The world is full of people telling you who to believe they are, but we thought we'd tell you who we're not. Let start here. We're not in shipping. We don't make lift. Seriously.
No lift. We do this. We're good at this. And we make all of these. And even though you'll find us here and here, we don't make energy.
We make you save it. And you'll be saving we're just about everything around you. Helping machines talk to each other and to you, making your world more personal. We're seeking out the big questions and answering them honestly. Like, how can we make the most of our energy and resources?
Or can we make access to energy and digital, basic human rights. We're real people, employees, developers, partners, investors, and inventor all passionate about doing what's right. We're open. Humans of all sorts from all over, learning from each other, and about other. We're not here to save the world.
It'll go on with or without us. We're here to be your digital partner for sustainability and efficient to ensure life is on everywhere for everyone at every moment.
Hello, and welcome to our 1st all virtual investor event focused on ESG. We know that your time is precious. So on behalf of all of Schneider Electric, I'd like to say that we appreciate that you choose to spend it with us today. Over the next two and a half hours, we've set up an engaging agenda to help us get you to know us better With the lens of ESG, we have executive presentations, panel discussions, as well as some representations from board members as well. We will also be unveiling our new Schneider Sustainability Impact for the next 5 years.
Following this session, we will also have Q And A So feel free to raise your questions on the platform and we'll get to them towards the end of this event. So with that, Let's get started. I want to thank you again for your interest in our company. And I'd like to pass the ball now to our Chairman and CEO, Jean Pascal Require. For his opening presentation.
Thank you, Amit. Hi to all of you. I hope that all of you do very well and I'm really happy to be with you today to focus on the subject of ESG unsustainability because as you know at Schneider, ESG is embedded everywhere. At the core of our business and our strategy, what we do At the core of our DNA, the way we do business, in the way we interact with our communities around us, and of course, at the core of our governance. So I'd like to go with you through those main points, detail with you the main element of our commitment to ESG.
First thing you know, our purpose. Our purpose is to empower all to make the most of And we believe at Schneider that it's important to reconcile those 2 dimensions. We see a world where we can leverage technology, To bridge progress means access to energy for all and sustainability means cutting carbon emissions by 2 in the next coming 20 years. At Schneider, we call this life is on energy for all on the sustainable planet. On our mission, is to be the digital partner we convert energy management on automation to deliver to our customers the values of sustainability, efficiency, And of course, now in times of COVID, the reinforced need of resilience.
And we do it for 4 end markets building on data centers, 50% of our business, infrastructure and industry, 50% of our business, and we do it around the world in a very balanced manner. Asia Pac, North America, at the same level in terms of business, Europes slightly behind on rest of the world, 16% of our business. We deliver our solution in an integrated digital platform, EcoStruxure, and because our customers want solutions, We deliver it with a model which is integrated, which makes people on the ground responsible. We call it empowered, We are open associating partners and integrators to our solutions. And finally, everything we do is geared up to sustainability.
Over the past 20 years, we have positioned our business on the energy demand side because we are convinced This is a place where technology brings the most changes and brings the most capacity to decarbonize the use of energy. And we've built an integrated portfolio for the demand side to be all electric all digital to enable decarbonization. Over time, we've seen more and more cases where micro grids, local micro grid based on renewable and on local storage are integrating the demand side, are cheap in a way generation capabilities from the traditionally centralized generation, and we realized early enough that to orchestrate all those autonomous points of consumption and production of energy, we would need a smart and green grid. And Schneider has assembled a unique portfolio to put all the bricks of that demand and smart grid together for an optimized usage of energy. When we say that our mission is to make sure that life is on, Schneider might not be visible in many places where we live and work, but we operate mission critical processes and we touch lives every day and make life on the environment more sustainable.
Think about during the COVID, we realized that more than 90 countries had declared what we are doing mission critical operations on asking us to keep operating our factories on our services to make sure cities, hospitals, grids could keep working. We operate, of course, data centers. We are in 50% of the data centers in the world, critical networks like water networks, utilities and grids. And of course, we are presenting 40% of buildings like hospitals, and we participate to critical industries in the world. We have seen over the past 5 years a tipping point and acceleration of the awareness for sustainability.
Think about it today more than 300 companies have signed for the 1.5 degree trajectory of the global compact. We've seen multiple coalition forming the EV 100, the I100, the EP100, where companies work together together with their ecosystem of suppliers, to make sure that their operation together are becoming more sustainable. We have been working with many of those companies to find the equation that would allow us to bring progress to all means energy on digital to all and at the same time cut emissions and make climate sustainable for our planet. And it's pretty simple. First, we have to use digital for savings and make sure we save on energy and resources.
2nd, use digital to organize circularity and make sure that we reuse most of the resources that we already used. 3rd, makes the world more electrical and expect a world which in 20 years will be twice as much electrical twice more electrical than today. Best example being, of course, electric mobility. And finally, make sure that electricity is green and renewable. And especially we see a great future for wind and solar.
We at Schneider have a role in this transition. The first role is to deliver a unique level of efficiency, which is a major engine of a better sustainability. And as you know, that 4 level efficiency is integrating energy and automation, connecting everything from the endpoint to the cloud making sure the life cycle of every installation is integrated from design build to operate on maintenance, and 4, make sure that our customers go from the management of their company side by side to an integrated management of their whole company. On the top of efficiency, we deliver decarbonization solutions, we do that using massively digital and services, which I remind you are now 50% of our business. But on the top of it, we manage for the sake of our customers, 1,000,000,000 of energy sourcing, doing 2 things, helping our customers to save and consume less and second, making sure they buy the right source green sources of energy, which makes that over the past years, we've become the biggest platform of renewable sourcing in the world.
And we are attached to measure the value that we bring to our customers. And to be very precise and very targeted, we do that measurement only on 20% of our total business. So of course, the value we deliver to the total of our customers is much higher. But on that 20% that we measure over the past 3 years with Elpark customers to save 120,000,000 tons of, of metric tons of carbon. Just to give you a 5% of our R and D is dedicated to innovation in sustainability.
Probably the best example of that is This big innovation in Medium Voltage, getting rid of SF 6 on any gas in Medium Voltage, our Air SET product will be the first one to use no gas to deal with medium voltage applications. 75% of our products are green premium exceeding all the highest requests for environmental compliance around the world, And finally, we do eco design to make sure that we manage all lifecycle of our products on our systems. But it's not all about efficiency and sustainability. What we do digitizing the environment around us makes the future more digital and electric makes the future smart and green. And if you speak about net 0 building industry 4.0 smart cities, micro grids based on renewables, on electric mobility, These are all the points that we address at Schneider with the technologies we bring on the market.
I've explained to you, our ESG is at the core of our strategy on our business mission. Now let me explain to you our ESG is at the core of our DNA, the way we do business. You've been following Schneider for a long time and you know that every 3 years we've come with a new plan in which we are embedding objectives for, ESG on which or against which we have been progressing on keeping on developing our ambition. We are also practitioners of sustainability on all the sites of Schneider. 13 net zero sites, 80 percent of the electricity that we buy today based on renewable minus 15% of energy consumption, thanks to the usage of EcoStruxure advisor, energy advisor, resource advisor, sorry, two hundred sites we are 0 ways to landfill already, and we are proud to, see that the World Economic Forum has picked 5 of our factories as landmark factories for sustainability and digitization.
We have also upped or increased our ambition in terms of carbon ambition. We want to be carbon neutral by 2025 net 0 by 2030 on Scope 12. And if you go to Scope 12 and 3, we want to be carbon neutral by 2000 and 40 and net 0 by 2050. On these two policies that we bring along all the scope 3 of companies working with us, both suppliers and integrators, so multiple capabilities and opportunities for us to work with them on their progress in, in, in, in carbon performance. We believe that what makes a difference at Schneider is the fact that ESG is embedded in the values we propose to people working at Schneider, embedded in the values that our customers are looking at when they come to Schneider.
And more and more, I'm happy to see that in the values that our investors are looking for to invest in. And we believe at Schneider's that great people make a great company on what we propose to our people is H Schneider, a meaningful mission in what we do, in the way we do business, an environment of work, which is the most inclusive in every direction, on a place which allow people to make decision on feed and power. And these are not only intentions. They are supported by tangible policies that you see in this slide, and that we deploy on a global scale, policies, tools and processes to support their implementation. We also are attached to benchmark with other companies on our ESG commitments, and we've been participating to multiple rankings for now a long time, and we keep competing in the world of ESG to make sure that we get inspired by the best methodologies, deployed by the best companies around the world and we keep staying at the front of what is being done in the field of ESG.
Third point is that this commitment to ESG applies to our ecosystem. And in the time of COVID, we've immediately created the tomorrow rising fund. Today, we have 73 projects of the Schneider Electric Foundation dedicated to helping communities in difficulty on especially helping the youth, which has been at the moment sometimes deprived of school, or is having difficulties to find a job, making sure that we offer opportunities to young people around the world, helping on the access to energy where over the past years we've brought energy across the world to almost 30,000,000 people on social inclusion, making sure that we educate youngsters to the business of the future in the field of energy and in the field of automation. In the past years, we've trained 250,000 plus, used to the business of Watch Schneider does. To take an example, for instance, of what we do in India, which has been a place where we have focused particularly in the past years.
We are securing energy in more than 100,000,000 homes with specific systems, specific to India. We have installed 45,000 solar water pumps. We have brought together 150 plus micro grids based on solar. And we have helped the creation of more than 300 enterprises in the field of electricity and in the field of automation. But we deploy that commitment to ESG beyond the pyramid of Schneider.
And we go to our partners because, as you know, Schneider, in our industry, the company that we are the most which partners, suppliers, and integrators. On this deployment goes into a shared vision of ESG with sharing of the principles of trust, quality, safety, cyber security, and ethics, our climate commitments when we decide to be net 0 emission on increasing our scope 3, it means that we have to include all of our partners on innovation. And we participate to coalitions to work together of companies, we've been one of the earliest adopters of the UN Global Compact, which gives us a compass on the direction on a common grammar in the way to reach our objectives, but also also multiple other coalition. With other companies or with other institutions. So, summarize, our commitment to ESG is embedded into our strategy, into our DNA, our way of doing business on our ecosystem.
And all of this is supported by a strong and robust governance. In our board, We have a HR and CSR committee which reviews systematically the questions of ESG. In our XCOM, Olivier is in charge of strategy and sustainability put in into one end of those 2 subjects on making sure that sustainability is at the core of our strategy. Sustainability has been part of our incentives for now a long time for almost everybody in the company. It impacts a lot.
STIP is a short term incentive on LTIP, our performance shares. It's embedded also in our principle of trust on our processes for ethics and compliance, and we make sure that we benchmark externally on actually our performance conditions on LTIP are only referenced today to external benchmarks. In summary, we see ESG embedded ESG inside at every level of our company. In our business and strategy, in our DNA, the way we do business in the way we deal and we certainly don't oppose the imperative of return to shareholders to ESG. Actually, we see the 2 helping each other.
Everything I described, IO efficiency, reducing the risk of our company goes to the interest of our shareholders. Thank you for taking the time to dive deeper into the subject of ESG. To discover with multiple people of Schneider that you're gonna be, seeing in the next sessions discover what it means practically in our daily life to put in motion, to put in execution, the principles which I just described. What we do here, we don't do it alone. We were, as I said, one of the earliest adopters of the global compact.
Then after I had the privilege on the earner to be for 2 mandates in 6 years, the president of the Global Compact France, which is actually the 2nd largest network in the world of the global compact. And then I've been proposed and I do it proudly to be at the board of the global compact. Sandra Ojumbo, who is the executive director of the global compact, was kind enough to explain us what is the value global compact brings to a company like Schneider.
Greetings from New York. I am Sando Jambel, the CEO and Executive Director of the United Nations Global Compact, the world's largest corporate sustainability initiative. We are championing the 17 sustainable development goals, calling all companies to align their strategies and operations around our 10 principles on human rights labor standards, environmental issues, and anti corruption. These 17 goals result from a UN process in 2015 that was fully inclusive with governments involving business, civil society, and citizens from the outset. We are all in agreement on where the world needs to go.
Fulfilling these goals by 2030 will take an unprecedented effort by all sectors in society, and business has to play a very important role in the process. It is very easy, especially in tough business environments, to ignore principles, but we aim to be a north star for companies to keep them moving in the right direction. Since business is a part of the fabric of society as a whole, It has a responsibility to deliver value for society as well. By mitigating climate change, by helping alleviate poverty, promoting inclusion and equality, society will prosper, and so in turn, will businesses. It is a true win win relationship.
The work of the UN Global Compact is not philosophy or philanthropy. We are here to unite business for a better world. The SDGs are the agreed road map for companies to do good and to do well in the long term. Delivering on the promises of the 2030 agenda, for sustainable development is definitely in their interest and in our collective interest. And this is where we need the support of investors.
They will be very strong catalysts for change. But what we have known for a long time and what the COVID-nineteen pandemic has reminded us is that no one entity alone can tackle the biggest global issues that we have. We need to work in partnership. Businesses are now more global and more interconnected, and the ecosystem of companies, governments, civil society and local institutions is incredibly complex. We all need companies, including Schneider, to embrace the FTG strongly and lead the way forward.
Recogniting the hard work and efforts you have already put in climate action and diversity and inclusion. I encourage you to go 1 or 2 steps further and to consider the 17 SDGs as a coherent global framework to stimulate your ambition further. As a member of the UN Global Compact Board, Jean Pascal has been a tireless advocate for the SDGs. Creating networks of collaborators to speed up progress, and we are grateful for his leadership. I encourage you all to embrace this vision, for the future of your company and for the world, and join us in uniting in the business of a better world.
Thank you.
