2023 Natural Resources Report

The Next Frontier:
Industrial Tech for
Sustainable Impact

2023 Natural Resources Report

Being efficient with resources
In this section
An “Impact Maker” for sustainability

2

3End-to-End Circularity

1

Governance and Environment policy

44Source better

142Minimize the Group’s impacts and dependencies
on nature

5

Manufacture better

19

6

Use longer and use again

25

5

8

Context and the Group’s commitment
Biodiversity is declining faster than at any time in human history: anurgent and aggressive action is imperative to prevent further
damage to nature and resources. This large loss of biodiversity
and nature threatens the livelihoods of communities worldwide andposes significant risks to economic activities and financial assets
reliant on nature’s resources, directly impacting businesses andtheir value chains(1).

Schneider Electric 2023 Natural Resources Report | www.se.com

While land-use change remains the biggest threat to nature, climatechange is expected to be the main cause of biodiversity loss in the
coming decades if global warming cannot be limited to 1.5°C(2).
The environmental crises we face today are interrelated. This
underscores the importance of taking a systems approach toproblem solving that considers the synergies among challenges
like resource scarcity, biodiversity decline, and climate change.
At Schneider Electric, we believe the transition to a circular economy
presents the greatest opportunity to safeguard biodiversity andnatural resources while also combating climate change.

Companies are taking a look at their entire value chain andreadily innovating to identify better ways of working and creating thatcan be sustained in the long-term, embracing end-to-end circularity.
We believe Schneider Electric is uniquely positioned to be a leader inthe transition to a circular economy, both externally with customers
and internally in our operations. Our value propositions have longdelivered resource efficiency, enabling customers to “do more withless” without compromising on performance, while also considering
the impact of our products and services on nature.
We have over the years adopted an approach looking at the end-to
end lifecycle impact of our products, with the aim to decouple
business growth from resource extraction. More recently, we
adopted a circularity framework.

“At Schneider Electric, we approach supply chain
sustainability holistically, electrifying our sites andprocesses, reducing our energy consumption through ouroffers, working in partnership with our suppliers todecarbonize, and through end-to-end circularity. Taking
this approach to circularity means assuming full
responsibility for our products’ lifecycles – from design
and production, to end-of-life. This requires a multi-year
transformation across our business, identifying ways tokeep resources in circulation for as long as possible tomaximize efficiency and preserve biodiversity while
delivering long-term value to our customers, partners,
and stakeholders.”
Mourad Tamoud
Chief Supply Chain Officer(1) “Biodiversity as a Material Financial Risk: What Board Directors Need to Know.” Climate Governance Initiative, March 6, 2023.
(2) “Six charts that show the state of global biodiversity loss.” World Economic Forum, October 17, 2022.

2023 Natural Resources Report

Progress of our Resources commitments
Schneider
Sustainability
Impact(SSI)

2021 – 2025 programs

4.

Increase green material content in our products

2020: 7%

29%

50%

5.

Primary and secondary packaging free fromsingle-use plastic, using recycled cardboard

2020: 13%

63%

100%

5.

Improve energy efficiency in our sites

2019: 0%

13%

15%

6.

Grow our product revenues covered with Green
Premium™

2020: 77%

81%

80%

7.

Switch our corporate vehicle fleet to electricvehicles2020: 1%

24%

33%

8.

Deploy local biodiversity conservation andrestoration programs in our sites

2020: 0%

66%

100%

9.

Give a second life to waste in “Waste-toResource” sites

2020: 120

10.

Avoid primary resource consumption through“take-back at end-of-use” since 2017 (metrictons)

2020: 157,588

11.

Deploy a water conservation strategy and action
plan for sites in water-stressed areas

2020: 0%Essentials (SSE)

Baseline(1)2023 progress(2)2025Target#200

137
311,229420,000

73%

100%

These programs
contribute to UN SDGs
(1) The baseline year is indicated in front of each SSI baseline performance.
(2) Each year, Schneider Electric obtains a “limited” level of assurance on methodology and progress from an independent third-party verifier for all the SSI and SSE
indicators (except SSI #+1 and SSE #12 in 2023), in accordance with ISAE 3000 assurance standard (for more information, please refer to the 2023 Universal
Registration Document). The 2023 performance is also discussed in more details in each section of this report.

2023 Highlights

Schneider Electric launched PanelSeT SFN, the 1st decarbonized steel
enclosure in the market.

Schneider Electric ranked 1st in the Gartner Supply Chain Top 25 and waslisted in the top five for the fourth consecutive year.

2030

•
•
•
•
•

No net biodiversity loss in Schneider Electric direct operations by 2030
100% deforestation-free wood in our operations and supply chain by 2030
Double energy productivity vs. 2005 (EP100)
Shift 100% of Company fleet to electric vehicles (EV100)
100% waste recovery by 2030

Life Is On | Schneider Electric | www.se.com

Long-term roadmap12023 Natural Resources Report

Sustainability strategy

An “Impact Maker” for sustainability
For over 15 years, sustainability has been at the core of Schneider Electric’s transformation journey. The
Group is now a world corporate leader in sustainability and a critical partner to our customers, suppliers,
investors, NGOs, and other stakeholders using our services and products to accelerate their own energy
efficiency and sustainability transition. Our purpose drives us in “empowering all to make the most of ourenergy and resources, bridging progress and sustainability for all”. Schneider Electric is an Impact Company.

IMPACT

Company

At Schneider Electric, we pride ourselves on being an Impact
Company because sustainability does not only inform what we do,it drives corporate decision making. This entails a responsibility toshare learnings and keep raising the bar.
We are an Impact Company convinced that to do good, we need to
do well, and vice-versa. To deliver sustainability impact, we mustcombine solid profitability with leading practice on allenvironmental, social, and governance (ESG) dimensions. At thesame time, this positive impact supports the long-term resilience of
the Company as we attract new customers, investors, and talents.

Our sustainability and business impacts converge to act for a
climate positive and socially equitable world, while deliveringsolutions to our customers for sustainability and efficiency.
We bring everyone along in our ecosystem, from employees tosupply chain partners, customers, as well as local communities andinstitutions. Building on a foundation of trust, our unique operating
model with a multi-hub approach is set up to impact at both global
and local levels. From a meaningful purpose, our culture builds onstrong people and leadership values empowering all Schneider
Electric people to make a great company.

1. Do well to do goodand vice versa

2. Bring everyone along

Performance
The foundation for doing good

Model & culture
Set up for global and local impact

Business
Part of the solution

All stakeholders
in the ecosystem

All ESG
Dimensions

An Impact model recognized in external ratings
Corporate Knights:
A Global 100
Most Sustainable
Corporation
In top 1% performance
among 100,000+
companies, achieving
Outstanding level

The only company in its
sector listed as A List 13
years in a row

See our recognitions on theAwards page at www.se.com

2

Schneider has beenfeatured on Corporate
Knights’ Global 100 listof sustainability leaders
every year since 2012,
ranking 7th in 2023

Moody’s
ESG Solutions

Dow Jones
Sustainability Indices

Schneider is part of theEuronext Vigeo World
120, Europe 120, Euro
120, France 20 and
CAC40 ESG indices#1 among industry
peers, scoring 88 out of
100 in the latest S&P
Global Corporate
Sustainability
Assessment

2023 Natural Resources Report

Our 2025 sustainability commitments
With less than 10 years left to reach the 17 United Nations Sustainable Development Goals (SDGs), Schneider Electric has accelerated its
impact and is making new, bold commitments to drive meaningful impact within the framework of its business activity. Schneider Electric’s
6 long-term commitments are to:

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.

Be efficient with resourcesby behaving responsibly and making the most of digital technology topreserve our planet.

Live up to our principles of trust

by upholding ourselves and all around us to high social, governance, andethical standards.

Create equal opportunities

by ensuring all employees are uniquely valued in an inclusive environment todevelop and contribute their best.

Harness the power of all generations

by fostering learning, upskilling, and development for each generation,paving the way for the next.

Empower local communities

by promoting local initiatives and enabling individuals and partners to makesustainability a reality for all.

Our unique transformation tool
Since 2005, Schneider Electric measures and demonstrates its
progress against sustainability goals with a unique transformation
dashboard today called Schneider Sustainability Impact (SSI).
The SSI is the translation of our six long-term commitments into aselection of 11 highly transformative and innovative programs
executing our 2021 – 2025 sustainability strategy. It has been
designed to focus on the most material issues, leveraging internaland external stakeholders’ feedback.
Every quarter, the SSI provides, on a scoring scale of 10, an overallmeasure of all the programs’ progress, which is shared with all our
stakeholders together with financial results.

To ensure robustness, the SSI’s performance and monitoring
systems are audited annually by an independent third party andobtain a “moderate” assurance, in accordance with ISAE 3000
assurance standard (except for SSI #+1). In 2023, the Groupobtained a “reasonable” assurance for SSI #8.

2. Disrupting
the status quo
3. Transparent
quarterly disclosure
4. Robustassured by an independent third party
5. Rewarding
employees for performance

Life Is On | Schneider Electric | www.se.com

At the end of the year, 64,000 employees of the Group are
rewarded for the progress achieved as the SSI constitutes 20% of
their short-term incentive plans’ collective share (STIP).

1. Focusedon material issues

32023 Natural Resources Report

Being efficient with resources

1 Governance and environment policy
1.1 Environmental governanceBecause Schneider Electric builds products that can help
people and businesses decarbonize and digitize, environmental
sustainability is core to every step of the cradle-to-cradle productlifecycle. The Group works to minimize the environmental impact of
how it designs, manufactures, delivers, and maintains its products.
The Group also engages with partners and suppliers on thematerials it uses, and integrates strict social and environmental
accountability standards that address considerations aroundbusiness ethics, human rights, and environmental impact.
Schneider’s environmental performance is delivered with the
involvement of its strategy, Research & Development (R&D),
Manufacturing, Procurement, Finance, Human Resources,
Transportation, Sales, Marketing, and Services teams. This
environmental performance is core to the customer value
proposition, and is reported and discussed during leadership
meetings of concerned entities, including the Global Supply Chain,
the Decarbonization Committee, the Low-carbon Product Design
Committee, the Board Audit & Risks Committee, the Board of
Directors, the Executive Committee, the Governance, Nominations
and Sustainability Committee, and with the Function Committee.
The environmental transformations are driven by a global
network of over 600 managers and experts responsible for theenvironmental management of sites, countries, product design,and marketing. The network of leaders driving environmental
transformations consists of the following:• For the design and development of new offers: Sustainable
Offers managers and leaders in each business are in chargeof integrating key environmental considerations into thedevelopment of new products and producing expectedenvironmental information for customers.
• For the management of industrial, logistics, and large
tertiary sites: Safety, Environment, and Real Estate VicePresidents are nominated in each region, with dedicated teams.
They are responsible for implementing the Group’s policies
across all sites in their geographical remit. In each region,
directors coordinate teams across a group of sites (clusters),
as well as on site. These environmental and safety leaders arein charge of reporting on performance as well as executing
environmental progress plans in the field.
• For logistics: The Logistics Senior Vice-President and his/her
teams within the Global Supply Chain department are in
charge of measuring and reducing CO2 emissions from freightat Group level.
• For countries and commercial entities: Environment andsafety champions are appointed in each country and are
responsible for local reporting actions where necessary;monitoring regulations, taxes, and national opportunities asapplicable (e.g., national transcriptions of the Waste from
Electrical and Electronic Equipment (WEEE) in relation to
end-of-life product management, and monitoring national
substance regulations such as China Restriction of Hazardous
Substances (RoHS); the proactive management of local
environmental initiatives; and finally, relations with local
stakeholders.

4• Electrifier program: Formerly known as “Edison”, this programaims to recognize employees with remarkable achievements,
expertise and leadership. Offering them opportunities tocontribute to strategic busness drivers across different realms.
Read more in Section 2.5.3.8 on page 230 of the 2023 Universal
Registration Document.
Various governance bodies enable those communities to meet
every month or quarter to ensure consistent adoption ofenvironmental policies and standards throughout the Group.
This network has access to a wide range of resources including
standards, policies, best practices, benchmarks, and guidelines, allof which are shared on the dedicated intranet site and databases.

