Message from the Chairman

It is not enough to have a written guide to our responsibilities. Rather, we must thoughtfully act to carry out those responsibilities each and every day if we are to achieve the impact we should have on the health care concerns that matter most to our stakeholders and businesses.

When we speak about Our Credo, we use the word responsibility, but it is the root of that word that reflects the urgency and importance of the work we do . . . response. Our day-to-day work is about our response to the unmet needs of our patients and customers; our response to the needs of our colleagues; our response to supporting the global communities in which we live and work; and our response to the call for research and innovation in health care.

In our business of health care, we are inspired and united by a common purpose: to care for the health and well-being of the people we serve around the world. Caring drives the people of Johnson & Johnson in our aim to make the world a better and healthier place through everything we do. It is core to our business strategy and initiatives, the programs and partnerships we build, the positions we take on public policy issues, and our care for the environment. Our Credo helps to remind us of our priorities, and we believe it comes to life through the character and actions of the people across our Family of Companies.

As you will read in the following pages, the passion and commitment of our people yield innovations that further minimize our impact on the planet, drive new alliances to address major health challenges in developing and developed countries, and help to create economic opportunity for people.

This year, our featured topics highlight our efforts in areas important to our stakeholders, such as:

A landmark collaboration to accelerate discovery and development of new drugs to treat tuberculosis, one of the world’s oldest and most deadly diseases
How we are making a greater impact in sustainable sourcing and procurement across our network of suppliers and manufacturers
Our work to implement greener building design, including completion of our first Leadership in Energy and Environmental Design (LEED) Gold-certified research laboratory
How we are setting actions and plans across our businesses to manage for sustainable growth
Our role in making good health care available throughout the world

Here we present our 2009 Successes and Challenges. Performance against indicators and goals is presented in designated sections of the report, and a data summary chart is provided at the back of the book.

FACING OUR CHALLENGES

Like many companies, we faced a difficult year in 2009, which was marked by significant patent expirations, unprecedented economic pressures and an increasingly competitive marketplace. Our Credo keeps us focused on how we must work to address our challenges and compels us to ensure that we hold ourselves to the highest standards.

The series of product recalls in our McNeil Consumer Healthcare business was a disappointment to us. As we continue to work with the FDA, we are driven by a steadfast commitment to address the conditions that led to these recalls. There is still much work ahead, but we will do everything necessary to bring McNeil quality to the level that consumers expect of us, and that we expect of ourselves.

IDENTIFYING MATERIAL ISSUES

In the past year, we have initiated a new assessment of issues that are important to our Company and of interest to our stakeholders. The goal is to better understand those issues that are material to our business. We continue to seek input from partners and stakeholders and compare this feedback with the issues that will have the most substantive effect on our business strategy or pose the most significant impact to us in the next three to five years—issues such as the quality and safety of our products, and access to and affordability of health care around the world. Next we will prioritize our main challenges and develop targets for the next year and goals for future years.

GOAL-SETTING AND REPORTING

Our goal-setting and reporting continue to evolve amid our materiality assessment, changes in our organization and changes in the health care landscape.

For more than two decades, Johnson & Johnson has been setting formal sustainability goals in five-year cycles. Within each cycle, we assess progress against these goals, develop new targets and consider goals in additional areas.

We continue to make progress against our goals, which aim to make a progressively positive impact. These include efforts focused on the environment such as emissions, waste and water reduction. For example, our investments in renewable energy reduced CO₂ emissions from our worldwide facilities by 15.9 percent in 2009 compared to 1990. In 2009, energy from renewable sources accounted for 39 percent of our energy use. Installation of more solar power at several facilities in the next year will help drive down our impacts even further.

Through our Healthy People and Safe People goals, we strive to continually improve in areas such as injury prevention and ergonomics, vehicle safety and employee wellness and disease prevention. We continue to invest in efforts to improve the health and well-being of our employees and their families and provide the safest, most productive work environment possible.

This year we are articulating our aspirations for the next five years. Our Healthy Future 2015 goals will build on our current goals while incorporating issues considered material for Johnson & Johnson. We have begun a systematic outreach to stakeholders and sustainability experts for input in a variety of areas. This invaluable input is helping to shape our new goals, which will launch in January 2011.

Our strongest goal setting and reporting has traditionally been in the area of environmental performance. In our 2008 report, we acknowledged that we had more to do to provide greater depth and breadth of information, especially in areas beyond our environmental reporting. We continue to make strides with this report. We also plan to launch a new website focused on the Company’s environmental, social, governance and economic responsibility efforts. Over time, this site will become core to our stakeholder engagement and transparency efforts.

THE ROAD AHEAD

We are proud of our 2009 accomplishments, but we recognize there is a great deal more to do. In the near term, we continue to assess what more we can do across our business segments, our supply chain and together with partners, including governments, other companies and social and environmental non-governmental organizations.

The people of Johnson & Johnson remain committed to living up to the responsibilities laid out in Our Credo. As our Company approaches our 125-year milestone, improving human health and well-being is still our crucial mission and the ultimate measure of upholding our responsibility now and for generations to come.

William C. Weldon
Chairman, Board of Directors, and Chief Executive Officer
August 1, 2010