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Hello to all of you. My name is Linda Noel. I have served as a board member of Schneider Electric for the past 6 years and currently chair the human resources and corporate social responsibility committee. During my time on this board, I have witnessed firsthand the strong commitment of the company to the many facets of ESG. In my view, Schneider Electric has consistently been on the leading edge of ESG topics, which I have seen debated, explored, and challenged and frequent discussions in the boardroom since the day I joined.
Decisions carefully consider all impacts. To ensure the enhancement of society and the environment. The steady progress and trend of results achieved are well reflected in the formal Schneider barometer and subsequently in the Schneider Sustainability impact. ESG has clearly been an integral part of Schneider's DNA for many years. It's visible It's real, and it's becoming entrenched in the group's purpose.
In the human resources and CSR committee, We spend many hours on these topics so that well reasoned recommendations are delivered to the board. And as we approach the end of the 2020 SSI cycle, we have carefully deliberated with management on the most effective criteria for the next cycle, keeping all stakeholders in mind. In devising the new 5 year program, The HR and CSR committee wanted to confirm a few key elements were embodied in the framework. First, embracing simple limited criteria that are transformational in nature and would have maximum impact for multiple stakeholders. Ensuring plan criteria could be easily quantified and measured.
Progressively raising the bar in sustainability commitments with all parts of the organization contributing. And finally, maintaining focus and progress on delivering in areas from past plans, even though they may not be part of the new SSI. The employees of Schneider Electric around the world strive to continually challenge themselves and lead the way for others to follow. Schneider is not afraid to challenge the status quo. It's a company that cares.
A company that is concerned with doing things right, but also with doing the right things. The new 2021 to 2025 Schneider Sustainability Impact program is an excellent example of this. I have great hope and support for what lies ahead.
Good morning, good evening to all of you wherever you are in the world, and thanks a lot for taking the time to be with us today. For this investor that dedicated to our ESG strategy. So what I am going to do in my presentation is to tell you how we see the situation today What is our strategy for the next cycle and what are the detailed commitments we want to take Schneider Electric as a company for the next 5 years? First of all, quick wrap up on what has been said so far. What is the case for change?
It's very obvious for all of you, you are expert in ESG, the topic of climate very high on the agenda, the topic of social aspiration being very important and taking different forms in different parts of the world, strong focus from our shareholder and you know very well that on the ESG topic and of course also an ecosystem, which has been more and more demanding and weaker testimony at Shanda, I think, that our customer asking more question are more demanding when it comes to sustainability, same with our supplier and same for our entire ecosystem. So interestingly and acceleration for the case for change with a specific focus on climate change. 2nd point very important for the first time we have a universal framework So sustainable development goals and I am sure all of you are very familiar with that, but for the first time all companies, all organizations are somewhere speaking about the same language, And it's important even for us as a company and we will talk about it later when we speak about our business because we see that it's getting momentum, traction inside companies and especially again on the topic of climate change and energy efficiency which is of course very important for Schneider Electric not only because of the commitments we are taking for ourselves but also because we can be part of the solution for our customers.
And of course, This framework is translated into specific target, to achieve by 2030, which is again giving a a lot of detail information on what companies should do in the next cycle. Sapon that I wanted to mention Jabaskal said it, it is a very important topic for Shanda. I think it's not new. It has been in our DNA for many, many years. We were one of the first company in the world probably to create a sustainability barometer in 2005 when we started with to publish those commitment, midterm commitment translated in 1 year target measured on a quarterly basis that we published actually to all our investor communities since that time.
And also we were one of the first companies to incorporate ESG criteria in the incentive of our employees and our leaders and also having a specific committee at the board level focused on that sustainability topic for 20 since 2014. The next point that I wanted to mention also in the introduction, we've been recognized a lot in the past year as a company which give us a lot of energy and a lot of feedback I should say on what we are doing less well or very well And that's very important for us because while we are very pleased with all those good scores improving year over year that you can see on the screen, we are going into the detail of all those surveys to understand where the gap, what are the area of progress and know that the topic of sustainability is not a topic which is standardized over time. It's a topic which keep evolving year over year. What I am seeing here is that the bar is raising and we are learning a lot for source survey what also other companies are doing and it's a big source of inspiration for Schneider Electric.
Besides those external recognition, we have been also pretty pleased with our people recognition, and more than people recognition when we look first at the feedback from our employees in our 1 voice internal survey. The the first reason for people to join Schneider Electric and to stay at Schneider It's actually because of our commitment for sustainability. And I will tell you it's not new. I have been in this company for 27 years and tell you many, many company will tell you that's probably the first reason why they are still at Schneider Electric because we are really committed to make the difference for what we do at Schneider Electric, but of course what we do for our customer. And as a result of that, it has been translated in an important improvement of our employee engagement in the past years.
The second dimension we are also looking at because it's important to hear what people say outside Shrada Electric and we take here Glassdoor as a proxy but we have been very pleased with the improvement of our score in the past year reaching 4 for the overall score, but with a very specific focus on everything which is culture values again and as a with the translation of that 83% of the people recommending Shanda Ayitrich to a friend. So again, we don't take anything for granted but these are a couple of metrics that help us to to track how we are doing. But again, just to confirm that it is also a topic which is very high in the agenda of our employee, and very, very strong vector of motivation and engagement for our people. Last but not the least, to close this introduction, we know that Shadratic was one of the first company to publish a carbon pledge more than 1 year ago in line with the science based target and of course with the objective to contribute to improve the situation in the coming years and leading the weight towards the 1.5, degree climate objective.
So of course, we have taken strong commitment on our own operations, COP 1 and 2 to become net 0 by 2030 but also a lot of commitment on the Scope 3 Upstream, but also downstream. And I will come back a little bit later on how we want to achieve those long term goals which are very important for us because it gives a complete framework for what we want to do in the future, but the most important is what are we going to do in the next 5 years to get there and that's what I am going to present to you in a minute. So to wrap up really uh-uh my introduction which was a kind of consolidation of what you have heard so far, you've seen that this is very high in the agenda of many companies. The case for change is very high and you know that very, very well. Clear framework provided by the sustainable development goal, a very strong DNA at Shadrach, a lot of recognition internally and internally strong commitments to our carbon pledge.
Now the question for us is what do we go next, how we can take sustainability to the next level I am very pleased to share with you now what is our strategy and our commitments towards 2025. So what is our strategy? First of all, everything start from the purpose and you heard Jean Pascal explaining before that sustainability is very high in the purpose and the mission of Chandra Electric. How do we differentiate in our sustainability strategy is by playing basically on both sides of the equation. First, leading by example in our own ecosystem, what we do at Schneider Electric to become more sustainable company.
But at the same time, we are part of the solution for our customer and we believe those 2 dimension and playing again on the two sides of the equation make Schneider Electric's sustainability strategy very differentiated. We have defined 6 transformation, which are very important, what we call our 6 long term commitment around climate, resources, what we call our principle of trust and I will come back to that a bit more in details later, offering equal opportunities for all a very strong focus on generation and beside the 5 key pillars where we take a lot of global commitment we want to make sure we have also a stronger impact on local communities by empowering people to do more. So this is basically the menu of our 6 transformation for the next cycle. Now, how do we want to make the difference and to have an impact? We want on one side to have a very limited number of key transformation, what we call our 2025 key impact transformation, which are assembled in what we call the Schneider Sustainability impact that you know very well because it's a practice that we have seen strong at Schneider Electric.
But beside that, we have a set of complementary programs, what we call the essential program and the of 2 will make our commitment for each of those 6 transformation. So let me start with the 1st long term commitment. Of course, No surprise, we want to act for a climate positive world. We want really to be the company that will bring innovative solutions to the world that deliver immediate and lasting decarbonization and of course in all of that in line with our carbon pledge and of course for each of those transformation, we want to make sure that we are aligned with the objective which have been provided by the SDGs. So how we are going to make it happen?
In terms of key impact, key transformation, first of all, We ambition to have 80% of our sales by 25% coming from grid revenues, what does it mean activities which have a strong impact when it comes to sustainability in the world. 2nd objective we fix for ourselves easily to achieve 800 megatons of CO2 emission saved and avoided for our customer which is very, very important because again we are providing a lot of solution for our customer that can help to decarbonize the world and very much in line with our long term care mod page commitment on, scope 3 downstream. And last but not the least, learning from the experience we had with Walmart that we published a couple of months ago where we have built a program to help our Walmart to decarbonize their supplier we are also at Schneider Electric building our own program where we are targeting 1000 supplier, the one which are the most carbon intense if I may say. And our objective is to help them by creating this program to save 50% of their CO2 emission. And that's very, very important because of course that will be a strong contributor to deliver our ambition on the Scope 3 Upstream at Shneider Electric.
And we are doing all that, thanks to energy and sustainability services, which are with our own organization, which is helping our customer to get lower CO2 emission. And you see a couple of programs that I am not going to describe, we want to implement a systematic carbon price, for instance, in all our R and D and investment decision, and also a very strong focus to make all, most of our sites, I should say 0 CO2. 2nd transformation, we want to be more efficient with resources by behaving responsibly and making the most of digital technology to preserve the planet. What are the commitments we are taking? First of all, we want 50% we want to deliver 50 percent of green material content in our products.
We are best lining 2020, but we are more or less at 25% based on our first estimation and second commitment to 100% primary and secondary packaging, free from single use plastic and use recycle cardboard. We have a certain number of programmes in already green premium because it was there in the previous program, we are also taking a commitment to get 100% of electrical vehicle by 2030 and we have fixed the 1st milestone by 2030, 2025, sorry for our own fleet and we have also a very important a biodiversity pledge in which we are taking a certain number of commitment. Soft Transformation is about living up to our principle of trust So you would probably ask at that point of time what does it mean? We consider at Shreedharic that ethics, safety, quality, cybersec are extremely important. That is why you trust a company to do business with and that is true for all the stakeholders and we are taking a certain number of commitment to deliver to our principle of trust by upholding ourselves and all around to high social governance analytics standards.
How we want to make it happen? First of all, we want to make sure that 100% of our strategic supplier provide decent work to employees, how we are going to measure that. We are leveraging the international labor organization definition of decent work and we will make sure that our supplier, the strategic 1, are compliant with that organization definition. Secondly, we want to measure what is the level of confidence of our employees to report behaviors which are against our principle of trust, how we are going to do it We will measure every year, the the confidence of our employees who has surveyed, to make sure that their confidence again to escalate issue when they face issue inside the company. Again, couple of programs to support those transformation.
If I have just to give an example, Since 2 years, we are training 100 percent of our employees every year on ethics and cyber security which we believe are really 2 important fundamentals in our principle of trust and of course we have a very large number of policies to cover those 4 dimensions that we have implemented over here and communicated through the entire company. When it comes to the next commitment, which is closer to people and social dimension, we really want to be the company that offer equal chance to everyone everywhere in the world. So that we are a strong ambition that we are and we want to do it by ensuring all employees are uniquely valued and work in an inclusive to develop and contribute their best. 1 of the ambition and the target we fix to ourselves by 2025 First of all, a very strong commitment again on gender diversity. It's not new, but we keep raising the bar So we want to have basically gender parity in recruitment and to have 50% of our recruitment which are female and male that's a commitment we've taken many, many years ago moving from 30 to a little bit more than 40 today and now we want to go to the full gender parity.
And that should translate in more female in management at Schneider Electric, so 40% is our ambition for frontline manager and 30% for leadership team. And for your information, we are already at 38% at the level of the executive committee. So we are really showing the way from the top of the company. We will also to have impact outside Schneider Electric and that's why we want to make sure that by 20 25, 50,000,000 people and we started the measurement in 2008, will have access to green electricity, why because we believe that access to electricity is the first thing you need to educate people, to help people to access to opportunity everywhere in the world. So for us it's very important that we commit both internally and also have an impact externally on our ecosystem.
A couple of again of essential program in that transformation. I will mention in particular that we keep a very strong focus on pay gap. We have reached close to 1% of bigger up in between men and female in the past cycle. So we keep this strong focus because you know that there are people coming in coming out and that may change over time but we want to make sure we stay below 1% in the next cycle. And I would like also to mention that we have deployed in the past year certain number of policies, to give you an example, we launched 3 years ago our global family policy everywhere in the world with the same standard but also a policy for flexibility at work where we have offered since a couple of years the possibility for employees to work from home, which actually was very helpful when we entered in COVID-nineteen because it was not something new for Shada, I think.
And we keep raising the bar but again what is very important here, all those policies are global policy for Schneider Electric. When it comes to the next commitment, which is really a little bit new in that presentation, while we commit on diversity and inclusion in general, we focus on of course gender like I have described before. In the next cycle, we want to take a specific commitment on generation. So we really want to harness the power of all generation. People are all working inside the same company coming from different generation, and we want to do it freely by fostering learning, upskilling and offering development opportunities for all.
And what we want to do in particular is to focus on the 2 extreme, giving more opportunity to the youth and also reinventing somewhere the end of off hire for our employees. So the type of commitment we are taking here, one to offer more opportunities for the next generation and with a very strong focus on internship apprentices and fresh graduate, recruitment. So multiplied by 2, by 25 compared to what we are doing today. But also offering training in energy management to 1,000,000 underprivileged people and that's a program we started in 2009, but that we continue in the next cycle. Here in terms of program, there will be one that I would like to highlight and we are just starting the journey, so more to come in the future, but we would like really to reinvent the last mile of the carrier of our employee and to have a systematic carrier plan when you enter in the last 10 years and rather than going through a very linear carrier where you are in or out offering different opportunities for employees to invent themselves somewhere and to offer different opportunities depending on on what they want to do.
So that's really a very strong commitment that we are taking and a program that we want to build in the next cycle. And last but not the least, you've heard me talking a lot about global initiative. You heard me in my introduction saying that Shada Electric was one of the first company in 2005 to launch this strategy with global commitment everywhere in the world, measured, published every quarter but we wanted in this next program to empower even more our local communities because while there are large number of those initiatives that have described which could be driven globally and it's good that we can impact all our entities everywhere in the world. We want to make sure that we empower our local communities by promoting local initiative, enabling individuals and partners to make sustainability a reality for all. So what does it mean?