1.2 Group policy
Schneider Electric’s operational environment strategy aligns with its
broader sustainability strategy. The Group’s ambition is to operate
sustainably within the limits of the planet and reconcile beneficial
global economic growth and progress with the need forenvironmental preservation and regeneration.
Within its Global Environment Policy, Schneider Electric sets
operational goals that emphasize the steps necessary to help
advance towards its ambition. These goals are:• Continuously improve the environment management system
and meet compliance obligations (see section 5 on page 19).
• Continue protecting the environment, preventing pollution,
limiting emissions, and promoting biodiversity (see section 2 on
page 5).
• Decouple our supply chain from natural resource consumption(see section 4 on page 14).
Targets enabling those goals are defined in the Group’s Schneider
Sustainability Impact (SSI) and Schneider Sustainability Essentials(SSE) scorecards. Relevant SSI and SSE targets are SSI #5,
SSE #8, SSE #9, and SSE #11.

2023 Natural Resources Report

2 Minimize the Group’s impacts and dependencies onnature2.1 Context

2.2 Risks and opportunities

A sustainable future for people and economies will only be possible
if nature, climate, and people are valued in an integrated way.
Climate change is among the main drivers of biodiversity loss,
while nature is part of the climate solution. If the limit of warmingof 1.5°C becomes impossible to reach, climate change will likely
become the dominant cause of biodiversity loss in the coming
decades. WWF “Living Planet Report 2022”(1) points out that risingtemperatures are already driving mass mortality events, as well as
the first extinctions of entire species: it shows an average 69% drop
in monitored vertebrate wildlife populations between 1970 and2018. Every degree of warming is expected to increase theselosses and the impact they have on people.

When considering this “climate-nature nexus”, Schneider Electricrecognizes the inability to mitigate – or adapt to – the impacts ofclimate change without protecting, restoring, and enhancing the
global stocks of nature. The Group used the TNFD framework to
conduct a double materiality assessment: impacts anddependencies; and risks and opportunities related to nature. The
double materiality approach looks at the two-way interaction withnature: how nature impacts a company and its operations, but also
how the operations of a company impact nature.

In 2020, analysis by the World Economic Forum (WEF)(2) revealed
that out of 163 industry sectors and their supply chains, more thanhalf of the world’s Gross Domestic Product – USD 44 trillion of
economic value generation – is moderately or highly dependent on
nature and its services. Pollination, water quality, and disease
control are three examples of the services an ecosystem canprovide. As nature loses its capacity to provide such services, theeconomy could be significantly disrupted. This report found thatmany industries have significant “hidden dependencies” on naturein their supply chain and may be more at risk of disruption than
expected.
The urgency to accelerate corporate action on biodiversity
management is reflected in the increase in disclosure
requirements. Following COP15 in 2022, the Global Biodiversity
Framework (GBF) established a global goal to halt biodiversity loss.
Target 15 outlined by the GBF requires corporations to disclose
their risks, impacts, and dependencies on nature. With increased
expectations from investors and stakeholders for companies to bealigned with the GBF, the Taskforce on Nature-related Financial
Disclosure (TNFD) was officially launched in Q3 2023 to facilitatetransparency and consistency in disclosures.
The Group anticipates new requirements under the Corporate
Sustainability Reporting Directive (CSRD) in its next reporting year
and will be taking necessary measures to remain compliant. While
the Group has aligned its targets with the GBF, it will stay on top of
evolving international standards and best practices especially as
the Science-Based Target Network continues to mature. The Group
have designed a robust program that is guided by science andfollows the mitigation hierarchy – prioritizing actions to avoid,
reduce, and minimize impacts across its value chain.
Schneider Electric will continue to grow its Biodiversity programwith strong governance and commitment across the business.

Schneider Electric assesses periodically its impacts anddependencies on the four realms of nature defined by TNFD (land,
ocean, freshwater, and atmosphere), and five main drivers of naturechange: climate change, resource exploitation, land and sea usechange, pollution, and invasive alien species.
The Group’s biodiversity impacts are indirectly caused by its
carbon emissions, and its dependencies are concentrated
upstream of the Group’s supply chain. Specifically, water-related
ecosystem services, due to metals and resources processing.
It remains a priority for the Group to understand how its impacts
and dependencies will translate to physical and transition risks thatare material to the business. As the Group expands its efforts tomanage its impacts along its value chain, it also recognizes
significant opportunities to enhance the resilience of its supply
chain through better partnership with suppliers and enhancing
visibility on environmental measures. The Group’s commitments
and early actions on biodiversity management continues to support
its reputation as a leader in its sector.

2.3 The Group’s commitment
In 2021, Schneider Electric committed to no net biodiversity loss in
its own operations by 2030. This was underpinned by the following
five actionable commitments. Internal guidelines define the rules
applicable for the SSE targets and best practices are sharedacross sites for continuous improvement.

Schneider Electric’s commitments to act4natureinternational:

Consult Schneider’s commitments to Act4Natureinternational on www.se.com(1) Living Planet Report 2022, WWF(2) Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy, WEF

Life Is On | Schneider Electric | www.se.com

1. Quantify and regularly publish the assessment of the Group’s
impacts on biodiversity.
2. Commit to reduce Schneider’s impacts and align biodiversity
objectives with science.
3. Develop solutions and technologies that contribute to thepreservation of biodiversity.
4. Engage and transform the value chain.
5. Act locally, engaging employees and partners. (Refer tosection 5.6 on page 23 for more details on Schneider Electric’s
site level actions)52023 Natural Resources Report

Being efficient with resources

Circularity is the biggest gear to pull
for a net zero, nature positive future

NATURE
Towardnaturepositive

CLIMATE

Towardnet zero

CIRCULARITY

End-to-end
circularity

When products and materials are circulated in the economy attheir highest value, the need for virgin materials is reduced. This
leads to a reduction in with metal and mineral extraction, fewer
resource needs for manufacturing. This in turn leads to lesser
environmental emissions and more space for nature regeneration
and wilderness preservation.
The reduction in environmental emissions links directly to
Schneider achieving its SSI #1 to #5 by 2025 and its Net-Zerotarget by 2030. Circularity is a non-negotiable for Net Zerobecause most efforts to tackle the crisis have focused on atransition to renewable energy, complemented by energy
efficiency, but these measures can only address 55% ofemissions. The remaining 45% of emissions come from theproduction and consumption of products. Beyond this corporate
level, circularity principles also guide product sustainability, forexample eco-design and Green Premium; efficient manufacturing,for example, waste to resource sites; and component and material
securitization, for example, copper circularity.
Schneider has committed to net-zero biodiversity loss from its
operations by 2030. Analyzing Schneider’s end to end
biodiversity footprint, a significant share (85%) comes fromdownstream activities (mainly electrical consumption); thesecond most significant source of impact is upstream activities(15%) represented by sourcing of metals, timber and minerals.
By incorporating the concepts of circularity i.e., use better, use
longer, and use again, Schneider can drastically reduce its
upstream and downstream biodiversity footprint. Schneider has
the ambition of having 100% of sites with biodiversity
conservation and restoration programs.

2.4 Biodiversity footprint measurement

Schneider Electric’s 2022 terrestrial dynamic footprint by
scope (in MSA.km²)

The quantification of the Group’s impacts on biodiversity is an
essential first step to understand its impacts and dependencies
on nature and take appropriate action. In 2020, Schneider Electric
became the first company to publish the end-to-end Biodiversity
Footprint Assessment (BFA) of its activities, using the Global
Biodiversity Score (GBS) tool developed by Caisse des Dépôts
et Consignations Biodiversité.

250

232

200
150
100

The GBS gives detailed and modular results which can be split by
input line (for example, by raw materials such as metal, plastic, or
timber), by pressures on biodiversity (such as land use, climatechange, fragmentation, or encroachment), or it can be presented
by scopes in Mean Species Abundance per square kilometer(MSA.km²). Synthetic, easy to understand, and widely available,
this metric has the potential to become the international standard.
In 2023, Schneider Electric concluded its second BFA to evaluate
the progress of its sustainability programs on its biodiversity
footprint. The latest results illustrate the Groups’ terrestrial dynamic
biodiversity impact across its value chain, with data from 2022.

6

50
0

49.5
1.0
Upstream

Climate Change

Direct Operations

Metals and Minerals

Downstream (Excl.
avoided and saved)

Woodlogs

Others

The findings of the second BFA are aligned with the previous study,
indicating that climate change continues to be the primary driver ofSchneider Electric’s impacts on biodiversity loss. This is particularly
significant downstream in the Group’s value chain, resulting fromthe use of its products.

2023 Natural Resources Report

The study also highlights land-use change driven impacts aremostly material upstream of the Group’s supply chain, with raw
materials of concern being copper, steel, and aluminum, andpackaging – timber, card, and plastic. This underscores theimportance of the interconnections with green materials, circular
economy, and elimination of single-use-plastics programs toeffectively manage biodiversity throughout the entire value chain.
Schneider Electric’s upstream dynamic terrestrial impacts
2019 vs 2022 (in MSA.km²)
60

2.0

50

1.6

40

1.2

30
0.8

20

0.4

10
0

2019

2022

Climate Change

Metals and Minerals

Others

Impact Intensity

The report also highlighted important trade-offs for consideration,for instance the phasing out of single-use plastics has led to ahigher consumption of cardboard in packaging and therefore,
impacts related to wood log. More efforts, and particularly thecommitment to zero-deforestation wood by 2030, are underway
to better mitigate this impact.
Schneider Electric’s dynamic terrestrial impacts 2019 vs 2022
in its direct operations (in MSA.km²)
2.0

0.10

1.6

0.08

1.2

0.06

0.8

0.04

0.4

0.02

0

2019

Climate Change

2022• Reduce the “land use” due to the extraction of raw
materials. The main driver of land use is the extraction of woodand metals. Wood is mainly used for packaging purposes(cardboard, pallets, boxes); metals are the core of theGroup’s products (silver, copper, steel, aluminum, etc.). Greatertransparency and access to data on end-to-end supply chain
is key to understand how to minimize the Group’s impacts anddependencies on nature. Nevertheless, whether on climate or
nature, data quality should not get in the way of necessary
immediate action. Schneider made several commitments:− Source 100% deforestation-free wood by 2030.
− Source 50% “green materials” in its products by 2025
(SSI #4).
− Use 100% of sustainable primary and secondary packaging
by 2025 (SSI #5).

2.5 Using the Group’s voice to sharelearnings

0
Woodlogs

More details on Schneider’s climate programs and achievements
are presented in section 2.3 on pages 154 to 183 of the 2023
Universal Registration Document.

During the UN Biodiversity Conference (COP15), Schneider Electric
supported the ambitious Target 15, a collective commitment which
requires business and financial institutions to assess and disclose
dependencies and impacts on biodiversity, and to acceleratebusiness action to reduce negative impacts.
Schneider Electric remains committed to Target 15 asdemonstrated by aligning its no net loss target to the GBF anddisclosing impacts, risks, and dependencies.
In February 2023, the Schneider Electric Research Institutepublished the first in a series of research into corporate action on
biodiversity. This whitepaper “The why, what, and how of corporate
biodiversity action” provides an introductory overview of corporate
biodiversity action. It can support companies, especiallymanufacturing ones, in recognizing the imperative for such action,
understanding key concepts and developments, identifying
priorities with the right frameworks and tools, and ultimately
realizing some of the opportunities that a nature-positive economy
can bring for all. A second white paper was published in October
2023, “Green Digital Solutions for Corporate Biodiversity Action”
exploring how new technologies help in biodiversity conservation.

0

Others

Impact Intensity

Based on the outcome of the second BFA, Schneider Electric is on
track to achieve its target of “no net loss in its direct operations by2030”.

