e
r
P
o
l
l
u
t
i
o
n
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Million Euros Percent
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
C
i
r
c
u
l
a
r
E
c
o
n
o
m
y
(9)
B
i
o
d
i
v
e
r
s
i
t
y
(10)
Y; N;
N/EL(1)
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
g
e
(12)
Y/N
Manufacture of renewable energy technologies
CCM 3.1
2
N/EL
N/EL
N/EL
N/EL
N/EL
Manufacture of other low carbon technologies
CCM 3.6
264
16%
N/EL
N/EL
N/EL
N/EL
N/EL
CCM 3.5
64
N/EL
N/EL
N/EL
N/EL
N/EL
CCM 3.20
200
12%
N/EL
N/EL
N/EL
N/EL
N/EL
Transmission and distribution of electricity
Infrastructure for rail transport
CCM 4.9
CCM 6.14
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
CCM 6.15
16
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
and devices for measuring, regulation and controlling
CCM 7.5
12
N/EL
N/EL
N/EL
N/EL
N/EL
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
Manufacture of energy efficiency equipment
for buildings
Manufacture, installation, and servicing of HV, MV and
LV electrical equipment for electrical transmission
and distribution that result in or enable a substantial
contribution to climate change mitigation
Infrastructure enabling low carbon road transport
and public transport
Infrastructure enabling low carbon water transport
CCM 6.16
Low carbon airport infrastructure
CCM 6.17
Installation, maintenance and repair of instruments
energy performance of buildings
Professional services related to energy
performance of buildings
Manufacture, installation and associated services for
reduction and prevention in water supply systems
Provision of IT/OT data-driven solutions
for leakage reduction
Provision of IT/OT data-driven solutions
Repair, refurbishment and remanufacturing
Sale of spare parts
WTR 4.1
CE 4.1
CE 5.1
CE 5.2
Product-as-a-service and other circular use- and
result-oriented service models
CapEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
Of which enabling
Of which transitional
= not relevant. N/A = not applicable.
-
1
1
1
0(2)
18
1
3
592
588
-
CCM 9.3
9
1%
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
1%
1%
N/EL
N/EL
N/EL
N/EL
-
-
35%
34%
35%
34%
-
-
-
-
0%
0%
-
-
CE 5.5
0(2)
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
0%
4%
-
0%
1%
0%
0%
1%
0%
1%
0%
0%
0%
leakage control technologies enabling leakage
WTR 1.1
0(2)
0%
N/EL
N/EL
N/EL
N/EL
N/EL
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
W
a
t
e
r
(13)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
P
o
l
l
u
t
i
o
n
(14)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
C
l
i
r
c
u
a
r
E
c
o
n
o
m
y
(15)
Y/N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Chapter 2 – Sustainable development
Proportion of
Taxonomy-
aligned (A.1.) or
-eligible (A.2.)
CapEx, year N-1
Category
enabling
activity
Category
transitional
activity
S
a
f
e
g
u
a
r
d
s
i
i
M
n
m
u
m
i
i
B
o
d
v
e
r
s
i
t
y
(16)
Y/N
(17)
Y/N
(18)
Percent
(19)
E
(20)
T
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
0%
1%
15%
N/A
6%
0%
4%
0%
0%
0%
0%
N/A
N/A
N/A
N/A
N/A
N/A
27%
27%
-
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
T
Continued on next page
(1) Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective;
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective;
N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective.
(2) This figure is less than EUR 0.5 million
289
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Chapter 2 – Sustainable development
2.7 Methodology and audit of indicators
Proportion of CapEx from Taxonomy-aligned activities continued
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic Activities
C
o
d
e
(
s
)
C
a
p
E
x
C
a
p
E
x
,
y
e
a
r
N
P
r
o
p
o
r
t
i
o
n
o
f
M
i
t
i
g
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
W
a
t
e
r
P
o
l
l
u
t
i
o
n
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
C
l
i
r
c
u
a
r
E
c
o
n
o
m
y
(9)
i
i
B
o
d
v
e
r
s
i
t
y
(10)
(13)
(14)
(15)
(16)
(17)
(19)
(20)
Million Euros Percent
EL; N/EL(3) EL; N/EL(3) EL; N/EL(3) EL; N/EL(3) EL; N/EL(3) EL; N/EL(3)
A.2. Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities)
Manufacture of renewable energy technologies
CCM 3.1
Manufacture of energy efficiency equipment
for buildings
Manufacture of low carbon technologies
CCM 3.5
CCM 3.6
1
47
5
0%
3%
0%
EL
EL
EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
Manufacture, installation, and servicing of HV, MV and
LV electrical equipment for electrical transmission and
distribution that result in or enable a substantial
contribution to climate change mitigation
CCM 3.20
141
8%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
Transmission and distribution of electricity
Infrastructure for rail transport
CCM 4.9
CCM 6.14
Infrastructure enabling low-carbon road transport and
public transport
CCM 6.15
Infrastructure enabling low-carbon water transport
CCM 6.16
Low carbon airport infrastructure
CCM 6.17
-
0(2)
0(2)
0(2)
0(2)
Installation, maintenance and repair of instruments
and devices for measuring, regulation and controlling
energy performance of buildings
CCM 7.5
0(2)
-
0%
0%
0%
0%
0%
Acquisition and ownership of buildings
CCM 7.7
305
18%
Data-driven solutions for GHG emissions reductions
CCM 8.2
3
Professional services related to energy performance
of buildings
CCM 9.3
0(2)
0%
0%
N/EL
EL
EL
EL
EL
EL
EL
EL
EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
Manufacture, installation and associated services for
leakage control technologies enabling leakage
reduction and prevention in water supply systems
Provision of IT/OT data-driven solutions for leakage
reduction
WTR 1.1
0(2)
0%
N/EL
N/EL
EL
N/EL
N/EL
N/EL
WTR 4.1
8
0%
N/EL
N/EL
EL
N/EL
N/EL
N/EL
M
i
t
i
g
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
(11)
A
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
(12)
W
a
t
e
r
P
o
l
l
u
t
i
o
n
C
i
r
c
u
l
a
r
E
c
o
n
o
m
y
B
i
o
d
i
v
e
r
s
i
t
y
S
a
f
e
g
u
a
r
d
s
M
i
n
i
m
u
m
Proportion of
Taxonomy-
aligned (A.1.) or
-eligible (A.2.)
CapEx, year N-1
Category
enabling
activity
Category
transitional
activity
(18)
Percent
0%
1%
1%
N/A
2%
0%
-
-
-
-
-
23%
1%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
28%
54%
Provision of IT/OT data-driven solutions
Repair, refurbishment and remanufacturing
Sale of spare parts
Product-as-a-service and other circular use- and
result-oriented service models
CapEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
EL
EL
EL
EL
EL
N/EL
N/EL
N/EL
N/EL
N/EL
CE 4.1
CE 5.1
CE 5.2
CE 5.5
7
0(2)
1
0(2)
0%
0%
0%
0%
-
-
0%
1%
-
-
20%
22%
-
-
Manufacture of electrical and electronic equipment
CE 1.2
334
20%
852
51%
30%
A. CapEx of Taxonomy-eligible activities (A.1 + A.2)
1,444
86%
64%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities (B)
Total (A+B)
= not relevant. N/A = not applicable.
231
14%
1,675
100%
T
R
O
P
E
R
C
I
G
E
T
A
R
T
S
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Proportion of CapEx from Taxonomy-aligned activities continued
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic Activities
C
o
d
e
(
s
)
C
a
p
E
x
C
a
p
E
x
,
y
e
a
r
N
P
r
o
p
o
r
t
i
o
n
o
f
M
i
t
i
g
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
W
a
t
e
r
P
o
l
l
u
t
i
o
n
C
i
r
c
u
l
a
r
E
c
o
n
o
m
y
(9)
B
i
o
d
i
v
e
r
s
i
t
y
(10)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Million Euros Percent
EL; N/EL(3) EL; N/EL(3) EL; N/EL(3) EL; N/EL(3) EL; N/EL(3) EL; N/EL(3)
M
i
t
i
g
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
(11)
A
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
(12)
Manufacture of renewable energy technologies
CCM 3.1
N/EL
N/EL
N/EL
N/EL
N/EL
A.2. Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities)
Manufacture of energy efficiency equipment
for buildings
Manufacture of low carbon technologies
CCM 3.5
CCM 3.6
Manufacture, installation, and servicing of HV, MV and
LV electrical equipment for electrical transmission and
distribution that result in or enable a substantial
contribution to climate change mitigation
Transmission and distribution of electricity
Infrastructure for rail transport
Infrastructure enabling low-carbon road transport and
public transport
Infrastructure enabling low-carbon water transport
CCM 6.16
Low carbon airport infrastructure
CCM 6.17
Installation, maintenance and repair of instruments
CCM 4.9
CCM 6.14
CCM 6.15
energy performance of buildings
CCM 3.20
141
8%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
and devices for measuring, regulation and controlling
CCM 7.5
0(2)
N/EL
N/EL
N/EL
N/EL
N/EL
Acquisition and ownership of buildings
CCM 7.7
305
18%
Data-driven solutions for GHG emissions reductions
CCM 8.2
3
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
CCM 9.3
0(2)
N/EL
N/EL
N/EL
N/EL
N/EL
leakage control technologies enabling leakage
WTR 1.1
0(2)
0%
N/EL
N/EL
EL
N/EL
N/EL
N/EL
Professional services related to energy performance
of buildings
Manufacture, installation and associated services for
reduction and prevention in water supply systems
Provision of IT/OT data-driven solutions for leakage
reduction
WTR 4.1
0%
N/EL
N/EL
EL
N/EL
N/EL
N/EL
Manufacture of electrical and electronic equipment
CE 1.2
334
20%
Provision of IT/OT data-driven solutions
Repair, refurbishment and remanufacturing
Sale of spare parts
CE 4.1
CE 5.1
CE 5.2
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
N/EL
EL
EL
EL
EL
EL
N/EL
N/EL
N/EL
N/EL
N/EL
CE 5.5
0(2)
N/EL
N/EL
N/EL
N/EL
A. CapEx of Taxonomy-eligible activities (A.1 + A.2)
1,444
86%
64%
852
51%
30%
-
-
0%
1%
-
-
20%
22%
-
-
Product-as-a-service and other circular use- and
result-oriented service models
CapEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities (B)
Total (A+B)
= not relevant. N/A = not applicable.
EL
EL
EL
EL
EL
EL
EL
EL
EL
EL
EL
1
47
5
-
0(2)
0(2)
0(2)
0(2)
8
7
1
0(2)
0%
3%
0%
-
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
231
14%
1,675
100%
Chapter 2 – Sustainable development
Proportion of
Taxonomy-
aligned (A.1.) or
-eligible (A.2.)
CapEx, year N-1
Category
enabling
activity
Category
transitional
activity
W
a
t
e
r
P
o
l
l
u
t
i
o
n
C
l
i
r
c
u
a
r
E
c
o
n
o
m
y
i
i
B
o
d
v
e
r
s
i
t
y
S
a
f
e
g
u
a
r
d
s
i
i
M
n
m
u
m
(13)
(14)
(15)
(16)
(17)
(18)
Percent
(19)
(20)
0%
1%
1%
N/A
2%
-
0%
-
-
-
23%
1%
-
N/A
N/A
N/A
N/A
N/A
N/A
N/A
28%
54%
(2) This figure is less than EUR 0.5 million
(3) EL – Eligible, Taxonomy-eligible activity for the relevant environmental objective;
N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective.
291
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Chapter 2 – Sustainable development
2.7 Methodology and audit of indicators
Proportion of OpEx from Taxonomy-aligned activities
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic Activities
C
o
d
e
(
s
)
O
p
E
x
O
p
E
x
,
y
e
a
r
N
P
r
o
p
o
r
t
i
o
n
o
f
M
i
t
i
g
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
W
a
t
e
r
P
o
l
l
u
t
i
o
n
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
C
l
i
r
c
u
a
r
E
c
o
n
o
m
y
(9)
Million Euros Percent
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
i
i
B
o
d
v
e
r
s
i
t
y
(10)
Y; N;
N/EL(1)
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
Manufacture of other low carbon technologies
CCM 3.6
844
48%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
OpEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
Of which enabling
Of which transitional
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)
844
844
48%
48%
48%
48%
-
-
-
-
-
-
-
Total (A.1 + A.2)
844
48%
48%
-
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities (B)
Total (A+B)
= not relevant
914
52%
1,758
100%
-
-
-
-
-
-
-
-
-
-
-
-
Whenever an economic activity contributes substantially to multiple environmental objectives, non-financial undertakings shall report under
the most relevant environmental objective while avoiding double counting. In 2023, non-financial undertakings such as Schneider Electric
must now also declare their turnover, CapEx and OpEx that are eligible and aligned with multiple environmental objectives (i.e. without
removing double counting when an activity contributes substantially to several objectives) to facilitate financial undertakings’ reporting
needs, by using the templates below:
Proportion of turnover from activities eligible and aligned with multiple environmental objectives
Proportion of turnover / Total turnover
Taxonomy-aligned per objective
Taxonomy-eligible per objective
Climate change mitigation (CCM)
Climate change adaptation (CCA)
Protection of water and marine resources (WTR)
Transition to a circular economy (CE)
Pollution prevention and control (PPC)
Biodiversity and ecosystems protection (BIO)
Percent
28%
-
0%(1)
4%
-
-
Percent
46%
-
1%
80%
-
-
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
Y
Y
Y
Y
A
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
(12)
Y/N
Y
Y
Y
Y
W
a
t
e
r
(13)
Y/N
Y
Y
Y
Y
P
o
l
l
u
t
i
o
n
(14)
Y/N
Y
Y
Y
Y
C
i
r
c
u
l
a
r
E
c
o
n
o
m
y
(15)
Y/N
Y
Y
Y
Y
B
i
o
d
i
v
e
r
s
i
t
y
(16)
Y/N
Y
Y
Y
Y
S
a
f
e
g
u
a
r
d
s
M
i
n
i
m
u
m
(17)
Y/N
Y
Y
Y
Y
Category
enabling
activity
Category
transitional
activity
(19)
E
E
E
(20)
T
T
Proportion of
Taxonomy-
aligned (A.1.) or
-eligible (A.2.)
OpEx, year N-1
(18)
Percent
50%
50%
50%
-
-
50%
T
R
O
P
E
R
C
I
G
E
T
A
R
T
S
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Economic Activities
C
o
d
e
(
s
)
O
p
E
x
O
p
E
x
,
y
e
a
r
N
P
r
o
p
o
r
t
i
o
n
o
f
M
i
t
i
g
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
A
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
W
a
t
e
r
P
o
l
l
u
t
i
o
n
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Million Euros Percent
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Y; N;
N/EL(1)
Manufacture of other low carbon technologies
CCM 3.6
844
48%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
OpEx of environmentally sustainable activities
(Taxonomy-aligned) (A.1)
Of which enabling
Of which transitional
844
844
48%
48%
48%
48%
-
-
-
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
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)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities (B)
Total (A+B)
= not relevant
-
-
-
-
914
52%
1,758
100%
Total (A.1 + A.2)
844
48%
48%
-
C
i
r
c
u
l
a
r
E
c
o
n
o
m
y
(9)
-
-
-
B
i
o
d
i
v
e
r
s
i
t
y
(10)
Y; N;
N/EL(1)
-
-
-
Whenever an economic activity contributes substantially to multiple environmental objectives, non-financial undertakings shall report under
the most relevant environmental objective while avoiding double counting. In 2023, non-financial undertakings such as Schneider Electric
must now also declare their turnover, CapEx and OpEx that are eligible and aligned with multiple environmental objectives (i.e. without
removing double counting when an activity contributes substantially to several objectives) to facilitate financial undertakings’ reporting
needs, by using the templates below:
Proportion of turnover from activities eligible and aligned with multiple environmental objectives
Proportion of turnover / Total turnover
Taxonomy-aligned per objective
Taxonomy-eligible per objective
Climate change mitigation (CCM)
Climate change adaptation (CCA)
Protection of water and marine resources (WTR)
Transition to a circular economy (CE)
Pollution prevention and control (PPC)
Biodiversity and ecosystems protection (BIO)
Percent
28%
0%(1)
4%
-
-
-
-
-
-
-
-
-
Percent
46%
1%
80%
-
-
-
Substantial contribution criteria
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
Y
Y
Y
Y
A
d
a
p
t
a
t
i
o
n
C
l
i
m
a
t
e
C
h
a
n
g
e
(12)
Y/N
Y
Y
Y
Y
W
a
t
e
r
(13)
Y/N
Y
Y
Y
Y
P
o
l
l
u
t
i
o
n
(14)
Y/N
Y
Y
Y
Y
C
l
i
r
c
u
a
r
E
c
o
n
o
m
y
(15)
Y/N
Y
Y
Y
Y
i
i
B
o
d
v
e
r
s
i
t
y
S
a
f
e
g
u
a
r
d
s
i
i
M
n
m
u
m
(16)
Y/N
Y
Y
Y
Y
(17)
Y/N
Y
Y
Y
Y
Chapter 2 – Sustainable development
Category
enabling
activity
Category
transitional
activity
(19)
E
E
E
(20)
T
T
Proportion of
Taxonomy-
aligned (A.1.) or
-eligible (A.2.)
OpEx, year N-1
(18)
Percent
50%
50%
50%
-
-
50%
(1) Y – Yes, Taxonomy-eligible and Taxonomy-aligned activity with the relevant environmental objective;
N – No, Taxonomy-eligible but not Taxonomy-aligned activity with the relevant environmental objective;
N/EL – Not eligible, Taxonomy-non-eligible activity for the relevant environmental objective.
Proportion of CapEx from activities eligible and aligned with multiple environmental objectives
Proportion of CapEx / Total CapEx
Taxonomy-aligned per objective
Taxonomy-eligible per objective
Climate change mitigation (CCM)
Climate change adaptation (CCA)
Protection of water and marine resources (WTR)
Transition to a circular economy (CE)
Pollution prevention and control (PPC)
Biodiversity and ecosystems protection (BIO)
Percent
34%
-
0%(1)
1%
-
-
Percent
64%
-
1%
50%
-
-
Proportion of OpEx from activities eligible and aligned with multiple environmental objectives
Taxonomy-aligned per objective
Taxonomy-eligible per objective
Proportion of OpEx / Total OpEx
Climate change mitigation (CCM)
Climate change adaptation (CCA)
Protection of water and marine resources (WTR)
Transition to a circular economy (CE)
Pollution prevention and control (PPC)
Biodiversity and ecosystems protection (BIO)
(1) This figure is rounded and represents a percentage less than 0.5%.
Percent
48%
-
-
-
-
-
Percent
48%
-
-
-
-
-
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Chapter 2 – Sustainable development
2.7 Methodology and audit of indicators
R
T 2.7.3 Sustainability Accounting Standard (SASB)
O
Correspondence table
Topic
Accounting metric
Category
Unit of measure
Code
Response/ Data/ Reference
Energy
Management
Hazardous
Waste
Management
(1) Total energy consumed
(2) percentage grid electricity
(3) percentage renewable
Gigajoules (GJ)
RT-EE-130a.1
The following KPIs covers our measured energy consumption (about 83% of Group energy consumption):
Quantitative
Percentage (%)
Amount of hazardous waste generated, percentage
recycled
Number and aggregate quantity of reportable spills,
quantity recovered
Quantitative
Tonnes (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
23 product recalls have been issued in 2023, amounting to approximately 30,000 units recalled or reworked. Schneider
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, certified to
an energy efficiency certification
Revenue from renewable energy-related and energy
efficiency-related products
Quantitative
Reporting
currency
Percentage (%)
by revenue
Reporting
currency
RT-EE-250a.2
RT-EE-410a.1
RT-EE-410a.2
RT-EE-410a.3
Description of the management of risks associated with
the use of critical materials
Discussion
and Analysis
n/a
RT-EE-440a.1
Details regarding our sustainable procurement practices are provided in section 2.2.12 on page 138, in particular our
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 anti-competitive behavior
regulations
Number of units produced by product category
Quantitative
Quantitative
Reporting
currency
Activity metrics
Number of employees
Quantitative
Number
RT-EE-510a.2
RT-EE-510a.3
RT-EE-000.A
RT-EE-000.B
No material losses.
No material losses.
A breakdown of revenues by activity is provided page 3 and page 518.
137,855 (spot 2023 year-end headcount, excluding supplementary workforce).
More workforce statistics in section 2.8.2 on page 312.
Activity metrics
Topic
Energy
Management
Hazardous
Waste
Management
Product
Life cycle
Management
Materials
Sourcing
(1) 3,365,298 GJ (934,805 MWh)
(2) 30.3% (282,838 MWh)
(3) 67.9% (634,401 MWh)
Hazardous waste generated: 7,573 tonnes.
Hazardous waste channeled according to legal requirements and Schneider Electric expectations: 7,573 tonnes.
Zero reportable spills in 2023, therefore no recovered quantity to report.
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
Product Safety
interest.
No material loss at the Group level.
Around 80% of Schneider’s products are assessed on the presence or absence of IEC 62474 DSL (Declarable Substance
List, which covers 37 worldwide regulations and about 160 substances or substance groups). 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 can be found in section 2.4.3.5
page 193.
Impact revenues measure (see below).
Revenues derived from products certified to energy efficiency certifications, such as ENERGY STAR, are included in our
Schneider Electric measures “Impact revenues”, i.e., 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 2023, 74% of Group
revenues qualify as Impact revenues. The Group aims to grow its Impact revenues to 80% by 2025 (SSI #1).
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 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 benefited armed conflict in the covered countries, nor supported illegally
operating or sanctioned entities.
Critical materials supply risks 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 is
implemented and is being ramped-up in 2024 to establish a direct connection to critical material sources and manage
strategic stocks, demand, and supply. For example, a Manual Pilot of a copper tolling model is planned in 2024.
As stated in its Trust Charter, Anti-Corruption Policy, Competition Law Policy, and various other policies, 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, the French Sapin II law, and the various antitrust laws and competition rules globally.
Schneider Electric has a zero tolerance policy with regard to corruption and breaches of competition laws and considers
that “doing the right thing” is a key value-creation driver for all its stakeholders. This commitment materialized through
strong and continuously developing programs such as its Anti-Corruption Compliance program (part of its Trust program,
see section 2.2.7 on page 131), and its Competition Law Compliance program (see section 2.2.8 on page 133).
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2.7.3 Sustainability Accounting Standard (SASB)
Correspondence table
Topic
Accounting metric
Category
Unit of measure
Code
Response/ Data/ Reference
Energy
Management
(1) Total energy consumed
(2) percentage grid electricity
(3) percentage renewable
Hazardous
Waste
Management
recycled
quantity recovered
Gigajoules (GJ)
RT-EE-130a.1
Quantitative
Percentage (%)
The following KPIs covers our measured energy consumption (about 83% of Group energy consumption):
(1) 3,365,298 GJ (934,805 MWh)
(2) 30.3% (282,838 MWh)
(3) 67.9% (634,401 MWh)
Amount of hazardous waste generated, percentage
Tonnes (t),
Percentage (%)
RT-EE-150a.1
Hazardous waste generated: 7,573 tonnes.
Hazardous waste channeled according to legal requirements and Schneider Electric expectations: 7,573 tonnes.
Number and aggregate quantity of reportable spills,
Number, Kilograms
RT-EE-150a.2
Zero reportable spills in 2023, therefore no recovered quantity to report.
23 product recalls have been issued in 2023, amounting to approximately 30,000 units recalled or reworked. Schneider
Electric has an Offer Safety Alert (OSA) process to alert the relevant Line of Business and other interested parties as soon
as it is suspected that customers’ health or property safety may be put at risk by Schneider products, solutions, or
projects. The Offer Safety Alert Committee (OSAC) is a permanent corporate committee that oversees and regulates the
management of OSA. Its mission is to ensure all OSA are managed with the due diligence and urgency to minimize safety
risks to customers. Its independent, multi-discipline nature allows the OSAC to make decisions in our customers’ best
interest.
No material loss at the Group level.
Topic
Energy
Management
Hazardous
Waste
Management
Product Safety
Around 80% of Schneider’s products are assessed on the presence or absence of IEC 62474 DSL (Declarable Substance
List, which covers 37 worldwide regulations and about 160 substances or substance groups). 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 can be found in section 2.4.3.5
page 193.
Revenues derived from products certified to energy efficiency certifications, such as ENERGY STAR, are included in our
Impact revenues measure (see below).
Product
Life cycle
Management
Schneider Electric measures “Impact revenues”, i.e., 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 2023, 74% 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 2.2.12 on page 138, 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 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 benefited armed conflict in the covered countries, nor supported illegally
operating or sanctioned entities.
Critical materials supply risks 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 is
implemented and is being ramped-up in 2024 to establish a direct connection to critical material sources and manage
strategic stocks, demand, and supply. For example, a Manual Pilot of a copper tolling model is planned in 2024.
As stated in its Trust Charter, Anti-Corruption Policy, Competition Law Policy, and various other policies, 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, the French Sapin II law, and the various antitrust laws and competition rules globally.
Materials
Sourcing
Schneider Electric has a zero tolerance policy with regard to corruption and breaches of competition laws and considers
that “doing the right thing” is a key value-creation driver for all its stakeholders. This commitment materialized through
strong and continuously developing programs such as its Anti-Corruption Compliance program (part of its Trust program,
see section 2.2.7 on page 131), and its Competition Law Compliance program (see section 2.2.8 on page 133).
Business
Ethics
Total amount of monetary losses as a result of legal
proceedings associated with bribery or corruption
Quantitative
Total amount of monetary losses as a result of legal
proceedings associated with anti-competitive behavior
Quantitative
Reporting
currency
regulations
Number of units produced by product category
Activity metrics
Number of employees
Quantitative
Number
RT-EE-510a.2
RT-EE-510a.3
RT-EE-000.A
RT-EE-000.B
No material losses.
No material losses.
A breakdown of revenues by activity is provided page 3 and page 518.
137,855 (spot 2023 year-end headcount, excluding supplementary workforce).
More workforce statistics in section 2.8.2 on page 312.
Activity metrics
295
Number of recalls issued, total units recalled
RT-EE-250a.1
Quantitative
(kg)
Number
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, certified to
an energy efficiency certification
Revenue from renewable energy-related and energy
efficiency-related products
Quantitative
Reporting
currency
Percentage (%)
by revenue
Reporting
currency
RT-EE-250a.2
RT-EE-410a.1
RT-EE-410a.2
RT-EE-410a.3
Description of the management of risks associated with
Discussion
n/a
RT-EE-440a.1
the use of critical materials
and Analysis
Description of policies and practices for prevention of:
RT-EE-510a.1
Discussion
and Analysis
n/a
(1) corruption and bribery and
(2) anti-competitive behavior
Materials
Sourcing
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2.7 Methodology and audit of indicators
R
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Disclosures (TCFD) correspondence table
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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. 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 the Schneider Sustainability Impact (SSI) program 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. Schneider Electric presents below its main
climate-related disclosures in line with TCFD recommendations.
Recommended
Disclosure
CDP Climate Change
& URD 2023 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 – C1.1a, C1.1b
URD – Chapter 2 (2.1.7;
2.3.1); Chapter 3 (3.2.2)
Several governance bodies are involved in the process of designing and
continuously monitoring the SSI program, which includes a sustainability risks and
opportunities assessment (including climate) and leads to the design of concrete
transformation initiatives to align the Company on the challenges identified:
CDP – C1.2
URD – Chapter 2 (2.1.7,
2.3.1)
• The Board of Directors has oversight of climate-related issues notably through its
Governance, Nominations & Sustainability Committee (which replaces the Human
Resources & CSR Committee, as of May 2023). This Committee has six Director
members who report to the Board of Directors, and reviews Schneider’s CSR
strategy, follows up on progress made, and ensures implementation of the
Group’s long-term sustainability commitments.
• The Executive Committee has a dedicated Function Committee, which meets
quarterly. It 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 the rollout of action plans.
• Three Committees involving Group Executive Vice-Presidents and Senior
Vice-Presidents are dedicated to overseeing 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 ecodesign, 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.
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Chapter 2 – Sustainable development
Recommended
Disclosure
CDP Climate Change
& URD 2023 references
Brief description (please refer to CDP Climate Change response and other sections of this
Universal Registration Document for further details)
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, C2.1b,
C2.2a, C2.3, C2.3a, C2.4,
C2.4a
URD – Chapter 2 (2.1.6,
2.3.1)
To identify and price the materiality of climate-related risks and opportunities, the
Group mandated an external consultant to perform a scenario-based risk and
materiality analysis. Five emissions pathways and three time horizons have been
considered: SSP5-8.5, SSP3-7.0, SSP2-4.5, SSP1-2.6, and SSP1-1.9 by 2025, 2030,
and 2050. Significant climate-related risks and opportunities identified for Schneider
Electric include:
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)
• Transition risks and opportunities, relating to market, policy, reputation, and
technology;
• Physical risks and opportunities, relating to damage to property and assets, and
supply chain disruption.
Market: The growing demand for low-carbon products and services generally
presents significant business opportunity for Schneider Electric. The Group is
already exploring ways to enhance the efficiency and emissions profile of existing
products through innovations, such as SF6-free medium voltage switchgears. The
low-carbon transition can present risks with potential financial impacts for companies
delaying the change, as well as opportunities for sustainability leaders. For example,
consumer preferences may change and further veer toward environmentally
sustainable alternatives. In 2023, 74% of the Group revenues qualify as Schneider
Impact revenues, defined as 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 industry-leading offers on the market for more efficient,
low-emission products and services that support the transition to a low-carbon
economy needs adapted investments in research and development (R&D).
Schneider Electric invests about 5% of its annual revenues in R&D each year. This
also includes a sharp focus on product quality and performance to prevent potential
trade-offs associated with our products’ enhanced sustainability profile.
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 on page 166.
Policy: A number of governments have introduced or are contemplating regulatory
changes to address climate change. For example, Emissions Trading Systems and
carbon taxes are now implemented or scheduled in many countries and markets.
Given the relatively low level of the Group’s Scope 1 and 2 carbon emissions, carbon
pricing mechanisms primarily present the potential for indirect rather than direct
impacts, namely by higher raw materials and manufactured components costs, and
increasing costs incurred by consumers during use of sold products.
Schneider Electric supports the shaping of climate policies that can move the
industries and world forward. In 2023, 89% of the Group’s revenues came from
economic activities listed as eligible in the EU Taxonomy for sustainable activities,
demonstrating the prominence of Schneider Electric’s markets in the transition
towards a sustainable economy. The Group is committed to keeping its position as
sustainability leader to capture associated opportunities through various strategies,
including decarbonization, incorporation of a shadow carbon price, and policy
advocacy. Read more on climate policy advocacy in section 2.3.7.2 on page 180.
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2.7 Methodology and audit of indicators
Recommended
Disclosure
CDP Climate Change
& URD 2023 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)
Reputation: 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, there is a 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. In addition,
the Group remains diligent in protecting brand reputation through accurate and
transparent communications and marketing. In 2023, as litigation and legislative
developments surrounding green claims rose, and public focus on greenwashing
heightened, Schneider Electric sharpened its focus on environmental claims and
language used regarding sustainability.
Technology: As the global economy transitions towards a low-carbon future,
technological innovation will accelerate the impairment of fossil-fuel intensive assets.
Schneider Electric has launched several transformations as part of its commitment to
be “Net-Zero ready” in its operations by 2030. Read more in section 2.3.3 on page
164.
Damage to property and assets: Physical risks resulting from climate change can
have financial implications for the Group, such as direct damage to property and
assets. As a result, climate and weather-related risks are part of the Group’s
Business Continuity & Risk Management program, leading to preventive investment
to secure assets and adapt to material climate and weather risks. Both exogenous
threats and endogenous risks were measured and weighed for industrial and
logistics sites worldwide. 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 EUR 28 million in
2023.
Supply chain disruption: Schneider Electric has over 300 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. Climate-related damages to assets,
human consequences, and supply chain disruptions 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.
Read more on the methodology and results of scenario analysis in section 2.3.1 on
page 156, and in Chapter 3 on page 348.
To further tie climate-related issues to financial planning, Schneider Electric
successfully launched in 2020 the first-ever sustainability-linked convertible bonds,
linked to three SSI targets including the objective to save and avoid 800 million
tonnes of CO2 on customers’ end by 2025, since 2018.
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Recommended
Disclosure
CDP Climate Change
& URD 2023 references
Brief description (please refer to CDP Climate Change response and other sections of this
Universal Registration Document for further details)
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.
Several scenarios to 2050 were developed in 2019, which 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 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 IEA, BNEF, the IRENA, among others.
Governance is well in place, under the leadership of the Chief Sustainability,
Customer Satisfaction & Quality Officer, and both short- and long-term analyses 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.
Read more in section 2.3.1.3 on page 160.
3. Risk Management: Disclose how the organization identifies, assesses, and manages climate-related risks.
Environment and climate-related risks are included in Schneider’s Enterprise Risk
Management framework and risk taxonomy (more details in section 2.3.1.1 on
page 156). In addition to the risk identification processes described above, 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 addition, a materiality analysis is conducted by the Sustainability
Department every 3-4 years to identify and prioritize material environmental, social,
and governance (ESG) issues through engagement with various stakeholders. The
Group is currently working with all stakeholders to update its materiality assessment
in alignment with the latest guidance for double materiality.
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 2 (2.1, 2.3),
Chapter 3 (3.3)
CDP – C2.1, C2.2
URD – 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.
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2.7 Methodology and audit of indicators
Recommended
Disclosure
CDP Climate Change
& URD 2023 references
Brief description (please refer to CDP Climate Change response and other sections of this
Universal Registration Document for further details)
3. a), 3. b) and 3. c)
(continued)
Schneider places dependency analysis at the heart of its risk management and has
performed a forward-looking climate risk and vulnerability assessment with an
independent third party 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, medium,
and long term, using scenario analysis. This assessment covers acute and chronic
climate physical risks, legal and regulatory risks and opportunities linked to current
and emerging climate regulations, as well as market, technology, and reputational
risks and opportunities linked to changes in customer behaviors. 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.
Climate adaptation risks are also studied and mitigated at site level for the Group’s
industrial and key logistic sites. Our Property Damage and Business Interruption
program, aligned with 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, and ensures crisis
management from the initial phase following an incident all the way to the recovery of
critical activities. Typically, all critical industrial sites are externally audited on-site at
least every two years. Schneider Electric then deploys protection measures to
mitigate or avoid risks identified. The cost of response is based on surveyors’ opinion
on the cost of the work required to mitigate and adapt to the event.
For its supply chain operations, the Group also works with a third-party company
providing predictive analytics to obtain intelligence and risk analytics. Risks are
assessed on a continuous basis covering sustainability, quality, and financial risks,
among others.
The different governance bodies involved in the definition and monitoring of
Schneider Electric’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 Universal Registration Document. Each program
of the SSI has a dedicated pilot in charge of driving the transformation and is
sponsored at the Senior Vice President and Executive Committee level to ensure
management control and oversight.
In addition, an Integrated Management System covers the Group’s main plants,
distribution centers, and large offices, and hosts ISO 14001, ISO 50001, ISO 9001,
and OHSAS 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 the Supplier Risk Assessment. This process enables the Group
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 logistics nodes (such as ports and critical supplier locations) to
shorten reaction time when events occur and minimize business impact.
Read more on Schneider Electric’s climate-related risk management in section 2.3.1
on page 156.
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Recommended
Disclosure
CDP Climate Change
& URD 2023 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,
2.7, 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 transparently discloses its end-to-end
carbon footprint (Scope 1, 2, and 3) and obtained in 2023 a “reasonable” assurance
from an independent third- party verifier on Scope 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 86% are due to the use phase and the products’
end of life, and around 12% comes 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 in section
2.3.2 on page 161 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 using the Greenhouse Gas Protocol methodology.
The carbon footprint methodology is compliant with ISO 14069 principles. The results
are calculated in tonnes of CO2 equivalent, taking into account all GHGs 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 the SSI and SSE 2021 – 2025
programs on pages 71 to 75. 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 customers’ end thanks to
EcoStruxure™).
The overall performance of the SSI represents 20% of the short-term incentives for
more than 64,000 employees worldwide (collective share). The Schneider
Sustainability External and Relative Index (SSERI), which measures Schneider’s
performance in four 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 per
metric tonne (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
externalities.
Schneider Electric is a signatory of the Business Ambition for 1.5°C initiative aimed at
setting 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 GHG
reduction targets validated by the SBTi, in alignment 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 durable 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
2.7 Methodology and audit of indicators
E
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T 2.7.5 Report of one of the Statutory Auditors, appointed
as independent third party, on the verification of the
consolidated non-financial statement
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(Year ended December 31st, 2023)
This is a free translation into English 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 your company SCHNEIDER
ELECTRIC SE (hereinafter the “Entity”), appointed as independent third
party (“third party”) and accredited 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, 2023 (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, in all material respects.
Emphasis of Matter
Without modifying our conclusion and in accordance with Article A. 225-3
of the French Commercial Code, we make the following comment:
We draw attention to Paragraph 2.7.1 of the URD 2023 to the
Identified Sustainability Information which specifies that the scope
of published indicators excludes certain Schneider Electric’s
entities. Our opinion is not qualified in respect of this matter.
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 available on request.
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 of SCHNEIDER ELECTRIC SE is responsible for:
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
• designing, implementing and maintaining 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 endorsed 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)(1).
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.
• 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
Means and resources
Our work engaged the skills of 11 people between September 2023
and February 2024 and took a total of 24 weeks.
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Chapter 2 – Sustainable development
We were assisted in our work by our specialists in sustainable
development and corporate social responsibility. We conducted 63
interviews with people responsible for preparing the Statement,
representing in particular the following Directions: CSR, Risk
Management, Compliance, Human Resources, Health and Safety,
Environment and Procurement.
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 of the
French Commercial Code as well as information regarding
compliance with human rights and anti corruption and tax avoidance
legislation and includes, where applicable, an explanation of the
reasons 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 provides the information required
under Article R.225-105 II of the French Commercial Code
where relevant with respect to the main risks;
• 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 their business
relationships, their products or services, as well as their 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
the key performance indicators used, with respect to the
main risks and the policies presented, and
− corroborate the qualitative information (measures and
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 countries;
• 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. To accomplish
this, we conducted the following:
− Interviews regarding internal control mechanisms for
environmental and health and safety risks. These
assessments were carried out with a selection of contributing
regions and clusters, namely: China, Europe, Global ETO,
North America (Energy only), India (Health and Safety only),
as well as a selection of countries: China, France, Italy,
Mexico, and the USA.
− Interviews regarding internal control mechanisms for social
risks. These assessments were conducted with a selection of
countries: India, Italy, Mexico, the USA, the Philippines,
China, and France.
•
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 entities, Schneider
Electric France (Angoulême Agriers, Espagnac S.E.F.);
Schneider Electric Mexico (Monterrey P2 - Monterrey P3);
Schneider Electric USA (El Paso 1); Schneider Electric Italy
(SEII SPA Napoli); Schneider Electric China (SWD, WPF);
Schneider Electric India (Chennai Plant) and covers between
28% and 52% 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 21, 2024
One of the Statutory Auditors
PricewaterhouseCoopers Audit
Jean-Christophe Georghiou
Partner
Nicolas Brément
Partner, Sustainable Performance
Appendix: 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 Indicators (SSE) 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 (OIFR)
• 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
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2.7 Methodology and audit of indicators
R
T 2.7.6 Reasonable assurance report from one of the
O
Statutory Auditors on a selection of Schneider Electric’s
non-financial performance indicators as for the year
ended December 31, 2023
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, 2023 (the “Identified Sustainability
Information”) presented below and included in the consolidated
non-financial statement presented in the Universal Registration
Document 2023 (hereinafter “URD 2023”):
• KPI 1: SSE #14 – 0.38 or below Medical Incident Rate for a value
of 0.51;
• KPI 2: Number of hours worked for a value of 301,436,421 hours,
of which (1) Schneider Electric employees for a value of de
256,505,806 hours and (2) temporary workers for a value of
44,930,615 hours;
• KPI 3: Lost-Time Injury Rate (LTIR) for a value of 0.28;
• KPI 4: Lost-Time Day Rate (LTDR) for a value of 7.78;
• KPI 5: Occupational Illness Frequency Rate (OIFR) for a value of
0.010;
• KPI 6: SSI #8 – Increase gender diversity, from hiring (50%) to
front-line managers (40%) and leadership teams (30%) for a
value of 40.94%, 28.20% et 28.98%;
• KPI 7 : SSE #3 – Electricity sourced from renewables for a value
of 88%;
• KPI 8: SSE #5 – Energy efficiency in our sites for a value of 13%;
• KPI 9: Measured energy consumption by source for a value of
934,805 MWh, of which (1) grid electricity for a value of
82,590 MWh, (2) purchased renewable electricity for a value of
610,614 MWh, (3) self generated renewable electricity for a
value of 23,194 MWh, (4) district heating for a value of
14,736 MWh, (5) fuel oil for a value of 12,991 MW, (6) gas for a
value of 190,088 MWh, (7) coal for a value of 0 MWh, and
(8) renewable energies (heat and fuel) for a value of 593 MWh;
• KPI 10: Estimated Total Scopes 1 and 2 GHG emissions
(market-based) for a value of 112,792 tCO2eq (Scope 1) and
89,440 tCO2eq (Scope 2).
Our assurance does not extend to information in respect of earlier
periods or to any other information included in the URD 2023.
Our Reasonable Assurance Opinion
In our opinion, the Identified Sustainability Information set out in the
URD 2023 for the yar ended December 31st, 2023 is prepared, in all
material respects, in accordance with the reporting framework
defined by the Company (KPI 1 to 5: GHSD017 (version updated in
May 2023) ; KPI 6 : SSI #08 - Gender Diversity - Reporting Protocol
(9037_-1) (version updated in November 2023) and KPI 7 à 10 :
GED 001 (version updated in September 2023) and Carbon
footprint SE - Reporting Protocol (version updated in 2023)) and the
basis of preparation set out in the section 2.7.1 of the URD 2023 as
for the year ended December 31st, 2023.
Emphasis of Matter
We draw attention to Paragraph 2.7.1 of the URD 2023 to the
Identified Sustainability Information which specifies that the scope
of published indicators excludes certain Schneider Electric’s
entities. Our opinion is not qualified in respect of this matter.
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 (KPI 1 to 5:
GHSD017 (version updated in May 2023) ; KPI 6: SSI #08 - Gender
Diversity - Reporting Protocol (9037_-1) (version updated in
November 2023) and KPI 7 to 10: GED 001 (version updated in
September 2023) and Carbon footprint SE - Reporting Protocol
(version updated in 2023)), available upon request from the
sustainable performance team of the entity, and the basis of
preparation set out in the section 2.7.1 – “Methodology of published
indicators” of URD 2023 as for the year ended December 31st, 2023
(together “the Reporting Criteria”), which Schneider Electric has
used to prepare the Identified Sustainability Information.
Inherent Limitations in Preparing the Identified Sustainability
Information
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 2023.
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.
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Chapter 2 – Sustainable development
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 21, 2024
One of the Statutory Auditors
PricewaterhouseCoopers Audit
Jean-Christophe Georghiou
Partner
Nicolas Brément
Partner, Sustainable Performance
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, if any,
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 Board of 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 respect of greenhouse
gas emissions included in the Identified sustainability information,
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.
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.821-28 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.
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In this section
2.8.1 Environmental and climate indicators
2.8.2 Social indicators
2.8.3 Societal indicators
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2.8.1 Environmental and climate indicators
2.8.1.1 Key performance indicators from the Schneider Sustainability Impact and
Schneider Sustainability Essentials
Increase green material content in our products
2020: 7%
2021-2025 programs
Baseline(1)
2023 progress(2)
Schneider
Sustainability #
Impact
(SSI)
Essentials
(SSE)
1.
2.
3.
4.
5.
1.
2.
3.
4.
5.
6.
7.
8.
9.
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
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
2025
Target
80%
800M
2019: 70%
2020: 263M
74%
553M
2020: 0%
27%
50%
2020: 13%
2020: 30
2020: 26%
2020: 80%
2020: 0%
2019: 0%
2020: 77%
2020: 1%
2020: 0%
29%
63%
101
60%
88%88%
1.6%
13%
81%81%
50%
100%
150
100%
90%
15%
15%
80%
24%
33%
66%
100%
2020: 120
137
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
311,229
420,000
2020: 0%
73%
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 2023), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 302). In addition, SSI
#8, SSE #3, SSE #5 and SSE #14 received a “reasonable” assurance level in 2023. Please refer to page 266 for the methodological presentation of each indicator. The
2023 performance is also discussed in more details in each section of this report.
(3) Per Schneider Electric definition and methodology.
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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
#
#
#
%
2023
234
196
38
87%
2022
243
204
39
86%
2021
244
211
33
87%
2020
232
212
20
90%
(1) ISO 14001 certification is systematic for all large industrial, logistics and tertiary sites within two years of acquisition. A reduction in the number of ISO 14001 certified
sites usually results from sites closing during the year.
(2) The percentage of sites certified ISO 14001 is calculated based on waste generation from certified sites vs total sites, as the majority of sites - in number - are small
leased offices where certification is not relevant.
2.8.1.3 Group site consumption, emissions and waste
Materials
GRI
301-2
301-2
Indicators
SSI #4 – Green material content in our
products(1)
SSI #5 – Primary and secondary packaging
free from single-use plastic using recycled
cardboard(2)
SSE #6 – Product revenues covered by Green
Premium™
Units
%
%
%
2023
29%
63%
2022
18%
45%
2021
11%
21%
2020
7%
13%
81%
80%
78%
77%
301-3,
306-4
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)
2023 audited indicators. UP = Unpublished
metric tons
50,101
57,052
46,488
60,149
# recalls
23
24
14
25
(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 311,299 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
2.8 Indicators
Waste
GRI
Indicators
Estimated coverage (% waste generation)
Units
%
2023
87%
2022
86%
2021
87%
2020
90%
306-3
Total waste generated
metric tons
124,139
131,402
136,816
125,292
Total waste generated/Turnover
metric tons/
3.46
3.84
4.73
4.98
306-3,
306-4,
306-5
306-5
306-2
306-3
306-5
Non-hazardous waste generated
of which reused or recycled
million €
metric tons
metric tons
of which incinerated with energy recovery
metric tons
of which landfilled or incinerated without
energy recovery
metric tons
Non-hazardous waste reduction(1)
metric tons
Share of non-hazardous waste recovered or
reduced(2)
Hazardous waste generated
Hazardous waste channeled according to
Schneider Electric expectations(3)
%
metric tons
metric tons
116,566
105,593
6,871
4,102
21,098
97.0%
7,573
7,573
123,311
111,567
6,719
5,025
11,941
96.3%
8,091
8,091
128,267
115,550
6,964
5,753
13,667
95.9%
8,549
8,549
117,607
113,211
4,396
7,729
96.5%
7,685
7,667
Hazardous waste generated/Turnover
metric tons/
0.21
0.24
0.30
0.30
Hazardous waste intensity reduction against 2017(4)
SSE #9 - Number of ‘Waste-to-Resource’ sites
2-27, 306-3 # and aggregate quantity of reportable spills
306-3
Quantity of spills recovered
2-27, 306-3 Number of significant fines (> EUR 10,000)
related to environmental or ecological issues
2023 audited indicators. UP = Unpublished. NA = Not applicable
million €
%
#
kg
kg
#
-50%
137
0
NA
0
-44%
-30%
-27%
127
0
NA
0
126
0
NA
0
120
0
NA
0
(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: 96.5%, 95.9%, 95.5%, and 96.3% for
2023, 2022, 2021, and 2020, 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
#
#
#
2023
260
107
153
2022
260
107
153
2021
260
107
153
2020
UP
UP
UP
2023 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)
2023 audited indicators.
Units
%
kg
2023
90%
2022
90%
2021
90%
2020
90%
304,975
308,520
342,228
440,442
kg/million €
8.5
9.0
11.8
17.5
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Chapter 2 – Sustainable development
Water
GRI
Indicators
Estimated coverage (% water withdrawal)
303-3
Total water withdrawals (other than for cooling)
of which surface water
of which groundwater
of which third party sources
of which other sources(1)
303-3
Water withdrawn for cooling and restituted w/o
impact(2)
Units
2023
%
m3
m3
m3
m3
m3
m3
84%
1,899,190
17,699
472,199
1,377,377
31,916
813,411
303-3
Water withdrawal/Turnover(3)
m3/million €
52.9
Water withdrawal intensity reduction vs 2017(3)
303-3
303-1
Total water withdrawals from areas with water stress(4)
SSE #11 – Sites in water-stressed areas with a water
conservation strategy and related action plan(4)
%
m3
%
-51.0%
874,114
73.0%
2023 audited indicators. UP = Unpublished.
2022
83%
2021
86%
2020
88%
1,921,569
2,072,263
1,928,032
14,514
492,308
19,156
17,461
513,631
452,602
1,388,474
1,507,606
1,446,391
26,273
622,951
56.2
-48.0%
842,216
48.0%
31,870
11,578
879,602
780,201
71.7
-33.6%
930,603
8.5%
76.5
-29.1%
UP
UP
Due to the impact of rounding on individual elements within this disclosure table, numbers may not exactly sum to the Group total.
(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
%
#
2023
95%
128
2022
95%
132
2021
95%
140
2020
96%
150
302-1,
302-4
302-1,
302-4
Estimated total energy consumption
MWh
1,124,327
1,201,276
1,325,491
1,216,845
of which measured energy consumption
of which estimated energy consumption for
sites out of reporting perimeter(2)
MWh
MWh
934,805
189,522
979,497
1,080,366
1,034,003
221,779
245,125
182,842
Estimated total energy consumption/turnover MWh/million €
€/MWh
%
31.3
31,932
157.3%
35.1
28,450
129.3%
45.9
21,803
75.7%
48.3
20,709
66.9%
Estimated total energy productivity
Estimated total improvement in energy
productivity vs 2005(3)
Estimated total energy consumption from
renewable sources
MWh
707,033
688,474
670,287
UP
UP
UP
UP
Estimated total percentage of renewable energy
%
62.9%
57.3%
50.6%
Estimated total energy consumption from
non-renewable sources
MWh
417,294
512,802
655,204
Estimated total percentage of non renewable energy
%
37.1%
42.7%
49.4%
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
82,590
610,614
23,194
14,736
12,991
108,263
588,851
20,719
24,519
6,520
132,771
612,752
15,861
33,830
6,967
148,969
585,495
12,464
27,602
6,941
190,088
229,552
276,954
251,377
0
593
0
1,073
0
1,231
0
1,155
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Chapter 2 – Sustainable development
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(2)
grid electricity
purchased renewable electricity(4)
self generated renewable electricity
district heating
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T
A
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fuel oil
gas
coal
renewable fuel and heat
2023 audited indicators. UP = Unpublished.
Units
MWh
2023
2,960
2022
2,263
2021
2,558
2020
2,734
%
88%
85%
82%
80%
MWh
MWh
MWh
MWh
MWh
MWh
MWh
MWh
92,379
72,632
0
2,490
1,013
21,008
0
0
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
Due to the impact of rounding on individual elements within this disclosure table, numbers may not exactly sum to the Group total.
(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. 2023 includes 48,100 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 2023 EAC account for 32.8% of total measured purchased renewable electricity reported.
Greenhouse gas (GHG)
GRI
Indicators
Estimated coverage (% total GHG emissions)
Estimated Total Scopes 1 and 2 GHG
emissions (market-based)(1)(2)
305-1,
305-2
305-5
305-4
Absolute reduction vs base year (2021)(2)
%
-31.2%
Total Scopes 1 and 2 per euro turnover
Units
%
TCO2e
2023
99%
202,232
2022
99%
2021
99%
2020
99%
229,177
293,832
287,595
305-1
Direct (Scope 1) GHG emissions(2)
of which fuel oil
of which gas
of which coal
of which vehicle fleet
of which SF6 emissions(2)
SF6 leakage rate(3)
Target SF6 leakage rate(3)
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)(1)
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)(1)(4)
TCO2e/
million €
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
%
%
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
5.6
112,792
3,116
38,968
0
61,492
4,054
0.08%
0.11%
5,162
89,440
39,476
0
4,853
42,961
-22.0%
6.7
119,447
4,414
47,271
0
55,598
4,606
0.08%
0.11%
7,557
109,730
49,674
703
8,358
50,995
0.0%
10.2
NA
11.4
140,718
142,388
4,520
56,776
0
4,451
52,197
0
62,683
73,229
5,886
0.10%
0.19%
10,853
153,115
66,692
701
14,714
71,008
7,287
0.14%
0.25%
5,224
145,207
70,145
694
11,550
62,818
305-3
Other relevant indirect (Scope 3) GHG
emissions(2)
TCO2e 56,777,964
60,788,549
68,737,485
65,770,721
305-5
Absolute variation vs base year (2021)(2)
%
-17.4%
-11.6%
0.0%
NA
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Chapter 2 – Sustainable development
Greenhouse gas (GHG) (continued)
GRI
Indicators
305-4
Total Scope 3 per euro turnover(2)
305-3
Other relevant indirect (Scope 3 upstream)
GHG emissions
1. Purchased goods and services
2. Capital goods
3. Fuel- and energy-related activities (not
included in 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(2)
9. Transportation of goods not paid by the
Group
11. Use of sold products(2)(6)
12. End-of-life treatment of sold products(2)
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)
Units
2023
TCO2e/
million €
1,581
2022
1,779
2021
2,378
2020
2,614
TCO2e
7,766,994
8,613,192
8,237,192
6,966,062
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
TCO2e
6,829,733
7,572,974
7,278,733
6,137,388
55,361
40,652
563,643
34,927
60,702
181,977
57,986
43,544
62,876
53,167
63,863
55,151
670,840
616,519
497,761
37,415
56,501
42,760
30,778
31,872
33,304
173,932
152,359
146,723
49,010,970
52,175,356
60,500,294
58,804,659
TCO2e
481,039
427,872
485,877
371,159
TCO2e 44,223,749
4,306,182
TCO2e
#
101
TCO2e 52,434,385
47,281,888
55,338,592
54,103,061
4,465,596
4,675,824
4,330,439
77
51
30
51,325,544
49,708,425
46,964,497
TCO2e
60,163,742
41,674,416
33,930,803
28,605,883
TCO2e 552,559,056
439,960,929
346,960,969
263,321,741
2023 audited indicators. NA = Not applicable.
Due to the impact of rounding on individual elements within this disclosure table, numbers may not exactly sum to the Group total.
(1) Scope 2 emissions are quantified with the market-based methodology and the location-based methodology, following GHG Protocol Scope 2 guidance, and the
results from both approaches are disclosed. Values 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). Location-based Scope 2 electricity emissions on energy reporting perimeter are equal to 301,748 TCO2e (audited value), and 378,840 TCO2e on
total estimated perimeter (audited value). Total Scope 2 (location-based) emissions is 386,781 TCO2e (audited value). Total Scope 1 and 2 (location-based) CO2
emissions (energy, vehicles, and SF6 emissions in TCO2e) on full perimeter are equal to 499,573 TCO2e (audited value).
(2) The historical values of this indicator have been updated to be in line with the latest Global Warming Potential (GWP) value of SF6, as published by the IPCC in its 6th
Assessment Report available in January 2024. Previous GWP value of 23,500 (AR5) has been updated to 24,300 (AR6) for 2023 and historical emissions. This change
impacts Scope 1 and Scope 3 CO2 equivalent emissions.
(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 12 sites
in 2023, 13 sites in 2022 and in 2021, and 14 sites in 2020 and 2019.
(4) The CO2 emissions linked to energy consumption for sites outside the energy reporting perimeter are considered estimates for two reasons: on the one hand, energy
consumption and corresponding CO2 emissions of these sites are estimated (instead of being collected from meters and invoices, energy consumption are based on
site surface and average energy intensity of sites per region from 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.
(5) Prior to 2023, this category was meant to capture greenhouse gas emissions (CH4 and N2O emissions) generated from renewable electricity produced with biomass.
(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.
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:
this scenario is 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. The 2023 carbon footprint is based on this same scenario. The update introduced in 2022 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 have
led to 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. When new methodologies are developed during the reporting 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 potentially to some adjustments with retroactive impact. In 2023, there has been no update to methodology, nor any retroactive impact
due to methodological adjustments.
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Chapter 2 – Sustainable development
2.8 Indicators
2.8.2 Social indicators
2.8.2.1 Key performance indicators from the Schneider Sustainability Impact and
Schneider Sustainability Essentials
2021-2025 programs
Baseline(1)
2023 progress(2)
Schneider
Sustainability #
Impact
(SSI)
6.
7.
8.
10.
12.
13.
14.
15.
16.
17.
Essentials
(SSE)
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%)
Double hiring opportunities for interns,
apprentices and fresh graduates
Deploy a ‘Social Excellence’ program through
multiple tiers of suppliers(3)
Train our employees on Cybersecurity
and Ethics every year
2022: 1%
21%
2021: 81%
+1pt
2025
Target
100%
+10pts
2020: 41/23/24
41/28/29
50/40/30
2019: 4,939
x1.52
x2.00
--
In progress
--
2020: 90%
97.3%
100%
Decrease the Medical Incident rate
2019: 0.79
Reduce total number of safety recalls issued to 0
2020: 25
23
0.51
0.38
0
Be in the top 25% in external ratings for
Cybersecurity performance
Assess our suppliers under our ‘Vigilance
Program’
2020: Top 25%
Top 25%
Top 25%
2020: 374
3,248
3,248
4,000
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(4)
Multiply the number of employee-driven
development interactions on the Open Talent
Market
2020: F: -1.73%
2020: M: 1.00%
2019: 53%
2019: 99%
2020: 5,019
Support the digital upskilling of our employees
2020: 41%
Provide access to meaningful career
development programs for employees during
later stages of their career
2022: 43%
19.
20.
21.
22.
23.
-1.00%-1.00%
0.67%0.67%
61%
<1%
<1%
60%
100%
100%
x1.5
78%
67%
x4
90%
90%
24.
Increase our employee engagement level
2020: 69%
73%
75%
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 2023), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 302). In addition, SSI
#8, SSE #3, SSE #5 and SSE #14 received a “reasonable” assurance level in 2023. Please refer to page 266 for the methodological presentation of each indicator. The
2023 performance is also discussed in more details in each section of this report.
(3) 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 153,121 employees from consolidated companies where HR IT systems have been
deployed. About 14,800 employees are excluded, including approximately 6,400 AVEVA employees, 3,000 LUMINOUS 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 2023. Total Group
workforce, i.e. employees and non-employee interim workers, is 167,104 people in 2023.
The calculation methodology of the absenteeism rate varies 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
2023
2022
2021
2020
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
153,121
149,812
147,468
147,349
year-end HC
137,855
134,931
128,384
128,770
%
%
89.8%
10.2%
15,266
19.2%
88.8%
11.2%
14,881
22.3%
87.2%
12.8%
19,084
24.0%
87.3%
12.7%
18,548
23.7%
Spot supplementary employees* at year-end
year-end HC
2-7
Share of temporary personnel (fixed-term
contracts and supplementary personnel*)
%
2023 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 (137,855 employees, i.e. around 90% of employees excluding supplementary employees).
Workforce composition(1)
GRI
Indicators
Units
2023
Coverage (of total employees)
2-7
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
2-7
Voluntary turnover
Breakdown of workforce by region
Asia-Pacific
Western Europe
North America
Rest of the world
90%
98%
2%
24,608
19,738
5,246
10,878
3,614
14.6%
14%
16%
36%
14%
8%
18%
18%
8.0%
33%
27%
27%
13%
%
%
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%
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2.8 Indicators
Workforce composition (continued)
GRI
2-7
Indicators
Units
2023
2022
2021
2020
Breakdown of workforce by top 10 countries
United States
China
Mexico
India
France
Germany
Spain
United Kingdom
Italy
Philippines
2-7
Annual change in workforce in top 10 countries
United States
China
Mexico
India
France
Germany
Spain
United Kingdom
Italy
Philippines
2-7
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
2-7
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%
6%
3%
8%
5%
-1%
6%
12%
7%
7%
3%
34%
46%
41%
34%
29%
27%
25%
40%
19%
23%
22%
53%
65%
35%
47%
67%
33%
14%
12%
11%
11%
11%
4%
3%
2%
2%
2%
5%
6%
7%
46%
2%
2%
8%
-1%
0%
10%
33%
42%
41%
33%
28%
27%
24%
37%
21%
22%
21%
52%
66%
34%
48%
67%
33%
14%
11%
10%
8%
11%
4%
3%
3%
2%
2%
5%
-2%
8%
8%
7%
9%
0%
-3%
4%
-9%
34%
42%
44%
33%
26%
27%
23%
37%
16%
21%
19%
51%
66%
34%
49%
66%
34%
13%
11%
10%
7%
11%
3%
3%
3%
2%
2%
-5%
-3%
36%
-3%
-4%
-9%
-5%
-6%
-4%
-2%
33%
42%
38%
23%
24%
25%
23%
34%
UP
19%
21%
50%
67%
33%
50%
67%
33%
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Chapter 2 – Sustainable development
Workforce composition (continued)
Indicators
Units
2023
2022
2021
2020
GRI
2-7
Breakdown of workforce by age(3)
< 30 years
30-50 years
> 50 years
2-7
Breakdown of workforce by seniority
< 5 years
5/14 years
15/24 years
25/34 years
> 34 years
2-7
Breakdown of workforce by function
Marketing
Sales
Services and projects
Support
Technical
Industrial
2023 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
2023 audited indicators. UP = Unpublished.