See, only one goals by 25, actually 3 in in reality, but we want all our president and zone president everywhere in the world to define 3 local commitments in line, with the sustainability transformation that I have described before that will have a specific impact in their local communities. And why? Because there are a lot of topics when it comes to sustainability, that can be treated at the local global level, but you imagine also that there are a lot of local specificity and no way we can embark everything at the global level but we want really our country operation to take both local commitment that will make an impact to their local ecosystem. Here again, a certain number of programs in the pipe with one in particular that I would like to mention beyond and beside everything that I have described, we would like really to encourage all our employees to reduce their own environmental footprint in their own life at home, you know, in their own ecosystem. And in particular, by leveraging all the Schneider Electric product, like for instance, a wiser solution, that help people to have a measurement on their energy and to get recommendation on how to save energy.
But we would like really implement those from locally again to have a higher impact. So as a wrap up, you can see here what is the new Schneider sustainability impact summary for the next 5 years with our 11 global impact where we will measure and track on a quarterly basis our progress versus yearly target in line with our of course 2025 ambition So this is what will form in particular the basis that we use for the incentive of our people, in line with what we have been doing in the past. Besides that, I have explained to you that we have a certain number of program, what we call the essential, and for most of them, actually, we will continue to also have a measurement to track the progress in line with the ambition of each of those programs. Last but not the least, we want to make sure that we leverage our own solution at Schneider. I mentioned before that we are doing a lot for our customer, thanks to our energy and sustainability services solution we are going to track basically all those commitments in a EcoStruxure resource advisor that will help us of course to measure the program and to make sure that we can share with all the entity of Shadrach everywhere, all those commitments that I have described before.
So to conclude, I would say, beside those commitments, we were also to keep focusing on a certain number of key enablers, I said it in my introduction, we will continue to have ESG criteria and objectives embedded in the rewards and in the incentives of our leaders and employees In 2020, as you know, we have introduced this new external index for the LTIP, which is actually a combination of the score of the top 4 a rating that we have selected, which is new and help us to benchmark not against our own objective but external objective. In the next cycle, we will continue to have 60,000 employees having an objective and sustainability in their incentive, in their short term incentive and of course, what we are going to use is a new SSI that I have described before with the top 12, target that I have described that will form the basis of the measurement We are going to add a couple of external and internal committee in order to have external spying partner, but also internally reinforcing the governance and we will continue to keep upgrading ourselves in terms of disclosure and rating and of course having a strong alignment with all the standout that you know very well in the market whether it's TCFD, SABGI or whatever, it's very important that we give you a clear visibility, visibility, I should say, on how we perform according to all those disclosure.
And last but not the least, we will adapt our communication to all the stakeholders like we are starting today with this ESG Investor Day and we have a massive launching plan in January, a kickoff with all the employees of Shadow Electric that will be gathered online at the same time to discover all our new commitments when it comes to sustainability. And by doing energy and resources and bridging again progress and sustainability for all. I hope it gives you a clear picture on how we are moving where we commit to go and we will have to be very happy, of course, to go much more in details in all the Q and A later on today or in the future opportunity that we will have to meet in our ESG workshop. Thank you very much for your attention.
Our people know bucks in the market, and they take pride every day when they come to work here. My name is Steve Blackowski. I'm the plant manager here in Lexington, Kentucky. We may factor, load centers, and safety switches for Schneider Electric. And we use our EcoStruxure products to be more digital and connected.
The plan is 500,000 square feet. We have 500 people on-site at any given moment. The plan opened back in 1958. And so we've had, be creative and put more automation in this plant to be faster, leaner, and really drive what our customers' expectations are. For, like, example, We've installed AAA onto our assets.
It gives our technicians the ability to walk up to a piece of equipment, and they can pull schematics. They can basically troubleshoot the schematic, know where one of the sensors may be faulting out that, and it's been a 20% reduction in mean time to repair. The Aussie RFID technology that we installed was one of the most important things as a smart factory. And so at any point in time within our plant, we can track up to 6000 parts Also, the Aviva into stop web studio is one of the things I use on a daily basis. I'm using Aviva on my tablet.
I use Aviva on cell phone. I can understand how we're truly performing every day or every night. We've improved our energy savings by 11% this year. Just by being able to understand where our usage is at and really focusing in on that information. And it's exciting which Schneider Electric can be on it and out on the floor every day, coming up with new and innovative ways to connect and pull out information.
And that's why it's fun to come to work every day.
Well, welcome to the first of our two panels of the day. In this panel, we're gonna talk and further take forward the conversation around how ESG is embedded in everything that we do at a practical level. It's also your chance to get to meet with some of our leaders that you might not have engaged with before. I'm gonna introduce the panel now. We have Barbara who joins us from Europe, and Barbara is leading the operations for Europe.
We have Charisse Lee who joins us from China from Shandai. Teresa was appointed earlier this year as our new chief human resources officer. We've got Ervek Currel, who's responsible for governance and the secretary general of the company, and he's based in Boston. And lastly, we have Murad Samode, who is our chief global supply chain officer, and he's based in in Hong Kong. So thank you all for joining us and spending the next few minutes together.
I'll let's get started. I'm gonna go directly to Murat. Murat, you know, talk about supply chain very topical issue at the moment. As you know, you've been taking the company through a transformation on our supply chain, and it's really been tested across the entire world at this point of time with COVID and fact that, you know, the agility and the transformation you've driven in the past, how has that sort of helped us through this crisis? So tell tell our viewers about our transformation and where we stand today.
Yeah. Thank you, Amit. And, you know, kind of thinking through what has been happening in 2020. And I have to say what the journey. I mean, it's really has been one of the most intense year for any supply chain professional and certainly for here the supply chain teams at Schneider Electric.
I would say it has been a real life test for our structure for our processes, for our organization and our people. And while we are still learning a lot through these crises, and these are feeding our forward thinking about the future of the strategy in the supply chain. I feel that our tailored, sustainable and connect for that 0 transformation and also the strong team's engagement in the recent years has really helped us in, I would say, facing the challenges presented by this year. To do the best for our customers and to get, I would say, all the activities and reaction. What kind of transformation I can kind of share with you, if you allow me, I meet there.
I think that Schneider has a unique setup with a 1 global supply chain that is strongly aligned and largely regionally set up This has enabled clearly a very agile reactions, quick decisions and arbitration that have been made very close to where our customers are And it has been very important to mention that 80% of our industrial costs are located in the regions where we do the sales. And that has been providing us a very short supply chain, globally speaking, the agility level as well as a quick response and ultimately also a strong contribution to the sustainability with a much lower level of CO2 emission.
Well, thanks for sharing that. And I'll come back to you with probably a couple more follow-up questions. But maybe if I bring in Sharice at this point, Sharice was congratulations on your new appointment. You know, you've been in the company for many years, and you you've been leading some of the transformations during that period of time as well. I think for our audience, if you can just give us a little bit of a sense about the culture of Schneider Electric and the unique specificities in terms of our value proposition.
And maybe link that also to the overall topic of ESG and how that becomes a driver with regards to our our our HR setup.
Yes, sure. So thank you, Amit. So first of all, I would say, I truly believe people are at the heart of company's performance, and at Schneider, our meaningful purpose and us working the talk on several topics that is very important for us is what attracts people Trishneider and also why people choose to stay and contribute to the power formation that we have. I think we have a very strong culture of inclusion You probably have heard several times from us. We provide eco opportunities to everyone everywhere and we ensure, all employees do uniquely values and safety contribute their best.
And then if you look at how our operating model is, right, our people and the leaders spread across the world to be able to be closer to customers. And this model enables us to operate effectively being a global company, but at the same time, direct to the local market very quickly and based on trust and empowerment. So the 3 pillars of our employee value proposition, as I mentioned, meaning for intrusive and empowered, truly at the heart of what makes us a great company. And this is what I feel very strongly being many years with Schneider. And as, as Murrah, you mentioned, right, this year, of course, health and safety was the primary because for everyone being a people company, we really believe this is a fundamental for us And also, I think during the crisis, the ability to make quick and fast decisions is key And this is how we worked, I believe, very well.
Each country has different situations managed. And here, the multi local setup is very useful in countries that empowers to make quick on the ground decisions and we put a lot of emphasis collaboration and trust and to have global, local, all work together to support our employees and customers, effective space And I think also another point I want to say is, many of our employees actually selflessly contributed community projects to the tomorrow rising funds and also in several cases when beyond their regular job folks support our customer commitment. And I truly believe this is our purpose that guides our individual and collective decisions. And this reminds me, our motto, which is it's Schneider Wings and we always.
Well, thank you for sharing, Charisse. And I can certainly vouch, and I'm sure I'm talking for many of our employees that, you know, the meaningful purpose and what the company stands for is is is what keeps a lot of us, you know, engaged in the company and wanting to work here. So, Urvi, if I if I come across to you now, And of course, you know, the elements of compliance, the elements of, you know, governance are so important across the board for the company and especially in a year like this, you know, where we've seen a lot of, we've we've seen it. It's been an unusual year. So can you please talk us through what is top of your mind in general and then more specifically this year as well.
Sure. Well, Sharice mentioned 2 very interesting terms, which are trust and empowerment. On the wool point is that we don't want those two dimensions to be opposed. We think they can actually integrate pretty well. You need trust in order to empower people, right?
On trust actually is a very core tenets of a company, a very core traits on it encompasses a lot of dimensions from quality, from safety. This has been mentioned. But also indeed, I would probably highlight a cyber on ethics and compliance as being uh-uh-uh to pillars of trust that we really insist on a lot. I mean, FX and compliance, obviously, for training, for making sure that our teams feel that it's okay to speak up whenever, you know, they feel that they They have to speak up. It's about embedding uh-uh compliance mechanisms also, uh-uh, into key processes so that it doesn't happen else.
Square, but it's actually embedded in the way we work. On another big, tenant is really cyber, we think that in today's world, in today's digital world, uh-uh, cyber is a key, pillar of trust. It's you know, our own, how we protect our assets, but it's also how by protecting our assets, we protect our customer asset. Now we take a very end to end approach to, to cybersecurity. It's a very big theme for us.
And we've been investing quite a fair bit on this one in order to a really raise the bar, to protect Schneider's asset, Schneider's employees on Schneider customers.
Thank you, Urvi. Very, very, very relevant and important, topics. Maybe I come to Barbara now. I think Barbara, you know, give us the operational perspective in this discussion. We've heard supply chain HR and and and compliance and governance side.
But a lot of these elements we just spoke about, you know, trust the multi local setup. Tell us practically how that applies in your region, which of course, you know, has has seen quite, different sort of setup between Northern Europe and Southern Europe through this year. So take us through how, all of these elements of ESG plan on an operational day this?
No, very, very point. And Murad also mentioned that this year was really challenging for us. And also for us in operation, It has been a really practical test of our operating model, our values of the company, and our customer orientation. And as you just mentioned, the crisis was different from country by country basis. So we will we usually did follow-up, but are the construction sites open or schools open, can our field service engineers go and visit customers and perform work?
So, it was really diverse. And I strongly believe that our empowered county organization set up with a relative strength. So we decided to adopt as already mentioned by by Charisse, a territorial approach by country with our country presidents having full authority to make decisions for all employees in their territory, irrespective of business units or a subsidiary companies. So the country presidents were also tasked to lie to local governments, mostly to enable our essential services and operations to continue. So I'll give you the example like in Italy, one of our manufacturing sites which was providing components for data centers was not really in the right category.
So first, we were asked to stop the production, but then released, and if the government had really told them how to do this, that this is really essential, and then because we could really continue to do the production. And this is really for the benefit of our customers and the society. So it was in the country a one size fits all centralized approach. We did ensure with a strong communication link and also then apply learnings from one country to another in a very swift manner. So because there were also different stages of the lockdowns in those different countries.
But overall, we managed it also with a lot of empowerment and trust between the teams.
Alright, Barbara. I mean, I, you know, as leader of Europe, I have to ask you one very topical question that we get increasingly in recent times, which is around the green deal, the the link, you know, specifically around Europe and how that's linked effectively with you know, modernization of the building stock. It's something which is very relevant in terms of, you know, our end markets. Is that something obviously which I assume is top of your mind and what are we doing about it? Do we see opportunities in the future?
Absolutely right. It's really on the top of our minds. A few years ago, it would have been unthinkable for a whole continent like Europe to declare its climate neutrality and consequently driving new business model with restructuring of an entire economic system. So but Europe simply put it into practice by calling it green deals. And in 2019, at the UNIT Climate Conference, the COP 25, while the overall outcome of the conference was mostly discussed negatively, The European Union took a bold commitment to become the 1st carbon neutral continent by 2050, something unthinkable 5 years ago.
And as a company we set the right course decades ago by placing energy efficiency and digitalization at the center of our development, So both are the basis for the decarbonization of buildings and industrial plants. We are therefore in a position to offer technologies and business models and also to describe the necessary framework conditions for their implementation. So in concrete terms, this means we can offer our customers a compelling business case for energy efficiency, the government intervention is an incremental opportunity specifically in the building space. And therefore, in Europe, we have specific teams who are following not only on EU level, but also on county levels. It is high on our agenda and we are involved.
And of course, implementation will take time, but the direction of the trial is very clear from my point of view. So sustainability is no longer a question of ideology, but it's becoming an integral part of the economy. And it is already an integral part of social demands and political framework conditions, and this is what the green deal reflects.
Alright. So direction of travel is very clear. That's that's good to hear and, lots for lots for us to do as we go ahead. Maybe if I come back, to you and, you know, I think we've been sharing with investors about, you know, our strong recognition with Gartner and, you know, we've been improving year on year. Practically speaking, a lot of that probably is linked to the level of digitization and efficiency, which we've been able to drive in our own factories in our own plants.
