APC 2014 Annual Report Download - page 40

1OVERVIEW OF THE GROUP’S STRATEGY, MARKETS AND BUSINESSES
RISK FACTORS
The Group’s plants and products are subject to
There can be no guarantee that Schneider Electric will not be
required to pay significant fines or compensation as a result of
environmental laws and regulations
past, current or future breaches of environmental laws and
Our plants and products are subject to extensive and increasingly regulations by companies that are currently or were previously
stringent environmental laws and regulations in the countries in members of the Group. This exposure exists even if the Group is
which we operate. not responsible for the breaches, in cases where they were
committed in the past by companies or businesses that were not
To limit risks related to the environment in general, the Group is part of the Group at the time.
involved in a process to continuously improve the environmental
performance of its plants and products. In1992, Schneider Electric Schneider Electric may also be exposed to the risk of claims for
drafted a formal environmental policy. This policy is designed to breaches of environmental laws and regulations. Such claims could
improve production processes, promote eco-design, and integrate adversely affect Schneider Electric’s financial position and
customer expectations into our environmental protection reputation, despite the efforts and investments made to comply at
approach. This policy also aims to identify, assess and prevent all times with all applicable environmental laws and regulations as
environmental risks, in order to guarantee full compliance with all they change.
environmental laws and regulations applicable to the Group’s If Schneider Electric fails to conduct its operations in compliance
businesses, particularly those in force in the European Union and with the applicable environmental laws and regulations, the judicial
considered more rigorous (notably the WEEE, RoHS directives and or regulatory authorities could require the Group to conduct
REACH Regulation). We record environmental provisions when the investigations and/or implement costly clean-up measures to deal
risks can be reliably measured or it is probable that clean-up work with the current or past contamination of current or former
will be performed and the related costs can be reasonably production facilities or off-site waste disposal facilities, and to scale
estimated. Provisions for environmental risks totaled back or temporarily or permanently close facilities in accordance
EUR308million as of December31, 2014. If no risk has been with the applicable environmental laws and regulations.
identified, Schneider Electric will not estimate the financial cost of
Finally, the Group may be exposed to new risks related to recent
environmental risks. We expect our spending on environmental
acquisitions. In application of IFRS rules, these risks are assessed
compliance programs to increase as a result of changes to existing
in the framework of the allocation of the purchase price, as
environmental regulations and the introduction of new regulations.
specified in note2 to the consolidated financial statements.
Information systems risk
The Group operates, either directly or through service providers, a or partially in a number ofcountries since 2008, and is continuing
wide range of highly complex information systems, including in France, Brazil the United States and other countries.
servers, networks, applications and databases, that are essential In addition to the deployment of ERP systems, the Group is
to the efficiency of our sales and manufacturing processes. Failure deploying various applications aimed at enhancing commercial and
of any of these hardware or software systems, a fulfillment failure supply chain efficiency.
by a service provider, human error or computer viruses could In view of these projects’ complexity, extensive functionalities and
adversely affect the quality of service offered by the Group. their worldwide deployment, the Group has set up dedicated
The Group regularly examines alternative solutions to protect governance and cost control structures to manage these issues
against this type of risk and has developed contingency plans to and limit the related risks.
mitigate the effects of any information system failure. Dedicated However, despite the Group’s policy of establishing governance
governance structures have been set up to manage relations with structures and contingency plans, there can be no assurance that
service providers responsible for outsourced IT systems information systems projects will not be subject to technical
operations. problems and/or execution delays. While it is difficult to accurately
Problems may also be encountered during the deployment of new quantify the impact of any such problems or delays, they could
applications or software. In particular, in the last few years, the have an adverse effect on inventory levels, service quality and,
Group has developed ERPs systems under SAP, which it started consequently, on our financial results.
to roll out in2008. This roll-out process has been carried out fully
38 2014 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC