APC 2015 Annual Report Download - page 66

2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC64
SUSTAINABLE DEVELOPMENT
2GREEN AND RESPONSIBLE GROWTH DRIVING ECONOMIC PERFORMANCE
In 2015, the assessment process detected 21 suppliers with low
performance on the sustainable development axis. This fi gure is
down by around 30% compared to the previous year. At the initiative
of the Group’s buyers and with the involvement of its suppliers, a
higher degree of maturity on these subjects has been achieved. In
particular, the Group has set a target fi gure in 2015 of increasing the
average score achieved in the assessment. This target was reached
and the average score increased by 10% between 2014 and 2015.
In addition to the external assessments, we have defi ned « off-
limit» situations which are:
•employee safety risks;
•environmental pollution;
•child labor.
These situations have been identifi ed as material issues in Schneider
Electric’s supply chain and unacceptable for a supplier of the
Group. Each buyer is expected to be alert to detect any problem
areas related to sustainable development themes when visiting a
supplier’s site. Off-limit cases must be addressed immediately or
escalated using the specifi c defi ned process.
To support this approach, training was made available to purchasing
teams: basic training on the ISO26000 standard for all purchasers is
now part of the standard purchaser curriculum; and more advanced
training allows employees to learn how to question recommended
suppliers during the business reviews (whether assessed by a third
party or not).
For off-limit situations, Schneider Electric favores a practical training
approach, based on case studies, to ensure that purchasers have
a clear understanding of situations that are unacceptable per
the Group’s standards. This also includes how to react if such a
situation is encountered.
Conflict Minerals rule
In August2012, the SEC (US Security and Exchange Commission)
adopted the so called Confl ict Minerals rule part as the Wall Street
Reform and Consumer Protection Act. This rule requires companies
to conduct a «reasonable country of minerals’ origin inquiry» and
due diligence to determine whether «confl ict minerals», as defi ned
in the rule, are used in their s upply chain.
Although this rule does not apply directly to Schneider Electric - since
we are not registered with the US SEC, we are deeply concerned
about social and environmental conditions in some mines that could
supply metals for our products. As part of our ongoing sustainable
business practices, we are committed to increasing our responsible
metal sourcing efforts.
In working towards these commitments, we have taken a number
of steps including:
•updating our purchasing terms and conditions to refl ect our
expectations from our suppliers;
•establishing a « Confl ict Minerals Compliance Program »
supported and sponsored by our top leadership. This program
was developed based on the OECD Due Diligence Guidance for
Responsible Supply Chains of Minerals from Confl ict-Affected and
High-Risk Areas and other appropriate international standards;
•identifying the use of confl ict minerals in our products;
•engaging with our suppliers so that they respond in a timely
manner to our requests for evidence of compliance.
We are working with an expert third party, collecting information from
our suppliers to identify the source of the minerals in question and
ensure they are recognized as «Confl ict Free» within established
International standards such as CFSI (Confl ict Free Smelter
Initiative), London Bullion Market Association (LBMA) or others.
We are aware of the complexity of this task, and we know it will
take time to collect the needed information but are commited
to contributing to this responsible sourcing initiative as well as
responding to our customers potential concerns.
Rollout of eco-responsible initiatives
Schneider Electric is rolling out several eco-responsible initiatives
with its suppliers.
For example, Schneider Electric has chosen to go further than the
European REACH and RoHS regulations. The approach is therefore
rolled out in the Group over the whole product portfolio and all
suppliers, regardless of their geographic origin. To support the
REACH and RoHS projects, Schneider Electric has implemented
a d ata c ollection process supported by a dedicated team to
gather required information from its suppliers. This has allowed it
to signifi cantly reduce its response time to collect such information
and therefore be quicker to respond to its customers’ inquiries.
In addition to data collection, Schneider Electric put in place a
review process for this data to guarantee the quality. Thanks to this
process, the level of verifi cation required for a given supplier can be
adjusted, particularly in order to make the controls more stringent in
cases where deviations have been detected.
Schneider Electric has also made available for all its customers
and stakeholders, its position regarding confl ict minerals. It can be
found on its website.
Furthermore, Schneider Electric launched an update in 2013
to the carbon impact analysis of company purchases (as part of
the Group’s carbon footprint). Schneider Electric has used this
approach to raise awareness on the importance of this subject
among purchasers and certain suppliers in the most relevant
purchasing sectors.
Another example is Schneider Electric’s commitment to support
the small and medium enterprises network. This support is given
through an approach to work adapted with certain suppliers. In
France, Schneider Electric is a major player of the International SME
Pact.
On May 6, 2014, Schneider Electric France obtained the
«Responsible Supplier Relations» label for a period of three years
(subject to satisfying the annual monitoring assessments).
Finally, by the very nature of its activity, the Group continually
encourages its ecosystem (including customers and suppliers) to
implement energy effi cient solutions.