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LEGRAND GROUP – THE JOURNEY TO SUSTAINABILITY

Rodica BURLACU, SUSTAINABLE DEVELOPMENT Term Paper, 2013

The main purpose of this paper is to present the close relationship between Legrand

Group’s business strategy and the way sustainability policies comply with it. In this respect,

I will present firstly the business environment with its components: market, competition,

products and key figures. Secondly, I will focus on the principles that form the basis of

sustainable development commitment, seen through the lens of the main areas where

sustainability matters. In the end, I will analyze two projects developed by the company

that concentrate their CSR strategy and, ultimately, a short summary according to the three

pillars.

Keywords: sustainability, strategy, CSR, information

Every evening I come back home from school, the lights at the entrance in the main

hall of the building turn on, and after I enter my flat, they turn off. It is not only the perfect

way to save energy by relying on movement detection sensors’ perception, but also a

solution to make people’s life easier. Taking into account the human factor, a major

problem is thus solved: the light turns on automatically so you don’t need to press any

button, which is useful when your hands are full of bags, and turns off after a few minutes,

thus ensuring that you don’t forget to do it.

Some years ago, lights turning on and off without any manual switching were hard

to imagine; but today both innovation and practical side go hand in hand to make people’s

life easier and, in the same time, working towards overall efficiency. I would assume that

this is the common perception of usual consumers, the ones whose life is constantly

improved by these new devices. However, such devices are the outcomes of an entire

process included in one company’s embedded culture: LEGRAND—THE GLOBAL

SPECIALIST IN ELECTRICAL AND DIGITAL BUILDING INFRASTRUCTURES.

I. LEGRAND GROUP BUSINESS OVERVIEW

1. General description

The French company Legrand Group is the world leader specialized in the production of

electrical and digital business infrastructure and it is reputedly known as a worldwide

standard setter in the field. The company develops its activities close to its markets, in

more than 70 countries around the world, where there is commercial and industrial

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activity, but its more than 200,000 catalogue products can be found in nearly 180 countries

worldwide. These figures prove the global presence and involvement of the company, as

well as its successful business story and part of its strategy. With a total workforce of more

than 35,000 employees, Legrand generated in 2012 sales of 4.5 billion euros, of which 79%

outside France.

Looking back at the very beginnings of the company, we can see that its original

activity was the production and decoration of china (in 1926). A turn point was its

acquisition by Verspieren and Decoster families in 1946, followed by the major change of

the production activity towards wiring devices manufacturing, starting with 1949. Other

important points in the history of the company are : 1966, the first production operations

outside France, by opening new subsidiaries in Belgium and Italy; 1970, the company is

listed at the Paris Stock Exchange and 1977, the first operations in an emerging economy –

Brazil, via the acquisition of Pial, the leading Brazilian wiring device manufacturer. Along

its history, Legrand acquired and integrated over 135 companies from different countries

worldwide, thus consolidating its development model: new economies and new business

segments.

2. Products

The offer of the Group is large, counting around 200,000 catalogue products. These

numbers covers the four main product and system categories: control and command of

electric power, cable management, energy distribution and Voice-Data-Image (VDI). This is

only a very general nomination of the main categories, since each product’s technical

feature depends on the type of building they are designed for: commercial, residential or

industrial.

It has been proved that end-users prefer Legrand products despite their higher

prices, because of some unique features. Electricians recommend and prefer products that

are more efficient in terms of installation procedures: easy, safe, reliable, good quality and

speed of installation. To end-users, quality, design and functionality prevail over the price.

This low price sensitivity of end-users can be explained by two facts: on the one

hand, the importance of the electrical installation in the building infrastructure in terms of

safety and reliability is not to be neglected; on the other hand, the costs dedicated to the

electrical infrastructure of a building count only for a small percent in the total building

cost so under certain limits there is no too big cost for these devices.