%
%
%
%
%
%
%
%
%
%
%
%
%
%
24%
59%
17%
42%
31%
18%
7%
2%
4%
13%
20%
27%
8%
28%
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%
%
%
%
%
%
%
%
%
%
%
%
%
%
77%
23%
38%
62%
59%
41%
58%
40%
2%
31%
17%
42%
10%
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%
* 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 (137,855 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
2023
2022
2021
2020
(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 (137,855 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.
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2023
2022
2021
2020
Chapter 2 – Sustainable development
2.8 Indicators
Layoffs (1)(2)
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
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
81%
19%
26%
74%
22%
8%
61%
9%
61%
39%
27%
47%
21%
5%
0%
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
UP = Unpublished.
(1) Based on data tracked in our global TalentLink tool, excluding supplementary employees, recent acquisitions, entities not integrated to the Group’s information system
tools and interns (137,855 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
2023
2022
2021
2020
%
%
%
%
%
%
35%
42%
18%
4%
1%
0%
36%
40%
19%
4%
1%
0%
41%
36%
19%
4%
1%
0%
41%
39%
16%
3%
1%
0%
(1) Based on data tracked in our global TalentLink tool, excluding supplementary employees, recent acquisitions, entities not integrated to the Group’s information system
tools and interns (137,855 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.
Chapter 2 – Sustainable development
Units
2023
2022
2021
2020
%
%
%
%
%
%
%
%
%
62%
38%
46%
41%
13%
31%
16%
42%
11%
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%
(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 (137,855 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
2023
2022
2021
2020
Average supplementary employees*
GRI
2-7
Indicators
Breakdown by category
White collar
Blue collar
2-7
Breakdown by region
Asia-Pacific
Western Europe
North America
Rest of the world
%
%
%
%
%
%
11%
89%
62%
19%
12%
7%
10%
90%
54%
24%
10%
12%
* 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)
2-30
Employees represented by
Unions
Works Council
403-4
Health and Safety Committee
2-30
2-30
Number of collective agreements
Employees covered by collective bargaining
agreements
(1) Compared to employees recorded in our global TalentLink tool
Units
%
%
%
%
#
%
2023
95%
79%
53%
80%
205
77%
2022
94%
60%
55%
76%
202
70%
8%
92%
67%
16%
6%
11%
2021
92%
80%
63%
81%
150
72%
10%
90%
64%
15%
7%
14%
2020
85%
66%
70%
89%
78
69%
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2.8 Indicators
2.8.2.4 Health and safety of employees and subcontractors
GRI
403-8
Indicator
Number of ISO 45001 sites
Percentage of operational facilities that are ISO
45001 certified
Units
#
%
2023
172
83%
#
#
#
#
#
#
#
#
#
per million
hours worked
per million
hours worked
per million
hours worked
per million
hours worked
per million
hours worked
per million
hours worked
per million
hours worked
per million
hours worked
per million
hours worked
154
119
35
83
63
20
0
0
0
0.51
0.46
0.78
0.28
0.25
0.44
7.78
7.80
7.66
403-9
Number of medical incidents(1)
of which Schneider Electric employees
of which temporary workers
403-9
Number of lost-time accidents(1)
of which Schneider Electric employees
of which temporary workers
403-9
Number of fatal accidents
of which Schneider Electric employees
of which temporary workers
403-9
SSE #14 Medical Incident Rate(2)
of which Schneider Electric employees
of which temporary workers
403-9
Lost-Time Injury Rate (LTIR)(2)
of which Schneider Electric employees
of which temporary workers
403-9
Lost-Time Day Rate (LTDR)(2)
of which Schneider Electric employees
of which temporary workers
403-9
Number of lost days
of which Schneider Electric employees
of which temporary workers
403-9
Number of hours worked
of which Schneider Electric employees
of which temporary workers
2022
211
87%
171
143
28
95
80
15
0
0
0
0.58
0.57
0.64
0.32
0.32
0.34
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
0.58
0.58
0.55
0.32
0.32
0.29
14.23
15.22
15.58
13.74
16.47
14.92
8.54
11.00
6.61
#
#
#
2,345
2,001
344
4,195
3,822
373
4,477
3,963
514
3,662
3,412
250
# 301,436,421
# 256,505,806
# 44,930,615
294,742,174
287,369,013
266,582,055
251,075,834
240,649,594
228,742,624
43,666,340
46,719,419
37,839,431
403-10
Occupational Illness Frequency Rate (OIFR)(2)
per million
of which Schneider Electric employees
of which temporary workers
hours worked
per million
hours worked
per million
hours worked
0.010
0.012
0.000
0.003
0.017
0.019
0.004
0.021
0.022
0.000
0.000
0.000
2023 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 Illnesses 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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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
White collar
Blue collar
404-2
2-24
2-24
2-24
Employees taking one day training
(7 hours or more)
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
2-24, 404-2 Breakdown of hours by training type
Data & AI / Analytics(1)
Digital / IT
Functional
Sustainability(2)
Management and Leadership
Mandatory / Compliance
Offer Excellence(3)
Personal Development
Products, Solutions and Services
Supply Chain
Well-being
Other
Chapter 2 – Sustainable development
Units
%
2023
95%
2022
92%
2021
91%
2020
90%
#
#
#
#
#
#
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
3,126,358
2,988,795
2,881,627
2,869,111
24.1
25.4
22.5
24.5
23.2
57%
43%
81%
99%
98%
97%
0%
9%
23%
18%
7%
5%
6%
6%
13%
9%
1%
4%
24.1
25.3
22.4
24.7
22.9
57%
43%
81%
98%
97%
95%
UP
6%
22%
17%
8%
8%
7%
7%
14%
9%
2%
-
24.5
25.1
24.0
24.9
23.7
53%
47%
83%
96%
97%
96%
UP
6%
25%
17%
6%
9%
6%
7%
12%
12%
1%
-
24.5
24.9
24.0
25.1
23.2
52%
48%
81%
93%
94%
90%
UP
8%
24%
20%
4%
4%
6%
11%
12%
9%
2%
-
Total Learning & Development spend(4)
million €
Learning & Development cost per employee
€/employee
91.1
660.8
75.6
560.8
56.8
425.8
44.2
356.1
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2.8 Indicators
GRI
404-3
Indicator
Employees having had a performance review(5)
Units
%
2023
97%
Breakdown by category
White collar
Blue collar
Breakdown by gender
Men
Women
Breakdown of promotions by gender(6)
Men
Women
Breakdown of promotions by generation
Gen Z
Millenials
Gen X
Boomer
%
%
%
%
%
%
%
%
%
%
%
75%
25%
69%
31%
67%
33%
11%
62%
24%
3%
2022
98%
76%
24%
70%
30%
67%
33%
17%
61%
20%
2%
2021
98%
76%
26%
71%
29%
UP
UP
UP
UP
UP
UP
2020
98%
75%
25%
72%
28%
UP
UP
UP
UP
UP
UP
2023 audited indicators. UP = Unpublished.
Due to the impact of rounding on individual elements within this disclosure table, numbers may not exactly sum to the Group total.
(1) This figure is rounded and represents a percentage less than 0.5%.
(2) Includes Sustainability, Environment and Health and Safety trainings.
(3) Prior to 2023, this was reported under “Technical” and “Agile” categories.
(4) 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
(5) The data relates to the eligible workforce for Performance interview at 12/31/2023 (TalentLink).
(6) 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 25.3 million in 2023, 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)
2023 progress(2)
Provide access to green electricity to 50M people
2020: 30M
Train people in energy management
Increase the number of volunteering
days since 2017
2020: 281,737
2020: 18,469
2025
Target
50M
1M
+16.6M
578,709
58,177
58.177
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 2023), in accordance with ISAE 3000 assurance standard (see Independent verifier’s report on page 302). In addition, SSI
#8, SSE #3, SSE #5 and SSE #14 received a “reasonable” assurance level in 2023. Please refer to page 266 for the methodological presentation of each indicator. The
2023 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
2023
2022
2021
€
4,000,000
4,000,000
4,000,000
%
%
%
%
%
%
%
%
%
%
83%
5%
1%
7%
4%
16%
38%
19%
22%
5%
81%
12%
2%
3%
2%
15%
6%
31%
35%
13%
75%
17%
1%
4%
3%
8%
10%
48%
18%
16%
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2.8.3.3 Breakdown of contributions from employees and Schneider Electric entities to the
Foundation’s actions
Indicator
Total financial contribution
From employees
From the Schneider Electric entities and partners(1)
Total in-kind contribution (products or services)
Units
2023
2022
2021
€
€
€
€
10,490,937
12,461,007
7,045,158
1,227,005
1,520,324
1,121,092
9,263,932
10,940,683
5,924,066
10,800,121
7,267,507
8,444,800
(1) In 2023, data from Schneider Electric entities and partners are grouped together. Data from past years have been restated accordingly.
2.8.3.4 Breakdown of total contributions (Employees, Schneider Electric entities and
Schneider Electric Foundation) to the Foundation’s actions
Indicator
Breakdown by region
Africa & Middle East
America
Asia & Pacific
Europe
Cross countries
Units
2023
2022
2021
%
%
%
%
%
10%
39%
17%
33%
1%
5%
35%
25%
31%
4%
3%
34%
29%
31%
3%
2.8.3.5 Total budget for the Foundation’s actions
Indicator
Units
2023
2022
2021
Foundation budget, financial contributions and donations in kind
€
25,291,058
23,728,514
19,489,958
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Chapter 3 – How we manage risk at Schneider Electric
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How we
manage risk
at Schneider
Electric
3.1 Risk management scope
327
3.2 Organization and management 327
3.2.1 Group values
3.2.2 Internal control and risk management roles
and responsibilities
327
328
3.3 Risk management mechanisms 332
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
332
333
334
335
337
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Chapter 3 – How we manage risk at Schneider Electric
An introduction by Chief Governance
Officer & Secretary General, Hervé Coureil
Above all, our daily pursuit is to cultivate and uphold trust with
our valued customers, partners, and employees by acting
with unwavering integrity, fostering transparency, and
demonstrating resilience.
Thank you for your support,
Hervé Coureil
Chief Governance Officer & Secretary General
Dear Stakeholders
In an ever-evolving world filled with uncertainties, we find
ourselves navigating through a multitude of risks. The landscape
is continuously shaped by technological advancements, social
movements, and political shifts, making it increasingly challenging
for companies to anticipate and prepare for the diverse range of
threats that can impact operations. However, it is within our ability
to adapt and respond to these risks and truly demonstrate
our resilience.
To do so, we remain committed to strengthening our Enterprise
Risk Management (ERM) framework, continuing to take a
comprehensive approach to risk management. We remain focused
on safeguarding the value, assets, and reputation of the Group,
identifying and assessing major risks, anticipating changes in the
risk landscape, implementing preventive measures, and building
crisis response capabilities.
As a vital component of this framework, our internal control
procedures are designed to ensure compliance with laws and
regulations, adherence to policies and guidelines, effective internal
processes, timely remediation of deficiencies, and the reliability of
financial reporting.
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3.1 Risk management scope
The Enterprise Risk Management (ERM) 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’s 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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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.
Deploys the
Enterprise Risk
Management
framework, driving
risk assessments
across various Group
entities, and
consolidate results in
comprehensive
reports.
Monitors
effectiveness of
controls in daily
operations and timely
remediation of
deficiencies through
a structured
evaluation and test
program.
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 risks specific to their local market and culture.
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 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 manages and develops a network of around
40 local internal controllers covering all Group entities, with a
central team leading and coordinating the Group Internal Control
activities. The main objectives of the Internal Control department
are to:
• Define and update the internal control framework in
collaboration with the experts in their area of activity. This
framework is summarized in the digital “Group Internal Controls
Principles” reference – in line with the recommendations of the
COSO and French Financial Market Authority (Autorité des
Marchés Financiers (AMF)) reference frameworks;
• Ensure internal control is anchored in the managerial practices
for a better control environment and support employees in
applying the internal control framework;
• Drive self-assessment campaign focusing on the main risks
identified;
• 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.
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 2023 and continuing in 2024. 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
the Audit & Risks 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 expects to reach
optimized maturity level in the way it develops and maintains a
Group risk appetite framework. 2022 was a year of deployment with
standardized risk reviews engaged for most of the Group’s risk
categories and geographical zones. It resulted in an increased risk
management maturity, and a consolidation of the risk exposure at
the corporate level. The deployment continued in 2023, with risk
reviews carried out in a more robust and systematic way, with
subsidiaries included. Recognizing the importance of equipping
key stakeholders with the necessary skills and knowledge, in 2023
the Group focused on further empowering teams to contribute to
the optimization of our risk management practices through several
communication efforts and continuous learning and engagement.
Looking ahead to 2024, the Group remains committed to advancing
its risk management practices. Building upon the foundation laid in
previous years, efforts will continue to refine the risk management
framework, leveraging the insights gained.
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, the Group’s level of mitigation, and the
roadmaps in place to reduce the risk exposure and increase
preparedness.
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3.2 Organization and management
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Risk Overseers
The Reporting and Consolidation unit drafts and updates:
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
• 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;
Management team;
• 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; and
− select Group tools for credit, trade, and cash management.
• 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 337.
• Perform risk maturity self-assessments on a regular basis; and
• Define risk thresholds and review them regularly.
Global Finance department
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.
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Other Global Functions
3rd line of defense: Internal Audit
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.
In accordance with professional standards governing this activity,
Internal Audit independently assesses the effectiveness of
governance, risk management, and internal control 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 24 global auditors (including IT) and
30 regional auditors in 2023. 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 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.
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, 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. Additionally, the reports
are also shared with Senior Management and the Audit Committee.
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
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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 334) 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, and 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 and
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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3.3.2 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 offers 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)
Figure 3: Three risk natures and their unique approaches
Trend driven risk
Risk resulting from organizational
strategic or 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 the
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)
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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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.
Figure 4: Risk flywheel
Risk
Taxonomy
Risk Maturity
Assessment
Trust
Charter
Yearly Risk
Review
Policies
Key Risk
Metrics
Mandatory
PMI Tasks
Key Internal
Controls
Chapter 3 – How we manage risk at Schneider Electric
3.3 Risk management mechanisms
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is in charge of moving the
risk flywheel for his/her
respective domain
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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. An organization’s
policies provide a framework to operate effectively and efficiently
and are important for all stakeholders, enabling and reinforcing
trust. Each Risk Overseer is responsible for ensuring needed
policies are written and published, and that they are implemented,
communicated, and their implementation is being monitored. See
more details about policies in Chapter 2, section 2.1.7.
Mandatory PMI(1) 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.
(1) PMI = Post Merger Integration
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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.
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 2023,
around 40 of the Group’s top leaders were interviewed in addition
to external analysts and Board members. Furthermore, the scope
was expanded to include a larger leadership audience. To achieve
this, an additional survey was deployed, which successfully
garnered the participation of 400 leaders. These results served as
a valuable addition to the insights obtained through the interviewing
process.
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 337.
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.
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3.3 Risk management mechanisms
T Management of risks by the Legal
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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 357. 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.
It brings its methodology to develop emergency plans (crisis
management plans, etc.) and co-ordinates the corporate crisis
team (SEECC – Schneider Electric Emergency Coordination Center,
created in 2009) each time that it is activated. Global Security also
participates in crisis management, in managing the corporate crisis
cell, and in supporting local entities (to limit the consequences of
the occurrence of certain risks such as civil war, weather events,
pandemics, attacks on people, terrorism, etc.). In addition, it
regularly organizes Security Audits (R&D centers, head offices,
sensitive plants, etc.).
Global Security 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 20 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 three levels (red, orange, and green), with red
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 335. 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 into
consideration the current mitigation measures, as well as the probability of occurrence of the 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 Group’s 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, project, system quality, and offer reliability
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
Technology evolutions (Generative AI)
2.2 Operational disruption due to global political and economical disruptions
2.3
New competitive landscape and business models in energy
2.4
Supply chain resilience
2.5
Evolution of software and digital services offers
2.6
Attracting and developing talent with a focus on critical skills
2.7
Failure to achieve our long-term sustainability commitments and comply with regulatory requirements
2.8
Business disruption due to environment-related risks
3
Management practice risks
3.1
Inappropriate Data Management
3.2
IT systems management
3.3
Pricing strategy
3.4 M&A and integration
Key to symbols
High impact
Medium impact
Low impact
Potential
net impact Page
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Chapter 3 – How we manage risk at Schneider Electric
3.4 Key risks and opportunities
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. As an
industrial and technology company, the Group has activities spread
over dozens of R&D sites, and more than 200 production and logistic
units. With the use of Interent of Things (IoT), artificial intelligence
(AI), and other technologies supporting business activities, the
overall attack surface on IT and OT is large.
The security profile of the Company has evolved with more
connectivity and openness in the digital landscape and
digitalization of products. This is expanding the attack surface and
increasing the exposure to cybersecurity risk, where connected
products and digital offers (e.g., remotely managed services like
“Advisors”) at Schneider Electric or customers’ sites could be used
as a gateway for malicious cyberattacks. The move to a service-
oriented business model with software and augmented data
naturally increases risks, such as data breaches and intellectual
property (IP) theft.
As part of a bigger ecosystem with companies acquired (that are
bringing their own level of cybersecurity), thousands of unique
suppliers (with heterogeneous maturity in cybersecurity), and
customers, notably Critical Infrastructure clients, the Group faces
an increasing pressure on cybersecurity, product security, and
data protection, on top of scrutiny from national authorities.
Risk monitoring and management
Schneider Electric analyzes risks across its extended digital and
operational landscapes, as seen in the figure below, in order to
determine how to mitigate the corresponding risks.
Schneider Electric major Cyber Risks
1 Damage to Customer Assets
2 Business Disruption
People
Physical and digital capabilities
3 Compliance (customer payment, personal data…)
Sites and areas
4 Intellectual Property Theft
Network & Infrastructure
Ecosystem
Front Ends
Enterprise OT
Populations
Enterprise IT
1
Customers
1
Apps, Analytics
& Services
Edge Control
Connected products
2
Partners
2
Suppliers
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Staging
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Digital Services
Platform
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Web &
E-Commerce
2
Partner Portal
1
Remote Customer
Support
1
Field Services
Rep. & Project
teams
3
HR, Compliance
teams
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VIPs
4
R&D
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Global Supply
Chain
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IT partners &
outsourcers
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Cloud & Data
Centers
2
Active Directory
2
ERP & Finance
2
Endpoints
& BYOD
3
Data Hub & HR
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Chapter 3 – How we manage risk at Schneider Electric
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) continued
− Product vulnerabilities management. Schneider Electric’s
vulnerability management process, based on ISO/IEC 29147
and ISO/IEC 30111, tracks and fixes vulnerabilities with the
assistance of its Corporate Product Cyber Emergency
Response Team (CPCERT). The Company’s teams
continuously detect, mitigate, and remediate vulnerabilities
for products in the market as they are discovered. Schneider
Electric aims to work collaboratively with Researchers,
Country Cyber Emergency Response Teams (CCERTs), and
asset end-users through the Cybersecurity Support Portal to
ensure that accurate vulnerability mitigation and remediation
information is responsibly disclosed. In cases of critical
vulnerabilities, the incident management protocol can be
activated to expedite resolution.
− IP and Source Code protection. Schneider Electric protects
its portfolio of IP, preventing accidental loss, source code
exfiltration, and tampering through legal frameworks such as
patents, licenses, and escrow agreements, administrative
controls including non-disclosures and specific addendums,
and security measures including access control and code
integrity regarding third-party and open-source code.
− Customer environment security. To meet customer
expectations, Field Service Representatives (FSRs) must
follow consistent and sound security measures and be
certified with a “Cyber Badge”. This certification
demonstrates they have undergone training on secure
operation principles consistent with industry-leading
cybersecurity standards such as NIST, ISA/IEC 62443-2-4,
and ISO/IEC 27000-series and possess up-to-date
equipment and software to carry out their work on a
customer site.
To reach the highest level of trustworthiness, the company
continuously enhances its security posture through core pillars(1)
and notably supply chain security.
To mitigate the risks from design to maintenance and build Trust
along its supply chain, Schneider Electric leverages practices
prescribed in standards such as ISA/IEC 62443 and ISO/IEC
27001. The Company also pushes for responsible interactions
between actors within the supply chain.
• Third-Party Security: Schneider Electric mandates that its
suppliers meet high standards in cybersecurity and privacy, as
per the Third-Party Security Principles(2). The Company requires
them to extend these guidelines to their own suppliers and
service providers. These security expectations are included in
the onboarding process and Schneider Electric assesses
suppliers’ cybersecurity maturity to verify compliance with the
company’s requirements before engagement.
• Secure practices for products and software with:
− Secure Lifecycle Management. Schneider Electric
recognizes the need to have cybersecurity measures
fit-for-purpose throughout the entire lifecycle of the product,
from development to retirement. This discipline includes
end-to-end security across all software and system
development lifecycles, certified to the ISA/IEC 62443-4-1
Secure Development Lifecycle standard, to which Schneider
Electric has contributed for over a decade.
− Pen tests, final security reviews and digital certification. The
company enhances the security validation of its technology
leveraging its CREST-accredited penetration testing lab20
and by engaging external partners. All applications,
products, or systems undergo a formal security review, with
EcoStruxure™ cloud offers undergoing an additional digital
certification process. This brings a consistent and
disciplined approach to embedding security into the
Company’s products and maintaining external certifications.
− Industrial security. One cyber leader per site monitors alerts,
vulnerabilities, and supports incident response. On top of
this governance, hygiene is assured globally, in plants and
distributions centers (including OT asset inventory, IT/OT
firewalls and Secure Remote Access, endpoint protection on
all PCs, and real-time monitoring). From 2022 onwards, every
new production line is ISA/IEC 62443-3-3 and ISA/IEC
62443-2-4 Security Level 2 compliant.
(1) https://download.schneider-electric.com/files?p_Doc_Ref=SECyberSecurity&_ga=2.148019319.1795750856.1655361711-1193465033.1621862359
(2) https://www.se.com/id/en/download/document/3rd_party_cyber_09112020AR0/
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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.
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.
1.3 Product, project, system quality, and offer reliability
Risk description
Schneider Electric has more than 228,000 references produced in
153 factories, spread across 38 countries around the world.
As Schneider Electric operates in essential industries, ensuring
product quality and safety remains a paramount concern. Any
malfunctions or failures in products or services could potentially lead
to the Company incurring liabilities for both tangible and intangible
damages, as well as personal injuries. Moreover, such failures can
also result in additional costs associated with product recalls,
necessitate new development expenditures, and consume valuable
technical and economic resources. Therefore, Schneider maintains
it is crucial to prioritize and address these aspects diligently.
Schneider Electric’s products are also subject to multiple quality
and safety controls and are governed by both national and
supranational regulations and standards. New or more stringent
standards or regulations could result in additional capital
investment or costs of specific measures to maintain compliance.
The first wave of regulation updates has been released this year:
new revision of EN 60669-2-1 – “Switches for household and similar
fixed electrical installations”, and the New Battery Regulation
2023/1542, both of which will require significant efforts to ensure
compliance of products in 2024.
The above-mentioned costs could have a significant impact on the
profitability and cash equivalent of the Group, impacted in the past
years by recalls. The business reputation of Schneider Electric
could also be negatively impacted.
Looking forward, Schneider Electric is likely to encounter further
challenges that will impact its approach to product quality. Overall,
the regulatory landscape is shifting towards more stringent Quality
Assurance Standards. In addition, the increasing pace of changes
in support of sustainability requirements are prompting changes in
product design. Examples include: the phase out of products
containing SF6 gas in many countries; changes in packaging; and
changes due to regionalization of supplies. Schneider Electric is
proactively addressing these upcoming changes in its Quality
Management framework by integrating sustainability into its quality
assurance process and by strengthening the change management
process.
In addition to controlling changes and securing the validation of the
product, Schneider Electric is enhancing its reliability program to
strengthen the robustness over time of its offers, thereby extending
the useful lifetime of its products. In this way, Schneider Electric
creates ever greater value to its customers and the environment.
Successfully navigating these challenges will offer Schneider Electric
considerable competitive advantages. A proactive response to
emerging requirements and a commitment to innovation enhances
Schneider Electric’s market positioning as a leader in sustainable
and high-quality solutions.
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1.3 Product, project, system quality, and offer reliability continued
Risk monitoring and management
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 build
“quality” inside of the Company culture. This is extended to all the
value chain and leverages process digitization across all entities
that have an impact on quality.
This program includes:
• A brand-new proactive Design Quality program called “Design
for Safety and Reliability” (DfSR) with the new mandatory Quality
Fundamentals for Design domain, to increase safety,
robustness, and reliability of new offers; Customer Satisfaction
and Quality (CS&Q) function puts a strong focus on stopping any
launches that do not comply to quality standards. In addition,
roles and responsibilities were better defined and the number of
resources focused on design quality has greatly increased.
• Reinforced Quality in Industrialization by adding Quality
Fundamentals, based on industry standards, such as Advanced
Product Quality Planning from the Automotive Industry Action
Group, for prototypes, pre-series, and launch. Roles and
responsibilities were redefined, and the resources refocused on
industrialization quality will continue to expand. This adoption of
the highest applicable standard positions Schneider Electric for
even more proactive identification, prioritization, and mitigation
of product and process risks. This “zero-defect” and data-
driven program aims to ensure products achieve 100% first time
right and on-time flawless launches. The resulting safety,
robustness, quality and cost optimization strives to exceed
customers’ expectations.
• Unified all manufacturing quality initiatives, fundamentals, and
principles into the Schneider Performance System which focuses
and aligns the entire supply chain in the pursuit of built-in-quality.
Risks in manufacturing and distribution are systematically
captured in a living Potential Failure Mode and Effects process
including a Company-wide reduction program which achieved
dramatic risk reduction through error proofing and leveraging
Schneider’s smart factory solutions to ensure quality.
• Significantly strengthened supplier quality processes by
benchmarking various industries and adopting rigorous 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
with added controls for both prevention and detection.
Schneider Electric’s supplier partners have received
communications regarding the Company’s transformation
journey to support the improvements with the desired speed.
• Enhanced the efficiency of service and project execution by
incorporating risk management and mitigation strategies
throughout the entire process, from offer definition to
maintenance. Integrated Quality Fundamentals for Project and
Service into daily activities to strengthen processes and
establish standardization for proactive identification,
prioritization, and mitigation of risks. By implementing this
approach, the Group seeks to improve safety, robustness,
quality, and cost optimization, surpassing customers’
expectations while ensuring their safety. Additionally, this will
help establish consistent standards across the Company.
To ensure that the culture of quality supports efforts being made,
three main changes have been introduced: 1) Quality became part
of Schneider Electric’s Code of Conduct, the Trust Charter, to
ensure that everyone understands that a quality deviation could
become a compliance issue; 2) Quality was added to the
Schneider Electric Essentials program reflecting values that anchor
the Company’s culture; and 3) a Quality Academy has been
created to promote learning about quality and non-quality for all
employees and to set a new standard of technical know-how of the
Quality function.
1.4 Competition laws
Risk description
Schneider Electric has a strong brand and is present in many
markets and at many levels of the supply chain worldwide.
Competition laws on both national and supranational levels affect
all aspects of Schneider Electric’s business strategies and
day-to-day operations. This includes agreements with partners as
well as unilateral market activities and mergers and acquisitions.
Any violation of competition law can cause severe consequences
for Schneider Electric, and the individuals involved in such
activities, including substantial fines and a serious loss of
reputation.
In order to ensure compliance with applicable competition laws
and regulations, Schneider Electric has implemented a risk based
Competition Law Compliance Program that identifies, assesses
and addresses competition law risks throughout the business. This
three step risk approach is a continuous process. This means that
the Competition Law Compliance Program will be developed and
updated in response to a number of factors, such as Schneider
Electric’s market presence and regulatory developments.
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.
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3.4 Key risks and opportunities
1. Event triggered risks
1.4 Competition laws continued
Schneider Electric strongly disagrees with the allegations of the
statement of objections and submitted its response to the FCA on
October 4, 2022.
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
(cf. p. 502).
Risk monitoring and management
To raise awareness about applicable competition laws and manage
areas of risk, Schneider Electric’s Competition Law Compliance
Program is based on policies, guidelines and procedures,
e-learnings and in person trainings, internal controls and audits
and an internal reporting and whistleblowing mechanisms.
Schneider Electric published and deployed an updated and
enhanced Group Competition Law Policy in 2022. In addition,
nine topic specific Competition Law Guidelines were also launched
in 2022 including topics related to information exchange,
procurement, distribution, e-commerce and mergers and
acquisitions.
Both the Group Competition Law Policy and the Competition Law
Guidelines have been translated into over 40 languages and are
accessible to all employees via Schneider Electric’s internal policy
platform.
The whistleblowing system of Trust Line for employees and external
stakeholders such as suppliers is managed to identify any
inappropriate practice or behavior with competitors or business
partners that may be reported.
Furthermore, internal controls and internal audit missions continue
to be reinforced on compliance risks, including in respect of
competition and antitrust risks.
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 2021, creating risk maps for corruption matters at
both regional and Group level. Action plans were implemented in
2021 and 2022. In 2023, Schneider Electric established risk maps
for newly acquired entities currently being integrated.
Third, the identified risks are managed by means of effective
measures and procedures:
• 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 – 98.5 % of employees exposed to
corruption risks have completed the annual mandatory
Anti-corruption e-learning. The content is updated yearly.
Schneider Electric also ensures ongoing communication to keep
employees informed about updates to the anti-corruption
program and highlight high-risk areas.
• Third parties’ integrity – Schneider Electric manages the
integrity of its stakeholders through different evaluation
processes: Business Agents Policy for assessing intermediaries,
Third Party Due Diligence Policy for evaluating suppliers and
clients, Sponsorship Policy for assessing sponsorship projects,
and Philanthropy Policy for evaluating donation opportunities.
The Group also have specific rules in place to govern marketing
practices. Additionally, compliance-related aspects are
thoroughly assessed during mergers and acquisitions, following
the specific M&A Compliance framework.
• Specific accounting controls – Schneider Electric has
developed accounting control procedures to ensure that books,
records, and accounts are not used to hide fraud. Since 2021,
work was initiated to strengthen specific anti-corruption controls
for a defined set of sensitive-judged accounts and transactions.
This effort was fully completed in 2023.
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1.5 Corruption linked to B2B and project business continued
• Whistleblowing – A global whistleblowing system, available to
employees and external stakeholders, is also managed to
combat this risk. In 2023, 1,135 employee and 156 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.
2023 specific events
In 2023, out of the cases that were opened regarding
noncompliance to the French DoV, two were completed and one
company was ordered by the Paris judicial court to strenghten its
risk analysis and its measurement monitoring system. This confirms
that the raising expectations towards multinationals vigilance are to
be taken seriously. Up to the date of publication of this document, 5
other cases are in litigation with court decisions expected in 2024.
These cases concern freedom of association, social and
environmental rights, or human rights violations.
As regards the Corporate Sustainability Due Diligence Directive,
the European Commission is still in the trilogue process in view of
adopting a text for a European Directive.
The text should be close to the French DoV law and would cover
Schneider Electric’s operations and supply chain (potentially Tier 2
suppliers and above). Regarding the current draft of this Directive,
approximately 20,000 companies based in Europe should be
concerned; in comparison, more than 300 companies are
concerned by the French DoV.
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3.4 Key risks and opportunities
1. Event triggered risks
1.6 Human rights and safety issues through the value chain continued
Risk monitoring and management
Human rights are part of the Ethics & Compliance program which is
managed by the Ethics & Compliance Committee and 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.
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 +1.6 points increase both in 2022
and 2023, ending 2023 with 61.9 points as result.
Schneider Electric has built a supplier vigilance plan in which risky
suppliers are identified using criteria that take into account the
1.7 Counterparty risk
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 2023, in the scope of 2021
– 2025 Schneider Sustainability Essentials (SSE) objective #17
“4,000 suppliers assessed under our ‘Vigilance Program’”, the
Group conducted 212 on-site audits and 953 remote self-
assessments. At the end of 2023, 97% of non-conformances from
2022 have been closed, and 36% of 2023 non conformances. 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. By end
of 2023 over 168 suppliers were classified as conforming to the
stage 1 requirements of the program. In addition to the Vigilance
and Decent Work Programs, Schneider Electric is also developing
a program to strive towards more social excellence in its supply
chain, experimenting other means to go further and expand its
coverage beyond tier 1 suppliers.
Risk description
Risk monitoring and management
The Group has a particularly wide international presence (more
than 100 countries), with revenue almost equally spread across the
four regions (Asia Pacific, Western Europe, North America, Rest of
the World), and 39% 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, 2023, and considering the total scope for the
Group, 19,9% of trade receivables were overdue (1,308M€), out of
which 486M€ were overdue by more than three months (37% of
total overdues or 7,4% of trade receivables). (refer to Note 3 in
“Notes to the consolidated financial statements”, section 5 of
Chapter 5, page 473).
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 ensuring we act within the legal
and compliance framework set up by the Group.
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, 2023, the amount of the provision for
receivables impairment is EUR 373 million (as described in Note 16
in “Notes to the consolidated financial statements”, section 5 of
Chapter 5, page 485).
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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.
The main exposure of the Group in terms of currency exchange
risks is related to the US dollar, Chinese yuan, and currencies
linked to the US dollar.
In 2023, revenue in foreign currencies amounted EUR 29.2 billion,
including around EUR 11.2 billion in US dollars and EUR 4.5 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 193 million on
adjusted EBITA.
The result of exchange gains and losses of 2023 amounts to EUR
-50 million, excluding hyperinflation impact. (as described in Note 7
in “Notes to the consolidated financial statements”, section 5 of
Chapter 5, page 475).
Monitoring and management of the risk of
fluctuations in exchange rates
The Group manages its exposure to transactional currency risk to
reduce the sensitivity of earnings to changes in exchange rates.
Receivables and payables of the Group’s subsidiaries
denominated in currency other than their functional currency are
hedged primarily by means of rebalancing assets and liabilities per
currency (natural hedge).
More than 20 currencies are involved, with the US dollar, the
Chinese yuan, Japanese yen, the Singapore dollar, Mexican peso,
and the British sterling 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 Group is also carefully monitoring
the exchange rate evolutions in countries with high inflation
situation and where it has a presence.
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
499.
Description of risk of deliverability of
currencies
The Group has a particularly wide international presence (more
than 100 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
deliverability in currencies
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.
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3.4 Key risks and opportunities
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2. Trend driven risks
2.1 Technology evolutions (Generative AI)
Risk description
In recent years, technology evolutions, particularly the fast
advancement of AI and Generative AI (GenAI) is an emerging risk
for Schneider Electric, potentially posing significant impact both on
offer vs customer expectations and on internal processes and
tools. Lack of integration of AI technologies into Schneider Electric’s
internal and external offerings can put the Group at a disadvantage
in the market, hindering its ability to stay competitive.
As AI systems become more sophisticated, there is a need to
ensure that they are designed and deployed responsibly,
respecting privacy, fairness, transparency, and accountability.
Failure to address these risks could result in reputational damage,
financial liability, regulatory and compliance challenges, and legal
consequences for Schneider Electric at any point.
AI technologies are likely to have a significant impact on talent and
workforce, causing a shift in job roles and skills, and therefore
necessitating investment in upskilling and reskilling, and potentially
new talent. Schneider Electric needs to proactively plan for and
transform its workforce and ensure that employees are equipped with
the necessary skills to work alongside AI systems in the long run.
Conversely, leveraging AI and machine learning to enhance
employees’ productivity as well as enhance products, services,
and customer experiences can help Schneider Electric gain
business advantages.
Risk monitoring and management
Schneider Electric is striving for mastery on highest impact
technology by adopting technology advancements (AI).
Implementing AI responsibly means operationalizing a systematic
approach to assess risks for all AI / GenAI solutions, services, and
products; conducting impact and maintenance assessments on an
ongoing basis.
To address opportunities in AI, Schneider Electric launched the AI
Hub well before GenAI accelerated and scaled the advancements
in this space. The Company also conducted an opportunity study
to determine the most impactful GenAI application opportunities
and use cases across its 15 functions with the support of more than
200 internal and external stakeholders. Looking across all
functions, more than 200 potential use cases were identified and
then prioritized for short-term and mid-term implementation. The
first applications have already started to increase internal
productivity and enhance our offers. Most of them support the core
mission of the Company and making a positive impact on the
planet by equipping our customers and partners for their
sustainability journey.
2.2 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 make
significant operational adjustments, such as duplicating efforts to
comply with regional requirements, resulting in negative impacts on
the Group’s profitability. Besides 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 100 countries,
Schneider is increasingly impacted by this acceleration of regional
(vs. global) trade and new technology policies are putting pressure
on supply chains in the forms of both tariff and non-tariff barriers.
Additionally, the increase of armed conflict and potential related
consequences, such as employee security in impacted
geographies, sanctions compliance, national security regulations,
sourcing, and others, is another example of challenges the Group
is facing.
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.
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2.2 Operational disruption due to global political and economic disruptions
continued
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
China. 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).
2.3 New competitive landscape and business models in energy
Risk description
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: Increasing influence of digital giants and
software players;
• A value chain disruption when it comes to marketplace: more
products are being purchased via online marketplaces. While
this is currently primarily transactional home electrification
products (such as smart thermostats) it will inevitably expand to
more expensive and complex products (such as EVSE, storage,
and smart panels);
• An All Electric world: Oil majors urged to reduce their impacts
on carbon emissions; and
• Shift towards decentralized energy production: Fueled by the
advancements in technology that have made renewable energy
systems more accessible and cost-effective, the growing
Prosumer market has witnessed significant developments in the
past years.
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; and
• On the other hand, more local experts adopted by local markets
eager to interact with agnostic solutions and interconnect
seamlessly with other players.
The described environment constitutes both a risk and an
opportunity to the Group. Schneider Electric is at the forefront of
the move to electrification and decarbonization, meeting the
changing needs of the market. With its unique position and
expertize, Schneider can facilitate the transition to decentralized
energy production and support Prosumers in maximizing energy
efficiency and optimizing grid interactions. As such, shifting market
expectations and competitive landscape can impact the Group
performance significantly.
Risk monitoring and management
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 provides a full portfolio of solutions for
customers (hardware and software) – as EcoStruxure™ solutions –
and energy and automation digital solutions for efficiency and
sustainability. This includes the recent launch of Schneider Home
Offer which builds on the Group’ significant Residential buildings
market share and access to offer electric vehicle (EV) charging,
Battery and Solar Invertor Hardware working as a system that
includes a Smart Electrical Panel for Prosumers.
Additionally, 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.
Over the past two years, Schneider Electric has assembled a
unique portfolio of software companies that are leading the
Prosumer transformation journey. These companies are core to the
Prosumer business strategy which delivers value to residential,
commercial and industrial, as well as utility costumers. These
companies are accelerating via the strong established access and
global presence of the Group, while also contributing to the rest of
Schneider Electric’s businesses as new go-to-markets, enriching
offerings in the eMobility space for commercial and industrial
customers, as well as new and enhanced value propositions for
consumers and the residential segment.
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3.4 Key risks and opportunities
2. Trend driven risks
2.4 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.
Risk monitoring and management
The Group’s supply chain strategy team is responding to the global
supply chain crisis to ensure supply chain flexibility and resilience
is continually improved.
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 2023, component mapping is reaching 73% of global revenue.
According to internal processes, all medium and high business
risks components are having a containment plan. As of Q4 2023,
77% of electronic ranges related risks and 60% of
electromechanical ranges related risk stand mitigated with a mix of
strategic safety stocks and multi-source actions. 78% of critical raw
materials have an effective risk mitigation plan, out of which 50% is
already fully effective. The resilience three-year plan targeting
building a redundant manufacturing network, launched in 2021 and
named Power of Two has been significantly increased to cover all
critical businesses, 60% is fully operational and most will be live in
2024. As of end 2023, 69% of distribution centers are covered by a
logistic back-up powered by flow orchestration through 7 digitized
control towers in case of disruption.
Rare earth material supply risk related to potential scarcity in the
market has been fully assessed and is taken as a data entry in the
design roadmap. On top, strategic partnership with key suppliers
have been reinforced through long-term agreements and C-Level
connection, with a particular focus on electronic semiconductor
players. A procurement and planning hub was established in
Singapore to manage a direct supply of critical material sources
and manage strategic stocks, demand, and supply. As of 2023 this
supply chain hub deployment is focused on active electronics and
copper cathods, and will ramp up in 2024.
Energy supply risks in Europe have been assessed and business
continuity plans have been anticipated on critical factories and
suppliers, while we accelerate the 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 82% in 2023 and following our plans 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 embedded
into source resilience containment plans.
Leveraging its network of 153 factories and 79 distribution centers
globally, and network of seven control towers (in each region), the
Group is able to monitor global transport reliability, labor
availability, and overall market dynamics in real time, adjusting lead
times as necessary, while enacting mitigating actions to ensure
lead times are as short as possible. All strategic distribution
centers will have a ready-to-deliver backup logistic center; as of
today business coverage is 71%. Sites prevention plans including
cybersecurity practices are fully deployed and monitored centrally.
Teams are empowered to proactively communicate with customers
to continue to support them and their operations.
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2.5 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 so, the Group helps users
decarbonize, reduce energy consumption, increase resiliency, and
optimize occupancy effort. The whole range of software offering is
contained across the Divisions. It primarily consists of acquired
hardware agnostic software and also includes 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 (AI)
and advanced algorithms.
The Group is investing in its digital transformation journey and as
such is increasing the share of its digital offers. The software and
digital services portfolio continues its growth. 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.
Consequently, the risk for the Group is double:
• Long-term potential misalignment with end-users needs; and
•
Integration of already existing offers, solutions, and roadmaps
into a comprehensive and customer-relevant portfolio.
Besides the digital offer readiness risks, and as a direct extension,
the Group must also pay attention to:
• Challenges in commercialization and selling (cross-selling,
simplified offer for effective selling, etc.); and
• Churn prevention.
There are several risk factors that are particularly relevant to the
Group’s agnostic software portfolio, which represents the majority
of the software and digital services portfolio in terms of revenue.
These include:
• The ability to attract and retain employees in the global software
market, which is very competitive;
• Risks related to a shift towards a SaaS subscription model,
including product and portfolio readiness, cloud strategy, and
capabilities;
• The ability to align the software portfolio, which generates a
significant proportion of revenue from the energy sector, with
emerging energy trends; and
• Product and cybersecurity.
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.
The Group has also 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. One
of the key activities is the launch of an assessment of shared
services provided by AVEVA to other software companies;
• Monetizing critical connected assets with advanced Advisor
offer through installed base, using AI 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
• Proposing an agnostic solution within a large software portfolio
and integrating open standards.
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3.4 Key risks and opportunities
2. Trend driven risks
2.6 Attracting and developing talent with a focus on critical skills
Risk description
The growth of the Group’s businesses in markets around the world,
the digital transformation, and the rapidly evolving context of the
“next normal” requires an increased focus on talent. Shaping the
workforce of the future depends on the Group’s ability to attract,
hire, onboard, develop, and retain the best talent. Critical skills,
especially in the areas of technologies, software, services,
sustainability, supply chain, quality, and electronics must be
prioritized. 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, and the challenge is amplified 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.
Simultaneously, by implementing the appropriate policies and
programs, the Group can foster a culture of innovation and
expertise, enhance its reputation as an employer of choice and a
leader in nurturing essential skills within its workforce, and
ultimately gain a competitive edge in the market.
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
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.
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, 49 countries are using the system with most of the
remaining countries joining by 2025;
• 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 while 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;
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2.6 Attracting and developing talent with a focus on critical skills continued
• Career development focus for all employees, leveraging a digital
ecosystem powered by AI, Open Talent Market, for internal
mobility and anchored within an annual performance and
development review and regular meaningful career
conversations;
• A revamped “Electrifier” (formerly called Edison) expert
program evolved around 4 business streams and articulated
around 3 levels of expertise: Electrifier, Senior Electrifier and
Fellow Electrifier designed with the objective of bolstering the
core of our business, while pioneering advancements on
Electricity 4.0, Industry 4.0 and our Sustainability solutions;
• Targeted career development programs supporting employees
at all stages of their career: from fresh graduates to senior
talent, ensuring a strong pipeline of talent for the future and
harnessing the power of all generations. Senior talent program
recognizes the contributions of this segment while empowering
them to design their next career stage through new contractual
opportunities, upskilling, knowledge sharing, mentoring, and
coaching among other options;
• 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.
2.7 Failure to achieve our long-term sustainability commitments and comply
with regulatory requirements
Risk description
Schneider Electric has set ambitious sustainability commitments
translated into concrete targets in the Schneider Sustainability
Impacts (SSI) and Schneider Sustainability Essentials (SSE)
programs and the Group Net-Zero commitment. At the same time,
the Group is facing stronger pressure on environmental, social and
governance (ESG) performance and transparency from regulators,
investors, and customers.
Business expectations regarding sustainability are evolving fast,
requiring rapid and significant transformation of our value
proposition and sustainability practice across our operations and
geographies. As regulations tackling ESG develop, the Group
could see market disruptions in geographies where it operates as
well as where its supply chain is located.
Failure to lead sustainability best practices could end in an inability
to meet customer and regulatory requirements, resulting in a loss of
competitiveness, distrust on the part of stakeholders, and a loss of
attractivity to investors, customers, or new talents.
As an Impact company with sustainability at its core, falling short
on its sustainability commitments, and especially 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 brand reputational impacts.
Conversely, achieving ambitious sustainability commitments would
give Schneider Electric higher credibility and attractivity to its
stakeholders. Thanks to the SSI disruptive and virtuous process of
continuous improvement, the Group is mitigating its risks, and
innovation and transformation is ensuring business opportunities as
the need for digital solutions is growing.
Risk monitoring and management
Schneider’s sustainability commitments are designed to involve all
stakeholders. Internally, a clear governance is in place from Board
to operational levels to monitor performance, ensure compliance,
and progress.
SSI performance is embedded in managers’ and leaders’ short-
term incentives, and ESG performance in four external ratings
linked to attribution of Performance Shares for leaders (Schneider
Sustainability External and Relative Index, SSERI). Suppliers’
progress in decarbonization, resource management, and decent
work practices are also included in the Group’s targets.
Finally, Schneider is committed to communicating its sustainability
commitments performance frequently and transparently to its
investors, along with its quarterly financial results.
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3.4 Key risks and opportunities
2. Trend driven risks
2.8 Business disruption due to environment-related risks
Risk description
The risk of business discontinuity can arise from multiple vectors
influenced by climate change trends.
Physical climate risks have the potential to cause:
• Losses and damages to Schneider Electric operations and
enabling infrastructures. 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, as well as impacts from
chronic environmental changes like average temperature
increase or sea level rise. This could result in damage to assets,
disruption to business operations, and human and
environmental consequences.
• Business disruption due to logistics bottlenecks. Physical
climate risk may threaten business continuity not only on
Schneider’s premises, but for all players in the value chain (from
raw material extraction and transformation to transportation
hubs and distribution centers) requiring a systemic approach
towards climate adaptation.
• Cost increase, risks of scarcity, and insecurity of raw
materials supply. Global mega-trends of electrification and
decarbonization, are increasing drastically the demand for
specific raw materials, adding volatility on the markets of
materials used to manufacture electrical equipment.
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, digitize, and decarbonize.
Risk monitoring and management
Schneider Electric, like many other companies, faces these risks
and proactively address them to ensure the continuity of its
operations, while committing to continuously reduce its
environmental impacts.
Losses and damages on Schneider Electric operations and
enabling infrastructures:
• Schneider places dependency analysis at the heart of its risk
management and has performed a forward-looking climate risk
and vulnerability assessment with Risilience to identify and price
the materiality of physical and transition climate risks that may
affect its own operations and sites, its extended value chain,
and overall economic activities in the short-term, medium-term,
and long-term.
• 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 2025, 2030, and 2050.
• Schneider assessed exposure to and financial impacts arising
from eight different natural hazards. On its operations, the
analysis includes 338 sites ranging from factories and
distribution centers to offices. The impact from extreme weather
events on business activities considered in the study is not
limited to on-site potential damages but includes as well the
risks on enabling activities like transportation and infrastructure
failures or power plant offline.
• On a longer time scale, the impact from chronic physical risks is
not limited to Schneider assets but covers the reduction of
employees’ productivity, the increase of air conditioning loads in
buildings, and overheating in data centers, in addition to the
other indirect impacts previously mentioned. Currently, the most
disruptive threats faced are drought and water stress. In the
future there is likely to be an increase in exposure of our sites to
heatwave, drought, and water stress.
• Without adaptation action and in a Paris Agreement (2°C)
scenario, the expected aggregated impact to Schneider
Electric’s discounted cash flows from physical climate-related
risks amounts 2.1% over the next 10 years.
• Climate change adaptation consists of several resilience
initiatives. 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, leading to preventive
investment to secure assets and mitigate material climate risks.
• Climate-related physical risks are part of the on-site
assessments made by independent global risk experts (GRC),
defining current potential financial impacts as well as the cost of
response. All industrial and logistics sites worldwide are
evaluated every three years. Risk profiles of each site are
thereby updated, and recommendations are made to mitigate
and adapt to identified risks. The Group deploys protection
measures to mitigate or avoid the risks. 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 2023.
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2.8 Business disruption due to environment-related risks continued
Business disruption due to logistics bottlenecks:
• Schneider Electric monitor events across 10,000 logistics 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. 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. Read more about “Power of
Two in Manufacturing” page 348.
Cost increase, risks of scarcity and insecurity of raw materials
supply:
•
In the forward-looking climate risk and vulnerability assessment,
Schneider assessed the impact of natural hazards on five raw
material streams to determine the share of procurement
spending in those five raw material streams, supplied from
countries that are highly exposed to natural hazards. Out of all
hazards, Schneider’s analyzed upward value chain is mostly
exposed to hurricanes, with 34% to 55% of its spendings in
those five raw material streams sourced from countries at high
risk of facing hurricanes.
• 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 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.
• 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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3.4 Key risks and opportunities
3. Management practice risks
3.1 Inappropriate Data Management
Risk description
Risk monitoring and management
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.
To support this system, the Company leverages a network of Data
Offices in each jurisdiction, practice or function, that governs the
full range of data-related activities ensuring data excellence,
security, and scalability. These functions are equipped with
specialist resources focusing on the adherence of Schneider Data
Golden rules and include a focus on data risk and security. To
monitor performance and impact, maturity assessments are
performed regularly.
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.
Finally, and specifically to digital assets, independent assurance
checks are performed to identify correct adherence to data
protection and relevant regulations. This is in line with privacy
regulations and includes in certain high risk cases the execution
and delivery of a Data Privacy Impact assessment.
The last decades have seen a sharp increase in globalization
trends coupled with an acceleration of digital transformation. The
importance of the data economy as an enabler for wealth and
progress has been acknowledged by many governments, citizens,
and enterprises, hence adequate data management becomes
essential.
Inappropriate data management poses tangible risks. Firstly, it can
lead to breaches in data security and privacy, potentially exposing
sensitive company and customer information to unauthorized
parties. This could result in reputational damage, legal
consequences, and financial losses. Furthermore, poor data
management may hinder the company’s ability to comply with data
protection regulations such as GDPR, leading to regulatory
penalties and compliance issues. The number of related
regulations are increasing 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.
Secondly, inadequate data management can impede effective
decision-making and business operations. Without proper
organization, storage, and access to data, employees may struggle
to retrieve accurate information in a timely manner, leading to
inefficiencies and errors in decision-making processes. This can
impact various aspects of the company’s functions, from product
development and supply chain management to customer service
and financial planning.
Finally, inappropriate data management may hinder innovation and
digital transformation initiatives within Schneider Electric. Data is a
valuable asset that can be leveraged for insights, product
development, and process optimization. If data is not managed
effectively, it can impede the company’s ability to harness the full
potential of data-driven technologies such as IoT, AI, and advanced
analytics. This aspect 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.
Adequate management of the risks outlined above, presents
potential opportunities the Group is looking to pursue, as outlined
below:
• Given the global nature of Schneider Electric’s operations,
ensuring proper data management is crucial to maintaining trust
with customers and stakeholders;
• Ensuring that data is managed appropriately is essential for
maintaining operational excellence and driving business
performance;
• By implementing robust data management practices, Schneider
Electric can better position itself to drive innovation, improve
operational efficiency, and deliver superior value to its
customers and partners.
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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.
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 2023, the Group continued to reduce legacy IT applications
through a dedicated “Technical Debt Reduction” program.
3.3 Pricing strategy
Risk description
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.
In 2023, the Group saw a normalization of raw material prices,
freight rates and supply chain conditions compared to 2022,
though overall inflation and foreign exchange rate fluctuation
continued to impact the Group’s cost base. 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.
Pricing risk is expected to persist in 2024 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.
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3.4 Key risks and opportunities
3. Management practice risks
3.4 M&A and integration
Risk description
Risk monitoring and management
Mergers and acquisitions (M&A) provide opportunities to enhance
Schneider Electric’s business portfolio, strengthen its positions in
existing businesses, acquire new technologies or expertise, enter
new markets, and exit businesses that are no longer core.
Successful M&A can drive increased revenue, profitability, cash
flow and shareholder value.
M&A and integration also present risks for Schneider Electric.
In transaction execution, such risks include, but are not limited to,
suboptimal acquisition strategies or flawed selection of acquisition
targets, overestimating an acquisition’s future performance or
potential, overestimating revenue or cost synergies with Schneider
Electric, value erosion of acquired businesses post acquisition,
paying too high a price for an acquisition or selling a business for
too low a price, not identifying or underestimating future losses or
liabilities related to M&A transactions, and missing or not
adequately assessing important facts in due diligence.
Schneider Electric has a detailed strategy process, part of which
includes identification and prioritization of acquisition targets as
well as identification of businesses to be divested.
During transaction due diligence, Schneider Electric aims to
identify and assess M&A and integration risks and uses various
means of risk mitigation, including reflection in transaction price,
contractual protections, post-closing remedial actions, and detailed
integration and separation plans. Where risks are not identified, not
adequately assessed, or where risk mitigation measures fall short,
consequences can include financial loss, legal costs and penalties,
regulatory action, and business and reputational damage for
Schneider Electric.
During the due diligence phase, Schneider Electric develops
detailed integration plans, which are implemented after
transaction closing.
With regards to integration, key risks include, inter alia, higher than
expected integration cost, longer than planned integration
processes, loss of key people, challenges in integrating different
cultures, and difficulties in implementing Schneider Electric’s
standards in areas such as legal, regulatory, data, cybersecurity
and sustainability. If not managed, these risks could lead to
negative consequences for the Group, including but not limited
to, financial losses or penalties, legal liabilities, and
reputational damage.
These include the deployment of the Group’s Trust Standards:
minimum requirements in terms of policies, standards, procedures,
processes or guidelines in areas such as Human Resources, Legal,
Ethics & Compliance, Cybersecurity, that all Schneider Electric
entities must meet. The Group aims for all acquired entities to
comply with these Trust Standards requirements within a period of
three years following the acquisition. The Trust Standards
deployment plan is part of the overall integration plan of each
acquisition.
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3.5 Insurance
Schneider Electric transfers high severity, low
frequency risks to leading insurance companies.
The Risk and Insurance department reviews the
current pricing and coverage conditions of the
external insurance market in implementing the
most efficient insurance program.
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.
Chapter 3 – How we manage risk at Schneider Electric
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 2023.
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Corporate
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4.1 Governance Report
4.1.1 Composition of the Board of Directors
4.1.2 Activities and operating procedures
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362
of the Board of Directors
380
4.1.3 Activities and operating procedures of the Committees 388
4.1.4 Report of the Vice-Chairman
& Lead Independent Director
Internal regulations of the Board of Directors
4.1.5
4.1.6 Regulated agreements and commitments
4.1.7 Stakeholder Committee
4.1.8 Senior management
395
396
405
406
407
4.2 Compensation Report
408
4.2.1 Overview
4.2.2 Report on the compensation granted or paid
during the 2023 fiscal year (say on pay ex-post)
4.2.3 Compensation policy for the 2024 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
408
410
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Vice-Chairman & Lead Independent
Director’s introduction
Dear Shareholders,
2023 was a milestone year for Schneider with a successful
leadership transition implemented at the helm of the Company and
record financial performance thanks to strong execution driving
revenues, adjusted EBITA, net income and free cashflow to
record-high levels. Based on these results, the Board of Directors
proposes a dividend of €3.50 per share, representing the 14th
consecutive year of dividend progression. The Board is also proud
of the 2023 Schneider Sustainability Impact score, which exceeded
expectations.
The new governance structure splitting the office of Chairman from
that of the Chief Executive Officer came into effect on May 4, 2023,
when Peter Herweck was appointed as Chief Executive Officer
while Jean-Pascal Tricoire continues to support the Company as
Chairman. This new governance satisfies our investors as well as all
Board members, as demonstrated by the results of the external
assessment of our Board performance in 2023. The change in
governance was accompanied by the establishment of new
Committees and a reorganization of the powers of each corporate
body. Currently, the Chairman of the Board is entrusted with
extended powers, which will put Jean-Pascal Tricoire’s extensive
experience at the Company’s service, while my own powers, as
Vice-Chairman & Lead Independent Director, were also reinforced.
During the year, the Board continued to work on its composition,
and invites you to support the appointment of a new Independent
Director at the Shareholders Meeting. Philippe Knoche, a French
and German dual citizen based in Paris, who was the Chief
Executive Officer of Orano from 2015 to 2023, has recently joined
Thales as Senior Executive Vice President Operations and
Performance in October 2023. He will bring to the Board his
expertise in energy and technology, as well as experience in
transformations both at a strategic and operational level. Also
submitted to your votes are the renewals of the terms of office of
Cécile Cabanis, Jill Lee and myself, all of whom bring relevant and
complementary skills to the Board.
Throughout 2023, I had the opportunity to discuss our
compensation policy and practices in engagements with many of
Schneider Electric’s shareholders, as well as investor
representative bodies. Several changes were already implemented
in 2023, such as: (i) the reassessment of the different components
of executive officer compensation (which led to a decrease of the
on-target global remuneration opportunity by 23% compared to the
previous Chairman & CEO compensation policy), (ii) the increase of
the performance targets linked to the involuntary severance
indemnity, and (iii) the inclusion of a clawback provision.
For the 2024 policy, the Board wishes to maintain its overall balance
and stability, ensuring a strong link between pay and performance,
a strong alignment with employees and shareholders, and a
long-term focus. The Board also considered shareholder feedback,
which is why, to remedy some shareholder concerns, I announced
in my letter dated April 13, 2023 that the Board would propose to
implement two changes to the 2024 compensation policy: (i) the
introduction of a stricter retention rule for unvested share awards
that would be pro-rated for time in case of retirement or change of
assignment within the Group for the Chief Executive Officer, and (ii)
the introduction of new sustainability performance conditions in the
LTIP linked to the reduction of our Scope 1, 2, and 3 (upstream) CO2
emissions, in replacement of the previous Schneider Sustainability
External & Relative Index (SSERI). This amendment is designed to
align executive remuneration with the Group’s commitment in terms
of climate transition and Schneider’s sustainable value creation
over the long-term. The Board hopes that these improvements in
the CEO compensation policy and the related resolution submitted
to your vote will garner strong support among shareholders.
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 2024
Shareholders Meeting. We look forward to a successful AGM and
sincerely hope that many of you will take part in the Company’s
future by voting on the resolutions, attending, 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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Schneider Electric Universal Registration Document 2023 | www.se.com
Chapter 4 – Corporate governance report
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).
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.
361
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4.1 Governance Report
R
T 4.1.1 Composition of the Board of Directors
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4.1.1.1 Board members
As of March 28, 2024, the Board of Directors consisted of 16 Directors. Mr. Philippe Knoche was appointed as an Observer by the Board of
Directors on December 13, 2023, in effect from February 14, 2024, with the intent to propose his appointment as a Board member to the
Annual Shareholders’ Meeting to be held on May 23, 2024.
