Good afternoon, everyone. I'm very pleased to welcome you to this Legrand Capital Markets ESG event, which is digital and live. If you remember, as you know, six months ago, we had the opportunity to present you during a dedicated CMD the whole equity story of Legrand and the strategic roadmap and the mid-term targets. As you know, ESG and CSR is a key part of the Legrand equity story for close to 20 years now. We wanted to take this opportunity today to do a 360-degree exercise around Legrand CSR and ESG strategy, while also presenting you the fifth CSR roadmap.
As you will see, we'll go through a world presentation, as well as a review of the track record of Legrand, and we will end the meeting with a Q&A session of half an hour. Now I'm handing it over to Benoît Coquart, CEO of Legrand.
Thank you, Ronan. Hello, everybody, I'm happy and pleased to be with you today, even if only digitally. Let me say maybe a few words before giving the mic to Virginie to remind you a number of core elements of the Legrand CSR strategy. Number one, you know that the CSR has been part of our integrated performance for quite a while. We started this journey close to 20 years ago, as Ronan said, and it's already the fifth CSR roadmap that we're gonna launch today. This CSR approach is governed by a very strict process with a strong involvement from our board. As you can see on this slide, not less than 10 meetings, either from the Board or from Board Committees, were dedicated to CSR topics in 2021.
It's part of our process, and it has been part of our process for quite some time, and it's also strongly embedded into our incentivization scheme. For example, more than 1,300 people at Legrand are directly incentivized on CSR result. When it comes to my remuneration, the CEO remuneration, it's 17.5% of my total target remuneration which is connected to CSR achievement. Lastly, we try to be as professional as far as CSR reporting is concerned, as for financial reporting. Not only our CSR reporting is audited, but on top of that, it is published at the same time as our financial performance. When it comes to ESG, the G is of course a very important part.
I'll not elaborate too much on that because we'll have the pleasure to have a video from Ángeles García-Poveda, our Chairwoman of the Board, who will give you more insights about the way the Legrand Board works. Just a few concepts. As you know, we have a separation of duties between Chairwoman and CEO. We have a Board made of a lot of independent Board members. As you can see, 75% of our Board members are independent. We have a strong involvement of our Board members. There's one number which I love, the fact that we have an attendance rate of 98% to Board meetings and committee meetings, which is quite high and among the best practices.
Last, we have a board made of a lot of different expertise, highly complementary, with half of the board, for example, composed of former or current CEO of listed company. Very important thing to have in mind when it comes to Legrand CSR, we really want to have a CSR roadmap that has some impact. We are looking at impacting not only Legrand, but also our environment and our stakeholders. We have put on this slide a couple of achievements of the past roadmaps, which I believe are quite interesting, impacting both employees, clients and other stakeholders. For example, we've been able to cut by almost 50% the number of work accidents in three years' time, which is quite a lot.
We've helped our customers to save more than 13 million tons of CO2, helping them to achieve their own CSR commitments. As far as our own scope one and scope two emissions, we've been able to cut them by 28% in three years at current scope. We've done also a number of things for our suppliers, and we have trained more than 21,000 employees on compliance. Many achievements which are easy to quantify and which have helped Legrand to be a better company.
As far as the next roadmap is concerned, the 2022-2024 roadmap, we have decided to have a highly focused roadmap, focusing on really items that matter and that can have an impact around four priorities. Promote diversity and inclusion, not only gender, but also other type of inclusion. Reduce our carbon footprint, Scope one, two, three, and help our customers to do so with Scope four commitments. Develop a circular economy with strong objectives as far as single-use plastic and use of recycled materials are concerned. And last, be a responsible business for customers, employees and all our stakeholders.
The way this CMD gonna be structured, Virginie Gatin, our Executive Vice President for CSR, will present the key outcomes of Legrand historical CSR commitments with a few numbers, then the mid and long-term commitment, especially the 2030 Legrand commitments. We spend with Virginie a lot of time going through the new CSR roadmap, the 2022-2024 roadmap, and then Franck Lemery, our CFO, will tell us how we manage our integrated performance. Now I'm handing over the mic to Virginie.
Thank you very much, Benoît. I'm delighted to be with you today to present the new CSR roadmap. First, let's go through a bit of history of what CSR has meant for Legrand up until now. It's always important to look back, I think, when you look forward to better understand what you've achieved and really use that as your ground for the next step. There has been a historical commitment on CSR almost 20 years now, but we wanted to look back at a bit of a closer gap, which is the past 10 years, to see what we've achieved. One key element we've really seen is our focus on environmental topics. As you can see, great results on this.
Whether it's on direct energy consumption reduction, whether it's on CO2 emission reductions, Scope one and two, water consumption, we've really strongly reduced those while at the same time having a very dynamic business at +65% in that same timeline. Really important to see that we managed to completely decouple our environmental impacts from our great financial results. Another area which is really key for us is transparency. Transparency for our clients, where we want them to understand what they are purchasing from us and really get that information on what is the environmental content or environmental profile of the products that they purchase. Which is why we've put so much emphasis and energy on providing to our clients the Environmental Sustainability Profile.
Sorry, Product Sustainability Profile of our products, where we really increase the share of our products covered by this, which gives our clients a vision of what are on the various topics of environmental impact, the impact across the whole life cycle analysis of the product. This is really a key commitment that we will continue pushing in the next roadmap as well. There's not just environmental impacts, of course. We've had very strong commitment on health and safety, which is key for us, the well-being of our employees. There again, you see great achievements, with a very strong decrease on accident frequency rates over the past decade. Same goes for accident severity rates.
It's important to see that this happens at the same time as an increase in the number of employees, because it really shows that the way we integrate new employees, they are really, you know, onboarded on the health and safety topic, but also new acquisitions. This is a really strong focus for Legrand, and we want there again to continue because we feel this is super important. The third topic we wanted to cover is the social one. Diversity is a bit more recent in our focus, but really important for us. We've had great achievements with +18% of women managers since 2018, and this is a 2021 achievement, so really good. Beyond diversity, there are other topics which are really key for the success of the company.