Talk us through this program and how that is coming along.
Yeah, I mean, indeed, you know, part of resilience that we have been able to build over the past 3 years is really focusing on this TSC 4.0 program which is kind of tailoring our supply chain to fit with our customers, I would say, needed capabilities, the way we serve them the way we do the planning with them and providing them a superior service. The second is sustainability. We spoke a lot about it. I mean, also Babara has been mentioning, but we are also demonstrating inside our facility and also with our suppliers that sustainability is really a major driver of the way we will see the world next steps and how we see supply chain evolving in the future. And I will come back to that But the 3rd element of this TSC 4.00 is really C4 Connected.
And here on the connectivity, we have been investing massively in the last 3 years on developing our smart factories, smart distribution centers that are powered by EcoStruxure as a solution in order to provide visibility I can mention that during the COVID crisis, it enabled us to support our customers with remote FAT final acceptance test on their systems and their equipments, we have also been able to run augmented operator advisor from the EcoStruxure platform and solutions enabling us to provide, I would say, remote technical assistance to manage some equipments and some processes And all that operating also with our suppliers through platforms, digital platforms, enabling us to react extremely rapidly as collaborating with countries, providing the, I would say, suppliers, the fact that we are essential business and helping them to maintain their operations All that has enabled to demonstrate the power of digital. And I can just say that we have today 80 factories that are recognized mass factories of which 5 have been identified by the World Economic Forum as the lighthouse of the Future, 10 distribution centers using all the technologies of EcoStruxure. And we have on top of that developed a connection across a network of control towers that are providing visibility and tracking of the various events as well as all the goods, I would say inside our supply chain between the different nodes of our supply chain.
So really a big, big step there that has been made. And I would just say that it's really material that we are embarking further in our next transformation on which we add, I would say, the resilience aspect learning from the crisis that we've lived through in 2020, understanding the necessary of having redundancy in the system, the necessity to have power of 2 in term of manufacturing, but also in term of sourcing we are clearly engaging in the next steps of the transformation.
So concrete steps to reduce our own carbon print. And as we've heard earlier, you know, from Olivia in terms of, you know, the possibilities in the next 5 years incorporating our ecosystem and suppliers as well. So Absolutely.
Absolutely. I mean, and sorry, but to add to that, we are making a big step to target 1000 of our suppliers and target with them to reduce by 50% the carbon emission of these suppliers, you know, helping them through the journey of managing their energy, declaring, understanding the possibilities that are offered also through EcoStruxure And it's really an exciting journey that we are engaging on.
Charice, maybe I come back to you and you're talking about the last the last cycle of the SSI, which we're going to complete in fact at the end of this year, are there maybe a couple of, specific projects that you might want to talk about or highlight which you think are important?
Yes, sure. Sure, Amit. It's true. There are several programs. Actually, we have either introduced or are introducing to keep us ahead of the curve and progress on our sustainability, commitments Maybe just highlight a few of them.
So first of all, we have introduced our global family leave policy and 2 years ago, right, aiming to strengthen our commitment of inclusion and we believe particularly I think in the words of COVID today we define family life and work is changing every day. And so coming back to the to the point of empowerment I mentioned earlier by supporting our employees with personal time at moments when it matters the most, we truly encourage them to manage their unique life and work so that they can be at their best. This is our intention. And with this policy, we have already, made the commitments across all the countries that all the paid leave and setting global minimum standards, why of course preserving country flexibility based on set you through and market needs, give you just one example, like, clearly, right, our employees can have 1 week of fully paid leave for care, of their families that either needs, elder care or care for serious health conditions, etcetera. So this is certainly a global family leave policy is now fully implemented in all of our countries and we also made some enhancements specifically for COVID-nineteen this year and which is very well appreciated by our employees.
And the second example want to say is the implementation of our pay equity framework. And looking at the entire ecosystem from hiring, promotion and any salary review, It helps to bridge the payback pay gap for women. And now we decide in the new sustainability index to also raise the bar, to be gender agnostic, which means we were focused on closing pay equity gas for all employees including men and women and this is the commitment that we are making as a next step. And the last thing to highlight is how we approach new ways of working and looking at all that happens this year, we know there's no going back to the way we used to work. In fact, our employees told us they need more flexibility in how they work as our, in our latest global employee survey.
So as a result, we have refreshed our global flexibility test work policy and we believe the future of work is a hybrid mode. So starting next January, our employees will have the option to flex between working from office and home with 2 days a week, working from home as a global standard. And of course, if there are roles that allow them to And we assume, flexibility as a given and it's based on trust and also empowerment and to allow our employees to be at their best. And yeah, that's what we committed. And also we believe this will help to achieve a greener footprint as we commute less to contribute closer to the sustainability and vision.
And of course, we still have some challenges see very transparent. I think as our strategy evolves to more digitization, we are focused to ensure we are able to have more digital citizens and also ensuring we provide software arms of our company with distinct geosets and culture. And that's when area, we will need to continue to work on. And we also continue to work on the gender diversity with specific commitment in the new SSR as you probably already heard from Olivia. There is strong connection between our people strategy and sustain the stability strategy to make the, it happens.
Very, very interesting. Thanks for that, Sherry. So I'm just mindful of time as well. Anything discussion, but I think we I might come back to you, Urvi, in terms of for closing and see if there's any specific aspects which, you know, which remain at top of your mind that you'd like to share with us?
I think in particular, in the current environment, in that new normal or next normal that many people are are talking about, I mean, trust becomes a real keyword, right? As Minh mentioned, uh-uh, many times, I think we can look at it for many angles, but that's the why, really, what we're trying to achieve. And, I try to summarize often the approach by by, you know, GPS acronym, g for governance, p for performance, s for security. It's really how do you embed, performance mechanisms into governance mechanisms into processes to make sure that you have, the high control points that are, you know, embedded in your business processes. It's how you work on your performance management in order to make the right decisions, based on the right datasets.
And then it's how beyond performance you think about security and resiliency to make sure that you stay for the long term. So So GPS is often, you know, the free letter of the acronym I use in order to to think about how to achieve a a trust in a large organization like like ours.
Well, alright. I think I think we're out of time. So with that, I just need to thank each of you for joining this panel. It's not done yet because I know that some of you
are going to be back. They're joining us for the Q and A
that we're going to be taking from the investors, Thank you.
The pace is very fast here. It can be an overwhelming city. It's exhilarating. I love that aspect of it. My name is Don Anderson.
I'm Blackstone's chief sustainability officer as part of our operations group. Blackstone is a global company. So we're very opportunistic, and we watch different regions of the globe very carefully, and we invest it accordingly. The sectors that I tend to serve are the sectors where the companies have the largest environmental footprint, and that means the largest energy spend. I have to set priorities carefully, and Schneider Electric helps me do that.
My companies can see their spend data over time. My job is to reduce that spend, so it is the fundamental that drives my initiatives. Resource advisor tracks money associated with energy been that Schneider Electric is continuously renegotiating on behalf of the company's The relationship with Schneider across both the procurement side and the sustainability side means that I have an excellent chance of getting good performance data early in our hold period. That's absolutely critical to my relationship with the companies I'm trying to support. The amount of savings just from the procurement side of the relationship, over $60,000,000.
For me, it's fascinating to have a strictly business oriented approach to sustainability and get to the real bottom line. How much are we actually saving together?
Montgomery County located in Maryland is a community that's just on the outside of Washington, DC. We're over a million people And we have from urban to very rural type of urban. My name is Michael Yombrak, and I am the Capital Energy Project Manager. Because we've seen a lot of weather induced incidences recently that put about a quarter of a million people without power We started looking at developing microgrid systems. From the county executive on down, we are very intent on keeping pertinent and important functions that service the community up and operating in the event of a power grid outage.
Working with Schneider Electric, we identify 2 of our major facilities, public safety headquarters, and the other is our correctional facility. If a grid goes down using the EcoStruxure system, we're able to provide electrical power from the facility by both the standby generators CHP and the solar. We financed the project using energy as a service. The county pays no money up front Duke Renewable Energy came in and financed the project and Schneider Electric assisted us with the development, all the way from designed to commissioning and validating the operations of the system. Their EcoStruxure system is one of the prime reasons we selected Schneider, it's a state of the art technologies, being able to bring these disparate and generation technologies together and operating in sync.
Montgomery County will continue to grow. We wanna make sure that the community is safe and secure. We're very excited about being one of the first in the country to do a microgrid and be able to provide continual services to the communities.
Well, welcome everybody. Welcome to our second panel of the day. And in this panel, what we want to cover is really sustainability as a business enabler. What does it mean for customers today? What is it?
What are we doing today for customers in this sphere? And going into the future, what does it mean for opportunities for us as we go ahead? Joining me on this panel, it's a great panel. We've got 2 of our leaders from the operations, and we have 2 of our leaders from the business. So let me introduce them.
First of all, we have Annette Kated. Annette is leading our North America business based in the US, which is our largest market. And, thank you, Annette, for joining us today. We then have Cristal Ederman. Cristal is leading France.
France is our 3rd largest market now being now being tested by India as as as the joint third market. But we still thank you and, of course, based in France. We have Peter Hoebeck joining us based in Europe and leading industrial automation for the for the group. And we have Philippe Alarm, leader of our energy management business based in Asia. So thank you all for being here, and we're gonna spend the next next minutes with all of you to discuss this topic with the sphere of Schneider Electric.
So maybe I'll come to you first, Annette. And, you know, I think it's it's it's important to look at our largest market. Right? So US, let's look at that. And and what we see in the press all the time around the climate change topic, you know, there's hurricanes there's floods.
There's, you know, the electrical, lines are going down from time to time. And and something that we see, it's pretty real, and it's happening in front of our eyes. Can you talk us through what this means, you know, for yourself on the ground leading this big business for us over here and what it means for our customers?
Yeah. Thank you, Ahmed. I think, I mean, you make a really good point that, you know, it shouldn't be lost on anyone that 2020 has been the busiest hurricane season in record. I mean, we've already had 6 named hurricanes and the National Ocean Administration, you know, says we'll have at least 25 this year and at least 6 more that will actually have names, which they're above category 3. And we have wildfires in California now still 4000 firefighters fighting 22 wildfires.
So it's it's right, you know, what you're saying. And and let me say that 70% of Americans believe in climate change. So, you know, our customers are calling us about, their own sustainability goals, their own resiliency. I mean, we see what's happening in California with you know, intermittent power outages or taking, purposely taking power down because of, high wind situations. So we're seeing this across the country, and it's really, you know, as you said, it's at our doorstep, and it's impacting, you know, customers and and, you know, Americans, everywhere.
So our customers are asking us about resiliency. They're asking us about sustainability. And they're asking us about efficiency as they as they always have. And one of the ways that we've really been able to help them think about you know, their futures is through frankly talking to them about microgrids and distributed energy, alternatives. And, you know, fortunately, when now, many many companies are, you know, really looking at how they spend their CapEx and their OpEx and the in the face of, you know, economic uncertainty and the pandemic.
And so we actually have 2 companies that we have as joint ventures, alpha structure with the Carlisle Group and green structure with hub capital. And these two companies have become energy of the service to really help our customers, drive sustainable solutions, leveraging micro grids, leveraging Snyder solutions without really spinning their own CapEx. Alpha structure being kind of the large energy intensive, you know, over the 5 Megawatt size, companies and, customers, and then green structure being a smaller sort of 500 to, you know, kilowatt to 5, 5 Megawatt size, medium sized companies. So, you know, these two solutions have really helped us, meet customers' needs, and it doesn't matter if or military installation trying to drive resiliency or, you know, a municipality like Montgomery County, or, or, frankly, a a company like PACCAR who is trying to electrify their, peer built, fleet and, really try and put electrical infrastructure in for their fleet, and needing, you know, a more resilient grid and a grid that can actually meet their needs. So, look, there's a lot of activity in the in the micro grid space and our our customers are very interested in working together with them on finding solutions that, you know, actually future proof their businesses.
So you're saying, so microgrid is is actually a reality. We've seen projects happening on the ground. And even though we have, some of these partnerships as you just mentioned, and there's probably a lot of opportunity to look forward to those to those ones. But even in the past, we've been doing a lot of micro grids in the US under your leadership. Right?
Absolutely. We have. Yeah. Which really been, it's really been a growing business for us. And frankly, it's been an opportunity to talk to customers about their own sustainability goals.
And then it becomes not just about microgrid, but but the entire technology stack that Snyder offers to really, you know, digitize our customers, you know, energy requirements.
Maybe I come to, Filip next. You know, I think Filip has the leader of energy management it's it's a large part of of of our of our group. And and you're effectively covering, I would say, all end markets. But if I were to just hone in on 2, right, which are important for your business and topical here, one of course is buildings. And we've heard from John Pascal earlier, about the fact that, you know, what's the level of emissions coming from buildings, there's a real need, not just for efficiency, but actually for reduction of carbon as well as a consequence.
So give us your thoughts around that, and and what do you think is the real opportunity ahead of us?
So indeed, as you said, Amit, buildings are responsible today for 40% of the carbon footprint. So there is no plan for any government or anybody, sustainability plan that would not impact and involved the building and the data set of footprints. So what we see here is that it's a full life cycle discussion because there is an opportunity to do better at the CapEx phase at the design and build phase and also at the OpEx phase. And the great news is that we see solution that exists today, today not tomorrow, today in the CapEx and the OpEx phase that mostly rely on 2 big transformation. 1, moving the world to a more electric technology because electricity is the most efficient energy Second one is more digital to drive efficiency and actually combine the 2.