Board expertise
International markets (15)
Corporate finance (13)
Public company management (14)
Industry knowledge (9)
Accounting, audit & risk (5)
Sustainability (5)
Law, governance, ethics &
compliance (4)
Digital & Technology (7)
Employee perspective and
knowledge of the Group (4)
Jean-Pascal
Tricoire
Chairman of the
Board of Directors
C
Fred Kindle
Vice-Chairman &
Lead Independent Director
Léo Apotheker
Director
Nive Bhagat
Independent Director
Cécile Cabanis
Independent Director
Giulia Chierchia
Independent Director
Rita Félix
Employee Director
C
Linda Knoll
Independent Director
C
Jill Lee
Independent Director
C
Xiaoyun Ma
Employee Shareholders
Director
Anna Ohlsson-
Leijon
Independent Director
Abhay Parasnis
Independent Director
Anders Runevad
Independent Director
Gregory Spierkel
Independent Director
Lip-Bu Tan
Independent Director
Bruno Turchet
Employee Director
Philippe Knoche
Observer
Board committees
Audit & Risks
Committee
Jill Lee C
Cécile Cabanis
Anna Ohlsson-Leijon
Gregory Spierkel
C
Governance,
Nominations &
Sustainability
Committee
Jean-Pascal Tricoire C
Léo Apotheker
Fred Kindle
Linda Knoll
Anders Runevad
Gregory Spierkel
Human Capital &
Remunerations
Committee
Linda Knoll C
Nive Bhagat
Rita Félix
Fred Kindle
Anna Ohlsson-Leijon
Investment
Committee
Digital
Committee
Léo Apotheker C
Giulia Chierchia
Jill Lee
Xiaoyun Ma
Anders Runevad
Lip-Bu Tan
Jean-Pascal Tricoire
Bruno Turchet
Gregory Spierkel C
Léo Apotheker
Nive Bhagat
Xiaoyun Ma
Abhay Parasnis
Lip-Bu Tan
Jean-Pascal Tricoire
Board members key
Audit & Risks Committee
362
Governance, Nominations & Sustainability
Committee
Human Capital & Remunerations Committee
Digital Committee
Investment Committee
C Committee Chair
Schneider Electric Universal Registration Document 2023 | www.se.com
Chapter 4 – Corporate governance report
An independent and balanced governance structure
The Board of Directors of Schneider Electric SE is independent and seeks to ensure a gender balance and broad diversity in terms of skills,
experience, nationality, and age. The Board of Directors constantly reviews its composition and search for complementary profiles in line
with the skill set highlighted by its skill matrix and the challenges of the Company. On February 15, 2023, the Board decided to implement a
new governance structure that splits the office of Chairman from that of the Chief Executive Officer. This new governance structure became
effective on May 4, 2023, further to the decision of the Board of Directors to separate the functions of Chairman of the Board and Chief
Executive Officer and to appoint Mr. Peter Herweck as Chief Executive Officer and Mr. Jean-Pascal Tricoire as Chairman of the Board.
Board of Directors
Jean-Pascal Tricoire
Chairman of the Board of Directors
Fred Kindle
Vice-Chairman & Lead Independent Director
+ Peter Herweck
Chief Executive Officer
13+3
Directors
85%
46%
11
Independent Directors*
Female*
Non-French nationalities
57 years
6 years
1
2
Average age
Average length of office
Director representing
employee shareholders
Directors representing
employees
Directors’ nationality
Board tenure
Board of Directors
Belgium
Canada
China
Germany
Italy
Portugal
Singapore
Switzerland
United Kingdom
Sweden
USA
France
1
1
1
1
1
1
1
1
1
2
3
4
1
> 12 years
6
6–12 years
6
2–5 years
3
< or equal to 1 year
7
Meetings in 2023
6h
40min
94%
Attendance rate
in 2023
5
Average duration of
meetings
Executive sessions
in 2023**
* Employee Directors and Employee Shareholders Director excluded as
prescribed by the AFEP-MEDEF Corporate Governance Code.
Including two meetings without the Chairman attending.
**
Board committees
Audit & Risks
Committee
6
meetings***
100%
attendance
100%
independence*
Governance,
Nominations &
Sustainability
Committee
6
meetings***
96%
attendance
67%
independence*
Human Capital &
Remunerations
Committee
4
meetings***
100%
attendance
100%
independence*
Investment
Committee
3
meetings
90%
attendance
67%
independence*
Digital
Committee
5
meetings***
94%
attendance
67%
independence*
*** Including joint meetings with other committees.
363
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Chapter 4 – Corporate governance report
4.1 Governance Report
T Overview of the composition of the Board of Directors as of the date
R
of this Universal Registration Document
Personal information
Position within the board
Attendance rate in 2023
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
Committee
Audit
& Risks
Committee
Governance,
Nominations
& Sustain-
ability
Committee
Human
Capital
& Remu-
nerations
Committee
Investment
Committee
Digital
Committee
Jean-Pascal Tricoire, Chairman of the Board of Directors
10
100% 92%
C
7
100% 100%
15
100% 100%
C
O
P
E
R
E
C
N
A
N
R
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V
O
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T
A
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O
P
R
O
C
60 M
Fred Kindle, Vice-Chairman & Lead Independent Director
817,016
2013
2
AGM
2025
1
65 M
Léo Apotheker, Non-independent Director
40,000
70 M
Nive Bhagat, Independent Director
3,093
2
F
52
Cécile Cabanis, Independent Director
200
1
F
52
Giulia Chierchia, Independent Director
1,000
2
F
45
Rita Félix, Employee Director
1
250
F
41
Linda Knoll, Independent Director
190
1
F
63
Jill Lee, Independent Director
3
1,000
2016
2008
2022
2016
2023
2020
2014
AGM
2024
AGM
2025
AGM
2026
AGM
2024
AGM
2027
AGM
2024
AGM
2026
F
1,000
60
Xiaoyun Ma, Director representing the employee shareholders
2020
1
AGM
2024
F
1
60
Anna Ohlsson-Leijon, Independent Director
39,556
F
55
Abhay Parasnis, Independent Director
1,000
2
49 M
Anders Runevad, Independent Director
1,000
2
64 M
Gregory Spierkel, Independent Director
1,000
3
1,000
67 M
Lip-Bu Tan, Independent Director
2
1,000
64 M
Bruno Turchet, Employee Director
3
50 M
Philippe Knoche, Observer
1
888
2017
2021
2023
2018
2015
2019
2021
AGM
2025
AGM
2025
AGM
2027
AGM
2026
AGM
2027
AGM
2027
AGM
2025
55 M
1
0
–
–
1
7
100% 100%
86% 100%
<1
67% 100%
3
9
3
6
2
100% 100%
100% 100%
100% 100%
C
86%
55%
86% 100%
<1
86% 100%
100% 83%
100% 100%
100% 100%
100% 100%
5
8
4
2
–
C
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).
Changes in the composition of the Board of Directors in 2023 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
2023 AGM*
Directors who joined the Board of Directors in 2023
Observer who joined the Board of Directors in early
2024
Léo Apotheker
Gregory Spierkel
Lip-Bu Tan
Giulia Chierchia
Abhay Parasnis
Philippe Knoche
Directors who left the Board of Directors in 2023
–
364
* Annual Shareholders’ Meeting.
M
M
M
F
M
M
–
April 2008
April 2015
April 2019
May 2023
May 2023
AGM 2025
AGM 2027
AGM 2027
AGM 2027
AGM 2027
December 2023
AGM 2024
–
–
–
Schneider Electric Universal Registration Document 2023 | www.se.com
Chapter 4 – Corporate governance report
4.1.1.2 Biographies of the Chief Executive Officer and Board members
List of directorships and other functions of the Chief Executive Officer and members of the Board of
Directors as of the date of this Universal Registration Document
Jean-Pascal
Tricoire
Chairman of the Board of Directors
of Schneider Electric SE
Age: 60 years
Nationality: French
Business address: Schneider Electric
35, rue Joseph Monier, 92500 Rueil-
Malmaison, France
817,016(1) Schneider Electric SE shares
Board committees
C
Attendance rate at:
Board
meetings
Committee
meetings
100%
92%
Experience and qualifications
Jean-Pascal Tricoire is currently Chairman of the Board of Directors
of Schneider Electric SE after having been for 18 years successively
Chairman of the Management Board and Chairman & CEO. 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. 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 on May 3, 2006. On April 25,
2013, following the change in mode of governance of the Company,
he was appointed Chairman & CEO. On May 4, 2023, Jean-Pascal
Tricoire transitioned to Chairman of the Board. Jean-Pascal Tricoire is a
graduate of ESEO Angers and obtained an MBA from EM Lyon and went to
Management training at Harvard and INSEAD.
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; Member of
the Board of Trustees of Northeastern University (USA).
Other internal directorships:
Director of Delixi Electric Ltd (China); Chairman of the Board of Directors of
Schneider Electric Asia Pacific Ltd (Hong Kong).
Previous directorships
Previous directorships held in the past five years:
Director of Schneider Electric USA, Inc. (USA); Chairman of the Board of
Directors of Schneider Electric Industries SAS (France); Chairman of the
Board of Directors of Schneider Electric Holdings Inc. (USA).
Skills
Peter
Herweck
Chief Executive Officer
of Schneider Electric SE
Age: 57 years
Nationality: German
Business address: Schneider Electric
35, rue Joseph Monier, 92500 Rueil-
Malmaison, France
30,534(1) Schneider Electric SE shares
Experience and qualifications
Peter Herweck is the Chief Executive Officer of Schneider Electric SE since
May 2023. Peter Herweck first joined Schneider Electric in 2016 when he
was appointed to the Executive Committee to lead the Industrial Automation
business. In 2018, he undertook the merger of Schneider’s Industrial
Software business with AVEVA of which he became the Chief Executive
Officer in May 2021. Peter Herweck started his career in 1991 as a Software
Development Engineer with Mitsubishi in Japan, before joining Siemens
in 1993 where he held various executive positions before becoming Chief
Strategy Officer. Peter Herweck’s background includes extensive global
responsibilities of senior management in the US, Japan, China, and several
European countries. Peter Herweck holds an MBA from Wake Forest
University School of Business, USA, and Electrical Engineering degrees
from Metz University, France, and Saarland University, Germany. He is also
a Harvard Business School Advanced Management alumnus, USA.
Term of office
First appointed: 2023
Current external directorships
Other directorships at listed companies:
Director of Teradyne, Inc. (USA).
Other directorships:
None.
Other internal directorships:
Chairman of Schneider Electric Industries SAS (France); President of
Schneider Electric Software & Digital Hub AG (Switzerland); Chairman of
Aveva Group plc (United Kingdom).
Previous directorships
Previous directorships held in the past five years:
CEO of Aveva Group plc (United Kingdom).
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.
Board committees
Audit & Risks Committee
Governance, Nominations & Sustainability Committee
Human Capital & Remunerations Committee
Investment Committee
Digital Committee
C Committee Chair
Skills
Public Company Management
Corporate Finance
International Markets
Industry Knowledge
Law, Governance, Ethics & Compliance
Sustainability
Accounting, Audit & Risk
Digital & Software
Employee perspective & Knowledge
of the Group
365
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Chapter 4 – Corporate governance report
4.1 Governance Report
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Fred
Kindle*
Vice-Chairman & Lead Independent
Director of Schneider Electric SE
Age: 65 years
Nationality: Swiss
Business address: Schneider Electric
35, rue Joseph Monier, 92500 Rueil-
Malmaison, France
40,000 Schneider Electric SE shares
Léo
Apotheker
Company Director
Age: 70 years
Nationality: French/German
Business address: Schneider Electric
35, rue Joseph Monier, 92500 Rueil-
Malmaison, France
3,093 Schneider Electric SE shares
Board committees
C
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
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 a company Director.
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.
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. Léo Apotheker graduated
with a degree in International Relations and Economics from the Hebrew
University in Jerusalem.
Term of office
First appointed: 2016
Current term started: 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:
Chairman of the Board of Directors of VZ Holding AG (Switzerland);
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
Term of office
First appointed: 2008
Current term started: 2023
Term ends: 2025
Current external directorships
Other directorships at listed companies:
Director of NICE-Systems Ltd (Israel).
Other directorships:
Chairman of Syncron International AB (Sweden); Chairman of Harvest
(France); Chairman of Eudonet (France); Director of MercuryGate (USA).
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); Director of Taulia (USA); Member of the Supervisory
Board of Steria (France); Chairman of Appway (Switzerland).
Skills
* 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.
366
Schneider Electric Universal Registration Document 2023 | www.se.com
Nive
Bhagat*
Chief Financial Officer of Capgemini
Age: 52 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%
100%
Experience and qualifications
Nivedita Krishnamurthy Bhagat, also known as Nive Bhagat, is currently
Chief Financial Officer of Capgemini Group. 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 Head of
Markets of its Application Business in the UK and European Head of the
Cloud Infrastructure Services business before spending almost five years
as CEO of Capgemini’s global Cloud, Cyber and Infrastructure business.
Nive was appointed as Chief Financial Officer of the Capgemini Group
and member of the Group Executive Board on January 1st, 2024. She has
a Bachelor’s degree in Economics and is a Chartered Accountant from the
Institute of Chartered Accountants of India.
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), Capgemini Outsourcing Services GmbH (Germany),
Capgemini Semiconnext Platform B.V (Netherlands), and Capgemini
Solutions Canada Inc. (Canada).
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
Chapter 4 – Corporate governance report
Cécile
Cabanis*
Deputy Chief Executive Officer
of Tikehau Capital
Age: 52 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%
Experience and qualifications
Cécile Cabanis is currently Deputy Chief Executive Officer, Tikehau
Capital, in charge of ESG, Human Capital, Brand and Communication.
She was previously Chief Financial Officer of Danone, also in charge
of Strategy, IS/IT, data transformation, procurement, sustainability, and
inclusive diversity. She was a member of the Executive Committee and
a member of the board of directors. She graduated as an engineer in
Agronomy from Institut National Agronomique Paris-Grignon. She started
her career at L’Oréal in South Africa in 1995. She joined Orange in 2000 as
a director in Mergers & Acquisitions. She joined Danone in 2004 and has
served in a range of key positions in Finance including head of corporate
development.
Term of office
First appointed: 2016
Current term started: 2020
Term ends: 2024
Current external directorships
Other directorships at listed companies:
Vice-Chairwoman of the Supervisory Board and Chairwoman of the Audit
Committee of Unibail-Rodamco-Westfield SE (France).
Other directorships:
Chairwoman of the Supervisory Board of Mediawan (France); Member of
the Supervisory Board of Société Editrice du Monde (France); Member of
the college of the French Antitrust Authority (France).
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), and 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
* 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
Audit & Risks Committee
Governance, Nominations & Sustainability Committee
Human Capital & Remunerations Committee
Investment Committee
Digital Committee
C Committee Chair
Skills
Public Company Management
Corporate Finance
International Markets
Industry Knowledge
Law, Governance, Ethics & Compliance
Sustainability
Accounting, Audit & Risk
Digital & Software
Employee perspective & Knowledge
of the Group
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Chapter 4 – Corporate governance report
4.1 Governance Report
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Giulia
Chierchia*
Executive Vice-President Strategy,
Sustainability and Ventures of BP
Age: 45 years
Nationality: Italian/Belgian
Business address: BP, 1 St. James’
Square, SW1Y 4PD, London, United
Kingdom
250 Schneider Electric SE shares
Rita
Félix
Customer Experience and Satisfaction
Director for Home & Distribution
Age: 41 years
Nationality: Portuguese
Business address: Schneider Electric,
Av. do Forte 3, Ed. Suécia IV, Piso 3,
2794-038 Carnaxide, Portugal
190(1) Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
67%
100%
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, 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).
Experience and qualifications
Rita Félix 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 owned by Allianz
Trade). Rita Félix came to Schneider Electric Portugal in 2012 as Business
Excellence Manager. In 2017, she was appointed Project Management
Officer (PMO) for Global Marketing, International Operations at Schneider
Electric Group. She has worked as PMO, Inside Sales Director and, more
recently as Market and Competitive Intelligence leader. On December
2023, she has been appointed as Customer Experience and Satisfaction
Director for global Home and Distribution division. Since July 2020, she
was designated employee Director. Rita Félix 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). Addionally, she has attended the High-Performance
Boards program, IMD Business School, 2020, the Strategy in the Age
of Digital Disruption program, INSEAD, 2021, the Digital Transformation
Foundations program, IMD Business School, 2022, and more recently the
Leading Sustainable Business Transformations program (IMD Business
School, 2023).
Term of office
First appointed: 2023
Term ends: 2027
Current external directorships
Other directorships at listed companies:
None.
Term of office
First appointed: 2020
Term ends: 2024
Current external directorships
Other directorships at listed companies:
None.
Other directorships:
Director of BP Technology Ventures Limited (United Kingdom).
Other directorships:
None.
Previous directorships
Previous directorships held in the past five years:
None
Previous directorships
Previous directorships held in the past five years:
None.
Skills
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.
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Chapter 4 – Corporate governance report
Linda
Knoll*
Company Director
Jill
Lee*
Company Director
Age: 63 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%
100%
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).
Skills
Age: 60 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%
Experience and qualifications
Jill Lee is a non-executive director of PSA International and 65 Equity
Partners, both wholly owned portfolio companies of Temasek Holdings.
She is also a non-executive director of JTC Corporation, a statutory
board under Singapore’s Ministry of Trade and Industry that champions
sustainable industrial development. Jill Lee 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, Jill Lee went on to build an
international career where she spent several years heading Asia regional
CFO functions in China, followed by strategic global positions in Germany
and Switzerland. Her career in Siemens spanned 20 years until 2010,
where she had been the Country CFO in Singapore, North-East Asia
CFO in China, as well as Chief Diversity Officer for Siemens Group in
Germany. Later, Jill Lee was Senior Vice-President, Finance, Strategy and
Investments for Neptune Orient Lines in Singapore (2010 to 2011). From
2012 to 2018, Jill Lee held leadership positions in ABB, including North
Asia CFO in China, as well as Head of Next Level Program Management
responsible for global transformation programs at ABB Group in
Switzerland. Jill Lee was previously a non-executive director and Chair of
the audit committees of Sulzer Ltd (2011–2018), Signify N.V. (2017–2020),
and medmix Ltd (2021–2022). Jill Lee holds a Bachelor’s Degree in
Business Administration from National University of Singapore and an
MBA from Nanyang Technological University in Singapore.
Term of office
First appointed: 2020
Term ends: 2024
Current external directorships
Other directorships at listed companies:
None.
Other directorships:
Non-executive Director of 65 Equity Partners Pte Ltd (Singapore); Non-
executive Director of PSA International Pte Ltd (Singapore); Non-executive
director of JTC Corporation (a governmental agency in Singapore);
Advisory Board Member of Nanyang Business School (Singapore) -
advisory role for the university with maximum of two meetings per year.
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. (Netherlands); Non-executive Director
of Sulzer Ltd (Switzerland).
Skills
* 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
Audit & Risks Committee
Governance, Nominations & Sustainability Committee
Human Capital & Remunerations Committee
Investment Committee
Digital Committee
C Committee Chair
Skills
Public Company Management
Corporate Finance
International Markets
Industry Knowledge
Law, Governance, Ethics & Compliance
Sustainability
Accounting, Audit & Risk
Digital & Software
Employee perspective & Knowledge
of the Group
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Chapter 4 – Corporate governance report
4.1 Governance Report
Xiaoyun
Ma
Chief Financial Officer for Schneider
Electric’s China & East Asia Operations
Age: 60 years
Nationality: Chinese
Business address: Schneider Electric,
8F, Schneider Electric Building, No. 6,
East WangJing Rd. Chaoyang District
Beijing 100102, China
39,556(1) Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
86%
55%
Experience and qualifications
Xiaoyun Ma, currently Employee Shareholders Director, is the Chief
Financial Officer for Schneider Electric’s China & East Asia Operations,
in charge of China & East Asia 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, and 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
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Anna
Ohlsson-Leijon*
Executive Vice-President of AB
Electrolux and CEO of Business Area
Europe & APACMEA
Age: 55 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
86%
100%
Experience and qualifications
Anna Ohlsson-Leijon is currently Executive Vice-President of AB Electrolux,
and CEO of Business Area Europe & APACMEA. 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, and in 2024 she
took on the role as CEO of a new Business Area combined for Europe and
Asia Pacific Middle East and Africa. Anna Ohlsson-Leijon holds a Bachelor
of Sciences Degree in Business Administration and Economics from
Linköping Anna Ohlsson-Leijon* 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:
None.
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.
Schneider Electric Universal Registration Document 2023 | www.se.com
Chapter 4 – Corporate governance report
Abhay
Parasnis*
Founder & CEO of Typeface AI
Age: 49 years
Nationality: American
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
86%
100%
Experience and qualifications
Abhay Parasnis is founder & CEO of Typeface AI, a generative AI
company. Previously, he was Vice-President, Chief Technology Officer &
Chief Product Officer 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 Adobe, Inc., a software company that provides digital
marketing and media solutions, in 2015 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
First appointed: 2023
Term ends: 2027
Current external directorships
Other directorships at listed companies:
Director of Dropbox, Inc. (USA).
Other directorships:
None.
Previous directorships
Previous directorships held in the past five years:
None.
Skills
Anders
Runevad*
Company Director
Age: 64 years
Nationality: Swedish
Business address: Schneider Electric
35, rue Joseph Monier, 92500 Rueil-
Malmaison, France
1,000 Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
83%
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, the UK, and US. 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:
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
* 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
Audit & Risks Committee
Governance, Nominations & Sustainability Committee
Human Capital & Remunerations Committee
Investment Committee
Digital Committee
C Committee Chair
Skills
Public Company Management
Corporate Finance
International Markets
Industry Knowledge
Law, Governance, Ethics & Compliance
Sustainability
Accounting, Audit & Risk
Digital & Software
Employee perspective & Knowledge
of the Group
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Chapter 4 – Corporate governance report
4.1 Governance Report
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%
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 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: 2023
Term ends: 2027
Current external directorships
Other directorships at listed companies:
Director of PACCAR Inc. (USA).
Other directorships:
Member of McLaren Advisory Group (McLaren Technology Group)
(United Kingdom).
Previous directorships
Previous directorships held in the past five years:
Director of MGM Resorts International (USA).
Skills
Lip-Bu
Tan*
Company Director
Age: 64 years
Nationality: American
Business address: One California
Street, Suite 1750, San Francisco, CA
94111, United States
1,000 Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
Experience and qualifications
Lip-Bu Tan is the former Executive Chairman of Cadence Design Systems,
Inc. from which he retired as Chief Executive Officer in 2021. Lip-Bu Tan
held management positions at EDS Nuclear and ECHO Energy before
becoming Vice-President of Chappell & Co. He also serves as Chairman
of Walden International, a venture capital firm he founded in 1987 and
is Founding Managing Partner of Celesta Capital and Walden Catalyst
Ventures, a venture capital firm focused on investing in core technology
companies. 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 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.
Term of office
First appointed: 2019
Current term started: 2023
Term ends: 2027
Current external directorships
Other directorships at listed companies:
Chairman of the Board of Credo Technology Group Holding Ltd
(Cayman Islands); Director of Intel Corporation (USA).
Other directorships:
Director of 3DGS Inc. (USA), Agita Labs (USA), RF Pixels, Inc. (USA),
DustPhotonics (Israel), Artera (USA), LightBits Labs (Israel), Movandi
Corporation (USA), Prosimo, Inc. (USA), Proteantecs (Israel), Rivos, Inc.
(USA), Speedata.io (Israel), Vayyar Imaging (Israel), SambaNova Systems,
Inc. (USA), and 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); Advisory Board member of
the College of Engineering, and Compute, Data Science & Social Division
at University of California, Berkeley (USA); Global Advisory board Member
of METI Japan; Member of the board of Global Semiconductor Alliance
(GSA); Member of The Business Council and Committee 100.
Previous directorships
Chairman of Cadence Design Systems, Inc. (USA); Director of Advanced
Micro-Fabrication Equipment Inc (Shanghai) and 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), CNEX Labs, Inc. (USA), Fungible, Inc. (USA),
Innovium, Inc. (USA), Komprise (USA), NuVia, Inc. (USA), Oryx Vision
(Israel), Rosetal System Information Ltd (Israel), HiDeep, Inc. (South
Korea), and Silicon Mitus, Inc. (South Korea).
Skills
* 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.
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Chapter 4 – Corporate governance report
Bruno
Turchet
Vice-President Industrialization for
Home & Distribution Europe Division
Age: 50 years
Nationality: French
Business address: Schneider Electric
35, rue Joseph Monier, 92500 Rueil-
Malmaison, France
888(1) Schneider Electric SE shares
Board committees
Attendance rate at:
Board
meetings
Committee
meetings
100%
100%
Experience and qualifications
Bruno Turchet, currently Employee Director, began his career in 1999
as Electromechanical Engineer for Assystem Technologies (French
consulting and engineering company) and held the role of Key Account
Manager for the industry market (2001-2005). He joined Schneider Electric
in 2005 and has worked 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 was appointed employee
Director. 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
Philippe
Knoche
Senior Executive Vice President
Operations and Performance of Thales
Age: 55 years
Nationality: French/German
Business address: Thales, Campus
Meudon, 4, rue de la Verrerie, 92190
Meudon
0 Schneider Electric SE shares
Experience and qualifications
Philippe Knoche is currently Senior Executive Vice President Operations
and Performance of Thales and the former Chief Executive Officer of
Orano. He began his career in 1995 in Brussels as a case handler on anti-
dumping for the European Commission. In 2000, he joined Areva group as
Director of Strategy, and became Director of the Processing Business Unit
in 2004. In 2006, he took charge of the project to build the EPR generation
3 nuclear reactor in Finland. In 2010, Philippe Knoche was appointed
Director of the Reactors and Services Business Group and member of
Areva’s Executive Board, before being named Executive Vice-President
for Nuclear Operations in 2011. In 2015, Philippe Knoche was appointed
Chief Executive Officer of Areva which he completely transformed and
restructured, leading to the creation in 2017 of Orano of which he had
been the Chief Executive Officer before joining Thales in October 2023 as
Senior Executive Vice President Operations and Performance. Philippe
Knoche is a graduate of Ecole polytechnique and Ecole des mines.
Term of office
Co-optation as Observer member: December 2023
Candidate for appointment as a Director: May 2024
Current external directorships
Other directorships at listed companies:
None.
Other directorships:
None
Previous directorships
Previous directorships held in the past five years:
Chief Executive Officer of Orano (France); Chairman of the Board of
the World Nuclear Association (WNA, expired on 05/15/2022); Thales
board member and Chairman of the Governance and Compensations
Committee (France).
Skills
* An independent Director within the meaning of the AFEP-MEDEF Corporate Governance Code.
(1) Held directly or through the FCPE.
Note: bold indicates the names of companies whose securities are listed on a regulated market.
Board committees
Audit & Risks Committee
Governance, Nominations & Sustainability Committee
Human Capital & Remunerations Committee
Investment Committee
Digital Committee
C Committee Chair
Skills
Public Company Management
Corporate Finance
International Markets
Industry Knowledge
Law, Governance, Ethics & Compliance
Sustainability
Accounting, Audit & Risk
Digital & Software
Employee perspective & Knowledge
of the Group
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Chapter 4 – Corporate governance report
4.1 Governance Report
T
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N
A
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4.1.1.3 Changes to the Board composition
submitted to the Annual Shareholders’
Meeting
recommendation of the Governance, Nominations &
Sustainability Committee, the Board proposes to shareholders
the renewal of her mandate for a four-year term.
• Mrs. Jill Lee brings to the Board her experience as former Chief
As part of the Board’s continuous review of its composition, the Board
of Directors asked the Governance, Nominations & Sustainability
Committee to make a recommendation on the renewal of Mr. Fred
Kindle, Mrs. Cécile Cabanis, and Mrs. Jill Lee, as well as search for
a complementary candidate in line with the skill set highlighted by
its Board skills matrix and the challenges of the Company.
In that respect, the Committee has analyzed Mr. Fred Kindle’s,
Mrs. Cécile Cabanis’, and Mrs. Jill Lee’s situation with regards to
their relevance and performance, 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. Fred Kindle, Vice-Chairman & Lead Independent Director,
brings to the Board of Directors the benefit of his experience as
former Chief Executive Officer of ABB as well as his skills in
corporate finance, and his knowledge of international markets,
Schneider’s industry, and governance matters. He holds none
other position at listed companies, and his attendance rate at
the meetings of the Board and the committees in which he
participates in 2023 is 100%. The Committee recommended to
the Board that Mr. Fred Kindle continues to participate in the
work of the Board as Vice-Chairman & Lead Independent
Director, which leads the Board to propose to shareholders the
renewal of his mandate for a four-year term.
• Mrs. Cécile Cabanis brings to the Board her experience as
former Chief Financial Officer of Danone, a major French group
in the CAC 40, and as Deputy Chief Executive Officer of Tikehau
Capital where she oversees the Human Capital, ESG/CSR,
Communications, and Brand Marketing functions of the group.
The Board is benefiting from her skills in accounting, risks &
audit, sustainability, and her knowledge of international markets.
She holds only one other position in a listed company (Vice-
Chairwoman of the Supervisory Board of Unibail-Rodamco-
Westfield SE), and her attendance rate at Board meetings in
2023 is 86%, while her attendance rate at meetings of the
Committee in which she participates is 100%. Upon the
Financial Officer of Sulzer Ltd as well as her knowledge in
accountability, risks & audit, Schneider Electric’s industry, and
understanding of international markets, especially the Asian
markets. Mrs. Jill Lee holds no other directorship in listed
companies and her attendance rate at the meetings of the
Board and the committees in which she participates in 2023
is 100%. The Committee recommended to the Board that
Mrs. Jill Lee continues to participate in the work of the Board as
Chairwoman of the Audit & Risks Committee, which leads the
Board to propose to shareholders the renewal of her mandate
for a four-year term.
The Governance, Nominations & Sustainability 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 identified
as being a French speaker, connected to French environment with
a strong expertise in energy and software. Among these
candidates, the Governance, Nominations & Sustainability
Committee preselected a shortlist and the members of the
Committee interviewed the short-listed candidates. Following these
interviews, the Committee recommended a candidate to the Board
of Directors, Mr. Philippe Knoche, who was appointed as Observer
by the Board of Directors on December 13, 2023, with effect from
February 14, 2024, with the intent to propose his appointment as a
Board member to the 2024 Annual Shareholders’ Meeting.
Mr. Philippe Knoche, a French and German dual citizen based in
Paris, who was the Chief Executive Officer of Orano from 2015 to
2023, has recently joined Thales as Senior Executive Vice President
Operations and Performance in October 2023. He will bring to the
Board his expertise in energy and technology as well as his
experience in transformations both at a strategic and operational
level. 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 by the Shareholders’ Meeting
in May 2024, will join the Audit & Risks Committee.
If all proposals submitted to the Annual Shareholders’ Meeting are approved by the shareholders, the Board of Directors would comprise:
17
Directors
3
Employee Directors
12 (86%)
57.5
Independent Directors*
Average age of Directors
43%
Women Directors*
Board members nationality
Board expertise
Europe (8)
France (3)
North America (4)
Asia (2)
Public company management (14)
Corporate finance (13)
International markets (15)
Industry knowledge (9)
Sustainability (5)
Law, governance, ethics &
compliance (4)
Digital & Software (7)
Accounting, audit & risk (5)
Employee perspective &
Knowledge of the Group (4)
* Excluding the Director representing the employee shareholders and the Directors representing the employees.
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Chapter 4 – Corporate governance report
4.1.1.4 Skills and diversity
Employee Directors and the Employee Shareholders Director).
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,
Nominations & Sustainability 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 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, 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
appointment of Mr. Philippe Knoche be confirmed at the 2024
Annual Shareholders’ Meeting, will reach 43% (excluding the
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 41% in 2023 (no change
compared to 2022). For the leadership pool, comprising of the top
leaders (Vice-Presidents and above, excluding direct reports to the
CEO, around 1,016 employees), the female representation is 29%
(+1% vs. 2022).
At its meeting on December 13, 2023, 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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Public Company Management
Corporate Finance
Accounting, Audit & Risk
International Markets
Industry Knowledge
Employee perspective &
Knowledge of the Group
Digital & Software
Law, Governance,
Ethics & Compliance
Sustainability
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9
4
7
4
5
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Chapter 4 – Corporate governance report
4.1 Governance Report
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 (six of the sixteen Board members are former
CEOs of listed companies: L. Apotheker, F. Kindle, A. Runevad, G. Spierkel, LB. Tan, and
JP. Tricoire) as well as other top executive positions (e.g., CEO of private companies, 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: L. Apotheker, C. Cabanis, G. Chierchia, F. Kindle, P. Knoche, J. Lee,
A. Runevad, A. Ohlsson-Leijon, G. Spierkel, and JP. Tricoire;
• US market: L. Apotheker, L. Knoll, A. Parasnis, G. Spierkel, and LB. Tan; and
• Asian market: N. Bhagat, J. Lee, X. Ma, A. Parasnis, A. Runevad, JP. Tricoire.
Industry Knowledge
Directors who have gained experience in energy, electricity and automation 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 & Software
Directors who have gained technical or managerial experience directly in information
technology, digitization, software, 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,
climate change, or have notoriety for promotion of sustainable business in the wider
economy. This skill does include experiences such as technical experience in innovative
green technologies.
4.1.1.5 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,
Nominations & Sustainability 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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Chapter 4 – Corporate governance report
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, Nominations & Sustainability 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, Nominations &
Sustainability Committee, the Board of Directors, during its meeting
of February 14, 2024, 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 0.2% 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 sixteen Directors, eleven are independent according to
the definition prescribed by the AFEP-MEDEF Corporate
Governance Code: Mrs. Nive Bhagat, Mrs. Cécile Cabanis,
Mrs. Giulia Chierchia, Mr. Fred Kindle, Mrs. Linda Knoll, Mrs. Jill
Lee, Mrs. Anna Ohlsson-Leijon, Mr. Abhay Parasnis, Mr. Anders
Runevad, Mr. Gregory Spierkel, and Mr. Lip-Bu Tan.
• Mr. Jean-Pascal Tricoire, as former Chief Executive Officer,
Mrs. Xiaoyun Ma, as Employee Shareholder Director, Mrs. Rita
Félix 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 Félix, and
Mr. Bruno Turchet, is therefore 85%. The proportion would rise
to 86% should the renewal of Mr. Fred Kindle, Mrs. Cécile
Cabanis, and Mrs. Jill Lee, and the appointment of Mr. Philippe
Knoche, who will qualify as independent Director 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 14th, 15th, 16th, and 17th
resolutions.
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Chapter 4 – Corporate governance report
4.1 Governance Report
The following table shows the status of each Director with regard to the criteria for independence set out in Article 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
means that a criterion for independence is satisfied and
(1) In this table,
(2) Mr. Jean-Pascal Tricoire is the former Chairman & Chief Executive Officer of Schneider Electric SE, the former Chairman of the Board of Directors of Schneider Electric
Industries SAS, the former Director of Schneider Electric USA Inc., Director of Delixi Electric Ltd, and Chairman of the Board of Directors of Schneider Electric Asia
Pacific Ltd.
signifies that a criterion for independence is not satisfied.
(3) Mrs. Rita Félix 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 nor the Chief Executive Officer 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 nor the Chief Executive Officer 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 Chief Executive Officer 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
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 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 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 2023 Universal
Registration Document) for the former Chairman & Chief Executive
Officer, who became the Chairman of Board of Directors, and for the
current Chief Executive Officer, and a minimum shareholding
requirement for Directors.
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Chapter 4 – Corporate governance report
4.1.1.6 Directors’ and Chief Executive
Officer’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 Chief Executive Officer.
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 not yet met by
Mr. Peter Herweck who owns 30,534 Schneider Electric shares.
To the Company’s knowledge, the Chief Executive Officer’s and Directors’ shareholdings in the Company’s registered capital as of the date
of December 31, 2023, are as follows:
Chief Executive Officer
Peter Herweck
Board member
Jean-Pascal Tricoire
Fred Kindle
Léo Apotheker
Nive Bhagat
Cécile Cabanis
Giulia Chierchia
Rita Félix
Linda Knoll
Jill Lee
Xiaoyun Ma
Anna Ohlsson-Leijon
Abhay Parasnis
Anders Runevad
Gregory Spierkel
Lip-Bu Tan
Bruno Turchet
TOTAL
Schneider Electric shares
30,534
817,016
40,000
3,093
200
1,000
250
190
1,000
1,000
39,556
1,000
1,000
1,000
1,000
1,000
888
939,727
The Chief Executive Officer and the members of the Board of Directors directly held 0.16% of the share capital as of December 31, 2023.
The table below shows the transactions in Schneider Electric securities carried out during fiscal year 2023 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
24/03/2023
Acquisition
LTIP – Plans 36 & 37
Jean-Pascal Tricoire
24/03/2023
Acquisition
LTIP – Plans 37
Xiaoyun Ma
Peter Herweck
Peter Herweck
22/05/2023
Disposal
Ordinary shares
06/07/2023
Subscription
Shares in Schneider Electric FCPE
1,198.64
06/07/2023
Subscription
Shares in Schneider Electric FCPE
Jean-Pascal Tricoire
06/07/2023
Subscription
Shares in Schneider Electric FCPE
Jean-Pascal Tricoire
02/08/2023
Disposal
Ordinary shares
Giulia Chierchia
02/08/2023
Acquisition
Ordinary shares
Jean-Pascal Tricoire
10/08/2023
Disposal
Ordinary shares
Jean-Pascal Tricoire
24/08/2023
Disposal
Ordinary shares
Jean-Pascal Tricoire
24/08/2023
Disposal
Ordinary shares
Xiaoyun Ma
14/11/2023
Disposal
Ordinary shares
Peter Herweck
27/11/2023
Disposal
Ordinary shares
Number of
securities/
instruments
58,027
6,839
500
19.48
19.37
Unit price
(in euros)
Amount of the
transaction
(in euros)
–
–
165.44
126.20
126.20
126.20
–
–
82,720.00
151,268.37
2,458.38
2,444.49
17,000
162.10
2,755,700.00
250
158.68
39,670.00
1,220
9,300
4,425
1,000
550
163.00
198,860.00
160.00
1,488,000.00
160.00
708,000.00
161.01
165.70
161,010.00
91,135.00
Jean-Pascal Tricoire
29/11/2023
Disposal
Shares in Schneider Electric FCPE
5,994.84
370.30
2,219,889.25
Jean-Pascal Tricoire
29/11/2023
Disposal
Shares in Schneider Electric FCPE
3,458.44
407.78
1,410,282.66
Xiaoyun Ma
Xiaoyun Ma
01/12/2023
Disposal
Ordinary shares
19/12/2023
Disposal
Ordinary shares
1,000
1,000
169.79
169,790.00
181,60
181,600.00
See details regarding Performance shares granted to Executive Directors and the Chief Executive Officer in section 4.2.5 of Chapter 4 of this
Universal Registration Document.
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of the Board of Directors
4.1.2.1 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 accordance with the wishes of Mr. Jean-Pascal Tricoire to step
down as Chief Executive Officer, 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. This new
Mission of the Board of Directors
governance structure became effective on May 4, 2023, further to
the decision of the Board of Directors to separate the functions of
Chairman of the Board and Chief Executive Officer and to appoint
Mr. Peter Herweck as Chief Executive Officer and Mr. Jean-Pascal
Tricoire as Chairman of the Board.
4.1.2.1.1 Roles and duties of the Board of Directors
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 settle 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 beyond the exercise its
legal or statutory duties.
Statutory missions of
the Board of Directors
• 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 ensure that the Company has reported in accordance with EU sustainability reporting framework;
• 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 canceling 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 EUR 250 million;
(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 EUR 125 million;
(v) any off-balance sheet commitment in excess of EUR 125 million 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 establish the multi-annual strategic approach on social and environmental responsibility and review the
results reached on a yearly basis (including on climate);
Additional missions of
the Board of Directors
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Additional missions of
the Board of Directors
• 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, and (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.
4.1.2.1.2 Roles and duties of the
Chairman of the Board
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.
Missions of the Chairman of the Board of Directors
On May 4, 2023, the Board of Directors appointed Mr. Jean-Pascal
Tricoire as Chairman of the Board.
In addition to his statutory missions, the Chairman of the Board is
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.
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’s 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 the 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; and
• To work with the Board on the preparation and implementation of succession plan(s) for the corporate
officer(s).
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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.
4.1.2.1.3 Roles and duties of the Vice-Chairman of
the Board
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
Mission of the Vice-Chairman & Lead Independent Director
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.
Mr. Jean-Pascal Tricoire was appointed as Chairman of the Board
on May 4, 2023, and as he was not considered as independent with
regard to the criteria set by Article 10.5 of the AFEP-MEDEF
Corporate Governance Code, Mr. Fred Kindle pursued his mission
as Vice-Chairman & Lead Independent Director.
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 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-Chairperson 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.
• 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; and
• To engage with shareholders on governance matters and inform the Board of their concerns.
4.1.2.1.4 Roles and duties of the
Chief Executive Officer
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 Annual Shareholders’ Meeting
and Board of Directors.
Mr. Peter Herweck has been appointed as Chief Executive Officer
of Schneider Electric by the Board of Directors 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 EUR 250 million;
• 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 EUR 125 million;
• any off-balance sheet commitment in excess of EUR 125 million other than those relating to a guarantee given to an entity of the Group;
and
• major and very significant changes to the Group’s internal organization.
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4.1.2.2 Board of Directors activities in 2023
The Board held seven meetings in 2023 (vs. nine in 2022). The
meetings lasted six hours and forty minutes on average with an
average participation rate of Directors of 94% (vs. 97% in 2022).
Eleven Directors have an attendance rate of 100% and none have
an attendance rate less than 67% 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 2022 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 2023;
• Review of the first and third quarterly results and reports prepared by Senior Management;
• Review of the Group’s 2023 guidance set in February and of the new guidance issued in April and July 2023;
• Proposal to the Annual Shareholders’ Meeting that the dividend be set at EUR 3.15 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 2023 risk matrix, the framework design, and the deployment status of the Enterprise Risk Management framework;
• Review of the Group Trust Standards and their implantation;
• Review of the Group “Ethics & Compliance System”;
• Monitoring of the share buyback program;
• Liquidity review;
• Authorization of the Chief Executive Officer to issue bonds convertible into new shares and/or exchangeable for existing shares
(OCEANEs); and
• Authorization of the Chief Executive Officer to issue of sureties, endorsements, and guarantees.
Strategy
• Thorough review of the Group strategy, as every year, as part of a three-day meeting named “Strategy session”, held physically in
California from August 27 to 30, 2023, specifically dedicated to the topic;
• Review, during this Strategy session, on an in-depth strategy analysis of Energy Management, Industrial Automation, Prosumer, Energy
Management Software, and One Software strategy;
• Authorization or review of external growth and divestment operations (such as AVEVA, EcoAct, and Telemecanique Sensors);
• Review of the portfolio; and
•
Information about moves and changes concerning competitors of Schneider Electric.
Corporate governance & sustainability
• Decision to implement a new governance structure with separation of the functions of Chairman and Chief Executive Officer (amendment
of the Internal Board regulations);
• Thorough review, as every year, of the succession planning of the Corporate Officers and top management;
• Deliberation on the composition of its membership and that of its committees and the principle of balanced gender representation;
• Review of the mission assigned to each Committee;
• Deliberation 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 2023 Long-term incentive plan;
• Recorded the calculation of the level of achievement of performance conditions applicable to Performance Share plans nº 36, 37, 37bis,
38, 39, 39bis, 39ter, 40, 41, 41bis, and 41ter;
• Decision of capital increases reserved for employees;
• Reviewed the CSR strategy, results, and targets of the Schneider Sustainability Impact 2021–2025;
• Decision to submit to the Annual General Meeting a say-on-climate;
• Review of the preparation of the Company to be ready to implement the Corporate Sustainability Reporting Directive (“CSRD”) for its
2024 Universal Registration Document;
• 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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2023 Annual Shareholders’ Meeting
The Board approved the agenda and draft resolutions of the 2023 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 2023 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, the Company Climate strategy, and the renewal of
financial authorizations.
In application of the provisions of Article 1.3.3 of the internal
regulations, the Vice-Chairman & Lead Independent Director
convenes executive sessions of the Board of Directors (with
non-executive members of the Board of Directors and without the
Chairperson attending) when he deems appropriate at the end of
Board meetings. In 2023, the Board of Directors held five
“executive sessions”, vs. seven in 2022, including two without the
Chairman of the Board of Directors attending.
In addition, when the Board debated and determined the
compensation of the Corporate Officers, the interested parties were
not present, as prescribed by Article 11.2 of the internal regulations,
unless solicited to provide information on specific issues.
4.1.2.3 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 Félix 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.
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, Nominations & Sustainability
Committee then interview the candidates and issue a
recommendation to the Board of Directors.
In preparation of the 2024 Annual Shareholders’ Meeting, the
Governance, Nominations & Sustainability Committee focused on
furthering the international diversification of the Board of Directors
and maintaining the number of women Directors, as well as adding
a French speaker, connected to French environment with strong
business and board experience, and international exposure.
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 of the Board of Directors and the Chief Executive
Officer positions. 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, Nominations & Sustainability
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, Nominations & Sustainability
Committee, addresses various scenarios:
• Unplanned vacancy due to prohibition, resignation, or death;
and
• Planned vacancy due to retirement or expiration of term of
Director selection process
office.
The independent Director selection process is led by the
Governance, Nominations & Sustainability Committee (formerly
called 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, Nominations & Sustainability 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 terms of skill
set.
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, Nominations &
Sustainability Committee:
• Provides the Board with progress reports, in particular at
executive sessions;
• Works closely with the 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; and
• Meets with key executives.
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Succession plan implemented in 2023
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
recommendations as well as the governance mechanisms in place
to safeguard the balance of power between the Board and
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
Mr. Jean-Pascal Tricoire’s upcoming four-year term.
Over the last four years, the Governance & Remunerations
Committee (newly called the Governance, Nominations &
Sustainability 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 internal and external candidates;
• 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; and
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.
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
skills in complex environments and global knowledge of the
industry Schneider Electric operates in, considered the following
essential:
• Understanding of technology, in particular digital and software;
• Engagement on Sustainability and climate change;
• Commitment to keep building 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 unanimously decided that
Mr. Peter Herweck, who was Chief Executive Officer of AVEVA,
would succeed Mr. Jean-Pascal Tricoire as Chief Executive Officer
of Schneider Electric on May 4, 2023, at the date of the Annual
Shareholders’ 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. 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
became responsible for the General Management of the Company,
as the sole executive corporate officer.
Mr. Jean-Pascal Tricoire remained as Chairman of the Board, at the
unanimous request of the Board members who wanted 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 the 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.
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4.1.2.4 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.
Formal self-assessment conducted in the fourth quarter of 2023 (with the assistance of an independent
and external expert)
A formal assessment of the activities of the Board of Directors has been performed in Q4 2023 by an third party (Russel Reynolds) and
under the responsibility of the Vice-Chairman & Lead Independent Director.
The report was presented and discussed in detail at the Governance, Nominations & Sustainability Committee meeting on November 27,
2023, and a summary report was presented to the Board of Directors on December 13, 2023. 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) Implementation of the change of
governance structure; (iv) Works of the Committees; (v) On-boarding program of the new members; (vi) Deep dive on the Strategy Session;
(vii) 2024 top Board priorities; and (viii) Effective contribution of each Director.
Key findings
• High standard for board effectiveness thanks to diverse and skilled composition;
• High level of satisfaction and confidence among the Directors, effective and open communication, and collaborative approach;
• Strong dedication ensuring the Company’s strategy is robust, forward-thinking, and congruent with its purpose;
• Board invest significant time in discussions around business, including a strategy session and speed-dating with the executive team
• Priorities embedding environmental, social and governance (ESG) considerations, going beyond sustainability reporting and leveraging
ESG as a key driver in business decisions;
• Board induction is noteworthy with a board mentor system;
• CEO succession process considered as a positive experience with the Board feeling engaged and confident in the succession process
for the Executive Committee.
Recommendations
• Leverage the non-executive Chair role to continue to play an active role in the various Board committees and coaching of CEO;
• Strengthen the onboarding of new Board members through greater interaction with the executive team over 2 years;
• Make sure to put on the agenda a dedicated session on all key risks identified through the Enterprise Risk Management framework, and
consider stress testing key assumptions on risks through scenario planning;
• Continue to put ESG at the forefront and unique aspects of the model and culture (Multihub, DEI,…);
• Continue to monitor the transition impact on the dynamics between the Chair, the CEO and the management team.
4.1.2.5 Information and training of the Board of Directors and its members
Information given to Directors
To ensure that the Board of Directors is well informed at all times, Schneider Electric SE applies the following rules: members of the Board
have access, via a secure dedicated platform, in principle, ten days before every Board meeting, to the agenda for the meeting and to the
draft minutes of the last meeting and, four to five days before, to the Board’s file.
Executive Committee members are invited, depending on the subject, to present the major issues within their areas of responsibility.
Statutory auditors attend the portion of the Board’s meetings at which the full year and half year financial statements are reviewed.
In addition, each year a Board meeting called “Strategy 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.
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In addition, the Directors representing employees, Mrs. Rita Félix
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 4.1.1.6
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.
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, climate strategy, 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 Chief Executive Officer,
Directors receive information through relevant financial analysts’
reports and other documents. Board members also have the
opportunity to meet informally with key members of Senior
Management.
Board of Director dinners are organized in order to offer more
opportunities to interact with investors, customers, experts, etc.
These dinners are meant to provide 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 2023, four 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 and the Board Secretary, 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 stored 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.
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Committees
In its internal regulations, the Board defined the functions, missions, and resources of its five study committees: the Audit & Risks
Committee, the Governance, Nominations & Sustainability Committee, the Human Capital & Remunerations Committee, the Investment
Committee, and the Digital Committee.
Committee members are appointed by the Board of Directors on the proposal of the Governance, Nominations & Sustainability 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.
4.1.3.1 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 2023*
members
of independent Directors
average attendance rate
Composition as of December 31, 2023
The internal regulations and
procedures of the Board of
Directors stipulate that the Audit &
Risks Committee must have at
least three members.
• Jill Lee
Chairwoman
• Cécile Cabanis
• Anna Ohlsson-Leijon
• Gregory Spierkel
Member
Member
Member
Independent
Independent
Independent
Independent
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.
As demonstrated by their career records, summarized in section 4.1.1.2 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 2023
• Chairpersonship: no change.
• Membership: no change.
Individual attendance rate in 2023
• 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 from the Chairperson of the Board of Directors or the
Chief Executive Officer.
• 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 Chief Executive Officer will not attend the meeting of the
Committee.
• 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 Chief Executive Officer 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 Chairperson of the Board of Directors
and the Vice-Chairman & Lead Independent Director
promptly informed of any difficulties encountered.
*
Including the joint meeting with the Digital Committee relating to cybersecurity risk review.
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Responsibilities
The Audit & Risks Committee is responsible for preparing the work of the Board of Directors by making recommendations on financial,
extra-financial, accounting, internal control, internal audit, compliance, and risk management issues. Accordingly, its missions are as
follows:
Items
Details of missions
Preparation for the annual
and interim financial
statements to be
approved by the Board
• To check the appropriateness and consistency of the accounting methods used for drawing up
consolidated and corporate accounts, as well as to check that significant operations on Group level
have been dealt with appropriately and that rules relating to the scope of consolidation have been
complied with;
• To examine off-balance sheet risks (including those of a social and environmental nature) and
commitments as well as the cash situation;
• To examine the process for drawing up financial information; and
• To review the Universal Registration Document as well as the reports on the interim financial
statements and other main financial documents.
Sustainability Reporting in
accordance with the new
CSRD regulation
• To monitor issues relating to the preparation and control of the sustainability information;
• To monitor the process of preparation of the sustainability information;
• To monitor the process used to determine what information to disclose in accordance with the
Issues related to the
statutory auditors and
sustainability auditors
Following-up on the
efficiency of internal
control, risk management
systems, and compliance
program
sustainability reporting standards;
• To make recommendations to ensure the integrity of the sustainability reporting; and
• To report to the Board on the results of the sustainability information certification mission as well as
how this mission contributed to the integrity of sustainability information;
• To make recommendations concerning the appointment or reappointment of the statutory auditors
and sustainability 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;
• To handle follow-up on legal control of sustainability information made by sustainability auditors,
notably by examining the external audit plan and results of controls made by sustainability auditors;
and
• To verify the statutory and sustainability 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 monitor the effectiveness of the internal control and risk management systems, as well as, where
applicable, internal audit, with regard to the procedures relating to the preparation and processing of
the financial statements and sustainability information and therefore, more particularly;
(i)
(ii)
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;
(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-
(v)
assessments with respect to internal 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; and
(vi) to assess Cyber Risks and the Group’s Cyber Security posture (jointly with the Digital
Committee).
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The Audit & Risks Committee reported on its work at the Board’s meetings of February 15, July 26, October 25, and December 13, 2023.
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 2024 audit and control missions plan;
• Review of the main internal audits performed in 2023;
• Review of risks covered by insurance;
• Status report on the Enterprise Risk Management System;
• Update on the EU Corporate Sustainability Reporting Directive and Gap assessment;
• Update on Group Trust Standards and their implementation;
• Update on the Group Ethics & Compliance system;
• 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 2024 external audit program.
Corporate governance
• Recommended dividend for 2023; and
• Review of the financial authorizations and proposition for their renewal by the Annual Shareholders’
Meeting of May 4, 2023.
4.1.3.2 Governance, Nominations & Sustainability Committee
6
6
67%
96%
meetings in 2023*
members
of independent Directors
average attendance rate
Following the evolution of the set-up of the Committees decided by the Board of Directors, the Governance, Nominations &
Sustainability Committee was created on May 4, 2023 and replaced the former Governance & Remunerations Committee. The
following section describes both Committees.
Composition as of December 31, 2023
The Board of Directors’ internal
regulations and procedures
provide that the Governance,
Nominations & Sustainability
Committee must have at least
three members.
• Jean-Pascal Tricoire
Chairman since May 4, 2023
• Léo Apotheker
• Fred Kindle
• Linda Knoll
• Anders Runevad
• Greg Spierkel
Member
Member
Member
Member
Member
Non-independent
Non-independent
Independent
Independent
Independent
Independent
Changes in the composition in 2023
• Chairpersonship: Mr. Jean-Pascal Tricoire was appointed as Chairperson of the Committee with effect on May 4, 2023, in
replacement of Mr. Fred Kindle who remains a member of the Committee.
• Membership: Mr. Jean-Pascal Tricoire was appointed as a member of the Committee with effect on May 4, 2023.
Individual attendance rate in 2023
• Jean-Pascal Tricoire 75%
• Léo Apotheker 100%
• Fred Kindle 100%
Operating procedures
• Linda Knoll 100%
• Anders Runevad 100%
• Greg Spierkel 100%
• The Committee meets at the initiative of its Chairperson or at
the request of the Chairperson of the Board of Directors or the
Chief Executive Officer.
• The Committee shall meet at least three times a year.
• The Committee may hear any person it wishes.
• The Secretary of the Board of Directors is the secretary of the
• The agenda is drawn up by the Chairperson, after
Committee.
consultation with the Chairperson of the Board of Directors.
*
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Responsibilities
Items
Details of missions
Appointments &
succession plans
Missions aiming at
reassuring both
shareholders and the
market that the Board of
Directors carries out its
duties with all necessary
independence and
objectivity
Sustainability &
corporate governance
• 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; and
• 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; and
• To prepare the draft corporate governance report of the Board of Directors.
• To ensure that the long-term commitments in terms 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 sustainability risks jointly with the Audit & Risks Committee; and
• To work with the Stakeholder Committee and set its workplan each year.
Activity in 2023 of the Governance, Nominations & Sustainability Committee
The Governance, Nominations & Sustainability Committee reported on its work at the Board’s meetings of July 26, October 25, and
December 13, 2023.
Items
Details of missions
Proposals to the
Board of Directors
• Composition of the Board of Directors and its committees;
• Definition of the ESG criteria for long-term (LTIP) compensation of Corporate Officers (jointly with the
Human Capital & Remunerations Committee); and
• Training program for the Directors representing the employees for 2023.
Reports to the
Board of Directors
• Review of the succession plan for the Executive Committee members;
• Sustainability strategy; and
• Diversity and Inclusion progress.
Self-assessment of
the Board of Directors
Shareholder engagement
• Review of the report and findings of the external self-assessment of the Board of Directors.
• Reporting on the Vice-Chairman & Lead Independent Director’s meetings with governance analysts
within the main shareholders: 22 meetings were held, covering more than 36% 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 4.1.4 of Chapter 4 of this Universal Registration Document).
Activity in 2023 of the Governance & Remunerations Committee
The Governance & Remunerations Committee reported on its work at the Board’s meetings of February 15, and May 4, 2023.
Items
Details of missions
Proposals to the
Board of Directors
Implementation of the 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 2023 compensation, 2023 objectives,
and level of achievement of 2022 objectives) and allocation to them of performance shares as part of
the Long-term incentive plan;
• Presentation of “Say on Pay” 2022 and the principles and criteria proposed for 2023 to the Annual
Shareholders’ Meeting; and
• Directors’ remuneration.
Reports to the
Board of Directors
• Draft corporate governance report of the Board of Directors.
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4.1.3.3 Human Capital & Remunerations Committee
4
5
100%
100%
meetings in 2023*
members
of independent Directors**
average attendance rate
Following the evolution of the set-up of the Committees decided by the Board of Directors, the Human Capital & Remunerations
Committee was created on May 4, 2023 and replaced the former Human Resources & CSR Committee. The following section
describes both Committees.
Composition as of December 31, 2023
The Board of Directors’ internal
regulations and procedures
provide that the Human Capital &
Remunerations Committee must
have at least three members.
Member since May 4, 2023
• Nive Bhagat
• Fred Kindle
• Linda Knoll
Independent
Independent
Independent
Chairwoman
• Rita Félix
Member
Member
Employee Director
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Member since May 4, 2023
Independent
Changes in the composition in 2023
• Chairmanship: No change.
• Membership: Mrs. Nive Bhagat and Mrs. Anna Ohlsson-Leijon were appointed as members of the Committee with effect on May 4, 2023.
Mrs. Xiaoyun Ma left the Committee following her appointment as a member of the Investment Committee with effect on May 4, 2023.
Individual attendance rate in 2023
• Linda Knoll 100%
• Nive Bhagat 100%
• Rita Félix 100%
Operating procedures
• The Committee meets at the initiative of its Chairperson or at
the request from the Chairperson of the Board of Directors or
the Chief Executive Officer.
• Fred Kindle 100%
• Anna Ohlsson-Leijon 100%
• The Committee shall meet at least three times a year.
• The Committee may hear any person it wishes.
• The Chief Human Resources Officer, Mrs. Charise Le, is the
• The agenda is drawn up by the Chairperson, after
secretary of the Committee.
consultation with the Chairperson of the Board of Directors.
Responsibilities
Items
Employee shareholding
schemes and share
allocation plans
Compensation of
Corporate Officers
and Directors
Details of missions
• To prepare the Board of Directors’ deliberations on employee shareholding; and
• To formulate proposals to the Board of Directors on setting up the long-term incentive plans such as
grant of stock options or performance/restricted shares.
• To formulate proposals to the Board of Directors on the compensation policy of the Chairperson of
the Board of Directors and/or Executive Corporate Officers: 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; and
• To propose an amount of the remuneration package for Directors to be submitted to the annual
general shareholders’ meeting and the method of distribution.
Human resources
• To review the social impact of major reorganization projects and major human resource policies; and
• To review risk management in relation to human resources.
Activity in 2023 of the Human Capital & Remunerations Committee
The Human Capital & Remunerations Committee reported on its work at the Board’s meetings of October 25, and December 13, 2023.
Items
Details of missions
Proposals to the
Board of Directors
•
Implementation of specific Performance Share plans to support the recruitment and the retention
policy;
• Definition of the ESG criteria for long-term (LTIP) compensation of top managers and executive
Corporate Officers (jointly with the Governance, Nominations & Sustainability Committee); and
• 2024 WESOP;
• Directors’ compensation;
• Corporate Officers’ compensation policy for 2024.
Reports to the
Board of Directors
• Special talent deep dive.
Including the joint meeting with the Governance, Nominations & Sustainabilty relating to the 2024 Long-term incentive plan
*
** Employee Directors excluded as prescribed by the AFEP-MEDEF Corporate Governance Code.
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Activity in 2023 of the Human Resources & CSR Committee
The Human Resources & CSR Committee reported on its work at the Board’s meeting of February 15, 2023.
Items
Details of missions
Proposals to the Board of Directors
• 2023 Long-term incentive plan.
Reports to the Board of Directors
• Review of the compensation, performance; and
• Pay equity ratio.
4.1.3.4 Investment Committee
3
8
67%
90%
meetings in 2023
members
of independent Directors*
average attendance rate
Composition as of December 31, 2023
The Board of Directors’ internal
regulations and procedures
provide that the Investment
Committee must have at least
three members.