Our employees' well-being, as well as their development and especially developing their skills and employability. We've also really focused on providing them with the right programs and the right tools. One important one is Serenity On program, which was launched at the end of 2017, which in countries where there's not always the right social coverage for employees, we wanted to be there to provide that social coverage, so for our employees, but also for their families, extend also to parental leave, for example. We want to be there and to provide that for our employees wherever the minimum social coverage is not available. We've also put a lot of focus on training with the launch in 2019 of the Learning with Legrand learning platform, which is an online platform providing a lot of training.
Beyond the in-person training that's been around for a long time, we've really increased this, which was of course great during the COVID period because it enabled us to continue training our people in those crucial times where the connection is super important with our employees. All of this great past, it's been great to see that it really comes out in the numbers. We carried out last year an engagement survey for all our employees, and a really great achievement was that 80% engagement rate, which shows that despite over a year of COVID, despite, you know, uncertain times for everyone, there is really this strong engagement from our employees. Of course, we believe that all that CSR engagement across the past two decades definitely contributes to this.
Also nice to point out that the third highest ranking result on that engagement survey is on diversity and inclusion. Now moving on to the mid long term, it's important to have that slightly longer- term vision before you set a CSR roadmap. At Legrand, our CSR roadmap is really focused on action. What do we want to do here and now? What do we ask all our entities, our countries to do? In order to know where we want to get to, it's important to have that slightly longer term understanding of where does the group want to go. There are three key pillars to that midterm ambition. One is definitely the climate.
I think we've been talking about it for quite a while, but it's really important for us to have that clear vision of where we want to get on climate. I'll get back to this in a minute. The second one is diversity and inclusion. I've already mentioned it. It's something we've accelerated in the past few years, and it's something we'll be continuing to focus on in the next years because it's really central and we feel it's really a part of what makes our company so successful, and it's really something that we strongly believe in. We have a target to have a third of our key positions held by women by 2030, and to have a gender balanced workforce by 2030. The third pillar already mentioned by Benoît is for our clients.
We really believe we have a strong role to play in providing our clients with eco-responsible products. This is why we have this 80% commitment of sales made to our customers with eco-responsible products, because we really believe in the buildings of today and tomorrow we have a role to play in providing energy efficiency products, but also transparency by giving the key information our clients need to understand what is in our products and what is the environmental impact of our products. Moving to carbon because it is a very strong commitment of ours, and it's one we will be continuing to focus on in the next decade and beyond. Our ultimate goal as a company is to be carbon neutral by 2050.
This requires very strongly to reduce our CO2 emissions by that date, probably up to 90%, and to neutralize the remaining emissions. Of course, 2050 sounds very far away, which is why we have a 2030 SBTi-validated goal for 2030. I'll get back to this in a second. We want to move to action, of course, straightaway, which is why we have one pillar of our new strategy on CO2 emission reduction. I'll cover it in a second as well. 2022 is the first step in that carbon neutrality journey, where we will be offsetting Scope one and two emissions and a few of our Scope three. In our Scope three we have our employee commute and our business travel.
We'll be offsetting this from 2022- 2030 to be in a way to show our commitment to carbon neutrality in the long term. Just going back to SBTi, because this is really for us a key element of where we want to be and who we want to be as a company. For those of you who don't know it, SBTi stands for Science Based Targets initiative. It's an initiative put together following the COP21 in Paris in 2015, where the CDP, ex Carbon Disclosure Project, WWF, WRI got together. I'm sorry I have one name missing, but anyway, there's a fourth one in there.
They got together and said, "Okay, COP21 is for government, it's for countries, but of course, we need companies to move in that same element to reduce our CO2 emissions. So what would the COP21 agreement mean for companies?" They translated in a science way what the COP21 meant for companies, and companies can go to SBTi, say, "Okay, this is my plan, my reduction plan," and SBTi checks if that's in line with the COP21 agreement. That's what we've done in line with the 1.5-degree global warming for 2030, which means that we're targeting to reduce by 50% our Scope one and two emissions and by 15% our Scope three emissions.
As you can see on the graph, if we did nothing, we would be in that upwards blue line, because of course, as a company, we're going to continue growing in the next decade. You can see the scale of the effort that we are going to provide over the next few years to remain in that downwards going brown line to really reduce our CO2 emissions, including acquisitions and of course the increased activity we will have over the next decade. Now moving to our new CSR roadmap. What are we going to do concretely over the next three years to reach those longer-term engagements? First, I think it's important to go back to how we did it.
First, we carried out a materiality survey, so asking a lot of people, as you can see, over 5,000 people, okay, what are the crucial or the most important CSR topics for Legrand? We ask internal Stakeholders, external Stakeholders, we carried out a lot of work to really identify key topics so that we would be sure in our new roadmap to really focus on the right topics, because materiality is crucial for a successful CSR roadmap. You need to make sure you put the action, you put the resources on the right topics that will deliver for the world, but will also deliver for your business. Before we get started into what are the four pillars, let's start with a video recapping this new CSR roadmap.
Every day, all over the world, we are improving lives with electrical and digital infrastructures and connected solutions that are simple, innovative, and sustainable, where people live, work, and meet. Legrand is pushing even further and stepping up its CSR commitments to create a more durable future for all.
For Legrand, diversity and inclusion are a source of value and performance, promoting innovation and making all lives better. That is why we encourage diversity at work with mixed backgrounds among our teams and actively battle against all forms of discrimination.
Legrand's priority is to limit its carbon footprint. Our aim is to be carbon neutral by 2050. We commit to reducing our CO2 emissions, developing solutions that make buildings more energy efficient, and involving all of our Stakeholders.
We are speeding up our circular economy initiative with new ways of imagining, designing, and making our products, which means using less material, prioritizing recycled material, limiting the use of plastic in our packaging.
Acting as a responsible player means enhancing the well-being of all our Stakeholders, listening to the needs and expectations to bring concrete answers, pursuing an economic activity with the utmost respect of business ethics, and promoting a work culture that respects and values every employee.
