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Our Commitment to Sustainability
Christopher Conley| October 2010
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Our CompanyHeadquartered in New Brunswick, NJ
• Global Leader in health care
• $61.9 billion in worldwide sales
• More than 250 operating companies
• In 60 countries
• Selling products in more than 175 countries
• 114,000 employees Worldwide
Our Strategic Framework
OperatingModel
Our Credo
Broadly based in human health care
Managed for the long term
Decentralized management
approach
Focused on peopleand values
Growth
InnovativeProducts
Robust Pipelines
Global Presence
TalentedPeople
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Our Commitment to Sustainability
“We are responsible to the communities in which we live and work and to the world community as well…
We must maintain in good order the property we are privileged to use, protecting the environment and natural resources.”
–The Johnson & Johnson Credo
Our Journey
“We must use our resources wisely, avoiding wasteof both raw materials and scrap, while we seeksubstitutes for things already in short supply. We must employ replaceable materials where we can, mustlet forests restore themselves as we cut, must preventloss and pollution of water, and must halt wastefulerosion of soil. Means to these ends are known butare now neglected through habit and ignorance of thefact that they pay. Sound business demands their employment, just as it demands reduction of wastein a factory or store.”
[Or Forfeit Freedom, by Robert Wood Johnson, Doubleday & Company, Garden City, New York, 1947, pp. 37-38]
2005 NextGeneration Goals 2010 Healthy Planet Goals
Healthy Future 2015(goals in development)
1990 PollutionPrevention Goals
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Our Achievements
• 2009 Johnson & Johnson debuted third in Newsweek’s list of the top 500 greenest large companies in America
• 2010 Practice Greenhealth “Champion For Change” Award
• #1 Largest Corporate Fleet of Hybrid Vehicles in U.S. Automotive Fleet Magazine 11/09
• #2 Largest Corporate User of On-Site Solar energyWorld Resources Institute 4/08
• EPA “Green Power Leadership Award,” 6th consecutive year
• EPA’s Smartway® Excellence Award for efficient product transport
• 96% of paper packaging is “Certified Sustainable” or has recycled fiber (≥30% PCR)
• Reduced overall water use by 14% (compared to 2005)
• Reduced non-hazardous waste by 32% & hazardous waste by 32% (compared to 2005)
Our Approach
Planet
People
Products
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Planet
Measuring Performance on Environmental Goals
ComplianceZero releases, violations, permit exceedences
Environmental Literacy Increased employee environmental literacy
Biodiversity Enhanced biodiversity conservation
TransparencyShare facility specific sustainability information publicly
Product Stewardship Improved environmental profile of products; take-back programs for electronic equipment
Paper & PackagingIncreased sourcing of paper and packaging from certified forests or increased recycled content; franchise goals for eliminating PVC
CO2 Reduction7% absolute reduction over 1990 levels for stationary sources; 30% reduction in emissions per km for fleet vehicle compared to 2003 levels
Water Use10% absolute reduction over 2005 levels
Waste Reduction10% absolute reduction over 2005 levels for non-hazardous & hazardous waste
External ManufacturingNew operating standards deployed and conformance measured
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Focusing on a Climate Friendly Energy Policy
DIRECT INDIRECTINDIRECT OFFSETS
NET EMISSIONS
1990 308 751 0 1059
2006 341 936 395 883
2007 344 972 385 932
2008 357 968 364 963
2009 337 940 386 891
CO2 Reduction• Our green house gas reduction goal
is the same as the Kyoto protocol
• We go back to 1990 as a baseline year and we do not index our emissions, this is an absolute reduction goal
Carbon Dioxide Net Emissions (Thousand Metric Tons)
Focusing on a Climate Friendly Energy Policy
Reduction Pathways• Energy efficiency – best practices
• On-site cogeneration
• On-site renewables: solar, wind, landfill gas
• Green power purchases
• Carbon trading
How We Are Achieving Our Carbon Dioxide Goal (CO2 Reduction Projects Since 2005)
Energy efficiency 27
Chiller upgrades 16
Solar PV / thermal 15
Cogeneration 7
HVAC 7
Boiler upgrades 4
Biomass 3
Wind 1
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• 39% of energy use from renewable energy sources in 2009
• Installation of on-site cogeneration, renewable energy infrastructure, and purchasing green power
• We plan to triple on-site solar capacity from 4 megawatts to 12 megawatts through seven solar-power projects in 2010
