Forging the principles oF sustainability

into every aspect oF

our business

sustainabi l i ty report

Momentive performance Materials is a

global leader in silicones and advanced

materials, with a 70-year heritage of

being first to market with performance

applications for major industries that

support and improve everyday life. the

company delivers the science behind the

solutions, by linking custom technology

platforms to opportunities for customers.

revenues: $2.1b in 2008

employees: ~4,500

corporate headquarters in albany, ny, usa

customers in more than 100 countries

Office locations in 35 countries

Manufacturing locations in usa,

brazil, united Kingdom, italy, germany,

india, china, Japan and thailand

at Momentive, ‘sustainability’ means continuous

improvement of the environmental, economic

and social quality of the world in which we live

and work, now and for future generations.

Jonathan D. rich

ceo statement

responsibility for our employees, responsibility for our neighbors,

responsibility for our customers and responsibility for the environment

have long been guiding principles at Momentive. During 2009, we

have endeavored to formalize and embody these principles in our

Sustainability Program. The process has intensified our focus, bringing

us to the next step through clarification of our needs and goals and

documentation of our achievements.

A sustainability program makes sense because it is good for the

environment and is a smart way to do business. it will help us reduce

our overall environmental footprint. at the same time, it will connect

with real needs in the marketplace and add value for our customers

and, through them, to society. sustainability must be among our daily

criteria, part of our customers’ and our buying decisions, and funda-

mental to the manufacturing process. sustainability planning will

help us protect our employees, improve our processes, reduce waste,

and reduce any potential environmental impact by our products. as a

result, Momentive will be a more competitive company and a better

corporate citizen.

We recognize, though, that Sustainability is not a quick fix. Rather, a

sustainability program is a long-term process of continuous improve-

ment. such a long-term effort is both necessary and worthwhile.

our sustainability program is more than compliance with regulation.

it is our commitment to our employees, the communities in which

we operate, and future generations.

Jonathan D. rich

President & Chief Executive Officer

amy presslyglobal productivity leaderOur Sustainability Program is the result of a global, cross-functional team effort initiated and directed by Momentive’s top management. We are passionate about these ideas.

edu araujoglobal ehs DirectorBy following our internal standards, we ensure that we do exactly the same thing in every facility, resulting in continuity across the world. We meet or exceed local regulations.

introduction: Weaving sustainability efforts into

a unified program of continuous improvement

2009 marked the formal design of our Sustainability Program,

but not the beginning of Momentive’s sustainability efforts. the

elements of the program have roots in our legacy companies.

these existing efforts provide a sound base upon which our

sustainability program has been built. implementing the program

has intensified our focus on operational excellence, provided

sustainable solutions for our customers, and prompted us to

evolve our focus on how we can participate in, and improve, the

communities in which we live and work. The formal program

has pushed us to develop both a strategic and a tactical action

plan to achieve our sustainability goals.

our sustainability program is built on three foundation stones:

environmental, health and safety in our global operations,

evaluation and reduction of the environmental impact of our

products, and corporate citizenship. Within this context, a cross-

functional team that included representatives from Momentive’s

ehs, Manufacturing, technology, sourcing and commercial

organizations identified the following 11 elements as those

most critical to our sustainability efforts and to assessing our

performance as we make improvements going forward.

proDucts

; reduced environmental

impact of our products

; reduced environmental

Impact from Packaging

; suppliers’ sustainability

operations ehs

; greenhouse gas

emission reduction

; global health/safety

program

; Waste reduction/raw

Material Efficiency

; reduced environmental

impact from operations

corporate citizenship

; trained employees

; attractive employer

; corporate code of

conduct compliance

; Facility enhancement

proDucts

Molecular chains of sustainable innovation

Momentive puts a very high priority on our customers’ needs. We recognize that in addition to safety and quality, our customers are increasingly focused on reducing the environmental impact of their products and operations. as part of our sustainability program, our product development processes will consider innovative solutions that lower the environmental impact of our products and our processes wherever possible.

reduced environmental impact of our products

reducing the environmental impact of our products is linked inexorably to our manufacturing processes. as we continue to refine these systems, we will reduce the energy needed in the manufacture process, the water used to rinse and cool, and the amount of raw material necessary to produce our products.

our sustainability program focuses not only on the manufacture of our products, but also on new products that offer sustainable performance to our customers and their products.

