207 Life Is On | Schneider Electric www.se.com Chapter 2 – Sustainable development Strategic Report 2. 2.7.1.2 Indicators from the Schneider Sustainability Impact SSI #1: Grow Schneider Impact revenues to 80% Schneider Impact revenues are defined as offers that bring energy, climate, or resource efficiency to our customers, while not generating any significant harmful impact to the environment. Schneider Impact revenues are split into four categories described thereafter. Activities included are: 1) Energy efficiency architectures bringing energy and/or resource efficiency to customers . Offers include building management systems, power management systems, lighting and room control, thermal control, variable speed drives, Sustainability Business (SB), and industry automation. Neutral technologies such as signaling, racks and enclosures, access control, or emergency lighting are excluded. 2) Grid reinforcement and smart grid architectures contributing to electrification and decarbonization . This includes all technologies and architectures contributing to a New Electric World, helping grid and electrification come to life: smart grid and microgrid technologies, EV charging infrastructures, medium voltage systems to upgrade electricity distribution networks, low voltage connectable offers enabling smart grid management and energy efficiency, secure power and switches that enable security, and security of supply; 3) Products with differentiating green performance, flagged thanks to our Green Premium program . Green Premium products offer environmental transparency (with digital life cycle analysis and circular end-of-life instructions), superior compliance to stringent environmental regulations, and differentiating environmental performance through specific environmental attributes (note: double-accounting with categories 1 or 2 is removed); 4) Services that bring benefits for circularity (prolonged asset lifetime and uptime, optimized maintenance operations, repair, and refurbish) and energy efficiency (maintenance to maintain the operational performance of equipment and avoid a decrease of energy efficiency over time). Additionally, revenues derived from activities with fossil sectors and others are systematically excluded, including Oil & Gas, coal mining, and fossil-power generation, in line with prevailing corporate responsibility reporting and sustainable finance practices, even though Schneider Electric’s technologies deliver resource and carbon efficiency in such sectors as well. In line with Schneider Electric’s strategy to phase out SF 6 from offers by 2025, SF 6 -containing switchgear for medium voltage applications are also excluded. In addition, neutral technologies such as signaling, racks and enclosures, access control, or emergency lighting are excluded. All revenues consolidated in financial accounts are taken into account. Calculation is based on revenues per line of business. Exclusion of fossil revenues is based on orders per customers’ end-segment, with extrapolation to estimate destination of transactional sales. This indicator was audited by Ernst & Young. SSI #2: Deliver 800 million tonnes of saved and avoided CO 2 emissions to our customers This indicator measures CO 2 savings and avoidances delivered by Schneider Electric offers to customers. CO 2 savings and avoidances are calculated for global sales of the reporting year and cumulated over the offers’ lifetime. Net emissions are calculated as the difference between emissions with Schneider Electric’s offer and emissions in the reference situation. The ambition for this indicator has been increased in 2021 with the definition of the new sustainability strategy: Schneider is committed to save and avoid 800 million metric tons of CO 2 thanks to EcoStruxure ™ for its customers. The difference between “saved” and “avoided” emissions is key: saved CO 2 emissions correspond to brownfield sales that enable reduction of global CO 2 emissions compared to previous years, and avoided CO 2 emissions correspond to greenfield sales that enable a limitation of the increase of global emissions. • Brownfield sales correspond to the situation where the offer sold replaces or upgrades an existing system, leading to a change of GHG emissions of installed infrastructure versus the previous year. For “saved” emissions, the “brownfield reference situation” is defined as the situation before the new solution is sold and installed at the customer’s site. • Greenfield sales correspond to the situation where the solution is installed into a new system, allowing a better performance with respect to the market alternative. The calculation of CO 2 impact of offers over their lifetime is based on sales data per product range. The electricity emission factors are forward looking, integrating the decarbonization of the global energy mix as per scenario of the IEA. Market data and expert assumptions are used to determine the use-case scenario of offers and the associated CO 2 impact. This methodology is associated to typical uncertainties of CO 2 corporate accounting methodologies, and conservative assumptions are preferred. More methodological details can be found in our website that has been made public in 2019. This indicator was audited by Ernst & Young. SSI #3: Reduce CO 2 emissions from top 1,000 suppliers’ operations by 50% Under this program, also called Zero Carbon Project, the Group partners with 1,000 of its suppliers, who commit to reduce their company’s CO 2 emissions (mandatory Scope 1 & 2; Scope 3 is optional) and not just on the proportion of sales to Schneider Electric. The active participation of upstream supply chain is critical because it represents multiple times GHG emission compared to Schneider Electric’s own operations. The top 1,000 suppliers come from 64 categories across direct material, indirect material and project procurement and have been nominated by the respective procurement teams.