Engagement with Schneider Electric on its sustainability strategy

In this piece, Ita McMahon explains how we were invited by French power equipment maker, Schneider Electric, to give our views on how the company can update their sustainability strategy and targets which are due to be renewed next year. We also talked to the company about its work on reducing its supply chain emissions.

Schneider Electric, a French firm held in our European Fund, provides products and solutions in the areas of electrification, automation and digitisation.

The company has an extensive sustainability strategy in place and has a good track record on incorporating sustainability into its products and services. For example, it has recently acquired EcoAct, a sustainability consultancy with 1,000 consultants employed globally.

31% (1) of Schneider Electric’s revenue meets the stringent EU Taxonomy standards, a classification system that defines criteria for economic activities that are aligned with a net zero trajectory by 2050. The company also has its own system for tracking products that have sustainability credentials. It has named this Schneider Sustainability Impact (SSI).

31% of Schneider Electric’s revenue meets the stringent EU Taxonomy standards

Currently, 74% of revenue comes from products aligned to the SSI standard and the company has an ambition to increase that to 80% by 2025 (2). All of this illustrates the extent to which environmental considerations are embedded into the company and the end markets that it serves.

In our conversation with Schneider we acknowledged the good work that the company has undertaken to date and also congratulated them for being an early adopter of the Science Based Target Initiative (SBTi) Corporate Net Zero Standard. This means that the company’s planned pathway to net zero has been accredited by an independent body, the SBTi.

The company talked about the most challenging area of carbon reduction – its supply chain emissions, and its plan to engage 1,000 of its top suppliers and help them reduce their emissions by 50%.

In terms of our recommendations for the future development of their sustainability strategy, we suggested that they focus on the idea of the circular economy, i.e. where products are not disposed of at the end of their useful life, but instead are repaired or repurposed.

this was a positive meeting, with a company that is already a leader in sustainable business

22% of Schneider’s ‘product families’ have a circular option available (3) and we think there’s opportunity to go further still. We suggested that they set a target for increasing this further.

They took the comment onboard and talked about their programme to embed ‘eco-design’ into their research and development processes so that circularity can be considered at the outset.

All in all, this was a positive meeting, with a company that is already a leader in sustainable business and that is open to hearing from investors and other stakeholders on setting ambitious targets for the future.

Written by Ita McMahon

References:
1. Pg 220, Schneider Sustainability Report 2023

2. Pg 3, Schneider Sustainability Impact Q2 2024 Report

3. Pg 8, Natural Resources Report 2023