Going a bit further into details regarding the products, each system category

provides a number of well-determined products, as follows:

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- Control and command of electric power, including comfort, security and

communication systems (lightning control, fire alarms, digital infrastructure

systems)

- Cable management (systems that enable the secure distribution of electricity and

data in buildings, aiming at preventing any accidental contact between electrical

wires and cables and other electrical or mechanical equipment, or any exposure of

these wires and cables that could be hazardous for end-users)

- Energy distribution (breakers and other specific devices that enable the installation

and connection of components)

- VDI (pre-wired systems for IT, telephone, and video networks

3. Business and market. Competition

Unlike its competitors, Legrand built its position as a world leader due to the

specialization in one business area, a fact which consequently contributed to the

acquisition of a large technical and commercial expertise.

a) Specialization

Despite of focusing on a single business area, the Group develops a complex range of

products and systems for electrical and digital building infrastructure, integrating the

development, the manufacturing and the marketing processes. Moreover, this position is

consolidated by a strong local presence that allows the company to establish durable

relations with key local distributors and electrical installers, thus becoming more thorough

in maintaining communication with their markets.

b) Brands

Legrand markets its products under internationally recognized brands, covering a

portfolio of more than 40 such specialist names, like Ortronics , Cablofil or Zucchini. These

brands and trademarks are protected in most of the markets based on their registration or

use.

c) Market positioning

The sector of the market where Legrand operates is very diverse and this is an

important advantage during waves of economic crisis. Since diversity provided by a big

range of products and systems with characteristics easily adaptable to different situations

and spaces is a defining feature of the business, market fluctuations do not make the

company necessary vulnerable. In addition, we can say that the market it operates in is

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more fragmented and not that dependent on private projects or large public. And an

example to support this, is the renovation market that brought a large piece of profit in

2012.

According to the customers it addresses, the company can divide its market into

three main paths (categories of buildings and end-users): the commercial, residential and

industrial sectors.

The Group’s vulnerability minimization can be traced also due to the geographical

diversity that limits the dependence on the performance of only a few countries from one

region. This is explained by the presence of huge number of operating sites (70 countries

with industrial operations) and markets (products commercialized in nearly 180 countries

worldwide).

d) Competition

Due to its firmly established market position globally, Legrand has no competitors

for the whole range of products or that could threaten its world leader position. However,

the Group makes a difference between the competitors at international level and at

local/national level. International competitors refer to comparable size companies which

compete only on some products (eg: Schneider Electric, Siemens, Panasonic) and other

more specialized companies that offer only one or two categories that make the object of

competition. On the other hand, there are the companies that can be regarded as

competitors only at the level of certain national markets (eg: Hager in Germany and

France)

e) Development strategy

Legrand Group is constantly aiming at developing its market share and revenue on a

profitability basis, following two growth paths, boosted by self-financed strategies and

means; on the one hand, the company relies on innovation and the development of new

products on a regular basis, and on the other hand, it directs resources towards the

acquisition of companies that have a leader position on their national or niche market.

Whenever we talk about innovation and new products at Legrand, we actually

describe the main trigger of their activity: a proactive and targeted research that would add

high value to its products on a regular basis. This is why Legrand products can be described

as safe and reliable, simple and easy to install, but in the same time, meeting the complex

demands of end-users. The use of new technologies and new designs closely follow the

development of new solutions for an improved life style; such an example can be the

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universal media socket or the home automation range, which manages in the same time,

the lighting, security, heating and video-audio broadcast systems in residential buildings.

The second growth engine at Legrand is the orientation towards the acquisition of

new companies, in order to enlarge its span of market opportunities all over the world.

Having access to a very big market (Legrand evaluates its market at about 80 billion euros)

is not necessary an advantage if you want to sell a non-customized product. Legrand,

however, understood that its market deals with real fragmentation and an attempt to

harmonize it becomes an impossible mission. Local producers are more familiar to the

requirements of that certain market and gaining access to it can be done only through

them, This is why the Group focuses on identifying the leaders in their target markets and

then proceeds to their acquisition of these small and medium enterprises. Legrand brings

that know-how, but products are still designed according to the specificities of that market.

This is a win-win situation, since Legrand expanded its market and the acquired company

remains on the market under its own brand. Following this approach, Legrand acquired

around 135 companies.

II. LEGRAND GROUP – SUSTAINABLE DEVELOPMENT

Sustainability is not a final point during a journey, but the journey itself. At every

point you come, you realize that many others open in front of you and there is always room

for more and for better.