We make products that are used as intermediates in major industries such as automotive, electronics, construction and energy. the very nature of our products improves productivity and efficiencies under difficult conditions: durability, adhesion, thermal manage-ment, wetting and spreading, softening and conditioning, tunability, cure on command, protection, etc. as we align with our customers in the drive toward sustainability, we will focus on increased

ease of incorporation, reduced energy to produce and reduced resource use.

using sustainability concepts in developing new products will help us develop products that complement our customers’ sustainability efforts. in this way, our sustainability program is helping us align our customers’ goals with society’s interest in reducing environmental impact.

because our products are used in such a variety of applications, it is difficult, if not impossible, to accurately quantify the environmental impact of our customers’ use of our products. instead, our sustainability program looks at the resources we are dedicating to developing sustainable products and the percentage of new sustainable product development projects. in order to assess whether these new products are meeting our customers’ needs, we also assess the actual and projected revenues from new “sustainable products.”

one example of this win-win effort between Momentive and our customers is nXt* silane that is used in the manufacture of silica tires. this product helps reduce tire-rolling resistance, leading to increased gas mileage, while maintaining or improving wet traction.

In an effort to help meet market demand for lower healthcare costs, our statsil* antimicrobial elastomer, used in medical devices, helps improve patient health with built-in antimicrobial protection in or on the human body. our uv-cure elastomers, extruded and molded without heat, help save energy. and, our silopren* lsr7000 series is virtually as clear as glass, and is a candidate to replace glass and plastics in many applications, thus saving the

energy cost associated with weight in the end-product. For this product, Momentive was chosen as a 2009 Finalist, receiving honorable Mention, in Material conneXion‘s recognition of innovative Materials of the year.

our elastomers are in many of the insulators from which the high voltage transmission wire is suspended — helping to keep electricity from seeping out of the transmission wires as it travels great distances.

For agriculture, silwet* products provide superior wetting and penetration properties that can significantly reduce both the water volumes and treatment costs during pesticide spray applications. silwet super spreaders are used today to enhance pesticide spray applications in more than 80 countries and on several important agricultural crops.

in the personal care industry, we are proactively working to make our silsoft* products more sustainable by incorporating renewable organic materials into our blends.

our sag* foam control products can help reduce food processing time.new niaX* surfactants can help create ultra-low density polyurethane foam in a way that less foam is required, thereby saving weight, material and recyclables, while delivering the same soft perfor-mance to furniture and bedding. in addition, more highly insular rigid foam materials are helping to save heating and cooling energy in building construction.

coatosil* high tech coatings additives can help improve adhesion, chemical resistance, cover more uniformly, and help protect metal from corrosion with-out the use of chromium. Future developments are focused on helping

eric thalerchief technology officer Our primary mission is to help our customers win and improve their effec-tiveness by aligning with their sustainability goals.

Mike Modakchief commercial officer Making products so they use less energy, consume less packaging and produce less waste is good for business and for the environment.

reduce the effect of marine fouling that adds significantly to the annual fuel cost for a container ship. our high technology adhesives are taking the heat out of solar panels, leD lighting and microchips, increasing product longevity and saving energy.

our hardcoats help enable the use of light weight plastics in automobiles for headlamps and glazing applications, thereby contributing to significant weight reduction and improving the fuel efficiency. And, in exterior window film that helps reduce a building’s solar heat gain, increase comfort and reduce energy consumption, our weatherable hardcoat can prolong service life and can promote higher efficiency of the film.

Momentive’s ge silicone ii* Window & Door caulk has permanent flexibility that keeps it from breaking down when exposed to harsh outdoor elements throughout the year. it is nahb research center green approved.

Momentive will receive $4.5 million in funding from the u.s. Department of energy to continue the development of breakthrough technology for the low cost production of light emitting diodes (leDs) used in solid state lighting and for increased leD light source performance. leD lights can consume 75 percent less energy and have a longer lifespan than conventional lighting options, but are currently more expensive to produce than conventional lighting.

reduced environmental Impact from Packaging

Packaging impacts the environment through disposal of waste and through initial manufacture of the packaging. The packaging for chemical products is often more complicated, and can have

even greater environmental impacts.We are working hard both internally and with the suppliers of our raw materials to adopt a “less is more” approach to packaging. Whenever possible, we are reducing the amount of packaging used for our raw materials and collaborating with our suppliers to recycle and re-use packaging such as steel drums and wooden skids.

our goal is to reduce the amount of packaging required in terms of environmental intensity. in 2010 we will collect the data necessary to establish a baseline so that long-term reduction targets can be established.

suppliers’ sustainability

having embraced the concept of sustainability, we are looking at every stage of production. By taking a long-range view, we are not simply choosing the raw material that is the least expensive today, but rather the raw material that offers the best value over the long term. our focus on sustainability is helping us become more strategic in our collaboration with our suppliers.

companies do business with other companies that share their values. Just as we are working closely with our customers to offer them sustainable products, as a customer, we are encouraging our suppliers to provide raw materials in the most sustainable way possible. We want to buy from suppliers who are committed to doing the right thing and who are incorporating sustainable principles into their businesses. strongly encouraging suppliers to implement their own sustainability programs will help us improve the overall impact of our business over the long term.