So if you take if you move to buildings The most of this application would be in the phase of the lifecycle of the OpEx when buildings are up and running where our experience has been that by bringing together the whole power management, digitize it and the whole building management together, and building somewhat the electrical and the digital together, you drive efficiency in the zip code and average of 30%. Not mentioning a better user experience and as a result, you also drive sustainability. So very obvious application that we see in buildings in advanced real estates, in life science and many other application in the building space. We all another point that people are talking less about is really in the CapEx phase. We've seen, say, 10 years ago, the whole beam and the 3 d modeling, deploying with company like Autodesk and now we see a fast adoption or transformation of this beam environment, what we call 4 d and 5 d, which is a costing and the scheduling so that the whole phase of construction will become massively more efficient at the time where actually post COVID people cannot always wear in the office and need to work from home and they need to digitize that whole process.
A process that is largely inefficient where a lot of these contractors are using paper and Excel. We're actually by going digital, you drive much more efficiency in the way you build, and actually, behind this, much less waste and a much more predictable deployment on project, which in the end is bottom line benefit for customers. And in that context, our recent acquisition of rib software is square in the trend of optimizing CapEx. So that's for buildings. Now there is a specific building that's that many people are talking about and actually that are spreading very fast in the world that are data centers because as we get more digital, we need more data center, quite a bit of debate in the world whether because those data center are enabler of a greener future, but they're also using a lot of energy.
So there is a big trend year to build carbon neutral data center. And the data center in the 4th place is very complicated, very complex. Building a carbon neutral data center with and it was mentioning micro grid capacity for the data center to give back energy either on cooling or electricity to the network, very complicated technology. And I'm very happy to report that we've been at the forefront of carbon negative data center, carbon neutral data center. We have an example for in Sweden with echo data center and we see actually that trends popping up very quickly.
Now the interesting question is that pre COVID all those trends were actually developing and what we are seeing is that post COVID with stimulus packages, we see an acceleration of this in every, everywhere in the world. China has been pledging for a 2060 carbon, carbon, carbon goal and we've seen more recently in Europe, the EU renovation wave, which is targeting specifically with 1,000,000,000 of euros building renovation as probably within building, building renovation, we probably the golden nuggets, to drive carbon neutrality. So a lot happening in the building space and slide electric has been positioning itself on the full life cycle with a very unique value proposition.
Yeah. If I could just add, I I think, Felipe, you know, when you think about, you know, many of our US customers and US examples, our customers really believe that, you know, these green building recognitions really help the asset value of of their buildings. Yep. And so they're very interested. And we have, you know, multiple examples.
United Therapeutics is one that we we just worked with their entire They're a life science company. We worked across their entire campus, and they are now the largest net zero building, in the United States. But again, it's really improving the value of their assets as well.
So sustainability as a in that context for real estate provider has a great return on investment. And because for all those real estate developer and most now.
Yeah. So it seems like a very very exciting landscape. So on the one hand, what you're saying is that there's an extra need from the customer's standpoint because that they, you know, but it's a good return on investment anyway, right, given the level of efficiency and and that can be driven. But at the same time, you also have, you know, you also have the stimulus, etcetera, which could be an added incentive that could come across over here. And and given our given our installed base, Philippe, because I've heard in the past, we've said, you know, we're in 1 in sort of 4 or 5 buildings in the entire world, the opportunity the ability for us to to really make a difference here could be quite immense.
Yeah.
And and you know that there is one data I like, which is 90% of the building, I mean, 90% of the existing building will still be alive by 2050. So if you believe that 40% of the carbon problems come from building, you absolutely need to go at the installed base at the current buildings to make them more sustainable. And that's where where really the opportunity is to to drive a more sustainable ship
maybe, Crystal, let let me let me jump across to you now. So, you know, we've spoken about microgrids. So Annette spoke about microgrids, Filip has spoken about you know, data centers and buildings and all of these have, you know, an angle to sustainability. Within Schneider, we also have the business, which is the sustainability services. We we we haven't really spoken that much about it in the past, but we do have a sizable sustainability services business.
Where we're doing consulting. I believe we're also doing procurement of green energy for customers. So tell us from the field, you know, you're leading France, and I'm sure you have examples or customer dealings as well where this sustainability services is is becoming more relevant and and really getting encompassed into our overall value offering?
Sure. So so, I mean, there's definitely a a growing need I would say for every large company to clearly define, I mean, ambitious but realistic targets to address climate change. And to take commitments on the on on sustainability and, and and and, obviously, this is where our sustainability, energy, and sustainability services teams, come in with, with customers. We have a a very comprehensive set of, of, services that we can, propose that comes from, I mean, supply. So I mean, procuring energy efficiently more and more procuring green energy efficiently and then demand services, I mean, how to optimize energy demand and where we come in is really with that expertise across various segments, understanding customer processes, understanding deeply, as was mentioned by, Annette and, and Philip, how buildings work, how factories work, how the grid works, So it's really that combination of our expertise at services level to set ambitious and roadmaps or really consultants combined with the expertise of the of the full Schneider working in those areas for for a long time.
And, and and clearly, when when we engage with, with customers, and I'll come to some examples, I mean, especially in Europe where where there's also some regulation, around making clear ambitious targets to become carbon neutral, for instance, and with clear deadline by 20 30 then 2050. Most companies have to build roadmaps beyond the roadmaps, then they have to build implementation plans. And so we have our consultants that either come in with customers with 1st set of surveys where we consult and and and work on building those roadmaps but then we can also help customers to implement those services. And most of those contracts with customers have to be deployed across the world. So indeed, there are a number of boutique consulting firms that can help customers build those roadmaps, but not many players can provide the, I mean, can bring the ability to deploy those programs across the world, across geographies.
And if I come to one one example of a public reference customer for ACI in the, automotive industry, who selected us as their preferred partner. They've defined, an ambitious program to become a carbon neutral on their Scope 12 by 2025. And so we are working actively with them on helping them procure green energy and low carbon fuel energy on all of their we're talking about 300 sites across the world in many geographies, and we're also working on building that very practical roadmap program, how to deploy that one country after the other, how to put in place the governance to put in place the tools and the systems to to monitor and obviously implementing digital solutions on-site in factory That's where EcoStruxure comes in to be able to report the data and and ensure that we are on track and they are on track with the commitments that, that they are making. And in those type of customer engagement and there are many customers and many of them are not public. So I'm not going to comment more, but across various segments, in the retail industry.
We have also many in the food and beverage industry. And it's always the same. We we sometimes only support them on their defining their high level roadmap sometime. We start working with them in in one geography and then the we we engage with them to help accelerate their deployment roadmaps. So there's definitely a path there.
And really every time I've been talking to customers, It's that ability to work across the globe and really the deep expertise that we have from our consultant experts who are 2 consultants working on, I mean, carbon and energy procurement combined with our field expertise.
Yeah. And and, Crystal, I mean, I'm reminded of last year when we had the, you know, when we had the Investor Day for, you know, a lot of this audience, which is probably listening in at the moment, you know, we had we had brought the investors to lower Troy, which is one of our one of several factories where we've deployed our own technologies. So, you know, we talk about, you know, making it more sustainable and we can capture it. Is is is there an element that that also enables you as as as a sales leader to be able to to show that to customers and and is that having any traction, in your job?
So absolutely, I mean, that's true with Le Vodroy and all our smart factories around the world. That's also true with our smart buildings and, and we are just inaugurating 1 in Granorpe in our, in our hometown in France, where it's really demonstrating life for our own carbon roadmap and then engaging with customers on very practical things around how to to train the teams, how to put in place the governance internally and how to engage on some of those either digital transformation or really I mean, sustainability transformation at company level. And so starting from those very physical field experience sharing our own experience as Schneider and we have taken ambitious carbon reduction roadmap, we've been tracking our own commitments for a long time that our own expertise is really something that customers value and that we use a lot when we engage with customers.
By the way, I'm happy that that building could be the next pit stop of our investors next time we do a summit, I mean, that building consumed 10x less energy than an average real an average normal real estate in France and this carbon neutral.
Yeah. And frankly even even in the in the US where we take some of our customers through a 1962 factory that's become a digital land escape and a an amazing example. It is it is one of our best ways of of selling our customers on what their future should look like. It's just really a great asset.
Let me come across to Peter now. Peter, of course, you know, you're well, you're leading industrial automation for the group. You know, you're also on the board of of Aviva. And and, of course, I think the industrial world compared to buildings has been in some ways digitized for a long time, you know, with control systems, etcetera. The I think the key question would be that how high is, sustainability really on the minds of your customers on the specifically on the shop floor?
Well, I mean, I think it's really on top of agenda of every customer where we go and it's a joint discussion on sustainability and, digital. Because digital and our digital offers are really enablers in that, in that respect because they ensure efficiency is all about, in manufacturing, but also sustainability, ensuring resilience. Now in industrial production as you as you've said, you know, we've had digital controls and software deployed for many years on the shop floor. However, I think what's exciting at the moment is the opportunity to enable with, you know, we talk about, applications or analytics or, you know, if I want to throw in some buzzwords like machine learning or AI that is really embedded in all of our software offers, that we have in in Schneider and in the Aviva stack. We're we're able to do advanced data aggregation now with the leader in the market coming in with Ozisoft Py system.
And so we have a vast amount of data plus we have the stack of the application software paired with our automation systems. And that's really the source of driving efficiency of driving productivity and, CO2 reduction, if you if you will. So we've been focusing really strategically on those two schemes, if if you will and the customer see those coming together. We have a totally, renewed automation offering that we that we are bringing to the market. And if you talk to our R and D engineers, they would talk about schemes like Eco Design and EcoFit.
You know, what does that mean? Eco Design, it means when we create our offers and, you know, we use plastics. We use, materials that haven't had the best CO2 footprint in the history, we are going, in the direction of, incorporating Circularity So using use plastics, for example, in, in our equipment. So if I if I take, for example, our latest a system of, of control components, the, in the past, we would, basically use energy and we would use plastics today. We're using much less energy.
We're using use plastics and we can help our customers to detect where they are using too much energy and drive the energy utilization down by using automation equipment. And now we're putting on top of the software that we have to, to drive that forward. So that's, really fabulous in the discussion. Now if I if I put an example to it where that comes together, so, the the automation side plus the software side plus the energy side because, you know, Schneider is at home traditionally in in end markets that are very energy intense. Our customers know that energy back to costs and creating, more, profitability and they want to drive sustainability forward.
Now we can simulate their facilities. We can downsize the usage of electricity And, because we simulate the process and, with that, we drive CO2 abatement our customers. So if you go into processing plan medium to large size, we can take thousands literally thousands of cars basically of the street in comparable CO2 generation when we do this combination of software energy management in automation with our customers.
Yeah. That's that's that's very interesting, Peter. And and and the last thing that you said, I think that, that that's important as well because it's not just the software, industrial software, and the industrial offerings, but it's really the ability to combine, the energy management offers as well. Right? So specifically to the industrial and infrastructure end market, so to speak.
It's good. Maybe if I move across back to Philippe Power come back to you. One of the questions, you know, we get sometimes, and and it's true that if you look at our equipment, our equipment has a long shelf life, you know, big installed base, our equipments, it's it's it's everywhere. Now if we want to include within that, you know, the carbon, reduction or the new innovations to be able to to to retrofit or to change things within, you know, within the big installed base, how are we thinking about that? How can we really make an impact on the ground given sort of the shelf life of our products?
So I guess probably the best example is the innovation we are actually launching today in our medium voltage line of businesses around SF 6three switchgear. So for the 1, I'm not going to go into all the detail of our our electrical distribution, but we've been using for, more than not a 100 year, but many, many years a gas named SF 6, which is not very carbon friendly. Let's call it like this. And actually we invented in medium voltage away to get rid of that gas and do the whole switching in our switch gear with air. And that's a revolution.
So that means that we're able to come back to our installed base and remove those circuit breakers and those switch gear and replace them by switch gear that are totally green that are using air and that are totally carbon friendly. When we do that, and I was talking about electric and digital, we always make sure that those retrofit kit are also digital so that we can bring a dimension of remote monitoring that drive efficiency that drive sustainability. Peter was mentioning about it. And that makes a whole difference because suddenly you totally retrofit your Ethoca installation from let's say technology that were rubbed and solid, but maybe not totally future ready to future ready in a sense of sustainability, but also digital, driving efficiency and driving cost reduction and better resiliency. So to me, that's probably the best example of a set of technology that helps our customer with the same and the same size to totally retrofit the installation and be future ready and sustainable.
Anat, let me
come back to you and, and and by the way, we we we just got the information that you are now the new chair of of of of Neema. So congratulations, first of all, for that. And maybe link to that, you know, tell us as to you know, a little bit on the policy framework or, you know, what what what is it that we, a Schneider, but really as a part of of the overall Lamar are trying to do or able to do going I'm
great. Yeah. It's great to be the the chair of NEMA, and it's so important to our industry because, you know, NEMA really focuses on not only, you know, safety of electricians and residents and buildings and factories, but also on, you know, the future of of this industry and creating a holistic energy system that is, you know, connected and cyber secure and renewable and intelligent And, you know, we take these things and then embed them in the national electrical code. And then that national electrical code becomes the standard for the, you know, the NEMA environments, which, you know, covers, you know, nearly all of all of North America in some way. And I think that, you know, there's really good examples of where this has worked really well.
We could take the the circuit arc fault interrupt breaker, for example, where we embedded that capability, that safety system, at the at the panel, versus the point of use in homes that make homes safer. It became part of the National Electrical Code. And therefore, you know, we were able to meet the needs of the customers that are then implementing the code. So It's great to work with NEMA on policy. I also chair the codes and standards committee, which actually creates a lot of these codes and standards that we that we then, embed in our in our electrical systems across the country.
Well, you know, fascinating discussion, I we'd we do need to stick to the schedule. So I I will probably you know, come back to each of you for, you know, for for for one final thought or question. And and maybe if if if I can frame it this way, you know, I think each of you have been in the company now for, for for several years, at least And, if you go back maybe 3 to 5 years, are there specific angles? What customers are saying today, which they weren't saying 3 or 5 years ago, which was not really on the top of their mind. Right?