In my opinion, Legrand Group has an enormous advantage compared to other

companies worldwide. By its object of business itself – the production of electrical devices

– the company has more means to prove its sustainability approach equally based on the

three pillars: people, profit and planet. The strategy followed in this respect is actually a

natural step in order to really be a sustainable company.

If I were to answer a question about how sustainability policies of this company are

perceived by the unauthorized public, unaware of any theoretical knowledge of the issue, I

would say that anyone could realize at a glance the important role of sustainability for

Legrand. How is that? The company’s website has a dedicated section named Sustainable

Development, providing the public with a diverse range of information on the topic. Could

this be a form of greenwashing? It may be, but the content transmitted to the public is

detailed, transparent and connected to other company’s sections, so there is a clear

message about the importance of sustainability policies.

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Sustainability does count for the Group. There is a clear description of the message

in this respect, a message that is integrated in the four values included in the Group’s

Charter of Fundamental Principles: ethical behavior, customer focus, optimization of

resources and innovation. These values find their reflection in three main areas of the

business, covering eight principles, as follows:

1. Corporate Governance:

- Applying ethical commitments on a day-to-day basis

- Integrating suppliers in the sustainable development process

2. Environment:

- Developing products with High Environmental Performance

- Limiting the environmental impact of the Group’s business

- Promoting energy efficiency

3. Workplace and community:

- Investing in Group’s employees

- Increasing access to electricity

- Promoting assisted living

Understanding and defining the sustainability policy is not possible without a close

follow-up of the Corporate Social Responsibility strategy, meaning that all functions in a

company are touched, from top vision to the strategic implementation, from product design

to financial data.

The 2011 – 2013 Roadmap

As I said before, sustainability is a journey, not a destination. According to the

Chairman’s speech, the company wished to continue the implementation of sustainability

policy following the 2007 – 2010 objectives, by launching new challenges in this respect:

the Group continues its journey with new objectives, described in the 2011 – 2013

Roadmap, and periodical progress is expected to be reported.

The objectives are clear and in accordance with the three pillars; the involvement of

stakeholders is a key feature and an equal importance is given to each sector. There are a

number of commitments described under each stake, and a brief description of every

proceeding, perceived as a “next step”.

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What is CSR?

“Deliberately including public interest into the decision-making progress by honoring

the triple bottom line” could be the official definition. However, further details should be

added. It brings value to the company by impacting the quality of its relationships with

both internal and external stakeholders. A good ability to involve key stakeholders in the

whole process through effective communication can be the way to achieve viable and

successful on long term, growth. Throughout the analysis of the areas where sustainability

is important, together with the values and principles, a thorough understanding of the CSR

impact should be provided later on.

Stakeholders prioritization matrix

This tool is useful in assisting the sustainability report. Companies realized that there is

a difference between aiming at short-term reputation and value enhancement, through

providing genuine value to key stakeholders.

Legrand drew up a map of its stakeholders in 2012. The mapping process clarified

existing relations in the areas of corporate social and environmental responsibility and

identified improvement priorities for the Group.

Key players: they focus efforts on the Group, are involved in decision-making

bodies and are consulted regularly. For Legrand, they include customers and

employees, as well as the Board and local managers.

Meet their needs/Keep satisfied: engage and consult on interest area and try to

increase the level of interest. Eg. Governments in the countries Legrand

operates, distributors, electricians, suppliers, NGOs (Electriciens sans frontieres)

Low power, interested people/Show consideration: interest through

involvement in low-risk areas, keep informed, potential goodwill promoters;

Legrand is present on social networks (Facebook, Twitter, Pinterest) and on

YouTube, trying to inform constantly their customers and potential customers

on their progress and products.

Low power, less interested/Least important: the purpose is to move them into

the next box, of interested people.

In the next pages, I will analyze how Legrand complies with the areas where

sustainability matters and how these areas go along their values, commitments and real

actions.

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1. Entrepreneurship

Identifying and exploring new business solutions both inside and outside the

organization.

In the case of Legrand, the organizational structure and the business development

model give to some extent the idea of entrepreneurship. The organizational structures –

Front and Back Office go hand in hand with the Group’s presence in markets with different

characteristics, so a decentralized structure is preferred in order to gain efficiency.

