www.se.com Schneider Electric Universal Registration Document 2021 190 Chapter 2 – Sustainable development 2.6 Delivering social impact for a just transition 2.6.1 Offering better lives through access to green electricity 2.6.1.1 Risks and opportunities Today, more than two billion people have little or no access to electricity, representing 25% of the world’s population. Notable progress has been made on energy access in recent years, with the number of people living without electricity dropping to 759 million in 2019 from one billion in 2016 ( 1 ) . Nonetheless, as SEforAll (2) puts it, “electricity access is growing, but not for everyone”. In sub-Saharan Africa, colossal additional efforts must be made to achieve universal access: • About 600 million people in sub-Saharan Africa do not have access to electricity, i.e., more than one in two inhabitants; • This trend is increasing, due to demographic pressure; • The COVID-19 pandemic will have further amplified the difficulties of access to electricity in the most fragile areas; according to SEforAll, the pandemic could increase the non-electrified population by 100 million in 2020; • By 2030, on the current trajectory, 85% of the remaining unelectrified world population will be in sub-Saharan Africa. Asia-Pacific is approaching universal electrification with ambitious government off-grid electrification and grid extension programs: • Between 2000 and 2018, more than 1.4 billion people gained access to electricity worldwide, mainly in developing countries in Asia; • Nevertheless, the grid can be unreliable in remote areas, where it must be supplemented with solar-powered backup solutions; • The growing need for equipment and electrical appliances for productive use in rural areas must be met with renewable energy solutions. In addition to the 759 million people without electricity access, an estimated one billion people have access to intermittent, unreliable, or dangerous electricity. To achieve United Nations Sustainable Development Goal 7 (SDG 7), access to affordable, reliable, sustainable, and modern energy must be a major objective, as the lack of energy affects the poorest: among the energy poor, three quarters are also multidimensionally poor in terms of human development 2 . Access to green electricity offers a chance to live a better life, as it can have a positive multiplier effect on all socio-economic dimensions of the individual or community: livelihood, health, education, security, and empowerment of women, while fighting against climate change by replacing fossil solutions. (1) Source: Tracking SDG 7: The Energy Progress Report, produced by the International Energy Agency (IEA), the International Renewable Energy Agency (IRENA), the United Nations Statistics Division (UNSD), the World Bank, and the World Health Organization (WHO). (2) Using the Global Multidimensional Poverty Index. 2.6.1.2 Group policy Schneider Electric launched its Access to Energy program in 2009, with a unique approach combining three dimensions that enrich each other: • A training and entrepreneurship program aimed at developing skills in the electricity trades and supporting entrepreneurs in this area, in particular women, in order to promote sustainable and inclusive local development. • A social and inclusive business, with products and solutions for rural electrification (collective and individual, such as solar lanterns, solar home systems including Pay-As-You-Go features, solar water pumping systems, microgrids including plug and play containerized solutions, etc.), creating local jobs in distribution, energy services, electricity powered industries, etc. • Impact investment funds to support local economies in gaining access to modern energy and reducing energy poverty. The purpose of the Access to Energy social business is to bring clean electricity to populations in emerging markets both as a fundamental right and a means for social and economic development, with a safe, affordable, reliable, and sustainable energy offer. At Schneider, we call this Electricity for Life and Electricity for Livelihood. The ambition of the Access to Energy social business is to connect an additional 20 million people between 2021 and 2025, and 70 million by 2030. 34 million people have already benefited from the Schneider energy access solutions between 2009 and 2021. The impact investment funds will contribute to these targets, within the scope of the invested companies contributing to the mission of providing access to green electricity. More broadly, Schneider’s vision of impact investing is to fund high social impact initiatives, such as energy and digital services that enable all generations to contribute to a better future. 2.6.1.3 Access to energy social business Schneider Electric develops products and solutions to meet a range of both individual and community needs across the energy chain, from solar lanterns and solar home systems to decentralized small power plants, water pumping systems, and street lighting. These offerings also make it possible to maintain a sustainable economic and social activity as well as include and involve local communities in projects. 2.6.1.3.1 Governance A new governance of the Access to Energy business was put in place from 2021. It is placed under the responsibility of the Access to Energy Business Vice-President, reporting to the Sustainability Senior Vice-President. An advisory board dedicated to the subject has been set up, made up of the Chief Strategy & Sustainability Officer, the Energy Management Executive Vice-President, the International Operations Executive Vice-President, as well as the Sustainability Senior Vice-President and the Access to Energy Business Vice-President, and, once a year, the Chairman & CEO. The subject was also one of those reviewed in 2021 by the Schneider Electric Stakeholder Committee.