www.se.com Schneider Electric 160 2021 Sustainable Development Report 7 Methodology and audit of indicators 7.2 Methodology elements on EU taxonomy indicators Regarding the calculation of the proportion of activities considered eligible in accordance with Article 1(5) of the Disclosure Delegated Act in turnover, capital (CapEx) and operational expenditures (OpEx), Schneider Electric provides the following additional details: Calculation of Taxonomy-eligible turnover As detailed in Annex 1 of the Delegated Act on Article 8, the denominator of Taxonomy eligible turnover is equal to the net turnover recognized pursuant to IAS 1.82(a) after removal of intra- group transactions. At Schneider Electric, this represents EUR 28,905 million, as disclosed in the first line of the consolidated statement of income in the Universal Registration Document (URD, page 344). For 86% of revenues (excluding entities having their own reporting framework), eligibility calculation combines two approaches: • An offer-based (by nature of technology) approach, whereby workshops are conducted with offer management teams for each line of business to define whether products are in line with the definition of economic activities included in the EU Climate Delegated Act. The analysis is performed at the level of each product category, which enables a granular segmentation between Taxonomy-eligible and Taxonomy-non- eligible revenues. For example, Building Management Systems (BMS) generally include energy efficiency systems, which are Taxonomy-eligible, and fire safety and access control systems, which are not. In this example, the analysis enables to account only for energy efficiency systems installed as part of a BMS. An eligibility ratio is then consolidated for each product line (which includes multiple product categories). • An end-segment-based approach, whereby commercial teams indicate for each product line the amount of revenues generated from Taxonomy-eligible end-segments (Green Transport and Renewables mainly). Double-counting between offer-based approach and end- segment-based approaches are removed before consolidation. The following assumptions are made: • At the granularity level of product categories, data is based on orders instead of revenues. Therefore, the eligibility ratio is calculated by dividing the amount of eligible orders by the total amount of orders, and then applied to the net turnover. • At the granularity level of product categories, a non-significant share of orders (<5%) is not allocated per product category. These are not considered in the calculation of Taxonomy alignment per product line (the product line’s average eligibility ratio is applied). • End-segment sales data is based on orders. A correction factor is applied to assess the value of net revenues per end-segment. For the remaining 14% of revenues (related to entities having their own reporting frameworks), analysis is conducted separately following a review of each entity’s product line reporting. Calculation of Taxonomy-eligible Capital Expenditure (CapEx) As per specification of CapEx as detailed in Annex 1 of the Delegated Act on Article 8, the denominator of Taxonomy-eligible CapEx KPI is equal to additions to tangible and intangible assets of the financial year 2021 (including IFRS 16 rights of use), considered before depreciation, amortization and any re-measurement and including those resulting from revaluations and impairments for the financial year 2021 and excluding fair value changes. The denominator also covers additions to tangible and intangible assets resulting from business combinations that occurred during the financial year 2021. At Schneider Electric, total tangible assets resulting from the above definition represents EUR 581 million, including EUR 536 million from additions, as disclosed in the note 11 of the Group financial statements in the URD, and EUR 45 million from business combinations. The total covered IFRS 16 rights of use over 2021 represents EUR 402 million, as disclosed in the note 11 of the Group financial statements (page 369 of the URD), including EUR 349 million from additions and EUR 53 million from business combinations. The total intangible assets resulting from the above definition represents EUR 1,782 million. This amount is split as follows: EUR 333 million from additions, as disclosed in the note 10 of the Group financial statements (page 367 of the URD) – this includes EUR 307 millions of capitalized Research and Development (R&D) projects, as disclosed in the note 10 of the Group financial statements, and EUR 1,449 million from business combinations. As per specification of CapEx as detailed in Annex 1 of the Delegated Act on Article 8, all costs based on IFRS 16 related to long-term leasing of buildings are eligible. CapEx related to assets or processes associated with Taxonomy-eligible activities, including R&D CapEx, were calculated using allocation keys of eligible turnover per business and operations. In 2021, CapEx for eligible individual measures was not evaluated, however the Group is working to implement the reporting process to do so next year. Calculation of Taxonomy-eligible Operational Expenditure (OpEx) Only non-capitalized costs related to Research and Development (R&D) are reported. OpEx related to building renovation measures, short-term leases, maintenance and repair and other expenditures relating to the day-to-day servicing of assets represent less than EUR 116 million and are therefore considered as non-material for Schneider Electric business, and therefore excluded from the KPI calculation. The denominator of Taxonomy eligible OpEx KPI represents EUR 1,276 million, corresponding to non-capitalized Research and Development costs of the Group for EUR 1,232 million presented before offsetting with the R&D Tax Credit for EUR 44 million, as disclosed in the note 4 of the Group financial statements in the URD (page 365).