29 Life Is On | Schneider Electric www.se.com 2021 Sustainable Development Report Risk description and impact Policies Main actions and 2021 performance Opportunity created Environment Climate change Failure to meet 1.5°-aligned GHG reduction emissions targets • Greater financial costs than anticipated • Lock-in emissions of assets with long operating lifetime or long-term leases • Reputational impacts and loss of trust from customers, investors and employees • Limited engagement of suppliers to decarbonize Scope 3 upstream emissions Climate strategy for operations and supply chain Business strategy on Electricity 4.0 and Industry 4.0 Thought leadership with Schneider Sustainability Research Institute Climate initiatives (such as Climate Group) • SSI #1: Grow our green revenues to 80% (71% achieved) • SSI #3: Reduce CO 2 emissions from top 1,000 suppliers’ operations by 50% (1% achieved) • SSE #1: 150 Zero-CO 2 sites (51 achieved) • SSE #2: 100% substitution with SF 6 -free MV technologies (38% achieved) • SSE #3: 90% of electricity sourced from renewables (83% achieved) • SSE #4: 15% CO 2 efficiency in transportation (-1% achieved) • SSE #5: 15% energy efficiency in our sites (6.6% achieved) • SSE #7: one-third of fleet comprised of electric vehicles (7,7% achieved) Market growth for Schneider Electric energy efficiency, electrification and renewable offers Showcase of EcoStruxure ™ in our sites Customer attractivity Inadequate evolution of the supply chain footprint Supply chain disruption due to increase of climate-related risks as well as the evolution of international trade and market barriers. • Delays in production and delivery, incurring important costs • Impact on customer experience if delays are too long Regional Supply Chain footprint Supply chain resiliency with multi-sourcing Independent risk assessment (fire, weather, climate) of our Industrial sites • Preventive and reactive risk management of Natural risks in Supplier Risk Management • Recurring risk assessment of our Industrial sites through Global Risk Consulting program • Introduction of CO 2 simulations to compare alternative supply chain strategies and footprints, and network models • Implementation of deliberate redundancies of both dual factories for same products, and dual suppliers (“Power of Two”) for all critical parts and components Strong local presence and strategic relationships with suppliers Shorter lead times and low logistics costs and CO 2 from deliveries Ability to make products and gain market share if our supply chain is more resilient than that of competition Workplace disruption Permanent site disruption due to increased frequency and severity of extreme weather events • Loss of output and remediation costs • Impact on operations Enterprise risk management Business continuity Disaster Recovery Plans • Pilot flood study at a critical location in conjunction with our insurance company launched • New Resilience Index created for most critical locations to measure, monitor and improve the site’s resilience to external risks Business continuity expertise extended to critical suppliers Recurring risk assessment program extended to critical supplier locations Resources Resource scarcity Volatile prices and materials and resource availability • Cost increase of primary materials and energy • Disruption of supply Supply chain resiliency Green materials Sustainable packaging Raw material productivity and hedging strategy Water stewardship in water- stressed areas Proactive product returns and take-back policies for a range of offers • SSI #4: Increase green material content in our products to 50% (11% a ch i eve d ) • SSI #5: 100% of our primary and secondary packaging is free from single-use plastic and uses recycled cardboard (21% achieved) • SSE #11: 100% of sites in water-stressed areas have a water conservation strategy and related action plan (9% achieved) Green offer differentiation. Resilient and efficient supply chain Access demanding green markets Superior resiliency in case virgin raw materials availability gets challenged