Dassault Systemes

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					 Dassault Systemes
ISIN code : FR0000130650. Rating : March 2009

General Information
Dassault Systèmes (DS) is the world leading company in the development of 3D and Product Lifecy-
cle Management (PLM) solutions, offering its clients IT services that enable them to create and simu-
late the entire life cycle of a product, from its inception stages to actual production and recycling. Its
services are sought after by industries such as automotive, aerospace, shipbuilding, industrial
equipment, consumer goods, life sciences, business services, etc. DS has grown rapidly over the
past few years (through internal growth as well as acquisitions) and 53% of its employees are now
located outside Europe.

CSR Profile
Overall, Dassault Systèmes is one of the CSR leaders in the European Software & It services sector.
In terms of human resources, it has implemented comprehensive tools to foster career management
and promote its staff’s employability, one of the most material issues in the sector. It also addresses
the other HR issues at stake (promotion of social dialogue, stress management and management of
working hours), but DS’ reporting on these issues remains mainly limited to its French operations
and does not reflect the group’s international presence. Likewise DS’ relevant and pragmatic efforts
to mitigate its environmental burden account for its positive rating in this domain, but room for im-
provement remains with regard to the scope of the group’s quantitative reporting. DS' Code of Busi-
ness Conduct, which is implemented groupwide, and related procedures contribute to the company’s
positive performance in the business behaviour (C&S) and human rights domains. Moreover, DS'
efforts to promote the integration of disabled people in its workforce constitute a good practice in
the sector. In line with the sector, DS’ relatively high score in corporate governance reflects good
practices such as the Board’s high level of independence, and the implementation of relevant inter-
nal controls. In this domain however, disclosure on executive remuneration remains incomplete.

 Executive Summary
Human Resources
Dassault Systèmes is a sector leader in terms of human resources management. In France, it ap-
pears to maintain sound labour relations: numerous collective agreements are regularly signed and
cover a wide range of issues. Moreover the company has developed a comprehensive career man-
agement system, and set measures to reduce stress, promote work-life balance and mitigate the
negative impacts of atypical working hours. Nevertheless the scope of DS' reporting on human re-
sources issues is often limited to France which accounts for only 31% of the company's global work-
force. The implementation of the 'One company initiative' is expected to lead to a more global ap-
proach of human resources issues.

Since the previous rating, DS' commitment to environmental protection has been included in the
group's Code of Business Conduct, which illustrates the company's intention to make environmental
protection one of its key missions. Although DS' reporting mainly emphasises the positive impact of
its Product Lifecycle Management (PLM) solutions on its clients' environmental footprint, the com-
pany also adresses its main direct environmental responsibilities through basic but relevant meas-
ures. However, while a growing number of companies in the sector are now able to disclose indica-
tors at group level, DS' quantitative reporting remains limited to French operations (31% of the
group employees). Overall however, DS ranks above the sector average in environment.

March 2009 - FR0000130650 Dassault Systemes                                                        Page 1
Business Behaviour (C&S)
Since 2005, the longstanding distribution agreement with IBM has significantly evolved: DS is pro-
gressively expanding its role in distributing its PLM products. In that context, the company has be-
come increasingly exposed to business behaviour issues. In this area, Dassault Systèmes has issued
formal commitments covering all the relevant issues at stake, although in rather general terms. With
regard to the management processes in place, the prevention of anti-competitive practices appears
to be well addressed by the company since it is supported by relevant training programmes while
the prevention of corruption only relies on basic internal controls. However while it states that no
corruption incidents have been reported internally in recent years, DS does not show the same level
of transparency with regard to antitrust incidents. Finally, a review of stakeholder sources did not
reveal any allegation against the company and overall DS' performance in business behaviour is
above the sector average.

Corporate Governance
In line with sector practices, Dassault Systèmes is a good performer in terms of corporate govern-
ance. In accordance with Vigeo's standards, the board is more than 50% independent, and its three
main committees only comprise independent members. Moreover, strong internal controls are in
place and non-audit fees paid to external auditors have significantly decreased since 2006. Although
executive remuneration is not voted upon at the AGM, shareholders voting rights' effective exercise
is globally ensured. Room for improvement remains however since executive remuneration incentive
targets remain undisclosed. Moreover CSR issues are not discussed at Board level nor do they ap-
pear to be covered by internal controls.

Community Involvement
DS' community involvement policy is to build upon the social and environmental value-added of its
core business (3D digital design & simulation software). Consequently, it supports projects in the
areas of technical education and science in various locations worldwide. The company also supports
other humanitarian causes notably through financial donations. However although DS appears to
invest not insignificant financial and human resources in this area, no group-level structure has been
established to coordinate the group's community involvement initiatives, and the absence of histori-
cal group wide quantitative data does not allow to determine a trend. As a result, DS ranks in line
with the sector average in community involvement.

Human Rights
DS makes succinct but clear and formal commitments relative to the issues of freedom of associa-
tion and non-discrimination. Although no specific actions appear to be in place to ensure freedom of
association is respected throughout its operations, no related controversies have been reported. In
the area of non-discrimination, since 2003, the company has been implementing a noteworthy pro-
gramme encouraging the integration of disabled staff, a complex and unusual issue to address in the
sector. However related actions appear to be limited to French operations. Overall however, DS
ranks among the best performers in the sector in the human rights domain.

Negative criteria assessment for the company
Armament: “minor involvement”. DS’ level of involvement in armament is considered as minor since
the products are considered as dual-use products or civilian products: Product Lifecycle Management
(PLM) solutions for virtual product definition and innovation, production processes’ definition and
optimization. Dassault Systèmes is the largest supplier of advanced design solutions to the aero-
space industry.

No serious allegations detected.

March 2009 - FR0000130650 Dassault Systemes                                                    Page 2