• Reduce greenhouse gas (GHG) emissions in the Group’s own
operations and in the supply chain. Climate change is one of the
major pressures on biodiversity globally and is the Group’s main
impact on biodiversity (over 70%). Therefore, Schneider’s
Net-Zero commitment will have a significant impact on reducing
the Group’s pressure on biodiversity.

Life Is On | Schneider Electric | www.se.com

The study also allowed Schneider Electric to further identify andreiterate the main levers of action to reduce its biodiversity footprint
across its value chain:

7

2023 Natural Resources Report

Being efficient with resources

3 End-to-end circularity
3.1 Context
Circularity is a greenfield growth opportunity for Schneider Electric.
Today, 80% of product revenues are covered by GreenPremium™
(see section 3.5 on page 11), ~19% revenue comes from softwareand services, and through continued growth of our ranges coveredby the repacked and refurbished label, 22% of our product families
have at least one circular option available. This expansion into newmarkets is driven by innovation such as artificial intelligence-based
maintenance which enables customers to maximize the value of
their assets and provides recurring revenue to Schneider.
Schneider Electric was recognized as a Circularity Lighthouse by
the World Economic Forum and McKinsey for its end-to-end
circular approach across a broad portfolio of its energy andbuilding automation solutions. Through ecodesign, Waste-toResource sites, lifetime extension services, and a global network of
refurbishment centers, Schneider Electric has saved and avoided
553 million tonnes of CO2 to customers since 2018.

cost of doing nothing signals not only overlooking the opportunity
to stay relevant but also compromising the Company’s license tooperate amidst critical raw material shortages and growingpressure from regulations like the EU Taxonomy and CSRD.
The goal of circularity is to design out waste and pollution, keep
products and materials in use, and regenerate natural systems. It
proposes a framework in which outputs from every stage of thelifecycle become inputs to another, offsetting the need for new
materials and energy-intensive manufacturing activities. A circular
economy is also a non-negotiable for a net-zero, nature-positive
future. Schneider’s circularity vision is to decouple business growthfrom the extraction of natural resources while meeting its net-zero,nature-positive target.

3.2 Our Vision
Our approach
Vision: to decouple business growth from resource extraction
while meeting our net-zero nature positive targets.

The Company also uses 27% green materials across its productswith the ambition to reach 50% by 2025. 22% of Schneider
Electric’s product families have a circularity option, and more thanhalf of Schneider Electric’s manufacturing sites recover more than
99% of waste.
One example is how Schneider Electric gives its MasterPact MTZ
circuit breakers a second life. Refurbished at the MasterTech plant
in France, these circuit breakers are collected from customers at
end-of-life, disassembled, diagnosed, upgraded, and tested before
being put back on the market.
Beyond Schneider Electric, various industries have started tolaunch circular offers such as lighting as a service, equipment
leasing, and circular IT pay-per-use models. On the flip side, theMission: adopt end-to-end circularity to (1) drive circularity
concepts as a core part of offer creation, product design, andmanufacturing; and (2) keep products, parts, and materials incirculation at their highest functional value as long as possible.
Strategic layers:• Design innovation: (1) applying eco-design principles to
product development, e.g. designing for reliability and lifetime
extension, and (2) business innovation to offer development,
e.g. deciding a go to market strategy between transactionalsales to as a service.

End-to-end circularity at Schneider Electric
0. Design and Innovate for circularity• Eco-Design to use better, longer and again• Business model innovation: develop bundled offers withfinancing and retained ownership where applicable
SUP
PL
IE
RS

6. Recycle raw
material & substances• Recover SF6 gas service• Material recycling

in
ea
ga
O

M

ER

S

AN

DP
ARTN

ERS

r

e
ett

Us

eb

Use longer
ST

8

DESIGN &INNOVATE

CU

4. Modernize & upgrade
Retrofit and upgrade solutions
to avoid replacing by new
equipment.

Us

5. Repack and refurbish• Take back and buy backservices• Repack and refurbish• Harvest spares

1. Source better• Use sustainable materials,
packaging.
2. Manufacture better• Waste to resource sites• Zero waste management• Optimized logistics• Local biodiversity actions• Single-use plastic free sites• Net-zero ready operations• Water action plans inwater-stressed sites
3. Maintain & repair
Condition-based maintenancepowered by analytics andartificial intelligence.

2023 Natural Resources Report• Use better: is about sourcing the best-in-class sustainable
materials and manufacturing products efficiently. Example
measures include sourcing materials with high recycled content
and minimizing manufacturing scrap.
• Use longer: involves providing services to keep products in use
for as long as possible. On-site repair and maintenance, as wellas equipment modernization services.
• Use again: relates to recirculating products, parts, andmaterials in the economy. For example, take back,refurbishment, and resale of retired assets.

One such client is New York City’s JFK International Airport’s New
Terminal One. Its EaaS microgrid achieves several superlatives.
It’s the largest airport microgrid in the US, featuring a revolutionary
federated design (i.e., four microgrids in one) that can power 100%of the terminal’s critical operations. Its 11.34 MW of decarbonizedelectrical capacity is sourced from fuel cells, battery storage, andthe largest rooftop solar array in NYC. AlphaStruxure’s carefulplanning and service excellence will prolong asset longevity,
minimize resource use, and propel decarbonization. That’s how
AlphaStruxure’s EaaS drives circularity.

3.3 Innovating through business models

3.4 EcoDesign for circularity

Offering “Everything as a Service” is a crucial component of
end-to-end circularity. By retaining ownership of the product andextending our responsibility beyond the point of sale, Schneider is
incentivized to design the most efficient, long-lasting products withservice support throughout its use and optimal management at the
point of retirement.

At Schneider Electric, every product or solution fulfills strict
environmental performance. The Group has embraced a circularapproach throughout the lifecycle of its products and aims todesign products with minimal material footprint and maximal
lifetime value. Implementing a circular model that minimizes waste
requires interventions across the value chain – innovative design,materials, service business models, reuse and redistribution
processes, collection, and more.

Most of Schneider’s new products are digital, connectable, ensure
full product life cycle management and predictive maintenance,and guarantee optimum performance, hence enabling the Group to
move towards customer-intimate models like subscription,
performance contracting, and leasing.
Schneider is exploring innovative circular offers, notably inElectrification as a Service and Energy as a Service through its
Alphastruxure joint venture with Carlyle.
AlphaStruxure, Schneider Electric’s joint venture with Carlyle, offers
resilient and decarbonized energy with “Energy as a Service”(EaaS). EaaS is a financial and technical solution for deploying
transformational on-site energy infrastructure projects – without the
CapEx or complexity for the customer. AlphaStruxure finances andowns the system, taking on capital costs in exchange forpredictable monthly payments, giving clients guaranteed pricing
and performance outcomes. AlphaStruxure assumes the design,delivery, operation and maintenance of the system over the entire
lifecycle. AlphaStruxure’s deep expertise and long-term
accountability enables a right-sized, waste-minimizing, andservice-optimizing approach that drives circularity for clients.

Circularity is a key enabler and lever to climate change mitigation
and biodiversity preservation. With circularity in mind, the Groupcan maximize the value retention of everything it produces throughthe products’ lifetime.
The circular journey of Schneider Electric starts with the designphase, to ensure that every product and offer is using the better
materials and processes, are used longer, and are used again once
they reach their first end-of-life: this is EcoDesign for Schneider
Electric. Ecodesign is defined in standards, International
Electrotechnical Commission (IEC) 62430:2019 – Environmentallyconscious design – as the design of products or services that aims tominimize the environmental impact throughout a product’s lifecycle.
In 2015, to respond to customers’ growing demand for productswith a smaller environmental footprint, and to embed circularprinciples in its products and offers, Schneider Electric adopted
EcoDesign Way™, a process to understand and manage theenvironmental impact throughout the lifecycle of products, andto coordinate efforts across the value chain, as shown with thefive EcoDesign categories below.

EcoDesign Circularity
Recirculation
Ensure products, parts andmaterials have multiple lives.
Life time Extension
Extend lifetime of products, parts
through design and services.

Packaging & Operations
Focus on alternatives packaging
solutions to optimize resources
and minimize waste generation.
Other benefits occuring at
SE operations.

Life Is On | Schneider Electric | www.se.com

Energy Efficiency
Optimize Energy Efficiency during
product use. Ability to deliver
energy efficiency for customers.

Materials & Substances
Optimize: Focus on using less.
Focus on alternative materials
acting for circularity, low carbon
and people and ecosystemsafety.

92023 Natural Resources Report

Being efficient with resources
EcoDesign allows businesses to implement Schneider Electric
environmental global commitments into new product development
processes and therefore ensuring that Schneider Electric offers
participate actively to its long-term commitments.
While the EcoDesign Way™ Scorecard is still being used in projects,
Schneider Electric has revamped the EcoDesign assets in 2023 tofurther accelerate positive impacts products and services could
have on the environment.
In 2023, the Group structured the EcoDesign strategy whiledeveloping multiple assets to better support all Design and
R&D teams.

EcoDesign in business strategy:• Each business unit defined its sustainability targets androadmap to reflect operationally the resources required toachieve a decarbonization plan. The Human Resources
department performed a thorough assessment to ensureeach business unit was correctly staffed to foster EcoDesign.
It includes roles and responsibility descriptions andupskilling plans.
The Group has implemented EcoDesign metrics into the Offer Life
Cycle Management to ensure all projects are incentivized to trackthe environmental footprint of their projects and report theirperformance on carbon and materials footprint. Mandatory
deliverables at key milestones of the Offer Life Cycle Management
have been updated to strengthen the EcoDesign requirements.

EcoDesign assets:• The Group has launched in 2023 the EcoDesign Training Path, a
set of 20 training modules, accessible for all the R&D community
to raise awareness, train and upskill the engineer in charge of
new product development. The EcoDesign Training Path
includes several training levels, from basic to expert and covers
a wide range of topics such as the EcoDesign principles,
lifecycle assessment (LCA), green materials, communication
rules, and standards. The central team of the different business
units are tracking the deployment of the different EcoDesign
Training Path modules to ensure a good appropriation by the
R&D team and therefore building a common knowledge to foster
Sustainable Innovation DNA across the company.
• In 2023, the Group has developed the EcoDesign Carbon
Calculator, an online tool based on LCA methodology anddatasets to allow non-environmental experts to model theirprojects’ environmental footprint, identify hotspots, and estimate
their first reduction potential. The EcoDesign Carbon Calculator,
focusing on a Climate Change indicator at first (otherenvironmental indicators could be activated at a later stage),intends to be used at an early stage of the Offer Life Cycle
Management. It relies on available Product Environmental Profile(PEP) and allows users to simulate different scenarios by using
extrapolation function. Multiple scenarios can be comparedto identify the best design opportunity for the project team.
The EcoDesign Carbon Calculator has been built thanks toa partnership with start-up, Altermaker, specialized in thedevelopment of IT solutions for LCA, with support of pilot project
teams who tested the tool. The EcoDesign Carbon Calculator
certainly does not intend to replace a full LCA tool but rather toeducate the whole project team on the order of magnitude of the
carbon footprint of their product or service, raising theirawareness on the environmental footprint accountability,
developing their ownership toward Schneider Electric’s
environmental commitments, and thereby actively contributing
to identify more opportunities.

EcoDesign Training Path Overview

EcoDesign Training Path Overview

ExpertAdvanced

BasicIntroduction• The EcoDesign
BOOST
to define the list of yourmost recommended
learnings according
to your role and yourknowledge.
• Sustainablecommunication

10• EcoDesign principles• Life Cycle Analysis
Principles• Environmental data
• Overview of externallabels & certifications• EcoDesign calculator• How to design asustainable
packaging?
• How to design
products with
Sustainable Materials?
• How to achieve
recyclability
performance?
• How to optimize
product energy
consumption?
• How to extend lifetimeof our products?
• Green supply chain• How to perform &verify a ProductEnvironmental Profile(PEP)?
• Life Cycle Analysis(LCA) & ProductEnvironmental Profile(PEP) advanced• How to anticipate
regulations &standards?
• How to performconformity
assessment?

