www.se.com Schneider Electric 90 2021 Sustainable Development Report 4 Being efficient with Resources 4.1 Preserving the planet and its biodiversity According to the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) global assessment report, biodiversity loss is unsustainable, and transformative changes are required to safeguard economic and social models. Major biodiversity loss undermines nature’s ability to support people and communities, a factor which strongly improves both quality of life and business prosperity. The fight against nature loss should be a business priority: nature is essential to global economic prosperity and individual business success. A sustainable future for people and economies will be possible if nature, climate, and people are addressed in an integrated way. Indeed, climate change is among the main drivers of biodiversity loss, and yet nature is part of the climate solutions. To engage in a transformative change, clear and measurable international targets, meaning counterparts to both the 1.5°C – 2°C increase climate limit and its associated carbon budget, must be defined. Schneider Electric supports the creation of ambitious biodiversity targets during the COP15 for Biodiversity. Schneider Electric calls for all companies to fast-track the adoption of ambitious biodiversity strategies, leveraging best practices from climate Science-Based Targets. In a joint effort with Marc Abadie, Chairman of CDC Biodiversité and Eva Zabey, CEO of Business for Nature, Schneider invites all companies to “raise corporate biodiversity ambition and aim at no net loss”. In addition to improving resource efficiency, it is also necessary in order to live within the limits of our planet to transform industrial processes and business models to move towards a circular economy. Circular economy is an obsession to avoid wastage and to reuse, repair, retrofit or recycle materials, maximizing environmental and financial value. A circular mindset also triggers process innovations and opens the door to new business models, enhancing customer intimacy and thus loyalty (e.g. take-back and modernization services). High hopes are placed on circularity as a state of mind, as it can transform multiple industries for the better. From a risk standpoint, some challenges may arise from a lack of stringent regulations or uncontrolled practices if used products come back into the loop without adequate controls and expertise, especially regarding life-critical products and electrical safety. Schneider Electric embraces circular principles all along the lifecycle of products and offers. The keystone of circularity is EcoDesignWay ™ , a process that is applied to the development of all new products. EcoDesignWay ™ enables the right trade-offs between the environmental impact along the lifecycle of products, allowing to coordinate the efforts over the whole value chain. Product innovation On product design, Schneider has committed to: • Phase-out potentially harmful substances and provide transparent information on environmental performance of products • Design with a circular mindset with Green Premium ™ , for increased durability, repairability and recyclability • Provide public and transparent information for the proper dismantling and end-of-life management of products • Increase green material content in products to 50% • 100% of its primary and secondary packaging is free from single-use plastic and uses recycled cardboard Process innovation In the manufacturing phase, the Group applies circularity principles in its operations and with customers: • Have 200 ‘Waste-to-Resource’ sites by 2025 to optimise waste generation and recycling on the Group’s sites • EcoStruxure ™ solutions help customers improve resource efficiency in industrial processes Business model innovation Over the lifecycle of offers, Schneider commits to innovate with circular business models and services: • Support customers to optimise asset lifecycle management for increased durability and efficiency, with Asset Performance Management (APM) services • Give a second life to products (unsold or obsolete stock, commercial returns), with the ‘circular certified’ label launched in France in 2020 • For specific product ranges such as products containing SF 6 , offer take-back and end- of-life management services. The Group is committed to avoid 420,000 metric tons of primary resource consumption through ‘take-back at end-of-use’ from 2017 to 2025