Legrand is firmly committed to boosting its actions to make its development ever more sustainable.
As you already heard, we have four pillars for this new CSR roadmap and 15 priorities. There's one more pillar than the previous roadmap. The reason we'll go through in a minute, but it's important to put forward a circular economy. Also important to note that we are contributing to 10 of the UN SDGs in this new roadmap. This is important because this is a great first way to contribute to society, but also a great way to have this dialogue, whether with authorities, governments, institutions and so on, where you have this shared language around what are you doing on sustainability. First going over our first pillar, which is promoting diversity and inclusion. We have four priorities in this pillar.
I'll take you through them, but importantly it's to explain why this is a pillar and why we've put so much focus on it. As I said previously, diversity and inclusion is a strength for our company, and we very strongly believe this. We also believe that we want to take it one step further beyond just gender diversity. Gender diversity remains an important pillar for us, but we want to go beyond this. We want to extend this to our value chain by involving our suppliers in this work. Our first priority is to reach 30% of women in managerial positions by 2024. This is on the path to our 2030 target. This will be done.
We just wanted to explain how very concrete this is for our entities and our countries and so on. This is really translated into when you recruit someone, we want 50% of female recruits. We really want people to think, "Okay, what can I do more every time I have a recruitment? Can I really participate in this objective?" A second one is the second pillar or second priority is diversity and inclusion labeling. For this, we really wanted to back this intention with an internationally recognized label, which is the GEEIS label. This means that we will be audited, and our target is to have 80% of our workforce covered by this label by 2024. Of course, we will pursue this beyond 2024. The idea is really promoting gender diversity.
The pillar common to everyone is gender diversity, but then we ask our countries to choose a second topic amongst the list that you can see here and really decide, "Okay, what makes the most sense for me locally?" This is really, once again, to open that diversity approach beyond just gender diversity. The third pillar is employability early in careers. What we want to do is help young people or people entering into a new career, because there's no age for that, to develop their skills and employability. The way we feel as a company we can really contribute to this is by opening up the company, getting in those talents, helping people understand what we do, how we do it, and really be an attractive company to these people whilst developing their skills.
We're opening 4,000 opportunities to early in careers every year over the next roadmap, over the next three years. This goes from internship to apprenticeship to recruitment, short-term and long-term contracts. This is really a way of opening our company. The fourth priority is extending this commitment to our suppliers by developing 200 additional business to suppliers that work in the inclusion and diversity field. This is quite wide ranging. It's really promoting employability of people who are today far away from employment, whether it's minority-owned businesses, whether it's businesses working with disabled people and so on. We really want to contribute as a company to opening this diversity and inclusion beyond just Legrand. The second pillar is our carbon footprint.
I've already talked about it, but it's important to understand towards that 2030 pathway, where do we want to be today? The first pillar is for our clients, what do we want to do? We want to continue participating in avoiding CO2 emissions for our clients. Benoît mentioned it's our Scope four. It's providing products and services to our clients that enable them to not consume energy, so to save energy and this leads to, of course, avoided CO2 emissions. This is through our energy efficient offerings, product services, and this means we'll be really pushing to develop more and sell more of those energy efficient products in the coming three years. And of course, this is in line with our 2030 target to have 80% of eco-responsible products.
The second priority is reducing our Scope one and two emissions, so the emissions more directly in our control. We want on a yearly basis to reduce our emissions by 10%. This will be done through three key areas. Energy efficiency. In continuously improving the energy efficiency of our factories, using more and more renewable energy, whether it's on site or through our purchasing, but we'll also be working on transportation, for example, our own vehicles. How can we reduce the CO2 emissions of our vehicles? Then there's Scope three. As you saw in previous slides, our Scope three represents 95% of the CO2 emissions of the company, so it's a big share. Out of that 95%, almost 70% comes from our suppliers. 70% of our whole carbon footprint is our suppliers.
In order to tackle this, our focus for this new roadmap is really engage, partner with our suppliers to really get into this situation where they commit with us to reduce their CO2 emissions. Our aim is to work with our 250 top suppliers. What I mean by top suppliers is we've identified the suppliers that contribute the most to our carbon footprint. Either through a direct commitment with Legrand or through their own SBTi commitment, we give ourselves and them 2.5 years now to commit to reducing by 30% by 2030 their CO2 emissions in order, of course, to have less impact on the environment, but also to contribute to the reduction of our own CO2 emissions.
This is a great work started by a purchasing department which will be continued throughout this roadmap and will of course continue beyond. The third pillar of our roadmap is circular economy. Circular economy is not new for us. We've been working on eco-design for a while. Having it as a pillar is important for us because we really believe circularity is the way forward in order to have a really positive impact on the world. It's on the one hand, of course, to contribute to reducing our CO2 emissions, but it's also a way of changing the way we produce, changing the way we collect, changing the way we recycle. It's really creating this circularity that is key to reducing environmental impacts today and in the future. This is really important for us.
It's important for our clients, and this is really a big focus we will be continuing on this roadmap, but of course beyond. One key element to circularity is recycled materials, using more and more recycled materials. Our first priority is to increase the share of recycled materials we use in our products. 15% plastic, 40% metals. You might think, okay, 15% plastic doesn't sound very much. What you need to understand is the type of plastics that we use in our products. This is not PET. This is not a plastic bottle that you can easily collect and recycle. We're talking about very specific plastics. The circularity does not exist yet. The collection, the sorting, the reusing is not something the loops don't exist yet.
We really want to be a forefront actor on this, to really create those virtuous loops, not just in France, not just in Europe, but really on all our geographies. We really believe we can play a role in getting that circular economy going. Our first step is 2022-2024 roadmap, but of course we'll aim to continue in the future. Our second priority is phasing out single-use plastic in packaging. Plastic is a huge issue. We all know it. The material itself is not the biggest issue because the material as it is is not a high CO2 material. The issue with plastic is the amount that we use, and not Legrand, but the whole humanity, and also the fact that we're not good at collecting, sorting and recycling it.