2023 Natural Resources Report

3.5 Leading with transparency: Green
Premium™ and Product Environmental
Profiles• is compliant with RoHS and REACH regulations;• has an estimated lifecycle assessment (LCA); and• has clear end-of-life instructions.

Green Premium™

Schneider Electric launched in 2008 its Green Premium™ program
to transparently communicate the environmental value of a productto customers, with both qualitative and quantitative data. The Green
Premium™ label means that a product follows the EcoDesignprinciples, and:In 2015, the Green Premium™ label added other environmental
criteria. For example, the Green Premium™ label signals circularity
business models, such as “take-back” programs. An example ofa take back program is for customers who have purchased one of
the Uninterruptable Power Supplies (UPS) to have access tocomplementary recycling when the battery in the product reaches
its end of useful life. In 2023, this service collected more than
16,000 tonnes of batteries globally for recycling.

External labels

RoHS

RoHS

PEP

EoLI

REACH

RoHS

REACH

EcoDesign Way™

Sustainable
performanceby design

EcoDesign

2003

2007

2008

2015

2018

2023

European Union
adopts RoHS

European Union
adopts REACH

Green Premium™ introduced
to provide transparent
information on regulated
substances and to share theenvironmental information of
our products

EcoDesign Way™, ourinternal ecodesign
approach, launched andembedded in the offer
creation process

Upgraded Green
Premium™ program toinclude green claim
differentiation

Data Digitization
acceleration

The program encompasses three pillars: Trust, Transparency, and Performance.
• Trust means Schneider continues to be transparent withcustomers, providing RoHS and REACH substance informationand going beyond regulations by applying the same rules
regardless of the geographies. That remains the core of theGreen Premium™ program.
• Transparency is the commitment from Schneider to disclose ina digital way the environmental impacts of its products, their
end-of-life treatment, as well as any environment-related
attributes meaningful for customers. This is crucial in theGroup’s strategy, as the first step for improvement ismeasurement and quantification.

Trust

Transparency

Performance

Digital environment disclosure (PEP)

Lower-impact
materials

Recyclability

Circularity profiles to provide guidance on
responsible product end-of-life treatments

Energyefficiency

Durability

Transparent environment attributes(e.g., Mercury- , Lead-, and PVC-free,sustainable packaging)SF6-freeRepairabilityLife Is On | Schneider Electric | www.se.com

Minimal use of hazardous substances in,and beyond, compliance with regulations(RoHS, REACH)• Performance is Schneider’s commitment to deliver productswith reduced environmental impact. Performance can takeseveral forms:− Use of lower-impact materials such as recycled plastics.
− Enhanced product recyclability to reduce waste, and loss ofcritical raw materials.
− Energy efficient products with at least 10% of improved
energy efficiency with respect to the market average or toprevious generations.
− Improved durability and the ability to function as required
under defined conditions of use, maintenance, and repair,
until a final limiting state is reached (which should be at least
5% higher than market average).
− SF6 -free products.
− Easy repair of product parts.

11

2023 Natural Resources Report

Being efficient with resources
In 2022, Schneider revamped the pages of its online catalogue
to make all environmental information more easily available tocustomers, so that they can quickly identify Green Premium™
products and can choose the producs they want according toenvironmental features. New online features such as environmental
claims badges have been added to every Schneider product pagein 2023. This helps customers to understand the environmental
benefits.
Customers can consult digital conformity declarations,
PEPs, and end-of-life instructions on product pages, on the
mySchneider mobile app, and on the “Check a Product”
website at https://checkaproduct.se.com
In 2023, more than one million downloads have been made fromthe “Check a Product” application. This is a testimony of customer
demand for product environmental information.
Some flagship Green Premium™ offers have been launched over
the year:• The Smart-UPS Modular Ultra series, which delivers all thesustainability features one expects. Built with circularity in mind
from the design phase and meeting the highest levels of energy
efficiency in the market today. This new series is 35% lower in
embodied CO2, 40% improvement in emissions, 3x longer
battery life, and 2.5x power density. The Smart-UPS Modular
Ultra series are certified Energy Star 2.0 in the US. The result isa family of UPS devices that have the lowest embodied carbon
footprint of any comparable model in the market today.
• The Mureva range, a collection of durable, waterproof
enclosures designed to protect people, property, andinstallations. The Mureva line includes at least 20% recycledplastic content, and the packaging has been changed,
consisting of 70% recycled fiber. These changes reduce water
consumption, chemical effluents, and dust emissions.
To continue to lead by example in the field of transparent andresponsible communication and avoid greenwashing, Schneider
Electric has been driving significant marketing activities.
First, a full audit of Schneider ‘s marketing process has been
conducted by a third-party company in order to strengthen the way
Schneider speaks about product sustainability.
Second, all Schneider web content has been scanned to assessthe use of specific words to use with caution.
Third, practical anti-greenwashing guidelines have beenreleased to all employees with specific communication for themarketing population. More than 1,000 marketing people havebeen trained on how to use those guidelines.

12

Resources

SSE #6
Our 2025 Commitment

80% of product revenues coveredby Green Premium™
In 2023, Schneider Electric received an increasing numberof customer inquiries requesting detailed information
regarding the material content and environmental impacts
of its products. In response, the Environmental Experts of
the Group generated more than 440 new PEP documents.
This has enabled the certification of a larger number of
products through the Green Premium™ program to deliver
even more transparent information.
Our progress2020 Baseline

2023 Progress

77%

2025 target
81%

80%

Product Environmental Profiles
A greater number of customers, regulators, and standards bodies
request quality and detailed environmental data. Many building
standards and local regulations demand or promote offers
providing Environmental Product Declarations (EPDs).
An environmental footprint is a product or solution-related
measurement that provides quantitative information based on LCA(according to ISO 14040-44 standard). It enables the assessmentof multiple environmental impact indicators, including the carbon
footprint, for all product or solution lifecycle stages. The scope of
this assessment is also referred to as “cradle-to-grave”.
Environmental footprint assessment is a mandatory requirement in
the Green Premium™ program.
Schneider Electric relies on PEPs to fulfill this requirement. A PEP is
defined as a product-oriented “summarized” version of a full LCA. It
relies on Product Category Rules (PCR) or Product Specific Rules(PSR), as specified by the ISO 14025 standard related to EPD.

2023 Natural Resources Report

At Schneider, there are two types of PEP available:• Certified – a type III Environmental Declaration in compliancewith ISO 14025. The certified PEP is externally reviewed by anaccredited verifier and published by a program operator
according to the rules provided by this operator (for example,
PEP Ecopassport).
• Internal – the internal PEP follows the exact same rules as thecertified one. However, an internal PEP is reviewed internallyand therefore cannot be registered through an independent
program operator. A process of accreditation for internalverifiers guarantees the adequate level of internal PEP
verifications. Verifiers check PEPs from lines of business otherthan their own, thus ensuring independence. Internal PEPs
comply with the ISO 14021 self-completed declaration.
In 2023, more than 2,000 valid PEPs were publicly available online,
covering all of Schneider’s product lines, and more than 80% of
product lines are covered by an ISO 14025 type III declaration.

Digitization of PEP data
Since 2008, when the Green Premium™ program incorporated the
mandatory requirement related to the availability of a PEP,
Schneider Electric has published PEPs at product family level.
In 2021, the Group launched a pilot project to extrapolate PEP
data from product-family level to product-level, to produce moregranular PEP data and start sharing them with a few strategic
customers. Sharing more granular PEP data enabled those few
customers to enhance the accuracy of their respective carbon
accounting and develop services for their own customers to help
them purchase more sustainable products based on quantitativeenvironmental impact data. With this initiative, Schneider Electricstrengthened the relationship with strategic clients, being
positioned in the top suppliers thanks to sustainability.
Over 2023, the PEP digitization program has been deployed,using artificial intelligence (AI) and a dedicated software, enabling
the Group to extrapolate and digitize quality data on more than
30,000 products.

The Group has advocated for LCA since then, to comply withexisting, recent, and future regulations (e.g. the EU CSRD and
Taxonomy, and the Netherlands Environmental performance ofbuildings regulation), to meet customers’ demand for LCA data andto deploy wise ecodesign strategies assessing and avoiding
environmental impact tradeoffs.
The Group also advocates for strategies to improve the supply
chain representativeness in LCA and the comparability of LCA
among industry, at various levels from EU and International
standardization to cross-industry initiatives such as the PACT
(Partnership for Carbon Transparency) Pathfinder Framework
project led by the WBCSD (World Business Council for Sustainable
Development), and the need for a single and public LCA database,to ensure LCA practitioners in the industry can leverage theirindividual supply chain data and at the same time use identical
LCA datasets (LCA raw data for materials, processes, energy
supply, etc.).

PEP Ecopassport PCRed4
In 2021, Schneider Electric made a major contribution to thedevelopment of the new Product Category Rules (PCR) of the PEP
Ecopassport association (PCRed4 issued in September 2021),
which are:• Compliance with the EN 50693:2019 standard: Productcategory rules for lifecycle assessments of electronic andelectrical products and systems – currently being mirrored in
the IEC TC111 Working Group 15 (IEC 63366);• Full alignment with the EN 15804+A2 standard: Sustainabilityof construction works – Environmental product declarations –Core rules for the product category of construction products;• Integration of key elements of the EU Product Environmental
Footprint, such as mandatory impact indicators, end-of-life
formulae, and quality ranking;• Alignment with ISO 14067:2018: Greenhouse gases – Carbon
footprint of products – Requirements and guidelines forquantification, integrating the latest requirements of the French
regulatory texts from RE2020.
The application of PCRed4 enables electrical and electronicequipment manufacturers to produce product environmental
declarations in accordance with the best-known international
standards, thus fostering cross-region and cross-industry
recognition. Schneider aims to use this new PCR document to
influence and strengthen the environmental footprint practices ofthe sector through standardization (TC 111 Working Group, ZVEI
initiative) and regulations (Sustainable Product Initiative of theEuropean Commission, Green Taxonomy).

Schneider Electric position on LCA and Product
Carbon Footprinting (PCF)

Officially from 2023, all PEPs published by the Group are compliant
with PCRed4.

Schneider Electric embarked on the LCA journey more than
20 years ago, with the aim of being transparent to its stakeholders
on the environmental impacts of its offers, considering the fulllifecycle and a wide set of environmental impact indicators, beyond
product carbon footprint.

By relying on the PEP Ecopassport PCRed4 methodology and theacceleration of environmental impact data digitization, Schneider
strives to provide quantified environmental footprint information
systematically and seamlessly to customers to differentiate its
sustainable offers, and therefore, be a change agent towards
a low-carbon and circular economy.

Life Is On | Schneider Electric | www.se.com

Thanks to the Group’s investment in those dedicated tools andprocesses and a strong project coordination involving central
functions and all divisions, it is now possible to share PEP data at
product level with more customers, external databases, and design
firms and software, to position Schneider Electric as a key playerof the sustainable transformation of building, infrastructure, andindustry, and drive this transformation with quantitative data
issued from LCAs.

13

2023 Natural Resources Report

Being efficient with resources

4 Source better
4.1 Reach 50% of green materials in
products by 2025
Risk relating to sourcing materials
The acceleration of electrification globally is increasing competition
to access some critical raw materials. For example, renewable
power generation is shifting dependency of the energy sector fromfossil fuels to mineral resources. The electric vehicles industry is
expected to increase the demand for lithium fiftyfold by 2040 andthe demand for cobalt and graphite thirtyfold, according to theInternational Energy Agency (IEA).
Evolving economic trends, global overexploitation, and limitedaccess can result in shortages of natural resources within theGroup’s operations and its value chain. This can result in businessdisruptions and rising costs in both the short- and long-term, andadditional challenges to secure supply for sustainabletransformation programs (green materials, substances substitution,
sustainable packaging).