• Léo Apotheker
Chairman
• Giulia Chierchia
Member since May 4, 2023
• Jill Lee
• Xiaoyun Ma
• Anders Runevad
• Lip-Bu Tan
Member
Member
Member
• Jean-Pascal Tricoire
Member since May 4, 2023
• Bruno Turchet
Member
Non-independent
Independent
Independent
Independent
Independent
Non-independent
Employee Director
Member since May 4, 2023
Employee Director
Changes in the composition in 2023
• Chairmanship: No change.
• Membership: Mrs. Giulia Chierchia, Mrs. Xiaoyun Ma and Mr. Jean-Pascal Tricoire were appointed as members of the Committee
with effect on May 4, 2023.
Individual attendance rate in 2023
• Jill Lee 100%
• Léo Apotheker 100%
• Xiaoyun Ma 50%
• Giulia Chierchia 100%
Operating procedures
• The Committee meets at the initiative of its Chairperson
or at the request from the Chairperson of the Board of
Directors or the Chief Executive Officier.
• Anders Runevad 67%
• Lip-Bu Tan 100%
• Jean-Pascal Tricoire 100%
• Bruno Turchet 100%
•
In order to carry out its assignments, the Committee may hear any
person it wishes.
• The Chief Executive Officer will be regularly invited to the meetings
• The agenda is drawn up by the Chairperson, after
of the Committee.
consultation with the Chairperson of the Board of Directors.
• The Senior Vice-President Mergers & Acquisitions is the secretary
• The Committee shall meet three times a year.
of the Committee.
Responsibilities
Items
Details of missions
Preparation
of the Board
of Directors’
deliberations
on investment
policy.
• To elaborate recommendations for 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 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 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
• To present to the Board, social and environmental aspects of the strategic projects submitted to it such as M&A projects.
Activity in 2023
The Investment Committee reported on its work at the Board’s meetings of February 15, October 25 and December 13, 2023, and
during the Strategy session.
Items
Details of missions
Proposals to the Board
of Directors
• Follow-up of investment projects and opportunities; and
• Portfolio review.
* Employee Directors excluded as prescribed by the AFEP-MEDEF Corporate Governance Code.
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4.1.3.5 Digital Committee
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7
67%
94%
meetings in 2023*
members
of independent Directors**
average attendance rate
Composition as of December 31, 2023
The Board of Directors’ internal
regulations and procedures
provide that the Digital Committee
must have at least three
members.
• Greg Spierkel
Chairman
• Léo Apotheker
• Nive Bhagat
• Xiaoyun Ma
Member
Member
Member
• Abhay Parasnis
Member since May 4, 2023
• Lip-Bu Tan
Member
Independent
Non-independent
Independent
Employee Director
Independent
Independent
• Jean-Pascal Tricoire
Member since May 4, 2023
Non-independent
Changes in the composition in 2023
• Chairmanship: No change.
• Membership: Mr. Abhay Parasnis and Mr. Jean-Pascal Tricoire were appointed as members of the Committee with effect on May 4, 2023.
Individual attendance rate in 2023
• Greg Spierkel 100%
• Léo Apotheker 100%
• Nive Bhagat 100%
• Xiaoyun Ma 60%
Operating procedures
• Abhay Parasnis 100%
• Lip-Bu Tan 100%
• Jean-Pascal Tricoire 100%
• The Committee meets at the initiative of its Chairperson or at
the request from the Chairperson of the Board of Directors or
the Chief Executive Officer.
• 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.
• The agenda is drawn up by the Chairperson, after
• The Chief Executive Officer will be regularly invited to the
consultation with the Chairperson of the Board of Directors.
meetings of the Committee.
• The Chief Digital Officer, Mr. Peter Weckesser, is the
secretary of the Committee.
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.
• To 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,
− 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 cybersecurity posture (jointly with the
Audit & Risks Committee).
Activity in 2023
The Digital Committee reported on its work at the Board’s meetings of February 15, July 26, October 25, and December 13, 2023.
Items
Details of missions
Proposals and reports to
the Board of Directors.
• AI;
• Digital Engineering;
• EcoStruxure Platform ;
• Joint review with the Audit & Risks Committee of the cybersecurity risks; and
• General updates on Schneider Digital.
*
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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Executive sessions
The Vice-Chairman & Lead Independent Director convenes,
whenever he deems it appropriate, and chairs the executive
sessions (i.e., the meetings where non-executive Board members
meet and some meetings without the Chairperson attending). The
employee Directors are invited to attend all executive sessions
following meetings of the Board at which they are present.
The Board of Directors held five executive sessions in 2023,
including two meetings without the Chairman of the Board
attending, 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 of
the executive sessions held without the Chairperson attending to
the Chairman of the Board.
Interaction with shareholders
The Vice-Chairman & Lead Independent Director is one of the
designated contacts for the shareholders on matters pertaining to
corporate governance. He carried out one shareholder
engagement campaign in 2023 before the Annual Shareholders’
Meeting to present to those who so wished, the resolutions
submitted for the shareholders’ approval. The other one, called
“off-season engagement” to freely exchange views on topical
themes of corporate governance that do not necessarily materialize
in resolutions submitted for the shareholders’ approval has been
carried out by the Chairman in January 2024. 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 22 face-to-face or phone meetings with
governance analysts of major shareholders from a wide range of
corporate governance cultures and covered more than 36% of the
share capital. The conclusions of these discussions have been
reported in detail to the Governance, Nominations & Sustainability
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 2023, this self-assessment was carried out with the assistance of
an external firm (Russel Reynolds). The conclusions of this
assessment, which highlighted the quest for continuous
improvement, are presented in section 4.1.2.4 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.
4.1.4 Report of the
Vice-Chairman & Lead
Independent Director
Mr. Fred Kindle hereby reports on the work he carried out in 2023
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 which provide for the compulsory appointment
of a Vice-Chairperson should the Chairperson be not considered
as independent according to the AFEP-MEDEF Corporate
Governance Code. Those internal regulations can be found in
section 4.1.5 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 Chief Executive Officer. 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 a member of the Governance,
Nominations & Sustainability and of the Human Capital &
Remunerations Committees.
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 Chief Executive Officer, the Chairman of the
Board, 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
of the Board of Directors and the content of the meeting file.
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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 14, 2024
with immediate effect.
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 the 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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1.3.4 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.
1.4
The Chief Executive Officer shall own a minimum number of shares representing five years of base salary. 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 him. He is required to retain at least 50% of the Performance Shares granted to
him until this number of shares is reached.
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;
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to approve statutory and consolidated financial statements;
to ensure that the Company has reported in accordance with EU sustainability reporting framework;
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;
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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(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 establish the multi-annual strategic approach on social and environmental responsibility and review the results reached on
a yearly basis (including on climate);
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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- employee shareholders and employees shall continue to be represented on the Board in compliance with the provisions set
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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.
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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.
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.
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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.
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.
By exception, any natural person linked to a Board member being a legal entity (Permanent Representative) or a shareholder
(either employee of such legal entity or executive) is allowed to communicate some of non public information to such legal entity
as well as any advisor of such legal entity. It is being specified that:
- Such communication is authorized only if (i) it is strictly necessary to accomplish the Board member’s mission, (ii) it is made
in the interest of the Company (with no conflict interest existing between the Company and the legal entity), (iii) it is limited in
its content as well as its recipients and (iv) it respects the applicable rules and regulations, in particular in matters of market
abuses;
- Such legal entity shall take all necessary measures to ensure that the strict confidentiality of such information is maintained;
- The Lead Independent Director can, upon request, obtain from the legal entity the list of the information communicated, and
of all the recipients of such information.
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.
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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.
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.
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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.
9.2. Duties of the Audit & Risks Committee
The Audit & Risks Committee monitors questions on drawing up and controlling accounting, financial and sustainability
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 sustainability 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 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 monitor issues relating to the preparation and control of the sustainability information;
to monitor the process of preparation of the sustainability information;
to monitor the process used to determine what information to disclose in accordance with the sustainability reporting
standards;
to make recommendations to ensure the integrity of the sustainability reporting;
to report to the Board on the results of the sustainability information certification mission as well as how this mission
contributed to the integrity of sustainability information;
to make recommendations concerning the appointment or reappointment of the statutory auditors and sustainability 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;
to handle follow-up on legal control of sustainability information made by sustainability auditors, notably by examining the
external audit plan and results of controls made by sustainability auditors;
to verify the statutory and sustainability 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 monitor the effectiveness of the internal control and risk management systems, as well as, where applicable, internal audit,
with regard to the procedures relating to the preparation and processing of the financial statements and sustainability
information, 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; and
(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 sustainability 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.
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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 terms 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 sustainability risks jointly with the Audit & Risks Committee;
to work with the Stakeholder Committee and set its workplan each year.
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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 Senior Vice-President Mergers & Acquisitions 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.
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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- may launch, at the Board’s request, or suggest research projects leading to material investments for the Company, typically
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. Digital Committee
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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4.1.6 Regulated agreements and commitments
4.1.6.1 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.
4.1.6.2 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, Nominations & Sustainability Committee reviewed at its meeting of December 13, 2023, 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.
4.1.6.3 Statutory auditors’ report on related party agreements (For the year ended
December 31, 2023)
Annual General Meeting of the fiscal year ended December 31, 2023
This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English-
speaking readers. This report includes information specifically required by European regulations or French law, such as information about
the appointment of Statutory Auditors. This report should be read in conjunction with, and construed in accordance with, French law and
professional auditing standards applicable in France.
To the Annual General Meeting of Schneider Electric S.E.,
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 February 29, 2024
PricewaterhouseCoopers Audit
Neuilly-sur-Seine on February 29, 2024
Juliette Decoux Guillemot
Mathieu Mougard
Jean-Christophe Georghiou
Séverine Scheer
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4.1 Governance Report
4.1.7 Stakeholder Committee
In order to reinforce its sustainability governance further with solid external insights, Schneider Electric created a Stakeholder Committee in 2021.
4.1.7.1 Composition
The internal regulations of the Stakeholder Committee provide that the Committee consists of no less than five and no more than ten members.
The members of the Stakeholder Committee are appointed by the Chairperson of the Board of Directors of the Company after consultation of its
Governance, Nominations & Sustainability Committee.
As of December 31, 2023, the Stakeholder Committee consisted of 9 members. In addition to the Chief Executive Officer of the Company,
it is mainly composed of global experts, recognized for their high level of expertise and engagement on sustainability issues, including from
non-governmental, international, or academic organizations, an independent Director and an employee Director of the Company.
Peter Herweck
Chief Executive Officer
57 years, German
Bertrand Piccard
Chairman of Solar Impulse
Foundation
65 years, Swiss
Lan Xue (Dr.)
Cheung Kong Chair Distinguished
Professor and Dean of
Schwarzman College in Tsinghua
University
64 years, Chinese
Amani Abou-Zeid (Dr.)
African Union Commissioner in
charge of Infrastructure, Energy,
ICT and Tourism
62 years, Egyptian
Linda Knoll
Director of Schneider
Electric SE, Human Capital &
Remunerations Committee Chair
63 years, American
Rita Félix
Employee Director of Schneider
Electric SE
40 years, Portuguese
Salvo Lombardo
Former Chief of Staff, UNHCR
64 years, Italian
Emily Reichert (Dr.)
CEO, Greentown Labs
49 years, American
Michela Conterno
CEO, LATI
48 years, Italian
4.1.7.2 Responsibilities
The primary mission for the Stakeholder Committee is to advise Schneider Electric on its journey to deliver the long and short-term
Sustainability commitments undertaken by the Company in accordance with its Purpose and Sustainability strategy.
More precisely, the mandate of the Stakeholder Committee is:
• To present the regulatory framework, customer expectations, best practice sharing, insights of the possible future opportunities, and
possible business positioning on two topics defined each year by the Board;
• To monitor the progress of the current Schneider Sustainable Impact and support in the next Schneider Sustainable Impact cycle; and
• To give advice on any questions submitted by the Board or the management.
The Stakeholder Committee reports to the Chairperson of the Board. Its recommendations are submitted to the Board for consideration
on a continuous basis.
4.1.7.3 Activity in 2023
In 2023, the Stakeholder Committee held three meetings on April 3, July 26 and November 2, 2023 devoted to the following topics:
International Energy Agency global annual conference on energy efficiency;
• Self-assessment of the Committee;
• Update on Sustainability;
•
• Mega trends;
• Update on Stakeholders engagements; and
• Topical deep-dive: Advocacy, Supply Chain and Circularity.
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Chapter 4 – Corporate governance report
4.1.8 Senior management
The Senior Management of Schneider Electric SE consists of the 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 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 (no change compared to 2022).
Name of Executive Committee member
Gender
Age
Nationality
Responsibility
Peter Herweck
Gwenaelle Avice-Huet
Laurent Bataille
Olivier Blum
Annette Clayton
Hervé Coureil
Barbara Frei
Caspar Herzberg
Charise Le
Chris Leong
Hilary Maxson
Manish Pant
Aamir Paul
Nadège Petit
Mourad Tamoud
Peter Weckesser
Zheng Yin
M
F
M
M
F
M
F
M
F
F
F
M
M
F
M
M
M
57
44
45
53
60
53
53
51
51
56
46
54
46
44
52
55
52
German
French
French
French
American
French
Swiss
German
Chinese
Malaysian
American
Indian
American
French
French
German
Chinese
Chief Executive Officer
Executive Vice-President Europe Operations
Executive Vice-President France Operations
Executive Vice-President Energy Management
Chairwoman North America
Chief Governance Officer & Secretary General
Executive Vice-President Industrial Automation
CEO AVEVA & EVP Schneider Electric Software
Chief Human Resources Officer
Executive Vice-President Chief Marketing Officer
Chief Financial Officer
Executive Vice-President International Operations
President & CEO 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 consists in approximatively 2,200 leaders of Schneider Electric’s businesses, functions, and operations. Its
responsibly is to ensure the sharing and cascading of the Group’s objectives and key strategic priorities. The Business Pulse community met
digitally seven times in total in 2023 to exchange on these matters.
The Top Pulse Community
The Top Pulse Community includes the Executive Committee members, for a total of approximately 350 leaders of Schneider Electric’s
businesses, functions, and operations to be inclusive of the key decision makers across the organization. The group meets once a year,
preferably in person, to ensure in depth discussion and decision making, as well as smooth and efficient implementation of such decisions.
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R
T 4.2 Compensation Report
O
P
The Compensation Report presents the compensation paid or
granted in 2023 to the Corporate Officers and Directors, as well as
the compensation policies applicable to them in 2024. In 2023, the
Board of Directors announced a new governance structure to
separate the roles of the Chairman of the Board of Directors and of
the Chief Executive Officer. In line with this new governance
structure, the Group had:
• a Chairman of the Board of Directors & Chief Executive Officer
(“Chairman & Chief Executive Officer”) (Mr. Jean-Pascal Tricoire)
from January 1, 2023 until May 3, 2023; and
• a Chairman of the Board of Directors (Mr. Jean-Pascal Tricoire)
and a Chief Executive Officer (Mr. Peter Herweck) as of
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 Shareholders’ Meeting of May 23,
2024 is invited to vote:
• with regard to 2023:
− for the Chairman & Chief Executive Officer
(Mr. Jean-Pascal Tricoire): the components which make up
the total remuneration and the benefits of all kinds paid
during 2023 or awarded in respect of 2023 (for the period
running from January 1, 2023 to May 3, 2023) (subject of the
8th resolution proposed to the Annual Shareholders’ Meeting);
− for the Chief Executive Officer (Mr. Peter Herweck): the
components which make up the total remuneration and the
benefits of all kinds paid during 2023 or awarded in respect
of 2023 (for the period running from May 4, 2023 to
December 31, 2023) (subject of the 9th resolution proposed
to the Annual Shareholders’ Meeting);
− for the Chairman of the Board of Directors
(Mr. Jean-Pascal Tricoire): the components which make up
the total remuneration and the benefits of all kinds paid
during 2023 (for the period running from May 4, 2023 to
December 31, 2023) (subject of the 10th resolution proposed
to the Annual Shareholders’ Meeting);
− for the Board members of Schneider Electric: the
components of remuneration presented in the Corporate
governance report pursuant to Article L. 22-10-9 I of the
French Commercial Code (subject of the 7th resolution
proposed to the Annual Shareholders’ Meeting); and
• with regard to 2024, the remuneration policies which will be
applicable:
− to the Chief Executive Officer (Mr. Peter Herweck)
(subject of the 11th resolution proposed to the Annual
Shareholders’ Meeting);
− to the Chairman of the Board of Directors
(Mr. Jean-Pascal Tricoire) (subject of the 12th resolution
proposed to the Annual Shareholders’ Meeting);
− to the Board members (subject of the 13th resolution
proposed to the Annual Shareholders’ Meeting).
The information included in this section also takes into account the
provisions of the AFEP-MEDEF Corporate Governance Code for
listed companies, as interpreted by the Haut Comité de
Gouvernement d’Entreprise (French High Committee on Corporate
Governance), and the AMF’s (Autorité des Marchés Financiers,
French Financial Market Authority) recommendations.
4.2.1 Overview
All resolutions linked to compensation were approved by the 2023
Annual Shareholders’ Meeting.
The 2023 compensation policies (say on pay ex-ante) were largely
approved by shareholders as follows:
• by more than 88% for the Chairman & Chief Executive Officer
(Mr. Jean-Pascal Tricoire) from January 1, 2023 until May 3,
2023;
• by more than 89% for the Chief Executive Officer (Mr. Peter
Herweck) from May 4, 2023 until December 31, 2023;
• by more than 88% for the Chairman of the Board of Directors
(Mr. Jean-Pascal Tricoire) from May 4, 2023 until December 31,
2023;
• by more than 95% for the members of the Board of Directors.
The 2022 Compensation Report for the Board members of
Schneider Electric (say on pay ex-post) was approved by more
than 92% of the shareholders.
The 2022 Compensation Report for the Chairman & Chief Executive
Officer (say on pay ex-post) raised some concerns and was
approved by 65.66% of our shareholders at the 2023 Annual
Shareholders’ Meeting. Those concerns were linked to the decision
to maintain Mr. Jean-Pascal Tricoire’s rights to his previously
granted but still unvested Performance Shares (LTIP 2021 and LTIP
2022). The Board of Directors would like to express its deepest
thanks to all shareholders with whom the Company has extensively
engaged and which then decided by a huge majority to support
this resolution. The key rationale behind the Board’s decision not to
apply any prorata for Mr. Jean-Pascal Tricoire lies on the fact that
those rights were clearly mentioned in the applicable compensation
policies previously approved by shareholders, hence forming an
agreement between all parties. Also, Mr. Tricoire was also not
granted any LTIP in his last year in office. Hearing the concerns
raised by some shareholders, the Board demonstrated its
responsiveness in the letter from Mr. Fred Kindle, Vice-Chairman &
Lead Independent Director, dated April 13, 2023, which
acknowledged the growing preference for a prorata vesting rule in
case of departure of the Chief Executive Officer. In accordance
with this Letter, the Board of Directors committed to introduce a
strict prorata rule in the next compensation policy, subject to the
shareholders approval.
As in previous years, key remuneration topics were discussed with
Schneider Electric’s largest shareholders ahead of the 2023 Annual
Shareholders’ Meeting. Schneider Electric representatives notably
interacted with 57 investors during the year, representing more than
57% of the issued share capital during the governance roadshow.
The Vice-Chairman & Lead Independent Director took part in
discussions with 17 of these investors. Feedback was reported to
the Human Capital & Remunerations Committee and to the Board
of Directors. This dialogue will be pursued in 2024 to ensure that
the Board takes feedback into account while determining the
compensation policy of the Corporate Officers. The Board values
the comments received during these engagements with
shareholders and takes them into consideration when making a
decision regarding compensation.
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Chapter 4 – Corporate governance report
2023 performance highlights
Business performance
2023 was another year of record performance for Schneider Electric, with +12.7% organic growth in revenues coupled with excellent
organic margin progression, highest Free Cash Flow and a strong step-up in net income for the full year.
Revenue
€36B
Adjusted EBITA
€6.4B
Cash conversion
Net Satisfaction Score
115%
+5.2pts
Positioning in relation to the Company’s performance
Progress on Schneider
Sustainability Impact
6.13
2023 compensation of Mr. Jean-Pascal Tricoire and Mr. Peter Herweck vs. shareholder value creation - share price and enterprise
value growth over ten years (re-based to 100).
4
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.
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€112B
€157
m
6
.
4
€
M
6
.
4
€
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5
.
1
€
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Total awarded compensation to Jean-Pascal Tricoire, Chairman & Chief Executive Officer (annualized salary + prorated annual incentive paid; no LTI granted)
Total awarded compensation to Peter Herweck, Chief Executive Officer (annualized salary + annual incentive at target + IFRS value of LTI granted at target)
Schneider Electric share price
Enterprise value
Summary of the compensation realized during the year 2023
Jean-Pascal Tricoire, Chairman & Chief Executive Officer (euros) - January 1 to May 3, 2023
341,398
Salary
479,322
STIP
5,612,639(1)
LTIP
173,109
Other
(1) LTIP represents realized value of shares vested which performance evaluation ended in 2023 (LTIP 2021).
Jean-Pascal Tricoire, Chairman (euros) - May 4 to December 31, 2023
612,500
Salary
0
STIP
0
LTIP
Peter Herweck, Chief Executive Officer (euros) - May 4 to December 31, 2023
790,323
Salary
853,549
STIP
2,410,221(2)
LTIP
(2) LTIP represents realized value of shares vested which performance evaluation ended in 2023 (LTIP 2021).
39,330
Other
272,970
Other
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Chapter 4 – Corporate governance report
4.2 Compensation Report
P
E
R
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during the 2023 fiscal year (say on pay ex-post)
4.2.2.1 Pillars and principles
C
R
N
E
The principles and criteria determining the 2023 compensation described in this section were supported by the shareholders at the
Annual Shareholders’ Meeting on May 4, 2023. 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 2023 compensation policy
Pay-for-performance
Principle 1: Prevalence of variable components: circa 80% for Chief Executive
Officer (at target).
A prevalent part of the Corporate Officer target package shall be variable; the 2023 target
package (on an annualized basis) thus consists of approximately 74% variable pay component
(excluding pension payments).
Chief Executive Officer:
2023 on target pay mix
Fixed
26%
Annual variable
compensation 26%
Performance shares
48%
26%
74%
Principle 2: Performance evaluated via economic and measurable criteria.
Performance is evaluated via criteria that are mainly economic (70% of variable cash
compensation and 75% of multi-year Performance Shares) and measurable, which are selected
based on key performance indicators (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.
2023 annual incentive (70% financial/
30% customer satisfaction and sustainability):
2023 long-term incentive
(75% financial/ 25% sustainability):
• 35% Group organic sales growth
• 25% Adjusted EBITA margin (organic)
improvement
• 10% Group cash conversion rate
• 10% Net Satisfaction Score
• 20% Schneider Sustainability Impact (SSI)
• 40% Adjusted Earnings per Share (EPS)
• 35% Relative Total Shareholder Return (TSR)
• 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 48% 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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Chapter 4 – Corporate governance report
Pillar
How it is reflected in the Group 2023 compensation policy
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 talents 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 2023 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
2023 Chief Executive Officer’s compensation relative to the market benchmarks
Total compensation package 2023:
Fixed compensation + targeted annual
variable compensation + LTI granted
75th percentile
6,470
8,035
14,680
Median
4,655
4,450
6,880
7,875
25th percentile
3,185
5,220
4,655
5,305
4,655
CAC 40
Stoxx
Europe 50
Peers
Total compensation includes annualized 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 Corporate Officers’ compensation in relation to the 2023 fiscal year
At its meeting on February 14, 2024, after examining the suitability and fairness of the outcome of the 2023 compensation policy for the
Corporate Officers and its alignment with the Group’s performance, upon recommendation of the Human Capital & Remunerations
Committee, the Board determined the Corporate Officers’ compensation for 2023 in accordance with the principles and criteria previously
approved by the shareholders in May 4, 2023 at the Annual Shareholders’ Meeting. The outcome is detailed and commented on hereinafter
along with the performance results for each Corporate Officer and each component of their respective compensation.
4.2.2.2.1 Chairman & Chief Executive Officer’s compensation from January 1 to May 3, 2023
Table summarizing the compensation paid or granted to the Chairman & Chief Executive Officer from January 1 to
May 3, 2023
The following table summarizes the compensation and benefits awarded or paid to the Chairman & Chief Executive Officer for the period
from January 1 to May 3, 2023 and the fiscal year 2022, 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
From January 1
to May 3, 2023
2022
From January 1
to May 3, 2023
2022
341,398
479,322
0
820,720
1,000,000
1,493,700
0
2,493,700
341,398
479,322
0
820,720
1,000,000
1,493,700
0
2,493,700
0(2)
0
3,457,692(2)
3,457,692
5,612,639(3)
5,612,639
7,585,289(3)
7,585,289
Complementary payment for pension building (fixed)
Complementary payment for pension building (variable)
SUBTOTAL (C) PENSION CASH BENEFIT
65,412
91,838
157,250
191,600
286,193
477,793
65,412
91,838
157,250
191,600
286,193
477,793
D – OTHER BENEFITS
Other benefits(4)
SUBTOTAL (D) OTHER BENEFITS
15,859
15,859
58,853
58,853
15,859
15,859
58,853
58,853
TOTAL COMPENSATION AND BENEFITS (A)+(B)+(C)+(D)
993,829
6,488,038
6,606,468
10,615,635
(1) The annual incentive for the fiscal year 2022 was paid in 2023 after approval by the shareholders at the Annual Shareholders’ Meeting of May 4, 2023 of the 6th
resolution relating to the compensation paid, due, or awarded to Jean-Pascal Tricoire in respect of the 2022 fiscal year. Hence, the total compensation in cash
actually paid in the fiscal year 2023 to Jean-Pascal Tricoire amounts to EUR 2,186,703 (2023 fixed compensation + 2022 annual incentive + fixed portion of pension
benefit for 2023 + variable portion of pension benefit for 2022). 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 2023 will only be paid in 2024, subject to their prior approval by the shareholders at the Annual
Shareholders’ Meeting of May 23, 2024 under the 8th resolution.
(2) Value of Performance Shares granted during fiscal year – As per AFEP-MEDEF Corporate Governance Code methodology, compensation is presented on a
reported basis. Long-term incentives for the fiscal year include Performance Shares granted during the fiscal year, the performance period of which has not elapsed.
The value of Performance Shares corresponds to the number of shares granted, before reduction on account of performance, multiplied by the share price
determined in line with IFRS accounting standards. No Performance Shares were granted to Jean-Pascal Tricoire in the period January 1 to May 3, 2023.
(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, 2022 or 2023, as the case may be.
(4) Other benefits include a company car.
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Chapter 4 – Corporate governance report
Say on pay table relating to the compensation paid or granted to the Chairman & Chief Executive Officer from
January 1 to May 3, 2023
The fixed, variable, and exceptional components of the total compensation and benefits paid or awarded for the fiscal year 2023 for the
period from January 1 to May 3, 2023 to the Chairman & Chief Executive Officer, as detailed below, will be submitted to the shareholders for
approval at the 2024 Annual Shareholders’ Meeting of May 23, 2024 under the 8th resolution.
The tables below summarize the compensation paid and awarded during the period from January 1 to May 3, 2023, 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
€341,398
(amount
due for
period
January 1
to May 3,
2023, paid
in 2023)
Reminder:
€1,000,000
(amount due
for 2022 paid
in 2022)
€479,322
(amount
due for
period
January 1
to May 3,
2023 to be
paid in
2024)
Reminder:
€1,493,700
(amount due
for 2022 paid
in 2023)
Reminder of the 2023 compensation policy
For the fiscal year 2023, 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 2023 compensation policy
Mr. Jean-Pascal Tricoire received in 2023 a fixed compensation of €341,398 corresponding to
his fixed annual compensation prorated for the period from January 1 to May 3, 2023.
Reminder of the 2023 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; and
• 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 2023 annual variable compensation focuses on what matters to Schneider
Electric in delivering value to shareholders. 100% of the variable compensation depends on
measurable objectives:
• 70% depends on financial criteria which closely align pay outcomes for the Chairman &
Chief Executive Officer to Schneider Electric’s financial performance:
− organic sales growth (35%);
− adjusted EBITA margin improvement (25%); and
− cash conversion rate (10%);
• 10% depends on Net Satisfaction Score highlighting the importance of building trust with
customers and focus on quality; and
• 20% depends on the Schneider Sustainability Impact (SSI) highlighting the importance of
sustainability in 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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Chapter 4 – Corporate governance report
4.2 Compensation Report
Elements of
compensation
submitted to
the vote
Annual variable
compensation
(continued)
Amounts
Description
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Long-term
incentive
(Performance
shares)
Pension
benefits
0
Performance
Shares
granted in
March 2023
Reminder:
31,305
Performance
Shares granted
in March 2022
(€3,457,692
according to
IFRS valuation)
€157,250
(amount due
for the period
January 1 to
May 3, 2023
(fixed portion
of €65,412
paid in 2023
and variable
portion of
€91,838 to be
paid in 2024))
Reminder:
€477,793
(amount due for
2022 (fixed
portion of
€191,600 paid in
2022 and
variable portion
of €286,193 paid
in 2023))
Application of the 2023 compensation policy
The annual incentive due for the period January 1 to May 3, 2023 was determined by the
Board at the meeting of February 14, 2024, based on the attainment rate of the objectives set
for fiscal year 2023.
The targets of the objectives determining the annual variable compensation of the Chairman &
Chief Executive Officer were the same as those used for the new Chief Executive Officer since
May 4, 2023. The detail of these targets and achievements is described in section 4.2.2.2.2 of
this Universal Registration Document relating to the Chief Executive Officer’s compensation
from May 4 to December 31, 2023.
As a result of the achievement rate being set at 108% by the Board of Directors, the 2023
annual variable compensation pay-out for the Chairman & Chief Executive Officer was
calculated on the base of his fixed compensation as follows:
At target pay-out
Achievement rate
2023 (Jan. 1 - May 3) Actual pay-out
as a % of salary
Amount (€)
as a % of target
as a % of base salary
Amount (€)
130%
€443,817
108%
140.4%
€479,322
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 2023 (see 8th resolution to be submitted to
the Annual Shareholders’ Meeting of May 23, 2024).
As a reminder, an amount of €1,493,700 was paid in 2023 to Mr. Jean-Pascal Tricoire for the
annual variable compensation due for the fiscal year 2022 after the approval of the 6th
resolution by the Annual Shareholders’ Meeting on May 4, 2023 (see page 381 of the 2022
Universal Registration Document).
Reminder of the 2023 compensation policy
The 2023 compensation policy provided that Mr. Jean-Pascal Tricoire, given that he left the
Corporate Officer position on May 3, 2023, was not entitled to any grant in 2023.
Application of the 2023 compensation policy
The Chairman & Chief Executive Officer has not been granted any Performance shares during
the period from January 1 to May 3, 2023.
Reminder of the 2023 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.
Schneider Electric Universal Registration Document 2023 | www.se.com
Elements of
compensation
submitted to
the vote
Pension
benefits
(continued)
Chapter 4 – Corporate governance report
Amounts
Description
Accordingly, Mr. Jean-Pascal Tricoire is entitled to receive annually a complementary
component, split into a fixed and variable portion as follows:
Corporate Officer
Fixed
portion
Target
(% of fixed
compensation)
Minimum
At target
Maximum
Total
at target
Full year amount
€191,600
130%
€0
€249,080
€498,160 €440,680
Variable portion
Amount prorated for the
period from January 1
to May 3, 2023
€65,412
130%
€0
€85,035
€170,071
€150,447
The variable part is dependent on performance criteria aligned with the variable annual
compensation (see above).
Application of the 2023 compensation policy
At the meeting held on February 14, 2024, the annual complementary variable portion for
pension for 2023 to be paid after the Annual Shareholders’ Meeting if the latter approves it,
was set by the Board of Directors at 140.4% of the annual complementary fixed portion, i.e. an
achievement rate of 108%.
For the period January 1 to May 3, 2023, Mr. Jean-Pascal Tricoire is entitled to receive:
Fixed amount
for period Jan. 1 to May 3 2023
Variable amount
for period Jan. 1 to May 3, 2023(1)
for period Jan. 1 to May 3, 2023
Total due
€65,412
€91,838
€157,250
(1) Calculated by applying to the variable portion at target of the pension above (€85,035) the percentage of target
achievement determined for the calculation of the 2023 annual variable compensation, i.e. 108%.
In compliance with applicable law, the payment of the variable amount will be subject to
shareholders’ approval (see 8th resolution submitted to the Annual Shareholders’ Meeting of
May 23, 2024).
Reminder: an amount of €286,193 was paid in 2023 to Mr. Jean-Pascal Tricoire for the variable
portion of his pension due for the fiscal year 2022 after its approval by the Annual
Shareholders’ Meeting on May 4, 2023 (see page 385 of the 2022 Universal Registration
Document).
Other benefits
€15,859
received in
period
January 1
to May 3,
2023
Reminder:
€58,853
received in
2022
Reminder of the 2023 compensation policy
The compensation policy provides that the Chairman & Chief Executive Officer may benefit
from:
the employer matching contributions;
•
•
the profit-sharing;
• a company car; and
• supplementary Life & Disability scheme.
Application of the 2023 compensation policy
For the period from January 1 to May 3, 2023, the Chairman & Chief Executive Officer was
eligible for the use of a company car, representing a equivalent cost of €15,859.
Employer matching
contributions to
Employee Saving Plan
Employer matching
contributions to
collective pension
saving plan (PERECO)
Profit-sharing
Company car
Total benefits for
period Jan. 1 to May
3, 2023
N/A
N/A
N/A
€15,859
€15,859
The Chairman & Chief Executive 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 and (ii) additional coverages conditional on the
fulfillment of some conditions as described in the compensation policy (see Chapter 4, section
4.2.3.1.2 of the 2022 Universal Registration Document).
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4.2 Compensation Report
Elements of
compensation
submitted to
the vote
Amounts
Description
Termination
benefits
No
payment
Involuntary Severance Pay
The Board had decided that, upon leaving the position as Chief Executive Officer on May 3,
2023, Mr. Jean-Pascal Tricoire was not entitled to receive any severance pay (see Chapter 4,
section 4.2.3.1.2 of the 2022 Universal Registration Document).
Non-compete compensation
The Board had decided that, upon leaving the position as Chief Executive Officer on May 3,
2023, Mr. Jean-Pascal Tricoire was not entitled to receive any non-compete compensation
(see Chapter 4, section 4.2.3.1.2 of the 2022 Universal Registration Document).
For the period from January 1 to May 3, 2023, 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
EUR 260,352 for the period from January 1 to May 3, 2023.
Mr. Jean-Pascal Tricoire was 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 & Chief Executive Officer) of
Schneider Electric SE exclusively. The remainder was 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 2021 Long-term incentive plan realized in 2023 (LTIP 2021)
The performance period for shares granted in 2021 finished on December 31, 2023 and shares under the Plans nº 38 and 39 are therefore
deemed vested. Their final acquisition is, however, still subject to the satisfaction of the presence condition at the delivery date.
The performance conditions upon which the vesting of the Performance Shares depended were the same as those used for the new Chief
Executive Officer since May 4, 2023. The detail of these targets and achievements is described in section 4.2.2.2.2 of this Universal
Registration Document relating to the Chief Executive Officer’s compensation from May 4 to December 31, 2023.
The Board of Directors at its meeting of February 14, 2024 as well as the Chief Executive Officer on March 1, 2024 pursuant to the
delegation of powers granted by the Board of Directors on February 14, 2024 assessed the achievement rate of the performance criteria
based on the Group’s performance over the three-year period 2021 – 2023 and set the final rate of achievement at 81.46%, i.e. a reduction
of 18.54% in relation to the number of shares originally granted.
The Chairman & Chief Executive Officer was conditionally granted 11,371 shares under Plan nº 38 and 26,532 shares under Plan nº 39. 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 38)(1)
Number of shares
(Plan nº 39)
Number of shares
deemed vested
11,371
26,532
30,876
Number of shares
lapsed
7,027
Value of deemed
vested shares(2)
€5,612,639
March 25, 2024
March 25, 2024
(1) Plan nº 38 – 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, 2025.
(2) Vested shares are valued at the closing share price of December 30, 2023, i.e. EUR 181.78.
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Chapter 4 – Corporate governance report
4.2.2.2.2 Chief Executive Officer’s compensation from May 4 to December 31, 2023
Table summarizing the compensation paid or granted to the Chief Executive Officer in 2023
The following table summarizes the compensation and benefits awarded or paid to the Chief Executive Officer for the period from May 4 to
December 31, 2023, presented on a reported basis in accordance with AFEP-MEDEF guidelines.
These amounts correspond to the period from May 4 to December 31, 2023 and do not include the compensation paid to Mr. Peter Herweck
before this period in his former positions including as Chief Executive Officer of AVEVA for the period from January 1 to February 28, 2023
and Executive Vice President from March 1 to May 3, 2023.
Peter Herweck
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
Complementary payment for pension building (fixed)
Complementary payment for pension building (variable)
SUBTOTAL (C) PENSION CASH BENEFIT
D – OTHER BENEFITS
Other benefits(4)
SUBTOTAL (D) OTHER BENEFITS
TOTAL COMPENSATION AND BENEFITS (A)+(B)+(C)+(D)
Compensation & benefits
awarded for fiscal year
Compensation & benefits realized in
fiscal year
2023
2022
2023
2022
790,323
853,549
0
1,643,872
2,255,301(2)
2,255,301
118,548
128,032
246,580
26,390
26,390
4,172,143
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
790,323
853,549
0
1,643,872
2,410,221(3)
2,410,221
118,548
128,032
246,580
26,390
26,390
4,327,063
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
(1) Due to the start as Chief Executive Officer on May 4, 2023, no annual incentive in respect of the fiscal year 2022 was paid to Peter Herweck in 2023 in his Corporate
Officer role. Hence, the total compensation in cash actually paid in the period May 4 to December 31, 2023 amounts to EUR 908,871 (2023 fixed compensation +
fixed portion of pension benefit for the period May 4 to December 31, 2023). In accordance with Article L.22-10-34 II of the French Commercial Code, the variable
elements in cash awarded to Peter Herweck for the period May 4 - December 31, 2023 will only be paid in 2024, subject to their prior approval by the shareholders at
the Annual Shareholders’ Meeting of May 23, 2024 under the 9th 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 period May 4 to December 31, 2023 include Performance Shares granted during the period May 4 to December 31, 2023,
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, 2022 or 2023, as the case may be. Performance Shares deemed
vested in 2023 were granted to Peter Herweck in 2021 when he was not yet Chief Executive Officer.
(4) Other benefits include company car as well as employer matching contributions to the capital increase for employees or contributions to the Employee Saving Plan.
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4.2 Compensation Report
4.2 Compensation Report
Say on pay table relating to the compensation paid or granted to the Chief Executive Officer from May 4 to
December 31, 2023
The fixed, variable, and exceptional components of the total compensation and benefits paid or awarded for the period from May 4 to
December 31, 2023 to the Corporate Officer, as detailed below, will be submitted to the shareholders for approval at the 2024 Annual
Shareholders’ Meeting of May 23, 2024 under the 9th resolution.
The tables below summarize the compensation paid and awarded during the period from May 4 to December 31, 2023, 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
€790,323
(amount
due for
period May
4 to
December
31, 2023
paid in
2023)
Reminder:
N/A
€853,549
(amount
due for the
period
May 4 to
December
31, 2023 to
be paid in
2024)
Reminder:
N/A
Reminder of the 2023 compensation policy
For the fiscal year 2023, his theoretical gross annual fixed compensation was set by the Board
of Directors at €1,200,000 upon recommendation from the Governance & Remunerations
Committee.
Application of the 2023 compensation policy
Mr. Peter Herweck received in 2023 a fixed compensation of €790,323 corresponding to his
fixed annual compensation prorated for the period from May 4 to December 31, 2023.
Reminder of the 2023 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: 100% of the fixed compensation; and
• at maximum over-performance: 200% 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 2023 annual variable compensation focuses on what matters to Schneider
Electric in delivering value to shareholders. 100% of the variable compensation depends on
measurable objectives:
• 70% depends on financial criteria which closely align pay outcomes for the Corporate
Officer to Schneider Electric’s financial performance:
− organic sales growth (35%);
− adjusted EBITA margin improvement (25%); and
− cash conversion rate (10%);
• 10% depends on Net Satisfaction Score highlighting the importance of building trust with
customers and focus on quality; and
• 20% depends on the Schneider Sustainability Impact (SSI) highlighting the importance of
sustainability in 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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Elements of
compensation
submitted to
the vote
Annual
variable
compensation
(continued)
Chapter 4 – Corporate governance report
Amounts
Description
Application of the 2023 compensation policy
The annual incentive due for 2023 was determined by the Board at the meeting of February 14,
2024, based on the attainment rate of the objectives set for fiscal year 2023 as follows:
Weight (%)
Performance range
Achievement
Threshold
0%
Target
100%
Maximum
200%
2023
Results
Achievement
rate
(non-
weighted)
Achievement
rate
(weighted)
35%
11%
14%
17% 12.7%
56.7%
19.8%
25% 1.2 pts
10%
1.7 pts
85% 100%
2.3 pts 1.8 pts
115% 115%
116.7%
200.0%
29.2%
20.0%
10% 3.0 pt
4.0 pt
6.0 pt 5.2 pts
148.0%
14.8%
20%
100%
5.4
6.0
6.6
6.13
121.7%
24.2%
108%
2023 performance criteria
Group financial
indicators (70%)
Organic sales growth
Adjusted EBITA
margin
improvement (org.)
Cash conversion rate
Net Satisfaction
score (10%)
Sustainability (20%)
Schneider
Sustainability Impact
(score)
Total
Overall, 2023 annual variable compensation resulted in a total achievement rate of 108%,
above target, reflecting record levels in revenues and adjusted EBITA, and excellent level of
Free Cash Flow delivered by Schneider Electric in 2023.
Indeed, after having set the compensation targets on February 15, 2023, aligned with the
targets disclosed to the market at that time, the Board decided on July 26, 2023 to use the
discretion clause provided in the 2023 compensation policy approved by shareholders at the
2023 Annual Shareholders’ Meeting.
The targets set at the beginning of 2023 did not appear adequate anymore considering the
strong volume and strong net price impact achieved in the first half of the year Therefore, the
Board resolved to increase the targets linked to revenue growth and adjusted EBITA margin in
order to align them with the new guidance announced to the market at that time:
• Revenue growth of +11% to +13% organic (previously +10% to +13% organic in February
2023);
• Adjusted EBITA margin up +120 bps to +150 bps organic (previously +100 bps to +130 bps
organic in February 2023).
At the same time, the Board decided also to increase the targets set in February for the Net
Satisfaction score which had strongly recovered during the first half of the year with +3 pts
already achieved.
These decisions have been made to ensure a better alignment with the shareholders’
experience and to make sure that the Chief Executive Officer was compensated only for the
Company’s intrinsic performance. Without this adjustment:
•
the indicator linked to revenue growth would have been achieved by 70% delivering 24.5%
of target variable compensation for this criteria instead of the 19.8% which was delivered
after taking into consideration the targets adjustment resolved by the Board;
the indicator linked to Adjusted EBITA margin would have been overachieved by 200%
delivering 50% of target variable compensation for this criteria instead of the 29.2% which
was delivered after taking into consideration the targets adjustment resolved by the Board;
the indicator linked to Net Satisfaction Score would have been ovachieved by 200%
delivering 20% of target variable compensation for this criteria instead of the 14.8% which
was delivered after taking into consideration the targets adjustment resolved by the Board.
•
•
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4.2 Compensation Report
Amounts
Description
Elements of
compensation
submitted to
the vote
Annual
variable
compensation
(continued)
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Long-term
incentive
(Performance
shares)
17,559
Performance
Shares
granted in
May 2023
(€2,255,301
according to
IFRS
valuation)
Reminder:
N/A
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Detailed achievement of each criterion:
• Organic sales growth: The Group delivered an organic sales growth of +12.7%, which
was almost at the top end of the guidance communicated to the market in July of +11% to
+13%. However, as a consequence of a more stringent target setting methodology, this
good performance results only in an achievement rate of this criterion of 19.8% on the
range between 0% to 70%.
• Adjusted EBITA margin improvement: In 2023, Adjusted EBITA margin rate improved by
+1.8pts organically to reach 17.9%, as a consequence of good volumes and the strong
gross margin improvement, combined with control over support function cost growth. This
result is above the guidance communicated to the market in July of an Adjusted EBITA
margin up +1.2pts to +1.5pts organic. However, as a consequence of a more stringent
target setting methodology, this excellent performance results only in an achievement rate
of this criterion of 29.2% on a scale from 0% to 50%.
• Cash conversion: Free Cash Flow was €4.594 billion. Therefore, cash conversion rate was
115% in 2023 which represented an achievement rate of 20% on this criterion, on a scale
from 0% to 20%.
• Net Satisfaction score: The Net Satisfaction score was at +5.2pts from 48.5% in 2022 to
53.7% in 2023 as a result of an outstanding recovery. This good result led to an
achievement rate of 14.8% 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 2023 the SSI
achieved a score of 6.13/10 exceeding its target for the year, representing an achievement
rate of 24.8% on a scale from 0% to 40%.
As a result, the 2023 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
2023 (May 4-Dec. 31) Actual pay-out
as a % of salary
Amount (€)
as a % of target
as a % of base salary
Amount (€)
100%
€1,200,000
108%
108%
€853,549
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 2023 (see 9th resolution to be submitted to
the Annual Shareholders’ Meeting of May 23, 2024).
Reminder of the 2023 compensation policy
The 2023 compensation policy provided:
• a maximum annual award to the Chief Executive Officer capped at 150% of the combined
fixed and annual variable compensation at the date of the grant;
• a vesting period of three years with an additional mandatory one-year holding period for
80% of shares granted under the plan reserved to the Corporate Officer except for the sale
of shares necessary to cover his tax; and
• 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 2023 to 2025 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.
Schneider Electric Universal Registration Document 2023 | www.se.com
Chapter 4 – Corporate governance report
Elements of
compensation
submitted to
the vote
Long-term
incentive
(Performance
shares)
(continued)
Amounts
Description
17.5% vs. CAC 40
companies
35%
Relative Total
Shareholder
Return (TSR)
• 0% below median
• 50% at median (rank 20)
• 100% at rank 10
• 120% at ranks 1 to 4*
Vesting linear between these points
• 0% at rank 7 and below
• 50% at median (rank 6)
• 100% at rank 4
• 150% at ranks 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 (top 5%)
• 100%: Platinum medal (top 1%)
• 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.
Application of the 2023 compensation policy
The volume of the maximum annual award was set in consideration of:
• The market practice and competitive positioning of the Chief Executive Officer’s
compensation package;
• The Group’s performance, acknowledged by the market;
• The performance criteria applicable to the final acquisition of LTIP awards; and
• The culture of ownership deeply rooted in Schneider Electric’s DNA.
According to the authorization given by the Annual Shareholders’ Meeting on May 5, 2022 in
its 15th resolution, the Board of Directors, during its meeting of May 4, 2023 decided to grant
Mr. Peter Herweck a total of 17,559 Performance Shares (representing 0.003% of Schneider
Electric’s share capital) subject to the performance criteria described above and measured
over a period of three years:
• 14,047 Performance Shares under Plan nº 43 in his capacity as Chief Executive Officer of
Schneider Electric SE;
• 3,512 Performance Shares under Plan nº 42bis in his capacity as Chairman of Schneider
Electric Software & Digital Hub AG.
This grant was set for the full year 2023 including the months where Mr. Peter Herweck was
Chief Executive Officer of AVEVA (January 1 to February 28, 2023) and Executive Vice
President (March 1 to May 3, 2023), before transitioning to his new role. This value of this LTIP
grant in accordance with IFRS standards was EUR 2,255,301, i.e. 94% of the combined fixed
and target short-term variable compensation(1) (or 188% of the fixed compensation), well below
the maximum grant authorized under the compensation policy.
(1) In the 2022 Universal Registration Document, it was stated that the Board intended to grant Mr. Peter Herweck an amount of LTIP, which value in accordance with IFRS
standards would be around 85% of the combined fixed and target short-term variable compensation (i.e. 170% of the fixed compensation). At the date of the grant, the
IFRS value cannot be known with certainty as it is computed only at the end of the calendar year. For the 2023 grant, as disclosed in the 2022 Universal Registration
Document, the value of the grant to the Chief Executive Officer was based on the assumption that the discount rate applied according to the IFRS rules would be 26%
as it was for the 2022 grant. The final discount rate applied according to the IFRS rules to the 2023 grant was finally equal to 18.19%, hence the final IFRS value for the
2023 grant represented 94% of the combined fixed and target short-term variable compensation (or 188% of the fixed compensation).
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4.2 Compensation Report
Elements of
compensation
submitted to
the vote
Pension
benefits
Amounts
Description
€246,580
(amount
due for
period May
4 to
December
31, 2023
(fixed
portion of
€118,548
paid in
2023 and
variable
portion of
€128,032 to
be paid in
2024))
Reminder:
N/A
Reminder of the 2023 compensation policy
The Chief Executive Officer receives complementary cash payments whose 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 Chief Executive Officer depending on performance conditions
linked to the Group’s results. The Chief Executive Officer has committed to depositing these
additional payments, after taxes, into investment vehicles of his choice, dedicated to the
supplementary financing of pensions.Accordingly, Mr. Peter Herweck is entitled to receive
annually a complementary component, split into a fixed and variable portion as follows:
Fixed portion
Minimum
At target
Maximum
Total
at target
Variable portion
Full year amount
€180,000
€0
€180,000
€360,000
€360,000
Amount prorated for the
period from May 4 to
December 31, 2023
€118,548
€0
€118,548
€237,096
€237,096
The variable part is dependent on performance criteria aligned with the variable annual
compensation (see above).
Application of the 2023 compensation policy
At the meeting held on February 14, 2024, the achievement rate of the annual complementary
variable portion for pension for 2023 to be paid after the Annual Shareholders’ Meeting of May
23, 2024, if the latter approves it, was set by the Board of Directors at 108%.
For the period May 4 to December 31, 2023, Mr. Peter Herweck is entitled to receive:
Fixed amount
for period May 4 to Dec. 31, 2023
Variable amount
for period May 4 to Dec. 31, 2023(1)
for period May 4 to Dec. 31, 2023
Total
€118,548
€128,032
€246,580
(1) Calculated by applying to the variable portion at target of the pension above (€118,548) the percentage of
target achievement determined for the calculation of the 2023 annual variable compensation, i.e. 108%.
In compliance with applicable law, the payment of the variable amount will be subject to
shareholders’ approval (see 9th resolution submitted to the Annual Shareholders’ Meeting of
May 23, 2024).
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Chapter 4 – Corporate governance report
Elements of
compensation
submitted to
the vote
Other benefits
Amounts
Description
€26,390
(received in
the period
May 4 to
December
31, 2023)
Reminder:
N/A
the employer matching contributions;
the profit-sharing;
Reminder of the 2023 compensation policy
The compensation policy provides that the Chief Executive Officer may benefit from:
•
•
• a company car;
• a tax assistance; and
• supplementary Life & Disability scheme.
Application of the 2023 compensation policy
For the period May 4 to December 31, 2023 the Chief Executive Officer is eligible for 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
during the period from May 4 to December 31, 2023 represented an equivalent cost of
€24,986.
Employer matching
contributions to
Employee Saving Plan
Employer matching
contributions to
collective pension
saving plan (PERECO)
Profit-sharing
Company car
Total 2023 benefits
€1,404
€0
N/A
€24,986
€26,390
The Chief Executive 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 and (ii) additional coverages conditional on the
fulfillment of some conditions as described in the compensation policy (see Chapter 4, section
4.2.3.1.3 of the 2022 Universal Registration Document).
Involuntary Severance Pay
The Chief Executive Officer 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 cash
compensation paid over the last three years (see Chapter 4, section 4.2.3.1.3 of the 2022
Universal Registration Document).
Non-compete compensation
The Chief Executive Officer 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 4.2.3.1.3 of the 2022 Universal Registration Document).
Termination
benefits
No
payment
For the period May 4 to December 31, 2023, Mr. Peter Herweck 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. Peter Herweck’s compensation amounted to EUR 373,501 in
the period May 4 to December 31, 2023.
Mr. Peter Herweck was granted 80% of his cash compensation described above (fixed compensation, annual variable compensation, and
pension complementary payments) in consideration for his duties as a Corporate Officer (Chief Executive Officer) of Schneider Electric SE
exclusively. The remainder is granted to him for the discharge of his operational duties as President of Schneider Electric Software & Digital
Hub AG.
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4.2 Compensation Report
Details relating to the 2021 Long-term incentive plan realized in 2023 (LTIP 2021)
The performance period for shares granted in 2021 finished on December 31, 2023 and shares under the Plan nº 39 are therefore deemed
vested. Their final acquisition is, however, still subject to the satisfaction of the presence condition at the delivery date.
The Board of Directors at its meeting of February 14, 2024 as well as the Chief Executive Officer on March 1, 2024 pursuant to the
delegation of powers granted by the Board of Directors on February 14, 2024 assessed the achievement rate of the performance criteria
based on the Group’s performance over the three-year period 2021 - 2023 and set the final rate of achievement at 81.46%, i.e. a reduction
of 18.54% in relation to the number of shares originally granted.
The Chief Executive Officer was conditionally granted 16,276 shares under Plan nº 39 in 2021 (i.e. when he was not yet Chief Executive
Officer). After applying the final achievement rate base on performance, the outcomes are as follows:
Corporate Officer
Peter Herweck
Vesting date
Number of shares
(Plan nº 39)
Number of shares
deemed vested
16,276
13,259
Number of shares
lapsed
3,017
Value of deemed
vested shares(1)
€2,410,221
March 25, 2024
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(1) Vested shares are valued at the closing share price of December 30, 2023, i.e. EUR 181.78.
Shares granted under the 2021 LTIP were subjected to performance conditions as follows:
40%
Adjusted Earnings per
Share (EPS) improvement
17.5%
Relative Total Shareholder
17.5%
Relative Total Shareholder
Return (TSR) vs. CAC 40
Return (TSR) vs. panel of
competitors
25%
Schneider Sustainability
External and Relative Index
(SSERI)
2021 – 2023 payout rate:
40%
2021 – 2023 payout rate:
0.00%
2021 – 2023 payout rate:
17.50%
2021 – 2023 payout rate:
23.96%
2023 was the final year of performance measurement for the LTIP 2021 running from 2021 to 2023. 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. Schneider Electric delivered 43.7% return to shareholders over the same three-year period, above the
average of 36.5% for the CAC 40 companies, demonstrating a strong value creation for the shareholders. Despite this performance over the
period, Schneider Electric ranked 22nd on relative TSR among the CAC 40 companies, and the criterion was not deemed met as per the
applicable principle of the compensation policy. Schneider Electric ranked 3rd among the panel of competitors. These results across the
range of performance criteria led to a vesting outcome of 81.46% out of 100%.
2021 LTIP performance criteria achievement
0%
Achievement scale
100%
Adjusted EPS (40%)
Relative TSR vs. Peer group (17.5%)
Relative TSR vs. CAC 40 (17.5%)
0
0.0%
SSERI (25%)
Total weighted achievement rate
40.00%
17.50%
23.96%
81.46%
• Adjusted Earnings per Share (EPS) improvement (40%)
During the three-year plan, the Adjusted EPS improved organically by more than +19% on average. 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 support function costs. Overall, the achievement rate for this criterion was 40% (out of 40%).
Adjusted Earnings per Share
improvement rate
Total
Reference
period
2021
2022
2023
Weight (%)
Min 0%
75%
Max 100%
Target
Actual
achievement
Pay-out rate
Weighted
pay-out rate
13.33%
13.33%
13.33%
40%
11.5%
15.5%
17.0%
31.77%
1.1%
3.0%
5.9%
5.0%
8.3%
8.0%
13.13%
16.50%
100%
100%
100%
13.33%
13.33%
13.33%
40%
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Chapter 4 – Corporate governance report
• Relative Total Shareholder Return (TSR)
vs. CAC 40 (17.5%) – Schneider Electric delivered 43.7% return to shareholders over the three-year performance period, way above the
average of 36.5% for the CAC 40 companies, demonstrating a strong value creation for the shareholders. However, Schneider Electric
ranked 22nd on relative TSR among the CAC 40 companies, at less than 0.7 pts of the median company (Safran with a TSR of 44.4%).
Consequently, the achievement rate for this criterion was set at 0% (out of 17.5%).
vs. panel of peer companies (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 17.50% (out of 17.5%). This criterion delivered an over-performance of
8.75% but considering the full achievement of the EPS criterion, no off-setting mechanism was used for the 2021 LTIP.
Relative
Total
Shareholder
Return
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
15
10
4-1
22nd rank
0%
0%
4
3-1
3rd rank
150% 17.50%
• 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 Electric in 2021, 2022, and 2023 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
6.25% Ecovadis
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%)
6.25% CDP
Climate Change
• 0%: C score
• 50%: B score (25% at B-)
• 100%: A score (75% at A-)
Total
25%
Actual achievement
2021
2022
2023
Pay-out
rate
Weighted
pay-out rate
World
sector
leader
sector
leader
83.33%
5.21%
World 120 &
Europe 120
World 120 &
Europe 120
World 120 &
Europe 120
100%
6.25%
Platinum
Medal
Platinum
Medal
Platinum
Medal
100%
6.25%
A score
A score
A score
100%
6.25%
23.96%
Historical vesting of the Corporate Officers’ Performance Share plans:
LTIP 2021
81.46%
LTIP 2020
96.71%
LTIP 2019
96.86%
LTIP 2018
98.18%
LTIP 2017
99.54%
LTIP 2016
91.46%
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Chapter 4 – Corporate governance report
4.2 Compensation Report
4.2.2.2.3 Chairman of the Board’s compensation from May 4 to December 31, 2023
Table summarizing the compensation paid or granted to the Chairman of the Board of Directors in 2023
The following table summarizes the compensation and benefits awarded or paid to the Chairman of the Board of Directors for the period
from May 4 to December, 31, 2023 presented on a reported basis in accordance with AFEP-MEDEF guidelines.
Jean-Pascal Tricoire
Chairman of the Board of Directors
(Euro)
A – CASH COMPENSATION
Fixed compensation
Annual variable compensation
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
Complementary payment for pension building (fixed)
Complementary payment for pension building (variable)
SUBTOTAL (C) PENSION CASH BENEFIT
D – OTHER BENEFITS
Other benefits(1)
SUBTOTAL (D) OTHER BENEFITS
TOTAL COMPENSATION AND BENEFITS (A)+(B)+(C)+(D)
Compensation & benefits
awarded for fiscal year
Compensation & benefits realized in
fiscal year
2023
2022
2023
2022
612,500
0
0
612,500
0
0
0
0
0
39,330
39,330
651,830
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
612,500
0
0
612,500
0
0
0
0
0
39,330
39,330
651,830
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
(1) 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.
Say on pay table relating to the compensation paid or granted to the Chairman of the Board from May 4 to
December 31, 2023
The fixed components of the total compensation and benefits paid for the period from May 4 to December 31, 2023 to the Chairman of the
Board, as detailed below, will be submitted to the shareholders for approval at the 2024 Annual Shareholders’ Meeting of May 23, 2024
under the 10th resolution.
The tables below summarize the compensation paid for the period from May 4 to December 31, 2023, along with a description of how each
component was calculated in compliance with the compensation policy in force.
Elements of
compensation
submitted to
the vote
Fixed
compensation
Amounts
Description
€612,500
(due for
period May
4 to
December
31, 2023
paid in
2023)
Reminder of the 2023 compensation policy
For the fiscal year 2023, his theoretical gross annual fixed compensation was set by the Board
of Directors at €930,000 upon recommendation from the Governance & Remunerations
Committee.
Application of the 2023 compensation policy
Mr. Jean-Pascal Tricoire received a fixed compensation of €612,500 for the period from May 4
to December 31, 2023.
Annual
variable
compensation
€0
Reminder of the 2023 compensation policy
The 2023 compensation policy provided that the Chairman of the Board of Directors does not
benefit from any annual variable compensation.
Application of the 2023 compensation policy
The Chairman of the Board of Directors did neither receive nor was awarded any annual
variable compensation for the period from May 4 to December 31, 2023.
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Chapter 4 – Corporate governance report
Elements of
compensation
submitted to
the vote
Long-term
incentive
(Performance
shares)
Amounts
Description
0
Performance
shares
Reminder of the 2023 compensation policy
The 2023 compensation policy provided that the Chairman of the Board of Directors does not
benefit from any long-term incentive plan.
Application of the 2023 compensation policy
The Chairman of the Board of Directors was not granted any Performance shares during the
period from May 4 to December 31, 2023.
