www.se.com Schneider Electric 14 2021 Resources Report 3 G reen offers Schneider Electric products support customers every day, make their lives easier, and enable efficient operations. But because products also consume resources and energy, during their production and use, Schneider is committed to reducing their environmental impact. Since 2003, a Product stewardship team has been dedicated to providing high environmental performance products to the Group’s customers as well as full transparency regarding environmental impact. Initially, efforts were focused on compliance with the most rigorous environmental regulations, then on data transparency (through Product Environmental Profiles and End of Life Instructions). Over the last few years, additional efforts have been made to develop a more customer-centric program, helping Schneider customers to better differentiate offers based on strong environmental value propositions. With the Green Premium ™ program and the EcoDesign Way ™ process, Schneider reduces the environmental impact of its products using lower impact materials, drastically changing its packaging strategy as well as bringing circular value propositions to extend the durability of products. 3.1 Risks and opportunities The increasing complexity of environmental regulations could slow down the Group’s innovation potential, and could phase out specific chemical substances or resources too quickly with no suitable alternative being found in a scalable manner. The complexity is directly linked to a “regionalization” of environmental regulations (e.g., California Prop 65 and China RoHS) while global resources are limited. With increasingly stringent environmental regulations year after year, there is a risk for Schneider Electric to have key materials and substances that could be utilized to deliver high performance to be regulated themselves. This would limit the innovation potential of products that would fall within the regulation radar with possible restrictions. There is also a risk to face contradictory recommendations due to regulations overlap (e.g., substances restriction versus circularity performance). By its customers’ s ide, Schn eider ha s observed a m ultiplication of e xternal r epositories t o leverage pr oduct en vironmental performance, some being specific to a single customer. As such, there is a risk for Schneider products not to be systematically referenced e xternally. To c ircumvent t he r isks s tated e arlier, S chn eider r elies on t he completeness o f the G reen P remium ™ pr ogram, ena blin g it to cover a ll r elevant pr oduct-oriented en vironmental t opics. R elying on the EcoDesign Way ™ process and tools is also key to include environmental performance as soon as possible in the new product de velopment pr ocess. T his ena bles S chneider pr oduct development t eams t o innovate w hile del ive ring m ore Green Premium ™ products t hat w ill d ifferentiate t hemselves f rom those of c ompetitors t hanks t o h igher en vironmental p erformance. The m ultiplication o f en vironmental r egulations r equires a l ot of information to be shared with the supply chain and updated regularly. Only the best-in-class suppliers will be able to answer this challenge. Also, it is an opportunity for the Group to put in place a s trong i nteraction w ith t hose s uppliers a nd ens ure that future restrictions will be anticipated. Schneider r einforces a wo rldwide a pproach o f environmental product stewardship directives fed by a regional and local environmental s teward ne twork, w hich s trengthen it s influence position t owards r egulators t hrough S chn eider pr ofessional associations. From t he customers’ p erspective, S chneider r elies on th e “Check a Product” platform, a public websit e (https://checkaproduct.se.com/CheckProduct . aspx?cskey=4b4b15ad9d8148759e39fcb1b346ad 9f) p roviding a ll relevant product enviro nmental information. T hanks to “Check a Pro duct”, the Group is in a good position t o be well referenced i n external databases such as the SCIP (Substa nce of Concern in Products) database and in customers’ prescription tools. In a c ommitment t o go o ne s tep f urther, S chneider t akes t he necessary steps to digitize the environmental information of offers. Within a fully digitized ecosystem, the Group can provide a streamlined a nd e fficient pr ocess t o share en vironmental d ata with external third-party databases or customers’ own prescription tools. RoHS: Restriction of Hazardous Substances. REACH: Registration, Evaluation, Authorization and Restriction of Chemicals. PEP: Product Environmental Profile. EoLI: End-of-Life Instructions. European Union adopts RoHS Green Premium introduced to provide transparent information on regulated substances and to share the environmental information of our products European Union adopts REACH EcoDesign Way launched our internal eco-design approach embedded in the offer creation process Upgraded Green Premium program to include green claim differentiation Enhanced environmental performance criteria Data Digitization acceleration RoHS RoHS PEP REACH EoLI REACH RoHS EcoDesign Way ™ 2003 2007 2008 2015 2018 2022