www.se.com Schneider Electric Universal Registration Document 2021 74 Chapter 2 – Sustainable development 2.1 Sustainability at the heart of our strategy 2.1.4.4 Internal governance model Internal policies create the backbone of an organization’s compliance and security program. They ensure employees understand how to implement critical tasks and meet behavior expectations. Regulators have made clear the need for effective policy development and management programs. It is no longer enough to merely document the existence of policies and procedures. Organizations must be able to demonstrate that employees know, understand and apply them. In other words, simply developing and publishing policies is no longer sufficient in the eyes of our stakeholders (NGOs, regulators, customers, financial partners, etc.). To that end, Schneider Electric has established a four tier form of documentation pyramid of norms, under the umbrella of its Code of Conduct called the Trust Charter, strengthened by policies, standards, procedures, and guidelines. Policies consist of formal statements produced and supported by the leadership team, that state where the organization stands on important issues. Schneider has around 85 global policies. The Schneider Electric Global Policy Management Policy provides the rules to be followed for global policies. Standards defined in these internal policies assign quantifiable measures and define acceptable level of quality. They aim to make a policy more meaningful and effective. Procedures establish the proper steps to take to operationalize a policy and/or standard. Finally, guidelines provide additional guidance with a set of recommendations to clarify expectations in relation to a given procedure. Trust Charter In 2021, Schneider Electric evolved its Principles of Responsibility to the Trust Charter, acting as its Code of Conduct and demonstrating its commitment to ethics, safety, sustainability, quality, and cybersecurity. It is an executive summary of our policies and a guide on how we work. It is available publicly on our website in 30 languages. Further details are provided on page 94. Human rights & corporate citizenship In 2017, Schneider Electric drafted a specific Human Rights Policy as part of a broader program on duty of vigilance in its value chain and in line with the United Nations Guiding Principles on Business and Human Rights (see page 106). Human resources and safety The Group’s Human Resources policies cover the following topics: diversity, equity and inclusion, health & well-being, safety, security and travel, employee engagement, family leave, anti-harassment, recruiting, international mobility, training, human capital development, talent identification, total remuneration, social benefits, and COVID-19. These apply to the Group and are accompanied by global processes. Ethical business conduct In addition to the Trust Charter, different policies bolster the Group’s commitments in terms of business ethics and integrity. The Business Agents Policy specifies the rules to be followed when an external stakeholder is solicited to get a deal and integrates the approval process of business agents. The Internal Fraud Investigation directive indicates the commitment to whistleblower protection. The Gifts & Hospitality Policy was approved by the Group’s CEO in December 2015 and updated in 2021 before local deployment. It is supplemented by an anti-corruption Code of Conduct detailing related processes. Other policies cover social media management, competition law, conflict of interest, export control, etc. Cybersecurity, data privacy and protection With the acceleration of the digitalization, Schneider Electric developed many policies to reinforce its cybersecurity and respect personal data and privacy, such as IT asset management and usage, acceptable use of assets, general information security, data classification, global data privacy, user access management policy, email security policy, and many others. It is the pillar containing the most policies. Climate and resources Schneider Electric’s environmental policy aims to improve industrial processes, reinforce product EcoDesign and incorporate Group customers’ concerns about environmental protection by providing them with product and service solutions. It is bolstered by the Energy and Environment policies. These policies apply to the Group and are accompanied by global action plans. Responsible sourcing In 2016, Schneider Electric renewed the charter for its suppliers, called the Supplier Guide Book. The first chapter of this book sets out the Group’s sustainability expectations in five areas: environment, fair and ethical business practices, sustainable purchasing, working conditions, and human rights. These requirements are detailed in a dedicated document called the Supplier Code of Conduct. In 2018, the Group adopted the Responsible Business Alliance (RBA) Code of Conduct for suppliers. In October 2021, Schneider renewed its Supplier Code of Conduct whereby it requires all its suppliers to review their own operations, take ambitious targets, and initiate bold actions in the areas mentioned in this Supplier Code of Conduct. Strive for high quality Schneider’s priority is to delight its customers with an outstanding end-to-end experience. Quality is every customer’s right and every employee’s responsibility. Experience is the most important driver for customers, defining the business relationships they sustain with suppliers and partners. The Group’s customers place trust in its resilient, highly personalized, multi-channel experience, and the superior quality of its products. To ensure this, the company acts with agility, discipline, and good business sense throughout the offer life cycle from creation to supply, manufacturing, delivery, when in operation and when being serviced. The Group has deployed a specific Quality Directive “Managing Customer Safety Risks” and a Quality Procedure “Offer Safety Review” to protect its customers. They are supported by a robust Quality Management System, which is improved continuously to fulfill expectations of all relevant parties. It is in full alignment with the Trust Charter as well as in compliance with ISO 9001 standard.