Pension
benefits
€0
Reminder of the 2023 compensation policy
The 2023 compensation policy provided that the Chairman of the Board of Directors does not
benefit from any Company pension arrangement or pension allowance.
Application of the 2023 compensation policy
The Chairman of the Board did not receive any pension benefits during the period from May 4
to December 31, 2023.
Other benefits
€39,330
(received in
period May 4
to December
31, 2023)
the employer matching contributions;
the profit-sharing;
Reminder of the 2023 compensation policy
The compensation policy provides that the Chairman of the Board may benefit from:
•
•
• a company car;
• a tax assistance; and
• supplementary Life & Disability scheme.
Application of the 2023 compensation policy
For period from May 4 to December 31, 2023, the Chairman of the Board 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 represented an equivalent cost of €29,702.
Employer matching
contributions to
Employee Saving Plan
Employer matching
contributions to
collective pension
saving plan (PERECO)
Profit-sharing
Company car
Total 2023 benefits
€1,404
€800
€7,424
€29,702
€39,330
The Chairman of the Board is eligible for 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 (see Chapter 4, section 2.3.1.4 of the Universal Registration
Document).
Termination
benefits
No
payment
Involuntary Severance Pay
The 2023 compensation policy provided that the Chairman of the Board of Directors does not
benefit from any severance pay (see Chapter 4, section 4.2.3.1.4 of the 2022 Universal
Registration Document).
Non-compete compensation
The 2023 compensation policy provided that the Chairman of the Board of Directors does not
benefit from any non-compete indemnity (see Chapter 4, section 4.2.3.1.4 of the 2022
Universal Registration Document).
For the period from May 4 to December 31, 2023, 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
EUR 187,538 for the period May 4 to December 31, 2023.
Mr. Jean-Pascal Tricoire was granted 65% of his cash compensation described above (fixed compensation) in consideration for his duties
as Chairman of the Board of Schneider Electric SE exclusively. The remainder was granted to him for the discharge of his duties as
Chairman of Schneider Electric Asia Pacific.
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4.2 Compensation Report
4.2.2.3 Non-executive Directors’ compensation in relation to the 2023 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 Human Capital &
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 EUR 2,800,000 by
the Annual Shareholders’ Meeting held on May 4, 2023. The 2023
compensation policy approved by said Annual Shareholders’
Meeting 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 EUR 25,000 for membership of the
Board;
− an amount of EUR 7,000 per Board meeting attended;
− an amount of EUR 4,000 per committee meeting attended;
− an amount of EUR 25,000 for the yearly strategy week (half in
case of digital assistance);
− an amount of EUR 5,000 (for intercontinental travel) or
EUR 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: EUR 20,000;
− Governance, Nominations & Sustainability Committee,
Human Capital & Remunerations Committee, Digital
Committee, and Investment Committee: EUR 15,000; and
− Lead Independent Director: EUR 250,000.
• For an observer, an annual fixed payment of EUR 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 2022 and 2023 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
Giulia Chierchia
Rita Felix(3)
Fred Kindle
Willy Kissling(5)
Linda Knoll
Jill Lee
Xiaoyun Ma(3)(4)
Anna Ohlsson-Leijon
Abhay Parasnis
Fleur Pellerin(5)
Anders Runevad
Gregory Spierkel
Lip-Bu Tan
Bruno Turchet(3)(6)
Total
Directors’ compensation
(€)
Other compensation & benefits
(€)
Total (€)
2023(1)
2022(2)
2023(1)
2022(2)
2023(1)
2022(2)
177,000
138,000
114,000
87,000
122,000
389,000
–
161,000
163,000
–
135,000
115,000
–
138,000
184,000
129,000
109,000
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
2,161,000
2,205,220
–
–
–
–
–
–
–
20,000(7)
–
–
–
–
–
–
–
–
–
20,000
–
–
–
–
–
–
–
25,000(7)
–
–
–
–
–
–
–
–
–
177,000
138,000
114,000
87,000
122,000
389,000
–
181,000
163,000
–
135,000
115,000
–
138,000
184,000
129,000
109,000
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
25,000
2,181,000
2,230,220
(1) Awarded for the fiscal year 2023 and paid in 2024.
(2) Awarded for the fiscal year 2022 and paid in 2023.
(3) Employee Directors are separately entitled to the compensation granted to
(4) Xiaoyun Ma waived the payment of the sum of EUR 87,000 she was entitled to.
(5) Board member whose term of office ended in 2022.
(6) 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.
EUR 32,700, in favor of the trade union which appointed him.
(7) Amount paid to Linda Knoll as a member of the Stakeholder Committee.
The total amount awarded to the Board members for their office as Directors for 2023 was EUR 2,161,000 compared to EUR 2,205,220 for
2022, i.e. a decrease of 2.0%, the drop of the number of meetings from nine to seven being compensated by the increase of number of
Directors from fourteen to sixteen. Excluding the special fee paid to the Vice-Chairman & Lead Independent Director, the amount is
composed of approximately 20% fixed compensation and 80% variable.
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Chapter 4 – Corporate governance 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 Chapter 2 of this 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, pay
equity is fully
integrated during the
annual global salary
review and technology
is embedded at the
core of the process for
managers to take the
right decision during
hiring and promotion
process through a tool
called Fair Pay
Simulator.
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 was
certified as the “Living
Wage Certified”
organization through
Fair Wage Network in
2023.
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.
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”.
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.
Pay equity ratio measures the ratio between the level of
compensation of the Chairman and the Chief Executive Officer 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.
For the Chairman (May 4 to December 31, 2023)
• Annualized 2023 fixed compensation; and
• Annualized relevant benefits (cost of the company car, profit-
sharing and employer matching contributions to Employee
saving plan) for 2023.
For the employees:
• 2023 fixed compensation;
• Variable compensation paid in 2023 (for the performance year
2022);
• Relevant bonuses and benefits (in cash and kind) for 2023;
• Profit sharing and employer matching contributions to employee
saving plan for 2023; and
• Value of the Performance shares granted in 2023 at their fair
value (IFRS) on the grant date.
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 & Chief Executive Officer (January 1 to
May 3, 2023)
• Annualized 2023 fixed compensation;
• Variable incentive paid in 2023 (for the performance year 2022);
• Annualized relevant benefits (cost of the company car, profit-
sharing, and employer matching contributions to Employee
saving plan) for 2023.
For the Chief Executive Officer (May 4 to December 31, 2023)
• Annualized 2023 fixed compensation;
• Annualized 2023 annual incentive at target;
• Annualized relevant benefits (cost of the company car and
employer matching contributions to Employee saving plan) for
2023; and
• Value of the Performance shares granted in the period May 4 to
December 31, 2023 at their fair value (IFRS) on the grant date.
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4.2 Compensation Report
Scope
France perimeter:
The legal scope, the issuer, comprises of only two employees,
therefore, an alternate “relevant scope” was defined to reflect a
larger representative employee population in France as prescribed
by Article 27.2 of the 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(s) and the Chairman and represents more than 4,000
employees in France on a full-time equivalent basis.
Global perimeter:
In addition, from 2021 the Board of Directors, upon
recommendation of the Human Capital & Remunerations
Committee, decided to voluntarily report the evolution of the pay
ratio between the Chairman & Chief Executive Officer and the
average and median compensation of the employees on a broader
scope which includes approximately 131,000 Schneider Electric
employees across the top 30 countries (“Global perimeter”). This
represents circa 89% of all Schneider Electric employees globally.
There is no historical data for this ratio before 2021 as the HR
Information System was not ready before this date 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 (Chairman & Chief Executive Officer)
Total compensation paid (annualized)
Adjusted EBITA
Revenue
FY2019
FY2020
FY2021
FY2022
FY2023
155
133
151
135
129
112
100
101
98
French perimeter
Mr. Tricoire total compensation paid (in €)
% change in total compensation
5,754,154
-7%
5,525,324
-4%
5,430,941
-2%
6,506,045
+20%
2,548,889
-61%
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
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%
25
-62%
31
-62%
101,133
+4%
47
-63%
67
-64%
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Mr. Tricoire (Chairman)
Total compensation paid (annualized)
Adjusted EBITA
Revenue
FY2019
FY2020
FY2021
FY2022
FY2023
No graph since new starting point in 2023
French perimeter
Mr. Tricoire total compensation paid (in €)
% change in total compensation
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
Global perimeter
Pay ratio – average compensation
% change in average pay ratio
Pay ratio – median compensation
% change in median pay ratio
Mr. Herweck (Chief Executive Officer)
Total compensation paid (annualized)
Adjusted EBITA
Revenue
French perimeter
Mr. Tricoire total compensation paid in FY (in €)
% change in total compensation
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
Global perimeter
Pay ratio – average compensation
% change in average pay ratio
Pay ratio – median compensation
% change in median pay ratio
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
985,189
10
12
101,133
18
26
FY2019
FY2020
FY2021
FY2022
FY2023
No graph since new starting point in 2023
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
4,694,643
N/A
N/A
N/A
N/A
N/A
46
57
101,133
87
124
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4.2 Compensation Report
R
T 4.2.3 Compensation policy for the 2024 fiscal year
O
(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 2024. It will be submitted to the shareholders at the 2024 Annual Shareholders’ Meeting (11th to 13th
resolutions) and, subject to shareholders approval, will remain in force until the next policy is approved by the shareholders.
For the fiscal year 2024, as a consequence of the change of
governance, three different compensation policies will be
applicable:
− to the Chief Executive Officer (Mr. Peter Herweck) (subject of
the 11th resolution proposed to the Annual Shareholders’
Meeting);
− to the Chairman of the Board of Directors
(Mr. Jean-Pascal Tricoire) (subject of the 12th resolution
proposed to the Annual Shareholders’ Meeting);
− to the Board members (subject of the 13th resolution
proposed to the Annual Shareholders’ Meeting).
4.2.3.1 Executive compensation policy
4.2.3.1.1 Overview
Schneider Electric follows a rigorous process for determining executive compensation, under the leadership of committed and
independent Directors.
Role of the Human Capital & 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 Human
Capital & Remunerations Committee which makes
recommendations to the Board of Directors for decision. The Board
also receives inputs and recommendations from the Human Capital
& Remunerations 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 Human Capital &
Remunerations Committee is authorized to call upon external
experts for specific topics, benchmarking data and analyses. In
2023, the Committee held one joint meeting with the Governance,
Nominations & Sustainability Committee to discuss the definition of
the ESG criteria for long-term (LTIP) compensation of executive
Corporate Officers and top managers.
One of the two Directors representing the employees is a member
of the Human Capital & Remunerations 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 Governance,
Nominations & Sustainability
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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Chapter 4 – Corporate governance report
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 Electric such as unexpected changes in the industry environment and
in compensation practice generally, not taken into account when determining the current compensation 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 compensation 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 2024 compensation policy
The Committee reviewed the existing policy and reassessed the pillars and principles formulated in 2018, as well as the compensation
elements and criteria in light of shareholders’ feedback received during the shareholder engagement process described above.
Upon recommendations of the Human Capital & Remunerations Committee, the Board wishes to maintain the overall stability of the
compensation policy which appears balanced, 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’ feedback.
In 2023, several changes were implemented including (i) the review of the targeted amounts for the different components of the
compensation which has led to a decrease of the on-target global remuneration opportunity by 23% compared to the previous Chairman &
Chief Executive Officer compensation policy, (ii) the strengthening of the performance targets linked to the involuntary severance indemnity,
and (iii) the inclusion of a clawback provision.
Also, as announced in the letter from Mr. Fred Kindle, Vice-Chairman & Lead Independent Director, dated April 13, 2023 and to remedy to
the concerns raised by shareholders, the Board proposes to implement two changes to the 2024 compensation policy.
Introduction of a strict
post-mandate vesting
rule
New sustainability
targets for the LTIP
The Board acknowledges the preference of some investors for a prorata vesting rule in case of departure of the
Chief Executive Officer. The post-mandate vesting rules will be modified to provide that, 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 to a prorata
for the time the Chief Executive Officer remained with the Group in this capacity during the vesting period.
In line with investors’ expectations and the Company’s commitment ahead of the 2023 Annual Shareholders’
Meeting, the Board, on recommendation of the Human Capital & Remunerations Committee, has considered
moving away from the SSERI performance condition to integrate sustainability criteria in line with most material
CSR topics of the Group. The Board proposes to introduce sustainability criteria linked to the reduction of our
Scope 1, 2, and 3 (upstream) CO2 emissions, in order to align executive remuneration with the Group commitment
in terms of climate transition and Schneider Electric’s sustainable value creation direction.
How are performance criteria linked to Schneider Electric strategic priorities?
Balance between compensation elements
24%
Not linked to
performance
48%
Paid in cash
48%
Short term
24%
Fixed
compensation
24%
Target annual
variable
compensation
100% of fixed(2)
52%
LTIP(1)
76%
Linked to
performance
52%
Paid in shares
52%
Long term
(minimum 3 years +
presence condition)
(1) Estimated valued, in accordance with IFRS standards, of the LTIP to be granted during 2024 fiscal year.
(2) Between 0% and 200%.
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4.2 Compensation Report
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
Carbon emissions
reduction targets
40%
35%
25%
Variable pay is linked to performance metrics designed to deliver Schneider Electric’s 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 Officers 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.
2024 compensation pillars and principles
Pay-for-performance
Alignment with shareholders’
interest
Competitiveness
• Principle 1: Prevalence of variable
components: circa 80% for Chief
Executive Officer (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.
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4.2.3.1.2 Compensation policy of Mr. Peter Herweck as Chief Executive Officer
Fixed compensation
The Board decided to set the fixed compensation of the Chief Executive Officer at €1,200,000 for the fiscal year 2024, unchanged
compared to 2023 on a full year basis.
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, Chief Executive Officer
Annual variable compensation
FY 2024
€1,200,000
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 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 2024, 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.
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 14, 2024 and will be communicated ex-post. In case of unforeseen scope impact or
exceptional events, the Board may decide to adjust and restate from the calculation of the achievement of these criteria the impact of
such events. These adjustments or restatements would be disclosed ex-post in the Universal Registration Document.
The Net Satisfaction score 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, and 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 Net Satisfaction score 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 Net Satisfaction score of
-100%;
• On the other end of the spectrum, if all of the customers gave a grade of 9 or 10, then the Net Satisfaction score would be 100%.
In consideration of all elements described above, the Board decided to set the annual variable compensation opportunity at target and
maximum as follows:
Minimum
At target
Maximum
0% of fixed compensation
100% of fixed compensation
200% of fixed compensation
Nil
€1,200,000
€2,400,000
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 for its Chief Executive Officer.
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4.2 Compensation Report
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, except for the sale of shares necessary to
cover his tax.
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)
In line with the commitment taken by the Board ahead of the 2023 Annual Shareholders’ Meeting to review and strengthen the structure
of LTIPs in line with Schneider Electric’s most material CSR topics and strategy, the sustainability criteria that will be used to determine
the Chief Executive Officer’s long-term remuneration will change starting from 2024. Other criteria and their respective weight will
remain unchanged compared to 2023, 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).
In order to align the interests of the Group’s executives to those of the shareholders, in 2024, the Board will allocate Performance
Shares to more than 4,000 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 annual variable compensation at the date of grant to ensure that it does not represent a disproportionate
percentage of his overall compensation.
The volume of the annual award will be set in consideration of:
•
•
•
•
the market practice and competitive positioning of the Chief Executive Officer’s compensation package;
the Group’s performance, acknowledged by the market;
the performance criteria applicable to the final acquisition of LTIP awards; and
the culture of ownership deeply rooted in Schneider Electric’s DNA.
For 2024, the Board intends to grant Mr. Peter Herweck an amount of LTIP, which value in accordance with IFRS standards will be
around(1) 108.5% of the combined fixed and target short-term variable compensation (i.e. 217% of the fixed compensation), well below
the maximum grant authorized under the compensation policy (150% of the combined fixed and target annual variable compensation,
or 300% of the fixed compensation). To determine the LTI grant level, the Board took into consideration the market practice (see section
4.2.3.1 of the Universal Registration Document), the Group’s performance in 2023, and the strong and ambitious objectives as
announced during the Capital Market Day in November 2023 and adjusted upward the LTIP grant in value, within the maximum limit
provided by the compensation policy, to reflect the importance of the strategic orientation.
In the context described above, the Board decided that the number of shares granted to the Chief Executive Officer 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 2024 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 18.19% as it was for the 2023 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 2024 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; and
• 25%, based on Schneider Electric’s carbon emissions reduction targets.
• 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; and
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. In case of
unforeseen scope impact or exceptional events, the Board may decide to adjust and restate from the calculation of the achievement of
these criteria the impact of such events. These adjustments or restatements would be disclosed ex-post in the Universal Registration
Document.
• 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.
• 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 nine of the
CAC 40 companies, this criterion may compensate the under-performance under the Adjusted EPS criterion up to the same number of
shares. This compensation mechanism allows only an over-performance of the Schneider Electric TSR criterion to compensate an
under-performance of the Adjusted EPS criterion. The under-performance of the Schneider Electric TSR criterion or sustainability
criterion cannot be compensated in any way. This mechanism ensures that the experience of the management is perfectly aligned with
that of the shareholders. Over the last three years (2021, 2022 and 2023), the compensation mechanism occurred twice, i.e. in 2021
and 2022, and has been implemented to compensate the under-performance of the internal financial criteria for the COVID year in
2020 while the Board decided to maintain the targets although the guidance was adjusted downward.
If the Schneider Electric TSR is closely clustered with that of other companies in the panel, then the Board of Directors will apply its
judgment to decide whether Schneider Electric’s TSR shall be deemed to be ranked in the same position as those companies.
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• Carbon emissions reduction targets (25%)
This criterion aims at linking the Chief Executive Officer’s compensation with Schneider Electric’s greenhouse gas (GHG) reduction
targets as validated by the Science Based Targets initiative (SBTi), aligned with its “Corporate Net-Zero Standard” published in
October 2021. The Board thus decided to link the LTIP:
• For 12.5% to an absolute number of tons of CO2 emissions (carbon budget) that the Group would have to reach for its Scope 1 & 2
emissions for the full year 2026 (last year before the vesting in March 2027) with (i) a minimum objective (159,163 tons of CO2
emissions, i.e. a reduction of 20% vs. the 2023 emissions) under which no vesting will occur for this criteria; (ii) a targeted objective
(151,584 tons of CO2 emissions, i.e. a reduction of 25% vs. the 2023 emissions) that the Group will have to achieve in order to vest all
shares under this criteria, and (iii) a linear vesting if the actual achievement is between these two objectives.
• For 12.5% to an absolute number of Scope 3 upstream CO2 emissions per euro of revenue (carbon intensity) that the Group would
have to reach for the full year 2026 (last year before the vesting in March 2027) with (i) a minimum objective (185 g of CO2 emissions
per euro of revenue, i.e. a reduction of 15% vs. the 2023 Scope 3 upstream carbon intensity) under which no vesting will occur for
this criteria, (ii) a targeted objective (165 g of CO2 emissions per euro of revenue i.e. a reduction of 25% vs. the 2023 Scope 3
upstream carbon intensity) that the Group will have to achieve in order to vest all shares under this criteria, and (iii) a linear vesting if
the actual achievement is between these two objectives.
In case of significant change in the consolidation scope or in the methods used to calculate GHG emissions, Schneider Electric will
apply the recalculation rules defined by the GHG Protocol and the Science Based Target Initiative. In case of significant regulatory
changes or any other external event significantly impacting this condition, the Board may adjust the target or decide not to take in
consideration this criteria.
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% Carbon emissions
reduction targets
12.5% Scope 1 & 2 carbon emissions
target
• 0% if the carbon emissions are above or equal to 159,163 ton
of CO2
• 100% if the carbon emissions are below or equal to 151,584
ton of CO2
Vesting linear between these points
12.5% Scope 3 upstream carbon
intensity target
• 0% if the carbon intensity is above or equal to 185 g of CO2 per
euro of revenue
• 100% if the carbon intensity is below or equal to 165 g of CO2
per euro of revenue
Vesting linear between these points
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 whose 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 Chief Executive Officer depending on performance
conditions linked to the Group’s results.
The Chief Executive Officer has committed to depositing these additional payments, after taxes, into investment vehicles of his choice,
dedicated to the supplementary financing of pensions.
Fixed portion
€180,000
Minimum
€0
Variable portion
At target
€180,000
Maximum
€360,000
Total at target
€360,000
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 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;
and
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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; and
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
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
As announced in the letter from Mr. Fred Kindle, Vice-Chairman & Lead Independent Director, dated April 13, 2023 and in response to the
concerns raised by shareholders, the Board proposes to implement a strict prorata vesting rule in case of departure of the Chief Executive
Officer. The post-mandate vesting rules will provide that, 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 to a prorata for the time the Chief Executive Officer remained with the Group in this capacity during the vesting period.
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
Not applicable
Payment of an indemnity (twice
the average of the annual fixed
and variable cash compensation
paid over the last three years
subject to performance
conditions)
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 subject to a
prorata basis to the time serve in
executive functions
• 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.
In any case, involuntary severance indemnity will not be paid if the resignation is a consequence of wrongful or gross misconduct.
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• 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 three 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 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; in case of forced departure in 2026, the performance condition will be calculated on the 2023, 2024 and
2025 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: In case of voluntary resignation or removal from office for wrongful or gross misconduct, the
Chief Executive Officer will lose all his unvested Performance Shares. If the Chief Executive Officer leaves the Group in
circumstances of a forced departure or 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 which will be pro-rated for the time the Chief Executive Officer remained with the Group in this capacity during the vesting
period.
• 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; and
− 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
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
Chief Executive Officer
NO
NO
YES
YES
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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 relocates 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 compensation report.
4.2.3.1.3 Compensation policy of Jean-Pascal Tricoire as non-executive Chairman of the Board
Fixed compensation
The Board decided to set the fixed compensation of the Chairman of the Board at €930,000 for the fiscal year 2024, unchanged
compared to 2023 on a full year basis.
This compensation is explained by the enlarged mission given by the Board to its Chairman (which is described in section 4.1.2.1.2 of
the Universal Registration Document) in order to ensure a smooth and efficient transition.
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.
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Other benefits
The Chairman of the Board will be entitled to receive the following benefits.
Employer matching montributions and mrofit-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 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; or
• any non-compete indemnity.
Chairman of the Board
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
NO
NO
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.
4.2.3.2 Non-executive Directors’ compensation policy
Changes in the 2024 compensation policy
The Human Capital & Remunerations Committee reviewed the existing non-executive Directors’ policy at the end of 2023. This review aims
at (i) taking better account of the increasing workload of the Board and its Committees as well as the time and efforts required to prepare
their meetings, (ii) encouraging good attendance at these meetings, and (iii) considering the travel time for Directors attending Board
meetings physically.
Upon recommendations of the Human Capital & Remunerations Committee, the Board proposes to implement the following changes for the
2024 non-executive Directors’ compensation policy:
Differentiate the Board’s attendance fee
between physical and digital attendance
Increase to €11,000 for physical attendance and decrease to €6,000 for digital attendance
(vs. €7,000 per meeting).
Increase the additional fee for travel
Increase to €6,000 for inter-continental travel (vs. €5,000) and €3,500 for intra-continental
travel (vs. €3,000)
Increase the attendance fee per committee
meeting
Increase to €4,500 per committee meeting (vs. €4,000)
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2024 compensation policy subject to the approval by the 2024 Annual Shareholders’ Meeting under the
13th resolution
At the 2023 Annual Shareholders’ Meeting, the shareholders approved under the 10th resolution the maximum total amount of the annual
compensation that can be paid to the members of the Board which stands at EUR 2,800,000. It is proposed:
•
•
to maintain the cap of annual total compensation payable to the members of the Board of Directors at EUR 2,800,000; and
to review the allocation rules as detailed below.
Director’s individual compensation
• Non-executive Directors will be paid:
− a fixed basic amount of €25,000 for membership of the Board;
− an amount of €11,000 per Board meeting physically attended, and €6,000 per Board meeting digitally attended;
− an amount of €4,500 per committee meeting attended;
− an amount of €25,000 for the yearly strategy week (half in case of digital attendance); and
− an amount of €6,000 (for intercontinental travel) or €3,500 (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.
4.2.4 Compensation of Group Senior Management
(excluding Corporate Officers)
Scope of Senior Management in 2023
On December 31, 2023, Group Senior Management is composed of 17 Executive Committee members. The Executive Committee is chaired
by the Chief Executive Officer and includes:
• Executive Vice-Presidents of Corporate Functions: Finance, Supply Chain, Digital, Innovation, Governance, Marketing, and Human
Resources;
• Chief Executive Officer Aveva & Executive Vice-President Schneider Electric Software;
• 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.
41% of the Group Senior Management (including Chief Executive Officer) is composed of women.
Compensation policy
The compensation principles of the Group Senior Management (excluding the Corporate Officer) and their individual analyses are reviewed
by the Human Capital & Remunerations Committee for information and consultation with the Board of Directors. The Human Capital &
Remunerations 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 Officer 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; and
the proportion of variable components within their on target compensation package is around 75% vs. around 80% for the Corporate
Officer.
•
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Compensation paid in 2023
Gross compensation, including benefits in kind, paid by Group companies in 2023 to the members of Group Senior Management other than
the Corporate Officer, amounted to EUR 37.8 million, including EUR 10.6 million in variable compensation paid in the 2023 fiscal year.
improvement of Group adjusted EBITA margin (organic);
The performance objectives for the annual incentive for the fiscal year 2023 were:
• Group organic sales growth;
•
• Group cash conversion rate;
•
• Schneider Sustainability Impact.
improvement of Net Satisfaction Score; and
Long-term incentive plans
During the last three financial years, 497,792 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 2023, Performance shares were allocated under the 2023 Long-term incentive plan 42.
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; and
the Group’s Senior Management subject to the French Social Security system, with the exception of the Corporate Officer, 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 Compensation Report
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 LTIPs 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 Capital & Remunerations
Committee.
Past share plans (as of December 31, 2023)
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
2023 are characterized by:
• a total of 4,259 beneficiaries in the 2023 LTIP (vs. 3,963
beneficiaries in the 2022 LTIP);
• allocations to Executive Committee members, including the
Corporate Officers, represented 14.6% of the total attributions in
the framework of the 2023 LTIP (vs. 13.9% in the framework of
the 2022 LTIP); and
• 30.2% of the beneficiaries were women in the 2023 LTIP to
whom 29.1% of the shares were granted (vs. 29.0% of women in
the 2022 LTIP to whom 27.5% 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.
LTIP 2020
LTIP 2021
LTIP 2022
LTIP 2023
Plan number
Plans 36, 37, 37bis
Plans 38, 39, 39bis, 39ter
Plans 40, 41, 41bis, 41ter
Date of Annual Shareholders’
Meeting
Date of the grant by the Board
Mar. 24, 2020
Oct. 21, 2020
Apr. 25, 2019
Apr. 25, 2019
Mar. 25, 2021
Jul. 29, 2021
Oct. 26, 2021
1,557,170
37,903
16,276
134,114
Mar. 25, 2024
Jul. 29, 2024
Oct. 26, 2024
Apr. 25, 2019
May 5, 2022
Mar. 24, 2022
Jul. 27, 2022
Oct. 26, 2022
1,423,558
31,105
16.028
129,031
Mar. 24, 2025
Jul. 27, 2025
Oct. 26, 2025
Plans 42, 42bis, 43, 42ter,
42quater
May 5, 2022
Mar. 28, 2023
May 4, 2023
Jul. 26, 2023
Oct. 25, 2023
1,510,001
17,559
149,661
Mar. 28, 2026
May 4, 2026
Jul. 26, 2026
Oct. 25, 2026
Number of shares at grant of which:
– Jean-Pascal Tricoire
– Peter Herweck
– Top ten employee beneficiaries
2,216,791
60,000
25,000
207,000
Vesting/delivery date
Mar. 24, 2023
Oct. 23, 2023
End of holding period
Number of rights outstanding
as of Dec. 31, 2022
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)
May 4, 2027 for
Plan 43
(only for
14,047 shares
granted to
Peter Herweck
2,013,503
1,479,719
1,402,324
N/A
Number of rights granted in 2023
N/A
Number of shares delivered in 2023
1,951,976
Number of rights canceled in 2023
61,527
Number of rights outstanding
as of Dec. 31, 2023
0
Total number of rights outstanding
as of Dec. 31, 2023
4,225,200
N/A
403
77,061
1,402,255
N/A
397
67,912
1,334,015
1,510,001
0
21,071
1,488,930
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Chapter 4 – Corporate governance report
Plan 37
Apr. 25, 2019
Mar. 24, 2020
2,095,740
42,000
25,000
1,899,740
N/A
1,843,341
56,399
0
Mar. 24, 2023
3 years
N/A
Plan 37bis
Apr. 25, 2019
Oct. 21, 2020
103,051
95,763
N/A
91,227
4,536
0
Oct. 23, 2023
3 years
N/A
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:
18,000
– Jean-Pascal Tricoire
– Peter Herweck
18,000
Number of rights outstanding as of
Dec. 31, 2022
18,000
Number of shares granted in 2023
N/A
Number of shares delivered in 2023
17,408
Number of rights canceled in 2023
592
Number of rights outstanding as of
Dec. 31, 2023
0
Vesting date/vesting period
End of holding period
Presence condition
Performance conditions
Mar. 24, 2023
3 years
Mar. 24, 2024
Yes
• Yes for 70% of the shares/100% for the Corporate Officer and Executive Committee
• 2020, 2021, 2022 Adjusted EPS improvement average achievement rate (40%)
• TSR ranking at end of 2022 vs. bespoke peer group and CAC 40 (35%)
• 2020, 2021, 2022 Schneider Sustainability External and Relative Index (25%)**
% achievement of the
performance conditions
96.71%
Detailed achievement of the
performance conditions of
Plans 36, 37, and 37bis
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
Reference
period
Weight (%)
Actual
achievement
Pay-out rate
Weighted
pay-out rate
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)**
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% 6th rank
113.33%* 17.50%*
2020 – 2022 17.50% 3rd rank
150.00%* 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.
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4.2 Compensation Report
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
– Peter Herweck
Number of rights outstanding as of
Dec. 31, 2022
11,371
11,371
11,371
Number of shares granted in 2023
N/A
Number of shares delivered in 2023
Number of rights canceled in 2023
0
0
Number of rights outstanding as of
Dec. 31, 2023
11,371
1,463,997
26,532
16,276
1,388,897
N/A
403
75,461
1,313,033
48,720
33,082
47,150
N/A
0
1,600
45,550
32,301
N/A
0
0
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
81.46%
Detailed achievement of the
Performance conditions of
Plans 38, 39, 39bis, and 39ter
The Board of Directors at its meeting of February 14, 2024 as well as the Chief Executive
Officer on March 1, 2024 pursuant to the delegation of powers granted by the Board of
Directors on February 14, 2024 assessed the achievement rate of performance criteria for
Plans nº 38, 39, 39bis, and 39ter granted in 2021 based on the Group’s performance over the
three-year period 2021 – 2023, and set the final rate of achievement at 81.46%, i.e. a
reduction of 18.54% in relation to the number of shares originally granted.
Performance conditions of Plans
38, 39, 39bis, and 39ter
Reference
period
Weight (%)
Actual
achievement
Pay-out rate
Weighted
pay-out rate
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)
2021
2022
2023
13.33% 31.77%
100.00% 40.00%
13.33% 13.13%
100.00%
13.33% 16.50%
100.00%
2021 – 2023 17.50% 22nd rank
0.00%
0.00%
2021 – 2023 17.50% 3rd rank
150.00% 17.50%*
2021
2022
2023
8.33% 87.50%
87.50% 23.96%
8.33% 100.00% 100.00%
8.33% 100.00% 100.00%
Total
100%
81.46%
* The relative TSR criterion delivered an over-performance but considering the full achievement of the EPS
criterion, no off-setting mechanism was used for the 2021 LTIP.
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Chapter 4 – Corporate governance report
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
– Peter Herweck
Number of rights outstanding as of
Dec. 31, 2022
9,332
9,332
9,332
Number of shares granted in 2023
Number of shares delivered in 2023
Number of rights canceled in 2023
0
0
0
Number of rights outstanding as of
Dec. 31, 2023
9,332
1,321,546
21,773
16,028
1,300,312
0
397
65,011
1,234,904
May 5, 2022
Jul. 27, 2022
67,590
May 5, 2022
Oct. 26, 2022
25,090
67,590
25,090
0
0
1,950
65,640
0
0
951
24,139
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
LTIP 2023
Plan number
Plan 42
Plan 43
Plan 42bis
Plan 42ter
Plan 42quater
Date of Annual Shareholders’ Meeting May 5, 2022
May 5, 2022
May 5, 2022
May 5, 2022
May 5, 2022
Date of the grant by the Board
Mar. 28, 2023
May 4, 2023
May 4, 2023
Jul. 26, 2023
Oct. 25, 2023
Number of shares at grant of which:
– Peter Herweck
1,414,309
Number of rights outstanding as of
Dec. 31, 2022
N/A
14,047
14,047
N/A
Number of shares granted in 2023
1,414,309
14,047
Number of shares delivered in 2023
0
Number of rights canceled in 2023
20,958
0
0
3,512
3,512
N/A
3,512
0
0
47,528
30,605
N/A
N/A
47,528
0
113
30,605
0
0
Number of rights outstanding as of
Dec. 31, 2023
Vesting date/vesting period
1,393,351
14,047
3,512
47,415
30,605
Mar. 28, 2026
3 years
May 4, 2026
3 years
May 4, 2026
3 years
Jul. 26, 2026
3 years
Oct. 25, 2026
3 years
End of holding period
Presence condition
N/A
Yes
May 4, 2027
N/A
N/A
N/A
Performance conditions
• Yes for 70% of the shares/100% for the Corporate Officer and Executive
Committee
• 2023, 2024, 2025 Adjusted EPS improvement average achievement rate
(40%)
• TSR ranking at end of 2025 vs. bespoke peer group and CAC 40 (35%)
• 2023, 2024, 2025 Schneider Sustainability External and Relative Index
(25%)
Achievement of the Performance
conditions
To be assessed by the Board of Directors in February 2026
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Chapter 5 – Consolidated financial statements
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financial
statements
at December 31,
2023
5.1 Consolidated statement
of income
5.2 Consolidated statement
of cash flows
452
454
5.3 Consolidated balance sheet
455
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, 2023
457
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511
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Chapter 5 – Consolidated financial statements at December 31, 2023
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T
S 5.1 Consolidated statement of income
N
E
(in millions of euros except for earnings per share)
Note
Full Year 2023
Full Year 2022
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
35,902
(20,890)
15,012
(1,168)
(7,432)
6,412
98
(147)
6,363
(430)
5,933
79
(387)
(308)
(222)
(530)
5,403
(1,285)
51
4,169
4,003
166
7.15
7.07
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
* 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, 2023
Other comprehensive income
(in 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 2023
Full Year 2022
4,169
3,536
19
19
20
19
(1,034)
31
(46)
6
(1,043)
20
(6)
(119)
69
(36)
(1,079)
3,090
2,950
140
631
44
36
(4)
707
(8)
2
137
(25)
106
813
4,349
4,284
65
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T
S 5.2 Consolidated statement of cash flows
N
E
(in millions of euros)
Note
Full Year 2023
Full Year 2022
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 receivable
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 2023, transactions with non-controlling interests mainly relate to the purchase of AVEVA’s non-controlling interests.
The accompanying notes are an integral part of the consolidated financial statements.
4,169
(51)
743
717
60
87
(252)
(164)
220
5,529
62
(382)
493
205
378
5,907
(914)
52
(451)
(1,313)
611
(89)
(257)
265
(1,048)
3,509
(1,299)
(703)
939
284
(4,702)
(1,767)
(84)
(3,823)
(240)
(4)
792
3,863
792
4,654
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
11
10
21
11
10
2
20
22
22
19
2
19
18
18
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Chapter 5 – Consolidated financial statements at December 31, 2023
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
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, 2023
Dec. 31, 2022
9
10
11
12
13
14
15
16
17
18
2
24,664
5,837
4,209
1,206
1,245
1,636
38,797
4,519
8,388
2,290
4,696
19,893
209
58,899
25,136
6,373
3,935
1,241
1,125
1,616
39,426
4,346
7,514
2,156
3,986
18,002
940
58,368
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5.3 Consolidated balance sheet
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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 liabilities
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, 2023
Dec. 31, 2022
Note
19
2,291
2,937
21,528
(294)
26,462
706
27,168
1,069
959
11,592
50
703
848
15,221
7,596
4,013
1,061
1,379
2,341
80
16,470
40
58,899
2,284
2,660
19,812
683
25,439
655
26,094
1,186
994
7,330
194
885
865
11,454
6,254
3,787
1,036
1,887
3,133
4,554
20,651
169
58,368
20
21
22
22
14
21
22
22
2
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Chapter 5 – Consolidated financial statements at December 31, 2023
5.4 Consolidated statement of changes
in equity
Additional
paid-in
capital
Retained
earnings
Translation
reserve
Equity
attributable to
owners of the
parent
Noncontrolling
interests
Total
(in millions of euros)
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
IAS 29 Hyperinflation
Other
Number of
shares
(thousands)
569,033
Capital
2,276
–
–
–
2,060
–
–
–
–
–
–
–
–
–
8
–
–
–
–
–
–
2,456
19,694
–
–
–
204
–
–
–
–
–
–
3,477
138
3,615
–
(1,618)
(219)
161
(1,881)
53
7
Dec. 31, 2022
571,093
2,284
2,660
19,812
Profit for the year
Other comprehensive income
Comprehensive income for the year
Capital increase
Dividends
Purchase of treasury shares
Share-based compensation expense
IAS 29 Hyperinflation
Other
–
–
–
1,743
–
–
–
–
–
–
–
–
7
–
–
–
–
–
–
–
–
277
–
–
–
–
–
4,003
(76)
3,927
–
(1,767)
(703)
196
68
(5)
Dec. 31, 2023
572,836
2,291
2,937
21,528
The accompanying notes are an integral part of the consolidated financial statements.
14
–
669
669
–
–
–
–
–
–
–
683
–
(977)
(977)
–
–
–
–
–
–
(294)
24,440
3,669
28,109
3,477
807
4,284
212
(1,618)
(219)
161
(1,881)
53
7
25,439
4,003
(1,053)
2,950
284
(1,767)
(703)
196
68
(5)
26,462
59
6
65
–
(157)
–
23
(2,907)
–
(38)
655
166
(26)
140
–
(84)
–
–
–
(5)
706
3,536
813
4,349
212
(1,775)
(219)
184
(4,788)
53
(31)
26,094
4,169
(1,079)
3,090
284
(1,851)
(703)
196
68
(10)
27,168
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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
Intangible assets
Investments in associates and joint ventures
Note
459
471
473
474
474
475
475
475
477
478
480
482
483
484
15
484
Inventories and work in progress
16 Trade and other operating receivables
485
17 Other receivables and prepaid expenses
485
18 Cash and cash equivalents
486
19 Shareholder’s equity
486
20 Pensions and other post-employment benefit obligations 489
21 Provisions for contingencies and charges
493
22 Current and non-current financial liabilities
493
23 Classification of financial instruments
496
24 Employees
501
25 Related party transactions
502
26 Commitments and contingent liabilities
502
27 Subsequent events
503
28 Statutory Auditors’ fees
503
29 Consolidated companies
504
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, 2023 were authorized for issue
by the Board of Directors on February 14, 2024. They will be submitted to shareholders for approval at the Annual General Meeting of May
23, 2024.
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, 2023
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, 2023. The same accounting methods were used as for the consolidated financial statements for the
year ended December 31, 2022.
The IFRS standards and interpretations as adopted by the European Union are available at the following website: https://finance.ec.euro
pa.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, 2023
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, 2023:
• Amendments to IAS 12 – Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction;
• Amendments to IAS 12 – Income taxes: International Tax Reform – Pillar Two Model Rules;
• 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, interpretations and amendments unendorsed by the European Union as of December 31, 2023
or whose application is not mandatory as of January 1, 2023
• Amendments to IAS 21 – The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability;
• Amendments to IAS 7 – Statement of Cash Flows and IFRS 7 - Financial Instruments: Disclosures on Supplier Finance Arrangements;
• 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, 2023. At this stage of analysis, the Group does not expect any material impact on its 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 analyzed through both climate transition risk and opportunities, physical risks perspective and carbon
neutral external commitments perspective. The Group is committed to be carbon neutral in its operations by 2025, 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.
Those objectives are concretely declined in the Group’s Sustainability strategy through the SSI and SSE programs that are externally
reported respectively on a quarterly and annually basis.
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 allowing our sites to transition to Zero-CO2 sites and prioritize low-carbon investments. In 2023, trainings and change
management have been performed to ensure adoption.
• Significant investments on both industrial processes (sites electrification) and real estate portfolio (EV chargers installation) 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 (heatpumps, microgrids, solar panels, thermal insulation...) between 2024 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 to a future circa 7%, with a strong focus on sustainability. Around 8 billion of euros (absolute
amount) have been invested in R&D between 2017 and 2022.
•
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The actual and potential financial links and effects of the Group’s external commitments or the specific climate risks identified are detailed
as follows:
• The Group has performed an evaluation of physical risks on its sites with an independent expert. 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. In 2023, the Group has worked on quantifying investments and additional costs,
as well as opportunities to achieve long-term net zero carbon commitments, taking into consideration several scenarios in order to
integrate them into the Group’s impairment tests. The Group has not identified any risk of impairment at December 2023.
• 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 for the the 64,000 employees, which benefit 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 tons 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.
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, 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:
•
•
•
•
•
•
•
•
•
•
•
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.
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Chapter 5 – Consolidated financial statements at December 31, 2023
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).
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.
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The Group applies IAS 29 - Financial Reporting in Hyperinflationary Economies to the Group’s subsidiaries in countries with
hyperinflationary economies (Argentina and Türkiye). 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 2023, all the
necessary conditions were met to consider Türkiye and Argentina 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 Türkiye in its financial statements from January 1, 2022.
The Group used the Consumer Price Index (CPI) for both Argentina and Türkiye to remeasure its income statement items, cash flows and
non-monetary assets and liabilities. This index was up 211% for Argentina and up 65% for Türkiye between December 2022 and December
2023.
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:
•
•
•
•
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.
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Chapter 5 – Consolidated financial statements at December 31, 2023
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.
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.
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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.).
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The obligation is recorded under other current and other non-current liabilities.
Right-of-use assets
The Group accounts for the assets related to the right-of-use on the lease starting date (i.e. the date on which the underlying asset is
available).
Assets are measured at cost, less accumulated depreciation and impairment losses, and adjusted for the revaluation of lease liabilities.
The cost of right-of-use assets includes the amount of lease liabilities, initial direct costs incurred and lease payments made on or before the
effective date, minus lease inducements received. They are recognized as tangible assets, in the Balance Sheet.
Unless the Group is reasonably certain that it will become the owner of the leased asset at the end of the lease term, the recorded right-of-
use assets are depreciated using the linear method over the shortest period of time between estimated life of the underlying asset and the
duration of the lease. The assets related to the right-of-use are subject to depreciation.
Determining the duration of contracts
The duration of the Group’s contracts varies according to geographies.
The real estate contracts have variable durations depending on the countries and local regulations. Vehicles and forklifts are generally
contracted between 3 and 6 years.
In certain geographies, the Group’s real estate contracts offer unilateral options for termination of contracts (particularly in France with
contracts 3-6-9).
According to the recommendation of IFRIC, on a case-by-case analysis and based on Real Estate teams’ expertise, experience strategy
and projects, the Group is determining the most probable duration to perform our calculations.
In most of cases, the duration chosen is the enforceable duration of the real estate contracts, in particular on the most strategic buildings
and factories.
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 cashflows that will be generated by the tested assets. These future cashflows 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 Weighted Average Cost of
Capital (WACC) at the measurement date. This rate is based on the following main assumptions:
• a long-term interest rate of 3.5%, corresponding to the interest rate for 10-year OAT treasury bonds;
•
•
the average premium applied to financing obtained by the Group in 2023;
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 CGUs (or groups of CGUs) 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
groups of cash-generating units in 2022 were Low Voltage, Medium Voltage, Secure Power and Industrial Automation. In 2023, to reflect its
ongoing strategy toward sustainability and digital transformation, the Group reorganized the level at which Goodwill is being monitored.
Hence, the groups of CGUs in 2023 are Low Voltage, Medium Voltage, Secure Power, Sustainability, EM Software, Industrial Automation and
Industrial Automation Software. This change does not modify our reporting segments. Goodwill was reallocated using relative values of
groups of CGUs, similarly to disposal operations.
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Net assets were allocated to the group of CGUs at the lowest possible level on the basis of the group of CGUs activities to which they
belong.
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.
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.
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.
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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 cancelled from consolidated reserves, net of tax.
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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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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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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 revaluated 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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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 Note 3) 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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Note 2: Changes in the scope of consolidation
The list of main consolidated companies can be found in Note 29.
2.1 – Scope variations
Main acquisitions of the period
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 (the Scheme), 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 4,554 million) as of December 31, 2022). The recognition of
this liability triggered an immediate reduction in non-controlling interests and in the group share of equity.
On January 18, 2023, following the deliverance of the UK Court Order to the Registrar of Companies, the Scheme (acquisition by the Group
of the outstanding AVEVA shares not already owned) became effective. AVEVA shares were unlisted from the London Stock Exchange on
January 19, 2023.
The financial liability was settled in cash on January 31, 2023 for GBP 4,055 million (EUR 4,610 million at the foreign exchange closing rate
incurred on January 31, 2023) including stamp duties. The Group’s transaction cash out, including EUR 71 million legal fees paid, was
presented under the financing section of the cash flow statement and amounted to EUR 4,681 million.
In the context of this transaction, the Group also incurred, through hedging schemes, a negative impact on cash for EUR 106 million.
EcoAct
On November 2, 2023, the Group acquired 100% of the capital of EcoAct SAS (“EcoAct”), an international leader in climate consulting and
net zero solutions headquartered in Paris, France. EcoAct will be reported within the Energy management reporting segment.
The purchase accounting as per IFRS 3R is not completed as of December 31, 2023.
Main divestments of the period
Transformer plants in Poland and Türkiye
On January 6, 2023, the Group closed the transaction for the disposal of its Transformer plants in Poland and Türkiye to Cahors Group, an
international company specializing in energy distribution, headquartered in France. The businesses had around 800 employees and were
reported within the Energy management reporting segment up until disposal effective date.
As of December 31, 2022, net assets were already measured at fair value less costs to sell, leading to no impact from the divestment in the
consolidated statement of income of the period.
VinZero
On May 31, 2023, the Group closed the transaction for the disposal of RIB Software’s VinZero business to a European corporate. 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 business was reported within the Energy management reporting segment
up until disposal effective date. The gain on disposal was recorded under “Other operating income and expenses”.
Gutor
On August 2, 2023, the Group closed the transaction for the disposal of Gutor Electronics’ operations to Latour Capital, a French private
equity investor. Gutor is a global leader in the manufacturing of industrial uninterruptible power supply (UPS) systems and the provision of
related services. Gutor was reported within the Energy management reporting segment up until disposal effective date.
Telemecanique Sensors
On October 31, 2023, the Group closed the transaction for the disposal of its industrial sensors business, Telemecanique Sensors, to
YAGEO. As part of the transaction, the Group granted YAGEO a license to use Telemecanique Sensors trademark. The all-cash transaction
valued Telemecanique Sensors at EUR 723 million (Enterprise Value). Telemecanique Sensors was reported within the Industrial Automation
reporting segment up until disposal effective date.
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Follow-up on acquisitions and divestments transacted in 2022 with effect in 2023
EV Connect Inc.
On June 21, 2022, the Group completed the purchase of a 95.52% controlling stake in EV Connect Inc. and now 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 non-controlling interests”.
In November 2023, the Group purchased 3.88% of non-controlling interests which raised its stake in EV Connect Inc. at 99.4%.
The purchase accounting as per IFRS 3R is completed as of December 31, 2023. The net adjustment of the opening balance sheet,
resulting mainly from the booking of identifiable intangible assets (technology, customer relationship and trademark), led to the recognition
of a EUR 255 million goodwill at acquisition date.
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, 2023:
Autogrid
On July 20, 2022, the Group completed the acquisition of Autogrid, raising its stake from 24.2% to 91.8% controlling stake. AutoGrid is a
Virtual Power Plant (VPP) and Distributed Energy Resource Management System (DERMS) provider and is reported within Energy
Management reporting segment. The Group held an agreement to acquire the remaining 8.2% of non-controlling interests in 2026. The
related debt was recognized in “Non-current purchase commitments over non-controlling interests” as of December 2022.
On December 14, 2023, the Group entered into an agreement with Uplight Inc. for the sale of Autogrid. 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 209 million and EUR 40 million respectively. The assets are mainly intangible assets (including goodwill) for
EUR 197 million. No impairment loss was recognized by the Group following the IFRS 5 classification.
This transaction represents a reorganization among Schneider Electric-owned or affiliated businesses aimed at Prosumers, to better align
their capabilities. The transaction, which closed on February 8, 2024, has raised the controlling stake of the Group in Uplight Inc., which will
remain consolidated as an equity investment.
2.2 – Impact of changes in the scope of consolidation on the Group cash flow
Changes in the scope of consolidation at December 31, 2023, decreased the Group’s cash position by a net EUR 4,091 million outflow, as
described below:
(in millions of euros)
Acquisitions
Disposals
FINANCIAL INVESTMENTS NET OF DISPOSALS
AVEVA
Others
TRANSACTION WITH NON-CONTROLLING INTERESTS
TOTAL CASH FLOW IMPACT
Full Year 2023
Full Year 2022
(307)
918
611
(4,681)
(21)
(4,702)
(4,091)
(559)
262
(297)
–
(73)
(73)
(370)
In 2023, cash outflows mainly relate to the acquisitions of AVEVA’s non-controlling interests and EcoAct. Cash inflows mainly relate to the
disposals of Telemecaniques Sensors, VinZero and Gutor. The main acquisitions and disposals of the year are described in Note 2.1.
In 2022, cash outflows mainly related to the acquisitions of EV Connect and Autogrid as well as other individually not significant acquisitions.
Cash inflows mainly related to the disposals of Eurotherm and of the load bank business of ASCO Power Technologies, as well as other
individually not significant disposals.
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Chapter 5 – Consolidated financial statements at December 31, 2023
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”.
The Executive Committee, which is chaired by the Chief Executive Officer, 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
Executive Committee and are mainly based on Adjusted EBITA.
Share-based payment is presented under “Central functions & digital costs”.
The Executive Committee does not review assets and liabilities by reporting segments.
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 2023
(in millions of euros)
Backlog
Revenue
Adjusted EBITA
Adjusted EBITA (%)
Energy
Management
Industrial
Automation
Central functions
& digital costs
15,414
28,241
5,967
21.1%
3,748
7,661
1,304
17.0%
–
–
(859)
On December 31, 2023, the total backlog to be executed in more than a year amounted to EUR 4,287 million.
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)
Total
19,162
35,902
6,412
17.9%
Total
16,490
34,176
6,017
17.6%
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5.5 Notes to the consolidated financial statements
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.
Full Year 2023
(in millions of euros)
Revenue by country market
Non-current assets as of Dec. 31, 2023
Full Year 2022
(in millions of euros)
Revenue by country market
Non-current assets as of Dec. 31, 2022
Western
Europe
8,912
12,396
of which
France
2,067
2,823
Asia
Pacific
of which
China
10,247
5,616
4,871
1,154
North
America
12,211
15,338
of which
USA
Rest of the
World
10,553
14,958
4,532
1,360
Total
35,902
34,710
Western
Europe
8,304
12,383
of which
France
1,986
2,579
Asia
Pacific
of which
China
10,341
5,540
5,154
1,170
North
America
10,986
16,564
of which
USA
Rest of the
World
9,526
16,203
4,545
957
Total
34,176
35,444
Moreover, the Group follows the share of new economies in revenue:
(in millions of euros)
Revenue – Mature countries
Revenue – New economies
TOTAL
Full Year 2023
Full Year 2022
21,825
14,077
35,902
61%
39%
100%
20,243
13,933
34,176
59%
41%
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 2023
Full Year 2022
(520)
(1,168)
(328)
(2,016)
(448)
(1,040)
(357)
(1,845)
* Including EUR 58 million of research and development tax credit in full year 2023 and EUR 51 million in full year 2022
** 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 236
million in 2023 and EUR 242 million in 2022.
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 2023
Full Year 2022
(544)
(486)
(396)
(34)
(555)
(503)
(423)
(1)
IMPAIRMENT LOSSES, DEPRECIATION AND AMORTIZATION EXPENSES
(1,460)
(1,482)
A EUR 34 million impairment was recognized on Clipsal brand in 2023 following the annual impairment tests realized by the Group.
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Chapter 5 – Consolidated financial statements at December 31, 2023
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 2023
Full Year 2022
(8)
265
(30)
(111)
(18)
98
5
(108)
(117)
(180)
(33)
(433)
In 2023, the gains on business disposals mainly relate to the 2023 divestments described in Note 2. The costs of acquisitions and
integrations are mainly related to the recent and ongoing acquisitions of the year.
In 2022, the losses on business disposals mainly related to the divestments of our activies in Russia, Loadbank and Eurotherm. Impairment
of assets mainly related to Transformers disposal as described in Note 2. The costs of acquisitions and integrations are mainly related to the
recent acquisitions. In 2022, it also included EUR 28 million of share-based payments, corresponding to the acceleration of multiple AVEVA
plans, in line with the terms of AVEVA’s transaction.
Note 7: Other financial income and expenses
(in millions of euros)
Full Year 2023
Full Year 2022
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
(50)
(39)
(54)
3
6
(36)
2
(54)
(222)
(21)
(5)
(37)
3
2
(34)
18
(35)
(109)
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
Full Year 2023
Full Year 2022
(1,411)
126
(1,285)
(1,195)
(16)
(1,211)
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5.5 Notes to the consolidated financial statements
8.2 – Income tax expense by country market
Full Year 2023
(in millions of euros)
Western
Europe
of which
France
Asia
Pacific
of which
China
North
America
of which
USA
Rest of the
World
Revenue by country market
in %
Income tax expense by country market*
in %
8,912
25%
(290)
23%
2,067
6%
(113)
9%
10,247
29%
(528)
41%
4,871
14%
(327)
25%
12,211
34%
(415)
32%
10,553
29%
(366)
29%
4,532
13%
(52)
4%
Total
35,902
(1,285)
*after reallocation of withholding taxes on dividends
Full Year 2022
(in millions of euros)
Revenue by country market
in %
Income tax expense by country market*
in %
Western
Europe
of which
France
Asia
Pacific
of which
China
8,304
24%
(299)
25%
1,986
6%
(117)
10%
10,341
30%
(505)
42%
5,154
15%
(333)
28%
North
America
10,986
32%
(349)
29%
of which
USA
Rest of the
World
9,526
28%
(289)
24%
4,545
13%
(58)
5%
Total
34,176
(1,211)
* after reallocation of withholding taxes on dividends
8.3 – 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 2023
Full Year 2022
4,003
(1,285)
(166)
51
5,403
22.7%
(1,225)
139
(9)
(89)
(59)
(42)
(1,285)
23.8%
3,477
(1,211)
(59)
29
4,718
23.3%
(1,101)
107
24
(79)
(80)
(82)
(1,211)
25.7%
24.6%
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).
In December 2022, member states of the European Union adopted the Pillar 2 directive, introducing an overall minimum corporate tax rate
of 15%, which will come into force for the financial year ending December 31, 2024. To date, the estimated impact on the group’s effective
tax rate should remain less than 1%.
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Chapter 5 – Consolidated financial statements at December 31, 2023
Note 9: Goodwill
9.1 – Main items of goodwill
Goodwill is broken down by groups of Cash Generating Units (CGUs) as follows, with WACC used for annual impairment test:
(in millions of euros)
Energy Management:
Low Voltage
Medium Voltage
Secure Power
Other
Industrial Automation
Industrial Automation
Industrial Automation Software
TOTAL GOODWILL*
* Goodwill was reallocated using relative values of groups of CGUs.
As of December 31, 2022, the breakdown of goodwill by former groups of CGUs was:
(in millions of euros)
Energy Management:
Low Voltage
Medium Voltage
Secure Power
Industrial Automation
TOTAL GOODWILL
WACC
Dec. 31, 2023
9.0%
8.9%
9.0%
7.8 to 8.3%
9.3%
8.5%
14,332
7,629
3,183
2,989
531
10,332
5,809
4,523
24,664
WACC
Dec. 31, 2022
8.6%
8.9%
8.7%
8.7%
14,570
9,060
2,243
3,267
10,566
25,136
The Group performed the annual impairment test of all the groups of CGUs’ assets using the same methodology as the one used on
previous periods and described in Note 1.11.
Impairment tests performed in 2023 did not trigger any impairment losses on the groups of CGUs’ assets. Results of the impairment test
would have been the same should the Group have kept the same group of CGUs as in 2022.
The sensitivity analysis on the test hypothesis shows that no impairment losses would be recognized in each of the following scenarios, for
each group of CGUs:
• a 0.5 point increase of the discount rate;
• a 1.0 point decrease in the growth rate;
• a 0.5 point decrease in the margin rate.
9.2 – Climate-related matters
In 2023, the Group mandated external experts to evaluate the potential impact of climate-related matters and physical risks on fixed assets
over the Group future cash flows. This risk assessment covered a broad spectrum of risks as outlined below:
• Policy: Legislation that are or could be enacted by governments to price and penalize Greenhouse gas (GHG) emissions
• Market consumer: Consumer preferences could shift towards sustainable alternative products and services, transforming market demand
• Technology: Disruptive lower-carbon technology could change in key economic sectors and risks to carbon intensive assets and operations
• Liability: Litigation that could be brought by plaintiffs against companies for their liabilities in causing harm from climate change
•
• Reputation: Customer sentiment could be influenced by company’s actions to address climate change risk
• Physical risk: key facility operational risk and physical asset damage due to extreme weather
Investor: Investors prioritize returns from lower-carbon companies, driving cost of capital and valuation changes
Results of the risk assessment are showing that most of those risks do not have a significant impact on the Group future cash flows. The
most impactful risk would be the Policy risk. To evaluate this particular risk, external experts considered the Group scope 1, 2 and 3 GHG
emissions by country and projected them over 10 years period (based on growth of the business) multiplied by current and projected
country-level carbon pricing data, taken from several databases (including IEA, WB, NGFS), and projected across various climate futures
based on academic research. Our scope 3 emissions, that represents almost 100% of the Policy risk, are impacting our future cash flows
from a drop in demand (downstream) and an increase in our cost of sales (upstream).
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5.5 Notes to the consolidated financial statements
However, the model, being conservative, is not considering any upside from the Group’s strong long-term position to meet the increasing
demand of organizations making meaningful progress on their energy transition and decarbonization goals, neither the actions taken by the
Group to decarbonate its value chain.
In addition, the Group also considered the impact on future cash flows of its Scope 1,2 & 3 GHG pathway commitments towards 2030, 2040
& 2050.
Considering the above risk assessment and our commitments, the Group has performed a sensitivity analysis to our impairment tests at
groups of CGUs level and did not identify impairment risk on its assets.
9.3 – 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.