In terms of entrepreneurship, we can consider the local managers as real

entrepreneurs. Each local manager leads a Front Office by country, which means he is in

charge of dealing with specific issues related to the local market: distributors, product

specifiers and end-users. Since they are the interface between the local community and the

central decision-makers, they need to be creative in order to adapt the company’s offer to

the real needs and demands of the market. This is why I consider this approach a means of

profitable and viable growth. It is part of the strategy that each subsidiary is given a certain

amount of liberty in decision making in order to fit in the company’s value and the local

market’s actual needs.

This is mainly the question addressed when the markets under which a company

operates are very different. For Legrand, the challenge is notably found in the New

Economies. India and Brazil are two very big markets but they are in the same time two

different countries, with different attitudes towards risk, different values, different

cultures, different needs and customer behavior, which have to be managed in a different

manner. Trying to understand the other part by exchanging information is a step towards

sustainable growth with benefits for both sides.

2. Strategy

Ensures the right approach is taken and that it is implemented as a real organized effort

that mobilizes the whole company.

The objective of the company’s strategy is to ensure that the core values are

strengthened and that opportunities prevail over risks. What is Legrand doing in this

respect?

Firstly, for a strategy to be considered good, it should mobilize to the whole company.

At Legrand, from the Chairman’s speech to the Charter of Fundamental Principles, the same

values prevail. The Code of Conduct applies not only to usual employees, but also to the

Board.

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Then, in terms of risk approach. Risk assessment is conducted on many directions,

given the complexity of the business system and the numerous relationships established

between the business and the economic context, environment, geopolitical context, social

factors or technical issues. Risk is continuously changing and strategy should be conceived

in order to diminish these risks. Legrand is acting in this direction, as well. There are clear

categories of risk identified and for each one, risk assessment is conducted regularly. The

main purpose is related to economic shortages that may occur due to compensation that

should be paid in case of damage. One example is referring to industry and the

environment. Legrand has designed and developed an environmental risk prevention and

measurement policy and it deploys its environmental risk identification policy to back its

ISO 14001 site certification process.

Savings and cost reduction are part of the strategy, too. As part of the business

development model, the identification and ultimately the acquisition of local companies in

order to penetrate a market is a cost friendly strategy part. The investment is only related

to the acquisition itself and the necessary changes to align the production to Legrand’s

standards. But on the long term, profitability is ensured as the staff is local and the

reputation of the firm is confirmed.

In relation to the acquisition-driven growth strategy, another opportunity identified by

Legrand in order to ensure sustainable profitability, is the access to new economies. They

form both the demand for electrical equipment, since the constructions sector blossoms,

and the capital means to provide value.

The other growth engine, innovation and the launch of new products on a regular basis,

provide the strategical opportunity of enhancing reputation. This is also a step in front of

the competition, who may have an advantage on certain markets, but not globally.

To make sure that the company delivers innovation constantly, relations with the

educational system were established. Legrand is an active partner in many projects or

competitiveness clusters and gives support for innovative ideas on a constant basis.

This is why it supported the project Smart Lyon, which aimed at replacing the

incandescent bulb with LEDs.

Legrand stays connected with the academic world as well, having concluded important

partnerships with Engineering Schools in France. It also promotes the development of

skills for an increase accessibility to employment and encourages initiatives and excellence

(sponsor for skills contests such as Worldskills Competition).

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An improved dialogue with stakeholders is also part of the strategy. Structuring

dialogue is part of the objectives set for 2013 and so far an 85% progress was registered.

As part of its strategy, Legrand tries to understand the business ecosystem, focusing not

only on the core business, but also on the suppliers and the other interested parts (buyers,

subcontractors, employees).

3. Operations

Taking responsibility for all the impacts, both social and environmental, across the life-

cycle of a product or service.

Legrand declared its commitment to improve its operations based on the environment

stake, which comprises two main objectives: developing HEP products, on the one hand,

and limiting the environmental impact, on the other hand.

At a glance, we discover the involvement of staff in the implementation of

environmental policies. We can deduct that there is in place a “green team” , comprising

more than 130 people, who work with the three environmental managers in the Industrial

Division and the Group Environment Team. Human resources dedication towards

achieving results is thus a reality.

