Schneider Electric

No leading practices were identified for this company.

Schneider has a comprehensive low-carbon transition plan informed by climate scenario analysis that has considered the implications of a 1.5°C scenario. Moreover, 20% of the company’s annual incentive programme for its executives is linked to meeting sustainability and emissions targets. Schneider is also actively developing business models for a low-carbon future through its EcoStruxure Platform. 

No leading practices were identified for this company.

Schneider uses several levers to encourage its suppliers to reduce greenhouse gas (GHG) emissions and supply low-carbon products. As part of its Zero Carbon Project, the company has set a goal to achieve a 50% reduction in operational carbon emissions from its top 1,000 suppliers by 2025. This initiative involves capacity building, engagement modules, and collaboration support to guide suppliers towards decarbonisation efforts. 

The company has set a target to achieve net-zero emissions by 2050. Further, the company aims to reduce both its scope 1 and 2 emissions as well as its scope 3 emissions by 90% by 2050 compared to 2021. These targets are validated by the Science Based Targets initiative (SBTi) in accordance with its net-zero standard. However, the company plans to use carbon offsets to reach its net-zero target. Additionally, Schneider has not established adequate intermediate targets between 2030 and 2050. Implementing regularly spaced intermediate targets will help the company incentivise near-term actions towards its longer-term goals. 

Schneider has a comprehensive low-carbon transition plan and a climate scenario analysis exploring its business feasibility under a 1.5°C scenario. The company’s low-carbon business models, including the EcoStruxure Platform and the Green Premium eco-label, are of great significance to the global low-carbon transition. However, it is unclear how it defines its revenue impact using standards such as the EU taxonomy. Additionally, although the company has implemented board-level oversight of climate change, there is no evidence that its board possesses sufficient climate expertise. 

In 2022, Schneider allocated less than 30% of its total CapEx to low-carbon technologies. Although the company invested USD 1.9 billion in research and development (R&D) in 2020, it remains unclear what proportion of this expenditure was dedicated to low-carbon technologies. Additionally, there is no evidence of the company’s patenting activity in relation to climate change mitigation technologies. 

Schneider develops supplier capabilities and provides education on emissions reduction through its Zero Carbon Project. The company has set a target and established concrete plans to assist customers in avoiding 800 million tonnes of carbon dioxide (CO2) emissions by 2025. However, while Schneider actively engages in public initiatives addressing climate change, it is not clear how it monitors and reviews its policy positions to ensure alignment with the Paris Agreement goals. 

Schneider aims to reduce its scope 1 and 2 emissions by 76% and scope 3 in-use emissions by 25% by 2030 compared to 2021. The company has also set science-based targets to achieve a 90% reduction in scope 1 and 2 emissions and scope 3 emissions by 2050 compared to 2021. 

Schneider’s Sustainability Impact Programme outlines an action plan to meet its 2030 emissions target. However, despite substantial R&D investment, there is insufficient clarity on the company’s low-carbon R&D spending and patenting activities. 

In 2022, Schneider achieved a 17% reduction in emissions from sold products compared to 2018. Nevertheless, reducing absolute scope 3 emissions in the next five years will be challenging, primarily due to the anticipated growth in the company’s activity. 

Schneider actively supports the global low-carbon transition by prioritising sustainability. The company’s emphasis on energy management and automation solutions highlights a strategic shift towards digital services and connected solutions, as opposed to conventional industrial equipment. 

Schneider’s transition plan relies heavily on the capacity of its suppliers and customers to decarbonise and help the company reach its goals. To strengthen its transition plan, the company can explain its contributions to emissions reduction for its products and services more comprehensively. 

The company publicly discloses a commitment to engaging in social dialogue with workers and unions. However, no relevant disclosure was found regarding the categories of stakeholders it engages with on a just transition. Nor was there any evidence to show the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking low-carbon transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

The company discloses the actions it takes to create jobs by hiring operators to run solar-powered agri-service systems. It also discloses the measures it takes to ensure that these jobs embed equality of opportunity for women and vulnerable groups. In particular, it creates jobs for women in its rural energy projects. However, no evidence was found of the company committing to create and support access to green and decent jobs as part of the low-carbon transition. Furthermore, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company has a commitment to re- and up-skill workers and stakeholders affected by the low-carbon transition and discloses the actions it takes in this regard. For instance, it has set up its learning institute for business partners, customers and students. Furthermore, the company discloses the measures it takes to embed equality of opportunity for women and vulnerable groups in these actions. It does this through its youth education and entrepreneurship program to support youth, refugees, women in vulnerable situations, and marginalized groups of people. However, no relevant disclosure was found of a process for identifying skills gaps for workers and affected stakeholders in the context of the transition.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. The company lobbies for just transition policies and regulations by advocating for just clean energy transition in the electricity sector and appropriate training and reskilling programmes for all workers. However, no relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment.

The company commits to respecting human rights. However, it is unclear whether the company commits to respecting the ILO fundamental rights at work, nor is it clear whether its business relationships are committed to the same principles. While the company discloses a human rights due diligence process that includes the identification and assessment of human rights risks, no evidence that it discloses its salient human rights risks. The company takes action to engage with stakeholders whose human rights have been affected by its activities. Moreover, the company has a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. Moreover, the company has achieved paying all workers a living wage. While the company discloses the proportion of its direct workforce covered by collective bargaining agreements, no relevant disclosure was found of the company publicly stating that workers shall not be required to work more than 48 hours in a regular work week. The company discloses some indicators of workforce diversity, including the age, gender and race/ethnicity of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. The company commits to gender equality and women’s empowerment.

The company commits to protecting personal data. The company also has a privacy statement regarding the collection, sharing and access to personal data. While the company discloses its global tax strategy, no relevant disclosure was found of the corporate income tax paid for each relevant jurisdiction. The company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. Moreover, the company has a lobbying and political engagement policy, and it specifies that it does not make political contributions. The company also discloses its expenditure on lobbying activities.