At Schneider Electric, sustainability has been at the core of our business strategy for the past 15 years. We create technologies and solutions to advance a more efficient, sustainable, resilient, and inclusive world for all. We work with customers, partners, governments, and suppliers to deploy these solutions and create a low-carbon future.
Learn more about our ESG strategy and performance
ESG FAQ
Sustainability strategy
For Schneider Electric, “Sustainability” is about creating system value. It encompasses continuous improvement of environmental, social, and ethical dimensions across an organization's entire value chain and stakeholders. This holistic approach to sustainability allows the Group to greatly mitigate risks and also brings tangible value added through a greater attractivity to customers, new talents, and investors, while boosting innovation.
Sustainability is integrated in the processes and bodies that design and execute the Group’s strategy at the board (Human Resources and CSR Committee), executive (Group Sustainability Committee), and operational levels.
Schneider Electric’s current short-term sustainability roadmap 2021-2025 was built on the basis of a consultation process involving internal and external stakeholders, with a dedicated internal governance mechanisms implicating the Sustainability team, employees, experts in the Group, the Executive Committee, and the Board of Directors, under the leadership of the Chief Sustainability Officer. In the medium (5-10 years) and long term (10-30 years), Schneider Electric aligns its strategy on key issues under the United Nations Sustainable Development Goals and global climate scenarios in coherence with its business model and global footprint.
The results of Schneider Electric’s materiality matrix used to create the current strategy for 2025 showed that the top expectations for the Group are:
1. Leading climate action in our ecosystem with our partners;
2. Pioneering circular economy and being efficient with resources;
3. Ensuring a fair transition and guaranteeing high ethical, social, and environmental standards along more local value chains;
4. Leveraging digital in cybersecure solutions to boost positive impact.
To deal with these issues, Schneider Electric defined 6 long-term sustainability commitments (Climate, Resources, Trust, Equal, Generations, and Local) and launched the 2021-2025 Schneider Sustainability Impact and Schneider Sustainability Essentials programs to measure progress against them.
Each year, Schneider Electric performs risks, opportunities, and impact assessments, considering issues that can have direct positive or negative financial impacts for the Company in the short-term, medium-term, or long-term, as well as impacts the Company may have on people and the planet, directly or indirectly in its value chain. The assessments rely on a panel of both internal and external tools, and take into account stakeholders’ expectations. The Sustainability team, the Strategy team, the Group Risk Management function and the Duty of Vigilance Committee especially play a key role. Other topic-specific committees contribute to the assessments and oversee the Group’s strategy on those issues, such as the Carbon Committee, Human Resources Committee, and the Ethics Committee.
In 2024, Schneider Electric performed a double materiality assessment based on the guidance provided by EFRAG and the European Sustainability Reporting Standards 2 (ESRS) as a first step to comply with the Corporate Sustainability Reporting Directive (CSRD).
The double materiality assessment leverages various internal analyses and external inputs, including stakeholders’ consultations, to determine the materiality of relevant sustainability topics for the Group, both from a financial and/or impact perspective. A third-party assurance provider is verifying the materiality assessment process. Material risks, impacts, and opportunities across the value chain were validated by the Company’s senior management and governance bodies. The results of this assessment are disclosed in Schneider’s Universal Registration Document 2024.
The Schneider Sustainability Impact (SSI) is a scorecard demonstrating that rapid, disruptive changes for a more sustainable world are possible across diverse, complex topics. We are committed to taking urgent action to co-create a brighter future aligned with the United Nations Sustainable Development Goals (SDGs), consisting of 17 objectives and measuring our impact with transparency. The SDGs are about protecting the planet, alleviating poverty, and achieving worldwide peace and justice.
Since 2005, we have updated our SSI every three to five years. By tracking our sustainability performance and publishing quarterly results, we uphold our commitments to the SDGs and industry leadership in corporate social responsibility. Beyond our SSI, we also instill a culture around sustainability through performance incentives for employees and leadership.
As part of its Extra-Financial Performance Declaration, the Group presents the main risks and opportunities identified with respect to major societal challenges. To compile the list of risks for the Group every year, a panel of both internal and external tools are used to address the expectations of its stakeholders as best as possible. The Group Sustainability team leads the evaluation, working in close collaboration with the Strategy team, the Group Risk Management function, and with the Duty of Vigilance Committee.