Employees’ awareness in terms of environmental concern is raised on a regular basis.

More than 17,000 hours of training dedicated to the environment were held for employees,

11% more than in 2011. This increase shows the ascending importance of the issue in the

Group’s strategy. In addition, some events were organized: Sustainable Development Week

or the Sustainable Development Forum, held at the company’s headquarters in Limoges.

For Legrand, developing HEP products means taking care of different elements, from

the substance used in manufacturing, to the final shape of the product, from the whole life-

cycle of the product, to the end-user information and description availability.

One element is “green chemistry”, meaning that non harmful substances should be used

in the production process. The Group aims at complying with standards and regulations in

the chemicals use: RoHS and REACh. Progress was registered in 82 sites where the most

important logistic and administrative activities take place.

At the end of 2012, 72% of the sites were in compliance with the RoHS directive, with a

general localization in Europe. Since 2004, the Group made its goal to eliminate hazardous

substances from their production starting with sites from Europe. The Group wants to

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enlarge the area were hazardous substances are not used any more to the sites outside

Europe (although now this directive applies only to a limited number of products).

One year after the entering into force of REACh in 2007, Legrand made its objective the

compliance with this regulation in the chemicals use. It aims at eliminating the REACh

candidate substances from the future products, whenever an alternative is possible, with

the specification that the elimination is taken into account if a viable technically and

economically solution exists. Communication along the supply chain was improved due to

the access to Material Safety Data Sheets, so that products go into the market safer for the

public.

Legrand is doing well in eco – design, too, which means that the Group designs the

product smartly upfront, and which has, based on numerous indicators, a reduced

environmental impact on the entire life-cycle. Legrand classifies its products into three

categories, by their energy consuming capacity. According to this classification, the

materials allocation is made. For instance, there are products that do not consume energy

during their use (cables) so importance is given to those materials which can improve their

performance in some other way (lowering their volume).

Packaging is also included in the eco – design policy. It is of paramount importance for

the company to reduce the volume of packaging materials by using eco – friendly materials:

recycled cardboard or water based ink for printing, for example.

Office greening brings its impact to the energy saving policy. The company’s sites are

their own property, they are not rented. Also they are located in industrial locations where

certain regulations apply. The Group’s activities do not harm any way the soil or the

biodiversity in the region. As to 2012 numbers, there was a 87% increase in the sites that

have ISO 14001 certificates.

In addition to the attempts of limiting the water consumption and of finding a more

efficient way of calculating the carbon footprint, what I found very interesting was the level

to which environmental policies apply for employees. The company included in its office

car fleet a number of electrical cars to be used by employees while commuting to the office.

Charging devices were placed in the parking at the headquarters of the company.

Related to the responsible use of paper during its operations, Legrand was ranked by

WWF France and Riposte Verte in the PAP50 Enterprises Survey. Legrand came 6th from 50

French companies, meaning that it gives strong importance to paper consumption, the

share of sustainable paper used and that it moves towards maximizing recycling.

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Speaking about operations in the case of Legrand is really a challenge, since

improvements were put into practice in a large number of fields. Sustainable logistics is

another aspect. Improving transportation between production and storage sites and the

choice of the transportation means are of crucial importance. In this way, the following

proceedings were approached: the optimization of truck load to reduce the number of

trucks used, the use of rail transportation in France, or the reduced use of air freight.

Energy efficiency and an improved energy quality help also to achieving environmental

sustainability. Measures of two types were taken: on the one hand, providing solutions for

energy efficiency (improving the quality of energy systems for diminishing losses or the

use of photovoltaic panels) and on the other hand, emphasizing the customer involvement

in the promotion of the rational use of electricity (information centers, eco labels,

conferences to raise awareness).

4. Organizational behavior

Translating sustainability policies into action and creating a workplace where

sustainability is embedded in the culture of the company.

The organizational behavior is reflected in one of the stakes on which sustainable

development counts: workplace and community.

To begin with, the Chairman speech defines Sustainable Development as the heart of

the Legrand’s business. His speech is a source of inspiration for the staff, stating that the

business is performant : ” Legrand’s strong performance confirms the relevance of our

business development strategy”. In my opinion, this is a motivation for the staff, ensuring

them that they are part of a strategy that enables prosperity.

