APC 2012 Annual Report Download - page 37

2012 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 35
OVERVIEW OF THEGROUP’S STRATEGY, MARKETS AND BUSINESSES
1
RISK FACTORS
The Group is dependent upon hiring
andretaining highly qualified management
and technical personnel
Competition for highly qualifi ed management and technical
personnel is intense in the Group’s industry. Future success
depends in part on the Group’s ability to hire, assimilate and retain
engineers, sales people and other qualifi ed personnel, especially in
the area of energy effi ciency solutions.
In line with employee engagement and retention strategies, the
Group put in place a structured onboarding program referred to
as “Plug-In” which standardises best practice for orientating new
employees as well as employees changing job roles. A HR digitization
program encompassing unifi ed e-learning management systems,
global mobility through a liberated job market and performance
management help keep employees engaged. A structured global
mentoring program was launched to support current processes
already in place to mentor employees.
N ew enhanced job roles and critical competencies defi nition
for every employee were launched in alignment with the Group
strategy to keep employees on the same page as the business.
It allows managers to anticipate their needs for certain key
competences and to implement HR solutions to recruit or
improve these competences. Group employees will also be able
to benefi t from this process by acquiring new knowledge, vital for
the Company’s success.
The Group’s success also rests on a policy of actively promoting
diversity, in terms of both gender and nationality with hiring practices
and setting up of online communities for employee engagement,
retention and collaboration.
The Group’s human resources strategy is designed to create
a motivating working environment. A “Cool Site” program was
launched globally to promote engaging workplaces which support
the work environment at the Group. Specifi c policies have also been
developed covering international mobility, career development,
training, compensation and managing talent.
The Group’s expatriates help prepare the future of its business,
build local teams and assemble the necessary skill sets in targeted
regions. They are tasked with identifying and preparing local
successors. The Group places considerable emphasis on training
to expanding its skills base and retaining employees, thanks to
the Schneider Electric University, its business academies and its
leadership programs.
Industrial and environmental risks
Defective products or design flaws may cause
harm to persons and property and subject us
to product liability claims and other adverse
effects
Despite its testing and quality procedures, the Group’s products
might not operate properly or might contain design faults or defects,
which could give rise to disputes in respect of our liability as seller or
manufacturer, notably in Europe, where liability related to defective
products could lead to a loss of revenue, claims under warranty
and legal proceedings. Such disputes could reduce demand
for our products or harm our reputation for safety and quality. To
prevent or limit these risks, Schneider Electric immediately recalls
products if there are any doubts whatsoever that a product or one
of its components is not 100% safe for people and/or equipment.
At the end of2009, the Group launched a broad recall campaign
concerning a range of low voltage capacitors produced between
2004 and 2008. This campaign continued throughout 2010 and
2011 and was concluded in this fi rst half of 2012 in accordance
with schedule announced in the 2011 report. Another broad
recall campaign that is still ongoing involves our global recall of
Vigi Compact NS/NSX circuit breakers produced between 2009
and 2011, which began in2011 and was continued in2012. It is
expected to be concluded in2013. No broad product recall was
begun in2012.
Some of the expenses incurred by Schneider Electric in the context
of product recalls are covered by the liability insurance program
described in the “Insurance” section below.
Provisions for product risk totaled EUR410 million as of
December 31, 2012 (see note 23 to the consolidated fi nancial
statements).
The Group’s plants and products are subject to
environmental laws and regulations
Our plants and products are subject to extensive and increasingly
stringent environmental laws and regulations in the countries in
which we operate.
To limit risks related to the environment in general, the Group is
involved in a process to continuously improve the environmental
performance of its plants and products. In1992, Schneider Electric
drafted a formal environmental policy. This policy is designed
to improve production processes, promote eco-design, and
integrate customer expectations into our environmental protection
approach. This policy also aims to identify, assess and prevent
environmental risks, in order to guarantee full compliance with
all environmental laws and regulations applicable to the Group’s
businesses, particularly those in force in the European Union and
considered more rigorous (notably the WEEE, RoHS directives and
REACH Regulation). We record environmental provisions when
the risks can be reliably measured or it is probable that clean-up
work will be performed and the related costs can be reasonably
estimated. Provisions for environmental risks totaled EUR70million
as of December31, 2012. If no risk has been identifi ed, Schneider
Electric will not estimate the fi nancial cost of environmental risks.
We expect our spending on environmental compliance programs to
increase as a result of changes to existing environmental regulations
and the introduction of new regulations.
It is possible that Schneider Electric may be required to pay signifi cant
fi nes or compensation as a result of past, current or future breaches
of environmental laws and regulations by companies that are
currently or were previously members of the Group. This exposure
exists even if we are not responsible for the breaches, such as in