So maybe, Crystal, I come back to you because, know, I haven't come back to you for a little while, but let me come back to you and if you can take that question first.
Sure. Sure. So, I mean, definitely something that I mean, I was talking about the CO2 neutrality road maps, but clearly today, I mean, customers are asking us what's the CO2 footprint of some of our equipments, and they are really looking at building, I mean, and and owning low CO2 infrastructure and building the N2 and CO2 quantification something that really we were not talking about 3, 4 years ago, and that's happening across industries, across segments.
And that's a final question.
Yeah. It's a it's a
it's a great question. And and honestly, it it's an easy answer for me because, you know, we're so active now in, in the data center market. We have a lot of our data center customers asking us you know, how do we make our data centers net 0 and how do we meet, you know, our UN SDG commitments? And so, you know, just a a lot more customers and and actually Crystal talked about it earlier. A lot more customers asking us, how to help them meet their sustainability objectives and really relying on us as the experts as they create their sustainability roadmaps.
Great.
Peter, maybe to you?
Yeah. You see I have to disappoint you. I only joined 4 years ago, but what I can say is exciting to join a company where sustainability is not a lip service. And when I talk to the to the colleagues in in R And D And Engineering, they are really excited by driving down, the, you know, material usage, as I said earlier, and our customers in that regard. So it's fabulous.
Right. And Felipe, you've been, once again, I think you've been here the longest maybe you can you can give us, the entire journey, not just 3 to 5 years ago, but as you see,
my colleagues are spot on. So it's difficult to add to them. But I would say if we come back to the beginning space, and that's actually most recent with COVID, but we've seen a massive digital acceleration and which of course goes in the direction of efficiency, resiliency and sustainability, but somewhat in every I think the Chinese say in every crisis, there's an opportunity and in my view, in the context of COVID, for our business beyond sustainability, the massive adoption of digital is opening, territories which are immense at the time where traditionally Schneider is absolutely ready to fulfill and deliver promise for customers. So super exciting in that regard.
Well, with that, I think we'll probably to we have to close the panel. I wanna thank each one of you, you know, joining from different parts of the world, different times of the day for for for each of you. But I think in totality, I think it's quite clear that, we have, transformation in front of us. We have opportunities in front of us, and I think, you know, we at least all know what needs to be done to be able to capture them. So thank you very much.
Bye bye.
The Nordic Countries are perfect for locating data center. The electrical grid is very reliable and the energy is generated by 100% hydroelectric and wind power. My name is Mike Swanfeld, and I'm the chief technological officer of echo data center. We are a provider of colocation and HPCs services, and we have a high focus on sustainability and security. Equity Center will achieve climate positivity by reusing our waste heat in a low grade system, meaning that we don't introduce heat pumps to increase the temperature.
We will reuse the heat to feed a pallet factory producing biofuel. And by this, we will compensate for electricity that we use in our data center. We're having our equipment connected to EcoStruxure MD switchgear, UPSS, crawl units, empty set breakers, galaxy VX for UPSs. We bring all of that into the EcoStruxure platform where we're also using ITAdvisor to plan our capacity for the customer. When we are building data centers, we realize that we are part of the community.
We are connect to the local grid. We're connected to the local district heating network. We want to make sure that we give something back to the community as well. With the products coming from Schneider Electric, we expect to achieve a PoE of 1.15 And combining that with using hydroelectric power, we'll make sure that we are one of the most sustainable data centers in the Nordics and hopefully in the world.
I'm happy to welcome Fred Kindle. As you know, Fred is from 2020. Our Vice Chairman of the Board of Director on the independent lead director. I would like to spend a few minutes to have a fresh view on the board's perspective on ESG. Fred, as we know, you know very well this industry.
Both of us have been in this industry for a long time, and we are obviously delighted to benefit from your contribution on other side as we design our path towards our future. Fred, why why is sustainability important for the board? And how do you see very specific on what you see specific in Schneider Electric approach to sustainability.
Well, thank you, Jean Pascal. Happy to answer a few of your questions. Say, sustainability is really off the essence. It's about what we want to achieve and how we want to achieve it. And, in my own words, you know, if you think back 30 years ago, when you talked about the goals of a company, it was mostly about shareholder value creation and maybe having good working relationships with their employees and the unions.
And today, it's very different. What we want to achieve sustainability is a multi factor exercise. So it's not just about value creation for the shareholders. It's really doing good, doing good things, achieving good value, for everybody who is involved. And that, of course, includes the environment as such and societal progress, taking care of our people, but also for people of our partners and so forth.
So what we want to achieve sustainability as mal multi dimensions. There's many different dimensions that we need to achieve. And how we want to achieve it is also different. Today, we have to make sure that we do it in the stainable way, which means that, it has a a long term perspective. We need to manage the business in such such a way that it's not just about short term value maximization, shareholder value, but do it in a way which takes care of our people takes care of the environment, and that's making sure that it's a lasting success and not just a short term success.
More specifically to Schneider, I can honestly say that I was truly impressed when I joined the board because ESG Sustainability has been at the core of Schneider's business for many years already. It's an entrenched, dimension within the Schneider business, the Schneider Value added chain. It is visible everywhere. It visibly in how we do the business. It's visible in our targets.
It's visible in our incentive programs where ESG is actually in the short term and long term incentive plans. We have a board committee that deals with a corporate social possibility and HR. We have, newly established top level function called sustainability. So it is really not just a bolt on new dimensions, but it has been a part and integral part of the Schneider ecosystem for many years. So this, I think, knowing competitors, this is far advanced and I think the people at Schneider can really feel proud about that.
Alright. Thank you, Fred. In ESG, there is governance What what about your role? You you what has been your experience since you joined the board in 2016? How do you see your role on your contribution as a new vice chairman as a lead independent director of the company?
Do you have some insights also to share on the way we work at the board?
Yes. As you rightly ESG, the g stands for governance, and I think it's tightly related to sustainability. Governance, basically, in in simple words, is about helping the company to make the right decisions. And usually making the right decisions means involving people who are competent and having have have something to say in the right fashion. And, obviously, that starts in the board.
So when you talk about governance in the board, it's making sure that everybody in the board, every director, can raise their voice, can bring in their opinions. And at the end of the day, the right decision is made, and the right decision is not necessarily with that function, the chairman C, you know, who has the most weight, but it's making sure that all the voices are heard. And at the end, the best possible option is chosen. And so I think, I'm very glad that the situation in the Schneider Board is an excellent one. Actually, we've had chance to review that with an external advisor, this just took place in the last 3 months.
And this advisor has given us very high ratings because they feel this is a leading edge board. It's a board that is very competent, has 14 different directors, 6 of which are female, 8 different nationalities. Many of these board directors have had significant and leadership positions, always have deep functional expertise. So these people have a lot of competence, a lot of know how And our job in the board when you talk about governance is making sure that these voices are heard, and that's perfectly the case. Now speaking about my function as vice chairman, lead independent director, is basically making sure that these processes work well.
And that we really work according to the principle of good corporate governance and sustainability, which means that I have executive sessions, for instance, in the board where the chairman CEO is not present because he has very much weight anyway. So sometimes it's necessary that we have discussions amongst ourselves. I have, very intense dialogue with you, with the chairman and CEO, on at least a weekly basis, if not more, I have my private calls and discuss with individual board members. And in a way, you could say it's almost like not creating a democracy. Corporations don't work like democracies.
But it's going in that direction, making sure that everybody's hurt and everybody has their own weight to bring in. And so that's how we work with the Schneider board. And, hopefully, we can help to make a real sustainable success in the long term.
Freda, I can, I can really witness or testimony that we had many, many occasions to interact during this very specific period, having to manage a COVID on a certain number of strategic moves that happened during, you know, this year 2020? We are living indeed in a very special time, multiple transitions in our industry and managing in completely different with the COVID. In your mind, what are the key opportunities for Schneider? And what are the specific areas where are we most closely focused as we look to the future?
Well, I mean, since we talk about sustainability, that is definitely one key opportunity because it's not just a buzzword. It's not fat. Just fashionable to talk about sustainability. It's really of the essence. I truly think the world is changing dramatically because we see that humankind has had a lasting, unfortunately negative impact on the environment.
So sustainability will become not just the buzzwords, but it will be everywhere, visible, tangible, and companies have to live up to that. It's, a requirement to have run a business in a sustainable way, but it's also an opportunity. We can make it a business ourselves and actually have started doing that already in the past. So I think it's a great opportunity. We are experts in energy management, actually enlarge this topic of energy management into, let's call it sustainability management or something like that.
And I think that's a great opportunity for us where we can actually build up a new business with our additional business and expansion of our existing business that will do quite well. And this, of course, includes also the area of energy transition, you know, moving from from, oil and gas to renewable energy and all of that. That's an integral part of that. Then we have another very dominating theme, which is digital. As we all know, we talk about the 4th, maybe the 5th well revolution where the internet becomes pervasive.
It is everywhere. It will be in all technical they will all be able to communicate with each other, and we are in the midst of that. And that, again, is a tremendous business opportunity. The challenge as well, but I think we if you do well, we can make it a huge business success for ourselves. And last but not least, the world is growing.
The number of people is increasing by the day in in huge numbers. New economies are appearing. Mean, we have seen the, the rise of China again in the last 30 years. It has been spectacular to say the least. And many more economies are on the verge of of becoming very modern societies who require product system software that we are able to furnish that's another great opportunity.
I would say these 3 sustainability digital new economies are probably the biggest opportunities. When we talk about challenges, digital, as I mentioned, is both an opportunity and a challenge. It's it's a new type of technology that we need to be able to integrate to master. Their sustainability also has two sites, and I should mention that as a challenge as well. But in the actual situation, what comes to mind first, of course, is COVID 19.
We have a very, very special situation that unfortunately start in the beginning of this year. It has, led to very severe changes in our macro environment to economies that have suffered GDP actually going down those sorts of dramatic measures like lockdowns and travel restrictions. It has forced us to go online in our management style in a very expansive way. And then all while we can do that very well, it's at the same time a huge challenge because it's a new situation. We all have to cope with that.
It's not easy. It's both of some at times, but there's no escape. So we have to take care of that and the utmost, the most important goal in all of this is to protect our people and make sure that we are not affected in any way in a damaging way with regard to our health and safety of our own people. And of course, the people from our partners as well.
Yes. Else of our people is the absolute priority. Hey, if we zoom back on ESG and if I I come back to your role as a newly director of the board. What what do you see as your key focus areas unresponsibility from this ESG angle?
The key responsibility as a board director is making sure that we pursue the right goals, which I mentioned before, that that that these goals are not just about shareholder value creation, Let's make let's make sure. I mean, we need to share all the value. We need to make a profit in order to do goods. Let's put it this way. But as I said, you know, the the goal system is multi factors.
It's not just about shareholder value creation. That's one thing. The second thing then is making sure that we really pursue this in the right way. This starts in the board as well, that we have the top of ESG integrated everywhere. I mentioned we have a committee, but on top of the committee, basically, the ESG topic comes up everywhere.
It's about risk management. It's about making sure that we have the right incentives systems and it's about having the right port culture where we can discuss everything and nothing is to build. So I think Those are maybe the most important point points that come to mind when you talk about ESG in the board.
Fred, thank you very much for sharing your thoughts. And I really look forward to collaborating together on working closely together, to make sure we keep helping the people of Schneider to get the most of their energy and resources.
I'm happy to help, and I will try to do my best together with my colleagues in the board. Thank you very much.
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Hi, all. I'm happy to be here with you today and to speak about the financial aspects of ESG. In particular, why we believe ESG at Schneider is simply good business. First, I'll start with mentioning that when I decided to join Schneider almost 4 years ago, one of the key reasons was its vision and its business position, Both aligned with what I believe are key aspects of most scenarios of the future, namely a business tied to delivering efficiency, resilience, and sustainability to its customers and on the key trends of electrification industry 4.0 and digitization. And with this coronavirus crisis, these themes are only reinforced.
At Schneider, we are, of course, very focused on delivering value to our shareholders over the short, medium, and long term. Total shareholder return is a part of our incentive plan. As CFO, I believe that optimizing value for the longer term through good business practices, so acting with ESG values is the right route to build lasting shareholder value. For example, as a company focused on innovation, Whether in our R and D, our business models, or in how we interact with customers, it's imperative we attract and retain motivated employees. We believe our employees are motivated by our sense of purpose and drive innovation productivity, and shareholder returns for our company.
Another example is our adoption of EcoStructure Technologies into our own factories to drive driving the 1000000000 productivity commitment we've made between now 2022. These are just some examples of why we believe that profitable growth and long term shareholder value doesn't come at the cost of other stakeholders. On the contrary, we believe that having a meaningful purpose and focus on all stakeholders is imperative to drive long term value. Of course, we remain very committed to our shorter term targets and our path to around 17% adjusted EBITDA margin by 2022. At the same time, we wanna make sure we're also preparing the group for the long term.
It's for this reason we continue to invest in R And D, largely centered on green technologies and digital capabilities to drive efficiency and sustainability for customers. We believe that our focus on more connected and green products, more digital offerings, and our sustainability services will enable superior growth in future years. These are important drivers of our ambition of plus 3 to 6 percent organic revenue growth across the cycle. At an operational level, we assure that we allocate specific time in each of our internal business reviews towards elements of ESG, specifically focusing on quality and safety, customer satisfaction, employee engagement, diversification, and ethics within the company, as well as with our suppliers and larger ecosystem. ESG factors are also capital allocation and acquisitions, again, for good business and long term value creation.
Obviously, ESG factors are top of mind for management at Schneider today, and that's reflected by the new SSI commitments that we've announced. I'm glad that these topics are high on the minds of our investor community. We already have a large number of ESG investors, and we look forward to sharing our progress on a transparent basis with you going forward. I'll finish by reminding that the coronavirus crisis is only accelerated for our customers the key themes on which Schneider does business, particularly sustainability and digitalization. Resilience is also a key theme being accelerated by the crisis, and Schneider's consistent and relevant strategy along with our empowered and multi local setup has led to resilience being a key theme to our strong 2020 performance, Our views on ESG and how we do business as a company has played and will continue to play a large part in our performance going forward.
