63 Life Is On | Schneider Electric www.se.com Chapter 2 – Sustainable development Strategic Report 2. 2.1.2 The Schneider Sustainability Impact, a unique transformation tool 2.1.2.1 A continuous improvement process anchored in our practice since 2005 To demonstrate significant impacts and initiate lasting change, performance must be measured, in a relevant manner for a company and its stakeholders. That is why Schneider Electric defines specific Group objectives and measures its results each quarter (since 2005) in a dashboard commonly referred to as a “barometer”. In 2018, this barometer was renamed Schneider Sustainability Impact (SSI). Schneider uses this tool to address its sustainability challenges and to improve each of the pillars of its strategy identified through its materiality matrix. The SSI uses a scoring scale of 10 and provides an overall measure of the Group’s progress. The tool also enables Schneider to anticipate and effectively manage its risks and opportunities by mobilizing key stakeholders around specific, measured objectives and reliable results. The SSI’s performance and monitoring systems are audited annually by an external auditor (limited assurance). Each SSI seeks to: • Mobilize the whole Company around holistic sustainability goals impacting its ecosystem; • Share the Group’s improvement plans with stakeholders; • Create system value . On a daily basis, Schneider Electric proves that economic, environmental, and social interests are convergent. 2.1.2.2 Two complementary sustainability performance dashboards to progress between 2021 and 2025 In 2020, Schneider Electric defined six new objectives for the 2021-2025 period: 1. Act for a climate positive world, by continuously investing in and developing innovative solutions that deliver immediate and lasting decarbonization in line with our carbon pledge. 2. Be efficient with resources, by behaving responsibly and making the most of digital technology to preserve our planet. 3. Live up to our principles of Trust, by upholding ourselves and all around us to high social, governance, and ethical standards. 4. Create equal opportunities, by ensuring all employees are uniquely valued and work in an inclusive environment to develop and contribute their best. 5. Harness the power of all generations, by fostering learning, upskilling, and development for each generation, paving the way for the next. 6. Empower local communities, by promoting local initiatives and enabling individuals and partners to make sustainability a reality for all. The execution of the Group’s 2021 – 2025 sustainability strategy is tracked through quantitative key performance indicators (KPIs), under two complementary tools: the SSI and the new Schneider Sustainability Essentials (SSE). The SSI is the translation of our six long-term commitments into a selection of 11 highly transformative and innovative programs. The programs will be tracked and published quarterly, audited annually, and linked to short-term incentive plans for more than 64,000 employees. A notable addition to the SSI in 2021 is the local aspect, aiming to deploy local actions in the 100+ markets where the Group operates in order to better empower all leaders and collaborators to unlock meaningful local impacts. The SSE has been created to maintain a high level of commitment and transparency in the actions taken by the Group. This new tool brings balance between the innovative transformation plans of the SSI and the need to keep progressing on other long-lasting programs. In this spirit of continuous improvement, and in a holistic vision of sustainability, the SSE will track annual progress with 25 quantitative KPIs, and some additional qualitative programs. Collectively, the SSI 11 Global Impacts and its Local Impact, as well as the 25 SSE programs, are the Group’s short-term sustainability roadmap and our contribution to the 17 United Nations SDGs. More details on our contributions to each SDG are available online. 2.1.2.3 A vision beyond 2025 for climate, biodiversity, and access to energy Climate change, biodiversity loss, rising inequalities, all those issues have long-term consequences and cannot be addressed with a short-term mindset only: solving these issues requires a combination of a long-term vision and concrete short-term action. The Group’s meaningful purpose and its 2021-2025 SSI fit with Schneider’s longer-term 2050 vision for a fair and decarbonized world, and key steps along the way in 2030 and 2040 that are presented below. 2030 • Reach net-zero operational emissions and reduction of Scope 3 emissions by 35% (versus 2017) as part of the Group’s validated 1.5°C Science-Based Target (SBT) • Consume 100% renewable electricity (RE100) • Double energy productivity (versus 2005) (EP100) • Switch to 100% electric cars (EV100) • Provide access to energy to 100 million people 2040 Become carbon neutral on full end-to-end footprint by 2040 (full Scopes 1, 2, and 3), 10 years ahead of 1.5°C climate trajectory. This means that all Schneider Electric products will be carbon neutral by 2040 (using quality offsets) 2050 Engage with suppliers towards a net-zero CO 2 supply chain