Schneider Electric sees energy management demand drive strong quarter – Facilities Dive

Schneider Electric Q3 Performance Report: Driving Sustainable Development Goals through Energy Management and Innovation

Executive Summary: Financial Performance

Schneider Electric reported significant growth in the third quarter, demonstrating a strong market position in sectors critical to achieving global sustainability targets. The company’s performance underscores the increasing demand for technologies that support sustainable development.

1. Group Revenue: Over $11.5 billion (€10 billion), reflecting a 9% organic growth.
2. Energy Management: A 17% increase in North America, contributing to overall segment growth.
3. Software and Services: An 8% increase, accounting for 19% of total group revenues.

Contribution to SDG 9: Industry, Innovation, and Infrastructure

The company’s growth is substantially driven by its support for resilient and innovative infrastructure, particularly within the data center sector. This aligns directly with SDG 9 by providing the foundational technology for a digitized and sustainable industrial future.

• Data Center Expansion: The Energy Management segment’s 10% year-over-year growth is fueled by high demand from hyperscalers and AI-related entities, which are cornerstones of modern digital infrastructure.
• Technological Innovation: Strategic initiatives are enhancing infrastructure efficiency and sustainability.
  • Acquisition of a 75% stake in Motivair to strengthen high-performance, energy-efficient cooling systems.
  • Co-development of two data center reference designs with NVIDIA to accelerate the deployment of power and cooling systems, reducing lead times and resource consumption.
• Software Solutions: The 8% growth in the software vertical, led by the AVEVA platform and EcoStruxure solutions, provides critical tools for industries to automate and digitize operations, fostering innovation and efficiency.

Advancing SDG 7 (Affordable and Clean Energy) and SDG 11 (Sustainable Cities and Communities)

Schneider Electric’s focus on energy management extends to the built environment, promoting energy efficiency in buildings and contributing to the development of sustainable cities and communities.

• Energy Management in Buildings: Strong demand from nonresidential sectors, including retail and hotels, highlights the company’s role in making commercial buildings more energy-efficient, a key target of SDG 7 and SDG 11.
• Strategic Positioning: The company is positioning itself as an “energy technology partner” to support widespread electrification and digitization, which are essential for transitioning to cleaner energy systems and creating sustainable urban environments.

Commitment to SDG 13 (Climate Action) and SDG 12 (Responsible Consumption and Production)

The company has demonstrated a profound commitment to climate action and responsible production by actively decarbonizing its value chain, directly addressing SDG 13 and SDG 12.

• Supply Chain Decarbonization: The Zero Carbon project has achieved a significant milestone ahead of schedule. The company’s top 1,000 suppliers have successfully reduced their operational carbon emissions by 53% since 2020.
• Scope 3 Emissions Reduction: This achievement marks a critical step forward in the company’s Scope 3 decarbonization journey, showcasing a scalable model for climate action within a global value chain and promoting sustainable production patterns.

Operational Challenges and Outlook

While navigating macroeconomic challenges, including tariffs and supply chain disruptions, Schneider Electric remains focused on its long-term sustainability mission. The company is implementing commercial and supply chain actions to mitigate these impacts. The ongoing macroeconomic environment in Mexico, linked to tariff uncertainties, was noted as a specific area of concern. However, the company’s progress in sustainability and its strategic focus on electrification and digitization position it to continue advancing the Sustainable Development Goals.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 7: Affordable and Clean Energy
   • The article focuses heavily on Schneider Electric’s “Energy Management” segment, which is its leading growth driver. The company’s emphasis on providing solutions for electrification, automation, and digitization for industries and data centers directly relates to improving energy systems and promoting efficient energy use.
2. SDG 8: Decent Work and Economic Growth
   • The article details Schneider Electric’s strong financial performance, including a group revenue of over $11.5 billion and 9% organic growth. This economic growth, driven by technological innovation in energy management and software, contributes to overall economic productivity.
3. SDG 9: Industry, Innovation, and Infrastructure
   • The article highlights Schneider’s role in the “data center boom.” The company is developing innovative infrastructure solutions, such as co-developing data center reference designs with NVIDIA that integrate cooling and power management. This work supports the creation of resilient, efficient, and technologically advanced infrastructure.
4. SDG 12: Responsible Consumption and Production
   • Schneider’s “Zero Carbon project” is mentioned, which focuses on reducing carbon emissions within its supply chain. By engaging its top 1,000 suppliers to cut their operational emissions, the company is promoting sustainable practices and responsible production patterns throughout its value chain.
5. SDG 13: Climate Action
   • The article explicitly mentions climate action through its discussion of decarbonization. The success of the “Zero Carbon project,” which resulted in a 53% reduction in operational carbon emissions from top suppliers, is a direct measure to combat climate change and its impacts by mitigating emissions in the company’s Scope 3 value chain.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 7.3: By 2030, double the global rate of improvement in energy efficiency.
   • Schneider’s core business, as described in the article, is “Energy Management.” The company’s growth is driven by providing solutions that help complex facilities like data centers, retail, and hotels electrify, automate, and digitize. These actions are central to improving energy efficiency. The development of integrated cooling and power management systems for data centers is a specific example of advancing energy efficiency in a high-growth sector.
2. Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors.
   • The article reports significant growth in Schneider’s “Software and services” vertical (8% growth) and its acquisition of AVEVA to support its EcoStruxure energy management and automation solutions. This demonstrates a focus on technological upgrading and innovation as a driver of economic productivity and revenue growth ($11.5 billion).
3. Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.
   • The article discusses Schneider’s co-development of two data center reference designs with NVIDIA. These designs integrate cooling and power management to optimize “AI factories.” This is a direct example of upgrading infrastructure with a focus on sustainability and resource-use efficiency (energy and cooling) through the adoption of advanced technologies.
4. Target 12.6: Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle.
   • Schneider’s “Zero Carbon project” is a clear initiative to encourage its suppliers to adopt sustainable practices. The company’s CFO, Hilary Maxson, publicly reported on the progress of this project during an earnings call, stating that suppliers have reduced emissions by 53%. This demonstrates the integration of sustainability information into corporate reporting and encouraging the same throughout the value chain.
5. Target 13.2: Integrate climate change measures into national policies, strategies and planning.
   • While this target is aimed at the national level, corporate actions are a critical component of its achievement. Schneider’s “Zero Carbon project” and its success in reducing Scope 3 emissions represent a corporate strategy that integrates climate change measures directly into its supply chain and business operations, contributing to the broader goal of climate action.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. For Target 7.3 (Energy Efficiency):
   • An implied indicator is the 17% growth in the Energy Management segment in North America. While not a direct measure of energy efficiency improvement, strong growth in a business dedicated to energy management solutions suggests an increased uptake and implementation of energy-efficient technologies and practices by its customers.
2. For Target 8.2 (Economic Productivity):
   • Specific indicators of economic productivity and innovation-driven growth are mentioned: group revenue of +$11.5 billion, 8% growth in the software and services vertical, and 12% recurring revenue growth from the AVEVA software platform.
3. For Target 9.4 (Sustainable Infrastructure):
   • A qualitative indicator is the development of two new data center reference designs with integrated cooling and power management. This represents a tangible output of innovation aimed at making infrastructure more efficient and sustainable.
4. For Target 12.6 / 13.2 (Sustainable Practices / Climate Action):
   • A direct and quantifiable indicator is explicitly stated: “Schneider’s top 1,000 suppliers have reduced their operational carbon emissions by 53% since 2020.” This metric directly measures the progress of the company’s supply chain decarbonization efforts.

4. Summary Table of SDGs, Targets, and Indicators

Source: facilitiesdive.com