67 Life Is On | Schneider Electric 2021 Sustainable Development Report Implementation plan The program will be launched in the first quarter of 2022 with technical training sessions for participating suppliers. The sessions will focus on the rationale and elaborate on the requirements of the program. In addition, special focus will be given to build capacity and highlight the systems and processes that need to be implemented and actions that need to be taken by companies to ensure decent work conditions in their organization. The evaluation of supplier performance will be done on the basis of an online questionnaire that will be rolled out via the SSPSRM – the supplier relationship portal. A specifically trained team will be deployed at the Global Procurement Services to lead the launch of the initiative. The suppliers will be required for respond to the questions and upload evidence to support the responses. All responses and accompanying evidence must be evaluated to meet the minimum criteria of decent work, in order to qualify. In cases where the supplier actions do not meet the minimum requirements, feedback will be given, and corrective actions need to be implemented by the suppliers in a timebound manner. Upon rectification, the information needs to be resubmitted along with the evidence for the re- evaluation. The survey responses will be evaluated and corroborated with the evidence and validated by sample on-site audits. These audits will be conducted by the trained Duty of Vigilance auditors. 2.11.10 Su pplier diversity program in the United States Schneider Electric US’ supplier diversity program strives to identify, include, and engage qualified diverse suppliers to support the company’s goals to 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: • S mall Business Enterprise (SBE); • V eteran (VET); • M inority-Owned Enterprise (MBE); • W omen-Owned Enterprise (WBE); • H istorically Underutilized Business Zones (HUBZone). As of end of December 2021, 19,3% of Schneider Electric US’ suppliers were diverse, aiming to demonstrate year to year improvement i n u tilization o f diversely o wned b usinesses. 2.11.11 The Z ero C arbon P roj ect Schneider adopted a very ambitious target for 2050: to operate a ne t-zero c arbon em ission s upply c hain, me aning t hat all Schneider f actories a nd transportation, a nd t hat o f it s suppliers in t he en tire u pstream v alue c hain wo uld b e o perating w ithout using any fossil fuel and run only on clean energy. To achieve this ambitious target of 2050, as the first st ep, Schneider has launched The Zero Carbon Project, which aims at redu cing 50% of operational carbon emissions from its top 1,000 suppliers by 2025. 2.11.12 Green materials and sustainable p a ckaging Sustainable P ackaging ( SSI # 5) Resource e fficiency a nd c on servation a re the u nderlying pr inciples that g uide a ll ac tions a t S chn eider. D urin g t he p eriod o f 2 018 – 2020 the Company implemented an initiative to successfully move to 99% of cardboard and pallets used in the transport of goods to be sourced from recycled or certified sources. In 2021, this ambition was extended to use recycled cardboard in all primary and secondary packaging and remove all single use www.se.com plastic from Schneider packaging by 2025 (SSI #5). To achieve this transformation, a two-pronged approach is deployed. On the one hand, a cross functional team is deployed to review the packaging design and explore and authorize the use of alternate materials for packaging; on the other hand, various procurement teams engage with suppliers across regions to ensure the deployment of the roadmap by the suppliers to meet the prescribed requirements. To ensure streamlined actions, dedicated categories of packaging material were identified to be included in the transformation. As a result of concerted efforts by various teams, 21% of the packaging spend in scope was attributed to sustainable packaging. Green Materials (SSI #4) Similarly, another initiative has been launched to increase the proportion of green material in our products by 50% by 2025 (SSI #4). The scope of this initiative currently includes: • t hermoplastics (direct and indirect purchase); • s teel (direct purchase); and • al uminum (direct purchase). Other kinds of materials like steel purchased as fabricated components, other non-ferrous metals (such as copper, silver or brass), and thermoset, both direct and indirect procurement, will be considered for next phases. At the end of 2021, 11% of materials in scope were qualified as “Green”. For thermoplastics, the 2021 performance was achieved mainly by embedding recycled plastics in products and by obtaining supplier proof for both recycled and green flame retardant. For steel, a good progress was made notably thanks to the certification of large steel suppliers to Responsible Steel in 2021, as well as sourcing from suppliers using Electric Arc Furnace. For aluminum a similar approach than the one for steel will be applied, focusing on building trust and transparency with suppliers. 2.11.13 R ollout of eco-responsible initiatives Schneider Electric is rolling out several eco-responsible initiatives with its suppliers. For example, Schneider has chosen to go further than the European REACH and RoHS regulations. The approach is rolled out in the Group over the whole product portfolio and to all suppliers, regardless of their geographic origin. To support the REACH and RoHS projects, Schneider has implemented a data collection process supported by a dedicated team to gather the required information from its suppliers. This has allowed it to significantly reduce its response time to collect such information and therefore be quicker to respond to its customers’ inquiries. In addition to data collection, the Group put in place a review process for this data to guarantee its quality. Thanks to this process, the level of verification required for a given supplier can be adjusted in order to make the controls more stringent in cases where deviations have been detected. Another example is Schneider’s commitment to supporting the small and medium enterprises (SME) network. This support is given through an approach to work in an adapted manner with certain suppliers. In France, Schneider Electric is a major player in the International SME Pact. Finally, by the very nature of its activity, the Group continually encourages its ecosystem (including customers and suppliers) to implement energy efficient solutions.