The Group’s corporate governance bodies supervise the development of internal control and risk management systems. The Audit & Risks Committee has particular responsibility for following up on the efficiency of internal control and risk management systems and reports to the Board of Directors.
Internal tools:
- The materiality assessment, focused on analyzing key stakeholders' expectations, is performed prior to each SSI program launch every three to five years (last exercise done in 2020).
- The Group risk matrix, led by the Group Risk Management function, is updated every year.
- The Vigilance risks matrix focuses on the potential adverse impacts the Group may have on people or the planet, directly or indirectly, in its value chain through its business relationships.
- Other specific risk mappings are conducted regularly, dedicated among others to Ethics & Compliance (including AntiCorruption and Conflicts of Interest), Climate, Water and Biodiversity, supplier, and cybersecurity risks.
- Regulatory frameworks: the key topics listed under Article R. 225-105 of the French Commercial Code (ExtraFinancial Performance Declaration), the European Taxonomy Regulation or European Sustainability Reporting Standards (ESRS).
- International Finance Corporation’s (IFC) Performance Standards on Environmental and Social Sustainability.
- International institutions and Non-Governmental Organizations (NGOs), and peer working groups and initiatives.
- Analysis of the Environment, Social, and Governance (ESG) rating agencies' expectations.
- Specific requests from investors and customers.
- Recommendations from the Task Force on Climate-related Financial Disclosures (TCFD), the Taskforce on Nature-related Financial Disclosures (TNFD), and various other frameworks (SASB, GRI, etc.).
Overall, the different governance bodies involved in the definition and monitoring of our Sustainability roadmap and programs (Schneider Sustainability Impact) are in charge of defining strategic mitigation programs in response to the risks and opportunities identified. Strategic programs defined at Group level are then cascaded into business divisions down to the sites for implementation. Each program of the SSI has a dedicated pilot in charge of driving the transformation and is sponsored at the Senior Vice President and Executive level to ensure management control and oversight.
Schneider Electric uses a hybrid risk management model with central functions and experts that are independent of any business lines to oversee setting risk management mechanisms, establishing policies, and other activities, while the ownership of the risks belongs to the Business Units, Operating Divisions or Global Functions who are responsible for deploying the central framework to manage their risks.
A list of Key Risks, managed by different risk owners, are consolidated by the Risk Management Function and reviewed every year by the Audit & Risk Committee for disclosure, where the committee would have several dedicated sessions over each reporting year to ensure full details are examined.
Finalized results of the ERM process is published each year in the Universal Registration Document, and awareness promoting risk management is also promoted within the Group.
The Group has launched various trainings and campaigns targeting the board and all employees in order to further raise awareness on our risk management mechanisms. For the Board of Directors, the Group has started an initiative to enhance risk culture education across board members to ensure understanding of the Enterprise Risk Management framework. While for other employees, training sessions were organized to raise the maturity of risk owners and risk overseers through various communities. General employee awareness was also raised through videos and social media campaigns that communicates our risk management mechanisms.
As a world corporate leader in sustainability, we believe that what makes Schneider Electric stand out today and tomorrow is that it is an Impact company through 2 guiding principles:
1. Do well to do good and vice versaPerformance: Our sustainability and business impacts converge to act for a climate-positive and socially equitable world.
Business: we have integrated sustainability at the heart of our business strategy to be the digital partner for sustainability and efficiency for all partners.
All ESG: to deliver sustainability in our entire value chain, we must combine a solid profitability with leading practice on all Environmental, Social, and Governance dimensions.
2. Bring everyone alongModel & Culture: the company’s operating model is set up to impact on all of the above at global and local levels. Our culture builds on strong and practiced values with the right talent and processes to be a leading purpose-led company.
All stakeholders: we seek to address the needs of all stakeholders in its ecosystem, from employees to supply chain partners, customers, as well as local communities, and institutions.
Schneider Impact revenues are defined as offers that bring energy, climate, or resource efficiency to our customers. Schneider Electric’s Impact revenues are split into four categories described thereafter. Activities included are:
- Energy efficiency architectures bringing energy and/or resource efficiency to customers.
- Grid reinforcement and smart grid architectures contributing to electrification and decarbonization.
- Products with differentiating environmental performance.
- Services that bring benefits for circularity (prolonged asset lifetime and uptime, optimized maintenance operations, repair, and refurbishment) and energy efficiency (to maintain operational performance of equipment and avoid a decrease of energy efficiency over time).