Risk monitoring and management
Risks are considered in the STRIVE initiative of the Group’s Global
Supply Chain and covered by the Property Damage and Business
Interruption program at site level.
Schneider Electric approaches access to resources at different
time horizons to ensure supply resilience both now and in the
future by:• building short-term resilience in securing supply and protecting
operations against price volatility with real time alerts to notify
and activate action plans;• de-risking its portfolio with technological solutions and circularbusiness models; and• shaping the future with long-term material resilience andsustainability with disruptive actions.
To address uncertainty in long-term resource disruption, Schneider
has added resource parameters in product EcoDesign and defined
substitution strategies for critical resources. R&D actions are inplace, focusing on materials with main strategic functions
accompanied by communication channels to escalate and alert.

Green materials in the Group’s products
Schneider has committed to increase green materials in its
products to 50% by 2025, as part of its SSI program (SSI #4). With
that 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 upstream emissions, in line with the Group’s
Net-Zero commitment; and• differentiate Schneider’s products by using low-CO2, circular,
and safer materials.
According to Schneider Electric, a green material has a lower
environmental and social footprint, meaning low GHG emission,high recycled content, and minimized impact on people and theplanet.
Therefore, performance could be achieved, either throughselecting material and/or supplier with a proven lower
environmental footprint (e.g., proof of a material produced out of
a 100% recycled content), or strengthening the traceability ofsustainable initiatives in the value chain.
While the first action is particularly relevant for thermoplastics
materials, the second action is a priority for metal commodities
where visibility of the environmental impact and technology-originof procured metals is low.
The lower environmental footprint attributes are defined for eachcommodity in scope, as the environmental performance of metalcannot be based on the same attributes as plastic. In 2023, thescope of green materials focused on three types of commodities
covering around a third of purchased materials in volume:• Thermoplastics (including both direct and indirect procurement)–Thermoplastics are qualified as “green” when the supplierprovides evidence of a minimum recycled content, biobased
content (the minimum threshold depends on whether thecompound is halogenated or not) or is using a green
flame retardant.
• Steel (direct purchases) – Steel is qualified as “green” when the
supplier provides evidence that the mill of origin is an electricarc furnace or has a green certificate such as the ones
delivered by Responsible Steel.
• Aluminum (direct purchases) – Aluminum is qualified as “green”
when the supplier provides evidence that the product carbon
footprint is below 8 tonnes of CO2 per tonne of aluminum, isusing a minimum of 90% of recycled content in its product, orthat the mill of origin has a green certificate such as the ones
delivered by the Aluminium Stewardship Initiative.
Volume and distribution of “green materials” (in kt)

23
81

Steel
Thermoplastics
Aluminum205

142023 Natural Resources Report

Definitions of “green thermoplastics” and “green metals”

A GREEN THERMOPLASTIC IS
REACH / RoHS / POP compliant(1)ANDCase 1Case 2

If plastic is
halogen free(2)If plastic is still
halogenated(2)Complies with at least
one criteria below:

Complies with at least
one criteria below:≥ 20% ofrecycled content(3)≥ 50% ofrecycled content(3)≥ 20% ofbiobased content(4)≥ 50% ofbiobased content(4)Green flame retardant
and additives
For flame retardant
plastic only (5)(1) Persistent Organic Pollutants (POP)/Latest versions.
(2) According to IEC 63355.
(3) According to ISO 14021 and EN 45557.
(4) According to EN 16785 or ASTM D6866.
(5) According to GreenScreen used in TCO Certification.

A GREEN METAL IS
Steel from direct
procurement

Aluminum from direct
procurement

Complies with at least
one criteria below:

Complies with at least
one criteria below:

Steel product issourced from
Electric Arc Furnace(EAF)≤ 8 tCO2eq/tonneof Aluminum(2)Steel product has agreen certificate(1)The inclusion of other commodities like copper, thermoset, andindirect steel will be reassessed in the next phases, as the program
matures and the transparency of supply chains improves. In 2023,“copper” and “thermoset” draft definitions have been deployedinternally and performance is being tracked to prepare for inclusion
in future phases.
Additionally, in 2023, Schneider Electric has initiated work to define
criteria for “green electronics”. Criteria with matching key
performance indicators (KPIs) are being tested with pilots and are
expected to be scaled in 2024.

Partnerships to accelerate the sourcing ofgreen materials
A critical point to accelerate the uptake of green materials in
Schneider products is to be able to plan well in advance thedifferent steps of qualification of the materials, the components,
and the products; this is particularly true for thermoplastics. In
2023, Schneider Electric has been able to accelerate the volumesof thermoplastics qualified as green, mainly due to the business
units’ roadmap execution having an impact since the materials
have been qualified. The qualification period could span from eight
to 18 months depending on the materials and the productspecificities, hence Schneider Electric commits to plan well inadvance the offer roadmap,to factor in this incompressible
lead-time and ensure our target is achieved by 2025.
Schneider Electric has already identified the risk of qualification
bottleneck due to the increasing demand on the market. In the
future Schneider Electric aims to optimize and mutualize thequalification needs. In 2023, the Group accelerated its
engagement with suppliers regarding their sustainabletransformation by building stronger connections and by
securing the first volume of certified green steel.
Notably, Schneider Electric has partnered with ArcelorMittal, aglobal player in the steel and mining sector, to source recycled andenvironmentally produced steel called XCarb. The steel is made in
ArcelorMittal’s factory in Sestao, Spain, using a high percentage ofrecycled steel and processed in an electric arc furnace poweredby 100% renewable electricity. Schneider Electric is using this steel
to build electrical cabinets with significantly lower CO2 emissions(see example). This example is a clear business case on how
joining hands with suppliers to foster circular solutions could
support Schneider Electric’s decarbonation journey.

≥ 90%
recycled scrap(3)Aluminum product has agreen certificate(4)Life Is On | Schneider Electric | www.se.com(1) e.g., Responsible Steel.
(2) According to Aluminium Stewardship Initiative (ASI).
(3) According to EU green taxonomy.
(4) e.g., Aluminium Stewardship Initiative (ASI).

15

2023 Natural Resources Report

Being efficient with resources
Schneider Electric also continued to engage with industry-wideorganizations and contributes actively to the development of thoseto be seen as a catalyst of change across the supply chain. The
Group continues to participate in Responsible Steel working
groups, the world’s first global scheme for responsibly sourced
and produced steel.
Schneider Electric is an official partner of The Copper Mark, whichaims to accelerate responsible material sourcing for metals. Joining
The Copper Mark will help the Group to improve the environmental
and social aspects of the copper value chain. Schneider is looking
forward to engaging further in pursuit of responsible materials
sourcing goals together with The Copper Mark and encourages its
suppliers to participate in The Copper Mark Assurance Process,and aim collectively at responsible copper production.

4.2 Eliminating hazardous substances
Since 1950, chemical production has increased fiftyfold and is
expected to triple from 2010 to 2050, with only a small number ofthe 350,000 chemicals in use fully assessed for safety(1). Beyond
being a health concern, substances can contribute to climatechange as they emit GHG throughout their lifecycle.
To minimize the potential harm to the environment and humanhealth, Schneider Electric continues to prioritize the management
and substitution of hazardous chemicals from our products,
processes, and supply chain. In 2023, the Group updated its
definition of green products to align with the EU Taxonomy
Appendix C that was released in 2023. It also updated its
Substance in Products Directive giving the main orientations andstrategy to follow for products in our portfolio. The previous version
was published in 2015. The updated directive reflects among
others, the different criteria of the EU Taxonomy Appendix C. It will
be deployed in 2024 with the objective to maintain our leadershipin terms of transparency and control of substances of concern.
The Group has tackled substance management for many years
as part of our environmental programs reducing and managing
its waste, emissions- and water-related risks, including pollution.
It constantly substitutes substances or substance groups ofconcern targeted by regulations; when not technically possible,
Schneider Electric ensures that the chemical risk is under control
at all lifecycle steps. The recent development of the new medium
voltage switchgears without SF6 (one of the most potent andpersisting GHGs) is an example. As reflected in SSE #2, the Groupaims for 100% substitution with SF6 -free medium voltage
technologies.

Resources

SSI #4
Our 2025 Commitment

Increase green material content
in our products to 50%
In 2023, Schneider Electric became a pioneer in universal
enclosure activity, launching a premium range of products,
decarbonized thanks to better design, industrial process,and raw material.
PanelSeT SFN, the first decarbonized steel enclosure of themarket, is a new floor standing enclosure manufactured
with certified decarbonized steel, made from recycled raw
materials, and using renewable energy sources such as
solar and wind. This innovative approach helps us toreduce CO2 emissions by up to 34%.

The Group operates in different jurisdictions with evolving
regulations on environmental, health, safety, and productcompliance. The regionalization of environmental regulations (e.g.,
California Proposition 65, China RoHS and UAE RoHS) createscomplexity, with thousands of suppliers. Therefore, Schneider
maintains strong governance, relying on a global approach ofenvironmental product stewardship directives fed by a regional andlocal environmental steward network. As substance presence
identification and traceability are key, the Group is investing inrobust digital systems to perform and report the environmental
compliance of its wide product portfolio, across several hundredsof thousands of commercial references.

In addition, our customers will have a better user
experience with a new design that is more robust andsimpler to use, with an easy mounting system. The
enclosure is available as pre-assembled, as a kit orcustomized to the customer’s specific needs and targetedmarkets.
Our progress2020 Baseline
7%2023 Progress
29%

2025 target
50%(1) “New Study Underscores Dangerous Levels of Chemical Pollution.” Human Rights Watch, January 21, 2022.

16

2023 Natural Resources Report

RoHS and REACH

WEEE

Since 2015, Schneider Electric has adopted a proactive
implementation of the European RoHS Directive, which restricts theuse of chemicals in electric and electronic equipment, many ofwhich are also restricted under the REACH (Registration,
Evaluation, Authorization and Restriction of CHemicals) regulations.
The Group designs and manufactures all its products to becompliant with RoHS and REACH substances restriction, even if it
is not in the directive’s legal or geographical scope. This includes
all Schneider offers, whether local or independent name brands,
manufactured in its plant facilities or only labeled.

Related to RoHS is WEEE (also known as “e-waste”). It refers toregulations, typically passed at a country or state level, aimed atpromoting the reuse and recycling of electrical and electronicequipment and thereby reducing resource consumption andthe amount of e-waste going to landfill. Requirements of WEEE
regulations include, among others, financing the collection,
treatment, recovery, and environmentally sound disposal of WEEE.
With the rapidly expanding use of electrical and electronic
products globally and the resulting growth in e-waste, more andmore jurisdictions are enacting WEEE regulations.

Schneider Electric is committed to fulfilling its legal obligation andpursuing product compliance coverage to the largest possible
extent making business sense. The Group continues to work
towards reducing the number of products under the RoHS
Directive exemptions and the number of global exceptions to
REACH and RoHS. 81.8% of products globally (93.6% of revenue)
are compliant with RoHS restrictions, among which, 45.2% arewithout directive exemptions.

The European Union (EU) WEEE Directive, is implemented throughnational regulations in all European Economic Area (EEA) countries
including all EU member states, Norway, Liechtenstein, andIceland. Schneider closely monitors developing WEEE legislationand complies with the EU WEEE Directive and EEA national
regulations, as applicable.

In anticipation of future possible restrictions, research programs
are conducted to find alternative solutions to the presence of leadin some metallic alloys, brominated flame retardants inpolychlorinated biphenyls and cobalt in surface treatments. Perand polyfluoroalkyl substances is a wide family of substancestargeted by both Europe and the US in coming regulations. Afterthe first identification of the different uses, the Group participated in
the public consultation, describing the situation of each use case interm of exposure, alternative solutions availability, risk, andrequiring temporary derogation only when relevant. Following
this consultation, a new restriction proposal will be proposed in
2024, and Schneider will engage a large substitution program
where needed.

