www.se.com Schneider Electric Universal Registration Document 2021 222 Chapter 2 – Sustainable development Recommended Disclosure CDP Climate Change & URD 2021 references Brief description (please refer to CDP Climate Change response and other sections of this Universal Registration Document for further details) 3. Risk Management Disclose how the organization identifies, assesses, and manages climate-related risks. 3. a) Describe the organization’s processes for identifying and assessing climate-related risks. CDP – C2.1, C2.1a, C2.1b, C2.2, C2.2a URD – chapter 2 (2.1, 2.3) Environment and climate-related risks are included in Schneider’s unique risk taxonomy (more details in section 2.3.1.3 Risk management, page 129). Risks are identified and assessed at Group level through interviews with experts and leaders, run by the Internal Audit Department and the Group Risk Management Department each year. In 2021, around 40 of the Group’s top managers were interviewed in addition to board members. In addition, a materiality analysis is conducted by the Sustainability department every 3 years to identify and prioritize material ESG issues through engagement with various stakeholders. The different governance bodies involved in the definition and monitoring of Schneider’s Sustainability roadmap and programs (SSI), and in particular the Carbon committee, are in charge of defining strategic mitigation programs in response to the risks and opportunities identified. Strategic programs defined at Group level are then cascaded into business divisions down to the sites for implementation and are monitored through our digital platform EcoStruxure ™ Resource Advisor. Performance against those programs is tracked and published quarterly in the Schneider Sustainability Impact (SSI), and annually in the Schneider Sustainability Essentials (SSE) and URD. Each program of the SSI has a dedicated pilot in charge of driving the transformation and is sponsored at the Senior Vice President and Executive Committee level to ensure management control and oversight. Climate adaptation risks are also studied and mitigated at site level for our industrial sites. Our Property Damage and Business Interruption program, inspired from ISO 22301 standard, maps substantive risks of financial impact on the business, including asset destruction (buildings, equipment, inventories) and profit loss due to business interruption. An example of a risk analyzed at site level is flooding risks. Risk analysis of industrial sites includes an analysis of interdependencies, study of alternative supply, and estimation of time to recover in case of damage, etc. Typically, all critical industrial sites are externally audited onsite at least every two years. In addition, an Integrated Management System (IMS) covers the Group’s main plants, distribution centers, and large offices, and hosts ISO 14001, ISO 50001, ISO 9001, and OSHAS 18000/ISO 45001 – – – management systems. Each site is audited periodically, either externally by Bureau Veritas (every three years), or internally. With suppliers, sustainability risks (including natural and climate-related hazards), are embedded into Supplier Risk Assessment. This process enables to define risk mitigation action plans with suppliers, as well as prioritize double sourcing strategies. Leveraging external data providers, the Group monitors events across 10,000 nodes (such as ports and critical supplier locations) to shorten reaction time when events occur and minimize business impact. At present, the impact of climate-related matters is not material to the Group’s financial statements. 3. b) Describe the organization’s processes for managing climate- related risks. CDP – C2.1, C2.2 URD – chapter 1 (1.7), chapter 2 (2.1, 2.3) 3. c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management. CDP – C2.1, C2.2 URD – chapter 1 (1.7), chapter 2 (2.1, 2.3) 2.7 Methodology and audit of indicators