Part of this behavior is the organizational structure as well. The company established

two main core structures: the Front Office, operating locally, and the Back Office, taking the

decision that affect the company in its entirety. I think that this is an inspired approach

towards creating trust and motivation among employees. Giving some decision power in

hands of the local manager and local team not only contributes to efficiency in terms of

costs, but also acts as a boost for making people believe their work counts and it is

appreciated.

One of the objectives described in the Roadmap for 2011 – 2013 is the risk prevention

and ensuring the health and safety of employees. Numerous measures are under

development, but they all aim at compliance with national regulations and legislations,

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incorporation of safety in the industrial process and the harmonization of prevention

strategies.

Besides this, the company wants to develop skills management and to encourage

mobility. This is mainly a problem of ensuring that employees from different working

environments (developed versus developing countries) benefit from the same conditions at

workplace.

A very important point of view regarding the human resources inside this company is

the talent development strategy as part of the Group’s relationship with employees. The

Group has conducted many initiatives over a number of years to involve employees in its

CSR strategy: actions to rais awareness of Sustainable Development at sites, voluntary

participation in meetings such as the Sustainable Development Forum. Legrand’s

employees are also very involved in the new product innovation and development

processes. A Users’ Club was formed in 2012 in France for Group employees as a forum for

dialogue, sharing new ideas, testing products and concepts (electric car recharger, lighting

path for independent living, etc.), and to contribute to surveys and discussions.

Another point to be taken into account is how the employee engagement strategy

touches the employers. Social dialogue between stakeholders is important in a global

company as Legrand. Part of social dialogue is the communication between the manager

and the employees, but also it occurs at national level or regional level. Trainings and

conferences are organized regularly to improve this communication. Also, more than 85%

of the employees are part of employees’ unions with representatives in each subsidiary.

Adapting to markets is part of the social dialogue. What I found interesting about

Legrand is that whenever a decision is made by the top management, communication is

ensured in order to facilitate the putting into practice of the changes. One such example is

related to a relocation decision in Brazil concerning an industrial site. Employees that did

not wish to leave their places and move along with the site were given assistance in order

to find more easily another job (contact with companies in the region, CV circulation or

trainings in order to prepare the change).

A collective retirement savings plan is also put into practice. This is how the company

participates on a voluntary basis to the building of a long-term retirement savings plan,

under favorable financial conditions.

Promoting diversity at workplace goes hand in hand with the compliance with ethical

practices. One of the commitments made by the company was related to the promotion of

gender equality and a growth in the number of female managers. Here Legrand is not doing

very well, even if a campaign was launched “Elles by Legrand”, to raise awareness. The

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Group was unable to achieve the 30% recruitment target for female managers, mainly due

to the reduced number of applications for the jobs.

Organizational behavior also means rewards for employees. Legrand considers that

transparency is important and objectivity is obtained only by skills assessment. Salary

increases must be given according to objective criteria based on skills and compliance with

the values of the Group and not by means of the years you used to work for the company.

So it does not matter if you have been working here for 10 years if you did nothing

consistently, but it does matter if you worked 2 years and with responsibility.

In recognition of the Group’s Human resources policy that is driven with enthusiasm,

the company was awarded in 2012 the Best Positive Tandem Award in the 9th CEO/HR

Tandem awards.

5. Marketing

Marketing is the responsibility of the Front Office and helds an important part of the

business. Marketing at Legrand is aimed at providing information at all stages of the

distribution chan. Trainings, information and other services needed for the good

understanding of each product is provided along with sales.

Legrand follows a push-and-pull strategy.

The push approach refers to the new products and the optimization of the supply chain

with just in time approach. This means that the level of inventory is held at minimum and

the communication with customers becomes important. An high-value service was also

undertaken; an intelligent presorting system that allows the company to pre-sort its

products thus reducing errors at delivery and handling costs.

The pull approach refers to the increased communication between distributors and

end-users. The end-users ask for products, thus creating a demand. Distributors must be

trained in order to expand electric contractors’ expertise and to make them familiar to the

new products developed.