Requirements of the EU WEEE Directive 2002/96/EC and national
regulations generally include, among others, the following:• Financing the collection, treatment, recovery, andenvironmentally sound disposal of WEEE resulting fromproducts on the corresponding market which have reachedtheir end of useful life; and• Labeling products with a crossed-out wheelie bin symbol tohelp minimize WEEE disposal as unsorted municipal waste andfacilitate its separate collection. All applicable Schneider
Electric products in the European markets need to comply
with WEEE regulation and carry the “Wheelie Bin” sticker.

Compliance system
A strong data management system is key to ensuring productcompliance and anticipating substitution actions. Internal IT
processes are continuously adjusted to identify a more proactive,
safe approach to material and substance use, and more efficiently
fulfill the declaration requirements of the European Substances ofConcern in Products database through direct link or IEC 62474/IPC
1752 structured data exchange formats.
In addition to IT tools, supplier compliance data collection iscontinuously improved with a new workflow and a wider scopeof requests. This enables the Group to push for a more completematerial disclosure, increasing the visibility of all chemicals
present in its products for better transparency and chemical
exposure management.

Life Is On | Schneider Electric | www.se.com

17

2023 Natural Resources Report

Being efficient with resources
4.3 Sustainable packaging
Packaging is the first visible asset seen by customers and it isassociated with major environmental challenges such as resource
depletion, waste generation, and marine pollution. Schneider
Electric’s Sustainable Packaging program aims to foster innovative
packaging solutions to ensure a safe and quality packaging
experience with reduced impact on the environment.

Resources

Globally, a growing number of regulations require the developmentof packaging alternatives, with a focus on recyclability. To comply
with these regulations and avoid current or upcoming polluter-pays
packaging taxes, innovation and partnership with suppliers are key.
Schneider’s suppliers are required to comply with applicable laws
and regulations, including compliance with the European Union’s
Directive on Packaging and Packaging Waste (1994/62/EC), as
amended by 2018/852/EU and CEN packaging standards (EN13427:2005), as well as the US Toxics in Packaging legislation.

100% of our primary and secondary
packaging is free from single-use
plastic and uses recycled cardboard

Schneider is working with its suppliers to ensure adequate supplyof sustainable packaging materials.

SSI #5
Our 2025 Commitment

Packaging transformation is making progressing apace,with 80% of all cardboard used in the primary andsecondary packaging made from recycled carboard. Our
Wiser range is also completely free from single-use
plastics, using only recycled cardboard.

By 2025, Schneider Electric is committed to reach:• 100% of primary and secondary packaging with recycled
cardboard. Cardboard is considered as recycled when it
includes at least 70% recycled fiber by weight, if legally
accepted (according to FTD 00976). Exception may beapproved to avoid any compromise in product protection,
safety, or quality standard. Temporary exemption is made forNorth America, where an average of 50% of recycled fiber byweight is required to be considered as recycled.
• 100% of primary and secondary packaging free from single-use
plastic. Schneider Electric defines single-use plastics based on
the European Plastic Pact: “A single-use plastic product meansa product that is made wholly or partly from plastic and that is
not conceived, designed or placed on the market to accomplish,
within its life span, multiple trips or rotations by being returned toa producer for refill or reused for the same purpose for which it
was conceived”.(1)Our progress2020 Baseline

2023 Progress

2025 target

63%

100%

13%

Schneider packaging teams work to:• Ensure the recyclability of our packaging to reduce the Group’s
overall environmental footprint.
• Establish partnerships with key suppliers to identify sustainable
alternatives to replace current single-use plastics in our
packaging.
• Build up traceability in the supply chain by collecting suppliers’
declarations and certificates for recycled cardboard.

(1) Source: Directive 2019/904/EC of 5 June 2019 on the reduction of the impact of certain plastic products on the environment.

18

2023 Natural Resources Report

5 Manufacture better
5.1 Context
In addition to the ever-increasing offer of digital solutions suchas its various EcoStruxure™ software, consulting and advisory
services, and field services teams, Schneider Electric still relies
on traditional manufacturing to produce its wide range of energysaving products.
Nonetheless, the Group is committed to minimizing its impacts onnatural resources by operating with sustainability principles at its
core. This allows the Group to continue manufacturing into the
future, helping its customers deliver on their sustainability andbusiness objectives. In the process, still preserving theenvironment and its limited resources.
Schneider Electric aims to move towards closed-loop systems in
its operations and with its partners to prolong the life and use of theresources it depends on.
Schneider Electric’s real estate footprint is made of approximately
1,000 sites in total, across six continents, with a total occupied floorarea of approximately 5 million square meters. Around three-fourthsof this surface is occupied by large industrial facilities for
manufacturing and logistics purposes. The remainder consists ofoffice buildings, that vary in size and characteristics. Overall,
Schneider’s largest 100 sites account for about 55% of the Group’s
footprint and its largest 200 sites account for approximately 80%.
For this reason, the KPIs in the following sections are built aroundthose 200 largest sites, i.e., those with the most material impacts.

5.2 Risks and opportunities withinmanufacturing operations
Environmental risks related to manufacturing include the potential
for soil, soil gas, surface water, groundwater, and air contamination.
For instance, the release of hazardous substances can be harmful
to human health and the environment. It can also disrupt continuityof operations and tarnish reputation. As Schneider Electric’s
factories and distribution centers are spread across dozens
of countries and different national environmental regulatory
frameworks, risks of non-compliance exist. These risks are
related to potential mismanagement of the use, handling,storage, discharge, emission, and/or disposal of hazardous
substances and their related wastes as well as GHG-related
expectations.
A proactive approach towards site and property environmental
risks and compliance helps preserve the continuity of operations,
reduce reputational and legal risks, and avoid financial harm.

Resource and energy efficiency not only delivers financial savings,
but also limits the Group’s exposure to commodity-price volatility
and shortage risks. Electrification megatrends are increasing
competition to access some raw materials, creating shortage
risks for Schneider Electric. The Group believes environmental
performance is a powerful tool to innovate towards a more
efficient and resilient supply chain and generate bottom-line
savings. By using its own EcoStruxure™ architecture to achieve thisambition, the Group also showcases carbon efficient architectures
to its customers.
Environmental regulatory compliance, environmental management
systems, and engagement programs with key stakeholders are thefoundation of Schneider Electric’s environmental risk management,
prevention, and continuous improvement program for current,
former, and prospective operations.

Compliance with environmental regulations
Historical environmental liabilities are managed at a regional level
to ensure that local expertise, regulatory knowledge, and culturalawareness are applied. Using external consultants, known
environmental issues are thoroughly investigated, and, if
appropriate, remediated or otherwise managed throughengineered or institutional controls to reduce potential risks to
non-significant levels and in compliance with local regulations.
Environmental risks and provisions are reviewed with local andcorporate finance, as well as legal functions.
During 2023, no new material environmental impacts wereidentified. See section 5.5 on page 23 for more information.
Furthermore, no Schneider Electric sites are Seveso-classified.

Environment management systems
Schneider has put in place an Integrated Management System(IMS) which allows for standardized, streamlined, and collaborative
deployment of its various management systems. The IMS covers
the Group’s plants, distribution centers, and large offices, andhosts ISO 14001, ISO 50001, ISO 9001, and ISO 45001 compliancemanagement systems. Each site is audited periodically, either
externally by Bureau Veritas (every three years), or internally.
In particular, the relevant management system for the environmentis ISO 14001.
ISO 14001 certification allows Schneider Electric to define andmaintain robust environment governance on its sites, supporting
continuous improvement to deliver environmental performance.
The Group certifies all industrial and logistics sites with more than
50 employees and all large tertiary sites with more than 500
employees, within two years of their acquisition or creation.

Life Is On | Schneider Electric | www.se.com

192023 Natural Resources Report

Being efficient with resources
234 sites were certified ISO 14001 as of the end of 2023,
representing approximately 79% of the Group scope based on theshare of site surfaces, 82% of the Group scope in terms of energy
consumption, and over 83% of the Group scope in terms of water
usage, waste generation, and Volatile Organic Compounds (VOC)
emissions(1).
The Group’s environmental reporting scope and targets are basedon all ISO 14001 sites. Environment reporting metrics are shownin the table on page 301 of the 2023 Universal Registration
Document and include energy consumption, Scopes 1 and 2 CO2emissions, waste generation, water usage, and VOC emissions.
With the Safety, Environment, and Real Estate (SERE) network
working hand in hand with the Customer Satisfaction & Quality(CS&Q) network, a robust governance is in place to mitigate
environmental risks and drive continuous improvement.
The internal Energy and Environment Policies supported by the
Global Environment Directives on legal compliance, event reporting
and alerts, and environmental liabilities, provide clear expectations,scope and accountability rules, enabling the harmonization ofenvironment and energy governance across regions and activities.
Each site is assessed under more than 240 indicators consolidated
under the Environmental, Health and Safety Assessment (EHSA)
and published to all Global Supply Chain sites in a global EHSA
dashboard. Sites are also benchmarked based on “best available
techniques”, and documented and shared within SERE andCS&Q networks.

Engagement programs
Environmental risk management and prevention require more thanjust the appointment of technical environment experts. Robust
governance with key stakeholders across the entire organizationis critical to achieve and maintain success in the numerous areas
surrounding environmental risk and prevention.
The Group has therefore established the following engagement
programs:• The Company-wide Look at Environmental Assessment andRisk Review program (CLEARR), which focuses on historicaland current potential environmental site risks, and surveys newand existing selected manufacturing sites each year.
• Environmental due diligence reviews of mergers, acquisitions,and disposals, at any site where chemicals are or have beenused. Any environmental risks or liabilities identified are
addressed through proper risk management activities.
• Third-party services assess the risk profiles of key sites inrelation to certain external risks such as fires, earthquakes,
floods, and other natural disasters. This process is combinedwith the business continuity planning efforts to gauge relatedrisks and anticipate possible steps which would be required.
• Risks and mitigation actions are presented to the Board Audit& Risks Committee.

Resilience materials program
The Group approaches the access to resources at different time
horizons, to ensure materials supply resilience both now and in the
future. The Group is:• Building short-term resilience in securing supply and protecting
operations against price volatility with real-time alerts to notify
and activate action plans;• De-risking its portfolio with technological solutions and circularbusiness models; and• Shaping the future with long-term material resilience andsustainability with disruptive actions.
To ensure materials sourcing resiliency, Schneider has added
resource parameters in product ecodesign and defined
substitution strategies for critical resources. R&D actions arein place, focusing on materials with main strategic functions
accompanied by communication channels to escalate and alert.

5.3 Waste-to-Resources
Schneider Electric is committed to mitigating the potential adverse
impacts of hazardous waste on environment and health. Two mainlevers have been identified through the “Waste-to-Resource”
program. First, all sites generating hazardous waste ensure
visibility of handling and end-of-life treatment paths. They mustalso seek to add value to waste where possible (through material
or energy recovery) while neutralizing its hazardous nature.
Secondly, top hazardous waste-generating sites should work to
reduce the volumes of waste generated in the first place, notably
by implementing “best available techniques” (BAT) in theirindustrial processes. Such BAT processes lead to superior
performance from a resource efficiency perspective, and/or
chemical substances use, and/or emission reductions.
In recent years, global challenges with supply chains, material
shortages, and increased visibility towards waste pollution suchas ocean plastics have reinforced Schneider’s longstanding
prioritization of its circularity strategy and the importance ofengaging all stakeholders across the value chain to drive progress.
The Group’s 2021 – 2025 “Waste-to-Resource” (SSE #9) program,an evolution of its 2018 – 2020 Towards Zero Waste to Landfill
program, takes its waste recovery program even further: sites mustachieve 99% recovery for all waste not classified as hazardous
while also achieving 100% hazardous waste recovery using thebest available handling/treatment options locally. Additionally, topromote and emphasize the importance of circular economy,“Waste-to-Resource” sites are not allowed to use waste-to-energy
solutions for more than 10% of their waste. This provides anopportunity for sites to work collaboratively within their internal
supply chains, and alongside external suppliers and waste
management providers, to find innovative reduce, reuse, andrecycle solutions.