Note 10: Intangible assets
10.1 – Change in intangible assets
Dec. 31, 2023
Dec. 31, 2022
25,136
209
(7)
(95)
(579)
24,664
(367)
24,723
387
(119)
(536)
681
25,136
(367)
Gross value
(in millions of euros)
Dec. 31, 2021
Trademarks
2,861
Software
1,041
Development
Projects (R&D)
Acquired
technologies and
customer
relationships
3,823
4,786
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)
357
37
(107)
(39)
6
1
129
(53)
(17)
13
Dec. 31, 2022
2,993
1,075
4,077
4,859
Acquisitions
Translation adjustments
Reclassifications
Reclassifications to assets held for sale
Changes in scope of consolidation and other
–
(85)
(36)
(2)
1
114
(10)
36
–
(1)
328
(56)
(174)
(23)
(4)
–
(121)
(178)
(4)
(20)
Dec. 31, 2023
2,871
1,214
4,148
4,536
Other
216
2
21
55
(1)
7
300
9
(18)
17
(1)
(15)
292
Total
12,727
386
297
(90)
(63)
47
13,304
451
(290)
(335)
(30)
(39)
13,061
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Chapter 5 – Consolidated financial statements at December 31, 2023
Amortization and impairment
(in millions of euros)
Dec. 31, 2021
Trademarks
Software
Development
Projects (R&D)
Acquired
technologies and
customer
relationships
(486)
(858)
(2,654)
(2,069)
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
Other
(174)
(6)
3
(5)
(30)
–
(1)
Total
(6,241)
(732)
(39)
(88)
90
37
42
Dec. 31, 2022
(546)
(891)
(2,841)
(2,440)
(213)
(6,931)
Amortization
Impairment
Translation adjustments
Reclassifications
Reclassifications to assets held for sale
Changes in scope of consolidation and other
(35)
(34)
6
35
–
–
(78)
–
9
17
–
–
(239)
(15)
43
136
3
1
(355)
(1)
59
151
1
6
(10)
–
11
(4)
–
–
(717)
(50)
128
335
4
7
Dec. 31, 2023
Net value
(in millions of euros)
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2023
(574)
(943)
(2,912)
(2,579)
(216)
(7,224)
Trademarks
Software
Development
Projects (R&D)
Acquired
technologies and
customer
relationships
2,375
2,447
2,297
183
184
271
1,169
1,236
1,236
2,717
2,419
1,957
Other
42
87
76
Total
6,486
6,373
5,837
The amortization expenses and impairment losses of intangible assets other than goodwill restated in statement of cashflow are as follows:
(in millions of euros)
Amortization expenses of intangible assets other than goodwill
Impairment losses of intangible assets other than goodwill
TOTAL*
Full Year 2023
Full Year 2022
717
50
767
732
39
771
*
Includes amortization & impairment of intangible assets from purchase price allocation for EUR 430 million for the year 2023 (EUR 424 million in 2022)
10.2 – Trademarks
On December 31, 2023, the main trademarks recognized were as follows:
(in millions of euros)
APC (Secure Power)
Clipsal (Low Voltage)
Asco (Low Voltage)
OSIsoft (Industrial Automation Software)
Aveva (Industrial Automation Software)
Invensys - Triconex and Foxboro (Industrial Automation)
L&T (Low Voltage)
Digital (Industrial Automation)
Other
TRADEMARKS NET BOOK VALUE
Dec. 31, 2023
Dec. 31, 2022
1,664
122
113
112
86
50
36
35
79
2,297
1,724
162
117
133
86
52
50
39
84
2,447
Indefinite-lived brands are tested on a yearly basis for impairment.
In 2023, the Group reviewed the value of the main trademarks in accordance with the valuation model described 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 2023 led the Group to recognize an impairment of EUR 34 million on Clipsal brand.
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.
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5.5 Notes to the consolidated financial statements
T
S Note 11: Property, plant and equipment
N
E
Changes in property, plant and equipment in 2023 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, 2021
Acquisitions
Disposals
Translation adjustments
Reclassifications
Reclassifications to assets held for sale
Changes in scope of consolidation and other
Dec. 31, 2022
Acquisitions
Disposals
Translation adjustments
Reclassifications
Reclassifications to assets held for sale
Changes in scope of consolidation and other
Land
199
3
(26)
–
(4)
(6)
(1)
165
–
(3)
(3)
2
–
–
Buildings
2,043
28
(94)
28
79
(47)
(36)
Machinery and
equipment
4,795
127
(186)
59
211
(124)
(77)
Other
1,253
563
(95)
26
(295)
(19)
(19)
Rights of use of
assets (IFRS 16)
1,969
356
(68)
22
–
(10)
(2)
Total
10,259
1,077
(469)
135
(9)
(206)
(135)
2,001
4,805
1,414
2,267
10,652
31
(76)
(18)
135
–
1
133
(176)
(84)
265
–
2
746
(108)
(37)
(378)
–
(25)
305
(155)
(30)
–
(27)
1,215
(518)
(172)
24
–
(49)
Dec. 31, 2023
161
2,074
4,945
1,612
2,360
11,152
Amortization and impairment
(in millions of euros)
Dec. 31, 2021
Depreciation and impairment
Reversals
Translation adjustments
Reclassifications
Reclassifications to assets held for sale
Changes in scope of consolidation and other
Dec. 31, 2022
Depreciation and impairment
Reversals
Translation adjustments
Reclassifications
Reclassifications to assets held for sale
Changes in scope of consolidation and other
Land
(28)
(1)
13
(1)
–
–
–
(17)
(1)
1
–
(2)
–
–
Buildings
(1,167)
Machinery and
equipment
(3,739)
(94)
75
(15)
–
26
21
(274)
174
(49)
–
105
61
Other
(608)
(78)
70
(12)
–
9
5
Rights of use of
assets (IFRS 16)
(891)
(308)
8
(4)
–
3
(18)
Total
(6,433)
(755)
340
(81)
–
143
69
(1,154)
(3,722)
(614)
(1,210)
(6,717)
(108)
69
7
(23)
–
(1)
(272)
161
61
(6)
–
(6)
(76)
81
19
14
–
3
(303)
134
12
–
–
10
(760)
446
99
(17)
–
6
Dec. 31, 2023
(19)
(1,210)
(3,784)
(573)
(1,357)
(6,943)
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Chapter 5 – Consolidated financial statements at December 31, 2023
Net value
(in millions of euros)
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2023
Land
171
148
142
Buildings
Machinery and
equipment
876
847
864
1,056
1,083
1,161
Other
645
800
1,039
Rights of use of
assets (IFRS 16)
1,078
1,057
1,003
Total
3,826
3,935
4,209
Reclassifications primarily correspond to assets put into use.
The cash impact of purchases of property, plant and equipment in 2023 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 2023
Full Year 2022
(1,215)
305
(4)
(914)
(1,077)
356
14
(707)
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)
2023
2024
2025
2026
2027
2028
2029
2030
2031 and beyond
TOTAL
Full Year 2023
Full Year 2022
743
17
760
750
5
755
Dec. 31, 2023
Dec. 31, 2022
–
284
214
170
121
82
57
44
100
282
224
167
133
90
59
50
37
69
1,072
1,111
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Life Is On | Schneider Electric | www.se.comCH1CH2CH3CH4CH5CH6CH7CH8CH9INTEGRATED REPORT Chapter 5 – Consolidated financial statements at December 31, 2023
5.5 Notes to the consolidated financial statements
T
S Note 12: Investments in associates and joint ventures
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Investments in associates and joint ventures can be analyzed as follows:
(in millions of euros)
% of interest
Dec. 31, 2022
Dec. 31, 2023
CLOSING VALUE DEC. 31, 2021
Net Income/(loss)
Dividends distribution
Perimeter changes
Translation impacts & others
CLOSING VALUE DEC. 31, 2022
Net Income/(loss)
Dividends distribution
Perimeter changes
Translation impacts & others
CLOSING VALUE DEC. 31, 2023
Delixi
Sub-Group
Uplight
Planon
50.0%
50.0%
29.4%
30.4%
464
52
(25)
–
(10)
481
52
(20)
–
(26)
487
390
(28)
–
1
51
414
(30)
–
13
(9)
388
25.0%
25.0%
112
(2)
–
–
–
110
5
–
–
–
115
Fuji
Electrics
36.8%
36.8%
Sunten
Electric
Equipments
25.0%
25.0%
151
24
(14)
–
(6)
155
19
(16)
–
(16)
142
38
2
–
–
(4)
36
4
(3)
–
(3)
34
Other
Total
79
(19)
(2)
(14)
1
45
1
(1)
(2)
(3)
40
1,234
29
(41)
(13)
32
1,241
51
(40)
11
(57)
1,206
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, 2023
Dec. 31, 2022
754
472
1,225
643
21
560
1,225
1,342
143
104
40
814
502
1,316
619
102
595
1,316
1,354
137
104
50
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Schneider Electric Universal Registration Document 2023 | www.se.com
Chapter 5 – Consolidated financial statements at December 31, 2023
Note 13: Non-current financial assets
Non-current financial assets, primarily comprising investments, are detailed below:
(in millions of euros)
LISTED FINANCIAL ASSETS:
Gold Peak Industries Holding Ltd
Others (Unit fair value lower than EUR 3 million)
TOTAL LISTED FINANCIAL ASSETS
UNLISTED FINANCIAL ASSETS:
Funds
SE Ventures Funds of Funds in Portfolio
FCPR Aster II (part A, B and C)
Sensetime & Stalagnate Fund China
FCPR SEV1
SICAV SESS
FCPI Energy Access Ventures Fund
Gaia Energy Impact
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)
Nozomi Networks
Star Charge
Others (Unit fair value lower than EUR 10 million)
TOTAL UNLISTED FINANCIAL ASSETS
PENSIONS ASSETS
OTHER
TOTAL NON-CURRENT FINANCIAL ASSETS
%
of interest
Acquisitions
disposals
Fair value
through
P&L
Fair value
through
Equity
FX &
others
Fair value
Fair value
Dec. 31, 2023
Dec. 31, 2022
3.2 %
38,0 %
30,0 %
100,0 %
63,1 %
28,6 %
50,0 %
19,9 %
5,8 %
8,3 %
3,0 %
2,4 %
9,4 %
12,2 %
19,2 %
6,6 %
1,3 %
–
1
1
8
(3)
–
–
–
2
3
1
–
–
–
–
–
–
–
24
46
–
12
93
9
41
144
–
–
–
(7)
3
12
–
–
(1)
–
(1)
–
–
–
–
–
–
–
–
–
–
–
6
–
–
6
–
–
–
–
–
–
–
–
–
–
–
–
–
5
(9)
8
(2)
–
28
(2)
(8)
–
–
–
20
(43)
–
(23)
–
–
–
(3)
–
(4)
–
1
–
–
–
(2)
(2)
(2)
–
(3)
(2)
–
(7)
(1)
(2)
(3)
(30)
7
16
(7)
2
13
15
94
18
70
7
11
19
3
4
64
35
40
17
11
39
10
121
45
27
51
686
253
291
2
12
14
96
18
62
7
10
18
–
4
61
46
34
19
14
13
12
112
–
29
42
597
280
234
1,245
1,125
The fair value of investments listed in an active market corresponds to the stock price on the balance sheet date.
“Others” include mainly convertible and treasury bonds, as well as 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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5.5 Notes to the consolidated financial statements
T
S Note 14: Deferred taxes by nature
N
E
Deferred taxes by type can be analyzed as follows:
(in millions of euros)
Dec. 31, 2023
Dec. 31, 2022
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
629
234
474
(41)
(752)
207
182
933
1,636
703
724
197
466
(4)
(957)
164
141
731
1,616
885
Deferred tax assets recorded in respect of tax losses carried forward on December 31, 2023 essentially concern France (EUR 420 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 6 years. Unrecognized deferred tax losses amount EUR 149 million as of December 31, 2023 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, 2023
Dec. 31, 2022
2,279
355
1,518
759
211
5,122
(338)
(10)
(239)
(9)
(7)
(603)
1,941
345
1,279
750
204
4,519
2,021
367
1,519
681
200
4,788
(232)
(9)
(189)
(8)
(4)
(442)
1,789
358
1,330
673
196
4,346
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Chapter 5 – Consolidated financial statements at December 31, 2023
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, 2023
Dec. 31, 2022
6,330
1,911
264
256
8,761
(373)
8,388
7,343
517
200
82
109
137
5,675
1,662
389
276
8,002
(489)
7,514
6,537
438
174
102
119
144
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 as of December 31, 2022
Additions
Utilizations
Reversal of surplus provisions
Translation adjustments
Changes in scope of consolidation and other
PROVISIONS FOR IMPAIRMENT AS OF DECEMBER 31, 2023
Full Year 2023
Full Year 2022
(489)
(131)
132
73
18
24
(373)
(498)
(133)
58
70
4
10
(489)
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, 2023
Dec. 31, 2022
1,911
(2,402)
(491)
1,662
(1,840)
(178)
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, 2023
Dec. 31, 2022
447
746
618
37
122
320
423
713
596
41
79
304
OTHER RECEIVABLES AND PREPAID EXPENSES
2,290
2,156
485
Life Is On | Schneider Electric | www.se.comCH1CH2CH3CH4CH5CH6CH7CH8CH9INTEGRATED REPORT Chapter 5 – Consolidated financial statements at December 31, 2023
5.5 Notes to the consolidated financial statements
T
S Note 18: Cash and cash equivalents
N
E
(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, 2023
Dec. 31, 2022
2,024
588
2,084
4,696
(42)
4,654
1,716
693
1,577
3,986
(123)
3,863
Non-recourse factorings of trade receivables were realized in 2023 for a total amount of EUR 286 million, compared with EUR 264 million in
2022. Substantially all risks and rewards have been transferred.
Note 19: Shareholder’s equity
19.1 – Capital
Share capital
The company’ share capital at December 31, 2023 amounted to EUR 2,291,343,536 represented by 572,835,884 shares with a par value of
EUR 4, all fully paid up.
On December 31, 2023, a total of 600,194,772 voting rights were attached to the 572,835,884 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, 2021 were as follows:
(in number of shares and in euros)
SHARE CAPITAL AT DEC. 31, 2021
Cancellation of own shares
Capital increase
SHARE CAPITAL AT DEC. 31, 2022
Cancellation of own shares
Capital increase
SHARE CAPITAL AT DEC. 31, 2023
Cumulative
number of shares
Share capital
569,033,442 2,276,133,768
–
2,059,479
–
8,237,916
571,092,921 2,284,371,684
–
1,742,963
–
6,971,852
572,835,884 2,291,343,536
In 2023, the share premium account increased by EUR 212 million following the increases in capital.
On November 20, the Group issued convertible bonds with a total nominal amount of EUR 650 million. The equity component of these
convertible bonds has been valued at EUR 65 million (after fees) and has been recognized in “Additional paid-in capital”.
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Chapter 5 – Consolidated financial statements at December 31, 2023
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
Full Year 2023
Full Year 2022
Basic
Diluted
Basic
Diluted
559,846
–
–
559,846
9.65
7.15
559,846
2,807
3,935
566,588
9.54
7.07
558,129
–
–
558,129
8.45
6.23
558,129
3,348
3,684
565,161
8.35
6.15
19.3 – Dividends paid and proposed
In 2023, the Group paid out the 2022 dividend of EUR 3.15 per share, for a total of EUR 1,767 million.
At the Shareholders’ Meeting of May 23, 2024, shareholders will be asked to approve a dividend of EUR 3.50 per share for fiscal year 2023.
On December 31, 2023, Schneider Electric SE had distributable reserves in an amount of EUR 3,102 million (versus EUR 2,941 million at
December 31, 2022, 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 follows at December 31, 2023:
LTIP 2020
LTIP 2021
LTIP 2022
LTIP 2023
TOTAL
Plan no.
Plan 36 & 37
Plan 38 & 39
Plan 40 & 41
Plan 37bis
Plan 37ter
Plan 39bis
Plan 39ter
Plan 41bis
Plan 41ter
Date of Annual Shareholders’ Meeting
Apr. 25, 2017
Apr. 25, 2018
Apr. 25, 2019
Date of the grant by the Board
Mar. 24, 2020
Mar. 25, 2021
Mar. 24, 2022
Apr. 25, 2017
Apr. 25, 2017
Apr. 25, 2018
Apr. 25, 2018
May 5, 2022
May 5, 2022
Oct. 21, 2020
Oct. 21, 2020
July 29, 2021
Oct.26, 2021
July 27, 2022
Oct.26, 2022
Plan 42
Plan 42bis & 43
Plan 42ter
Plan 42quater
May 5, 22
May 5, 22
May 5, 2022
May 5, 2022
Mar. 28, 2023
May 4, 23
July 26, 2023
Oct. 25, 2023
Vesting date
End of holding period
Number of performance shares
Outstanding as of Dec. 31, 2022
Granted in 2023
Delivered in 2023
Canceled in 2023
Outstanding as of Dec. 31, 2023
Mar. 24, 2025
Mar. 25, 2024
Mar. 24, 2023
Mar. 28, 2023
May 4, 26
July 26, 2026
Oct. 25, 2026
Mar. 24, 2024 for Mar. 25, 2025 for Mar. 24, 2026 for May 4, 2027 for
Plan 43
Oct. 23, 2023
Oct. 23, 2023
July 29, 2024
Oct 26, 2024
July 27, 2025
Oct.26, 2025
Plan 36
Plan 38
Plan 40
2,013,503
–
(1,951,976)
(61,527)
1,479,719
–
(403)
(77,061)
1,402,324
–
(397)
(67,912)
–
1,510,001
–
(21,071)
4,895,546
1,510,001
(1,952,776)
(227,571)
–
1,402,255
1,334,015
1,488,930
4,225,200
Schneider Electric SE has not created shares in 2023 to deliver vested plans but used existing treasury shares.
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5.5 Notes to the consolidated financial statements
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 2020
LTIP 2021
LTIP 2022
LTIP 2023
IFRS 2 expense
The expense recorded under “Selling, general and administrative expenses” breaks down as follows:
(in millions of euros)
Group LTIP
Aveva
WESOP discount
Other
TOTAL
Plan no.
Fair Value per
share (in euros)
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
Plan 42 – Excom
Plan 42 – Other
Plan 42bis – Excom
Plan 43
Plan 42ter
Plan 42quater
52.9
55.2
57.8
90.7
85.3
89.3
93.4
97.3
102.9
116.6
117.5
119
123
128.8
107.8
111
119.2
124.5
127.1
127.1
139.4
118.1
Full Year 2023
Full Year 2022
144
–
41
23
208
114
34
–
18
166
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 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.
On April 20, 2023, the Group gave its employees the opportunity to purchase shares at a price of EUR 126.20 per share, as part of its
commitment to employee share ownership. This represented a 15% discount to the reference price of EUR 148.47 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, 1.7 million shares were subscribed, increasing the capital by EUR 219 million as of July 6, 2023.
As of December 31, 2023, the share-based payment expense recorded in accordance with IFRS 2, measured by reference to the fair value
of the discount amounted to EUR 41 million.
19.5 – Schneider Electric SE treasury shares
On December 31, 2023, the Group held 14,518,652 Schneider Electric shares in treasury stock, which have been recorded as a deduction
from retained earnings.
The Group has repurchased 4,493,173 shares for a total amount of EUR 703 million in 2023.
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Chapter 5 – Consolidated financial statements at December 31, 2023
19.6 – Income tax recorded in equity
Total income tax recorded in equity amounts to EUR 172 million as of December 31, 2023 and can be analyzed as follows:
(in millions of euros)
Dec. 31, 2023
Dec. 31, 2022
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
25
(19)
169
(3)
172
19
(13)
100
(3)
103
6
(6)
69
–
69
In 2023, the Group finalized the acquisition of AVEVA’s non-controlling interests. L&T, for which the Group holds 65%, is the main contributor
of non-controlling interests.
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.
The benefits offered to each employee depends on local laws and regulations and choices made by the subsidiaries.
Defined Contribution Pension Plans
The group policy regarding pensions is to propose defined contribution pension plans, including a contribution from the employer. This is
the most common active benefit offered worldwide, including for example 401k in US and PERO in France.
The contribution to these plans is booked as an operating cost and do not translate into any further obligation by the employer.
Defined Benefit Pension Plans
The Group’s main Defined Benefit pension plans are located in the United Kingdom (UK) and the United States (US). They respectively
represent 62% (2022: 57%) and 17% (2022: 24%) of the Group’s total Defined Benefit Obligations (DBO) on pensions. The majority of benefit
obligations under these plans, which represent 91% of the Group’s total commitment at December 31, 2023, 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,
2023, 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.
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5.5 Notes to the consolidated financial statements
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
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.
Effective in December 2023, the buy-in contract was converted to buy-out contract in conjunction with the plan termination. All liabilities
were transferred to the insurer with no further benefit obligation for the Invensys.
France
The French subsidiaries offer a Retirement Benefit (ICDR) that can be either taken as a lumpsum at retirement or as time off (partial or full)
before retirement is effective.
This benefit is calculated based on salary and years of services in company, according to the collective agreements and there is no funding
requirement.
The French pension reform voted in April 2023 increased progressively the legal retirement age from 62 to 64 years old. The accounting
impacts are not significant on the Group financial statements.
Assumptions
Actuarial valuations are generally performed each year. The assumptions used vary according to the economic conditions prevailing in the
country concerned, as follows:
Discount rate
Rate of compensation increases
4.53%
2.76%
4.82%
2.58%
4.58%
3.51%
4.85%
3.63%
5.08%
n.a.
5.35%
n.a.
Group weighted average rate
Of which United Kingdom
Of which United States
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2023
Dec. 31, 2022
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 2023 discount rate is 3.20% for the main plans.
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
10
9.9
9.7
9.7
9.7
9.4
Total
Of which United Kingdom
Of which United States
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2023
Dec. 31, 2022
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Chapter 5 – Consolidated financial statements at December 31, 2023
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, 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
of which France
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
of which France
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, 2023
of which UK
of which US
of which France
Defined benefit
obligations
Plan assets
Asset ceiling
Net Liability
(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)
(312)
(66)
(3)
517
(300)
–
148
(199)
(65)
(18)
498
(6)
–
30
(185)
(43)
(10)
(6,490)
(4,018)
(1,122)
(353)
8,871
6,524
1,692
–
–
(79)
–
170
91
121
41
(473)
6
130
(2)
(2,284)
(143)
–
6,196
4 339
1 287
66
–
–
(509)
–
254
(255)
200
38
2
(439)
6
257
(32)
50
69
–
5,852
4,351
937
65
(210)
(184)
–
–
–
–
(4)
–
(4)
(4)
–
–
–
–
–
26
8
–
(180)
(140)
-
-
–
–
–
(8)
–
(8)
(8)
–
–
–
–
–
–
16
(6)
–
(178)
(130)
–
–
(1,025)
323
(478)
(121)
(2)
5
(207)
170
(155)
(14)
(76)
64
–
130
8
137
(33)
(32)
(906)
222
(376)
(246)
(66)
(3)
8
(308)
254
(115)
(7)
(27)
(16)
59
–
257
(2)
(119)
20
(10)
(816)
203
(185)
(288)
The Group defined benefit obligations of EUR 6,490 million (2022: EUR 6,922 million) are broken down as EUR 6,246 million (2022: EUR
6,678 million) for post-employment benefits and EUR 244 million (2022: EUR 244 million) for other post-employment and long-term benefits.
The post-employment benefits are broken down between EUR 5,702 million for pension of which 97% are funded, and EUR 544 million for
lump sum benefits of which 69% are funded.
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5.5 Notes to the consolidated financial statements
The total present value of Defined Benefit Obligations breaks down as follows between wholly or partly funded plans and wholly unfunded
plans:
(in millions of euros)
Dec. 31, 2023
Dec. 31, 2022
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
(5,882)
5,852
(178)
(208)
(608)
(816)
253
(1,069)
(6,334)
6,196
(180)
(318)
(588)
(906)
280
(1,186)
* 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 2023
Full Year 2022
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 YEAR
of which UK
of which US
(40)
160
66
(50)
(17)
119
(47)
1
(81)
(2,490)
176
2,284
(26)
(137)
(146)
110
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
320
318
309
85
86
86
79
67
76
Total
484
471
471
Dec. 31, 2023
Dec. 31, 2022
8%
79%
13%
100%
5%
73%
22%
100%
20.2 – Sensitivity analysis
The effect of a ± 0.5% change in the discount rate and in the rate of compensation increases on the 2023 Defined Benefit Obligations is
as follows:
(in millions of euros)
+0.5%
–0.5%
+0.5%
–0.5%
+0.5%
–0.5%
+0.5%
–0.5%
Discount rate
Rate of compensation increases
(199)
83
216
(80)
(50)
–
54
–
(62)
46
66
(43)
(311)
129
336
(123)
United Kingdom
United States
Rest of the World
Total
2024
2025
2026
Plans asset allocation:
(in millions of euros)
Equity
Bonds
Others
TOTAL
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
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Chapter 5 – Consolidated financial statements at December 31, 2023
Note 21: Provisions for contingencies and charges
(in millions of euros)
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
Additions
Utilizations
Reversals of surplus provisions
Translation adjustments
Changes in the scope of consolidation
and other
Dec. 31, 2023
of which long-term portion
Economic risks
Customer risks
Products risks
Environmental
risks
Restructuring
Other risks
Provisions
270
169
40
(63)
–
9
(50)
206
130
59
(49)
–
(7)
–
209
124
147
104
36
(50)
(1)
7
10
149
97
43
(68)
(2)
(5)
2
119
61
675
150
240
(233)
(23)
–
25
684
155
305
(219)
(24)
(25)
6
727
194
350
315
39
(71)
(1)
12
(10)
319
278
39
(45)
–
(10)
(6)
297
256
160
12
144
(113)
(7)
(1)
(12)
171
8
92
(82)
(4)
(2)
(6)
169
16
422
341
162
(116)
(42)
14
61
501
326
255
(241)
(28)
(17)
29
499
308
2,024
1,091
661
(646)
(74)
41
24
2,030
994
793
(704)
(58)
(66)
25
2,020
959
Provisions are recognized following the principles described in Note 1.21.
Reconciliation with cash flow statement:
(in millions of euros)
Full Year 2023
Full Year 2022
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
793
(704)
(58)
31
56
87
661
(646)
(74)
(59)
91
32
Note 22: 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
Dec. 31, 2023
Dec. 31, 2022
10,843
1,793
(999)
(45)
11,592
1,018
109
128
42
999
45
2,341
13,933
(4,696)
9,237
50
80
9,367
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
In January 2023, the Group has drawn 1,700 million under the Term loan facility set up to fund the acquisition of the minority interest of
Aveva. This term loan matures in October 2025. As of December 31,2023, the amount used remains unchanged at 1,700 million at a rate of
Euribor increased by a 0.56% margin.
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5.5 Notes to the consolidated financial statements
22.1 – Breakdown by maturity
(in millions of euros)
2023
2024
2025
2026
2027
2028
2029
2030 and beyond
TOTAL
22.2 – Breakdown by currency
(in millions of euros)
Euro
US Dollar
Brazilian Real
Indian Rupee
Turkish Lira
Algerian Dinar
Other
TOTAL
22.3 – Bonds
(in millions of euros)
Schneider Electric SE 2023
Schneider Electric SE 2023
Schneider Electric SE 2024
Schneider Electric SE 2025
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 2028
Schneider Electric SE 2029
Schneider Electric SE 2029
Schneider Electric SE 2030 (OCEANEs)
Schneider Electric SE 2032
Schneider Electric SE 2033
Schneider Electric SE 2034
TOTAL
Dec. 31, 2023
Dec. 31, 2022
Carrying amount
Interests
Carrying amount
–
2,341
3,503
1,398
1,747
1,268
1,390
2,286
–
287
232
158
140
100
87
219
3,133
1,000
1,047
1,397
1,741
756
794
595
13,933
1,223
10,463
Dec. 31, 2023
Dec. 31, 2022
13,723
8
63
74
16
14
35
13,933
10,236
41
16
77
8
13
72
10,463
Dec. 31, 2023
Dec. 31, 2022
Interest rate
Maturity
–
–
999
749
751
300
650
747
498
746
499
755
496
795
594
582
595
495
592
500
799
998
747
–
300
651
747
497
745
498
756
–
795
–
–
594
–
–
0.000% fixed
1.500% fixed
0.250% fixed
0.875% fixed
3.380% fixed
1.841% fixed
0.000% fixed
0.875% fixed
1.000% fixed
1.375% fixed
3.250% fixed
1.500% fixed
3.250% fixed
0.250% fixed
3.130% fixed
1.970% fixed
3.500% fixed
3.500% fixed
3.380% fixed
June 2023
September 2023
September 2024
March 2025
April 2025
October 2025
June 2026
December 2026
April 2027
June 2027
November 2027
January 2028
June 2028
March 2029
October 2029
November 2030
November 2032
June 2033
April 2034
10,843
8,627
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, 2023 are as follow:
− 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 750 million worth of bonds issued in April 2023, at a rate of 3.375%, maturing in April 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 500 million worth of bonds issued in June 2023, at a rate of 3.25%, maturing in June 2028;
− EUR 800 million worth of bonds issued in March 2020, at a rate of 0.25%, maturing in March 2029;
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
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Chapter 5 – Consolidated financial statements at December 31, 2023
− EUR 600 million worth of bonds issued in October 2023, at a rate of 3.125%, maturing in October 2029;
− EUR 600 million worth of bonds issued in November 2022, at a rate of 3.50%, maturing in November 2032;
− EUR 500 million worth of bonds issued in June 2023, at a rate of 3.50%, maturing in June 2033; – EUR 600 million worth of bonds
issued in January 2023, at a rate of 3.375%, maturing in April 2034.
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 2023, 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 1.007 shares per bond in May 2023. 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.
The Group has also issued in 2023 OCEANEs for EUR 650 million at a rate of 1.97%, maturing in November 2030. At end of December
2023, the debt component recorded at net book value amounts to EUR 584 million and the optional component to EUR 66 million. The initial
conversion and/or exchange ratio of the Bonds was 426.66 shares per bond with a nominal value set at EUR 100,000.00 corresponding to
EUR 234.38 per share.
For all those transactions, issue premium and issue costs are amortized per the effective interest rate method.
22.4 – Cash flow statement impact
(in millions of euros)
Bonds
Other borrowings
Bank overdrafts
TOTAL CURRENT AND NON-CURRENT
FINANCIAL LIABILITIES
Non Cash Variation
Dec. 31, 2022
Cash variations
Scope impacts
Forex and others
Dec. 31, 2023
8,627
1,713
123
2,210
1,304
(128)
10,463
3,386
–
2
–
2
6
29
47
82
10,843
3,048
42
13,933
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, 2023
Dec. 31, 2022
2025–2027
80
50
130
4,554
194
4,748
In 2023, purchase commitments over non-controlling interests mainly relates to ETAP, Qmerit and EnergySage. In 2022, current portion
corresponded to the commitment over AVEVA’s non-controlling interests preceding the transaction described in note 2.
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5.5 Notes to the consolidated financial statements
T
S Note 23: Classification of financial instruments
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
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)
Carrying amount
through P&L
through equity
Fair value
Fair value
Financial
assets/liabilities
measured at
amortized cost
Fair value
Fair value
hierarchy
Dec. 31, 2023
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
Marketable securities
Negotiable debt securities and short-term
deposits
Cash
Derivative instruments - foreign currencies
Derivative instruments - interest rates
Derivative instruments - commodities
15
132
554
544
1,245
8,388
2,024
588
2,084
73
44
4
TOTAL CURRENT ASSETS
13,205
LIABILITIES:
Long-term portions of non-convertible
bonds *
Long-term portions of convertible bonds *
Non-current purchase commitments over
noncontrolling interests
Other long-term debt
TOTAL NON-CURRENT LIABILITIES
Short-term portion of bonds *
Short-term debt
Trade accounts payable
Current purchase commitments over
noncontrolling interests
Other
Derivative instruments - foreign currencies
Derivative instruments - interest rates
Derivative instruments - commodities
(8,612)
(1,232)
(50)
(1,748)
(11,642)
(999)
(1,342)
(7,596)
(80)
(100)
(48)
–
(1)
TOTAL CURRENT LIABILITIES
(10,166)
15
132
94
–
241
–
2,024
588
2,084
42
44
–
4,782
–
–
–
–
–
–
–
–
–
–
(48)
–
–
(48)
–
–
460
253
713
–
–
–
–
31
4
35
–
–
(50)
–
(50)
–
–
–
(80)
–
–
–
(1)
(81)
–
–
–
291
291
8,388
–
–
–
–
–
–
15
132
554
544
1,245
8,388
2,024
588
2,084
73
44
4
8,388
13,205
(8,612)
(1,232)
–
(1,748)
(8,488)
(1,218)
(50)
(1,748)
(11,592)
(11,504)
(999)
(1,342)
(7,596)
–
(100)
–
–
–
(977)
(1,342)
(7,596)
(80)
(100)
(48)
–
(1)
(10,037)
(10,144)
Level 1
Level 3
Level 3
Level 2
Level 2
Level 1
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
* 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 10,843 million compared to EUR 10,683 million at fair value.
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Chapter 5 – Consolidated financial statements at December 31, 2023
Carrying amount
Fair value
through P&L
Fair value
through equity
Financial
assets/liabilities
measured at
amortized cost
Fair value
Fair value
hierarchy
Dec. 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
Marketable securities
Negotiable debt securities and short-term
deposits
Cash
Derivative instruments - foreign currencies
Derivative instruments - interest rates
Derivative instruments - commodities
14
119
478
514
1,125
7,514
1,716
693
1,577
62
–
11
TOTAL CURRENT ASSETS
11,573
LIABILITIES:
Long-term portions of non-convertible
bonds *
Long-term portions of convertible bonds *
Non-current purchase commitments over
noncontrolling interests
Other long-term debt
TOTAL NON-CURRENT LIABILITIES
Short-term portion of bonds *
Short-term debt
Trade accounts payable
Current purchase commitments over
noncontrolling interests
Other
Derivative instruments - foreign currencies
Derivative instruments - interest rates
Derivative instruments - commodities
(6,677)
(651)
(194)
(2)
(7,524)
(1,299)
(1,834)
(6,254)
(4,554)
(174)
(264)
(3)
–
TOTAL CURRENT LIABILITIES
(14,382)
14
119
96
–
229
–
1,716
693
1,577
62
–
–
4,048
–
–
–
–
–
–
–
–
–
–
(182)
(3)
–
(185)
–
–
382
280
662
–
–
–
–
–
–
11
11
–
–
(194)
–
(194)
–
–
–
(4,554)
–
(82)
–
–
(4,636)
–
–
–
234
234
7,514
–
–
–
–
–
–
14
119
478
514
1,125
7,514
1,716
693
1,577
62
–
11
7,514
11,573
(6,677)
(651)
–
(2)
(7,330)
(1,299)
(1,834)
(6,254)
–
(174)
–
–
–
(6,210)
(577)
(194)
(2)
(6,983)
(1,288)
(1,834)
(6,254)
(4,554)
(174)
(264)
(3)
–
(9,561)
(14,371)
Level 1
Level 3
Level 3
Level 2
Level 2
Level 1
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
* 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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5.5 Notes to the consolidated financial statements
23.2 – Derivative instruments
(in millions of euros)
Forwards contracts
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
TOTAL
(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
Interest Rate Swap
Interest Rate Derivatives
TOTAL
Accounting
qualification
CFH
CFH
CFH
FVH
FVH
NIH
Trading
CFH
NIH
Maturity
< 1 year
< 2 years
> 2 years
< 1 year
< 2 years
< 1 year
< 1 year
< 1 year
> 2 years
CFH
< 1 year
FVH
> 2 years
Dec. 31, 2023
Nominal
sales
Nominal
purchases
Fair Value
Carrying
amount in
assets
Carrying
amount in
liabilities
Carrying
amounts in
OCI
483
69
3
1,755
550
714
990
65
502
5,131
–
–
1,050
1,050
6,181
(296)
(30)
(7)
(1,659)
–
–
(3,944)
(18)
–
(5,954)
(409)
(409)
(1,050)
(1,050)
(7,413)
3
–
–
1
17
12
(17)
(1)
10
25
3
3
44
44
72
10
1
–
18
17
12
5
–
10
73
4
4
44
44
(7)
(1)
–
(17)
–
–
(22)
(1)
–
(48)
(1)
(1)
–
–
121
(49)
2
–
–
–
8
12
–
(1)
10
31
3
3
–
–
34
Accounting
qualification
Maturity Nominal sales
Nominal
purchases
Fair Value
Carrying
amount in
assets
Carrying
amount in
liabilities
Carrying
amounts in
OCI
Dec. 31, 2022
CFH
CFH
CFH
FVH
NIH
Trading
CFH
NIH
< 1 year
< 2 years
> 2 years
< 1 year
< 1 year
< 1 year
< 1 year
< 1 year
CFH
< 1 year
FVH
> 2 years
579
31
12
1,762
420
221
75
797
3,897
–
–
250
250
(316)
(19)
(19)
(5,493)
–
(1,811)
(46)
–
(7,704)
(419)
(419)
(250)
(250)
–
–
–
(118)
2
1
–
(87)
(202)
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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Chapter 5 – Consolidated financial statements at December 31, 2023
23.3 – Foreign currency hedges
Since a significant proportion of affiliates’ transactions are denominated in currencies other than the affiliate’s functional currency, the Group
is exposed to currency risks. If the Group is not able to hedge these risks, fluctuations in exchange rates between the functional currency
and other currencies can have a significant impact on its results and distort year-on-year performance comparisons. As a result, the Group
uses derivative instruments to hedge its exposure to exchange rates mainly through FX forwards and natural hedges. Furthermore, some
long-term loans and borrowings granted to the affiliates are considered as net investment in foreign operations according to IAS 21.
Schneider Electric’s currency hedging policy is to protect its subsidiaries against risks on transactions denominated in a currency other than
their functional currency. Hedging approaches are detailed in Note 1.23.
The breakdown of the nominal of foreign change derivatives related to operating and financing activities is as follows:
(in millions of euros)
US Dollar
Chinese Yuan
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
Dec. 31, 2023
Sales
Purchases
Net
2,304
97
22
409
49
29
13
27
76
45
54
25
23
1,430
48
47
433
5,131
(2,321)
(581)
(202)
(621)
(108)
(184)
(107)
(95)
(12)
(17)
(65)
(41)
(37)
(1,114)
(10)
(106)
(333)
(5,954)
(17)
(484)
(180)
(212)
(59)
(155)
(94)
(68)
64
28
(11)
(16)
(14)
316
38
(59)
100
(823)
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 2023, the Group has set up EUR 800 million interest rate swaps to hedge its exposure.
(in millions of euros)
Fixed Rates
Floating rates
Total
Fixed Rates
Floating rates
Total
Dec. 31, 2023
Dec. 31, 2022
Total current and non-current financial
liabilities
Cash and cash equivalent
NET DEBT BEFORE HEDGING
Impact of Hedges
NET DEBT AFTER HEDGING
10,843
–
10,843
(1,050)
9,793
3,090
(4,696)
(1,606)
1,050
(556)
13,933
(4,696)
9,237
–
9,237
8,627
8,627
(250)
8,377
1,836
(3,986)
(2,150)
250
(1,900)
10,463
(3,986)
6,477
–
6,477
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5.5 Notes to the consolidated financial statements
23.5 – Commodity hedges
The Group is exposed to fluctuations in energy and raw material prices, in particular steel, copper, aluminum, silver, lead, nickel, zinc and
plastics. If the Group is not able to hedge, compensate for or pass on to customers any such increased costs, this could have an adverse
impact on its results. The Group has, however, implemented certain procedures to limit exposure to rising non-ferrous and precious raw
material prices. The Purchasing departments of the operating units report their purchasing forecasts to the Corporate Finance and Treasury
department. Purchase commitments are hedged using forward contracts, swaps and, to a lesser extent, options.
All commodities instruments are futures and options designated as cash flow hedge under IFRS standards, of which:
(in millions of euros)
Fair value
Nominal amount
Dec. 31, 2023
Dec. 31, 2022
3
(409)
11
(419)
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, 2023
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
Net amounts as
per IFRS 7
–
–
121
(49)
(40)
40
81
(9)
Gross amounts
121
(49)
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
Net amounts as
per IFRS 7
–
–
73
(264)
–
–
73
(264)
Gross amounts
73
(264)
The Group trades over-the-counter derivatives with tier-one banks under agreements which provide for the offsetting of amounts payable
and receivable in the event of default by one of the contracting parties. These conditional offsetting agreements do not meet the eligibility
criteria within the meaning of IAS 32 for offsetting derivative instruments recorded under assets and liabilities. However, they do fall within
the scope of disclosures under IFRS 7 on offsetting.
23.7 – Counterparty risk
Financial transactions are entered with carefully selected counterparties. Banking counterparties are chosen according to the customary
criteria, including the credit rating issued by an independent rating agency.
Group policy consists of diversifying counterparty risks and periodic controls are performed to check compliance with the related rules. In
addition, the Group takes out substantial credit insurance and uses other types of guarantees to limit the risk of losses on trade accounts
receivable.
23.8 – Liquidity risk
As of December 31, 2023, the Group had confirmed credit lines of EUR 2.950 million, all unused with EUR 2.850 million maturing after
December 2024. 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 4.7 billion cash & cash equivalent, the liquidity of the Group amounts to EUR 7.6
billion end of the year. In the next 12 months, the total short term and bond maturity amounts to EUR 2.3 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 2023, revenue in foreign currencies amounted to EUR 29.2 billion (EUR 27.3 billion in 2022), including around EUR 11.2 billion in US
dollars and EUR 4.5 billion in Chinese yuan (respectively EUR 9.9 and EUR 4.8 billion in 2022).
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.
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Chapter 5 – Consolidated financial statements at December 31, 2023
The table below shows the impact of a 10% change in the US dollar and the Chinese Yuan against the Euro on Revenue and Adjusted
EBITA. It includes the impact from the translation of financial statements into the Group’s presentation currency and assumes no scope
impact.
(in millions of euros)
US Dollar
Chinese Yuan
(in millions of euros)
US Dollar
Chinese Yuan
Note 24: Employees
24.1 – Employees
The Group average number of permanent and temporary employees is as follows:
(number of employees)
Production
Administration
TOTAL AVERAGE WORKFORCE
of which Western Europe
of which North America
of which Asia-Pacific
of which Rest of the world
24.2 – Employee benefit expense
(in millions of euros)
Payroll costs
Profit-sharing and incentive bonuses
Share-based payments
EMPLOYEE BENEFITS EXPENSE
Increase/
(decrease) in
average rate
10%
(10)%
10%
(10)%
Increase/
(decrease) in
average rate
10%
(10)%
10%
(10)%
Dec. 31, 2023
Revenue
Adj. EBITA
1,122
(1,020)
454
(413)
Dec. 31, 2022
212
(193)
122
(111)
Revenue
Adj. EBITA
990
(900)
478
(434)
162
(147)
121
(110)
Full Year 2023
Full Year 2022
86,482
81,562
81,506
80,833
168,044
162,339
42,927
41,145
61,946
22,026
41,482
37,839
59,045
23,973
Full Year 2023
Full Year 2022
(9,872)
(53)
(208)
(10,133)
(8,764)
(62)
(184)
(9,010)
24.3 – Benefits granted to senior executives
In 2023, 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 2023 by the Group to the members of Senior Management, excluding executive directors,
totaled EUR 37.8 million, of which EUR 10.6 million corresponded to the variable portion.
During the last three financial years, 497,792 performance shares have been allocated, excluding Corporate Officers. No stock options have
been granted during the last three financial years. In 2023, performance shares were allocated under the 2023 long-term incentive plans 42
and 42bis. 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, 2023
5.5 Notes to the consolidated financial statements
T
S Note 25: Related party transactions
N
E
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 2023.
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, 2023
Dec. 31, 2022
3,551
207
411
4,169
168
168
3,543
181
435
4,159
80
80
* 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. The hearing in front of the French Competition Authority is not yet planned, the Group is expecting it to take place in
2024 and an enforceable decision may be issued late 2024 or 2025. Should the French Competition Authority deny Schneider Electric’s
arguments and conclude that anti-competitive practices have been involved, it has broad discretion to determine on a case-by-case basis
the financial fine it may impose in accordance with the principles of proportionality and individuality as described in its 2021 press release
(https://www.autoritedelaconcurrence.fr/sites/default/files/Communique_sanction.pdf). This potential fine could not exist and could not
exceed a maximum amount of 10% of the total 2021 Group revenue according to article L. 464-2 of the French Commercial Code.
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. Schneider Electric officially contested the indictment decision and raised
numerous arguments in law and fact. Procedure is ongoing.
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.
Considering the difficulty in assessing the extent to which the French Competition Authority considers 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 case.
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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Chapter 5 – Consolidated financial statements at December 31, 2023
Note 27: Subsequent events
27.1 – Issuance of bonds
On January 10, 2024, the Group has issued two bonds, for EUR 600 million at a rate of 3.00% maturing in January 2031 and for EUR 700
million at a rate of 3.25% maturing in October 2035.
27.2 – ETAP
On January 23, 2024, the Group purchased the remaining 20% minority interests of ETAP in accordance with the forward agreement
concluded in 2021 when it acquired 80% of the company.
27.3 – AUTOGRID
On December 14, 2023, the Group entered into an agreement with Uplight Inc. (in which Schneider Electric holds a strategic minority
investment) to sell AutoGrid to Uplight. This transaction represents a reorganization among Schneider Electric-owned or affiliated
businesses aimed at Prosumers, to better align their capabilities. The transaction, which closed on February 8, 2024, has raised the
controlling stake of the Group in Uplight Inc., which will remain consolidated as an equity investment.
Note 28: Statutory Auditors’ fees
Fees paid by the Group to the Statutory Auditors and their networks:
(in thousands of euros)
PwC
%
Mazars
%
Total
Statutory auditors, certification, examination of the parent
Full Year 2023
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
11,956
1,506
10,450
1,681
413
1,268
13,637
88%
12%
9,886
942
8,944
349
16
333
97%
3%
21,842
2,448
19,394
2,030
429
1,601
100%
10,235
100%
23,872
* 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)
PwC
%
Mazars
%
Total
Statutory auditors, certification, examination of the parent
Full Year 2022
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.
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5.5 Notes to the consolidated financial statements
T
S Note 29: Consolidated companies
N
E
The main companies included in the Schneider Electric Group scope of consolidation are listed below:
(in % of interest)
Dec. 31, 2023
Dec. 31, 2022
Europe
Fully consolidated
Nxtcontrol GmbH
RIB Saa Software Engineering Gmbh
Schneider Electric ”Austria” GMBH
Schneider Electric Power Drives GmbH
Schneider Electric Systems Austria GmbH
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.
RIB Stavebni Software S.R.O.
Schneider Electric A.S.
Schneider Electric CZ S.R.O.
Schneider Electric Systems Czech Republic S.R.O.
Orbaekvej 280 A/S
RIB 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
EcoAct SAS FR
France Transfo
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’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
ABN GmbH
J&K Regeltechnik GmbH
Austria
Austria
Austria
Austria
Austria
Belgium
Belgium
Belgium
Belgium
Belgium
Bulgaria
Bulgaria
Croatia
Czech Republic
Czech Republic
Czech Republic
Czech Republic
Denmark
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
Germany
Germany
100
90
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
90
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
100
60
60
100
100
100
100
100
100
100
100
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
504
Schneider Electric Universal Registration Document 2023 | www.se.com
Chapter 5 – Consolidated financial statements at December 31, 2023
(in % of interest)
Dec. 31, 2023
Dec. 31, 2022
Merten GmbH
Proleit GmbH
RIB Cosinus Gmbh
RIB Deutschland Gmbh
RIB GmbH
RIB IMS Gmbh
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 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.
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.
InTwo International 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)
Lexel Holding Norge AS
Schneider Electric Norge AS
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
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.
EcoAct Iberica ES
Manufacturas Electricas S.A.U.
Proleit Iberia Slu
RIB Spain Sa
Schneider Electric Espana, S.A.U
Schneider Electric IT Spain, S.L.
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
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Greece
Hungary
Hungary
Ireland
Ireland
Ireland
Ireland
Italy
Italy
Italy
Italy
Italy
Latvia
Latvia
Latvia
Lithuania
Luxembourg
Luxembourg
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Norway
Norway
Norway
Poland
Poland
Poland
Poland
Poland
Portugal
Romania
Russia
Serbia
Serbia
Slovakia
Slovakia
Spain
Spain
Spain
Spain
Spain
Spain
Spain
Spain
Spain
Sweden
Sweden
Sweden
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
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
505
Life Is On | Schneider Electric | www.se.comCH1CH2CH3CH4CH5CH6CH7CH8CH9INTEGRATED REPORT Chapter 5 – Consolidated financial statements at December 31, 2023
5.5 Notes to the consolidated financial statements
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
(in % of interest)
Lexel AB
Schneider Electric Buildings AB
Schneider
Schneider
Feller AG
Gutor Electronic GmbH
RIB Cosinus Ag
Schneider Electric (Suisse) SA
Proleit Automation
Schneider Electric
Ascot Acquisition
Aveva Group plc (sub-group)
BTR Industries Ltd
BTR Property Holdings Ltd
EcoAct UK Carbon Clear Ltd
Invensys Group Holdings Ltd
Invensys Group Ltd
Invensys Holdings Ltd
Invensys International Holdings Ltd
Invensys Ltd
M&C Energy Group Limited
RIB Solutions (Uk) Ltd
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
Carros Sensors Topco Ltd
Delta Dore Finance SA (sub-group)
Planon Beheer BV
Schneider Lucibel Managed Services SAS
North America
Fully consolidated
Power Measurement Ltd
Schneider Electric Canada Inc.
Schneider Electric Solar Inc.
Schneider Electric Systems Canada 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.
Steck De Mexico S.A. De C.V.
Telvent Mexico, S.A. de C.V.
American Power Conversion Holdings Inc.
ASCO Power Services, Inc.
ASCO Power Technologies, L.P.
Autogrid Systems, Inc.
BTR, LLC
Charge Holdings, LLC
Echo HoldCo LLC
EcoAct Inc US
ETAP Automation Inc. (sub-group)
EV Connect, LLC
Foxboro Controles S.A.
GPI Interim Inc.
H.S. Investments, LLC
506
Sweden
Sweden
Sweden
Sweden
Switzerland
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
France
Netherlands
France
Canada
Canada
Canada
Canada
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
Dec. 31, 2023
Dec. 31, 2022
100
100
100
100
83.7
–
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
–
20
25
50
–
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
91.81
100
85.4
90.84
100
80
99.43
100
100
100
100
100
100
100
83.7
100
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
100
30
20
25
50
100
100
100
100
100
100
66.67
100
100
100
100
100
100
100
100
100
100
100
91.81
100
85.25
90.84
–
80
95.52
100
100
100
Schneider Electric Universal Registration Document 2023 | www.se.com
Chapter 5 – Consolidated financial statements at December 31, 2023
(in % of interest)
Integration Technologies Corp.
Invensys LLC
Osisoft, LLC
Pro-Face America, LLC
Proleit Corp.
Ranco Incorporated of Delaware
RIB Software North America Inc.
RIB US Cost Inc.
RIB Usa Inc.
Schneider Electric Buildings Americas, Inc.
Schneider Electric Buildings Critical Systems, Inc.
Schneider Electric Digital, Inc.
Schneider Electric Engineering Services, LLC
Schneider Electric Foundries LLC
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
Futureworx Proprietary Limited
Nu-Lec Industries Pty Ltd
RIB Holdings Pty Ltd
RIB Technologies 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
Guangzhou RIB Software Co., Ltd
Guangzhou Two Information Technology Co., Ltd
Jingxin Hongde (Beijing) Technology Co., Ltd.
Pro-Face China International Trading (Shanghai) Co., Ltd
Proleit Automation Systems (Shanghai) Co., Ltd
Schneider (Beijing) Low Voltage Co., Ltd.
Schneider (Beijing) Medium Voltage Co.
Schneider (Shaanxi) Baoguang Electrical Apparatus Co.
Schneider (Suzhou) Transformers Co.
Schneider (Wuxi) Drives Co., Ltd.
Schneider Busway (Guangzhou) Limited
Schneider Electric (China) Company Limited
Schneider Electric (Xiamen) Switchgear Co., Ltd
Schneider Electric (Xiamen) Switchgear Equipment Co., Ltd
Schneider Electric Equipment and Engineering (Xi’An) Co., Ltd
Schneider Electric IT (China) Co., Ltd
Schneider Electric IT (Xiamen) Co., Ltd
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
Dec. 31, 2023
Dec. 31, 2022
60
100
100
–
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
60
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
100
100
United States
30.36
29.4
Australia
Australia
Australia
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
China
China
China
China
–
100
100
–
100
100
100
100
100
100
100
100
100
100
100
65
100
100
54
100
100
51
100
100
95
100
70
100
90
95
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
65
100
100
54
100
100
12.34
100
100
95
100
70
100
90
95
100
100
100
100
100
100
507
Life Is On | Schneider Electric | www.se.comCH1CH2CH3CH4CH5CH6CH7CH8CH9INTEGRATED REPORT Chapter 5 – Consolidated financial statements at December 31, 2023
5.5 Notes to the consolidated financial statements
(in % of interest)
Dec. 31, 2023
Dec. 31, 2022
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
Construction Computer Software (Asia) Ltd
Fed-Supremetech Limited
Himel Hong Kong Limited
MTWO Ltd
RIB Creative Limited
RIB Limited
RIB Software International Ltd
RIB Solutions Ltd
Schneider Electric (Hong Kong) Limited
Schneider Electric Asia Pacific Limited
Schneider Electric IT Hong Kong Limited
Two Hong Kong Ltd
Luminous Power Technologies Private Limited
RIB Itwo Software 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
Winjit Technologies Private Limited
Zenatix Solutions 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
RIB Indonesia
Ranco Japan Ltd
Schneider Electric Japan Holdings Inc
Schneider Electric Japan, Inc.
Schneider Electric Solar Japan Inc.
Schneider Electric Systems Japan Inc.
Toshiba Schneider Inverter Corporation
Schneider Electric Korea Limited
Schneider Electric Systems Korea Ltd
Desea Sdn. Bhd.
Gutor Electronic Asia Pacific Sdn. Bhd.
Henikwon Corporation Sdn. Bhd.
RIB Malaysia 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.
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
China
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
Hong Kong
India
India
India
India
India
India
India
India
India
India
India
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Japan
Japan
Japan
Japan
Japan
Japan
Korea
Korea
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
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
100
54
100
100
100
100
100
100
100
100
100
100
100
100
65
75
100
75
100
100
100
100
95
100
100
100
95
95
65
100
100
100
100
100
100
60
100
100
100
–
65
100
30
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
100
54
100
100
100
100
100
100
100
100
100
100
100
100
65
75
100
79.47
100
100
100
75.5
–
100
100
100
95
95
65
100
100
100
100
100
100
60
100
100
100
100
65
100
30
100
100
100
S
T
N
E
M
E
T
A
T
S
L
A
I
C
N
A
N
I
F
508
Schneider Electric Universal Registration Document 2023 | www.se.com
Chapter 5 – Consolidated financial statements at December 31, 2023
(in % of interest)
Dec. 31, 2023
Dec. 31, 2022
Tamco Switchgear (Malaysia) Sdn. Bhd.
RIB Pacific Ltd
Schneider Electric (NZ) Limited
Schneider Electric Systems New Zealand Limited
RIB Itwo Software Inc.
Schneider Electric (Philippines), Inc.
Schneider Electric IT Philippines Inc.
RIB International Holding Pte. Limited
RIB Singapore Pte Ltd
Schneider Electric Asia Pte. Ltd.
Schneider Electric Export Services Pte Ltd
Schneider Electric IT Logistics Asia Pacific Pte Ltd
Schneider Electric IT Singapore Pte Ltd
Schneider Electric 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
RIB Thailand Pending
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
RIB Vietnam Software Company Limited
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.
Steck Electric S.A.
Schneider Electric Systems Argentina S.A.
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 Distribuidora Ltda
Steck Industria Eletrica Ltda
Telseb Serviços de Engenharia E Comércio de Equipamentos Eletrônicos e
Telecomunicações Ltda
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
Steck Andina S.A.S.
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
KMG Automation Limited Liability Partnership
Malaysia
New Zealand
New Zealand
New Zealand
Philippines
Philippines
Philippines
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Singapore
Sri Lanka
Taiwan
Taiwan
Thailand
Thailand
Thailand
Thailand
Thailand
Viet Nam
Viet Nam
Viet Nam
Viet Nam
Viet Nam
Viet Nam
China
China
Japan
Malaysia
Algeria
Algeria
Argentina
Argentina
Argentina
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Brazil
Chile
Chile
Chile
Colombia
Colombia
Colombia
Costa Rica
Ecuador
Egypt
Egypt
Egypt
Egypt
Egypt
Kazakhstan
65
100
100
100
100
100
100
100
100
100
–
100
100
65
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
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
51
91.99
92
51
60
51
65
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
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
100
51
91.99
92
51
60
51
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5.5 Notes to the consolidated financial statements
(in % of interest)
Dec. 31, 2023
Dec. 31, 2022
Schneider Electric LLP
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.
Schneider Electric Systems Limited
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.
Ccs Mining & Industrial (Pty) Limited
Construction Computer Software (Pty) Limited
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
Construction Computer Software (Gulf) Llc
L&T Electrical And Automation FZE
Levtech Consulting Dmcc
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.
Kazakhstan
Kenya
Kuwait
Kuwait
Israel
Lebanon
Morocco
Morocco
Nigeria
Nigeria
Nigeria
Oman
Pakistan
Peru
Peru
Qatar
Saudi Arabia
Saudi Arabia
Saudi Arabia
South Africa
South Africa
South Africa
South Africa
Turkey
Turkey
Turkey
Turkey
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Arab Emirates
Venezuela
Venezuela
85
100
31.9
49
100
100
100
100
100
100
100
100
100
100
100
49
65
100
100
100
100
100
74.9
100
–
100
–
100
100
65
100
100
100
100
100
93.56
100
100
31.9
49
100
100
100
100
100
100
100
100
100
100
100
49
65
100
100
100
100
100
74.9
100
100
100
100
100
100
65
100
100
100
100
100
93.56
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Chapter 5 – Consolidated financial statements at December 31, 2023
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 SE for the year ended December 31, 2023.
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, 2023 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, 2023 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. 821-53 and R. 821-180 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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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, 2023, the carrying amount of goodwill and trademarks with indefinite useful lives was
€24,664 million and €2,297 million respectively, representing 46% 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.
In line with the Group’s strategy of sustainable development and digital transformation, the Group has redefined
its CGU groups.
Goodwill is tested at CGU group level, as described in note 1.11 “Impairment of assets” to the consolidated
financial statements: Low Voltage, Medium Voltage, Secure Power, Industrial Automation, Industrial Automation
Software, Energy Management Software and Sustainability.
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, the consideration of climate risks and, for trademarks
with indefinite useful lives, royalty rates.
How our audit
addressed this risk
Our audit work consisted in:
• reviewing the methods used to determine the level of goodwill impairment testing, particularly regarding
changes made during the year;
• 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;
• assessing the procedures implemented by the Group to evaluate the impact of climate risks in determining
•
the value in use of each group of CGUs;
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, and, to this end,
verifying in particular that no impairment would have been recognized if the Group had maintained 2022’s
organization;
• 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, 2023
Uncertain tax positions and recognition and recoverability of deferred tax assets recognized for tax loss carryforwards
Notes 1.3, 1.16, 1.21 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, 2023, deferred tax assets in respect of tax loss carryforwards recognized in
the consolidated balance sheet amounted to €629 million, mainly in France for an amount of €420 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
addressed 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.
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.
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5.6 Statutory Auditors’ report on the consolidated financial statements
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 SE by the Annual General Meetings held on May 6, 2004 for Mazars and on
May 5, 2022 for PricewaterhouseCoopers Audit.
As of December 31, 2023, Mazars was in the twentieth consecutive year of their engagement and PricewaterhouseCoopers in their second
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. 821-55 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, 2023
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. 821-27 to L. 821-34 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 on February 29, 2024
PricewaterhouseCoopers Audit
Neuilly-sur-Seine on February 29, 2024
Juliette Decoux Guillemot
Mathieu Mougard
Jean-Christophe Georghiou
Séverine Scheer
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Chapter 5 – Consolidated financial statements at December 31, 2023
T
S 5.7 Extract of the management report for
N
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the year ended December 31, 2023
Consolidated financial statements
Business and Statement of Income highlights
Main acquisitions of the period
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 (the Scheme), 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 4,554 million) as of December 31, 2022). The recognition of
this liability triggered an immediate reduction in non-controlling interests and in the group share of equity.
On January 18, 2023, following the deliverance of the UK Court Order to the Registrar of Companies, the Scheme (acquisition by the Group
of the outstanding AVEVA shares not already owned) became effective. AVEVA shares were unlisted from the London Stock Exchange on
January 19, 2023.
The financial liability was settled in cash on January 31, 2023 for GBP 4,055 million (EUR 4,610 million at the foreign exchange closing rate
incurred on January 31, 2023) including stamp duties. The Group’s transaction cash out, including EUR 71 million legal fees paid, was
presented under the financing section of the cash flow statement and amounted to EUR 4,681 million.
In the context of this transaction, the Group also incurred, through hedging schemes, a negative impact on cash for EUR 106 million.
EcoAct
On November 2, 2023, the Group acquired 100% of the capital of EcoAct SAS (“EcoAct”), an international leader in climate consulting and
net zero solutions headquartered in Paris, France. EcoAct will be reported within the Energy management reporting segment.
The purchase accounting as per IFRS 3R is not completed as of December 31, 2023.
Main divestments of the period
Transformer plants in Poland and Türkiye
On January 6, 2023, the Group closed the transaction for the disposal of its Transformer plants in Poland and Türkiye to Cahors Group, an
international company specializing in energy distribution, headquartered in France. The businesses had around 800 employees and were
reported within the Energy management reporting segment up until disposal effective date.
As of December 31, 2022, net assets were already measured at fair value less costs to sell, leading to no impact from the divestment in the
consolidated statement of income of the period.
VinZero
On May 31, 2023, the Group closed the transaction for the disposal of RIB Software’s VinZero business to a European corporate. 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 business was reported within the Energy management reporting segment
up until disposal effective date. The gain on disposal was recorded under “Other operating income and expenses”.