6. Ethics and governance

The CSR strategy involves also the adherence of the company to law, ethical standards

and international norms.

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Ethics compliance creates value for the company in numerous ways; ethics means trust

and confidence, means a workplace where transparency and balanced practices are valued,

means reduction of costs related to corruption issues and means also risk minimization.

"Ethical behaviour, Customer Awareness, Resource Enhancement and Innovation are

the core values underlying the Legrand Group's management philosophy. These values

have been built over time within the company, and are the essence of our corporate

culture. We pass them on internally through our management principles and externally via

our relationships with our partners." The ethics compliance is assessed through the

knowledge of these three documents:

- Charter of Fundamental Principles

- Fair Competition Charter

- Guide to Good Business Practices

The Group focuses on preventing corruption, combating fraud and ensuring compliance

with competition rules; in addition it also covers conflicts of interest, compliance with

embargoes, as well as measures against money laundering and the financing of terrorism

The Group ensures that all of its stakeholders are informed and comply with its policy

of business ethics. It’s each employee’s responsibility to be aware of all of the rules

applicable within the scope of their job responsibilities, especially the laws and regulations

applicable to their own activity. Employees can consult their immediate supervisor, or the

Group’s Legal Department or Human Resources Department, with a generic email address

(ethics.legrand@legrandelectric.com ) on any issue concerning ethical or legal

requirements.

After having had a careful look at the company’s report, I could say that it has an

effective ethics program, taking action on each of the seven steps (eg. Anonymous e-mail

address to report abuses, see above)

The Group complies with regulations in force in the countries in which it operates. It

endorses the values of the UN International Charter of Human Rights, comprising the

Universal Declaration of Human Rights (1948), and the International Labor Organization

(ILO) Declaration. The adherence to the UN Global Compact also provides a basis for

principles to conduct an ethical behavior. There is a strong connection between the Group

Charter of Fundamental Principles and the ten principles of Global Compact.

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In line with the Group's values and the Charter of Fundamental Principles, Legrand's

endorsement of the Global Compact is a major part of the Group's social responsibility

policy.

The Global Compact is a United Nations initiative which aims to endow world markets

with responsible values and practices, to enable all people to benefit from the advantages

of globalisation.

For Legrand, applying ethical practices on a day-to-day basis means structuring

dialogue with stakeholders, listening to customers, through responsible communication,

customer relations and exchange platforms.

A way that kept my attention in terms of communication is collaborative innovation.

The Group’s relationships with its distributors, electricians, specifiers and users are central

to its strategy. Legrand has over 70 showrooms and 15 training centers, including Innoval

in Pantin, Bagnolet and Limoges. These structures have welcomed more than 100,000

people since 1999 (opening date of Innoval Limoges), including more than 4,000 visiting

customers and over 5,200 trainees in 2012. Assessments of service quality are conducted

with key customers. Meetings are held every two years with distributors to develop,

monitor and discuss business relationships.

Part of ethics is the relationship with suppliers, meaning that the Group is very careful

with its reputation and with the real value added to its products. This is why in its new

purchasing policy, another evaluation indicator was included and it refers to how

sustainable the suppliers are. Besides their know-how, competitiveness and compliance

with the Group’s principles, the alignment to the sustainable development vision is now an

assessment factor.

The Group recognizes losses and accrues liabilities relating to environmental and

product liability matters. A loss is recognized if available information indicates that it is

probable and reasonably estimable. Losses arising from environmental liabilities are

measured on a best-estimate basis, case by case, based on available information.

Losses arising from product liability issues are estimated on the basis of current facts

and circumstances, past experience, the number of claims and the expected cost of

administering, defending and, in some cases, settling such cases.

Legrand releases quarterly financial information, with a complex analysis of their

performance, available on the company’s website. The last report was publish in November

2013.

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Transparency and information

Following annual assessment in September 2013, Legrand was recently confirmed as

part of the Dow Jones Sustainability Index Europe. This stock market indexes comprises

companies which are leaders in the field of Sustainability. Legrand's inclusion in the DJSI

Stoxx illustrates the Group's high level of performance in social, societal, environmental

and governance terms. Besides the DJSI Stoxx, Legrand is also part of 5 other Sustainability

indexes.