(1) Exclusions mainly include AVEVA, RIB Software and Larsen & Toubro E&A division and to a limited extent other small non-integrated entities.

20

2023 Natural Resources Report

In 2023, the Group did make progress towards its target of 200
Waste-to-Resource sites by achieving 137 sites, a net of +10 sites
from last year, but continues to be impacted by the ongoing
evolution of its real estate footprint. Since the start of the program,
19 sites classified as Waste-to-Resource have been closed,
divested, or transferred to third parties, impacting the ability todeliver on the Group’s commitment of 200 sites. This real estateevolution also impacts the number of sites that can be targeted
before 2025 with further site consolidations and third-party
transfers expected in order to support business needs and deliver
further efficiencies. Despite the challenges on this site-based KPI,
overall performance on waste reduction, reuse, recycling, anddiversion from the landfill remain strong in 2023. Schneider
generated around 124,000 tons of waste in 2023, most of it being
solid waste. Continuous improvement plans have been deployed to
manage this waste, in line with the ISO 14001 certification. The
Group achieved 97.0% recovery of reported waste, and a 91.3%
recycling rate without energy recovery in 2023. The recovery ratio
has increased from 81% to 97% since 2009, thanks to site-by-sitewaste management action plans.

5.4 Water withdrawal, discharge, and stressIn 2021, the Group set the ambition to reduce hazardous waste
intensity by 30% in 2025 against the 2017 baseline. In 2023,
hazardous waste generation intensity was 0.21 tonnes/million EURof revenue, which represents an evolution of -50% vs. 2017.

Water withdrawal

Schneider Electric’s direct operations are not water intensive withindustrial processes consisting of mainly manual and automatic
assembly. However, without water the facilities cannot operate andas such, Water remains a continued focus of the business withincreased focus on sites located in the most water-stressed areas.
In 2023, water management and performance information weredisclosed in the CDP Water Security program, and Schneider wasscored a A-.

The Group measures water withdrawals per source, with details
on water withdrawn from the public network, groundwater, surface
water (for example lakes and rivers), and other sources of water(including rain and recycled water).
Water is primarily used for cooling and sanitary purposes and, ata few selected sites, for processes such as surface treatment andpaint lines.

Resources

In 2021, Schneider Electric set the target to reduce water intensity(in cubic meters of water withdrawn per milliom EUR of turnover) by
35% in 2025 vs. 2017, with a focus on sites with high water
withdrawal and within water-stressed areas. In 2023, water
withdrawal intensity was 53 cubic meters per million EUR ofrevenue, an evolution of -51% against the 2017 baseline.

SSE #9Our 2025 Commitment

200 “Waste-to-Resource” sites

Annual water withdrawal intensity* (m3/€M)

SSLVTA, a low voltage manufacturing site locatedin Shanghai, China produces low voltage electricalappliances such as circuit breakers and dual power
supply products on site.

The local team identified the potential of creating a close
loop – by utilizing activated carbon produced as anabsorbent to reduce its VOCs emission. Not only does
this promote waste as a resource, its also an economical
way to address the site’s environmental impact.

53

56

70

72

40
20
0
2019

2020

2021

2022

2023

2025

Target2025 target
200

Life Is On | Schneider Electric | www.se.com

137

60

* Scope of sites is GED 001 scope; Scope of total revenues is the Group’s revenue

Our progress
2023 Progress

80

Water intensity

Through this project, 1.5 tons of hazardous waste are
eliminated annually.

2020 Baseline

77

100

94

120

Due to the nature of the electrical manufacturing process,Volatile organic compounds (VOCs) are produced as a
byproduct in the plant’s exhaust gas. In addition, activatedcarbon is produced as waste on site and its classified
hazardous which needs to be outsourced for disposal.

120

Schneider Electric regularly assesses water-related risks. In 2022
the Group conducted corporate water footprint across the full value
chain, covering water consumption, scarcity, eutrophication,
ecotoxicity, and acidification. The assessment showed that direct
water use and indirect energy water use in facilities amounts forless than 1% of Schneider Electric’s overall water footprint;
18% was allocated to raw materials and 81% to the use phase of its
products.

21

2023 Natural Resources Report

Being efficient with resources
Focus on water-stressed areas
The Group recognizes the importance of water to our operations
and local communities, especially those that are located inwater-stressed areas. The Group monitors the water stress levelof all ISO 14001 sites (including factories, distribution centers, andlarge offices) using the World Resources Institute’s Aqueduct Water
Risk Atlas. Sites identified as “high” or “extremely high” using thetool are classified as water-stressed, regardless of the amount ofwater withdrawn.
76 sites are classified as water-stressed, accounting for about
46% of total water withdrawals. The Group has set the target that
100% of its sites in water-stressed areas have a water conservation
strategy and related action plan by 2025 (SSE #11). The actionplans require sites to conduct a water use assessment to identify
opportunities for water efficiency improvements. This covers goodpractices associated with metering, both water-related technicaland general water training for employees, and loss analysis as well
as deep dives into process-related activities, heating and cooling,
sanitation and canteens, and irrigation where relevant. In 2023, theGroup achieved 73% of its 2025 target.

Water discharge
Most of the water discharged by Schneider Electric is sanitaryand canteen wastewater and is sent to a third party, often a public
entity, for treatment without requiring additional pre-treatment in
Schneider’s facility.
In some cases, wastewater does require treatment before leaving
the site boundary (as is often the case when using water forindustrial processes like surface treatments). On-site wastewater
treatment reduces pollutants and monitoring plans align withregulatory requirements. Increasingly, sites with process water are
adopting closed loop systems to eliminate wastewater, minimize
freshwater withdrawal, and recover valuable raw materials.
An example of this is the Coimbatore site in Tamil Nadu, India
where Schneider produces Low Voltage Switch Boards. Highquality water is required for the powder coating process used forcovering panels. During 2023, the site began operating the
upgraded wastewater recycling process which includes a reverse
osmosis system and solar evaporator, at an investment ofapproximately EUR 30,000. This initiative recovers over 880 cubic
meters of water annually. It has also improved the quality of the
returned water which in turn has reduced the number of defects,
whilst also reducing site carbon emissions by 10t CO2e per year, avital part of our zero carbon site program. This, together with the
installation of a 2,500 cubic meters rainwater harvesting systemhave reduced water withdrawal by almost 15%.

22

Resources

SSE #11
Our 2025 Commitment

100% of sites in water-stressed
areas have a water conservation
strategy and action plan
Schneider Electric has three sites in the water-stressedarea of Nuevo Leon, Mexico. Recent water shortages
have highlighted the importance of water security both forour employees and their families, and operational business
continuity. It is especially important to be efficient withwater at these sites. The sites’ water action plans have
implemented the following initiatives across thethree operations:
1. Engaged and trained employees on the importanceof water and efforts to reduce demand.
2. Upgraded the water metering system.
3. Process improvements to the paint lines andcoatings operations.
4. Retrofitting of low flow taps, toilets, and urinals.
5. Xeriscaping is being introduced to replace sitelandscape with native species which require
no irrigation.
Over the last 12 months, the Monterrey sites have reduced
water demand by 24%. Beyond the factory boundaries,
the team has worked with NGOs including Fondo Unido,
Sociedad Sostenible (SOSAC), and REMARE, andgovernmental organizations in the Santa Catarina Riverbasin to support water security through the removal ofinvasive species, reforestation, and river clean-up
activities. The sites continue working to improve efficiency
and tackle water insecurity in the area.
Our progress2020 Baseline
0%2023 Progress

2025 target
73%

100%

2023 Natural Resources Report

5.5 Pollution mitigation

5.6 Biodiversity actions at sites

Conditions of use and release into the soilWith the objective of gaining an overview on biodiversity priority
sites, informing risk management, and addressing potential
biodiversity impacts, the Group ran a multi-site report with theIntegrated Biodiversity Assessment Tool (IBAT). Developed througha partnership with BirdLife International, Conservation International,International Union for Conservation of Nature (IUCN) and United
Nations Environment World Conservation Monitoring Centre(UNEP-WCMC), IBAT collects and enhances the underlying
datasets and maintains that scientific information.

Schneider Electric’s sites are mainly located in urban or industrial
areas. None of the Group’s businesses involve extraction or land
farming. In 2023, Schneider’s manufacturing sites conducted theirannual review of pollution risks as part of the ISO 14001 monitoring.
No spills or discharges causing soil pollution occurred in 2023.
Hazardous materials and their related wastes are managed
in compliance with regulations and with appropriate pollution
prevention mechanisms. As examples, this includes storage on
impervious surfaces and ensuring stormwater is isolated fromchemicals and wastes.

Discharge into the water and the air

The IBAT report enables users to assess the biodiversity-related
features of multiple operational sites for risk management andstrategy setting. In particular, the report is relevant for Global
Reporting Initiative (GRI) standard GRI 304: Biodiversity.

Because Schneider is mainly an assembler, its discharge into the
air and water is very limited. The Group’s manufacturing sites arecarefully monitored, as part of local regulations and the ISO 14001
certification. Discharges are tracked locally as required by current
legislation. No spills or discharges causing water or air pollution
occurred in 2023.

For each operational site, the report provides the counts ofprotected areas and Key Biodiversity Areas (KBAs) within a
1-kilometer radius.

Emissions of NOx (nitrogen oxides), SOx (sulphur oxides), andparticles into the air are monitored, where appropriate, at site levelin accordance with applicable legal requirements, with monitoringof these emissions verified via ISO 14001 audits.

• 21% of its sites are in proximity of a protected area as definedby the IUCN, of which:− 8% are in category 1a, 1b, and 2 (just six sites are inproximity of a category-1-protected area);− 29% are in category 3 or 4;− 31% are in category 5 or 6; and− 32% are not applicable, not assigned or not reported.
• 3% of the Group’s sites are in proximity of a key biodiversity area
(defined by IBAT as either “Alliance for Zero Extinction” or“Important Bird and Biodiversity Areas”).

Schneider is committed to preventing air pollution and adverse
health impacts from VOC emissions, and for this reason, the Group
works to reduce VOC emissions from industrial activities by 10%
every three years. VOC emissions(1), which are primarily linked to
production, decreased from 29 kilograms per million euro in 2017
to 8.5 kilograms per million euro in 2023. The Group engages witheach of its industrial sites that contribute the most to VOC
emissions, and which together account for over 90% of the Group’s
VOC emissions. For these sites, environment, health and safety,
and industrialization teams, come together and actively collaborate
to ensure conditions of use are strictly adhered to, and health andenvironmental risks are known and mitigated. Those top VOCemitting sites also investigate opportunities to reduce andphase-out concerned chemicals from industrial processes
wherever possible.
Finally, chlorofluorocarbon and hydrochlorofluorocarbon emissions
are monitored locally, in accordance with applicable regulations.
These emissions are mainly due to the operation of air conditioning
systems and are not directly linked to Schneider’s industrial
activities.

The results of the “IBAT multi-site Report, 2021” include all
Schneider sites and show that, within a 1-kilometer radius:

Among the sites in proximity of a protected area, 33% are either
industrial sites (characterized by discrete industrial processes suchas assembly lines) or distribution centers (warehouses andlogistics); the remaining 66% are office buildings.
All results are made available to sites, so that they can better
understand the local threat to biodiversity and restoration potential.
Sites use these results at their discretion to drive the local
biodiversity actions previously described.

Find our IBAT Multi-site Report generated underlicense 26614-25299 from the Integrated Biodiversity
Assessment Tool on 15 December 2021 on
www.ibat-alliance.org

Noise, odors, and light
All Schneider’s sites comply with local regulations on noise andodor. Given the nature of its activities and distribution model, theGroup does not have any significant external light pollution.

