Presentation of Aaron Davis - Chief Marketing Officer, Member of the Executive Committee , Schneider Electric to young leaders from 42 countries during the 6th Economic Forum of Young Leaders.

1. A message to the leaders of
tommorow
Aaron Davis, Chief Marketing Officer
September, 2011

2. ●1●Wife
9 Bikes!
●5 Kids of
unknown
extraterrestrial
origin
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 2

3. Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 3

4. 1) We are in a “New Normal” re: energy
The earth at night
Even sea-level rises at lower level of estimates will
cost multiple times more than “global stimulus “
“Human history becomes more and more a race
between education and catastrophe…”
HG Wells
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 4

5. Primary Effects and Observations
Coal burned
Coal
particulates
inhaled
Coal mined
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 5

6. Secondary Effects and Observations
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 6

7. ●Pyrocumulonimbus
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 7

8. Educating on generational and geographical stakes
"This is a marked difference from the normal
advertising we see coming out of energy
companies as they scramble to convince us they
are trying to save the planet…bringing people
back into the equation, not something most
energy companies consider to be their
responsibility.
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 8

9. Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 9

10. Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 10

11. The 3 Phases of Society Response to threat
Technology
15000
10000
5000
Cost
0
ROI
Investigation Prevention Mitigation
-5000 Altruism
-10000
-15000 Policy
We are here…
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 11

12. 3) We have 10 years… quickest wins: 50% of C0 cut
The 2
must come from behaviour
to fix 4 critical problems
Generation: Transmission: Buildings and Process: Point of Use:
> 10 years to fix > 10 years to fix 1- 5 years to fix 1-5 years to fix
Problems:
CO2 Emissions Stranded Capacity Stranded Capacity Efficiency
Transmission Efficiency Capacity Constraints Service Entrance Capacity and Integration
Capacity Constraints
Focusing on point of use architecture provides fastest impact and frees
upstream capacity through Power Plant to Plug Optimization
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 12
Source: Hot, Flat and Crowded: Tom Friedman

13. I=P A T x x
The Ehrlich Equation: Foundation of modern science
of evaluating human-caused environmental impact
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 13

14. Today’s annual impact
$8,000 / person
28,000,000,000 Tons CO2 Today
Impact Affluence
GDP / person
I=P A T x x
Population Technology
Impact / GDP
6,800,000,000
0.5 Ton CO2 / $
The Ehrlich Equation
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 14

15. Projected 2050 annual impact: no technology improvement
$12,000 / person
54,000,000,000 Tons CO2 2050 $8,000 / person
28,000,000,000 Tons CO2 Today
Impact Affluence
GDP / person
I=P A T x x
Population Technology
Impact / GDP
6,800,000,000
0.5 Ton CO2 / $1,000
9,000,000,000
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 15

16. Solution for 2050
5,000,000,000 Tons CO2 $12,000 / person
54,000,000,000 Tons CO2 2050 $8,000 / person
28,000,000,000 Tons CO2 Today
Impact Affluence
GDP / person
I=P A T
Cutting emissions from 54GT to 5GT required by
2050 to hold the 450ppm CO2 x
x limit: This means
technology must de-carbonize by a factor of 10X
Population Technology
Impact / GDP
6,800,000,000
0.5 Ton CO2 / $1K GDP
9,000,000,000
0.05 Ton CO2 / $1K GDP
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 16

17. Active energy management
is about being smart grid ready..efficiency is an asset!!
Demand / supply mgt :
Active Energy Efficiency
Energy visibility
Energy control & optimisation
Centralised
2
Generation Electric Vehicles &
3 Energy Storage
Residential
Industry
Human to Human internet still
immature,
Building
Machine to machine just beginning
Datacenter
Transmission Distribution Commercial & Industrial
Renewable
Energy Decentralised
Plants Generation
1
Communication and
software at all levels of
4
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day the “Smart Grid”
17

18. Boeing 787: 8 million lines of code
F-35 Joint Strike Fighter: 6 million
Chevy Volt: 10 million
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 18