We want, with the recycling of materials, to participate in that circularity. In the phasing out of single-use plastic, we want to participate in reducing the need for plastic in packaging. In this roadmap, we'll be focusing on two types of plastic we use in our packaging, Flow pack and expanded polystyrene in our packaging. For this, of course, we'll be working on redesigning our packaging. If we can do without, we'll do without. Shifting to paper packaging and any other innovations that our R&D come up with. The third pillar is transparency, what I've already mentioned, the Product Sustainability Profiles of our products. It's something we want to really continue pushing because it's something our clients need. It's something that you need to evaluate the impact of a building.
We'll continue to extend the coverage of our Product Sustainability Profiles over this roadmap to reach 72% by 2024. I think it's important to note that these are really detailed information we're providing to our clients. It's a lot of work across the whole life cycle analysis, and we're handing to our clients a lot of information on different elements that they really need and require. To recap a little bit all that I've been saying on circular economy, I'd like to show you a video recapping all this.
Up till today, an object's life cycle implies extracting raw materials, transforming the product, using it, and then disposing of it. The problem is that resources are limited and their transformation creates pollution and a lot of waste. A circular economy means transforming the production and the act of consumption into a virtuous cycle, which limits our impact on the environment. In the end, everything that can be recycled is recycled and so on. By prioritizing recycled materials, by limiting the use of our resources and the amount of plastic produced, we generate less CO2 and fight effectively against global warming.
To meet these challenges, Legrand wants to contribute to the development of a more circular economy. In our new 2022-2024 CSR roadmap, we are committed to integrating circular economy principles even further in our activities with new ways of designing and manufacturing our products, by increasing the use of recycled materials in our products, by eliminating plastic from our packaging, by continuing to provide our customers with environmental information on our products based on a life cycle analysis. To illustrate these commitments, here are some concrete examples of what we are doing in the Group today.
Legrand is integrating more and more recycled materials into its products. In fact, 1 ton of recycled plastic used avoids 2 tons of carbon emissions.
The Batibox flush-mounted boxes that you can see here are fully made with recycled plastic. It took us three years to identify and stabilize the supply of this material and to adapt our manufacturing processes. Our efforts focus also on the eco-design of our products. For example, our new Class 300 EOS connected video door entry system is produced with 45% less mass material. In operation, its energy consumption is on average 15% lower than the previous one, considering the integrations of multiple functionalities.
Now moving to our fourth pillar, to be a responsible business. We take this as the base of everything that we do. It's really important for us to keep this focus on important topics like compliance, like continuing to develop the employability and the skills of our employees through training.
Of course, as I mentioned early on, health and safety to continue decreasing the accident frequency rates. As you can see, we've shifted the focus from FR1- FR2 because we feel this is really important to cover all accidents with and without stoppage, to really be active on the topic of health and safety. Two topics which I wanted to focus on a little bit more, customer satisfaction, because it's a new topic for us. We want to reach 90% of sales made with satisfied clients, so we'll be developing more and more across our geographies, all this customer satisfaction work, which of course we've already started, but it's something we want to expand and to do more of.
I've already mentioned it, but it's very important for us. We also want to extend the coverage of our Serenity On program. The achievement for 2021 was slightly over 90% of our employees. We want to reach 100% of our employees in this new roadmap, but we also want to extend the coverage to go to topics that are important for our employees, like wellbeing. It's really something we'll be focusing on as well in this new roadmap. Recapping all this, four pillars, 15 priorities, and a very strong commitment from the company to focus on all of those and really make sure we deliver with, as you know, you know with Legrand, strong KPIs that we'll be giving updates on how we're doing every year.
I'm now handing over to Franck Lemery, our CFO, who will be talking about how we're managing our integrated performance.
Thank you, Virginie. Hello, everyone. I'm very pleased to be with you today digitally. Speaking about managing our integrated performance, the key message is very straightforward. We are applying the same discipline, challenging processes for all item of our performance. It may be operational performance, financial performance, CSR performance. It's always the same processes. Let's start with our governance because there is no performance without the right governance. Legrand governance is recognized by many as exemplary. To understand why, I invite you to listen to Ángeles García-Poveda, the independent Chairwoman of our Board.
Dear investors, I'm very happy to shed some light on the G part of things, as in Governance. Legrand has an exemplary governance on many levels. As you know, in 2018 we decided to split the roles between Chair and CEO, and later in 2020 I was appointed as an independent Chair in line with best governance practices. We also shortened our mandates from four to three years to allow for more flexibility. Our Board is composed of 12 Directors, nine of which are independent, 75%, including two employees and two other employee representatives attend our meetings. The board is organized with four different committees steering key topics, nominations and governance, remunerations, commitments and CSR, and audit. Our governance brings a number of strengths. The first one is Board Composition.
On top of the very high independence rates already mentioned earlier, we do have a strong and complementary mix of skills around the table. five nationalities, 42% of women. No less than six former or current listed company CEOs. New members are carefully selected following best practices. We partner with international search firms in the process, and keep a very careful eye on independence, diversity, and avoiding overboarding situations to ensure future commitment. Our Directors are indeed committed, as shown by our 99% average attendance rate. On top of our Board meetings and Committee meetings, we hold annual strategic seminars and also annual working sessions focused on learning on specific topics, such as technology or climate change. We also keep an eye on continuous improvement. We conduct yearly Board assessments.
Once every three years, the Board assessment is conducted externally, last one was in 2021, including an individual contribution assessment and a concrete action plan based on areas for improvement. All these trends are recognized externally. Since 2021, Legrand is part of the CAC 40 ESG index. We are also honored to be part of a number of rankings that evaluate governance. We are very often named as a governance-based practice in a number of publications, and have received over the last decade around 20 awards on topics such as general shareholder assembly organization, quality and transparency of documentation, corporate website, and more. The ultimate recognition comes from our Shareholders. Our last approval rates of our resolutions in the 2021 general shareholder assembly was an average 98%. At Legrand, Board and management entertain a sustained and continuous dialogue.