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Chapter 5 – Consolidated financial statements at December 31, 2023
Gutor
On August 2, 2023, the Group closed the transaction for the disposal of Gutor Electronics’ operations to Latour Capital, a French private
equity investor. Gutor is a global leader in the manufacturing of industrial uninterruptible power supply (UPS) systems and the provision of
related services. Gutor was reported within the Energy management reporting segment up until disposal effective date.
Telemecanique Sensors
On October 31, 2023, the Group closed the transaction for the disposal of its industrial sensors business, Telemecanique Sensors, to
YAGEO. As part of the transaction, the Group granted YAGEO a license to use Telemecanique Sensors trademark. The all-cash transaction
valued Telemecanique Sensors at EUR 723 million (Enterprise Value). Telemecanique Sensors was reported within the Industrial Automation
reporting segment up until disposal effective date.
Follow-up on acquisitions and divestments transacted in 2022 with effect in 2023
EV Connect Inc.
On June 21, 2022, the Group completed the purchase of a 95.52% controlling stake in EV Connect Inc. and now 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 non-controlling interests”.
In November 2023, the Group purchased 3.88% of non-controlling interests which raised its stake in EV Connect Inc. at 99.4%.
The purchase accounting as per IFRS 3R is completed as of December 31, 2023. The net adjustment of the opening balance sheet,
resulting mainly from the booking of identifiable intangible assets (technology, customer relationship and trademark), led to the recognition
of a EUR 255 million goodwill at acquisition date.
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, 2023:
Autogrid
On July 20, 2022, the Group completed the acquisition of Autogrid, raising its stake from 24.2% to 91.8% controlling stake. AutoGrid is a
Virtual Power Plant (VPP) and Distributed Energy Resource Management System (DERMS) provider and is reported within Energy
Management reporting segment. The Group held an agreement to acquire the remaining 8.2% of non-controlling interests in 2026. The
related debt was recognized in “Non-current purchase commitments over non-controlling interests” as of December 2022.
On December 14, 2023, the Group entered into an agreement with Uplight Inc. for the sale of Autogrid. 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 209 million and EUR 40 million respectively. The assets are mainly intangible assets (including goodwill) for
EUR 197 million. No impairment loss was recognized by the Group following the IFRS 5 classification.
This transaction represents a reorganization among Schneider Electric-owned or affiliated businesses aimed at Prosumers, to better align
their capabilities. The transaction, which closed on February 8, 2024, has raised the controlling stake of the Group in Uplight Inc., which will
remain consolidated as an equity investment.
Exchange rate changes
Fluctuations in the euro exchange rate had a negative impact in 2023, decreasing consolidated revenue by EUR 1,432 million due mainly to
the evolution observed in US Dollar and in Chinese Yuan compared to the Euro and a negative impact decreasing adjusted EBITA by EUR
573 million.
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5.7 Extract of the management report for the year ended December 31, 2023
Results of Operations
The following table sets forth our results of operations for 2023 and 2022:
(in millions of euros except for earnings per share)
Full Year 2023
Full Year 2022
Variance
Revenue
Cost of sales
Gross profit
% Gross profit
Research and development
Selling, general and administrative expenses
Adjusted EBITA *
% Adjusted EBITA
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)
35,902
(20,890)
15,012
41.8%
(1,168)
(7,432)
6,412
17.9%
98
(147)
6,363
17.7%
(430)
5,933
16.5%
79
(387)
(308)
(222)
(530)
5,403
(1,285)
51
4,169
4,003
166
7.15
7.07
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
5.1%
2.9%
8.2%
12.3%
9.0%
6.6%
(122.6)%
(35.2)%
18.8%
1.4%
20.3%
229.2%
197.7%
190.6%
103.7%
146.5%
14.5%
6.1%
75.9%
17.9%
15.1%
181.4%
14.8%
15.0%
* 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 35,902 million for the year ended December 31, 2023, up +12.7% organic and up +5.1% on a reported
basis. The Group saw strong growth across end-markets supported by secular trends of electrification, automation, and digitization, while
some areas such as residential buildings remained impacted by the effects of higher interest rates on consumer spending, though
stabilizing by the end of the year. Discrete automation markets were down after high demand in the prior year associated with supply chain
constraints in particular impacting sales in Western Europe, China and East Asia. The Group saw good volume expansion throughout the
year, with product growth supported by backlog execution as supply chain pressures eased, while the carryover impact of price actions
taken in 2022 faded across the year, as expected. FX impacts were (4.3)% driven by the weakening of the Chinese Yuan and U.S. Dollar
against the Euro, combined with the significant devaluation of several other currencies including the Egyptian Pound, Turkish Lira and
Argentinian Peso. There was a net negative impact of (2.5)% from acquisitions and disposals, primarily relating to the Group’s exit from
Russia in 2022 along with the net impact of other transactions.
Evolution of revenue by reporting segment
The following table sets forth our revenue by business segment for years ended December 31, 2023 and 2022:
(in millions of euros)
Full Year 2023
Full Year 2022
Energy
Management
Industrial
Automation
28,241
26,442
7,661
7,734
Total
35,902
34,176
Energy Management generated revenues of EUR 28,241 million, equivalent to 79% of the Group’s revenues and was up +14% organic.
North America grew +19% organic with strong growth across end-markets, including continued strong growth in Systems as a
consequence of strong demand across Data Center and Infrastructure end-markets. Western Europe was up +12% organic with double-
digit growth in the U.K., Germany and Italy, while France and Spain grew high-single digit. There was continued good traction in Data
Center and non-residential technical buildings, though residential markets, particularly in the north of the region, were impacted by
pressures on consumer-spending. Asia-Pacific grew +8% organic, with China delivering mid-single digit growth for the year, with strong
traction in transportation and renewable power, while softness in construction markets continued. India recorded double-digit growth,
despite facing a high base of comparison, with continued strong demand across end-markets. There was good growth in Australia and
across the rest of the region. Rest of the World was up +20% organic, benefitting from price actions taken in response to currency
devaluation in Argentina, Egypt and Turkey and with strong demand for systems offers across the region.
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Chapter 5 – Consolidated financial statements at December 31, 2023
Industrial Automation generated revenues of EUR 7,661 million, equivalent to 21% of the Group’s revenues and was up +7% organic. Growth
was led by sales into Process automation markets while sales into Discrete automation markets also grew, though at a slower pace due to
weakness in OEM demand, particularly in Western Europe, China and East Asia. The Group saw strong growth in its industrial software
offers through AVEVA, despite headwinds from a transition from a perpetual license model to a subscription model. North America grew
+7% organic led by growth in Discrete automation markets, supported by backlog execution, while growth in Process & Hybrid markets was
good despite a high base of comparison from projects in Mexico. Western Europe was up +7% organic, with strong growth in both Process
& Hybrid markets and industrial software at AVEVA, while Discrete automation markets were impacted by the demand weakness. Asia
Pacific was up +1% organic, impacted by weaker Discrete automation growth in China with weakness in OEM demand, particularly among
those tied to construction. There was strong growth in several countries across the rest of the region, notably India and Australia, while
growth in Japan and South Korea was muted due to OEM weakness. Rest of the World was up +20% organic, benefitting from price actions
taken in response to currency devaluation in Argentina, Egypt and Turkey, while outside of these countries there was strong growth in
Discrete automation markets and good growth in Process & Hybrid markets.
Gross profit
Gross profit was up +18.1% organic with Gross margin up +200bps organic, reaching 41.8% in 2023. The organic increase in margin
percentage was driven by a strong net price impact mainly related to carryover from price actions taken last year, an improvement of gross
margin in systems business and improved industrial productivity, particularly in H2.
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 12.3% from EUR 1,040 million for 2022 to EUR 1,168 million for 2023. As a percentage of revenues, the net cost
of research and development increased slightly from 3.0% in 2022 to 3.3% in 2023.
Total research and development expenditures, including capitalized development costs and development costs reported as cost of sales
(see Note 4 to the Consolidated Financial Statements) increased by 9.3% from EUR 1,845 million for 2022 to EUR 2,016 million for 2023. As a
percentage of revenues, total research and development expenses increased slightly to 5.6% for 2023 (5.4% for 2022).
In 2023, the net effect of capitalized development costs and amortization of capitalized development costs amounts to EUR 92 million on
operating income (EUR 115 million in 2022).
Selling, general and administrative expenses increased by 9.0% to EUR 7,432 million for 2023 (EUR 6,819 million for 2022). As a percentage
of revenues, selling, general and administrative expenses increased slightly to 20.7% for 2023 (20.0% for 2022).
Combined, total support function costs, that is, research and development expenses together with selling, general and administrative costs,
totaled EUR 8,600 million for 2023 compared to EUR 7,859 million for 2022, an increase of 9.4%. Support functions costs to sales ratio
increases from 23.0% in 2022, to 24.0% in 2023.
Other operating income and expenses
For 2023, other operating income and expenses amounted to a net income of EUR 98 million. The gains and losses on disposal of business
for EUR 265 million are mainly due to the gains on disposal of Telemecanique Sensors, Gutor, VinZero and Transformer Plants in Türkiye.
The costs of acquisition and integration totaled EUR (111) million (EUR (180)million for 2022. The decrease is mainly due to costs incurred in
2022 to purchase AVEVA’s remaining non-controlling interests.
Restructuring costs
For2023, restructuring costs decreased to EUR 147 million in 2023 compared to 227 million in 2022, and are linked to the Group’s initiatives
to decrease support function costs.
EBITA and Adjusted EBITA
EBITA is defined as earnings before interest, taxes and amortization of purchase accounting intangibles. EBITA comprises operating profit
before amortization and impairment of purchase accounting intangible assets and before goodwill impairment. Adjusted EBITA is adjusted
as EBITA before restructuring costs and before other operating income and expenses, which includes acquisition, integration and
separation costs.
Adjusted EBITA amounted to EUR 6,412 million for 2023, compared to EUR 6,017 million for 2022, an organic increase of 24.5%. As a
percentage of revenues, adjusted EBITA increased at 17.9% with margin improving 180 bps organically.
EBITA increased from EUR 5,357 million for 2022 to EUR 6,363 million in 2023. As a percentage of revenues, EBITA increases at 17.7% in
2023 (15.7% for 2022).
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5.7 Extract of the management report for the year ended December 31, 2023
Adjusted EBITA by business segment
The following table sets out EBITA and adjusted EBITA by business segment:
Full Year 2023
(in millions of euros)
Backlog
Revenue
Adjusted EBITA
Adjusted EBITA (%)
Energy
Management
Industrial
Automation
Central functions
& digital costs
15,414
28,241
5,967
21.1%
3,748
7,661
1,304
17.0%
–
–
(859)
On December 31, 2023, the total backlog to be executed in more than a year amounts to EUR 4,287 million.
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)
Total
19,162
35,902
6,412
17.9%
Total
16,490
34,176
6,017
17.6%
Energy Management reporting segment generated an adjusted EBITA of EUR 5,967 million, or 21.1% of revenues, up c. +220 bps organic
(up +70 bps on a reported basis), due mainly to a combination of strong net price impact, good contribution from volumes and an
improvement of gross margin in the systems business, more than offsetting investment in SFC and inflationary impacts.
Industrial Automation reporting segment generated an adjusted EBITA of EUR 1,304 million, or 17.0% of revenues, down c. -110 bps organic
(down -190 bps on a reported basis), where strong net price contribution, improved productivity and improvement of gross margin in the
systems business were more than offset by impacts from inflation and increased strategic investment within support function costs.
Central functions & digital costs in 2023 amounted to EUR 859 million (EUR 833 million in 2022) remaining stable at 2.4% of Group revenues.
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 2023.
Amortization and impairment of purchase accounting intangibles
The amortization and impairment of purchase accounting intangibles linked to acquisitions amounted to EUR 430 million compared with
EUR 424 million last year.
Operating income (EBIT)
Operating income or EBIT (Earnings Before Interest and Taxes), increased from EUR 4,933 million for 2022 to 5,933 million for 2023, an
increase of 20.3%.
Net financial income/loss
Net financial loss amounted to EUR 530 million for 2023, compared to EUR 215 million for 2022, mainly due to the increase in cost of debt
(from EUR 106 million in 2022 to EUR 308 million in 2023). This was mainly due to the increase in interest rates observed in 2023 and costs
related to the term loan facility set up for AVEVA’s non-controlling interests acquisition. In addition, there was an increased negative impact
from foreign exchange fluctuations (from EUR 21 million in 2022 to EUR 50 million in 2023).
Income tax expense
The effective tax rate was 23.8% for 2023, and 25.7% for 2022. In 2022, restating the EUR 195 million Russia and Belarus deconsolidation
impact from the profit before tax (no tax impact attached), the effective tax rate would have been of 24.6%. The corresponding income tax
expense increased from EUR 1,211 million for 2022 to EUR 1,285 million for 2023.
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Chapter 5 – Consolidated financial statements at December 31, 2023
Share of profit/ (loss) of associates
The share of associates was a EUR 51 million profit for 2023, compared to EUR 29 million profit for 2022.
Non-controlling interests
Non-controlling interests in net income for 2023 totaled EUR 166 million, compared to EUR 59 million for 2022. This represents the share in
net income attributable to the non-controlling interests, mainly coming from the Group Chinese and Indian subsidiaries.
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 4,003 million for 2023, compared to EUR 3,477
million profit for 2022.
Earnings per share
Basic Earnings per share amounted to EUR 7.15 per share for 2023 and EUR 6.23 per share for 2022.
Comments to the consolidated Cash-flow
The following table sets forth our cash-flow statement for 2023 and 2022:
(in millions of euros)
Note
Full Year 2023
Full Year 2022
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 receivable
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
The accompanying notes are an integral part of the consolidated financial statements.
*
In 2023, transactions with non-controlling interests mainly relate to the purchase of AVEVA’s non-controlling interests.
4,169
(51)
743
717
60
87
(252)
(164)
220
5,529
62
(382)
493
205
378
5,907
(914)
52
(451)
(1,313)
611
(89)
(257)
265
(1,048)
3,509
(1,299)
(703)
939
284
(4,702)
(1,767)
(84)
(3,823)
(240)
(4)
792
3,863
792
4,654
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
11
10
21
11
10
2
20
22
22
19
2
19
18
18
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5.7 Extract of the management report for the year ended December 31, 2023
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Operating Activities
Net cash from operating activities before changes in working capital requirement reached EUR 5,529 million for 2023, increasing compared
to EUR 5,393 million for 2022. It represented 15.4% of revenues for 2023 (15.8% of revenues from 2022).
Change in working capital requirement generated EUR 378 million in cash in 2023, compared to a consumption of EUR 1,039 million in
2022.
In all, net cash from operating activities increased from EUR 4,354 million in 2022 to EUR 5,907 million in 2023.
Investing Activities
Net capital expenditure, which includes capitalized development projects, increased, at EUR 1,313 million for 2023, compared to EUR 1,024
million for 2022, and representing 3.7% of sales in 2023 compared to 3.0% in 2022.
Free cash-flow (cash from operating activities net of net capital expenditure) amounted to EUR 4,594 million in 2023 versus EUR 3,330
million in 2022.
Cash conversion rate (free cash-flow over net income attributable to the equity holders of the parent company on continuing operations)
was 115% in 2023 versus 96% in 2022.
The acquisitions net of disposals represented a cash in of EUR 611 million (net of acquired cash) for 2023, compared with a cash-out of EUR
297 million for 2022. Those amounts correspond mainly to the acquisitions and disposals described in Notes 2.1 and 2.2 of the Consolidated
Financial Statements (Chapter 5).
Financing Activities
Net cash outflow from financing activities amounted to EUR 3,823 million during the year 2023, compared to cash outflow of EUR 1,453
million during the year 2022. The variance is mainly due to the purchase of AVEVA’s non-controlling interests for EUR 4.7 billion and bond
issuances in 2023 for EUR 3.5 billion (EUR 1.1 billion issued in 2022).
The dividend paid by Schneider Electric was EUR 1,767 million in 2023, compared with EUR 1,618 million in 2022.
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Chapter 6 – Parent company financial statements
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company
financial
statements
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6.1 Balance sheet
6.2 Statement of income
6.3 Notes to the financial
statements
Significant events of the financial year
6.3.1
6.3.2 Accounting principles
6.3.3
Notes
526
528
529
529
530
532
6.4 Statutory auditors’ report on
the annual financial statements 540
6.5 List of securities held at
December 31, 2023
6.6 Subsidiaries and affiliates
543
544
6.7 The company’s financial
results over the last 5 years
546
6.8 Extract of the management
report for the year ended
December 31, 2023
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Chapter 6 – Parent company financial statements
Chapter 6 – Parent company financial statements
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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 (Loans/Deposits and guarantees)
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
Note
12/31/2023 Gross Amort./Dep./Prov.
12/31/2023 Net
12/31/2022 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)
–
–
2,784
–
1,221
–
2,784
–
1,221
31,482
(27,477)
4,006
4,006
5,377,099
1,375,376
2,532,111
80,010
9,364,595
9,396,077
570,104
323,972
894,076
279,624
12,286,738
285
12,566,647
13,460,723
3,278
22,865
33,786
–
(19,468)
–
–
–
5,357,631
1,375,376
2,532,111
80,010
5,357,631
763,201
2,513,350
81,172
(19,468)
9,345,127
8,715,354
(46,945)
9,349,132
8,719,359
–
–
–
–
–
–
–
–
–
–
–
–
570,104
323,972
894,076
279,624
12,286,738
285
392,646
232,756
625,402
734,726
8,175,864
1,393
12,566,647
8,911,984
13,460,723
9,537,386
3,278
22,865
33,786
–
574
15,883
20,153
–
22,916,729
(46,945)
22,869,784
18,292,355
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
Regulated provisions
Total equity
PROVISIONS FOR CONTINGENCIES
Provisions for contingencies and expenses
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.
Note
7
7.1
7.2
7.3
8
9
9
10
11
12
6.3
12/31/2023
12/31/2022
2,291,344
2,827,850
2,284,372
2,616,090
243,027
273,900
2,560,475
2
8,196,598
243,027
325,407
1,744,408
2
7,213,305
286,602
286,602
316,327
316,327
1,300,000
9,773,502
1,808,904
42,000
1,018,000
109,162
296,565
2,088
650,000
8,094,325
39,096
42,000
1,491,000
79,789
237,057
80,378
14,350,221
10,713,646
–
28,987
7,376
–
40,199
9,877
22,869,784
18,293,355
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N
E
(in thousands of euros)
Note
2023
2022
Sales of services and other
Reversals of provisions, depreciation and amortization and expense transfers
Other operating revenue
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
1
–
486,927
486,928
(122,475)
(1,306)
(14,607)
(1,071)
(2,382)
(141,841)
79
11
412,303
412,393
(171,810)
(5,114)
(2,367)
(1,928)
(2,223)
(183,442)
345,087
228,952
2,002,364
536,573
–
2,538,937
(327,774)
(578)
(328,352)
1,500,580
89,438
–
1,590,018
(111,111)
1,396
(109,716)
17
2,210,585
1,480,303
2,555,672
39
91,009
138,116
–
229,164
–
(105,761)
(161,507)
(267,268)
(38,104)
42,907
1,709,254
312,074
93,678
145,098
1,034
551,884
(272,321)
(108,927)
(154,206)
(535,354)
16,531
18,623
2,560,475
1,744,408
18
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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
•
•
• The tax authority informed us that it will perform an accounting verification of all tax declarations made during the period from 01/01/2020
to 12/31/2022 and of all taxable income for the period from 01/01/2018 to 12/31/2019. This audit is already under way as at December 31,
2023.
In May 2023, the 2022 dividend was paid in the amount of EUR 1,767 million.
In January 2023, the Group withdrew EUR 1,700 million from its Term loan facility established to finance the acquisition of AVEVA’s
minority interests. This loan will mature in October 2025. On December 31, 2023, the amount due was still EUR 1,700 million at Euribor
plus a margin of 0.56%.
In 2023, Schneider Electric SE carried out a second convertible bond (OCEANE) issue for EUR 650 million at a rate of 1.97%, maturing in
November 2030. As at the end of December 2023, the debt component recognized at its net book value was EUR 650 million. The initial
conversion and/or exchange ratio of the Bonds is one share per Bond with a nominal value set at EUR 426.66 with a nominal value of
EUR 100,000, which corresponds to EUR 234.38 per share.
•
• The company bought back 4.5 million of its own shares for EUR 703 million.
• As of December 31, 2023, 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 EUR 279 million.
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6.3 Notes to the financial statements
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As in the prior financial year, the financial statements for the financial year ended December 31, 2023 have been prepared in accordance
with French generally accepted accounting principles and with ANC regulation no. 2014-03.
Accounting principles for the preparation of the financial statements of the parent company were applied, in accordance with the principle
of prudence 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 their acquisition or transfer cost.
Acquisition costs include purchase price, including import duties and non-refundable taxes, as well as any expenses directly attributable to
the preparation of the asset for use (registration fees, employee expenses related to establishment and preparation, installation and set-up
costs, testing ,etc.).
The company uses the component approach as defined by CRC regulation no. 2002-10. The analysis and investigations carried out by the
company and the Schneider Electric Group made it possible to ensure that the current split of non-current assets was in line with this
principle: components with distinct useful lives are accounted for separately, according to their own depreciation plan.
Intangible assets
Intangible rights are amortized over a maximum of five 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. Land is not depreciated.
Financial investments
Shares in subsidiaries and affiliates are recorded at acquisition cost, plus directly attributable costs (including acquisition costs related to
these transactions).
Provisions for impairment 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.
Shares in subsidiaries and affiliates are valued at their value in use each year.
Own shares
Own shares are assessed by category (investment securities, marketable securities), according to the FIFO “first-in, first-out” method.
The accounting classification of own shares depends on the purpose for which they are held:
• own shares are classified as marketable securities if they are explicitly or implicitly allocated to cover performance share distribution
plans or if they are purchased to regulate the share price of the Group.
• own shares are classified as financial investments if they are not explicitly allocated to cover a share distribution plan or if they are
purchased for use within the framework of a liquidity contract by an investment services provider, or for their subsequent cancellation as
part 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 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 reporting date is lower
•
than the weighted average cost.
• A provision for risks and charges is recognized when the own shares are explicitly or implicitly allocated to cover performance share
distribution plans.
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Chapter 6 – Parent company financial statements
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 and this revaluation is
recognized in the balance sheet as a translation gain or loss.
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.
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 and the analysis by age of the specific accounts as well as the related credit
risks. When it becomes certain that a bad debt will not be recovered, it, as well as its provision, is canceled on the income statement.
Other operating revenue
Royalties from the Schneider brand have been recognized in this item of the income statement
Net non-recurring income/(loss)
Income and expenses for the financial year are classified in the income statement in such a way as to differentiate between the items of
current income and the items of non-recurring income, including:
•
• which are not likely to be recurring;
• over which the company has only limited control.
those for which the achievement is not related to the day-to-day operation of the business;
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 schemes.
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: 12/31/2023;
• Data date: 10/31/2023;
•
Inflation rate: 2.10%;
• Discount rate: 4.10%;
• Rate of return on assets: 4.10%;
• Retirement age: Full rate age;
• Age at start of employment: 23 years old;
• Turnover rate: 0.00%;
• Mortality rate: TGH, TGF 05;
• Annuity growth rate: 1.65%.
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
Issuance costs are amortized over the life of the bonds and are booked under “deferred expenses.”
Issuance premiums are booked under “Call premiums” and amortized over the duration of the bonds.
In the case of convertible bonds (OCEANE), at conversion, the bond will be reclassified as equity for its nominal conversion amount.
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6.3 Notes to the financial statements
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Note 1 Non-current assets
1.1 – Intangible assets
This item primarily consists of capital increase and merger expenses, which are fully amortized.
1.2 – Property, plant and equipment
(in thousands of euros)
Property, plant and equipment
12/31/2022
Additions
Disposals
12/31/2023
Gross
Depreciation
NET
4,054
(48)
4,006
–
–
–
–
–
–
4,054
(48)
4,006
Property, plant and equipment are mainly comprised of undeveloped land.
Note 2 Financial investments
2.1 – Shares in subsidiaries and affiliates
(in thousands of euros)
Shares in subsidiaries and affiliates
12/31/2022
Increases
Decreases
12/31/2023
Gross
Provisions
NET
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, 2023 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
Own shares
Other
Provisions for other shares and own shares
NET
Carrying amount
5,343,544
6,049
8,038
5,357,631
12/31/2022
Increases
Decreases
12/31/2023
763,201
–
–
763,201
703,184
–
–
703,184
(91,061)
–
–
1,375,376
–
–
(91,061)
1,375,376
Other investment securities primarily include Schneider Electric SE shares acquired for allocation of share distribution plans.
In compliance with the decision adopted by the Board of Directors dated February 15, 2023, the company bought back 4,493,173 of its own
shares for a total of EUR 703 million.
In line with previous years, the Group decided to fund the performance shares of plans 41ter, 42, 42bis and 42ter with Schneider Electric
treasury shares; 1,468,821 shares for a total amount of EUR 106 million have been classified as marketable securities and 207,073 shares
for EUR 14.7 million were reclassified from marketable securities to “Other investment securities” following the departure of the
beneficiaries.
2.3 – Advances to subsidiaries and affiliates
(in thousands of euros)
Advances to subsidiaries and affiliates
12/31/2022
Increases
Decreases
12/31/2023
Gross
NET
2,513,350
2,513,350
18,761
18,761
–
–
2,532,111
2,532,111
At December 31, 2023, this item mainly consisted of a loan of EUR 2,500 million granted to Schneider Electric Industries SAS with a maturity
date of 2024, and accrued interests for a total amount of EUR 32.1 million.
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Chapter 6 – Parent company financial statements
Note 3 Receivables
(in thousands of euros)
Trade receivables
Other receivables
NET
12/31/2023
12/31/2022
570,104
323,972
894,076
392,646
232,756
625,402
Trade receivables mainly include the reinvoicing of the bonus share plans to Schneider Electric Industries SAS. and re-invoicing related to
brand royalties.
At December 31, 2023, the “Other receivables” are mainly composed of tax receivables for EUR 292 million and R&D tax credits for EUR 63
million euros.
Note 4 Marketable securities
(in thousands of euros)
Number of shares
Value
Value
Value
Value
Number of
shares
12/31/2022
Acquisitions
Disposals
12/31/2023
OWN SHARES
Gross
Provisions
NET TOTAL
SICAV
TOTAL
4,849,753
–
4,849,753
–
311,979
–
311,979
422,747
91,061
–
91,061
(123,416)
–
279,624
–
4,159,845
–
(123,416)
279,624
4,159,845
–
(422,747)
–
–
4,849,753
734,726
91,061
(546,163)
279,624
4,159,845
Marketable securities primarily represent own shares held by the company for allocation to future performance share distribution plans.
In 2023, following the Group’s decision to fund the performance shares of plans 41ter, 42, 42bis and 42ter with Schneider Electric treasury
shares, 1,468,821 shares for a total amount of EUR 106 million have been transferred into marketable securities. The company has
distributed 1.9 million shares for a total amount of EUR 123 million in connection with performance share plans, which have been re-invoiced
to the concerned Group entities. Following the loss of the rights of employees who left the Group, the company switched back 207,073
shares for a total amount of EUR 14.7 million to “Other investment securities.”
Note 5 Group cash and cash equivalents
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 to interest on commercial paper of EUR 2.6 million and fees.
6.2 – Deferred expenses
(in thousands of euros)
Bond issue expenses
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 100 million)
Oct. 13, 2015 over 10 years (EUR 200 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)
Jan. 15, 2019 over 9 years (EUR 250 million)
Jan. 15, 2019 over 9 years (EUR 500 million)
Sept. 9, 2019 over 5 years (EUR 200 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)
Jan. 13, 2023 over 6 years (EUR 600 million)
Jan. 13, 2023 over 11 years (EUR 600 million)
Apr. 6, 2023 over 2 years (EUR 750 million)
June 12, 2023 over 5 years (EUR 500 million)
June 12, 2023 over 10 years (EUR 500 million)
Nov. 27, 2023 over 7 years (EUR 650 million)
TOTAL
12/31/2022
Increases
Decreases
12/31/2023
715
289
112
277
761
1,170
1,136
451
1,012
231
1,672
945
192
3,659
1,354
1,905
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,963
2,269
2,081
1,260
1,260
4,394
(323)
(289)
(40)
(98)
(449)
(296)
(254)
(89)
(201)
(136)
(270)
(221)
(192)
(1,313)
(277)
(196)
(280)
(194)
(765)
(140)
(167)
(53)
392
–
72
179
312
874
882
362
811
95
1,402
724
–
2,346
1,077
1,709
1,683
2,075
1,316
1,120
1,093
4,341
15,883
13,227
(6,243)
22,865
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6.3 Notes to the financial statements
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6.3 – Issuance premiums
(in thousands of euros)
Issuance premiums
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 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)
Jan. 15, 2019 over 9 years (EUR 500 million)
Jan. 15, 2019 over 9 years (EUR 250 million)
Sept. 9, 2019 over 5 years (EUR 200 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. 9, 2022 over 5 years (EUR 500 million)
Nov. 9, 2022 over 10 years (EUR 600 million)
Nov. 24, 2020 over 6 years (EUR 650 million)
Jan. 13, 2023 over 6 years (EUR 600 million)
Jan. 13, 2023 over 11 years (EUR 600 million)
Apr. 6, 2023 over 2 years (EUR 750 million)
June 12, 2023 over 5 years (EUR 500 million)
June 12, 2023 over 10 years (EUR 500 million)
TOTAL
12/31/2022
Increases
Decreases
12/31/2023
2,012
403
(432)
1,726
2,288
3,614
70
(7,452)
(992)
3,848
1,761
177
268
3,986
(31,323)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,818
7,956
937
2,765
3,930
(910)
(403)
152
(911)
(466)
(700)
(14)
1,416
586
(513)
(304)
(177)
(58)
(294)
9,059
(580)
(574)
(345)
(198)
(326)
(20,046)
20,406
4,440
1,102
–
(280)
815
1,822
2,914
56
(6,036)
(406)
3,335
1,457
–
210
3,692
(22,264)
4,238
7,382
592
2,567
3,604
4,800
Total
6,874
212
–
(1,619)
1,744
7,211
219
–
(1,767)
(29)
2,560
8,196
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
financial year
Regulated
provisions
December 31, 2021 before allocation of
net income for the year
Change in share capital
Allocation of net income
2021 dividend
2022 net income
2,276
8
–
–
–
2,412
204
–
–
–
December 31, 2022 before allocation of
net income for the year
2,284
2,616
Change in share capital
Allocation of net income
2022 dividend
Withholdings
2023 net income
DECEMBER 31, 2023 BEFORE
ALLOCATION OF NET INCOME FOR
THE YEAR
7
–
–
–
–
212
–
–
–
–
688
–
1,498
(1,619)
–
567
–
1,744
(1,767)
(29)
–
1,498
–
(1,498)
–
1,744
1,744
–
(1,744)
–
–
2,560
2,291
2,828
516
2,560
–
–
–
–
–
–
–
–
–
–
–
–
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.
7.1 – Capital
Share capital
The company’s share capital at December 31, 2023 amounted to EUR 2,291,343,536 consisting of 572,835,884 shares with a par value of
EUR 4, all fully paid up.
Changes in share capital
The increase in share capital of EUR 6,971,852 recorded over the year corresponding to a:
(i) EUR 1,874,116 capital increase through the issue of company shares reserved for employees participating in the PEG which correspond
to 468,529 shares with a par value of EUR 4 bearing current dividend rights and which were subscribed at a price of EUR 126.20 by the
FCPE Schneider Relais France 2023). Additional paid-in capital of EUR 57,254,244 was also recorded, due to the difference between the
subscription price and the par value.
(ii) EUR 5,097,736 capital increase through the issue of shares reserved for Group employees based outside of France and for entities
under shareholding or employee savings programs (i.e. 341,250 shares held by employees directly and 933,184 shares held by the
FCPE Schneider Relais International 2023, at a subscription price of EUR 126.20 through the FCPE Schneider Relais International 2023).
Additional paid-in capital of EUR 155,735,835 was also recorded, due to the difference between the subscription price and the par
value. The total additional paid-in capital associated with the capital increase is EUR 212,990,079.
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Chapter 6 – Parent company financial statements
Own shares
At the reporting date, the total number of own shares held, and not allocated to performance share distribution plans, is 10,357,749 for a
total net value of EUR 1,375,176,658.
7.2 – Additional paid-in capital
Additional paid-in capital decreased by EUR 212 million over the financial year, coming from capital increases.
7.3 – Allocation of prior year net income
Pursuant to the 3rd resolution of the Ordinary and Extraordinary Shareholders’ Meeting of May 4, 2023, the 2022 gain of EUR 1,744 million
was allocated to retained earnings. In addition, EUR 1,767 million was distributed in the form of dividends.
Note 8 Provisions for contingencies and expenses
(in thousands of euros)
Provisions for contignencies
Provision for fees on own shares distribution
Other
TOTAL
12/31/2022
Increases
Decreases
12/31/2023
312,009
4,318
316,327
105,761
2,630
108,391
(138,116)
–
(138,116)
279,654
6,948
286,602
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 279 million was booked to cover the Group’s decision to fund bonus share plans with existing 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
Schneider Electric SE 2034
Schneider Electric SE 2025
Schneider Electric SE 2028
Schneider Electric SE 2033
Schneider Electric SE 2029
Schneider Electric SE 2024
TOTAL
TF: fixed rate.
TV: floating rate.
Convertible bonds (OCEANE)
(in thousands of euros)
Schneider Electric SE 2026
Schneider Electric SE 2030
TOTAL
Share capital
12/31/2023
12/31/2022
Interest rate
Maturity
94,325
–
750,000
–
200,000
100,000
800,000
200,000
750,000
750,000
500,000
250,000
800,000
500,000
–
500,000
600,000
600,000
750,000
500,000
500,000
600,000
29,177
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
–
–
–
–
–
–
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
3.375% TF
3.375% TF
3.25% TF
3.5% TF
3.125% TF
0% TF
07/23/2024
09/27/2022
03/11/2025
09/08/2023
10/13/2025
10/13/2025
09/09/2024
09/09/2024
12/13/2026
06/21/2027
01/15/2028
01/15/2028
03/11/2029
04/09/2027
06/12/2023
11/09/2027
11/09/2032
04/13/2034
04/06/2025
06/12/2028
06/12/2033
10/13/2029
07/25/2024
9,773,502
8,094,235
Share capital
12/31/2023
12/31/2022
650,000
650,000
1,300,000
650,000
–
650,000
Interest rate
0%
1.97% TF
Maturity
06/15/2026
11/27/2030
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.
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6.3 Notes to the financial statements
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In November 2020, Schneider Electric SE issued sustainable bonds that are convertible into or exchangeable for new or existing shares
(OCEANEs), for a nominal value of around EUR 650 million at a rate of 0.00%, maturing in June 2026. It should be noted that a long-term
performance bonus of 0.5% of the nominal unit value applies in the event that the average performance score has not been met as at
12/31/2025.
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 the
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 the nominal value.
The three key performance indicators from the 11 new Schneider Sustainability Impact (SSI) 2021-2025 indicators are the following:
• Climate: Deliver 800 million tonnes 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 premiums and issue costs are amortized per the effective interest rate method
In 2023, Schneider Electric SE also carried out a second convertible bond (OCEANE) issue for EUR 650 million at a rate of 1.97%, maturing
in November 2030. As at the end of December 2023, the debt component recognized at its net book value was EUR 650 million.
The initial conversion and/or exchange ratio of the bonds is 426.66 shares per bond with a nominal value of EUR 100,000, which
corresponds to EUR 234.38 per share.
At December 31, 2023, 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;
• 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 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 650 million worth of 0% bonds issued in November 2020 and maturing on June 15, 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 September 9, 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 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 9, 2027;
• EUR 600 million worth of 3.5% bonds issued in November 2022 and maturing on November 9, 2032.
• EUR 29 million worth of 0% bonds issued in May 2023 and maturing on July 25, 2024.
• EUR 750 million worth of 3.38% bonds issued in April 2023 and maturing on April 6, 2025;
• EUR 500 million worth of 3.25% bonds issued in June 2023 and maturing on June 12, 2028;
• EUR 600 million worth of 3.13% bonds issued in January 2023 and maturing on October 13, 2029;
• EUR 500 million worth of 3.50% bonds issued in June 2023 and maturing on June 12, 2033;
• EUR 600 million worth of 3.38% bonds issued in January 2023 and maturing on April 13, 2034.
The issue premiums and issuance costs are amortized in line with the effective interest method.
Note 10 Other borrowings
At December 31, 2023, other borrowings included drawdowns on credit lines and accrued interest on bonds. In total, EUR 1,700 million was
drawn on credit lines and the accrued interest amounted to EUR 109 million
Note 11 Debts related to investments
Debts related to investments correspond to an intercompany loan of EUR 42 million with the Luxembourgish entity, Industrielle de
Rassurance S.A
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Note 12 Borrowings and financial liabilities
(in thousands of euros)
Borrowings and financial liabilities
12/31/2022
Increase
Decrease
12/31/2023
Commercial Paper
Borrowings
Overdrafts
Other
NET
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 including convertible bonds
Other borrowings
Commercial paper
Accounts payable – trade
Accrued taxes and payroll costs
Other
Deferred revenue
1,491,000
–
–
–
1,491,000
–
–
–
–
–
(473,000)
–
–
–
1,018,000
–
–
–
(473,000)
1,018,000
Total
Due within 1 year Due in 1 to 5 years
Due beyond 5
years
2,532,111
2,532,111
570,104
323,972
279,624
3,278
11,073,502
1,808,904
1,018,000
109,162
296,565
2,088
–
570,104
323,972
279,624
3,278
1,136,325
1,808,904
1,018,000
109,162
296,565
2,088
–
–
–
–
–
–
–
–
–
–
–
1,800,000
–
–
–
–
–
–
8,137,177
–
–
–
–
–
–
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
5,377,098
2,532,111
405,060
11,268,738
5,357,631
2,532,111
405,060
11,268,738
91,009
2,532,461
It should be noted that Boissière 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 relates in its entirety to brand royalties billed to Group companies. Invoicing is carried out on the basis of a percentage of the
turnover of each company, 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)
In 2023, the company received EUR 2,002 million in dividends from Schneider Electric Industries SAS.
12/31/2023
12/31/2022
2,002,364
208,799
(578)
1,500,580
(21,673)
1,396
2,210,585
1,480,303
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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)
12/31//2023
12/31/2022
39
32,355
(70,498)
(38,104)
39,753
36,271
(59,494)
16,531
Non-recurring income/(loss) is mainly related to the income from the re-invoicing of performance shares and the non-recurring expenses
associated with these performance shares.
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 income tax due, for EUR 29 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 1,627 million at December 31, 2023.
Note 20 Pension benefit commitment
The company had made 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 have been no more active beneficiaries. The company has outsourced to AXA France
VIE its commitments to the retired beneficiaries of 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 2,105 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 the 2023 financial year, Schneider Electric SE set up EUR 800 million in interest rate swaps as a derivative instrument to partially
hedge its exposure to interest rates.
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Note 22 Contingencies
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. The hearing in front of the French Competition Authority is not yet planned, the Group is expecting it to take place in 2024 and an
enforceable decision may be issued late 2024 or 2025. Should the French Competition Authority deny Schneider Electric’s arguments and
conclude that anti-competitive practices have been involved, it has broad discretion to determine on a case-by-case basis the financial fine
it may impose in accordance with the principles of proportionality and individuality as described in its 2021 press release (https://www.
autoritedelaconcurrence.fr/sites/default/files/Communique_sanction.pdf).
This potential fine could not exist and could not exceed a maximum amount of 10% of the total 2021 Group revenue according to article L.
464-2 of the French Commercial Code.
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. Schneider Electric officially contested the indictment decision and raised
numerous arguments in law and fact. Procedure is ongoing.
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.
Considering the difficulty in assessing the extent to which the French Competition Authority considers 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 statutory provision has been made at this stage of the case.
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 statutory
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.
Note 23 Other Information
23.1 – Workforce
The average number of employees over the financial year is four.
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 10, 2024 SESE carried out a bond issue in two tranches: EUR 600 million at a rate of 3% and maturing in January 2031 and EUR
700 million at a rate of 3.25% and maturing in October 2035.
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ended December 31, 2023)
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, 2023.
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, 2023 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, 2023 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. 821-53 and R. 821-180-7 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, 2023, shares in subsidiaries and affiliates and related loans and advances recorded in the
Company’s balance sheet amounted to €5,358 million and €2,532 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 verifications and information pursuant to legal and regulatory requirements
Format of presentation of the financial statements intended to be included37 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 Chief Executive Officer, complies with the
single electronic format defined in the European Delegated Regulation No 2019/815 of 17 December 2018.
Based on the work we have performed, we conclude that the presentation of the financial statements intended to be included in the annual
financial report complies, in all material respects, with the European single electronic format.
We have no responsibility to verify that the financial statements that will ultimately be included by your company in the annual financial
report filed with the AMF are in agreement with those on which we have performed our work.
Appointment of the Statutory Auditors
We were appointed 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, 2023, Mazars was in the twentieth consecutive year of their engagement and PricewaterhouseCoopers in their second
year.
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6.4 Statutory auditors’ report on the annual financial statements
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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. 821-55-10-1 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. 821-27 to L. 821-34 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 on February 29, 2024
PricewaterhouseCoopers Audit
Neuilly-sur-Seine on February 29, 2024
Juliette Decoux Guillemot
Mathieu Mougard
Jean-Christophe Georghiou
Séverine Scheer
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Chapter 6 – Parent company financial statements
6.5 List of securities held at December 31,
2023
Number of securities
(in thousands of euros)
A. MAJOR INVESTMENTS
(Carrying amounts over EUR 5 million)
58,018,657
2,497
10,357,749
B. OTHER INVESTMENTS
(Carrying amounts under EUR 5 million)
C. INVESTMENTS IN REAL ESTATE COMPANIES
D. INVESTMENTS IN FOREIGN COMPANIES
Total
MARKETABLE SECURITIES
4,159,845
TOTAL
Company
Carrying amount
Schneider Electric Industries SAS
Muller SAS
Schneider Electric SE own shares
Schneider Electric SE own shares
5,343,544
8,038
1,375,177
6,726,759
–
–
6,049
6,732,807
279,623
7,012,430
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(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
prior to allocation of
net income*
Capital
Share interest held
company and still
guarantees given by
2023 revenues
2023 Profit or Loss
during financial year
(%)
Gross value
Net value
outstanding
the company
(ex VAT)
(-)
2023
Loans and advances
provided by the
Amount of
Dividends received
by the company
Schneider Electric Industries SAS 35, rue Joseph-Monier 92500 Rueil-Malmaison
928,299
6,298,071
100.00
5,343,544
5,343,544
2,532,111
4,486,895
2,068,597
1,999,903
B. Affiliates (10 to 50%-owned)
II. GENERAL INFORMATION ON 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 years
* the amounts in foreign currency have been converted into euros at the rate of December 31, 2023.
38
–
–
640
8,191
–
–
180,302
99.84
–
–
4.80
12,306
8,038
–
–
–
–
–
–
–
–
–
–
–
(215)
–
–
–
–
21,249
6,048
137,481
56,924
2,460
–
–
–
–
–
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Chapter 6 – Parent company financial statements
6.6 Subsidiaries and affiliates
I. DETAILED INFORMATION ON SUBSIDIARIES AND AFFILIATES WITH A CARRYING AMOUNT OF
OVER 1% OF THE SHARE CAPITAL OF SCHNEIDER ELECTRIC SE
Company
(in thousands of euros)
A. Subsidiaries (at least 50% owned)
B. Affiliates (10 to 50%-owned)
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)*
II. GENERAL INFORMATION ON OTHER SUBSIDIARIES AND AFFILIATES
* Including income or loss in prior financial years
* the amounts in foreign currency have been converted into euros at the rate of December 31, 2023.
Reserves and
retained earnings
prior to allocation of
Capital
net income*
Share interest held
(%)
Gross value
Net value
Loans and advances
provided by the
company and still
outstanding
Amount of
guarantees given by
the company
2023 revenues
(ex VAT)
2023 Profit or Loss
(-)
Dividends received
by the company
during financial year
2023
Schneider Electric Industries SAS 35, rue Joseph-Monier 92500 Rueil-Malmaison
928,299
6,298,071
100.00
5,343,544
5,343,544
2,532,111
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–
640
8,191
–
–
180,302
99.84
–
–
4.80
12,306
–
–
21,249
8,038
–
–
6,048
–
–
–
–
–
–
–
–
–
4,486,895
2,068,597
1,999,903
–
–
(215)
–
–
137,481
–
56,924
–
–
2,460
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Description
2023
2022
2021
2020
2019
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
2,291,344
572,835,884
3,701,523
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
–
–
–
–
–
–
–
–
–
–
–
1
2,002,364
79
1,500,580
–
1,500,362
450
1,553
2,385
49,896
provisions
Income tax
Earnings after tax, depreciation, amortization and provisions
Dividends paid1 excluding tax credit and withholdings
2,555,672
42,907
2,560,475
2,002,3632
1,690,046
18,623
1,744,408
1,650,197
1,392,930
52,342
1,498,235
1,650,197
(201,902)
32,287
(31,273)
1,474,378
(18,659)
71,684
57,108
1,413,455
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
4.42
4.48
3.502
4
13,505
(Social security, other benefits, etc.)(in thousands of euros)
1,102
(1) For 2023, estimate based on existing shares at December 31, 2023, including treasury shares.
(2) Pending approval by the Annual Shareholders’ Meeting of 2024.
2.99
3.05
3.15
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
0.10
2.55
1
3,693
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Chapter 6 – Parent company financial statements
6.8 Extract of the management report for
the year ended December 31, 2023
In 2023, Schneider Electric SE’s operating profit stood at EUR 345 million, compared with EUR 229 million the previous year. Interest
expense net of interest income amounted to -EUR 208 million compared with EUR 22 million the previous year.
Income from ordinary activities before tax stood at EUR 2,555 million in 2023 compared with EUR 1,709 million in 2022. This difference was
mainly due to Schneider Electric brand royalties, which were up by more than EUR 74 million, financial income, which was up by EUR 948
million, and financial expenses, which were up by EUR 218 million.
Net income for 2023 stood at EUR 2,560 million, compared with EUR 1,744 million for 2022. Equity amounted to EUR 8,196 million at
December 31, 2023, compared with EUR 7,213 million at the previous year-end, taking into account 2023 profit, and the impact of dividend
payments amounting to EUR 1,767 million.
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Chapter 7 – Information on the Company and its capital
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Information
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7.1 Shareholding
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7.1.1 Ownership structure
7.1.2 Employee shareholding
7.2 Capital
7.2.1 Share capital and voting rights
7.2.2 Potential capital
7.2.3 Authorizations to issue and cancel shares
7.2.4 Three-year summary of changes in capital
7.2.5 Share buybacks
7.2.6 Pledge
7.3 General information
on the Company
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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)
7.4.5 Disclosure thresholds (Article 7 Paragraph 2
of the Articles of Association)
7.4.6 Identifiable holders of bearer shares (Article 7
Paragraph 3 of the Articles of Association)
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
7.5 Stock market data
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
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Chapter 7 – Information on the Company and its capital
Chapter 7 – Information on the Company and its capital
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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, 2023(1)
12.3%
0.4%
2.5%
3.7%
4.6%
29.6%
46.9%
Western Europe
North America
Asia Pacific
Rest of World
Employee holdings
Treasury shares
Other (mainly individual
shareholders)
(1) Charts list ownership stakes to the best of the Company’s knowledge.
Three-year summary of changes in capital(1)
7.8%
5.7%
3.7%
2.5%
80.3%
BlackRock, Inc.
Sun Life Financial, Inc.
Employees
Treasury shares
Public
At December 31, 2023, the share capital of Schneider Electric was EUR 2,291,343,536, divided into 572,835,884 common shares, to which
600,194,772 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.
Dec. 31, 2023
Number of
Voting rights
Dec. 31, 2022
Dec. 31, 2021
Number of
voting rights
Capital
%
Voting rights
%(4)
Capital
%
Voting rights
%(4)
BlackRock, Inc.
Sun Life Financial, Inc.(2)
Employees(3)
Treasury shares
Public
Capital
%
7.8
5.7
3.7
2.5
80.3
shares
44,511,592
32,854,522
20,989,322
14,518,652
459,961,796
%(4)
7.6
5.6
6.4
44,511,592
32,854,522
37,756,304
80.4
470,553,702
7.3
6.8
3.8
2.1
80.0
7.0
6.6
6.6
–
79.8
6.3
7.0
3.6
2.2
80.9
6.1
6.8
6.2
–
80.9
TOTAL
100.0
572,835,884
100.0
585,676,120(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:
– 8,051,500 shares held by the FCPE Actionnariat (France), corresponding to 1.4% of capital and 2.7% of voting rights,
– 5,543,100 shares held by the FCPE Actionnariat Mondial (International), corresponding to 1.0% of capital and 1.8% of voting rights, and
– 7,394,722 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 2023 that crosses the 5%
threshold for either capital or voting rights.
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Chapter 7 – Information on the Company and its capital
Control of the Company
At December 31, 2023, 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)
2023
53.0
2022
61.7
2021
65.8
2020
57.0
2019
59.3
In 2023, 64% of the total from incentives and profit-sharing was invested in the Schneider Electric shareholder fund and 13% was received
by employees in cash.
7.1.2.2 The Schneider Electric employee shareholding
The Worldwide Employee Share Ownership Plan (WESOP) is one of the Group’s recurring key annual reward programs, offering employees
across the world an opportunity to become owners of the Company, at preferred conditions.
Through the WESOP, Schneider Electric shares Company value creation with employees, thus aligning both Company and employees’
interests. In countries where regulations permit, Schneider Electric offers its employees the opportunity to invest during share capital
increases reserved for its employees.
On December 31, 2023, Group employees held a total of 21.0 million Schneider Electric SE shares either directly, through the corporate
mutual funds (FCPE), or through Performance Share plans, representing 3.7% of the share capital and 6.4% of the voting rights, considering
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: 21% in France, 13% in China, 15% in India, 10% in the
United States, and 41% elsewhere. Approximately 54% of all employees are shareholders of the Group.
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7.2.1 Share capital and voting rights
At December 31, 2023, the share capital amounted to EUR 2,291,343,536 divided into 572 835 884 shares with a par value of EUR 4 fully
paid up. 600,194,772 voting rights were attached to the 572,835,884 issued shares as at December 31, 2023.
7.2.2 Potential capital
At December 31, 2023, the potential capital consisted of:
• 129,050 Performance Shares, part of which remains subject to the achievement of performance conditions (plans 40, 41ter, 42bis, 42ter,
42quater, and 43, 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 129,050 shares. Schneider Electric SE capital would be composed
of 572,964,934 ordinary shares, i.e. a 0.02% increase of the number of shares as of December 31, 2023; and
• 3,690,472 OCEANEs (out of which 3,683,972 OCEANEs issued in November 2020 and 6,500 OCEANEs issued on November 2023). If
all OCEANEs were exercised, this would lead to the issuance of 6,483,049 shares (out of which 3,709,759 shares(1) under the OCEANEs
issued in 2020 and 2,773,290 shares(2) under the OCEANEs issued in 2023). Schneider Electric SE capital would be composed of
579,447,983 ordinary shares, i.e. a 1.13% increase of the number of shares as of December 31, 2023.
(1) The initial conversion and/or exchange ratio was set at one share per OCEANE subject to standard adjustments including dividend protection at EUR 2.55 per share.
As the result of the dividend distribution of EUR 3.15 per share on May 11, 2023, the conversion and/or exchange ratio has been adjusted and increased from 1.003 to
1.007 share per OCEANE.
(2) The initial conversion and/or exchange ratio was set at 426.6601 shares per OCEANE subject to standard adjustments including dividend protection.
7.2.3 Authorizations to issue and cancel shares
7.2.3.1 Table summarizing the outstanding delegations relating to share capital increases
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 other securities giving
access to share capital of the Company
(19th resolution of the AGM of May 4, 2023)
Capitalizing additional paid-in capital,
reserves, earnings, or other
(24th resolution of the AGM of May 4, 2023)
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
(20th resolution of the AGM of May 4, 2023)
Issuance of shares and other securities through
an offer referred to in Article L. 411-2 1° of
the French Monetary and Financial Code
(21st resolution of the AGM of May 4, 2023)
Issuance of shares and other securities as
consideration for unlisted securities
(23rd resolution of the AGM of May 4, 2023)
Overall limits on issuance made
under the above resolutions
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
May 4, 2023/
Jul. 3, 2025
May 4, 2023/
Jul. 3, 2025
Use of
the resolution
(number of
shares whose
issuance has
been authorized)
Amount available
(in number of
shares)
None
197,226,710(8)
None
200,000,000
224 million(1)(2)
56,000,000
120 million(1)
30,000,000
224 million(1)(2)
56,000,000
800 million(1)
200,000,000
May 4, 2023/
Jul. 3, 2025
May 4, 2023/
Jul. 3, 2025
May 4, 2023/
Jul. 3, 2025
May 4, 2023/
Jul. 3, 2025
None
53,226,710(3)(8)
2,773,290(8)
27 226 710
None
56,000,000
2,773,290 197,226,710(3)(8)
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Employee share issues
Company Savings Plan
(25th resolution of the AGM of May 4, 2023)
Share issues to promote share ownership among
employees in foreign companies of the Group
(26th resolution of the AGM of May 4, 2023)
Free shares or Performance Shares
(15th resolution of the AGM of May 5, 2022)
Chapter 7 – Information on the Company and its capital
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
46 million(6)
11,500,000
24 million(4)(6)
6,000,000
45.5 million(7)
11,375,000
May 4, 2023/
Jul. 3, 2025
May 4, 2023/
Nov. 3, 2024
May 5, 2022/
May 4, 2025
7,800,000(3)
2,300,000(3)
1,602,681
9,772,319(5)
Maximum amount of the
authorized cancellation
(in euros)
Number of shares
Authorization
date -
authorization
expiration date
Amount
available (in
number of shares)
Reduction in capital through cancellation of shares
Cancellation of own shares
(27th resolution of the AGM of May 4, 2023)
224 million per
24-month period
56,000,000 May 4, 2023/
May 3, 2025
56,000,000
(1) The overall ceiling for issues is capped at EUR 800 million in aggregate.
(2) All issuances made without preference right (20th, 21st, and 23rd resolutions) are globally limited to EUR 224 million.
(3) Using the authorization of the 16th resolution of the Annual General Meeting (AGM) held on May 5, 2022, and the delegation of the Board of Directors granted on
December 14, 2022, 468,529 shares were issued in 2023 for French employees participating in a company savings plan. At its meeting of December 13, 2023, 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. At the Board of Directors’ meeting of March 28, 2023, 1,414,309 shares were
granted under the 2023 Long-term incentive plan. At the Board of Directors’ meeting of May 4, 2023, 17,559 shares were granted under the 2023 Long-term incentive
plan. At the Board of Directors’ meeting of July 27, 2023, 47,528 shares were granted under the 2023 Long-term incentive plan. At the Board of Directors’ meeting of
October 25, 2023, 30,605 shares were granted under the 2023 Long-term incentive plan.
(6) On the date of the 2023 Annual Shareholders’ Meeting, the share capital was EUR 2,284 million.
(7) On the date of the 2022 Annual Shareholders’ Meeting, the share capital was EUR 2,276 million.
(8) At its meeting of August 28, 29, and 30, 2023, the Board of Directors decided to use the powers granted to it by the General Meeting of May 4, 2023, in its 21st
resolution and grant full powers to the Chief Executive Officer to carry out the issuance of the OCEANEs within certain limits. On November 20, 2023, the CEO
decided the issuance by the Company, of 6,500 OCEANEs, in the context of an offering referred to in Article L. 411-2, 1° of the French Monetary and Financial Code to
qualified investors in France and outside France without the shareholders’ preferential subscription right, each OCEANE giving right to conversion or exchange into
new and/or existing shares of the Company (excluding any adjustments to preserve the rights of holders of OCEANEs).
7.2.3.2 Use of authorizations granted by the Annual Shareholders’ Meeting: issuance of
OCEANEs
7.2.3.2.1 Additional report by the Board of Directors of December 13, 2023 – Issue of bonds convertible
and/or exchangeable for new and/or existing shares (OCEANEs)
Madam, Sir,
We present to you the additional report referred to in Articles L. 225-129-5 and R. 225-116 of the French Commercial Code on the use by the
Board of Directors of the authorization granted to it under the twenty-first resolution of the combined general meeting of shareholders of May
4, 2023.
Legal framework of the issuance of the OCEANEs
The Shareholders’ Meeting of Schneider Electric SE (the “Company”) held on May 4, 2023 (the “Shareholders’ Meeting”) has, pursuant to
its twenty-first resolution and acting in accordance with the quorum and majority requirements for extraordinary shareholders’ meetings, in
accordance with the provisions of the French Commercial Code, in particular in Articles L. 225-129 to L. 225-129-6, L. 225-135, L. 225-136,
L. 228-91 to L. 228-93, L. 22-10-49, L. 22-10-52, and of Article L. 411-2 1° of the French Monetary and Financial Code, delegated to the
Board of Directors, with the power to subdelegate, in compliance with applicable laws and regulations, the authority to decide through an
offer referred to in Article L. 411-2 1° of the French Monetary and Financial Code, on one or more occasions, in the proportion and at the
times it deems appropriate, in France and/or abroad, in euros or in any other currency or unit of account set by reference to several
currencies, the capital increase without the shareholders’ preferential subscription right, through the issue of ordinary shares and/or
securities, governed by Articles L. 228-91 et seq. of the French Commercial Code granting access by any means, immediately and/or in the
future, to ordinary shares of the Company or of a company in which it directly or indirectly owns more than half of the share capital (the
“equity-linked securities”), it being specified that (a) the subscription of shares and other securities may be performed either in cash or by
offsetting debts, and (b) the shares to be issued will grant the same rights as the existing shares; it being specified that the issuance of any
shares or securities giving access to preferred shares is excluded. The Shareholders’ Meeting set the validity period of this delegation at 26
months granted within a maximum nominal amount of capital increase of EUR 120 million being deducted from the capital increase ceiling
of EUR 224 million provided for in the twentieth resolution and from the capital increase ceiling of EUR 800 million provided for in the
nineteenth resolution of said Shareholders’ Meeting.
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At its meeting of August 28, 29, and 30, 2023, the Board of Directors decided to use the powers granted to it by the Shareholders’ Meeting
in its twenty-first resolution, and to approve the principle of an issuance, by the Company, on one or more transactions, of securities giving
access to the share capital, represented by OCEANEs, in the context of a public offering referred to in Article L. 411-2, 1° of the French
Monetary and Financial Code, to qualified investors in France and outside France (as the case may be, except in the United States, Canada,
Japan, and/or Australia), without the shareholders’ preferential subscription right within the limits of a total nominal amount of EUR 750
million and a maximum total nominal amount of the corresponding capital increase(s) resulting from the potential conversion of the
OCEANEs into new ordinary shares of EUR 30 million (excluding any adjustments to preserve the rights of holders of OCEANEs). The Board
of Directors subdelegated until August 30, 2024, to the Chief Executive Officer, all powers to carry out the issuance of OCEANEs and to set
its conditions. The Chief Executive Officer using this subdelegation decided on November 20, 2023, to issue 6,500 OCEANEs with a
nominal value of EUR 100,000 and a per-unit issue price of EUR 100,000.
Main features of the issuance of the OCEANEs
In pursuance of the above-mentioned Board’s decision, OCEANEs have been issued under the main terms and conditions as follows:
• Date of announcement and launching of the issuance: November 20, 2023
• Settlement-delivery of the OCEANEs: November 27, 2023
• Terms of issue of the OCEANEs: by way of a placement to qualified investors only (within the meaning of Regulation (EU) 2017/1129 (as
amended, the “Prospectus Regulation”)), in accordance with Article L. 411-2-1° of the French Monetary and Financial Code, in France
and outside of France (excluding, in particular, the United States, Australia, Japan, Canada, and South Africa)
Issue price of the OCEANEs: EUR 100,000
• Number and nominal value of the OCEANEs to be issued: 6,500 OCEANEs with a nominal value of EUR 100,000
• Corresponding nominal amount of the issuance: EUR 650,000,000
•
• Redemption price of the OCEANEs: EUR 100,000
• Reference share price: EUR 164.4762 per share
•
•
Interest rate: 1.97% per annum, payable semi-annually in arrears on May 27 and November 27 of each year (or on the following
business day if this date is not a business day), and for the first time on May 27, 2024
Initial conversion/exchange premium: 42.5% above the Company’s reference share price on the regulated market of Euronext in Paris.