Utilizing Renewable Energy Sources
Janssen Division of Ortho-McNeil-Janssen Pharmaceuticals, Inc. Titusville, NJ
Johnson & Johnson World HeadquartersNew Brunswick, NJ
Johnson & Johnson Consumer Products Company Division of Johnson & Johnson Consumer Companies, Inc. Skillman, NJ
ALZA Corporation Mountain View, CA
Responsible Management of Water
Water Reduction and Usage• Since 2005, we have reduced
absolute water use by 14% (10.8 MM cubic meters)
• Projects to control cooling in energy efficient ways
• Process changes and improvements
• Continued focus on minimizing and eliminating sources of active pharmaceutical ingredients from waste water
2005 2006 2007 2008 2009 2010 Goal
12.513
11.7 11.510.8
11.3
Water Use MM m3
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Responsible Management of Waste
Waste Reduction• Manufacturing efficiency projects
• Plant consolidations
• Increased recycling
• Lean and process redesign
• Equipment upgrades
• Already exceeded our waste reduction goals for 2010 for both hazardous and non-hazardous waste
Non Hazardous and Hazardous Waste Reduction
(million of kilograms)
2005 2006 2007 2008 2009
62.3
35.2
57.3
29.5
49.4
34
51.9
29.3
42.2
24
vv
Non Hazardous Waste
Hazardous Waste
People
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Community Outreach
Every Mother, Every Child
• New five-year program supports the U.N.’s Millennium Development Goals (starting in 2010)
• J&J has pledged grant money, drugs and research funding for new HIV and tuberculosis medications to improve the health of women and children in developing nations
Kangela and her son, Liso
Found hope with mothers2mothers
Employee Engagement
• Employees make the biggest impacts
• Achieve our Healthy Planet 2010 goals
• 5-year program in place
• 80% of employees engaged
• Use the corporate topic or choose your own
Literacy Campaign: Why focus on employees?
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Measuring Performance on Healthy People Goals
• Create, promote and sustain an organizational culture of health− Promote eight health services offerings at 75% of sites /
companies worldwide in 2009; 13 health services offerings by 2010
• Reduce Population Health Risk Factors− Among employees who participate in the voluntary health
screening, demonstrate more than 66% in the “low risk” health category in 2009; more than 70% by 2012
• Promote a consistent approach to the deployment of occupational health services and standards
− Complete greater than 87% of periodic medical surveillance on time in 2009; 93% by 2012
Focusing on Workplace Safety
Improving Safety• Our Health and Safety Policy is supported by global
workplace safety standards and a safety management system
• Our Safe People 2010 goals include lost workday case rates and serious illness/injury case rates at or below 2006 levels, zero non-compliances and zero fines, and implementation of mechanisms to measure and improve safety culture
Fleet Safety• Over 35,000 cars in our
fleet worldwide
• Continue to increase awareness and training efforts to reduce number of accidents
Ergonomics• Ergonomic injuries accounted for 32% of lost workday cases
in 2009, up from 20% in 2008
• We continue to implement an aggressive strategy to modify high-risk tasks and have moved to an operating company focus, supported by electronic tools and awareness training
1995 2007 2008 2009
8.76
5.30 5.56 5.75
Rate of Crashes Per Million Miles Driven (CPMM)
(million of kilograms)
INDICATOR 1995 2005 2006 2007 2008 2009
Lost Workday Case RatePer 100 employees (Goal <0.07)
Johnson & Johnson Pharmaceutical Peer Data
0.310.80
0.060.41
0.070.47
0.080.51
0.100.47
0.120.37
Serious Illness & InjuryPer 100 employees (Goal: <0.035) 0.072 0.033 0.034 0.024 0.032 0.034
Fatalities 1 0 2 0 0 1
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Products
EARTHWARDS™
Continuing to deliver greener products
EARTHWARDS™ is our process to make our products greener. It strives to improve the environmental performance of a product by:
• Reducing Materials
• Reducing Energy
• Reducing Water
• Reducing Waste
• Utilizing safer chemicals
• Packaging more efficiently
• Driving innovation
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Defining a “Greener Product”
A greener product has a 10% or greater improvement in one of the following EARTHWARDS™ areas:
Reducing Energy
Reducing Materials & Utilizing Safer Chemicals
Reducing Water
Reducing Waste
More EfficientPackaging
Doing Good & Doing Well
26Consecutive yearsof adjusted earnings increases*
48Consecutive years of dividend increases~70% of sales from #1 or #2 global market share position~25% of sales from new products introduced in the past 5 years
Non-GAAP measure; excludes IPR&D charges and other special items*