We have had, in 2021, no less than 34 management team interventions during board meetings on topics such as M&A, investor relations, strategy, HR, IT, and more. Last, but certainly not least, we have a very open relationship with Benoît Coquart, the CEO, with a healthy balance between support and challenge, a very high degree of trust, and open, regular communication. I am personally committed to ensuring that Legrand remains best in class in terms of governance. On behalf of Legrand's board, I thank you for your trust.
Now, I propose to deep dive a little bit in our processes to see how they spur our CSR performance. The first lever is really to beat the drum. It's about regular milestone to challenge our performance. Those milestone can be at the group level, such as a dedicated CO2 SteerCo, which is chaired by Benoît and which aims at monitoring our achievement of our action plan towards for our CO2 trajectory. Another example could be leveraging traditional financial meetings like country budget review, where we will also extensively review all CSR KPIs. The second item is about managing very operationally some risks directly linked to CSR. The first example is an audit that we conducted on over 100 top sites to see what is their exposure and how to address this exposure to severe climate events.
It was about tackling climate urgency. The second example would be business compliance, the way we deploy our group compliance program. We are expecting from each and every entity, first, a clear commitment from the local management. Second, vast trainings of their teams. Third, strict application of very clear procedures, just to name one, the whistleblowing, which is very, very important. The third way to promote CSR within our processes is to include criteria beneficial to CSR into our decision-making. Once again, two examples. First, in our major investment cases, we are including a carbon price into the ROI. Second example that you know quite well is about our financing, which is more and more green, and which is including, since 2019, CSR criteria. It was the case in 2019 for our credit facility.
It was the case in 2021 for our first sustainability-linked bond. The last item, the last lever of processes to spur the performance of CSR is about providing best practices, very practical best practices for our team to achieve their goals. We are looking to ISO methodology, for example. We are looking to best in class industry also, for example, to fuel constantly a repository of best practices that our team can then leverage. To make a long story short, those practices are accordingly available on shelves for our team to help them to achieve their CSR target. After governance and after processes, the third pillar to manage efficiently our integrated performance is, of course, composition. This is the one closing the loop.
As you can see, CSR is included both in our long-term incentive plan, where CSR represents 1/3 of the criteria, and it is also included in our short-term bonuses schemes, where they generally represent around 20% of the bonus. That's it for my presentation, and I'm now giving back the mic to Benoît for the conclusion.
Thank you. Thank you very much, Franck. Well, I'm gonna be extremely short so that we have enough time for Q&A. I hope that you could see that our roadmap number one is clear, quantified, and ambitious. As usual with Legrand, it is associated with KPI that we'll be able to measure and to report on a yearly basis. Number two, it is really focusing on actions that matter and have significant impact on the company itself, impact on our employees, impact on the environment, impact on our suppliers, and impact on our stakeholders. Number three, it will mobilize the entire company, and it will have some impact on the way we recruit people. It will have some impact on our processes. It will have some impact on our incentivization scheme and on a lot of other topics.
Last, of course, needless to be mentioned, this is part of integrated performance and the CapEx or the additional expenses we need to incur in the years to come to achieve this roadmap are fully integrated into the midterm guidance we issued last September. Thank you very much, and we'll now open to Q&A.
Thank you, Benoît. Thank you, everyone. We will start the Q&A a bit in advance compared with the initial schedule. Let's see how many of you are connected to be ready to ask questions. Guillaume, if you are online, I suggest that we start now.
Okay. Thank you very much. Ladies and gentlemen, if you wish to ask a question, please press zero one on your telephone keypad to enter the queue for the question- and- answer session. We already have one question coming from Alasdair Leslie from Société Générale. Please go ahead, sir.
Good afternoon. Thanks. So just on scope for the avoided emissions for customers in the 12 million ton saving target there, I think that compares with around 8 million over the last three years, so implies something like a 40% increase for the next plan. In that plan, how much of that increase comes from growth in energy efficient products versus expanding the kind of mapping of your portfolio? And what portion of the portfolio have you analyzed already? And within that, you know, are the 21% of sales that relate to energy efficiency offerings already fully included in your calculations?
Thank you for this question. As you know, we are doing 21% of our sales with energy efficiency-related products. Products such as thermostat for residential building, for example, lighting controls for commercial buildings, PDUs for data centers. It was 19% in 2021. In 2020, sorry. Moving from 19% in 2020 to 21% in 2021. Clearly, all of our scope for reduction emissions come from the growth in these energy efficiency-related products. What we want is to sell more PDUs, thermostat lighting controls to larger number of customers, and it represents the entirety of the scope for saving that we will help our customers doing.
Now of course, if we can find, for example, additional acquisitions that are contributing to the 21% of sales, it will be added to the savings we're gonna help our customers doing. It has nothing to do with, for example, considering that one product is not helping and would suddenly have some positive impact. It's purely the growth of our energy efficiency related products.
Great. Thank you. Could I ask a second question?
Yeah, sure. Yeah. Go ahead.
Yes, sure.
Okay. Thank you. Yeah, just on taxonomy and the eligible revenues there, I presume those might be released with the sustainability report in the next few weeks. But do you still expect the majority of Legrand's revenues to be eligible? You know, we've seen other industrials report figures that I guess could be argued understate the contribution of their products that kind of make to climate change mitigation. Thank you.
Well, it's an interesting question indeed. No, we don't expect anymore the majority of products to be eligible because the rules of the game have evolved a lot compared to what they used to be, six months ago. I have to admit that even a few weeks back, the rules were not 100% specific yet. So only a portion of the 21% will be eligible. From what we could do as a computation today, it will be closer to 8% than to 21%. The gap between the 8% of our sales being eligible and the 21% of our sales made with energy efficiency-related product is coming from the fact that a lot of activities are just not considered within the taxonomy. I can take one example.