At Schneider Electric, we want everyone on the planet to have safe clean, and sustainable energy. We believe that access to energy is a fundamental human right as is education. That's why more than 10 years ago, we launched an international program to support professional training and energy related fields. The initiative means access to qualified employment or entrepreneurship for people from underprivileged backgrounds and a better future for the trainees and their communities. Our ambition is to provide professional training to one million people by 2025.
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We follow her from the beginning of her training in Lagos Nigeria to her diploma. She is the one who tells us all about her class mix around the world. Pierre and Senegal has been trained to be a teacher and is now fighting to improve future of young people in his country. For Viator in Brazil, Schneider's training has been a genuine lifeline, helping him build a career in electricity Lastly, in India, we meet Gurdeep, an ambitious young entrepreneur who installed solar panels and employees, young people who like him benefited from Schneider Electric Training. We are proud to share these inspiring life stories with as many people as possible.
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Well, welcome now to the q and a session, and thank you for, sending us a lot of questions. I've been collating them over the last two and a half hours as as the program has been going on. So you will notice that on the screen, we have several people you recognize from the last 2 a half hours, but we've also invited some of our other leaders who are actually instrumental in in actually working these programs in the new SSI as well. So what I'm gonna try to do is, I'm just clubbing together a whole bunch of the questions that have come through and are continuing to come through as we speak. We'll attempt to answer all of them, or as many as we can over the next, you know, 30 to 40 minutes.
And and we will be sure to get back to the ones that we might not be able to get to after. So with that, I'm just gonna get started and, I'll just go and just and then the order that we've sort of received them. So maybe the first question, Olivia, to you, it's centered around green revenues. So the is that, you know, we're already at 70% green revenues with an ambition to go to 80% as you just, announced a couple of hours ago. And the question is that how do you calculate green revenues today?
Is there a link with the EU taxonomy and and really what's what are the drivers to get us to the ambition to '80?
So we start with that as
You'll make.
Alright. I I I don't think we, at least I don't hear Olivia, Olivia.
Yes.
That's better. Go ahead.
So as I was saying, in 2019, we have declared in our annual report that we have 70% of our revenues, which are green. You know, we follow, what is the so called you, you, you, you, taxonomy, but which is still, as you know, a draft. So drive that cover all the activity which are being environmentally sustainable. We are taking conservative approach to give a very concrete answer. What are the activities which are covered at Shutter?
I think we take all the activity which are energy and resource efficiency. We take electrification and decarbonization activity. We add on top of that what we call our green premium products. And also everything which is related to services and and with profit. Once we have created these days, we deduct as per the guidance of the draft AU EU taxonomy, the revenues which are, in oil and gas and coal power, which represents a high single digit.
And the total of that makes 70% of our revenue in 2019. And as you you all are today, our objective is to get to 80% by the end of 2025.
Alright. I'm gonna move, move ahead. Maybe, I come to you next, Hillary. There are, a few questions on finance, which I'll I'll try to read them all together. The first question is how much of your growth in the last 3 years can be attributed to EcoStruxure and and let me just get the supplementary question in as well, which is what is the level of either R and D expense or CapEx that we plan to spend in order to reach our ESG targets, our our new sustainability targets.
So maybe you can take those, those two questions.
Sure. Thanks, Sameet. And just double checking. You can hear me.
Yes.
Yes, sir. Okay. Okay. But addressing the first question, maybe just to make a few points, First, Schneider's been investing in digital through its EcoStruxor platform starting early in 2008 and then continuing with the acquisition of Inventis, and more recently with Aviva and OSI soft. And I think as we've spoken throughout the the day to day digital, for us, and for me, certainly is one of ease to sustainability.
Those investments play a big part in our digital flywheel. I think we've talked about it a few times from connected product edge control software and into services, where we have around 50% of our revenues today. If we think back to 2008, that ratio of revenues derived from digital was significantly lower. And now with the current crisis, both digital and sustainability are more than ever at the top of our customer's agenda, so we're really quite well placed to address those needs with our current portfolio. So, while I don't give a specific number, yes, ecostructure and our past investments have definitely been an enabler of our growth in recent years.
On the second question, R And D And CapEx, digital remains a key area for our investment in coming years, either for our customers or, and I think we gave a few examples of what we're doing with ourselves. With, with EcoStruxure, so an investment for our cell. As I said earlier today, the deployment of EcoStruxure in our plant for example, is compatible within part of our journey towards, more than 1,000,000,000 in productivity between 2020 2022. So a good example of where it's not really a cost for us, but really a driver of an outcome that we're looking to, to have. R and D, I think we already covered it a bit already also, continuously focused on green and digital sustainability now as a key metric in our R and D teams, things like eco design, so really no different than any other aspect of the business picked like by far that we're, we're having them focus on.
So overall, I would say you wouldn't expect a noticeable increase in our cost and BPSG targets. In fact, we think sustainability is more of a catalyst for growth.
Right. Thank you, Hillary. John Pascal, there are a few questions coming for you. You know, let let me probably take 2 or 3 of them different topics. But the first one is, is interesting.
It's it's probably not directly linked to ESG, but it's it's around the completeness of the portfolio. And the question reads that, you know, there's been some activity this year on acquisitions and specifically also this morning with a couple of bolt on acquisition. So the question reads, you know, do you what do you think in terms of the completeness of your portfolio?
As I had the occasion to explain several times, from 2013 on, we have a portfolio which is complete, but then we want to keep building our capabilities, especially in digital. So this year has been really special because, while we have finished, of course, the acquisition of NND, which took us have to agree sometime. Then, IB was an acquisition that we, we, launched at the beginning of the year on concretive middle of the year. On OSI, came because the owner, launched the sales process regarding the 2 business, acquisition or partnership that we announced this morning, Can you hear me,
Yes. Go ahead.
Yeah. They correspond to a strategy that we have in energy management, electric or gas, is reinforces the global position we have in this sale on on to, plan on the partnerships that we are reinforcing by taking a share of planning is allowing us to build a full life cycle for a building operation. So those are logical. They were we had announced that we would be finalizing some bolt ons but consider that our offer is complete now when We selectively on surgically complete our portfolio with the modules that make sense and that create a lot of synergies with accretive businesses.
All right. Maybe I'll come back to a couple more questions, which are more ESG focused. So the first one, and I think that was asked by 2 or 3 people with regards to the SF 6 free. And the question is that how is it being accepted by customers, and will we need, policy initiatives to be able to actually scale the deployment of the SF 6 pre medium voltage offer?
Well, we we we're just launching a asset. Which is a true revolution on the market. Of course, for every customer wants to reuse carbon footprint to major innovations or, companies are testing it around around the world. We forecast that some, regulation in countries will gradually change on accelerate, the movement. But this, as as often a lot, but a large number of those, uh-uh, products are going either to utilities or to very critical processes.
So we our our customers on users are taking the necessary time to test, those new technologies before launching and adoption at scale. This is a a major a major change in this industry. We're extremely proud of this innovation, and we think it's really the future of many voltage.
Right. And and on the same vein, I
think there's one more question which says, are there any other products in the pipeline, which we should be looking forward to similar to SF Six Free, which could have a significant step change impact. In the future.
Look. I mean, we're gonna speak about the new innovation when they become available and on the market, but the whole of the company is directed to more efficiency and more sustainability as we say. Now when you look at innovation in the field of digitization, when you look at what we are doing with, EcoStruxure Automation Experts, which is the 1st universal automation range disconnecting all the way on software and creating a streamlined interface with the world of IT. I believe it's a major disruption. In, in digitization.
So those are part of the step change innovation that that we are putting on the market this year.
All right. Thank you. I'll probably come back to you in a bit. There are multiple other questions. There's a question which is linked to Olivia, what you had said around, you know, Walmart and the link, then to our own commitment that we taken.
So probably a good opportunity to introduce, Steve will I, Steve, if you can hear us. And Steve is the senior vice president for energy and sustainable services. So it was on the front line on the Walmart project. So the question is really that, the question is simple, can you share exactly what you are doing or what Schneider is doing on this specific project?
Sure. I'd be happy to. Thanks, Amit. The, as many of you may or may not know, project gigaton is Walmart initiative to engage its suppliers in climate action, along with NGOs and other stakeholders. But the goal is to remove 1,000,000,000 metric tons or 1 gigaton from their global value chain by 2030.
And so one of the key things for us and we are very happy to secure the contract and partnership with them is they've asked us to come in and really run the program of their gigaton PPA. Now PPA is a power purchase agreement for renewable energy where we match up and straight and advise on the transaction between renewable energy developers and large credit worthy buyers. In this case, Walmart said Hey. Look. Instead of just taking this to the largest buyers out there and Schneider, you orchestrating those transactions, Let's bring that capability to the many, many dozens, if not hundreds of suppliers that sit in their global value chain.
And be able to provide that type of service where they can participate in a very large PPA that may be a 10 to 20 year type of commitment that creates additional renewable resources on the grid. So we have had a lot of fun engaging with clients really around the world on this. This particular project is in North America. But as we see the sustainability space evolve and take shape, There are all kinds of creative ways that we've been able to get in and consult with clients on how they set their targets the strategies they can employ to get and achieve those targets and then provide the technologies, the arms and legs, and, if you will, to help implement those those strategies. And then finally, the tech technology platform and infrastructure resource advisor to report, provide analytics, on how they're progressing on that journey.
So this is one piece of it for Walmart, and we were very excited to participate in that.
Thank you, Steve. That's good to hear. And I I wanna probably link that to another question, and then I'm I'm I'm I'm building that link myself, but the question was around the fact that the biggest impact that we can drive is really through our scope 3 or through our supplier network. So I wanna bring in Dan Bartel, who's, SVP, you know, in the global supply chain organization responsible for global procurement. And and and then maybe you can you can take that question and I guess link it with, what Olivia was talking about, about same Walmart example, but potentially for our own suppliers.
But the specific question I have from the investors is, you know, how do you engage with your suppliers and how do you measure, the the progress that they're making?
Yeah. It's a great, great question. And and definitely, there's a clear link there with, with Steve and his organization. I agree. Suppliers definitely represent a very good opportunity for improving in many aspects of sustainability, especially on the topic of carbon reduction.
So we are absolutely leveraging, you know, the expertise of Steve's organization, helps identify, you know, which the buyers are the biggest emitters of of CO2. And, how do we build a program that enables us to do a few things, right? First of all, to get a commitment from those suppliers to support our target of of net zero carbon in the upstream supply chain by by 2050. Number 2, and how do we collaborate with those suppliers to engage them in real concrete actions, you know, set us on a trajectory in the next 5 years towards reaching that target. And finally, you know, leveraging the Schneider portfolio, wherever practical to do so to enable that process, right?
So for example, you know, the potential for suppliers to use resource advisor to to measure output and and animate their their CO2 reduction programs is something absolutely, on on the table. So we're addressing a thousand suppliers, in going after CO2 reduction. And keep in mind, this is separate from the duty of vigilance program, which is addressing environmental and social responsibility topics with 4000 suppliers. And on that one, in the next phase of the SSI, we're doubling the number of on-site vigilance audits from 100 per year to 200 per year for each of the next 5 years, for the high risk suppliers. And then for the the medium risk suppliers, about 3000 of them, we're gonna institute a a a desktop audit process so that we still are are getting after, uncovering the issue with a broader base of suppliers.
Maybe the risks aren't quite as high, but they still pose some level of risk and therefore require action. To bring it back, yes, suppliers are definitely a big contributor towards, you know, carbon emissions. Therefore, we're upping our game, increasing the focus on sustainability with our suppliers leveraging ESS and in drinking our own champagne, if you will, to to enable our suppliers, to support Schneider's carbon reduction targets.
Right. Thanks, Dan. So it's a, you know, we we have a responsibility to, to to to do that through our ecosystem, and we also have the technologies to be able to help them, to help them get there. So thanks for that. I have another question, which is on the board, and it's on the topic of, overboarding the on on the board.
So Urvi, I might bring you in as as as you guys know that, in the panel, Urvi is our chief governance officer. And and also the secretary general. So are there any thoughts or comments around how do we ensure enough participation on the board and the lack of overboarding?
Sure. So, 2 things. In terms of participation, attendance rate actually were 93%. Last year and we're on the way to improve it to 97 per for 2020. And that's actually with 12 minutes.
So almost one meeting amount. So it shows that you know, there's a very high degree of of attendance and engagement. This was mentioned also, briefly by Fred Kindle earlier, there was an assessment that was the form of a goal by your third party, which actually showed that with that said as being a very highly, engaged on committed committed role. And and, of course, of about also as its internal, regulation whereby, you know, before, a new Monday, it just by direct calls with the government on the. So so I guess overall, you know, 97 percent, attendance rate for 2020.
We have a very large number of
Alright. Thank you, Herve. I I might come back to you, Jean Pascal. It's it's an interesting question. Uh-uh.
I'll address it to you. So it's it's regarding our multi local setup. I I think, you know, This is an interesting question, and and and the audience member is asking that is there actually any downside for having a multi local setup, in terms of your speed of decision making or the inefficiency in potential collaboration because everyone is in different parts of the world.
There is a consequence to that, is that it's late here in Hong Kong as we speak now, like, the background I would say that the fact that we have been operating in the entire for now, almost 10 years made that from, the 1st year of the pandemic, We knew how to be digital and to manage your company from remote points on as a web of leaders close to some markets and close to, the biggest, groups of talents of our company. When you think about it, by the way, working from home is like working from multi hub. Now all the companies Amit I have suddenly except that we are 10 years of practice with us. When you think also about it, is that why mobility is restricted within regions. In most of region, it's impossible to, travel within the regions.
