Partnering With Our Suppliers (cont.)

ENCOURAGING CHANGE

We also continue working to influence our supply chain in regard to greenhouse gas (GHG) emissions by encouraging our suppliers to join the Carbon Disclosure Project’s (CDP) Supply Chain program. This collaborative program encourages participants to measure their energy use and greenhouse gas emissions and assess their reduction plans, with an option to report them publicly. We have been disclosing our own energy use to the CDP since 2003, and we believe that completing this inventory, reporting the results publicly and understanding a company’s emissions comprise the first step in better GHG management (see our reports at www.cdproject.net). By the end of 2009, more than 80 percent of the suppliers we approached chose to participate in the CDP.

Additionally, we continue to participate in the Pharmaceutical Supply Chain Initiative (www.pharmaceuticalsupplychain.org), an effort to gain some efficiency within the industry and to drive real improvements in the supply chain through collaboration, especially in Asia-Pacific and Eastern Europe. Participants include major pharmaceutical companies that share a vision of better social, economic and environmental outcomes for all involved in the pharmaceutical supply chain.

MAKING A DIFFERENCE

Opportunities to positively impact the environment exist all along our value chain, from reducing our own footprint to assisting our external manufacturers and suppliers in understanding how to reduce theirs. Several years ago, Johnson & Johnson set expectations for suppliers manufacturing finished products or active pharmaceutical ingredients. Our Standards for Responsible External Manufacturing outline expectations for appropriate business conduct, labor and employment, and environment, health and safety practices. These standards continually evolve to reflect the sustainability expectations we hold for our supply chain.

“By meeting our standards, our external manufacturers know that our confidence in them increases,” says Mel Campbell, VP Worldwide Operations, External Supply, Johnson & Johnson. “Through collaboration and partnership, we are using our influence to drive our sustainability efforts beyond our four walls, creating value for both Johnson & Johnson and our suppliers.”

Our Healthy Planet 2010 goal is for all our external manufacturers to conform to these standards by the end of 2010. By the end of 2009 we had assessed more than 85 percent of our approximately 700 external manufacturers against our standards. “If minor violations are found, we work with the company to improve their performance,” says Campbell. “If significant violations are identified that cannot be resolved, Johnson & Johnson terminates its relationship with the supplier.”

TAKING RESPONSIBILITY

Taking responsibility for the environmental and social impacts of our products requires thoughtful efforts: from the design and implementation of tools our businesses can use to assess raw materials, products, processes and packaging to setting goals that drive performance. We’ve been driving change within our own organization for years, and turning our attention to the supply chain is a natural progression.

“The choices we make today will determine the conditions that future generations inherit tomorrow,” says Guinan. “When you think in those terms, these efforts take on a greater sense of importance.”