Life Is On | Schneider Electric | www.se.com(1) Scope of sites is GED 001 Scope, Scope of revenue is the total Group revenues.

23

2023 Natural Resources Report

Being efficient with resources
In 2021, as part of the Group’s Biodiversity Pledge, Schneider
Electric committed to act locally, engaging employees and partners
to deploy biodiversity conservation and restoration programs in
100% of sites (>2000 SQM). To meet this target, 400 Schneider
sites have to define and deploy a Biodiversity program that aims toeliminate single-use plastics (relating to non-production such as
office and catering) and includes at least one local action which
addresses locally-specific ecological risks, and incorporates
structured governance and wider stakeholder involvement.
The scope of the single-use plastics ban for the Biodiversity
program is non-operational single use plastics (e.g., cups, cutlery
and gifts/souvenirs). Operational single use plastics (e.g., primary/secondary packaging, and products) are covered in Schneider
Electric’s SSI #4 and SSI #5 programs.
The program was launched in 2021 and whilst 2022 focused on
education and training, 2023 focused on action – tackling thecomplexities of biodiversity, assessing their impact, and working
with local stakeholders and employees in direct action to preserveor restore biodiversity in and around the sites. The Group achieved
66% performance in 2023, up from 18% in 2022.
The program empowers employees to understand the local
environment and priority ecological risks and take appropriate
action on and around the Schneider Electric sites. This has resulted
in a range of initiatives, for example: Monarch butterfly waystationsin Mexico and the US; creation of miniature forests in India, Saudi
Arabia, Canada and Algeria; mangrove restoration in Vietnam andChina; river and ocean clean-ups in Egypt and Italy; and creation of
ecological corridors in Brazil.
Action on Biodiversity represents a unique way to engage with
employees and communities on issues which are important tothem, building an empowered workforce that recognizes the valueof nature in tackling climate change and that many small actions
can make a big difference.

Resources

SSE #8
Our 2025 Commitment

100% of sites with local
biodiversity conservation andrestoration programs
Schneider Electric is engaged to act at local level. Everysite will engage in at least one local action to tackle locally
relevant ecological risks.
For example, the team at the Edmonton facility in Canada
were concerned about the decline of pollinators and theimpact on flowering plants and food production in the area.
Populations of key pollinators in the area have declined byabout 40%.
Over the last year the team have been working with a local
beekeeper to install a bee hive and train employees. This is
one of several actions that the team is taking to support
pollinators; others include installation of bat houses, andworking together with Root for Trees Canada to support
local reforestation, planting over 500 native trees andshrubs in local parks in the last two years.
Similar projects are also happening in the UK, France,
and the Netherlands.
Schneider takes the responsibility to protect, and wherever
possible improve, the biodiversity around its work place.
Our progress2020 Baseline
0%242023 Progress

2025 target
66%

100%

2023 Natural Resources Report

6 Use longer and use again
Schneider Electric aims to maximize the environmental
performance of its products. To achieve such ambition, the Groupdevelops services and business models to extend the useful lifeof its products, and when no option is possible, take back the
product, assess whether a second-life is possible, and ultimately
ensure the product or components are recycled.
The first focus, before considering end-of-life, is to prolong tolifespan of products. These solutions, using up to 60% lessmaterials than using brand new equipment, enable pull-throughand constant payback, increase customer stickiness, and build
long-term relationships.
To ensure products are correctly used, maintained, repaired,collected, sorted, and recycled, circularity has to be embeddedin the offer design stage (see EcoDesign approach in Section 3.4
on page 9).
There are opportunities to leverage the circular economies, both
externally with customers and internally in operations. Schneider’svalue propositions have long delivered resource efficiency,
enabling customers to “do more with less”.
The risks that Schneider Electric has identified are around theperception of “one size fits all” for circularity, as well as thetemptation to see it through a waste or recycling lens, and the focus
on developing the related guidelines, governance, and standards
based on this perception.
• Product durability versus shorter-term waste loops: Allresources are not equal in their thermal, mechanical, or
electromagnetic profiles. For the industrial sector, the biggest
impact of the circular economy will come from the promotion of
repairability, upgradability, “retrofitability”, extension of lifespan,and of related “product second- and third-life services”.
Schneider’s products are highly technical in nature with a long
lifespan and are highly unlikely to end up as ocean plastic
waste. Yet a risk that the emerging regulations may be too“resource/waste-centric” can be identified. To meet quality andsafety expectations, and adhere to stringent electric andelectronic equipment standards, recycled materials are
sometimes not available in either quantity and/or quality. The
Group actively advocates sector-specific approaches.

Resources

SSE #10
Our 2025 Commitment

420,000 metric tons of avoided
primary resource consumption
through “take-back at end-of-use”
since 2017
In order to properly promote the environmental benefits
in terms of CO2 and material savings, the ECOFITTM
teams have developed a calculator making use of theenvironmental impact database (based on PEPs created by
Schneider).
The calculation method of this calculator has been
independently reviewed by an audit and assurance
leading firm to ensure reliability of the information provided
to the customers.
Our progress2020 Baseline
157,5882023 Progress
311,2292025 target
420,000• Ensuring the safety of people and assets through qualified
and certified services: in fact, while promoting services toextend the products’ lifespan, Schneider grows the ranks ofcertified experts on its products (through thousands of Field
Services Representatives). Leveraging the circular economy,
there is a fantastic opportunity to enable more repair, retrofit,
and recycling services, on the condition that concerned productcategories are adequately maintained and serviced by qualified
and certified experts.

Life Is On | Schneider Electric | www.se.com

25

2023 Natural Resources Report

Being efficient with resources
6.1 Maintain and Repair

Customers can adopt Schneider’s Condition-Based Maintenanceapproach with EcoCare Membership, a next generation
services plan:

Extended equipment lifespan and resiliency
through Condition-Based Maintenance
The experience of recent times has accelerated the adoption of IoT
as a technological advancement that enhances the resilience ofinstallations. Furthermore, the pressing challenges of the energy
and climate crisis have underscored the need to decarbonize
installations, adding an additional layer of complexity.
Condition-Based Maintenance is a powerful solution that
addresses both challenges, enhancing equipment uptime andprolonging its lifespan. By constantly monitoring equipment healthand tracking stress, wear, and aging parameters, it allows one toproactively prevent failures that accelerate equipment aging. Thisapproach not only helps avoid the need for equipment replacement
but also contributes to avoiding carbon emissions by eliminating
the manufacturing of new equipment.
In new CapEx projects, Condition-Based Maintenance can be
implemented by leveraging native connected equipment. Whereas,for older installations, Condition-Based Maintenance can be
enabled by upgrading the installed base with sensors.

• 24/7 remote monitoring from Schneider Electric experts andon-site intervention in case of emergency.
• Unique Assets health indexes powered by advanced analytics.
• 45,000+ events monitored and manages.
• 25 million data points daily.
• 24,000+ recommendations every year.

6.2 Refurbished Offers
Schneider Electric creates shared value for its customers throughlocal models of take-back, refurbishment and resale of retired
assets.
As a continuation of Schneider Electric’s development of therefurbished models, extended capabilities are developed in orderto:• Expand the coverage and value creation for take back andrecovery services• Enlarge the basket of product ranges with a refurbished offer
guaranteed by Schneider Electric, and• Industrialize processes, systems, and operations to delivera simple customer experience
Schneider Electric puts its expertise as a manufacturer at theservice of providing manufacturer-level circular solutions, following
strict guidelines, ensuring traceability, guaranteed performance,
and Schneider Electric usual service support on site.

Refurbished ranges in 2023
Refurbished Products
Low Voltage

UPS

MasterPact MTZ

Get credentials by using
refurbished products guaranteedby Schneider Electric• A label dedicated to the sale andpromotion of products from thecircular economy, launched by
Schneider Electric.
• The warranty of a circular
product is identical to a new
product• Refurbished products have ahigher environmental value, byreducing carbon footprint &resource consumption

UPS 1phase

Industrial Automation & Control

Take back service
Take back and recycling of yourageing equipment and all related gas
like SF6.

Variable
Speed
Drives

26

HMI

PLC

MotionSystemDrives2023 Natural Resources Report

In addition to delivering tangible sustainability benefits (positively
contributing material resilience and our customers’ scope 3),
leveraging circular offers brings new benefits to customers,
not only financially, but also operationally – among which faster
availability, ability to better manage Capex / Opex decisions,provide prolonged access to spare parts, ensure continuity ofoperations with manufacturer-level refurbished products.

Case study: Bouygues Energies& Services: Supply of refurbishedelectrical equipment for the Six
Degres projectIn the evolving regulatory context encouraging all circular loops,
Schneider Electric continue to broaden its offerings to support thiscircular transition and create new business opportunities to bothpartners and end customers, with the primary intent to maximize
the reuse of products, equipment, spares.

6.3 Recycle raw materials and substancesEnd-of-life regulations
Schneider Electric has deployed a process that ensures a safe
treatment and recycling of its products at the end of their lifecycle.
In compliance with the WEEE directive, Schneider implements
product identification and selection actions, establishing recycling
streams, and pricing the taxes to be applied following theregulations of each country where the Group’s products are sold.
For products falling within the scope of the WEEE directive,a circularity profile including detailed end-of-life instructions
is systematically provided through the “Check a Product”
public website.

Enhance recycling
Schneider’s unique approach for the modernization of aging
equipment, minimizing waste, and maximizing safety, efficiency,
and resiliency, avoids up to 90% of waste by upgrading customers’
equipment with the latest technologies using sensors andconnectivity to optimize uptime and extend the assets’ lifespanreplacing the core components. This approach also enables the
take-back of products, to reuse, rebuild, resell, and recycle themwhen no other option is possible.

“Six Degres” is an environmentally friendly real estate project
covering 39,000 square meters. Designed to offer flexible
offices tailored to new ways of working, as well as a full rangeof services including co-working, auditorium, restaurants,
shops, nursery, sports hall, and wellness center. The project
also includes 7,000 square meters of terraces forming
suspended gardens that can accommodate up to 2,900
people. Located in the Val-de-Marne area near Paris, France,
it is scheduled for delivery in 2024.
To reduce the environmental footprint, the architects andBouygues have chosen innovative solutions: low-carbon
concrete for the infrastructures and foundations, wooden
floors and posts for the superstructure, algae-based paints,
and numerous materials and equipment from the circular
economy. From low-voltage equipment to medium-voltage,
including building management systems, all products must
contribute to reducing the carbon footprint.
From a circular economy perspective, Schneider Electric has
made significant contributions through various initiatives:
1. Refurbished MasterPact MTZ circuit breakers at the
MasterTech center near Granoble, France. Products thathave been taken back undergo dedicated refurbishment
and re-testing processes, ensuring manufacturer-level
performance and warranty.
2. Repacked products (Mureva and Unica) from redistribution
flows are given a second chance, thereby avoiding waste
and carbon emissions.
3. The AirSeT range provides SF6 -free medium voltage
equipment using AirSeT technology, offering a lower CO2
solution and environmentally safer end-of-life management.

Life Is On | Schneider Electric | www.se.com“This demand for low-carbon emission products is a real
underlying trend in all tenders”, notes Santiago Rivero, key
account manager for Bouygues Energies et Services. “AndFrance is a pioneer in the field, with legislation pushing is in
this direction and a growing awareness”.

27Schneider Electric SE
Headquarters:
35, rue Joseph Monier - CS 30323
F-92506 Rueil-Malmaison Cedex (France)
Tel.: +33 (0) 1 41 29 70 00
Fax: +33 (0) 1 41 29 71 00
European Company,
governed by a Board of directors with ashare capital of EUR 2,291,343,536
Registered in Nanterre, R.C.S. 542 048 574
Siret no.; 542 048 574 01791

FR© 2024 Schneider Electric. All Rights Reserved. Life Is On Schneider Electric is a trademark and property of Schneider Electric
SE, its subsidiaries and affiliated companies. All other trademarks are the property of their respective owners. 998-23059200