7 Life Is On | Schneider Electric www.se.com 2021 Sustainable Development Report 1.2 The S chneider Sustainability Impact, a u nique transformation tool 1 .2 .1 A c ontinuous i mprovement p rocess a nchored in our practice since 2005 To dem onstrate s ignificant i mpacts a n d i nitiate l asting c hange, performance must be measured, in a relevant manner for a company and its stakeholders. That is why Schneider Ele ctric defines specific Group objectives and measures its resu lts each quarter (since 2005) in a dashboard commonly referred t o as a “barometer”. I n 2018, t his b arometer w as r enamed S chneider Sustainability I m pact ( SSI). S chneider us es t his t ool t o a d dress it s sustainability c ha llenges a nd t o improve e ach o f t he pi llars o f it s strategy identified through its materiality matrix. The SSI uses a s coring scale of 10 and provides an overall measure of the Group’s progress. T he t o ol a l so ena bles S chneider t o anticipate a nd effectively manage its risks and opportunities by mobilizing key s takeholders a round s pecific, me asured o bjectives a nd r eliable r esults. The SSI’s performance and monitoring systems are audited annually by an external auditor (limited assurance). E ach SSI seeks to: • Mo bilize the whole Company around holistic sustainability goals impacting its ecosystem; • Sha re the Group’s improvement plans with stakeholders; • Cr eate system value . On a daily basis, Schneider Electric proves that economic, environmental, and social interests are convergent. 1.2.2 Two complementary sustainability p erformance dashboards to progress between 2021 and 2025 In 2020, Schneider Electric defined six new objectives for the 2021-2025 period: 1. Ac t for a climate positive world, by continuously investing in and developing innovative solutions that deliver immediate and lasting decarbonization in line with our carbon pledge. 2. Be efficient with resources, by behaving responsibly and making the most of digital technology to preserve our planet. 3. Li ve up to our principles of Trust, by upholding ourselves and all around us to high social, governance, and ethical standards. 4. Cr eate equal opportunities, by ensuring all employees are uniquely valued and work in an inclusive environment to develop and contribute their best. 5. Ha rness the power of all generations, by fostering learning, upskilling, and development for each generation, paving the way for the next. 6. Em power local communities, by promoting local initiatives and enabling individuals and partners to make sustainability a reality for all. 2030 • Reach net-zero operational emissions and reduction of Scope 3 e missions by 35% (versus 2017) as part of the Group’s validated 1.5°C Science-Based Target (SBT) • Co nsume 100% renewable electricity (RE100) • Dou ble energy productivity (versus 2005) (EP100) • Sw itch to 100% electric cars (EV100) • Provide access to energy to 100 million people The execution of the Group’s 2021 – 2025 sustainability strat egy is tracked through quantitative key performance indicators (KPIs), under t wo c omp lementary t ools: t he S SI and t he new S chneider Sustainability E ssentials ( SSE). The SSI is the translation of our six long-term commitments into a selection of 11 highly transformative and innovative programs. The programs will be tracked and published quarterly, audited annually, and linked to short-term incentive plans for more than 64,000 employees. A notable addition to the SSI in 2021 is the local aspect, aiming to deploy local actions in the 100+ markets where the Group operates in order to better empower all leaders and collaborators to unlock meaningful local impacts. The SSE has been created to maintain a high level of commitment and transparency in the actions taken by the Group. This new tool brings balance between the innovative transformation plans of the SSI and the need to keep progressing on other long-lasting programs. In this spirit of continuous improvement, and in a holistic vision of sustainability, the SSE will track annual progress with 25 quantitative KPIs, and some additional qualitative programs. Collectively, the SSI 11 Global Impacts and its Local Impact, as well as the 25 SSE programs, are the Group’s short-term sustainability roadmap and our contribution to the 17 U nited Na tions SDGs. M ore details on our contributions to each SDG are available online. 1.2.3 A vision beyond 2025 for climate, biodiversity, and access to energy Climate c hange, bio diversity lo ss, r ising i nequalities, a ll t hose issues have long-term consequences and cannot be addressed with a short-term mindset only: solving these issues requires a combination of a long-term vision and concret e short-term action. The Group’s meaningful purpose and its 2021-2025 SSI fit with Schneider’s longer-term 2050 v ision f or a fair and de carbonized world, and key steps along the way in 2030 and 2040 that are presented b elow. 2040 Become carbon neutral on full end-to-end footprint by 2040 (full Scopes 1, 2, and 3), 10 years ahead of 1.5°C climate trajectory. This means that all Schneider Electric products will be carbon neutral by 2040 (using quality offsets) 2050 Engage with suppliers towards a net-zero CO 2 supply chain