www.se.com Schneider Electric Universal Registration Document 2021 158 Chapter 2 – Sustainable development 2.4 Being efficient with Resources Today, 78% of Schneider Electric’s product sales come from Green Premium ™ products and the ambition is to reach 80% by 2025 (SSE #6). 80% of product revenues covered by Green Premium ™ In 2021, Schneider Electric received an increasing number of customer inquiries requesting detailed information regarding the material content and environmental impacts of its products. In response, the Industrial Automation Environmental Experts of the Group generated more than 75 new Product Environmental Profile (PEP) documents. This has enabled the certification of a larger amount of products through the Green Premium ™ program to deliver even more transparent information. Resources SSE #6 80% 77% Baseline 2025 target 2021 Progress 0 100 78% 2.4.3.4 EcoDesign Way ™ EcoDesign Way ™ is Schneider Electric’s proprietary process, deployed on product development projects of more than EUR 300,000. It is fully integrated in the Group’s Offer Creation Processes (OCP), mandatory deliverables, and encompasses all involved functions: Marketing, Quality, Design, Supply Chain, and Project Manager. EcoDesign Way ™ involves 3 steps: 1 Identification of relevant environmental performance for customers with inputs from marketing 2 Research and assessment of alternative solutions to target the selected environmental performance 3 Once performance is reached, draft of a marketing pitch. The EcoDesign Way ™ scorecard is fully aligned with all Green Premium ™ value propositions. Moreover, several initiatives have been launched to embed EcoDesign Way ™ earlier in the OCP with strong inputs from the Future Offer Manager to foster innovation and increase EcoDesign Way ™ ’s positive impact. For instance, a simplified Life Cycle Assessment tool was deployed to assess t he environmental potential of incubated projects. In 2021, Schneider Electric initiated a revamp of the EcoDesign Way ™ process to better include the latest global sustainability programs such as Green Materials and Green Packaging. The new eco-design process is expected to be more integrated within the Agile framework Schneider is deploying globally. The process should also involve the assessment of CO 2 emissions at a very early stage in the creation of new offers in order to encourage oriented investments. Moreover, the new eco-design process will not be limited to products but will also include systems/architectures. Finally, the revamping of ecodesign will be the opportunity to enhance sustainable innovation DNA by developing training and coaching modules for the project teams. 2.4.3.5 Green materials Schneider Electric has committed to increase green materials use in its products to 50% by 2025, as part of Schneider Sustainability Impact (SSI #4). With that long-term commitment, the Group aims to: • Be a change agent to accelerate the transformation toward a low-carbon and circular economy of the material industry; • Reduce Scope 3 supply chain emissions, in line with the 1.5°C carbon pledge; • Differentiate Schneider products from those of competitors in the eyes of customers by using low CO 2 , circular, and safer materials in products. In 2021, Cross-functional experts at Schneider (Procurement, R&D, Environment) have worked in close relationship with suppliers to define the Green attributes for each commodity in scope, based on existing international schemes and standards. A green material is: • A material with a lower environmental footprint; and/or • A material that is the output of an industrial technology which is a key enabler for a 1.5°C climate scenario and/or a more circular economy. Considering this definition, Schneider has identified two levers of action: • Build traceability in the value chain. This is a priority for metals today, where visibility on the environmental impact and technology-origin of procured metals is low. • Select green materials based on a lower environmental footprint. The lower environmental footprint attributes are defined for each commodity in scope, as the environmental performance of metal cannot be based on the same attributes as plastic. In 2021, the scope of green materials focused on three types of commodities covering about a third of purchased materials in volume: • Thermoplastics (including both direct and indirect procurement). Thermoplastics are qualified as “Green” when the supplier is bringing evidence of a minimum recycled content, biobased content (minimum threshold depends on whether the compound is halogenated or not) or is using a green flame retardant. • Steel (direct purchases). Steel is qualified as “Green” when the supplier is bringing evidence that the mill of origin is an Electric Arc Furnace (EAF) or has a Green certificate such as the ones delivered by Responsible Steel. • Aluminum (direct purchases). Aluminum is qualified as “Green” when the supplier is bringing evidence that the product carbon footprint is below 8 tonnes of CO 2 per ton of Aluminum, is using a minimum of 90% of recycled content in its product or that the mill of origin has a Green certificate such as the ones delivered by the Aluminum Stewardship Initiative. Volume and distribution of green materials (in kt) 110 220 30 Steel Thermoplastics Aluminum