The taxonomy does not take into account products for data centers. Whether your product or not are helping data centers to make energy saving doesn't matter, they are not considered at all in the taxonomy. Most of the gap between the 8% and the 21% comes from the fact that products for data centers, power factor correction products and a number of others are just not taken into account to do the taxonomy. We're gonna publish a 8% number. Now, the job which has to be done is to explain to the European Commission that it is too restrictive as a vision.
That when you have products or systems that help cutting the energy bill in a data center by as much as 10%, 15%, 20% or 25%, they should be taken into account in the taxonomy. It's a job which is not just starting. As far as the percentage of CapEx and OpEx are concerned, they will be consistent within these numbers, so it will probably lead to 12% of CapEx and 8% of OpEx. I have to add that, as usual, we haven't played a tactical game in the definition of the product eligible to the taxonomy. We have tried to stick as per the book, and as a result, we don't expect a significant gap between taxonomy-eligible and taxonomy-aligned products.
That's the number we have today.
Great. Thank you.
We have another question from Eric Lemarié, CIC Market Solutions. Please go ahead.
A question for Benoît Coquart. It's a naive question. I can observe, I can see that there is a separation between the CEO and the Chairman position, but I can see that you are still a member of the Board. Is it an issue, do you think for Legrand, to have within the Board the CEO? Because I suspect that from time to time you, well, you discuss about CEO performance. Do you have any comments from investors?
Well, no.
related to this situation?
No, I think it's a customary situation. If you look at most of the companies that have separated their duties between Chairmanship and CEO, most of the time, probably 95% of the time, the CEO is also a board member. It's a common practice. Now, of course, every time it comes to my performance and my compensation, I'm not part of the discussion. When you have the remuneration committee meeting, for example, specifically on my remuneration, I'm not participating, of course, to this committee meeting. When the Board has to decide on the qualitative part of my bonus, for example, or the next year remuneration, I'm exiting the room and the discussion is held without me.
I have to add actually that, when it comes to the Chairwoman remuneration, Ángeles García-Poveda is doing the same and exiting the room. No, it's a customary situation to have the CEO being part of the Board. It actually, I think it's pretty good for the open dialogue between the Directors and the management, provided of course that there's no conflict of interest. Wherever there's a topic specifically on the CEO, he can exit the room and let the Board members discuss without me.
Understood. Thank you.
Thank you. Ladies and gentlemen, as a reminder, if you wish to ask a question, please don't hesitate to press zero one on your telephone keypad. We have another question from Jean-Baptiste Rouvel, Oddo BHF. Please go ahead.
Hello, can you hear me?
Yes, very well.
Okay. Thank you very much. You have an objective to have 80% of sales made with eco-responsible products. It seems to me that before you already have an objective to have 80% of sales with sustainable products. Is it a new objective or is it just a change in wording? And second question, the previous objective, according to some people, lacked detail in the definition of sustainable products. Can you please be more specific in what you mean by eco-responsible products? Thank you very much.
Sure. Well, it's mostly a change in definition, in wording. The definition has remained the same. It is made of two types of things. The 21% of sales I was mentioning, so the products specifically designed to help our customers doing energy savings. On top of that, the product that do have Product Environmental Profile. So on one hand it is a 21%, on the other hand, this is 70%. And when you add the two together and when you cut the overlap, it leads to this number and to this target of having 80%. So in terms of definition, it remains the same. It is made of those two components.
I don't know if my colleagues want to add something. Don't be shy. It is an interesting opportunity for you to ask any questions related to CSR that you may have in mind. Really, if things are unclear, don't hesitate to ask us to be more precise.
We have other questions. The next one comes from Andreas Willi from JP Morgan. Please go ahead.
Yeah, good afternoon, everybody, and thanks for your time. I've got two questions, please. The first one on the EU green taxonomy-
Disclosure on how that process goes, and whether you think it correctly reflects your contribution, or is this something that you feel is not a particularly good indicator when we compare companies in terms of their contribution?
Yeah.
To climate change? The second question I have: When you look at M&A opportunities, particularly larger ones, if they come themselves with a much weaker performance on some of the key metrics you are targeting for sustainability, and obviously would therefore make it harder for your targets to be achieved, or kind of maybe you could talk a little bit how you assess that. Would you more likely shy away from such a target? Would you adjust kind of a specific incentive or guidance for a business if they basically get set back because of an acquisition they make? You see it on the other hand as an opportunity to basically accelerate that company's sustainability agenda in that sense when it joins Legrand?
Yeah. Okay. As far as the first question is concerned, well, I gave you the numbers, it's 8%. The taxonomy-eligible says it's 8%, CapEx it's 12 and OpEx it's 8%. Does it reflect adequately the percentage of our business having an impact on or being energy efficient? The answer is clearly no. Because we have a gap between the 21% of green products as per our definition and the 8% as far as taxonomy is concerned. The gap, once again, is coming from the fact that the taxonomy is only looking at a few sectors of activity and a lot of our activity is not taken into account in the taxonomy.
I think there's a lot of work to be done by the European Commission in order for the taxonomy to be more reliable and more consistent. Well, I think that Legrand is not the only company to say that. Many companies are complaining with the fact that a large part of the economy is not taken into account or considered by the taxonomy. The good thing is that the feeling I have is that the European Commission we have no choice but to progressively enhance the environmental taxonomy before even mentioning the next step, which is to move from eligible to align. No, the answer to your question is no. I think there's a lot of work still to be done.
As far as the second question is concerned, well, you know the Legrand model. We have a model which is more based on bolt-on acquisitions. The average size of the company we have acquired is probably sales of about EUR 40 million. The first comment that we would like to make is that before one of those companies have a significant negative or positive impact on the CSR metrics, well, they would have to be so very, very, very bad or very, very, very good. It is, again, because of the model of Legrand and of Legrand. Number two, from my experience, you know that we are mostly buying Leaders in their field of activity.
From my experience, even if a lot of those small to medium-sized companies do not have the level of maturity of Legrand as far as CSR is concerned, they are usually well managed. When you are a Leader, you are usually well managed in terms of people, product, customer relationship, but also impact on your Stakeholders. We haven't bought in recent times a company that would have very bad record as far as CSR is concerned. Last comment, we have included a number of CSR topics in our due diligence process.