Revenues derived from activities with fossil sectors and others are excluded, including Oil & Gas, coal mining, and fossil-power generation, in line with prevailing corporate responsibility reporting and sustainable finance practices, even though Schneider Electric’s technologies deliver resources and carbon efficiency in such sectors as well. In line with Schneider Electric’s strategy to phase out SF6 from offers, SF6-containing switchgear for medium voltage applications are also excluded. In addition, neutral technologies such as signaling, racks and enclosures, access control, or emergency lighting are excluded.
All revenues consolidated in financial accounts are taken into account. The calculation is based on revenues per line of business. The exclusion of fossil revenues is based on orders per customer’s end segment, with extrapolation to estimate the destination of transactional sales.
This indicator is audited annually by an external third party.
Schneider Electric has been an early adopter of transparent disclosures on sustainable revenues and created its own methodology of “Impact revenues” in 2019, covering offers that bring environmental efficiency to its customers, and excluding revenues from carbon-intensive segments.
The European Union (EU) has shown international leadership by being the first to develop a Regulation and Taxonomy aiming at driving investments towards environmentally sustainable activities, which the Group applauds.
Schneider Impact Revenues is a multi-criteria indicator, supporting climate and resources efficiency. The EU Taxonomy reporting on 2024 financial year, covers all six environmental objectives defined in the regulation, however the list of enabling technologies is incomplete. Notably for Schneider’s business, the EU Taxonomy includes only partially digital solutions and energy efficiency technologies for industry.
The applicability of some Technical Screening Criteria and Do Not Significantly Harm checks are a challenge for global industrial companies. In 2024, Schneider Electric's eligible revenue was 90% of revenue (71% of CapEx and 49% of OpEx) while aligned revenue was 28% of revenue (22% of CapEx, and 49% of OpEx) with challenges including 5% of revenue not compliant due to exclusions (i.e., revenues from fossil sector, products with SF6), 44% of revenue not compliant with technical screening criteria, and 14% of revenue not compliant with Do Not Significantly Harm criteria (pollution prevention and control). Schneider Electric will continue active involvement with the Commission to speed up the completion of the framework with missing sustainable technologies; and improve the usability and practical implementation of the technical screening criteria.
The methodology for calculating Taxonomy-eligible turnover, Capital Expenditure, and Operational Expenditure is detailed in the Group’s annual report.
In a nutshell, regarding revenues, two combined approaches are used:
- an offer-based approach (i.e., by nature of technology), whereby each line of business’s offers are reviewed against the definition of economic activities of the EU Climate and Environmental Delegated Acts,
- and an end-segment approach, whereby the amount of revenues generated from offers fitting with the economic activities description sold to Taxonomy-eligible end-segments (Green Transport and Renewables) is reviewed.
There is no double-counting between the two approaches.
ESG performance and disclosure
The execution of the Group’s 2021-2025 sustainability strategy is tracked through quantitative Key Performance Indicators (KPIs) part of two complementary dashboards: Schneider Sustainability Impact (SSI) and Schneider Sustainability Essentials (SSE).
Another tool called Schneider Sustainability External and Relative Index (SSERI) measures the Group’s performance in 4 independent ESG ratings.
The numerous awards received and the Group’s leadership in the main ESG indices (e.g. Dow Jones Sustainability World Index, CDP Climate A list, etc.), confirm that Schneider Electric is headed in the right direction.
The SSI and SSE are Schneider Electric's short-term sustainability roadmap; they translate the Group's 6 long-term commitments toward Climate, Resources, Trust, Equality, Generations, and Local communities into clear and measurable transformation indicators.
The SSI is made of 11 highly transformative and innovative programs, whose performance is published quarterly, audited annually, and linked to short-term incentive plans for the managers of the Group. A notable addition to the SSI in 2021 is the local aspect, aiming to deploy local actions in the 100+ markets where the Group operates in order to better empower all leaders and collaborators to unlock meaningful local impacts.
The SSE brings balance between the innovative transformation plans of the SSI and the need to keep progressing on other long-lasting programs. In that spirit of continuous improvement, and in a holistic vision of sustainability, the SSE tracks annual progress with 25 quantitative indicators, and some additional qualitative programs. Collectively, the SSI 11 Global Impacts and its Local Impact, as well as the 25 SSE programs, are the Group’s short-term sustainability roadmap and our contribution to the 17 UN Sustainable Development Goals.
