www.se.com 18 2021 Sustainable Development Report 1 Sustainability at the heart of our strategy 1 .4.4 Internal governance model I nternal policies create the backbone of an organization’s c ompliance a nd s ecurity pr ogram. T hey ens u re em ployees understand h ow t o i mplement c r itical t asks a n d me et b ehavior expectations. Regulators have made clear the need for effective policy de velopment a nd m a nagement pr ograms. I t is n o longer enough t o mer ely d ocument t he e xistence o f p olicies a nd procedures. O rganizations must be able t o demonstrate that employees know, understand a nd a pply t hem. I n other w ords, s imply de veloping and publishing policies is no longer sufficient in the eyes of our s takeholders ( NGOs, r egulators, c ustomers, f inancial p a rtners, etc.). T o that en d, S c hneider E lectric ha s established a f our t ier f orm of documentation pyramid of norms, under the umbrella of i ts Code of Conduct called the Trust Charter, strengthened by p olicies, s tandards, pr ocedures, a nd g u idelines. Policies consist of formal statements produced and supported by t he leadership team, that state where the organization stands on i mportant i ssues. S chneider ha s a r ound 8 5 global p olicies. T he Schneider E lectric G lobal P olicy M anagement P olicy pr ovides the rules to be followed for global policies. S tandards defined in these internal policies assign quantifiable m easures and define acceptable le vel of quality. They aim to make a policy more meaningful and effective. Procedures establish the p roper steps to take to operationalize a policy and/or standard. F inally, g uidelines pr ovide a dditional g uidance w ith a se t o f r ecommendations to clarify expectations in relation to a g iven p rocedure. Trust C h arter In 2021, Schneider Electric evolved its Principles of Responsibility to the Trust Charter, acting as its Code of Conduc t and demonstrating it s c ommitment t o ethics, s afety, s ustainability, qu ality, and cybersecurity. It is an executive summary of our policies and a guide on how we work. It is available publicly o n o ur website in 30 languages. Further details are provided on page 38. Human rights & corporate citizens hip In 2017, Schneider Electric drafted a specific Human Rights Policy a s part of a broader program on duty of vigilance in its value chain a nd in line with the United Nations Guiding Principles on Business a nd Human Rights (see page 50). Human resources and safety The G roup’s H uman R esources p olicies c over t h e following t opics: diversity, e quity a nd i nclusion, he alth & w el l-being, s afety, s ecurity and t ravel, em ployee eng agement, f a mily l eave, a nti-harassment, recruiting, i nternational m obility, t r aining, h uman c a pital development, t alent iden tification, t otal r emuneration, s ocial benefits, and COVID-19. These apply to the Group and are a ccompanied by global processes. Ethical business conduct I n addition to the Trust Charter, different policies bolster the G roup’s commitments in terms of business ethics and integrity. T he Business Agents Policy specifies the rules to be followed when a n external stakeholder is solicited to get a deal and integrates t he a pproval pr o cess o f business a gents. T he I nternal F r aud Investigation d irective i ndicates t he c ommitment t o whistleblower Schneider E lectric p r otection. The Gifts & Hospitality Policy wa s approved by the Group’s CEO in December 2015 and updated in 2021 before local depl oyment. It is supplemented by an anti-corruption Code of Conduct detailing related processes. Other policies cover social media m an agement, c ompetition l aw, conflict o f interest, e xport control, etc. Cybersecurity, data pr ivacy a nd pr otection Wi th t he ac celeration o f the d igi talization, S chn eider E lectric developed many policies to reinforce its cybersecurity and respect personal data and privacy, such as IT asset management and usage, ac ceptable us e o f a ssets, gener al i nformation s ecurity, data c lassification, g lobal d ata pr ivacy, us er access m an agement policy, email security policy, and many others. It is the pillar containing t he m ost p olicies. Climate and reso urces Schneider Electric’s envi ronmental policy aims to improve industrial processes, reinforce product Eco De sign an d incorporate Group customers’ concerns about environmental protec tion by providing them with product and servi ce solutions. It is bolstered by the Energy and Environment poli cies. These policies app ly to the Group and are accompanied by global action plans. Respon sible sou rcing In 2016, S chneider E lectric r enewed t he charter f or its suppliers, called the Supplier Guide Book. The first chapt er of this book sets out the Group’s sustainability expectations in five areas: environment, f air a nd e thical b usiness pr actices, s ustainable purchasing, working conditions, and human rights. These requirements are detailed in a dedicated docume nt called the Supplier Code of Conduct. In 2018, the Group a do pted the Responsible Business Alliance (RBA) Code of Conduct for suppliers. I n O ctober 2 021, S chneider r enewed it s Supplier C ode of Conduct whereby it requires all its suppliers to review their own ope rations, t ake a mbitious t arg ets, a nd i nitiate b old ac tions i n t he areas mentioned in this Supplier Code of Conduct. Strive f or high quality Schneider’s pr iority i s t o delight it s customers w ith a n ou tstanding end-to-end e xperience. Q uality i s every c ustomer’s r ight a nd e very employee’s r esponsibility. E xperience i s the m ost i mportant d river for cu stomers, d efining t he b usiness r ela tionships t hey su stain w ith suppliers a nd partners. T he G roup’s c ustomers pl ace t rust i n its resilient, h ighly p ersonalized, m ul ti-channel e xperience, a nd the superior quality of its products. To ensure this, the company acts wi th a gility, d iscipline, a nd g ood business s ense throughout t he offer life cycle from creation to supply, manufacturing, delivery, w hen in operation and when being serviced. The Group has deployed a specific Qualit y Directive “Managing Cu stomer Safety Risks” and a Quality Procedure “Offer Safety Review” to protect its customers. They are supported by a robust Qualit y Management Syst em, which is improved continuously to fulfill expectations of all rel evant parties. It is in full alignment with the Trust Charter as well as in compliance with ISO 9001 standard.