www.se.com Schneider Electric 14 2021 Trust Report 5.4 Due diligence and results The Group policy is supported by a robust Quality Management System, which is improved continuously to fulfill expectations of all relevant parties. It is in full alignment with our Trust Charter, Schneider Electric’s Code of Conduct, as well as in compliance with ISO 9001 standard. In 2021, 231 Schneider supply chain sites were certified to ISO 9001. 5.4.1 Reliability as a signature of Schneider Electric To ensure improvement in the area of design, the Group launched in mid-2020, a dedicated program, ReeD (Reliability End To End byDesign), to secure fundamentals and ensure full integration of new customer expectations (from Quality to Reliability). It is the obsession of the Group to ensure that “Reliability” is a signature value of Schneider Electric branding: • To deliver an outstanding customer satisfaction on products/ systems robustness • To create and deploy an easy access to the relevant knowledge This reliability program has been designed with R&D at its heart, with huge interactions with all functions and businesses of Schneider Electric: • By ensuring that new offers development is focused on customer promises. • By animating mitigation plan until deviation is fixed. • By ensuring Excellence in Offer Life Cycle changes. • By transitioning from product quality to systems reliability. • By combining people’s competency with robust digital processes. • By leveraging more digital tools to detect issues early and reduce the number of bugs seen by customers. • Reinforce risk analysis to ensure proper usage of our systems, software, and products to prevent associated issues and risks. 5.4.2 Towards a sustainable quality excellence for an ultimate customer experience Thanks to the implementation of a robustness program, Schneider Electric fosters a quality culture by boosting the basics to secure cultural transformation towards Sustainable Quality Excellence for premium customer experience through solid foundations such as people, organization, robustness, and suppliers. For full visibility all along the supply chain, the scope of action has been extended outside and inside Schneider Electric. It is the will of the group to move from a reactive to a predictive mode, leveraging digital and analytics, and building an integration layer that connects critical offers. Six digital streams have been designed to achieve defined goals: • Suppliers Process Monitoring to build with suppliers the capabilities of real time process control. • Manufacturing Process Monitoring to build with factories the capabilities of real time process control. • Logistics Process Monitoring to build the capability of real time process control in Schneider Electric’s logistics operations. • End-to-End Traceability to serialize, track, and trace Schneider Electric’s products. • Analytics & Optimization to leverage descriptive, predictive, and prescriptive analytics on data generated to get actionable insights to improve industrial quality. • Digitization of Processes to digitize processes for simplification, transparency, and robustness while capturing data for analytics. 5.4.3 Revalorising customer returns When sustainability supports Customer Satisfaction, it translates into new processes and policies to allow returns of adapted products for reuse, remanufacture and refurbishment. The strong collaboration between Sustainability, Global Supply Chain, Lines of Business and Customer Satisfaction and Quality teams imagine these new processes, enabling Schneider Electric to revalorize customers returns through reuse of components or remanufacture of new products in Local Adaptation Centers. The benefits can be seen at customer satisfaction level: by producing and delivering back order impacted by components in shortages, by serving new customers orders and on Sustainability level with anticipation of upcoming regulation compliance (Anti-Waste law), reducing carbon footprint of our supply chain and reducing cost of non quality due to product scrap. Schneider Electric has an Offer Safety Alert (OSA) process to alert the relevant Line of Business and other interested parties as soon as it is suspected that customers’ health or property safety may be put at risk by Schneider products, solutions, or projects. The Offer Safety Alert Committee (OSAC) is a permanent corporate committee that oversees and regulates the management of OSA. Its mission is to ensure all OSA are managed with the due diligence and urgency to minimize safety risks to customers. Its independent, multi-discipline nature allows the OSAC to make decisions in our customers’ best interest. As part of the Trust pillar of Schneider Sustainability Essentials 2021-2025, Schneider is committed to reduce by 50% the weight of scrap from safety units recalled by 2025 (SSE #15). 50% reduction in scrap from safety units recalled In 2021 the Group recalled 14 products as approved by the Offer Safety Alert Committee. The Customer Satisfaction & Quality team reaches out to customers impacted by the recall to arrange for product replacement. Investigation will be conducted on products returned to Schneider’s premises to determine the final root cause of the safety issue. The returned product thereafter will be assessed on its reusability and parts which could not be reused will be scrapped according to the local environmental regulations. Tr ust SSE #15 2 ,101 4,202 Baseline 2025 target 2021 Progress 0 100 4,024