Schneider Electric policies and commitments are aligned with international environmental standards and frameworks, and reports accordingly to the UN Global Compact and SDGs, the International Organization for Standardization (ISO), the Global Reporting Initiative (GRI), The Sustainability Accounting Standards Board (SASB), The Task Force on Climate-related Financial Disclosures (TCFD), The Science Based Targets initiative (SBTi), Organisation for Economic Co-operation and Development (OECD), International Labour Organization (ILO).
See more about our Key external frameworks p.91 of the 2024 URD.
You can find more details in our reports, our TCFD correspondence table on pages 324 to 329 of our 2024 Universal Registration Document. Likewise, a SASB correspondence table is provided on pages 322 to 323.
Schneider Electric is regularly top-ranked by many ESG rating agencies. For instance, in 2024 the Group obtained a CDP Climate Change A rating and was included in the Dow Jones Sustainability World Index, both for the 14th year in a row. The Group is also part of Euronext Vigeo World 120, Europe 120, Eurozone 120, and France 20 indices. Schneider Electric obtained an Ecovadis Platinum medal (top 1%), is rated AAA by MSCI and Negligible risk by Sustainalytics. In January 2025, Schneider Electric has also been named the World's Most Sustainable Corporation according to Corporate Knights Global 100 for the second time.
Know more about our ESG ratings performance in our Disclosure Dashboard.
The CDP is a global non-profit organization that runs a disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. Since early 2000s, the CDP conducts an annual survey to collect the corresponding data and information.
Yes, annual short-term incentives for the Group’s executives and about 76,000 eligible employees are linked to the Schneider Sustainability Impact (SSI) performance since 2011. From 2019, the weight of the SSI criteria has increased from 6% to 20% in the collective part of the annual incentive, highlighting further the importance of ESG on Schneider Electric’s business agenda. In France, since 2012, the SSI has also been included in the profit-sharing incentive plan for the French entities, Schneider Electric Industries, and Schneider Electric France. The reduction in the occupational accidents severity rate is also considered in the profit-sharing incentive plans of 24 other French entities.
Universal Registration Document 2024 - Page 208
Schneider Electric’s long-term incentive plan offers share ownership opportunities to the Group’s key talents and critical roles to align their rewards with the interests and experience of Schneider Electric shareholders. Similar to the short-term incentive, a portion of the award under the long-term incentive plan is subject to the achievement of sustainability objectives. From 2020, the long-term sustainability performance is measured through the Schneider Sustainability External & Relative Index (SSERI), which accounts for 25%, a combination of external indices which cover a range of environmental, social, and governance indicators wider than and different from the SSI criteria included in the annual incentive plan. From 2024, the SSERI criteria will evolve to cover climate targets on scopes 1, 2, and upstream scope 3.
The Schneider Sustainability External and Relative Index (SSERI) measures the long-term sustainability performance of the Group in terms of relative performance, through a combination of external indices which cover a range of environmental, social, and governance indicators wider than and different from the Schneider Sustainability Impact (SSI). The SSERI weighs 25% of the long-term incentives (LTI) performance criteria for about 4,000 employees. Using external indices ensures that the sustainability priorities governing the assessment of the long-term sustainability performance of the Group are at all times those which matter the most to the stakeholders. As their content is dynamic and includes new and more relevant topics as they emerge, it forces participants to constantly anticipate the most demanding trends in global sustainability. The Board has selected some of the most challenging external indices which are objective, recognized, and independent, covering main geographies in line with the Group’s global footprint and which complement each other as they cover different sustainability dimensions:
- DJSI World, which covers three dimensions: economic, environmental, and social;
- Euronext Vigeo, which covers environment, community involvement, business behavior, human rights, corporate governance, and human resources;
- EcoVadis, which covers four dimensions: environment, labor and human rights, sustainable procurement, and ethics;
- CDP Climate Change representing a major reference for climate change leadership globally.
A revised compensation policy was voted during the 2024 Annual General Meeting of the Group, whereby Scopes 1, 2, and 3 (upstream) CO2 emissions reduction targets are used instead of SSERI to calculate 25% of Long Term Incentive Plans starting in 2024, in order to align executive remuneration with the Group's climate transition commitments.