www.se.com Schneider Electric Universal Registration Document 2021 66 Chapter 2 – Sustainable development 2.1 Sustainability at the heart of our strategy 2.1.2.4 Process to select and deploy our commitments 2.1.2.4.1 Sustainability Strategy setting process Plan (1 year) Deploy (3 to 5 years) 1. Definition of Strategic Pillars • Internal & External stakeholder consultation (Materiality Analysis) • SSI Steering Committee Workshops 2. Definition of key performance indicators • 1-to-1 workshops with Sustainability SVP • Iterative KPI drafting and benchmarking 3. Program validation • Group Sustainability Committee • The Board of Directors, on the recommendation of the Human Resources & CSR Committee Quarterly Performance reporting Reward Monitoring Annual Audit • SSI Pilots provide quarterly performance updates • The Sustainability Team coordinates quarterly publications, the annual audit and reporting in voluntary and regulatory publications • The Group Sustainability Committee evaluates progress and decides corrective actions • The Board of Directors, on the recommendation of the Human Resources & CSR Committee, oversees progress and approves Reward plans 2.1.2.4.2 Program planification Analysis of material challenges Every three to five years, the Group defines a new SSI dashboard in the wake of an exercise to identify sustainability challenges on the basis of external and internal contributions. The voices of each stakeholder are taken into account via the Group’s materiality matrix, meetings with SRI investors, and the questionnaires from rating agencies or from customers, which all shed light on our strategic points of differentiation and on salient societal concerns. Definition of disruptive programs For each target and indicator, and this is a critical point for the operational implementation of each SSI, the ambition is defined in consultation with the departments concerned. In 2020, a specific SSI Steering Committee was created, with about 50 members: representants of each Executive Committee member, each geography, function, and business unit. Three all- hands workshops took place, and the sustainability team organized individual follow up interviews with each member to define precise and measurable programs. For the Group, it is a guarantee of strong mobilization in the field that is consistent with actual priorities; for teams, it is the assurance of having the necessary means and visibility to improve. In each new period, the barometer update takes into account results obtained, progress still expected, the emergence of new topics and new priorities, and the experience gained. Thus, it is a powerful tool to move the Group forward on its major challenges. Four scenarios may emerge from one SSI to the next: • Improvement plans are maintained in the barometer and their targets are renewed or increased. • Improvement plans change: new and more innovative or better-adapted indicators that cover the same subject are implemented; old indicators continue to be monitored internally if necessary. • Improvement plans are removed from the barometer; this is also the case with indicators that have reached a threshold. They continue to be monitored internally if necessary. • Improvement plans to address new challenges are implemented. Governance and validation of the SSI The Sustainability department presents a draft version of the new SSI to the Human Resources & CSR Committee Committee, which reports on its work to the Board of Directors, and to the Group Sustainability Committee for validation. This latter Committee includes six members of the Executive Committee: the Chief Strategy and Sustainability Officer; Chief Human Resources Officer; Chief Global Supply Chain Officer; Chief Marketing Officer; Chief Governance Officer & Secretary General; and Chief Financial Officer. The new barometer is then approved by the Chairman & CEO. 2.1.2.4.3 Program deployment Transparent quarterly and annual disclosure Quarterly results are supervised by the Group Sustainability Committee, which makes decisions on any corrective actions that may be necessary to reach objectives. This Committee meets quarterly. The Human Resources & CSR Committee within the Board of Directors conducts an annual review of the Group’s Sustainability Policy, analyzing, in particular, the performance of the SSI. Extra-financial annual results are presented together with financial results by Jean-Pascal Tricoire, Chairman & CEO of Schneider Electric, in order to demonstrate the Group’s commitment to making sustainability part of the Company’s long-term strategy. In addition, since 2014, quarterly results have been presented together with quarterly financial information to institutional investors by the Chief Finance Officer.