And we have members of the executive committee in almost all of the regions. So we can really by delegating to which our homework and make sure that there is a close of presence of our leaders very close to every region. Finally, what strikes me is that the COVID has recreated more boners, more separation between regions, on the fact that we have people immersed in those different regions that make make that at every time when we make a decision, we have people who understand the local situation. I can tell you the the situation where I live is very, very different from what we face in Europe or what we face in North America. And when we make decisions, correct the decision for the overall.
It's really important to have this, this direct feeling of of the field. So I see Frank here as an advantage. I mean, as we said before, the COVID has accelerated digitization on we were re ready in our way of working. On on when you speak about business, it's also a capitalizer for usage of of the tools that we have developed. I believe that's really people who work from home can still, design or co design on the 3 d model manufacturing site and infrastructure or complex building.
Sensing for the usage of ID where groups of people who are scattered can still keep working on the same project. So both from a business point of view as well as the way we manage your company, I think been good to serve before everybody else. Alright.
I I I've got two questions, which have come in, pretty much on the same topic. I think they're more clarification or for class So I'm gonna come to you, Xavier. So Xavier Hood is our senior vice president for environmental sort of topics. And the question that I'm combining from 2 of the analysts is around the commitment that we've taken now for 800,000,000 metric tons And and I think, they're trying to understand that for the last 3 years, our commitment was a 120,000,000 metric tons. And John Pascal said that that was calculated on the basis 20% of our business.
So I think the question being asked is that how do you reconcile between, saved and avoided And in order to get to that 800, what is the proportion that we will be covering as we go forward? So, Xavier, you might want to clarify on this topic.
Sure, Ahmed. It's a great question. I hope you
can hear me well. Yes.
Perfect. Yeah, in few words, we committed to, let's emerge a carbon positive ecosystem with customers and partners by 2025. So as much as we, we've been calculating how many tons of CO2 we were emitting ourselves. Scope 1, 2 or 3, we started to calculate what people call scope for, the savings of CO2, which our technologies help our customers enjoyed. And in the last three years indeed, we committed to save 120,000,000 tons of CO2 and a saving exactly as in the financial system is less than before.
But that means in retrofit projects when we help a building being retrofitted or modernized or a factory or a DC, We calculated how much the new assets with Schnado EcoStruxure were emitting less than before. So that was the saving of CO2, which we calculated so far. So now we're gonna do 2 different things in the next 5 years. First thing is we're gonna cover 100% of the turnover. While Jean Pascal was mentioning earlier, we covered 20%.
So that's going to be the entire coverage. And we're going to also report externally the avoidance of CO2 which is for greenfield, project, when a new building comes up, when a new data center comes up, we'll calculate how many tons of CO2 our technologies are gonna be less emissive than the prevailing practice that they average in that country, in that situation. So that's how we're gonna get from 120,000,000 to 800,000,000 tons of coverage and both scope for saving and avoided greenfield and brownfield.
Thank you, Xavier. So it's a it's a it's a stretch target, but, an ambitious one and that that's what we have embarked upon. So thanks for that. If I bring in now, because I have 2 questions, 3 questions, in fact, let me try to put them into 2. Linked to the culture and talent and diversity.
So I'm going to, ask or introduce Tina Malone, who's the senior vice president for talent and diversity, based in the US. Tina, if you can hear me, the question is, is about the overall diversity and and and you know, it's congratulating us for for what we have in the top management. The question is what percentage of females would you say are in middle management today. So that's the specific question. And maybe if I just ask a set for a second question and you can answer that together, is how do you measure the progress of diversity and inclusion, in the company?
So Tina, maybe you could take these two questions, please.
Sure Amit. I hope you can hear me well.
Yes, very well. Thank
you. For sure. Thank you. At Schneider, thank you for that question. We're definitely very proud and committed diversity, equity and inclusion, and believe our efforts pay off in terms of our ability to attract weight talent, of course, especially local talent in our markets, to innovate and, of course, also to contribute to society at large.
The question around gender diversity, if I may, I'll start with our executive committee, just remind the audience today, we are yearly at 38%. And amongst the women, when it comes to gender diversity and amongst 38% women. We have 3 women leaders who are leading our 3 key businesses in North America, Europe, and France. And the question around middle management is a very germane one where we want to accelerate is indeed further down the pipeline, especially in that frontline, middle management critical area. Today, we're at just over 20%.
So at 21% in middle management. And our goal as, articulated by the Schneider Sustainability ambition is to reach 40% by 2025. So quite a tall order, but we know from our data that that's probably where we see most leakiness, if you will, in our funnel. And then, your second question about the progress for sure regarding tracking, it's very important and encompasses holistic set of metrics, and we track it regularly at the global and local level. I think it's worth pointing out that first, we start envisioning we really seek as a business to create that workforce of the future for Schneider regarding skills, diversity, also experiences and values.
And then what we do is definitely work closely with our board and the executive committee. We also have an internal DNI advisory board all the country presidents in, in the markets to truly engage our teams at large to support the DNI ambition and day to day business decisions. And the last thing I'd point out, Amit, and this, and this call is certainly an example of that, more and more I and others were very committed to engaging our external stakeholders in that conversation ambition about DEI diversity equity inclusion, especially in this context of CSR and ESG.
Alright. Thank you very much, Tina, for that. Maybe Olivia, I'll come back to you. There's a question on Carbon price mentioned as one of the essential program, what price do you use and, how significant is it in your decision making?
Yes. First of all, I'd like to mention that there are many things we've done without car price in the past that we found even more effective with the top down approach. If you take, for instance, what we've been doing in the renewable electricity, we moved from 2% in 2017 to 80% in 2020. And you know that in our new SSI, we are taking even a bigger commitment and we found that it was much more efficient to drive it as a global program and to go faster than, implementing a carbon price. Nevertheless, for a certain number of key decision, which have a huge impact of Scrugg 1, 2, and 3, we believe it's important to use the carbon price and especially we want to make sure that in every single decision that we take for our supply chain of our R and D investments, we implement the carbon price in the future.
We have a range and we can give you more details later, but going from 30 to €130 depending on the time frame on on the investment. And by doing so, we believe that we create probably even a bigger impact, on the addition. But again, we believe that adding those complementary approach are important carbon price for some decision, but also a global plan with a top down approach in some cases is much faster and much more effective to get to a proper level of decarbonization.
All right. Thank you. Thank you very much for that, Olivia. There's a there's one or two questions, and I might, on the on the s part of the ESG, and it's linked to our commitments around the, access to energy program and and the significant amount of reach that we can make. Maybe I bring in, who is our SVP for sustainable development, you know, very, very closely associated with these topics.
So so, Jill, if you can just probably tell us in a few words, the impact that Tom tomorrow rising fund, is hap is having in terms of the benefit to society in general in the countries that we operate.
You know, we we launched early in April, a big campaign, global campaign, which is a local response. In fact, in Schneider Electric, we have the habit to, ask our team side by side country by country to be involved the in the community to understand better what's happened locally and to be able to to be the strong partnership. It's why we were able to launch, in 67 countries, more than 20 suite projects. With, a campaign with sweet air. The first is to weapons, especially for the most vulnerable people in COVID crisis, a lot of low income people close to our side.
The second is linked to resilience, through the community, with our people, to, to provide, the ability to have school again for teenager. It's very important to, to pull the teenager even, especially when he's the first poverty to come at school for themselves and for the community too. In 3rd, it's to build a new, area of prosperity locally. The first donors, were the president, the ex com members, and after that, many, people in Schneider Electric, the foundation match the donation And now we we follow the program because we know that the credit is not finished, and we would like to, appoint a strong support to, help the youth, especially as a teenager to combat at school for technical, skills, and you you are the feeling about that.
Thank you so much, Yale. And I can, you know, thank you because this is also internally united with the teams and and and the people of Schneider as well. So thank you for that. Hillary, maybe there's a there's a follow-up question, which is think you probably already covered it in your section, but it's really around the the road to 17% and the pricing power and the role that plays and the link it makes with, you know, connectable products, connected products, and our digital offerings. So I think the idea was is that one of the levers that we have to get to the 17?
Company has certainly led to
the pricing power that we've demonstrated, you know, since 2017, 18, 19, we've showed a net positive pricing, which which I think is very important for us as a, as a company. I think that for us, you know, as we, as we look at the journey towards 17% or around 17% in 2022. We also have an environment of increasing commodity prices. So one thing we're really focused on today is making sure that we're using that pricing power in order to pass through the additional costs, for commodities like we did this year for the additional costs associated with coronavirus. And then what you're talking about is more our strategic pricing.
So the ability to price even further, let's say, bay based on innovation. And that's something that we're always focused on in terms of a big lever in the journey towards the around 17%. I think what it does is give us the ability over time to ensure that all costs are passed through. And some degree of strategic pricing, but the bigger levers for us in terms of gross margin are gonna be like our productivity.
Alright. Thank you, Hillary. Just mindful of time. I think we're coming towards the close. I'd like to very quickly probably take another 2 or 3 questions and and then, we promised to to reply back on the ones we can't get through on.
Maybe maybe a quick one, Olivia, for you, which is around the demarcation between the global and the local programs. And, if there's, you know, how are you going to monitor especially the local programs if it's to be done across many, many countries.
Yes, and thank you, Amit. It's a very important question. I think it's Schneider. We are quite innovative, you know, in the past 15 years to have those global commitment. Where we put an ambition, we measure and we disclose performance on the quarterly basis.
When we took stock really on all the great things we've done in the past, we thought that for the next cycle, it will be also very important to bring a much stronger local dimension in our commitment. So we didn't want to be too prescriptive in the spirit of what Jean Pascal has said before where we really want to empower our countries. We are asking for for the next chapter, all our present, so which means all the people who have a territory responsibility at Schneider Electric to define 3 commitments that will apply that will have an impact on their local ecosystem. And of course, with the 2025 target, that will be also declining the yearly target. And if you take just one example, you know, Tina talked a bit before about the topic of diversity and nutrition, there are certain numbers as a global company that you can take at the global level.
For instance, the commitment we are taking on gender diversity, but there are many, many dimension of diversity and inclusion that deserve to be treated at the local level. And that's just to give an example, but it's true. It's the same on resources and many other topics. That's why we wanted really in this next chapter to make sure that we really empower our country to take at least 3 local commitment in line with our top 5 key transformation.
Alright. Now I think we are probably coming towards, towards the end. Maybe I come back to you, Jean Pascal, your probably getting close to midnight now for you. And, so thank you for for staying up for this one. But maybe I'll I'll let you have some closing remarks, but I I'll I'll preface it with the one last question which was also addressed to you, which is just overall in terms of a world which is gonna get, you know, where there is the transition from, you know, from fossil fuels towards renewables.
And and that is that is a journey which is which is there. At the same time as the company, you know, we are also having exposure to oil and gas. So the question is that how do you reconcile, the 2? And is there any angle that, you know, a lot of our focus has also been in areas. For instance, Aviva has a lot of, you know, oil and gas exposure.
So how do we reconcile the 2?
Well, the 3rd point is not to forget that in the energy mix of the planet, on increasing in a trajectory that drives us to keep the temperature within 1.5 degree. I see 60% of fossil fuel, and they are needed because the first thing is to make sure that we provide energy to everybody on because it's it's really the base, to have access to a decent drive. So that's number one. The second thing is that our commitment to miss industry is really sustainability to make it cleaner, to reduce the links, to reduce the issues, to make it safer and cleaner. And this is what we work on with our customers in this field.
Also, to understand that the weight of this industry in our turnover is around 78% of our total turnover. It's both limited with respect to, everything else we, we are doing. So on on on the large part of what we do here is really related to digitization again to reach new levels of performance inside our industry. So, we see it as part of the equation gas for instance, it's an important part of this transition, averaging for very, very specific application we'd be a part of it. And we need to be the partner of companies on the whole mix of their energy.
But again, The goal of the car is about saving. It's about efficiency on reducing the need of the demand. Remind you that it it reduces the impact of the supply by the factory of the street because going through fossil fuel, entance conversion. And therefore, conversion means losses on every time you save 1, you generate 3 of savings at the level of extraction. So that's that's how we see our role in the old condition.
On the I mean, I understand that I have to conclude now. Yes,
we can we can continue.
Yeah. So just two things. I think we explained, now in, in all the session that we went through. Sustainability is has been at the core of our strategy. And we see it as an disputable factor of accelerated goals because the world is really directed to finding new ways to be more sustainable and everything that goes into that direction is a bit more tailwind than any other things.
But also, it's really important because it our commitment to doing things in a very sustainable way It's the best way to derisk the company also. Doing everything in more compliant, more sustainable way, not only brings more roles in our strategic mission, but but take away the risks. But more important question, I do believe that great people make a great company, I'm having directed the whole company to the topic of sustainability on easy, makes a certain type of people want to join Schneider. And that's also important because with those people, we feel much more confident that we can grow the company according to the highest standards. All I can share with you is that I've been preaching this preaching or I've been putting that at the core of our strategy for the past 17 years.
And it's really great today to see the investors on the the investment circle has been really focused on it because at the end of the day, you are the people directing our industries. On the place where you put your investment, your money, is really, really changing the trajectory of, of our industry. So saying that just great alignment of investment community together with companies like ours, is really super encouraging on on and gives me confidence that we can not only grow technology, but also find a solution to the decarbonation of the world. And I hope this session has been explanatory enough of everything we do in, in the direction. So I I look forward to seeing you again on, I mean, I let you really conclude.
Well, no. Well, thank you. I think on behalf of, of of everyone on the panel on behalf. In fact, of everyone in the company, thank you very much. As I said at the start, you know, for spending your time with us.
You know, it really on ESG. We are part of a couple more conferences before the end of the year and and the IR team as always is available to engage with you. So thank you very, very much. Everyone says stay safe, and, hope to see you all very soon. Bye bye.