19. Parking Garage= Datacenter
● Features over 100 electronic controllers, 10 million lines of code, and even has
its own IP address.
● …it allows vehicles to connect remotely to other products like OnStar or
Ford SYNC, which allow for more flexibility in how functions can be delivered to
the customer.
● Electric cars like the Volt could eventually be able to interact with the electric
grid or connect with other applications.
●“Ultimately as a user of a vehicle, I don’t care whether
the processing is being done in a processor onboard
the car or somewhere off in an IT farm somewhere else,
as long as it makes my vehicle do something cool and
interesting,”
● Sky Matthews, director of Rational Systems Products at IBM.
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 19

20. ● Kevin Warwick,
professor of
Cybernetics at
University of Reading
● Photo: Time
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 20

21. Elasticity and the law of supply and demand
38% <2% 18% 15% 27%
Industry Data centres & Buildings Residential Transportation
& Infrastructure networks
Source: US DOE-EIA (Energy Outlook 2007) and Green Grid for Data Centers
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day Industry Buildings are included in building and not in industry 21

22. ”The law of diminishing marginal
utility…”
● Water or Diamonds
● Water or Datacenter
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 22

23. Digital economy is the « killer app>>
20 milligrams of CO2
per second spent on the
web
IT in world electricity
consumption
From 4% in 2008
to 40% in 2030
Sources : IEA
Scenario based on a 15% yearly growth
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 23

24. Machines won’t make humans
smarter…
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 24

25. Our children: The last generation
●That will need to learn to drive a car
●That will be able to make commercial piloting a
lifelong career
●That will have the majority of surgeries done by
human hands
●That will use physical passports
●That will wonder where their kids are…
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 25

26. Impact on companies and careers:
A question of curves! Socialization of
technology
(human to human)
Cost of computing:
Moore’s Law
Population growth Price of Energy: Elastic
Market Share of Renewables
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 26

27. And it’s just starting…
Machine to
Machine Internet
Typical Company Expense 1950 2000 2020
% of Revenue on IT 0 4 2
% of Revenue on Energy ? ? 6-30%+
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 27

28. Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 28

29. What would Pascal do?
Climate Change is True False
largely caused by human
energy practices?
Take action today to Save 30% of Save 30% of
reduce consumption, reinvest at consumption, reinvest at
higher ROI higher ROI
Make reduction impact in
home, business etc
Take no action More than 10% of global Short term benefits of
GDP invested in carbon-intensive
mitigation, poor ROI status quo
Long term dire
consequences to human
prosperity
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 29

30. Let’s look at the world we are living in
6 billion inhabitants 8 billion inhabitants
50% lives in cities 60% will live in cities
2 billion have access to an additional2 billion
a decent energy people in the “energy”
infrastructure middle class
1.2 billion still have
1.4 billion have no no access to energy
access to energy
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 30

31. Schneider Electric is committed to tackle
the main energy challenges
Achieve more while Energy management
• Making energy intelligent
using less: • Spreading energy efficiency
• Integrated solutions
- Reduce energy consumption
- Lower the environmental impact of
business activities
Energy access
Spread access to • Training young people in electrical
Careers B I
energy • Developing adapted offers and BOP
to the 1.5 billion who do not business models P
• Fostering entrepreneurship in
have it to foster development
access to energy
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 31

32. BipBop access to energy programme B
BOP
I
P
A unique social business model based on a simple idea:
there is no sustainable development without business
Business entrepreneurs the
Give potential
500 contractors their of the pyramid*
opportunity to start at the base
Objectives From 01/2009 to 12/2011 objectives
business
set up their activities in the energy management sector
supported by our sustainable investment fund.
Q3 2010: 130
Rely on local
Provide local people Innovation knowledge
with the skills to
maintain,
1M households from BoP equipped with +
bring project
adequate energy offers/solutions management,
develop and sell Q3 2010: 608,000
the solutions technological and
operational
capabilities
People
10,000 young people from the base of the
pyramid trained in energy skills
Q3 2010: 4,065
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 32