Of course, if we were to find that the company would never be able to be at the level we want it to be in terms of recyclability, CO2 emissions, or other metrics, it would be part of the decision, and it could very much be a reason why we wouldn't do the deal, among other reasons. Again, for the type of companies we are looking at, you will probably not see any of those having the significant, either positive or negative impact on our CSR achievements.
Yeah. Please.
Thank you very much.
Perhaps, so just one additional word, as I spoke about the processes of Legrand. Of course, buying a company is also an opportunity, as you said, for this company to onboard the Legrand processes and accordingly to improve its environmental footprints, its HR practices, thanks to Legrand processes. We have a very clear docking process within Legrand, where for each priorities of the CSR roadmap, there is a timetable for which each new acquisition should reach the Legrand KPI and the Legrand targets. It's a clear process.
If we want to add one thing, you've seen the slide shown by Virginie. I think this is an improvement to be made to the SBTi methodology to account differently for the acquisition. The way the process is done today, when you are adding 3% to your perimeter because you are buying companies representing 3% of your sales, EUR 200 million, it comes as an addition to your CO2 emissions, regardless of what you are doing. Even if you start decreasing the CO2 emissions of those acquired company, it comes as an addition, and you have to decrease even more in order to reach your 2030 commitment. I think this is. Well, it has been embedded, of course, into our journey.
We commit not only to decrease our CO2 emissions, but also to decrease more because of the acquisitions we'll continue to do. I think there's something that probably needs to be changed in methodology, because whenever there is a small company joining Legrand, I mean, it's good for the world, because usually most of the small and medium companies, they don't have the sort of same commitment as Legrand, and by integrating the Legrand perimeter, all of a sudden they get committed to reducing their Scope one, two and three emissions. It is not accounted this way yet in the SBTi methodology.
We have another question coming from Edouard Masson, Lazard Asset Management. Please go ahead, sir.
Yes, hello. Thank you very much, and thank you for today's presentation and for all you do on sustainability. My question is about your net zero ambition. Your goal is to reach net zero by 2050. Just wondering if you feel that this kind of remains ambitious enough. The IEA net zero scenario last year said that advanced economies need to reach net zero by 2045 for a 1.5 degree scenario, and we're seeing an increasing number of companies commit to net zero by 2030 or 2040. Just wondering if you have any reflections on this?
Well, I don't know how many companies that are committing to be net zero by 2030 on Scope one, two, and three, which seems to be a super ambitious target. I know that indeed you have some initiatives to move the 2050 target to 2045 or even 2040. I think this is the so-called Amazon pledge, if I'm correct. Now, what we've been focusing on at Legrand is not wondering whether 2045 was better than 2050, but it's to make sure that the next five- eight years was putting us on the right trajectory. Of course, it's mandatory to them to take long-term commitments, and we are doing so.
It shouldn't be done at the expense of shorter term commitments, and I think that what the society, the communities, governments and customers need to see now is not the sort of moving target, 2050, 2045. It's to see the numerous actions that companies are putting in place and implementing in order to effectively reduce the Scope one, two, and three emissions. In other words, we are focusing on delivering what we should deliver by 2030, which we believe is ambitious enough. Meanwhile, if we see an opportunity to be net zero by 2045 instead of 2050, we'll see. I think that the focus should really be on short-term actions and delivering and executing our plan.
Thank you. Next question comes from Gael de-Bray from Deutsche Bank. Please go ahead.
Thanks very much. Good afternoon, everybody. My questions are actually on your energy efficiency solutions. Firstly, could you elaborate on the typical payback periods for your various energy efficiency solutions, the lighting controls, thermostats and so on? Could you also give us an indication on the average annual organic growth rate you've typically seen in the past for your energy efficiency solutions? I'm also interested to hear if you've seen or you expect to see some kind of front loading or acceleration in demand for these solutions in the current context with obviously some tensions in the energy market and a pretty significant increase in energy prices.
Well, as far as the first question is concerned, it really depends on the solution. It can go from one year- two or four years. While I can take an example of one solution which has a pretty short payback, connecting the thermostat. A couple of numbers is the average heating expense of the average French household, but I think there's no reason why it should be different elsewhere. I mean, at least in Western Europe is EUR 1,300. According to the French governmental ADEME, smart thermostat can allow up to, I mean, on average a 15% reduction in the energy bill. And the average price of a thermostat could be EUR 250 or EUR 270 .
You see that for thermostats specifically, the payback could be as short as one year. Of course, it's even shorter in countries which are suffering from the hike in energy bill. For some other solutions, it can be a bit longer, two- three years. Most of the time it's not seven years, because if it is seven years, you don't have the incentive for the end user to buy.
As far as the average growth rate is concerned, well, as you know, what we call the fastest expanding segments, which do include not only energy efficiency related products, but also data centers and connected products, and which represented last year 33% of sales, should grow faster, and they grew faster over the last two years compared to our traditional infrastructure products. While it's difficult to shoot a number and it's dependent upon many factors, both organically and inorganically, they should indeed grow faster. You know that we have set as a midterm target that those faster expanding segments should reach progressively 50% of our total sales. As far as any potential acceleration, well, the surge in energy price is coming from, it's a few months old.
Well, of course, I'm not commenting, as you know, on recent trading. Midterm, of course, if energy prices were to remain at a high level, yes, of course, it should make the payback of those solutions even shorter and more interesting for end users, whether house owners or investors in commercial building or in data centers. It should definitely hurt a little bit of P&L, but help business-wise. But it is more a midterm support, if I may say, than something very short-term. Also more as, you know, our products are embedded into the wall. They are part of the infrastructure. They are not a product that you can buy off the shelf, put on a table, and where you would get instantly energy savings.
The good thing is that I can see that all across a number of geographies, especially in Europe, those solutions are progressively integrated into a stimulus plan because they are the right answer to the surge in energy price.
