CommonBlindSpotsintheInvestorCommunity:ChemicalsandtheFutureofMaterials

Tim Greiner, Pure Strategies Inc. @TimGreinerAl Iannuzzi, Johnson & Johnson @aliannuzzi

Troy Virgo, Shaw Industries Larisa Ruoff, The Sustainability Group LWC

Besuretoengageintheapp:sb16app.com

1)Checkintothesessionbyselectingsession fromtheprogramandselecting'checkin'

2)Poseand'up-vote' questions tobeposedduringQ&A:Insession description, select'submitaquestion'

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BizNGOAnnualMeeting

December8,2014

SallyEdwardsLowellCenterfor

SustainableProduction,UMASS

Lowell

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• 5%ofchildhoodcancer1

• 10%ofchildren’sneurodevelopmentaldisorders1

(e.g.,ADHD,autism-- 1in6childrendiagnosedwithneurodevelopmentaldisorder)

• 30%ofchildhoodasthma2

• 212chemicalsinblood&urine3

1.Mt.SinaiSchoolofMedicineCenter forChildren’s HealthandtheEnvironment2.European Commission3.CDC4th Fourth National Report onHumanExposure toEnvironmentalChemicals

WhyChemicals?

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Chemical risks are real - customers are seeking transparency and safety

RegulatoryRisk

• EnactedregulationsatInternational,Federal,stateforchanges

ReputationRisk

• ChemicalsinyourproductshowuponFoodBabeblog.

ReformulationRisk

• Competitorsswiftlyadoptsaferchemicalsandmaterials

6SlidecourtesyofSeagateandC2P

ChemicalRegulatoryRisks

SteeringCommittee

a project of Clean Production Action 7

CFPAssessmentFramework

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AnnualSurvey20Questions- 100pts

a project of Clean Production Action

9a project of Clean Production Action

ArjunaCapitalBNPParibasInvestmentPartnersBostonCommonAssetManagementCalvertInvestmentsCarnegieInvestmentCounselDignityHealthEverence FinancialFirstAffirmativeFinancialNetworkGreenCenturyCapitalManagementImpax AssetManagementInova HealthSystemsKaiserPermanenteMaryknoll SistersMercyHealthPaxWorldFundsSonen CapitalStaplesSustainabilityGroupofLoring,Wolcott&CoolidgeTrilliumAssetManagementTrinityHealthUniversityHospitalsWaldenAssetManagement

Partial listofChemicalFootprintSignatories

10a project of Clean Production Action

1st AnnualReportFindings

11a project of Clean Production Action

• Seniorleadershipmatters

• Chemicalsinproductsarethepriority

• Disclosurelagspractice

• Footprintmeasurementisnew&challenging

Timeline– JoinUs!2016• September12:surveyopens toResponders

• December6:workshop inSanFrancisco

• January31:surveycloses

2017• March-April:release2nd AnnualReport

www.chemicalfootprint.org

12a project of Clean Production Action

• World’s largest carpet manufacturer

• Headquarters in Dalton, Georgia

• Owned by Berkshire-Hathaway

• Annual revenue $4 billion +

• Provider of carpet, hardwood, rugs, turf, resilient, laminate, tile & stone, underlayment, adhesive

SB- NewMetrics‘16

Internal Challenges • No clear definitions/metrics• Incumbency • Transparency vs. Innovation

External Challenges• Supply chain cooperation• Customer performance expectations• 3rd party certifications/labels

Healthier Products - Challenges

Growing Set of Customer Demands

• Commit to a common definition of success§ 2030 - 100% of Products designed to Cradle

to Cradle Protocol

• Engage Supply Chain § Added Sustainable Sourcing Manager§ Developed new Sustainable Sourcing Guide

• Reformulate Products§ Meet Customer Demands§ Reduce Internal Resource Burden

Healthier Products – Shaw’s Approach

Respect human and natural systems

Select safe and healthy materials for both humans and the environment

Material reuse - eliminate the concept of waste

Power with abundant clean energy

Protect water as a precious resource

Cradle to Cradle Certification

Healthier Products – Lesson Learned

• Management Support

• Customer/Investor Demands

• Regulatory Pressure

• Innovative Suppliers

• Reward Positive Behaviour

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Citizenship & Sustainability Our Commitment to a Healthy Future

Children in Sub-Saharan Africa will benefit from our first-of-its-kind pediatric HIV treatment donation program.

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$31.4 billion

$25.1 billion

$13.5 billion

2015 SalesJohnson & Johnson

is the world's most comprehensive and broadly based manufacturer of health care products, as well as a provider of related services, for the

Consumer, Pharmaceutical and Medical Devices markets.

Total Products and Product Variations

389,000

Total Net Sales, Worldwide

Number of Operations, Worldwide

Total Number of Employees, Worldwide

$70.1 billion265

126,500

We’re creating a new vision of health.

A vision that expands the ways we’ve thoughtabout health and seeks new ways to make

everyone, everywhere healthier.

We’ll make the places we live, work and play healthier by using fewer and smarter

resources.

PlacesWe’ll team up

with partners and employees to create a culture of health and

well-being.

PracticesWe’ll help people be healthier

by providing better access and care in more places

around the world.

People

OUR FOCUS

We’ll make our products healthier for

the places we live.

Our goal

Fully integrate sustainable design solutions into our product innovation processes

Core Targets• New and existing products representing 20% of

J&J revenue achieve Earthwards® recognition for sustainable innovation improvements

• Increase recyclability of our consumer product packaging to 90+% in key markets

OUR FOCUS | Places

Earthwards® Areas of Measurement

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The Earthwards® approach leverages innovation to improve our products in seven key areas:

Making Sustainability a Priority Together

Al IannuzziSr. Director EHS & Sustainabilityaiannuz@its.jnj.com@aliannuzzi