www.se.com Schneider Electric 26 2021 Sustainable Development Report Following its assessment of material risks, Schneider Electric presents its main ESG risks and opportunities. Risk description and impact Policies Main actions and 2021 performance Opportunity created Business conduct Competition law Non-competitive behavior Schneider Electric products are sold worldwide and are subject to national and supranational competition laws and antitrust regulations. Non-compliance could result in fines and impact the company’s reputation. Trust Charter Conflict of interest Policy Competition Law Policy • New whistleblowing system in place this year called the Trust Line Increase relationship with suppliers to ensure compliance. Corruption and bribery Corruption is the abuse of entrusted power for private gain. It may occur through third parties’ activities (partners, suppliers, agents, companies to be acquired) and cause various impacts for the company: • Reputational • Legal • Financial • Development of the company • Employer brand Trust Charter Anti-Corruption Policy Business Agents Policy Gifts & Hospitality Policy Donations Policy Conflict of Interest Policy (new) Business Agent Policy (new) • Trust Line whistleblowing system • Specific risk mapping dedicated to “Ethics & Compliance” risks • SSI #7: Measure the level of confidence of our employees to report unethical conduct: 81% achieved, aiming for 10pts increase by 2025 • Four additional modules as part our anti-corruption e-learning • SSE #13: 100% of employees trained every year on Cybersecurity and Ethics in 2025 (96% achieved 2021) More opportunities with actual and potential customers Talent attraction and retention Corporate governance Delivering on ESG performance Failure to achieve our long-term sustainability commitments • Brand and reputational impact • Distrust from stakeholders Internal Governance in place at every level (Board, Executive Committee, Operations) to drive and monitor progress Quarterly Schneider Sustainability Impact (SSI) public disclosure SSI performance embedded in managers’ and leaders’ short-term incentives • SSI 2021 performance reached 3.92/10, beyond 3.75/10 target • Top 1% of several ESG Ratings Worldwide confirming we are headed in the right direction Higher credibility and trust to support our customers in their Climate and Sustainability journey Risks mitigation ahead of competition thanks to the SSI disruptive and virtuous continuous improvement process ESG compliance Failure to report, lack of transparency New Corporate Social Responsibility regulations, Standards and market expectations are redefining what “Sustainable businesses” are • Brand and reputational impact • Risk of exclusion from growing Socially Responsible Investment (SRI), ESG or green portfolios Transparent public reporting on sustainability objectives and performance in quarterly SSI reports and in annual reports aligned with key frameworks (GRI, SASB, TCFD, WEF Common Metrics, SDGs) Regular engagement with stakeholders to identify critical sustainability topics (materiality analysis) Engagement and dialog with investors to ensure expectations are met • Upgraded quarterly SSI reports • Winner of the 2021 Transparency Awards for ESG information Greater attractivity to investors, customers and talents Strengthened partnerships with clients, suppliers, and other partners in the Group’s ecosystem Anticipation of sustainability trends and risk mitigation Influence other companies to have better practices 1 Sustainability at the heart of our strategy