Okay. Thank you very much for that. Do you see a clear acceleration in demand then? Do you think we need to see a more, you know, some more fundamental changes to the system? You know, much more, much greater incentives than what we have at the moment, and do you see that really coming in?
Well, it's difficult to say as far as incentive schemes are concerned because, you know, it goes through a complex process. Yes, of course, a number at least of European governments are considering putting on the table additional incentives to do energy savings. It is obviously connected to the energy crisis that the world is enduring today. Yes, I believe that it should be part of some incentive schemes that could possibly be implemented in the quarters to come. Again, it's not in our hands. It depends on what the governments will do, but it is part of the solution together with, of course, reducing our consumption together with more efficient heating systems, more isolated buildings.
There are a whole set of solutions that could be implemented in order to help people to save energy.
Thank you very much.
Thank you.
Our next question comes from Jonathan Day from HSBC. Please go ahead.
Thank you. Good afternoon. Good afternoon, all. Thank you for the presentation. I was wondering if you could talk a little bit more about your progress in terms of supplier engagement, how suppliers are reacting, how many perhaps of the, or how much of the supply base has signed up to, or got validated, science-based targets, and how receptive they are to, just dealing with not just the aspects of energy efficiency but also diversity, inclusion, and all of the pillars that you're looking to support?
Sure. Maybe, Virginie, if you want to take the lead on that one.
Sure. Yes. As you've seen in the presentation, this is a new priority in the CSR roadmap we've just launched. We're at the beginning of the work with our suppliers. Our objective is to have engaged 250 suppliers by 2024. As you can imagine, we're gradually going to be building the number of suppliers that we engage. At the moment, we're starting the discussions with them to see where they're at today on the various topics. Our clear focus, of course, is carbon, because this is where we've set a priority, but also where we feel we have to go. Of course, there's been for the past few years also work on other topics, like social topics as well.
The discussions we're opening now are definitely very targeted on carbon and seeing where they're at today. Do they already have plans in place? Because some could have plans in place which are just not SBTi validated for any number of reasons. It's something that we're checking with them, that we'll be checking the next few years. Just to give you maybe a clearer guidance of how we're going to be doing it, we are not going to engage all 250 suppliers this year. This is something that we will build over the next three years because it's a very heavy work.
As I said, we'll consider that we've succeeded if we've engaged those 250 suppliers and if they've committed to reducing by at least 30%, their CO2 emissions by 2030. There's this double element which takes time, which takes, you know, requires us to partner with them. This is gonna be ongoing over the next three years. I don't have a clear answer to give you today. We'll probably have a much clearer vision to give you next year when we have kind of that first year behind us and we know a little bit where we're at.
We are, of course, using many different sizes of suppliers, so we can be quite small for some of them, which is usually quite good news because if we're small, it means that the supplier is big, and it usually means that they either have a lot of other clients that require them to you know to move on this topic, so we're not alone in asking, or they're big enough to have kind of Stakeholder pressure to commit to SBTi anyway. Then we have you know smaller sized supplier, maybe more localized, where the big discussions will be because as I said, we're not saying either you go down that road with us or you're out. We're really on that in that journey with them to partner with them and get there together.
It will take some time. We have very different profiles of suppliers, different sizes, different geographies. This is why, you know, we've put it over the next three years. It's not something that will be done in two months, but it's something that we've already started and will be ongoing until 2024.
Now, if I may add. Well, of course, one may see think that it's a little bit more complicated in the current supply chain situation than it used to be three or four years back. We made a clear and deliberate statement internally that we were prepared to drop an important supplier and to move from one supplier to another, if we were not able to engage him in helping us in this Scope three journey. I mean, it's as important for us to have a supplier playing the game as to have a supplier service, providing a good level of service, providing affordable price, available material, and so on and so forth.
It's gonna be completely integrated into our analysis of the supplier, and we are prepared to move from one supplier to another if we don't get the support we want. Perhaps to complement, it's interesting to look at our track record because this is not the first time that we are engaging with our suppliers to improve on CSR stakes. In the previous roadmap that Virginie described earlier, you could see that we were trying to improve some suppliers which were considered as risky in terms of CSR. We audited part of our portfolio, part of the suppliers with questionnaires, and we found out that roughly 100 suppliers were risky in terms of CSR. What does it mean, risky?
It means it could be HR practices, it could be the impact of the technology on environment. We work with them, and out of the 100, we had to give up a few, but roughly it's what? It's five or six, currently 10 are still working on their progress, and all the rest have improved. It shows that finally they care about CSR and they are ready to onboard our programs.
Right. Fantastic. Thank you very much. It's really interesting.
Next question comes from Eric Lemarié, again from CIC Market Solutions.
Please go ahead, sir.
Yes, thank you very much. I got a follow-up question on recycled plastic and recycled metals for your products. Do you think it could give you some sort of pricing power? Or in other words, do you see the final customers of Legrand can accept to pay more for a more sustainable product?
Well, yes, I think it can. I think it can be part of the innovation we are bringing to the customer and that we can embed into the pricing. Yes, indeed. Such as, at the same level as innovation, quality of service, and so on and so forth. I think it's a bit early. I can hardly tell you that we have evidence of that, but I think that progressively, the level of awareness of our customers will increase all the more as it's gonna be pushed and supported by the channel. When you are a distributor today, when you are a contractor today, you are also taking progressively a number of commitments to sell more products that have a smaller CO2 content or that are easier to recycle.
The channel will progressively, increasingly push those products toward the end customers. Again, end customers being either the end user or the investor in a commercial building or in a data center. It is not yet the case, but we are strongly convinced it can indeed come. Now, how will it impact the pricing of Legrand in the years to come? It's difficult to embed into a precise valuation, but it's gonna be part of the innovation story that Legrand has been selling to the market for decades.
Thank you. That's very clear.
Good. Well, thank you very much for attending this CMD dedicated to ESG. I hope that you feel how motivated and energized we are to make it to implement it and to deliver the results we committed to deliver. I hope to see you soon in person to discuss the CSR roadmap or Legrand. Thank you very much.