III. PROJECTS AND INITIATIVES FOR THE COMMUNITY

1. LEGRAND ELECTRICITY FOR ALL

As I said in the beginning, Legrand has a unique advantage for putting into practice a

sustainable development strategy, given its object of business: the electrical infrastructure.

Although the market is characterized by high-value products sold at higher prices

due to their added value, Legrand also produces highly accessible goods for low income

markets.

In Legrand’s vision, electricity is one of the features that contributes to

development. Electricity is a necessity and the Group works towards reducing the number

of people without access to electricity and improving thus the quality of life.

The program Legrand Electricity for All is impulsed by the General Management and

steered by the Sustainable Development Department. It is part of the business strategy and

it is implemented worldwide. The program focuses on four areas: aid partnerships,

exploratory research, frugal innovation, energy efficiency. It involves both internal and

external stakeholders. Among them, a partnership with an NGO – Electriciens sans

frontieres- was established.

The initiatives of this program cover both financial and assistance aid, through

financing of different electrification processes, development of products responding to

essential needs or the design of solutions for lower electricity consumption.

The Group proves that it can direct resources towards different aspects of life, from

very sophisticated products to frugal innovation, in order to cover the needs of every

consumer, regardless of their incomes and access to market.

The project is conducted to respond both to long-term plans (electrification of

schools and hospitals in a certain area) and to emergency situations.

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Since 2007, Legrand has taken part in more than 70 projects with Electriciens sans

frontières, targeting access to electricity or emergency aid in Africa, Asia and Latin

America. To date, the initiatives of the Group with Electriciens sans frontières have enabled

780,000 people to gain access to electricity in more than 20 countries.

2. ASISSTED LIVING PROMOTION

As far as I’m concerned, Legrand likes having a look not only in the present, as is the

case above, but also in the future, to identify trends and needs. This demonstrates a high

concern for improving the quality of life.

Since in Europe aging population is growing, a bigger and bigger number of old

people would need special facilities to continue their lives at home, and in full safety.

What Legrand proposes are user-friendly products, that can be accessed by a larger

number of people. Together with this, it develops solutions for facilitating orientation into

space in case of power shortages or fall prevention systems. Legrand is fully concerned also

about safety and this is why it promotes technical sensors against smoke or carbon

monoxide detection.

Home automation products are designed for people with diminishing capacities for

independent living. These products refer to door-entry systems that make possible to

program home environment using only one control point.

However, providing only prevention systems is not enough; Legrand went deeper

into the problem and thought that without communication with the outside world, the

systems are more inefficient. This is why these products come together with an automatic

transmission system that would ensure appropriate action in the right time.

Communication and collaboration with integrated parts is essential for the design of

such products. It requires multidisciplinary expertise from health care units, families,

research organizations or welfare professionals.

IV. CONCLUSION

To sum up, I think Legrand has already taken action on numerous stakes of

sustainability, making this strategy its core. Everything that happens in the company has to

be in harmony with sustainability.

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Having a short look at the triple bottom line, I think Legrand has a big advantage in

terms of environment. It is not only eco – friendly but it also helps others become

environment – aware by providing access to a huge market of eco – products. It is not

enough to want to become sustainable, if you don’t have the means; and Legrand helps you

do this.

People are part of the business and their behavior has to be in accordance with the

strategy. People are the most difficult to change, but raising awareness towards why

change is good, they become part of the change.

Profit is a consequence of a proficient business model, oriented towards sustainable

growth. The understanding of the motivation behind the two growth engines is the key to

make good profit on a regular basis with sustainable means.

To me, Legrand is the prove that change is possible and that good working practices

(ethics), economic context and human resources dedication, linked by an inspired strategy

can provide value and respect.

If asked wheatear I would like to work for a company like Legrand, my answer

would be Yes, because I consider that Legrand is consumer oriented and fits into the

European tradition of quality.

REFERENCES:

1. Legrand’s Global Compact Report for 2012

2. KPMG Sustainability Reporting – a Guide

3. Legrand’s website: www.legrand.com

4. Legrand’s Facebook page and YouTube channel

5. Press releases

6. Legrand 2011 – 2013 Roadmap