249 Life Is On | Schneider Electric www.se.com Chapter 3 – How we manage risk at Schneider Electric Strategic Report 3. 3.3 Risk management mechanisms 3.3.1 One unique risk taxonomy is established to have a common risk language One of the core assets of the Group risk management practice is a unique risk taxonomy, used by the different domains within the organization (Sales Regions, Business Units, Global Functions). It is key to ensure all the Group entities speak the same risk language and collaborate efficiently on decreasing the risk exposure. This document is updated once a year based on the relevance and characteristics of identified risks in a business context. The taxonomy contains several levels, described in the illustration below. Each risk is mapped to the pieces of the flywheel (see section 3.3.3, page 251) to ensure there are no gaps in the Group monitoring and mitigation of the risk universe. Highest structure of risk for Executive reporting & visualization granularity of the Risk Matrix e.g. Third party screening and sanctions compliance Operational risk level , managed by the domain/function in charge of the risk e.g. Supplies from countries under sanction Differentiation between event triggered risks , strategic risks and management practice risks Accountable risk level : for each risk type a risk owner is identified Detail available on risk zooms in the risk matrix e.g. Export control RISK MATRIX ENTERPRISE RISK MANAGEMENT Risk nature Risk type Risk category Risk vector Figure 2: Risk taxonomy structure