95 Life Is On | Schneider Electric www.se.com 2021 Sustainable Development Report These ambitions are embedded in the Group’s Trust Charter and the Group’s supply chain strategy as well as two global policies that drive eco-efficiency performance: the Environment Policy and the Energy Policy. The Group also partners with its suppliers to extend its environmental ambitions to its upstream supply chain. Flagship programs to achieve these goals include: • Zero-CO 2 sites (SSE #1), • Delivering energy efficiency with EcoStruxure ™ solutions (SSE #5), • Powering facilities with renewable energy (SSE #3), • Maximizing waste recovery through the ‘Waste-to-Resource’ program (SSE #9), • Sustainably sourcing packaging (SSI #5), • Focusing on water-stressed sites (SSE #11), • Emphasizing the importance of local biodiversity (SSE #8), and • Reducing CO 2 emissions generated by transportation (SSE #4). 4.2.3 Environmental risk management and prevention The Group takes a proactive approach to managing environmental liabilities and risks. Environmental regulatory compliance, environmental management systems, and continuous improvement are the foundation of the Group’s environmental risk management and prevention program for current, former, and prospective operations. Key ongoing initiatives include: • The Integrated Management System (IMS) covers the Group’s plants, distribution centers, and large offices, and hosts ISO 14001, ISO 50001, ISO 9001, and OHSAS 18000/ISO 45001 compliance management systems. Each site is audited periodically, either externally by Bureau Veritas (every three years), or internally. • The Company-wide Look at Environmental Assessment and Risk Review program (CLEARR) was continued, with additional and updated surveys of select manufacturing sites that focused on historical and current potential environmental risks. • Environmental risks and provisions are reviewed with local and corporate finance, as well as legal functions. • As part of mergers, acquisitions, and disposals, thorough environmental due diligence of sites is conducted where chemicals are or have been used. Any environmental risks or liabilities identified are addressed through proper risk management activities. • Risks and mitigation actions are presented to the Board Audit & Risks Committee. • Schneider Electric’s global risk matrix takes into consideration the biggest environmental risks (on suppliers, products, sites, and customer projects). Historical environmental liabilities are managed on a regional level to ensure local expertise, regulatory knowledge, and cultural awareness is applied. Using external consultants, known environmental issues are thoroughly investigated, and, if appropriate, remediated or otherwise managed through engineered or institutional controls to reduce potential risks to non-significant levels and in compliance with local regulations. Additionally, Schneider uses third-party services to assess each of its key sites’ risk profile, in relation to a certain number of external risks such as fires, earthquakes, flooding, and other natural disasters. Through this process and its business continuity planning efforts, Schneider endeavors to gauge related risks and anticipate possible steps which would be required. With around 244 ISO 14001 certified sites globally, the footprint is balanced geographically. Roughly 90 of the Group’s plants are in areas classified as ‘high’ or ‘extremely high’ baseline water stress, as defined by World Resources Institute’s (WRI) Aqueduct Water Risk Atlas. The nature of the Group’s manufacturing processes (mainly assembly) allows for the rebalancing of manufacturing lines in a fairly prompt manner, if needed. During the year 2021, no new material environmental impacts were identified. Furthermore, no Schneider Electric sites are Seveso-classified. 4.2.4 ISO 14001 and ISO 50001 certification ISO 14001 certification allows Schneider Electric to define and sustain robust environment governance on its sites, supporting continuous improvement to deliver environmental performance. As soon as the ISO 14001 environmental management standard was published in 1996, Schneider decided to certify its sites. The Group certifies all industrial and logistics sites comprised of more than 50 employees within two years of their acquisition or creation, and all large tertiary sites of more than 500 employees. 244 sites are certified ISO 14001 as of the end of 2021, representing approximately 76% of the Group scope based on the share of site surfaces, 82% of the Group scope in terms of energy consumption, and over 85% of the Group scope in terms of water consumption, waste generation, and Volatile Organic Compounds (VOC) emissions. 17 sites banning single-use plastics* in 2021 96% waste recovery in 2021 126 ‘Waste-to-Resource’ sites -34% water intensity since 2017 400 sites by 2025 100% target by 2030 200 sites by 2025 -35% target by 2025 Biodiversity, Waste, and Water Target * The scope of the single-use plastics ban for the biodiversity program is “consumer” plastics (e.g. cups, cutlery, gifts/souvenirs, etc.). “Industrial” plastics (e.g. primary/ secondary packaging, products) are covered in Schneider Electric’s SSI #4 and SSI #5 programs.