The conversion premium of 42.5% was set in view of the Schneider Electric SE share price at EUR 166.2 on November 17, 2023,
increasing 27% since January 1, 2023, and the duration of the transaction. Over 7 years, this premium corresponds to a compound
annual growth rate composed of the share price of 5.2% to reach the conversion price. This premium was set in consideration of the
coupon and the market practices observed for the recent issuance of convertible bond. In accordance with the provisions of Article R.
22-10-32 of the French Commercial Code, the price of the share to be issued is at least equal to the weighted average of the prices of the
last three trading sessions preceding the start of the offer, possibly reduced by a maximum discount of 10%
Initial conversion/exchange price: EUR 234.3786
•
• Maturity of the OCEANEs: November 27, 2030
• Conditions for redemption: redemption at nominal value
• Conditions for early redemption: at par plus any accrued interest at the Company’s option at any time from December 18, 2028
(inclusive), subject to a prior notice of at least 30 (but not more than 60) calendar days, if the arithmetic average, calculated over a period
of 10 consecutive trading days chosen by the Company from among the 20 consecutive trading days preceding the day of the
publication of the early redemption notice, of the daily products on each of such 10 consecutive trading days of the volume weighted
average price of the Company’s shares on Euronext Paris and the applicable conversion/exchange ratio on each such trading day,
exceeds 150% of the nominal value of each bond
• Dates, deadlines, and conditions of conversion/exchange: right to convert or exchange the bonds into new and/or existing shares of
the Company, exercisable at any time from January 7, 2024, up to the 7th business day (inclusive) preceding November 27, 2030, or, as
the case may be, the relevant early redemption date; and
Initial conversion/exchange ratio: 426.6601 shares per bond (adjustments: French standard protection against dilution and dividend
protection).
•
Impact on the holder of securities of the Company
Impact of the issuance on the share in equity of the Company
For information purpose, on the assumption that the Company decides to issue new shares only in case of exercise of the right to convert or
exchange the bonds into shares of the Company, the impact of the issuance of these new shares on the share in equity of the Company (on
the basis of the Company’s equity resulting from an interim financial situation and the number of shares making up the share capital as of
June 30, 2023) would be as follows:
Before issuance of OCEANEs
After issuance of OCEANEs and exercise of the right to attribution of shares
Non-diluted basis
13.21
14.28
Equity (in euros)
Diluted basis(*)
14.22
15.27
(*) In the event that all performance shares not yet qualified are delivered from shares to be issued (i.e., as of June 30, 2023: 1,472,669 new shares to be issued).
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Chapter 7 – Information on the Company and its capital
Impact of the issuance on the shareholder’s situation
For information purpose, on the assumption that the Company decides to issue new shares only in case of exercise of the right to convert or
exchange the bonds into shares of the Company, the impact of the issuance of these new shares on the shareholder’s ownership, holding
1% of the Company’s share capital prior to the issuance and who does not subscribe to it (on the basis of the number of shares making up
the share capital as of June 30, 2023), would be as follows:
Before issuance of OCEANEs
After issuance of OCEANEs and exercise of the right to attribution of shares
Shareholder’s ownership (in %)
Non-diluted basis
1%
0.995%
Diluted basis(*)
0.991%
0.986%
(*) In the event that all performance shares not yet qualified are delivered from shares to be issued (i.e., as of June 30, 2023: 1,472,669 new shares to be issued).
Theoretical impact of the issuance on the current market value of the Schneider Electric SE share
The theoretical impact of the issuance on the current market value of the Schneider Electric share is 0.48%.
This theoretical impact was calculated based on the number of shares making up the share capital as of June 30, 2023, and the average of
the twenty trading sessions preceding the issue as follows:
Average value of the twenty trading sessions preceding the issue (A)
Number of shares making up the share capital as of June 30, 2023 (B)
€151.1595
571,092,921
Theoretical market capitalization before the issuance of OCEANEs calculated on the basis of the average
value of the twenty trading sessions preceding the issue (C=A*B)
€86,326,120,391.90
Potential number of shares to be issued in case of exercise of the right to convert or exchange the bonds
into shares of the Company on the basis of a conversion/exchange ratio of 426.6601 shares per bond (D)
Number of shares making up the share capital after conversion or exchange of all the OCEANEs into
Company shares (E=B+D)
Theoretical share price after conversion or exchange of all the OCEANEs into Company shares (F=C/E)
Theoretical impact of the issuance on the current market value of the Company share (A-F)/A
2,773,291
573,866,212
€150.43
0.48%
7.2.3.2.2 Statutory Auditors’ additional report on the issue of bonds convertible into and/or exchangeable
for new and/or existing shares (OCEANEs) with cancellation of pre-emptive subscription rights
To the Annual General Meeting of Schneider Electric SE,
In our capacity as Statutory Auditors of your Company (the “Company”) and in accordance with the requirements of article R. 225-116 of the
French Commercial Code (Code de commerce), and further to our report of March 20, 2023, we hereby report to you on the issue, with the
cancellation of pre-emptive subscription rights, through an offer referred to in Paragraph II of Article L. 411-2-1° of the French Monetary and
Financial Code, 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 entitlement to the
allotment 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, and which 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 equity 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) 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 companies in
which the Company directly or indirectly holds, at the time of issue, more than half of the share capital, such securities also being able,
where applicable, to give access to existing equity securities and/or debt securities of said companies, as authorized by the Extraordinary
Shareholders’ Meeting of May 4, 2023.
This Extraordinary Shareholders’ Meeting delegated to the Board of Directors, with the option of sub-delegation under the conditions laid
down by law, the authority to decide on such issuance within a period of 26 months and up to a maximum nominal amount of capital
increase of €120 million being deducted from the capital increase ceiling of €224 million provided for in the 20th resolution and to the capital
increase ceiling of €800 million provided for in the nineteenth resolution of the said Extraordinary Shareholders’ Meeting.
Using this authorization, the Board of Directors decided at its meeting of August 28, 29 and 30, 2023, to approve the principle of an
issuance of securities giving access to the Company’s capital, represented by bonds convertible into or exchangeable for new or existing
shares in the Company (“OCEANEs”), in the context of a public offering referred to in Article L.411-2, 1° of the French Monetary and
Financial Code to qualified investors in France and outside France (as the case may be, except in the United States of America, Canada,
Japan and/or Australia), without shareholders’ preferential subscription rights. The Board of Directors has decided that (i) the total nominal
amount of such issuance of OCEANEs may not exceed €750 million and (ii) the maximum total nominal amount of the corresponding capital
increase(s) resulting from the potential conversion of the OCEANEs into new ordinary shares may not exceed €30 million euros (excluding
any adjustments to preserve the rights of OCEANE holders).
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7.2 Capital
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The Board of Directors sub-delegated to the Chief Executive Officer, for a period of 12 months from the date of the meeting, all powers to
decide the issuance of OCEANEs and to set its conditions.
Using this sub-delegation, the Chief Executive Officer decided on November 20, 2023 to issue 6,500 OCEANEs bonds with a nominal value
of 100,000 euros at a unit price of €100,000.
At its meeting on December 13, 2023, the Board of Directors placed on record the completion of this issuance.
It is the responsibility of the Board of Directors to prepare an additional report in accordance with Articles R. 225-115 et seq. of the French
Commercial Code. Our role is to report on the fairness of the interim financial information, on the cancellation of pre-emptive subscription
rights and on certain other disclosures relating to the issue, contained in this report.
We performed the procedures that we deemed necessary in accordance with the professional guidance issued by the French national auditing
body (Compagnie Nationale des Commissaires aux Comptes) for this type of engagement. These procedures mainly consisted in verifying:
•
•
•
the fairness of the financial information taken from the interim financial statements as at June 30, 2023, prepared under the responsibility
of the Board of Directors using the same methods and presentation as the latest annual financial statements. Our procedures in respect
of this interim financial position consisted in interviewing the members of management responsible for accounting and financial matters,
verifying that it has been prepared in accordance with the same accounting principles and the same valuation and presentation
methods as those used to prepare the latest annual financial statements, and performing analytical procedures;
the compliance of the terms and conditions of the issue with the delegation of authority granted by the Extraordinary Shareholders’ Meeting;
the information provided in the Board of Directors’ additional report on the choice of constituent elements used to determine the issue
price and on its final amount.
We have no matters to report as to:
•
•
•
•
•
the fairness of the financial information taken from the interim financial statements and included in the Board of Directors’ additional report;
the compliance of the terms and conditions of the issue with the delegation of authority granted by the Extraordinary Shareholders’
Meeting of May 4, 2023 and the information provided to shareholders;
the choice of constituent elements used to determine the issue price of equity securities and its final amount;
the presentation of the impact of the issue on the situation of the holders of shares and securities carrying rights to share, as expressed
in relation to shareholders’ equity and on the company’s share price;
the proposed cancellation of pre-emptive subscription rights, upon which you have voted.
Courbevoie and Neuilly-sur-Seine, December 22, 2023
The Statutory Auditors
Mazars
PricewaterhouseCoopers Audit
Juliette Decoux Guillemot
Mathieu Mougard
Jean-Christophe Georghiou
Séverine Scheer
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, 2020, through
capital increases/decreases:
Capital as of Dec. 31, 2020(1)
Employee share issue
Performance Shares issued
Capital as of Dec. 31, 2021(2)
IGE+XAO merger share issue
Employee share issue
Performance Shares issued
Capital as of Dec. 31, 2022(3)
Employee share issue
Performance Shares issued
Number of shares issued
or canceled
Cumulative number
Total amount
of shares
of the capital (in euros)
567,068,555
2,268,274,220
1,964,887
–
284,308
1,775,171
–
1,742,963
–
569,033,442
2,276,133,768
571,092,921
2,284,371,684
CAPITAL AS OF DEC. 31, 2023(4)
572,835,884
2,291,343,536
(1) Decrease in share capital (EUR 60 million) and in additional paid-in capital (EUR 929.4 million).
(2) Increase in share capital (EUR 7.86 million) and in additional paid-in capital (EUR 208.6 million).
(3) Increase in share capital (EUR 8.2 million) and in additional paid-in capital (EUR 204.5 million).
(4) Increase in share capital (EUR 7 million) and in additional paid-in capital (EUR 212.0 million).
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Chapter 7 – Information on the Company and its capital
7.2.5 Share buybacks
7.2.5.1 Current share buyback program
We remind you that on February 14, 2019, Schneider Electric initiated a new EUR 1.5 billion to EUR 2.0 billion share buyback program. The
program has been launched under the 15th resolution approved at the 2018 Annual Shareholders’ Meeting and pursued under the 14th, 17th,
15th, 14th, and 18th resolutions approved respectively at the 2019, 2020, 2021, 2022, and 2023 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 EUR 250 per share (from the previous EUR 150 per share) was approved at
the Annual Shareholders’ Meeting. Schneider Electric did not further progress the buyback in the second half-year of 2022, primarily due to
restrictions on account of the proposed transaction with the AVEVA minority shareholders that was in progress during the period. Schneider
Electric resumed its share buyback program in June 2023.
Since the beginning of the program in 2019, a total EUR 1,500,153,358 of share buyback corresponding to 12,094,889 shares bought back
by the Company had been completed including EUR 703,183,915 of share buyback in 2023 corresponding to 4,493,173 shares bought back
by the Company pursuant to the last authorizations achieving the targeted range for its share buyback program.
7.2.5.2 Share buyback program to be submitted to the Annual Shareholders’ Meeting
of May 23, 2024
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: 14,517,594 shares, i.e. 2.53% of share capital
• Treasury shares: 1,058 shares
• Total: 14,518,652 shares, i.e. 2.53% of share capital
Overview of purposes for which shares have been held*
• For all own shares* held: coverage of long-term inventive plans for
employees or corporate officers
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*: 57,283,588 Schneider
Electric SE shares with a nominal value of EUR 4,
− Taking into account treasury stock and own shares*:
42,764,936 shares or 7.46%
Maximum purchase price and maximum aggregate amount
of share purchases
• The maximum purchase price is set at EUR 250 per share,
i.e. EUR 14,320,897,000
Duration of the buyback program
• 18 months maximum, expiring on November 22, 2025
Transactions carried out pursuant to the program authorized by
the Annual Shareholders’ Meeting 2023 between May 5,
2023, and February 14, 2024
• Number of shares acquired: 4,493,173.
• Average purchase price: EUR 156.50.
• Number of shares transferred: 1,952,776.
• Average transfer price: EUR 51.79.
* As of January 31, 2024.
7.2.6 Pledge
Pledges on Schneider Electric SE shares
382,838 shares are pledged.
Pledges on subsidiaries’ shares
Schneider Electric SE has not pledged any shares in significant subsidiaries.
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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, 2023, the Company’s share capital was EUR 2,291,343,536. 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.
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.
Schneider Electric Universal Registration Document 2023 | www.se.com
Chapter 7 – Information on the Company and its capital
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.
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.
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7.4 Shareholders’ rights and obligations
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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, of 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.
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, 2023 back-up facilities with this type of condition amounted
EUR 2.9 billion, fully undrawn. It also applied to the Term Loan set up for the funding of the minority interest of Aveva which amounts
EUR 1,7 billion as of December 31, 2023, fully drawn. 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, 2023, EUR 10.9 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
2022
2023
2024
Number of
securities traded
(in thousands
of shares)
Value
(in millions of
euros)
17,344
20,499
18,090
19,727
17,519
18,231
18,436
21,501
14,085
16,043
18,166
15,505
16,190
16,777
17,759
19,693
14,416
206,801
13,946
2,257
2,462
2,256
2,718
2,376
2,634
2,812
3,219
2,123
2,565
2,961
2,496
2,569
2,619
2,625
3,172
2,545
32,340
2,482
Month
August
September
October
November
December
January
February
March
April
May
June
July
August
September
October
November
December
Total 2023
January
High(1)
137.80
131.38
133.66
143.94
143.22
149.36
159.62
157.64
158.92
166.96
167.98
166.90
163.00
159.38
158.70
169.16
182.94
182.94
185.80
Low(1)
trading sessions
Number of
118.56
111.14
112.46
124.80
129.56
131.72
148.22
139.92
141.38
153.26
156.52
155.58
152.74
151.40
134.38
144.00
168.06
131.72
171.10
23
22
21
22
21
22
20
23
18
22
22
21
23
21
22
22
19
255
22
(1) Data corresponds to trading volumes on NYSE Euronext.
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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 (%)
2023
2022
2021
2020
2019
810.99
126.82
1,001.51
135.05
890.06
123.40
1,426.11
134.90
1,347.22
100.98
182.94
131.72
181.78
1.93
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
The Schneider Electric SE share results vs. the CAC 40 index (rebased) over five years
Schneider Electric SE
CAC 40
180
160
140
120
100
80
60
40
Jan 2019
MONEP
Jan 2020
Jan 2021
Jan 2022
Jan 2023
Dec 2023
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 535 and 536).
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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 Chief Executive Officer.
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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Chapter 8 – Annual Shareholders’ Meeting
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8.1 Explanatory comments & draft
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8.1.1
Ordinary Shareholders’ Meeting
8.1.2 Extraordinary Shareholders’ Meeting
8.2 Statutory auditors’
special reports
8.2.1 Statutory auditors’ report on the issuance of shares
or securities giving access to capital reserved for
members of a company savings plan
8.2.2 Statutory auditors’ report on the issuance of shares
or securities reserved for a category of beneficiaries
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Chapter 8 – Annual Shareholders’ Meeting
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N 8.1 Explanatory comments
I
& 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 23, 2024, 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 14, 2024. 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
Item on the agenda: Company Climate strategy (without a resolution subject to shareholder approval)
ORDINARY SHAREHOLDERS’ MEETING:
Resolution 1
Resolution 10
Approval of statutory financial statements for the 2023 fiscal year
Resolution 2
Approval of consolidated financial statements for the 2023 fiscal year
Approval of the components of the total compensation and benefits
of all types paid during the 2023 fiscal year or awarded in respect
of the said fiscal year to Mr. Jean-Pascal Tricoire in his capacity as
Chairman of the Board of Directors (from May 4, 2023 to December
31, 2023)
Resolution 3
Resolution 11
Appropriation of profit for the fiscal year and setting the dividend
Approval of the compensation policy for the Chief Executive Officer
Resolution 4
Resolution 12
Approval of regulated agreements governed by Article L. 225-38 et
seq. of the French Commercial Code
Approval of the compensation policy for the Chairman of the Board
of Directors
Resolution 5
Appointment of Mazars as the statutory auditor responsible for
certifying sustainability information
Resolution 6
Appointment of PricewaterhouseCoopers Audit as the statutory
auditor responsible for certifying sustainability information
Resolution 13
Approval of the Directors’ compensation policy
Resolution 14
Renewal of the term of office of Mr. Fred Kindle
Resolution 15
Resolution 7
Renewal of the term of office of Mrs. Cécile Cabanis
Approval of the information on the Directors’ and the Corporate
Officers’ compensation paid or granted for the fiscal year ending
December 31, 2023 mentioned in Article L. 22-10-9 of the French
Commercial Code
Resolution 8
Resolution 16
Renewal of the term of office of Mrs. Jill Lee
Resolution 17
Appointment of Mr. Philippe Knoche as a Director
Approval of the components of the total compensation and benefits
of all types paid during the 2023 fiscal year or awarded in respect
of the said fiscal year to Mr. Jean-Pascal Tricoire in his capacity as
Chairman and Chief Executive Officer (from January 1, 2023 to
May 3, 2023)
Resolution 18
Authorization granted to the Board of Directors to buy back
Company shares
Resolution 9
Approval of the components of the total compensation and benefits
of all types paid during the 2023 fiscal year or awarded in respect
of the said fiscal year to Mr. Peter Herweck in his capacity as Chief
Executive Officer (from May 4, 2023 to December 31, 2023)
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Chapter 8 – Annual Shareholders’ Meeting
EXTRAORDINARY SHAREHOLDERS’ MEETING:
Resolution 19
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 20
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 21
Powers for formalities
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 2023 which show a profit of EUR 2,560,474,201.08; and
the consolidated financial statements for the year 2023 which show a net income (Group share) of EUR 4,003 million.
The activity and the results for the 2023 fiscal year are presented in the 2023 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 EUR 3.50 per share, representing a distribution rate of 48.1% of the Group’s
Adjusted net income and an estimated total distribution of EUR 1,954,114,015.00(1) (based on the number of shares ranking for dividends
at December 31, 2023). 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 EUR 2,834,374,351.98. The proposed dividend is an integral part of Schneider
Electric’s policy to reward shareholders over the long term. It represents an increase of 11% compared to last year.
The distribution will be paid according to the following schedule:
May 28, 2024
• Dividend ex-date:
• Record date:
May 29, 2024
• Dividend payment date: May 30, 2024
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 2025, 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 2023 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 2023 fiscal year as presented, as well
as the transactions reflected in these statements or summarized in these reports showing a net profit of EUR 2,560,474,201.08.
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 EUR 7,042 as well as the
theoretical tax borne as a result of these charges amounting to EUR 1,819.
(1) This amount is calculated based on the number of shares ranking for dividends at December 31, 2023 and could therefore change if this number varies between
January 1, 2024 and the ex-dividend date.
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Chapter 8 – Annual Shareholders’ Meeting
8.1 Explanatory comments & draft resolutions submitted
to the Annual Shareholders’ Meeting
Text of the second resolution
(Approval of consolidated financial statements for the 2023 fiscal year)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having heard the Board of
Directors’ report and the statutory auditors’ report, approves the consolidated financial statements for the 2023 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, 2023 closed with a net profit of EUR 2,560,474,201.08 and, considering the retained earnings
amounted to EUR 273,900,150.90, that the distributable earnings amounted to EUR 2,834,374,351.98, upon proposal of the Board of
Directors, decides:
•
•
the distribution to the shareholders of a dividend of EUR 3.50 per share, i.e., EUR 1,954,114,015.00(1) on the basis of the number of shares
ranking for dividends at December 31, 2023 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 28, 2024 and the dividend will be payable from May 30, 2024. 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, 2023, the fraction of the dividend
relating to this variation will either increase or reduce retained earnings.
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 2025, 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
2020
2.60
2021
2.90
2022
3.15
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, 2023.
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, 2023.
(1) This amount is calculated based on the number of shares ranking for dividends at December 31, 2023 and could therefore change if this number varies between
January 1, 2024 and the ex-dividend date.
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Chapter 8 – Annual Shareholders’ Meeting
5th and 6th resolutions: Appointment of Mazars and PricewaterhouseCoopers Audit as
the statutory auditors responsible for certifying sustainability information
Explanatory statement
Pursuant to Article L. 232-6-3 of the French Commercial Code (Code de commerce) transposing the Corporate Sustainability Reporting
Directive (known as the “CSRD” directive), the Company will be subject from 2024 to an obligation to publish, in the 2025 annual report,
information on sustainability (in place of the declaration of non-financial performance known as the “DPEF”).
The sustainability information to be published must be certified either by one or both of the statutory auditors or an independent
assurance provider which shall be appointed by the Shareholder’s Meeting.
PricewaterhouseCoopers Audit, one of the two statutory auditors responsible for certifying the accounts of the Company, has been the
independent third-party body responsible for verifying the non-financial performance declaration for 2022 and 2023.
In order to ensure continuity and consistency between the mission of verifying the non-financial performance declaration and the
mission of certifying sustainability information while favoring a collegial approach to the certification mission of sustainability information,
the Audit & Risks Committee recommended to the Board of Directors to appoint the current board of statutory auditors consisting in
Mazars and PricewaterhouseCoopers Audit as the statutory auditors responsible for certifying sustainability information from the fiscal
year beginning January 1, 2024.
Under the 5th resolution, you are invited to appoint Mazars as the statutory auditor responsible for certifying sustainability information
from the fiscal year beginning January 1st, 2024 and for the remaining period of its mission of certifying the Company’s accounts which
will expire at the closing of the Annual Shareholders’ Meeting which will be held in 2028 to approve the financial statements for the fiscal
year ending December 31, 2027.
Under the 6th resolution, you are invited to appoint PricewaterhouseCoopers Audit as the statutory auditor responsible for certifying
sustainability information from the fiscal year beginning January 1, 2024 and for the remaining period of its mission of certifying the
Company’s accounts which will expire at the closing of the Annual Shareholders’ Meeting which will be held in 2028 to approve the
financial statements for the fiscal year ending December 31, 2027.
Text of the fifth resolution
(Appointment of Mazars as the staturory auditor responsible for certifying sustainability information)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having heard the Board of
Directors’ report, and pursuant to Article L. 233-28-4 of the French Commercial Code, decides to appoint Mazars as the statutory auditor
responsible for certifying sustainability information from the fiscal year beginning January 1, 2024 and for the remaining period of its mission
of certifying the Company’s accounts which will expire at the closing of the Annual Shareholders’ Meeting to be held in 2028 to approve the
financial statements for the fiscal year ending December 31, 2027.
The company Mazars has indicated that it accepts these functions and that it is not affected by any incompatibility, or any prohibition likely
to prevent its assignment.
Text of the sixth resolution
(Appointment of PricewaterhouseCoopers Audit as the statutory auditor responsible for certifying
sustainability information)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having heard the Board of
Directors’ report, and pursuant to Article L. 233-28-4 of the French Commercial Code, decides to appoint PricewaterhouseCoopers Audit as
the staturory auditor responsible for certifying sustainability information from the fiscal year beginning January 1, 2024 and for the remaining
period of its mission of certifying the Company’s accounts which will expire at the closing of the Annual Shareholders’ Meeting to be held in
2028 to approve the financial statements for the fiscal year ending December 31, 2027.
The company PricewaterhouseCoopers Audit has indicated that it accepts these functions and that it is not affected by any incompatibility,
or any prohibition likely to prevent its assignment.
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8.1 Explanatory comments & draft resolutions submitted
to the Annual Shareholders’ Meeting
7th to 10th resolutions: Approval of the information on the Directors’ and the Corporate
Officers’ compensation paid or granted for 2023 (Say on pay ex-post)
Explanatory statement
Under the 7th resolution, in pursuance of Article L. 22-10-34 I of the French Commercial Code, you are invited to approve the
information listed in Article L. 22-10-9 of the French Commercial Code relating to the compensation of Directors and the Corporate
Officers 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 2023 Universal Registration Document and in section
4.2 of the Notice of meeting.
Under the 8th resolution, in pursuance of Article L. 22-10-34 II of the French Commercial Code, you are asked to approve fixed,
variable, and exceptional components of the total compensation and benefits of all types paid during the last fiscal year or awarded in
respect of the said year, to the Chairman & Chief Executive Officer, Mr. Jean-Pascal Tricoire, from January 1, 2023 to May 3, 2023. They
have been paid or awarded in accordance with the compensation policy approved by the Annual Shareholders’ Meeting of May 4,
2023. These components are detailed in section 4.2.2.2.1 of Chapter 4 of the 2023 Universal Registration Document and in section 4.2.1
of the Notice of meeting.
Under the 9th 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 Chief Executive Officer, Mr. Peter Herweck, from May 4, 2023 until December 31, 2023. They have been
paid or awarded in accordance with the compensation policy approved by the Annual Shareholders’ Meeting of May 4, 2023. These
components are detailed in section 4.2.2.2.2 of Chapter 4 of the 2023 Universal Registration Document and in section 4.2.2 of the
Notice of meeting.
Under the 10th 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 of the Board of Directors, Mr. Jean-Pascal Tricoire, from May 4, 2023 to December 31, 2023.
They have been paid or awarded in accordance with the compensation policy approved by the Annual Shareholders’ Meeting of May 4,
2023. These components are detailed in section 4.2.2.2.3 of Chapter 4 of the 2023 Universal Registration Document and in section 4.2.3
of the Notice of meeting.
Text of the seventh resolution
(Approval of the information on the Directors’ and the Corporate Officers’ compensation paid
or granted for the fiscal year ending December 31, 2023 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 2023 Universal
Registration Document, Chapter 4, section 4.2.2.
Text of the eighth resolution
(Approval of the components of the total compensation and benefits of all types paid during the 2023
fiscal year or awarded in respect of the said fiscal year to Mr. Jean-Pascal Tricoire in his capacity as
Chairman and Chief Executive Officer (from January 1, 2023 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. 22-10-34 II
of the said Code, the fixed, variable, and exceptional components of the total compensation and benefits of all types paid during the 2023
financial year or awarded in respect of the 2023 fiscal year to the Chairman & Chief Executive Officer, Mr. Jean-Pascal Tricoire, from
January 1, 2023 to May 3, 2023 as stated in the 2023 Universal Registration Document, Chapter 4, section 4.2.2.2.1.
Text of the ninth resolution
(Approval of the components of the total compensation and benefits of all types paid during the
2023 fiscal year or awarded in respect of the said fiscal year to Mr. Peter Herweck in his capacity
as Chief Executive Officer (from May 4, 2023 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. 22-10-34 II
of the said Code, the fixed, variable, and exceptional components of the total compensation and benefits of all types paid during the 2023
financial year or awarded in respect of the 2023 fiscal year to the Chief Executive Officer, Mr. Peter Herweck, from May 4, 2023 to December
31, 2023 as stated in the 2023 Universal Registration Document, Chapter 4, section 4.2.2.2.2.
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Chapter 8 – Annual Shareholders’ Meeting
Text of the tenth resolution
(Approval of the components of the total compensation and benefits of all types paid during the 2023
fiscal year or awarded in respect of the said fiscal year to Mr. Jean-Pascal Tricoire in his capacity as
Chairman of the Board of Directors (from May 4, 2023 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. 22-10-34 II
of the said Code, the fixed, variable, and exceptional components of the total compensation and benefits of all types paid during the 2023
financial year or awarded in respect of the 2023 fiscal year to the Chairman of the Board of Directors, Mr. Jean-Pascal Tricoire, from May 4,
2023 to December 31, 2023 as stated in the 2023 Universal Registration Document, Chapter 4, section 4.2.2.2.3.
11th to 13th resolutions: Approval of the 2023 compensation policy applicable to the
Corporate Officers and the Directors (Say on pay ex-ante)
Explanatory statement
Under the 11th and 12th 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 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 2023 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 Chief Executive Officer as presented in detail in section 4.2.3.1.2 of Chapter 4 of the 2023 Universal
Registration Document and in section 4.3.1.1 of the Notice of meeting. This policy would apply to Mr. Peter Herweck (11th resolution);
and
the compensation policy for the Chairman of the Board of Directors as presented in detail in section 4.2.3.1.3 of Chapter 4 of the
2023 Universal Registration Document and in section 4.3.1.2 of the Notice of meeting. This policy would apply to Mr. Jean-Pascal
Tricoire (12th resolution).
•
Under the 13th resolution, we ask you to, in accordance with Article L. 22-10-8 II of the French Commercial Code, to approve the
compensation policy of the Directors which means, firstly, the maximum amount that is proposed to be allocated to the Board members
annually and, secondly, the allocation rules of this amount as presented in detail in section 4.2.3.2 of Chapter 4 of the 2023 Universal
Registration Document and in section 4.3.2 of the Notice of meeting.
Text of the eleventh resolution
(Approval of the compensation policy for the Chief Executive Officer)
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 2023 Universal Registration Document, Chapter 4,
section 4.2.3.1.2.
Text of the twelfth resolution
(Approval of the compensation policy for the Chairman of the Board of Directors)
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 2023 Universal Registration Document,
Chapter 4, section 4.2.3.1.3.
Text of the thirteenth 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 2023 Universal Registration Document, Chapter 4, section
4.2.3.2.
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8.1 Explanatory comments & draft resolutions submitted
to the Annual Shareholders’ Meeting
14th, 15th, 16th, and 17th resolutions: Renewal of Mr. Fred Kindle, Mrs. Cécile Cabanis, and
Mrs. Jill Lee, appointment of Mr. Philippe Knoche
Explanatory statement
As of March 28, 2024, the Board of Directors is composed of sixteen members, including eleven who are deemed independent within
the meaning of the AFEP-MEDEF Corporate Governance Code, two Directors representing the employees, and one Director
representing the employee shareholders.
Each year, the Board of Directors conducts a review to ensure that there is an appropriate balance in its composition and that of its
committees. In particular, the Board seeks to ensure gender balance and broad diversity in terms of skills, experience, nationality, and
age, as described in its diversity policy (see section 4.1.1.4 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, Nominations & Sustainability
Committee to make a recommendation on the renewal of Mr. Fred Kindle, Mrs. Cécile Cabanis, and Mrs. Jill Lee, as well as search for
complementary profile in line with the skill set highlighted by its Board skills matrix and the challenges of the Company (see section
4.1.1.4 of Chapter 4 of the Universal Registration Document describing the director recruitment process).
In that respect, the Committee has analyzed Mr. Fred Kindle’s, Mrs. Cécile Cabanis’, and Mrs. Jill Lee’s situation with regards to their
relevance and performance, 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. Fred Kindle, Vice-Chairman & Lead Independent Director, brings to the Board of Directors the benefit of his experience as former
Chief Executive Officer of ABB as well as his skills in corporate finance, and his knowledge of international markets, Schneider’s
industry, and governance matters. He holds none other position at listed companies, and his attendance rate at the meetings of the
Board and the committees in which he participates in 2023 is 100%. The Committee recommended to the Board that Mr. Fred Kindle
continues to participate in the work of the Board as Vice-Chairman & Lead Independent Director, which leads the Board to propose
to you the renewal of his mandate for a four-year term.
• Mrs. Cécile Cabanis brings to the Board her experience as former Chief Financial Officer of Danone, a major French group in the
CAC 40, and as Deputy Chief Executive Officer of Tikehau Capital where she oversees the Human Capital, ESG/CSR,
Communications, and Brand Marketing functions of the group. The Board is benefiting from her skills in accounting, risks & audit,
sustainability, and her knowledge of international markets. She holds only one other position in a listed company (Vice-Chairwoman
of the Supervisory Board of Unibail-Rodamco-Westfield SE), and her attendance rate at Board meetings in 2023 is 86%, while her
attendance rate at meetings of the Committee in which she participates is 100%. Upon the recommendation of the Governance,
Nominations & Sustainability Committee, the Board proposes to you the renewal of her mandate for a four-year term.
• Mrs. Jill Lee brings to the Board her experience as former Chief Financial Officer of Sulzer Ltd. as well as her knowledge in
accountability, risks & audit, Schneider Electric’s industry, and understanding of international markets, especially the Asian markets.
Mrs. Jill Lee holds no other directorship in listed companies, and her attendance rate at the meetings of the Board and the
committees in which she participates in 2023 is 100%. The Committee recommended to the Board that Mrs. Jill Lee continues to
participate in the work of the Board as Chairwoman of the Audit & Risks Committee, which leads the Board to propose to you the
renewal of her mandate for a four-year term.
The Governance, Nominations & Sustainability 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 identified as being a French
speaker, connected to French environment with a strong expertise in energy and software. Among these candidates, the Governance,
Nominations & Sustainability Committee preselected a short list and the members of the Committee interviewed them. Following these
interviews, the Committee recommended one candidate to the Board of Directors, Mr. Philippe Knoche, who joined the Board as an
Observer on February 14, 2024 with the intent to propose his appointment as a Board member to the 2024 Annual Shareholders’ Meeting.
Mr. Philippe Knoche, a French and German dual citizen based in Paris, who was the Chief Executive Officer of Orano from 2015 to 2023,
has recently joined Thales as Senior Executive Vice President Operations and Performance in October 2023. He will bring to the Board
his expertise in energy and technology as well as his experience in transformations both at a strategic and operational level. 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 by the Shareholders’ Meeting in May 2024, will join the Audit & Risks Committee.
Acting upon recommendation of the Governance, Nominations & Sustainability Committee, the Board of Directors proposes to shareholders:
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in the 14th resolution, to renew the term of office of Mr. Fred Kindle for a four-year (4) term;
in the 15th resolution, to renew the term of office of Mrs. Cécile Cabanis for a four-year (4) term;
in the 16th resolution, to renew the term of office of Mrs. Jill Lee for a four-year (4) term; and
in the 17th resolution, to appoint Mr. Philippe Knoche as a Director for a four-year (4) term.
Should these resolutions be approved, the Board of Directors would consist of 17 members (including one Director representing the
employee shareholders and two Directors representing the employees), with an independence rate of 86% and 43% of women
(excluding the three Directors who are also employees), and 82% being of non-French origin or nationalities.
Mr. Fred Kindle’s, Mrs. Cécile Cabanis’, Mrs. Jill Lee’s, and Mr. Philippe Knoche’s biographies are provided in section 2.1.3 of the Notice
of meeting and section 4.1.1.2 of Chapter 4 of the 2023 Universal Registration Document.
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Text of the fourteenth resolution
(Renewal of the term of office of Mr. Fred Kindle)
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. Fred Kindle 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 2028 to approve the
financial statements for the 2027 fiscal year.
Text of the fifteenth resolution
(Renewal of the term of office of Mrs. Cécile Cabanis)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having heard the Board of
Directors’ report, takes note that the term of office of Mrs. Cécile Cabanis 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 2028 to approve the
financial statements for the 2027 fiscal year.
Text of the sixteenth resolution
(Renewal of the term of office of Mrs. Jill Lee)
The Annual Shareholders’ Meeting, having satisfied the quorum and majority requirements for ordinary meetings, having heard the Board of
Directors’ report, takes note that the term of office of Mrs. Jill Lee 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 2028 to approve the
financial statements for the 2027 fiscal year.
Text of the seventeenth resolution
(Appointment of Mr. Philippe Knoche 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. Philippe Knoche as a Director for a four-year (4) term expiring at the closing of the Annual Shareholders’
Meeting to be held in 2028 to approve the financial statements for the 2027 fiscal year.
18th resolution: Share buybacks
Explanatory statement
As the pre-existing authorization comes to its term in November 2024, 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 EUR 1.5 billion to EUR 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 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 EUR 250 per share (from the previous EUR 150 per share) was
approved at the Annual Shareholders’ Meeting. Schneider Electric did not further progress the buyback in the second half-year of 2022,
primarily due to restrictions on account of the proposed transaction with the AVEVA minority shareholders that was in progress during
the period. Schneider Electric resumed its share buyback program in June 2023.
Since the beginning of the program in 2019, a total EUR 1,500,153,358 of share buyback corresponding to 12,094,889 shares bought
back by the Company had been completed including EUR 703,183,915 of share buyback in 2023 corresponding to 4,493,173 shares
bought back by the Company pursuant to the last authorizations achieving the targeted range for its share buyback program.
All the 14,517,594 treasury shares held on December 31, 2023 (representing 2.53% of the share capital) are allocated to cover long-term
inventive plans for employees or corporate officers.
The authorization that you would give to the Board would allow to proceed to purchase shares for the purposes, amongst others, of:
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their allotment to employees or Corporate Officers as a long-term compensation tool;
their delivery as a result of the exercise of rights attached to securities giving access to the Company’s capital;
their cancellation;
their delivery in connection with external growth operations; and
their disposal in the course of a share management agreement.
Shares bought back may be canceled under the authorization adopted by the Annual Shareholders’ Meeting of May 4, 2023 (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, 2023: 57,283,588 shares). The maximum purchase price of the
shares would be set at EUR 250, and the total amount allocated to the share repurchase program would not exceed EUR 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 2023 Universal
Registration Document.
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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.
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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 the Annual Shareholders’ Meeting of May 4, 2023.
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, 57,283,588 shares, on the basis of the share capital as of December 31, 2023), it
being specified that the number of shares acquired in view of their retention and their future delivery for the purpose of an external growth
operation cannot exceed 5% of the Company’s share capital; and
(ii) the number of shares that the Company can hold at any time may not exceed 10% of the Company’s share capital.
The maximum share purchase price is set at EUR 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 EUR 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
4, 2023 in its 18th 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 and 20th 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, 2023, employees held 3.66% of the capital either directly or through the corporate mutual funds (FCPE).
The Company carried out capital increases reserved for Group employees in 2023 (WESOP 2023). These transactions are presented in
section 7.1.2.2 of Chapter 7 of the 2023 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 2024. As part of the 25th and the 26th resolutions of the Annual Shareholders’ Meeting of May 4, 2023, the Board of
Directors, at its meeting of December 13, 2023, decided to renew the annual employee shareholder plan in 2024, 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 80% 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 around EUR 1,400.
To allow for the implementation of a new global employee share ownership plan in 2025, you are requested to approve:
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the 19th 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 4, 2023 in its 25th resolution shall cease to be effective as from November 4,
2024(1)); and
the 20th 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
November 4, 2024(2)).
•
(1) The maximum amount of subscription applicable to the employee share ownership operations carried out before November 3, 2024 will be the ceiling applicable
to the 25th resolution of the Annual Shareholders’ Meeting of May 4, 2023.
(2) The maximum amount of subscription applicable to the employee share ownership operations carried out before November 3, 2024 will be the ceiling applicable
to the 26th resolution of the Annual Shareholders’ Meeting of May 4, 2023.
Text of the nineteenth 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. 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 November 4, 2024;
2. 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;
3. authorizes the Board of Directors, in application of Article L. 3332-21 of the French Labor Code, to make grants of free ordinary shares or
other securities granting immediate or differed access to ordinary share capital under all or part of the discount and/or, as the case may be,
for the matching contribution, provided that the value of the benefit resulting from this grant on account for the discount and/or the matching
contribution, shall not exceed the limits imposed by applicable law and regulations;
4. decides to waive, in favor of the above-mentioned beneficiaries, the shareholders’ preferential subscription rights with respect to the shares
or equity-linked securities that are the subject of this delegation which entails waiver of the shareholders’ preferential subscription right to
shares to which securities that may be issued under this resolution would give right; and
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8.1 Explanatory comments & draft resolutions submitted
to the Annual Shareholders’ Meeting
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5. decides that the Board of Directors shall have full powers to use this delegation, with the power to subdelegate as permitted by law, within
the limits and subject to the conditions specified above in order to, and in particular:
a. set in accordance with applicable laws and regulations the scope of companies whose above mentioned beneficiaries may subscribe
to the shares or equity-linked securities issued hereby and benefit, as the case may be, from shares or equity-linked securities,
b. decide that the subscriptions may be made directly or through Company mutual funds (fonds commun de placement d’entreprise) or
other structures or entities as permitted by applicable laws and regulations,
c. determine the conditions, in particular those relating to seniority, which shall have to be met by the beneficiaries of the capital
increases,
d. set the opening and closing dates of the subscription periods,
e. set the amounts of the issuances to be undertaken pursuant to this authorization and determine, in particular, the issuance prices,
dates, time-periods, terms, and conditions for the subscription, payment, settlement, and dividend rights of the securities (which may
be retroactive) as well as the other terms and conditions of the issuances, in accordance with applicable laws and regulations,
f. when granting free shares or equity-linked securities, set the number of shares or equity-linked securities to be issued, the number to
be granted to each beneficiary, and determine the dates, time periods, terms, and conditions of granting such shares or equity-linked
securities in accordance with applicable laws and regulations and, in particular, choose either to fully or partially substitute the
granting of such shares or equity-linked securities for the discount to the reference price provided for above, or to allocate the value
of such shares, or equity-linked securities to the total amount of the employer contribution, or to combine these two possibilities,
g. acknowledge the completion of capital increases in the amount of the shares that are subscribed (after possible reduction in the
event of over-subscription),
h. as the case may be, allocate the expenses of capital increases to the amount of premiums related thereto and deduct from this
amount the sums necessary to increase the legal reserve to one-tenth of the new share capital resulting from such capital increases,
enter into any agreements, carry out directly or indirectly through an agent all transactions and terms, including any formalities
following the capital increases and subsequent modifications to the Company’s Articles of Association, generally, enter into any
agreement in order to successfully complete the contemplated issuances, take all measures and decisions and carry out all
formalities necessary for the completion of the issuance, listing, and financial servicing of the securities issued pursuant to this
authorization as well as the exercise of rights attached thereto or subsequent to the completed capital increases.
This delegation (i) cancels, effective November 4, 2024, the authorization given by the Annual Shareholders’ Meeting of May 4, 2023, in its
25th 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 twentieth 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. 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 19th
resolution of this Annual Shareholders’ Meeting, and (ii) this delegation may be used only from and after November 4, 2024;
2. decides to waive the shareholders’ preferential right to subscribe for shares or other securities granting access to the share capital pursuant
to this resolution and to reserve the right to subscribe to one and/or another class of beneficiaries or recipients having the following
characteristics: (i) employees and officers of companies of Schneider Electric Group affiliated with the Company under the terms and
conditions set forth in Article L. 225-180 of the French Commercial Code and Article L. 3344-1 of the French 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;
3. takes note that this authorization shall constitute automatically and by law an express waiver by the shareholders, in favor of the holders of
securities granting access to Company capital, of their preferential right to subscribe for ordinary shares of the Company which such
securities carry the right to acquire;
4. decides that the amount payable to the Company for all shares issued, or to be issued, and pursuant to this resolution shall be set by the
Board of Directors on the basis of the trading price of the Company’s shares on Euronext Paris; the issue conditions shall be determined at
the discretion of the Board of Directors on the basis of either (i) the first or last quoted trading price of the Company’s shares at the trading
session on the date of the decision by the Board of Directors or the authorized representative 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 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 19th 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
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Chapter 8 – Annual Shareholders’ Meeting
this paragraph; the percentage of such discount applied to the trading price of the Company’s shares shall be determined by the Board of
Directors taking into consideration, among other things, legal, tax, and regulatory provisions of foreign law applicable, as the case may be,
to the persons benefiting from the issue;
5. 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
6. hereby resolves that the Board of Directors shall have full authority, under 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 November 4, 2024, the authorization given by the Annual Shareholders’ Meeting of May 4, 2023, in its
26th 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.
21st resolution: Power for formalities
Explanatory statement
Finally, under the 21st resolution, we request that you grant us the powers necessary to carry out the formalities.
Text of the twenty-first 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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8.2.1 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 23, 2024 - resolution n°19
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, 2024, the authorization given by the annual shareholders’ meeting of May 4, 2023 in its
twenty-fifth 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, 2024
PricewaterhouseCoopers Audit
Neuilly-sur-Seine on March 20, 2024
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 reserved for a category of
beneficiaries
Shareholders’ meeting as of May 23, 2024 - resolution n°20
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 1% 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 set out in the nineteenth resolution of
2% of the share capital on the date 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, 2024, the authorization given by the annual shareholders’ meeting of May 4, 2023 in its
twenty-sixth 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, 2024
PricewaterhouseCoopers Audit
Neuilly-sur-Seine on March 20, 2024
Juliette Decoux Guillemot
Mathieu Mougard
Jean-Christophe Georghiou
Séverine Scheer
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9
Persons responsible
for the Universal
Registration
Document and
audit of the
financial statements
Persons responsible
for the Universal
Registration Document
582
Persons responsible for
the audit of the financial
statements
582
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
Universal Registration Document
cross-reference table
583
Glossary
586
587
588
589
591
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O
N Persons responsible for the
I
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, 2024
CEO of Schneider Electric SE
Peter Herweck
Pursuant to Article 19 of Regulation (EU) 2017/1129 of the European Parliament and of the Council, the following information is
incorporated by reference in the present Universal Registration Document:
•
•
•
•
•
•
the consolidated financial statements and corresponding auditors’ reports provided in Chapter 5 of the Universal Registration
Document for the year ended December 31, 2021, registered with the AMF under number D.22-0171 on March 29, 2022;
the consolidated financial statements and corresponding auditors’ reports provided in Chapter 5 of the Universal Registration
Document for the year ended December 31, 2022, registered with the AMF under number D.23-0158 on March 28, 2023;
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 parent company financial statements and corresponding auditors’ reports provided in Chapter 6 of the Universal Registration
Document for the year ended December 31, 2022, registered with the AMF under number D.23-0158 on March 28, 2023;
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;
the management report provided in the Universal Registration Document for the year ended December 31, 2022, registered with the
AMF under number D.23-0158 on March 28, 2023;
• Passages not incorporated in these documents are either irrelevant for the investor or covered in another section of the Universal
Registration Document.
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”.
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Chapter 9 – Persons responsible for the Universal Registration Document and audit of the financial statements
Universal Registration Document
cross-reference table
To facilitate the reading of the Annual Report, filed as Universal Registration Document, the following table allows the identification of the
main headings required by Regulation (EU) 2017/1129 of the European Parliament and of the Council.
Information required under Appendix 1 and 2 of Commission Delegated Regulation (EU) 2019/980
Corresponding sections and chapters of
the Universal Registration Document
Page no.
1.
1.1
1.2
1.3
1.4
1.5
2.
2.1
2.2
3.
4.
4.1
4.2
4.3
4.4
5.
5.1
PERSONS RESPONSIBLE, THIRD PARTY INFORMATION, EXPERTS’
REPORTS AND COMPETENT AUTHORITY APPROVAL
Identity of the persons responsible for the information
Declaration by the persons responsible
Statement of experts and declaration of interest
Certification on information provided by third parties
Declaration of deposit to the competent authority
STATUTORY AUDITORS
Names and addresses
Resignation or departure of statutory auditors
RISK FACTORS
INFORMATION ABOUT THE ISSUER
Legal and business name
Place of registration and registration number
Issuer’s incorporation date and length of life
Domicile, legal form, applicable legislation, country of incorporation, registered
office’s address, and telephone number
BUSINESS OVERVIEW
Principal activities
Chapter 9
Chapter 9
N/A
N/A
Inside front cover
Chapter 9
N/A
582
582
N/A
N/A
N/A
582
N/A
Chapter 3, section 3.4
337-356
Chapter 7, section 7.3
Chapter 7, section 7.3
Chapter 7, section 7.3
Chapter 7, section 7.3
558
558
558
558
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
Principal markets
Exceptional events
Strategy and objectives
5.2
5.3
5.4
5.5
5.6
5.7
5.7.1
Dependence on patents, licenses, contracts, or new manufacturing processes
Chapter 3, section 3.4
340-341, 348
Competitive position
Investments
N/A
N/A
Principle investments realized during each year of the period covered by the
historical financial information until the date of the Universal Registration Document
Chapter 5, section 5.7
516-517
5.7.2 Major investments planned by the issuer and for which the management bodies
N/A
N/A
have already taken a firm commitment
5.7.3
Information on significant shareholdings in companies
Chapter 5, section 5.5
504-510
5.7.4
Environmental issues potentially affecting the use of the tangible fixed assets
N/A
Integrated Report
Integrated Report
N/A
Integrated Report
Chapter 1, section 1.1
Chapter 1, section 1.4
20-21
24-29
N/A
2-9
50
59-61
6.
6.1
6.2
ORGANIZATIONAL STRUCTURE
Brief description of the Group
List of main subsidiaries
N/A
558
Chapter 7, section 7.3
Chapter 5, section 5.5
504-510
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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.
7.
7.1
OPERATING AND FINANCIAL REVIEW
Financial condition
7.1.1
Evolution and result of activities
Chapter 5, section 5.7
516-523
7.1.2
Future expected development of the activities and R&D activities
Integrated Report
19
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
13-18
516-523
13-14
518-519
457
486-489
454
521-522
493-501
535-537
Restrictions on use of capital resources that have materially affected, or could
materially affect, directly or indirectly, the operations
Chapter 3, section 3.4
344-345
Expected sources of financing
REGULATORY ENVIRONMENT
TREND INFORMATION
Integrated Report
N/A
12, 19
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
19
19
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
Integrated Report
Chapter 4, section 4.1
Chapter 4, section 4.1
34-35
362-373
378
Chapter 4, section 4.2
408-449
Chapter 4, section 4.2
414-415
422-423, 427
Chapter 4, section 4.1
364, 365-373
Service contracts with members of administrative bodies
Information about the Audit Committee and the Remuneration Committee
Chapter 4, section 4.1
Chapter 4, section 4.1
Declaration – corporate governance applicable in the home country of the issuer
Chapter 4, section 4.1
Potential material impacts on corporate governance
Chapter 4, section 4.1
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
378
388-390
392-393
361
361
312-320
501
446-449
551
15.3
Agreements for employees’ equity stake in the capital of the issuer
Chapter 7, section 7.1
550-551
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
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 7.4
Chapter 7, section 7.1
550
559
550
Chapter 7, section 7.1
550-551
RELATED PARTY TRANSACTIONS
Chapter 5, section 5.5
502
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
Chapter 6, section 6.7
N/A
Chapter 5, section 5.6
Chapter 6, section 6.4
Chapter 2, section 2.7
Chapter 4, section 4.1
Chapter 8, section 8.2
N/A
N/A
Integrated Report
Chapter 8, section 8.1
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
546
N/A
511-515
540-542
302-305
405
578-579
N/A
N/A
3, 12, 16
567-568
487
546
341-342
502
539
N/A
552
552
488
534-535
543
19.1.4 Convertible securities, exchangeable securities, or securities with warrants
Chapter 5, section 5.5
Chapter 6, section 6.3
487, 494-495
535-536
19.1.5 Terms of any acquisition right and/or commitment in respect of authorized but
Chapter 4, section 4.2
446-449
non-issued capital
19.1.6 Information about the capital of any group member which is under option or
N/A
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
N/A
550
556
2
558
19.2.2 Rights, privileges, and restrictions attached to shares
Chapter 7, section 7.4
558-560
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 7.6
558
N/A
563
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O
N Annual Financial Report cross-reference
I
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.
582
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
3, 13-18, 32
332-336
337-356
516-523
Chapter 7, section 7.2
557
Chapter 6
Chapter 6, section 6.4
Chapter 5
Chapter 5, section 5.6
526-539
540-542
452-510
511-515
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Chapter 9 – Persons responsible for the Universal Registration Document and audit of the financial statements
Cross-reference table referring to the
elements of the Management Report
This Universal Registration Document includes all the information of the Management Report required by Articles L. 225-100 et seq.,
L. 232-1, I and II, and R. 225-102 et seq. of the French Commercial Code.
Information in the Management Report
Objective and exhaustive analysis of the business, results trend, and financial situation
including the debt situation of the Group during the fiscal year (Articles L. 225-100-1 and
L. 233-6 of the French Commercial Code)
Report on the subsidiaries’ activity and results (Article L. 233-6, paragraph 2 of the
French Commercial Code)
Analysis of the Company’s situation during the last fiscal year, its expected development,
and the important events occurred since the closing date (Article L. 232-1-II of the French
Commercial Code)
Activities in research and development (Article L. 233-26 and L. 232-1-II of the
French Commercial Code)
Non-financial key performance indicators (environmental information) (Articles L. 225-100-1,
L. 225-102-1, V, and R. 225-105 of the French Commercial Code)
Corresponding sections and Chapters
of the Universal Registration Document
Integrated Report
Integrated Report
Chapter 5, section 5.5
Chapter 6, section 6.5
Integrated Report
Chapter 5, section 5.5
Chapter 6, section 6.3
Page No.
2-17
2-17
504-510
543
19
503
539
Integrated Report
Chapter 1, section 1.4
Chapter 5, section 5.5
12, 24-29
60
462-463, 474
Chapter 2, section 2.8.1
306-311
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
312-320
Financial key performance indicators (Article L. 225-100-1 of the French Commercial Code)
Integrated Report
2-17
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
156-159
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
327-336
Main risks and uncertainties (Article L. 225-100-1 of the French Commercial Code)
Chapter 3, section 3.4
337-356
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 4.1.1
345
379
Retention requirement by the Executive Directors of free shares and/or stock options which
were awarded (Article L. 225-197-1-II, paragraph 5, and L. 225-185, paragraph 4 of the
French Commercial Code)
Chapter 4, sections 4.1.1, 4.2.5 379, 446-449
Stock Options awarded to employees and Executive Officers (Article L. 225-197-1 and
L. 225-185 of the French Commercial Code)
Shares held by employees (Article L. 225-102 of the French Commercial Code)
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)
List of main consolidated subsidiaries
N/A
Chapter 7, section 7.1
Chapter 7, section 7.2
N/A
550
552
Chapter 7 sections 7.1.1–7.4.5
550-560
Chapter 8, section 8.1
567-568
Chapter 6, section 6.7
Chapter 6, section 6.3
Chapter 7, section 7.1.1
N/A
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
546
537
550
N/A
504-510
567-568
N/A
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N Cross-reference table referring to the
I
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 et
seq. and L. 22-10-8 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
Chapter 4, section 4.2
Chapter 4, section 4.2.2.3
Chapter 4, section 4.2.2.1
Use of the possibility of claiming back variable remuneration (Article L. 22-10-9, I, 3° of the
French Commercial Code)
Chapter 4, section 4.2.3
Page no.
408
428
410
440
Directors’ commitments of any kind (Article L. 22-10-9, I, 4° of the French Commercial Code)
Chapter 4, sections 4.1.1.5, 4.1.6
378-405
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 4.2.2
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
410
429
429
408
410
410
428
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
365-373
Regulated agreements (Articles L. 225-37-4, 2° and L. 22-10-10 of the French Commercial
Code)
Chapter 4, section 4.1.6
405
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
552-553
Distinction made or not between the Chief Executive Officer and the Chairman of the Board
of Directors (Articles L. 225-37-4, 4° and L. 22-10-10 of the French Commercial Code)
Chapter 4, section 4.1.2.1
380
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)
Corporate Governance Code to which the Company adheres, including comply or explain
detail (Article L. 22-10-10, 4° of the French Commercial Code)
Participation 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 4, sections 4.1.1-4.1.2
362-380
Chapter 4, section 4.1.1
Chapter 4, section 4.1.2
Chapter 4
Chapter 7, section 7.4.1
Chapter 4, section 4.1.6
Chapter 7, section 7.4.8
362
382
361
558
405
560
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Chapter 9 – Persons responsible for the Universal Registration Document and audit of the financial statements
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
Page No.
Chapter 0
Chapter 2, section 2.1.6
8-9
81-87
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
313-317
313-317
234
312
312
Organization of concertation, notably information and consultation procedures
for personnel and negotiation with the latter
Summary of collective bargaining agreements signed with trade unions or workers’
representatives regarding occupational health and safety
Chapter 2, sections 2.5.5 and 2.8.2.3
239, 317
Chapter 2, sections 2.5.5 and 2.8.2.3
239, 317
Health and safety
Health and safety conditions
Chapter 2, sections 2.2.4 and 2.8.2.4
121, 318
Work accidents (including frequency and severity rates) and occupational illnesses
Chapter 2, section 2.8.2.4
318
Training
Training policies implemented
Total number of training hours
Equal opportunities
Measures regarding gender equality
Measures regarding employment and integration of disabled people
Anti-discrimination policy
ENVIRONMENTAL INFORMATION
General policy regarding environmental matters
Organization of the Company to take into account environmental matters, and, when
appropriate, assessment and certification policies regarding environment
Means devoted to the prevention of environmental risks and pollution
Amount of provisions and guarantees for environment-related risks, provided that this
information would not be likely to cause the Company serious damage within the
framework of ongoing litigation
Pollution
Chapter 2, sections 2.5.3.5 and
2.8.2.5
227, 319-320
Chapter 2, section 2.8.2.5
319-320
Chapter 2, sections 2.5.2.7
Chapter 2, sections 2.5.2.7
Chapter 2, sections 2.5.2.4
222-225
222-225
218
Chapter 2, section 2.3.1
Chapter 2, section 2.4.1
Chapter 5, section 5.5.1.21
156
186
468
Measures for prevention, reduction, or repair of emissions in the air, water, and ground
with serious environmental effects
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
186, 306
Chapter 2, sections 2.4.1 and 2.8.1
186, 306
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Chapter 9 – Persons responsible for the Universal Registration Document and audit of the financial statements
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
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 2.4.3
190
Measures for combatting food waste
Sustainable usage of resources
N/A
Water consumption and supply adapted to local constraints
Chapter 2, sections 2.4.5.3 and 2.8.1
202-203, 306
Consumption of raw materials and measures implemented for more efficient use
Chapter 2, section 2.4.4
196
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
167, 306
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
161, 306
Measures taken to adapt to the consequences of climate change
Chapter 2, section 2.3.3
164
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
161, 306
Biodiversity protection
Measures implemented to protect or develop biodiversity
Chapter 2, sections 2.4.2 and 2.8.1
187, 306
SOCIETAL INFORMATION
Societal commitments regarding sustainable development
Impact regarding regional employment and development
Chapter 2, section 2.6.2 and 2.6.4
246, 257
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 2.2.14
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 2.2.12.5
Consideration within relations with subcontractors and suppliers of their social and
environmental responsibility
Chapter 2, section 2.2.13
Fair operating practices
Measures implemented to promote consumer health and safety
Chapter 2, section 2.2.4
COMPLEMENTARY INFORMATION
Actions implemented to prevent any kind of corruption
Chapter 2, section 2.2.7
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
Actions implemented to promote the link between the Nation and the Army and
support commitment to the reserves
Actions implemented to promote physical activity and sport
Fight against food insecurity, respect for animal welfare, and a responsible, fair,
and sustainable food system
ARTICLE L. 22-10-36
Chapter 2, section 2.2.11
Chapter 2, section 2.2.11
Chapter 2, section 2.2.11
N/A
N/A
N/A
Actions implemented to prevent tax evasion
Chapter 2, section 2.2.9
ARTICLE L. 225-102-4
Vigilance plan
590
Chapter 2, section 2.2.2
151
78
251
140
149
121
130
239
216
136
136
136
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Chapter 9 – Persons responsible for the Universal Registration Document and audit of the financial statements
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 23,
2024.
AI Artificial Intelligence
AMF French Financial Market Authority – Autorité des Marchés
Financiers
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.
Circular Certified Schneider Electric label to give products a
second life (unsold or obsolete stock, commercial returns).
COP27/COP28 United Nations Climate Change Conference –
Sharm El-Sheikh 2022 (COP27) and Dubai 2023 (COP28)
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.
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.
EPS Earnings Per Share
ESG Environmental, Social and Governance
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 2023, more than
80% of Schneider’s product sales came from Green Premium™
products.
IEC International Electrotechnical Commission
IIoT Industrial Internet of Things
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.
Industrial Tech Electrical & Automation technologies are
converging with Software & Sustainability as enablers for rapid
acceleration through One data infrastructure, One customer
experience and One digital twin.
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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Glossary
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.
The Next Frontier The next milestone of Schneider Electric
revenues, profitability and Free Cash Flow journey supported by
five megatrends that reinforce our strategic vision – creating
unprecedented opportunities in our end-markets through the cycle.
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, India, and China). 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 23, 2024
Annual Shareholders’ Meeting
Financial Releases
February 15, 2024
April 25, 2024
July 31, 2024
October 30, 2024
2023 Annual Results
Q1 2024 Revenues
2024 Half Year Results
Q3 2024 Revenues
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Investor Relations
Amit Bhalla
Tel.: +44 (0) 20 7592 8216
Corporate Communications
Anthime Caprioli
Tel.: +33 6 45 636 835
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
European Company,
governed by a Board of directors with a
share capital of EUR 2,291,343,536
Registered in Nanterre, R.C.S. 542 048 574
Siret no.; 542 048 574 01791
© 2024 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. 998-23059200
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