33. Focus on: Pilot project at Bhubaneswar
Battery charging station
● Context
● In slums of Bhubaneswar, Schneider Electric partnered with Aide &
Action to provide basic electricity trainings to young
underprivileged people
● Trained electricians developed entrepreneurial activities through a
battery rental model
● Solution:
● One entrepreneur sold In-Diya lamps to 47 customers
(90-LEDs for INR 900 and 45-LEDs for INR 500)
● Entrepreneurs rent daily charged batteries for INR 5
● Economic model:
y Ch
arg ers Training
atter
i de B centre
Prov ining
to tr
a
Centre
Prov
id
To e e In-Diy
ntrep a
rene lamps Sell In-Diya lamps &
urs
Entrepreneur Rent charged batteries Communities
Schneider Electric - Aaron Davis, CMO – Feb 8 2011 – EDHEC USA day 33

34. In-Diya helping family
to work and study
34

35. Installation of SHS
by trained electricians
35

36. The first step towards brighter life
36

37. Make the most of
your energy™
schneider-electric.com
SDreport.schneider-electric.com
37

38. Life’s lessons learned…
If you want to build a ship,
don't drum up the men to gather
wood, divide the work, and give
orders. Instead, teach them to
yearn for the vast and endless sea
Antoine de Saint Exupery
38

39. “Find somone silly enough to payI wonder ifto
you I can
do what you like…” get paid in
doughnuts?
Does
marketing
really work??
39

40. Take your responsibility to mentor seriously
40

41. Simplify to the essence…
●“Everything should be made as
simple as possible, but no
simpler…”
● Albert Einstein
41

42. Get involved!
●“It is easy to be brave from a distance,
and quite safe too!!
42

43. Embrace power of positive influence
●Say something nice to someone
who cannot hear you…
43

44. Question everything we do and have
done
●“There is nothing more wasteful as doing with
great efficiency that which does not have to be
done at all…”
44

45. Support change, especially if it’s
uncomfortable
●"There is nothing more difficult to plan, more
doubtful of success nor more dangerous to manage
than the creation of a new system… for the creator
has the enmity of all those in existing system, and
merely lukewarm support from those who would
benefit from the new… "
●Machiavelli, The Prince, 1590
45

46. Listen to crazy people…
●“All progress depends on the
unreasonable man…”
● George Bernard Shaw
46

47. Enjoy “appropriate anxiety”
●A comfort zone is always relative and time specific
47

48. Share your passion!
●“No wild enthusiast ever yet could rest, till
half mankind were, like him, possessed…”
William Cowper
Typically 1% of a segment is an ADVOCATE
48

49. Keep moving: Ebay, FaceBook, Google
● "The only way to survive (and succeed) these
days is to do some sXXX and see what
happens.”
● Every now and then you do sXXX that, for
reasons which are completely unspecifiable,
turns out to be big sXXX, as opposed to little
sXXX.
● You just have to make sure there is enough sXXX
going on that some big sXXX happens."
Tom Peters
49

50. Your actions dictate your success…
●“Man must sit in chair for very long time
before roast duck fly in mouth…”
Chinese Proverb
50

51. Surround yourself with people smarter
than you…
●When we succeed, we succeed together.
If we failed, we failed alone.
51

52. Above all, don’t listen to the experts
●“Before man reaches the moon, your mail will be delivered
within hours from New York to Australia by guided missiles.
We stand on the threshhold of rocket mail… “
Arthur Summerfield, US Postmaster General, 1959
2002
52

53. P b T il Po c
u l oe rj t
ic t e
G A :M s n
S P isio
Families pay back to local district government over two
years
Creates Create aid programs that don’t rely on donations
utility infrastructure
Work with Ghanaians
Solar panels
Good intentions are not good enough - be
Composting toilets internet cafe
accountable
portable
girl-run internet cafe project
Improve Ideas from within the community
sanitation
Wealth creation
Innovation
Don’t do anything that creates dependency
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59. 59

60. Building a career, company or diploma…
Whose
stupid idea
was this??!
60

61. But the view will be worth the effort…
“There is no quicker way to kill the
human spirit than to ask it to do
mediocre work…”
Ayn Rand
61