www.se.com Schneider Electric 164 2021 Sustainable Development Report 7 Methodology and audit of indicators 7.4 Task-force for Climate Related Financial Disclosure (TCFD) correspondance table Climate Change has been clearly identified as crucial to both Schneider Electric’s internal and external stakeholders during the various materiality assessments that took place in 2014, 2017 and 2020. It is also one of the pillars of the Group’s Code of Conduct (Trust Charter). Overall, transformations linked to climate change are a source of opportunities for Schneider Electric, the main risk being to fail leading by example and thereby lose traction with customers, investors, new talents and collaborators in the company. Concrete climate-related programs to either grab opportunities, or mitigate risks are deployed every 3 to 5 years in our Schneider Sustainability Impact (SSI) and complement the Group’s Climate Pledge – our short-term (2025), mid-term (2030) and long-term (2040, 2050) objectives, aligned with a 1.5°C trajectory. We present below our main climate-related disclosures in line with TCFD recommendations. Recommended Disclosure CDP Climate Change & URD 2021 references Brief description (please refer to CDP Climate Change response and other sections of this Universal Registration Document for further details) 1. Governance: Disclose the organization’s governance around climate-related risks and opportunities. 1. a) Describe the board’s oversight of climate-related risks and opportunities. CDP – C1.1b URD – chapter 2 (2.1.4; 2.3.1); chapter 3 (3.1.4) The process for designing a new Schneider Sustainability Impact program (SSI) includes a sustainability risks and opportunities assessment (including climate), which leads to the design of concrete transformation initiatives to align the company on the challenges identified. The risks and opportunities are then monitored and managed on a continuous basis. Several governance bodies are involved in this process: • The Board of Directors has oversight of climate-related issues notably through its Human Resources & CSR Committee. This Committee has 6 Director members who report to the Board of Directors, and reviews Schneider’s CSR strategy, SSI performance and the Group’s positioning vs. its peers. • The Executive Committee has a dedicated Group Sustainability Committee, which gathers 6 Executive Committee members (1 level below the Chairman & CEO) and is chaired by the Chief Strategy & Sustainability (Chairman of the Committee). This Committee meets two to three times a year and decides on the sustainability strategy and validates the SSI and carbon pledge. • The SSI Steering Committee was formed in 2020 to propose precise and measurable transformation programs for the 2021 – 2025 SSI, which were then submitted to the Group Sustainability Committee for approval. • The Sustainability Department coordinates the overall sustainability strategy of the Group and rollout of action plans. • A Carbon Committee is in charge of continuously assessing climate-related risks and opportunities, steering the Group carbon pledge and proposing a strategy and management plan to the Group Sustainability Committee. Additionally, environmental transformations are driven by a network of leading experts in various environmental fields such as eco-design, energy efficiency, circular economy, or CO 2 . Environment leaders coordinate a network of more than 600 managers responsible for the environmental management of sites, countries, product design and marketing. Read more in section 2.3.1 “Climate governance” page 128. 1. b) Describe management’s role in assessing and managing climate-related risks and opportunities. CDP – C1.2, C1.2a URD – chapter 2 (2.1.6, 2.3.1) 2. Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities in the organization’s businesses, strategy and financial planning where such information is material. 2. a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term. CDP – C2.1a, C2.2a, C2.3, C2.3a, C2.4, C2.4a URD – chapter 2 (2.1.6, 2.3.1) The growing demand for greener, low-carbon products and services creates a strong business opportunity for Schneider Electric. The Group is uniquely positioned to grab these opportunities because it acts on both sides of the equation: • The solutions Schneider Electric brings to the market are directly linked to activities to mitigate, adapt, and improve humanity’s resilience to climate change; • At the same time, Schneider Electric acts to reduce its end-to-end CO 2 footprint, aiming for a net-zero CO 2 supply chain by 2050, with precise steps for 2025, 2030 and 2040. In 2021, 71% of the Group revenues qualify as Impact revenues, following Schneider Electric’s definition, meaning revenues from offers that bring energy, climate, or resource efficiency to customers, while not generating any significant harmful impacts to the environment. The Group aims to grow its Impact revenues to 80% by 2025. Additionally, maintaining the best offers on the market for greener, more efficient products and services that support the transition to a low-carbon economy needs adapted investments in Research and Development in the short term. Schneider Electric invest about 5% of its annual revenues in R&D each year. It is estimated that more than 90% of its innovation projects contribute to solutions contributing to climate change mitigation. 2. b) Describe the impact of climate-related risks and opportunities on the organization’s business, strategy, and financial planning. CDP – C2.3a, C2.4a, C3.1, C3.2, C3.2a, C3.3, C3.4, C3.4a URD – Chapter 2 (2.3)