Joerg Kruegerglobal operations leader Through Sustainability we are protecting our people, our neighbors, and our environment.

operations: environMental health anD saFety-

intertwining process and practice

global health and safety program improvements

2009 marked the best year ever for environmental health and safety (ehs) performance at Momentive. this is a remarkable achievement in light of the business challenges brought on by the global economic recession. We finished the year within the top quartile of our peer silicones and specialty chemical industries with an occupational safety and health (osha) rate of 0.99. in 2009, 68% of our sites achieved a zero injury and illness rate and a 38% improvement in the number of injury and illness rate over 2008.

our concern with safety and environ-mental protection goes beyond regula-tory guidelines. We have raised that bar by developing our own leading indicators to improve performance and putting in place our own system to

evaluate each and every incident and why it occurred.

Momentive is committed to protecting the health and safety of our employees and our communities. our sustainability program complements our ongoing efforts in support of ehs in operations and in our process to control the number of manufacturing incidents. our goal is zero incidents. 2009 was a banner year for Momentive in terms of incidents. We are proud of our results.

greenhouse gas emission reduction

the reduction of greenhouse gas (ghg) emissions was one of the earliest sustainability initiatives at Momentive. We track two types of GHG emissions: direct emissions, which are emissions from our own facilities, and indirect emissions, which are emissions that are generated by outside facilities when producing the energy we use. For example, when we use electricity in our facilities we take into account the carbon dioxide generated to produce that electricity. We are continually

reinvesting in our facilities to improve their energy efficiency while minimizing possible impact on our communities.

We have projects underway that improve efficiency and reduce our energy consumption. in our ohta, Japan facility, we switched from fuel oil to combustion using natural gas, a “cleaner” fuel that emits significantly less ghg. in our Waterford, ny, usa facility we recently re-insulated our steam lines to prevent heat loss. We also changed the lighting in the entire facility to higher efficiency lighting, significantly reducing electricity demands. other global initiatives include the re-capture and re-use of heat generated in manufacturing to heat our buildings.

Waste reduction and Raw Material Efficiency

as with other manufacturing companies, waste generation is a significant element of Momentive’s environmental footprint. accordingly, waste minimization is a component of our sustainability Program. Momentive will be tracking

waste generated by each manufacturing site and will require our facilities to identify specific actions for reducing the amount of their waste.

as part of this effort, Momentive is also developing a company-wide waste management standard. While these waste reduction efforts will focus primarily on chemical waste, they will include both chemical and non-chemical waste.

Momentive recognizes that it is more beneficial to avoid generation of waste in the first place than to try to reduce the impact of waste that is generated. to achieve that end, Momentive’s waste reduction efforts will emphasize waste minimization projects, such as improving production efficiencies through manufacturing process improvements or material substitution. Momentive will also consider recycling and alternative uses of waste materials and products that do not meet Momentive’s quality specifications.

reduced environmental impact from operations

Momentive’s code of conduct requires company facilities and employees to comply with all applicable legal require-ments, including ehs requirements. however, Momentive recognizes that the breadth and complexity of its operations make it difficult to avoid all instances of noncompliance.

For a number of years, Momentive has had a process for tracking the number of environmental events. these events include instances in which a Momentive facility inadvertently exceeds a limit for air or wastewater discharges, discharges wastes without the necessary autho-rization, or causes an accidental spill that must be reported to the relevant national authority. Few, if any, of these releases present a risk to the environ-ment, and Momentive employees are trained to take immediate response actions to halt such events and minimize their potential impact.

Momentive recognizes the importance of reducing and trying to eliminate these events to minimize the potential environmental impact of Momentive’s operations, and such efforts are part of the sustainability program. in 2009 we had a 38% reduction in environmental events including zero unauthorized discharges, a 60% reduction of wastewater exceedances and a 43% reduction of reportable spills.

Liquid Fuel2%

Electricity48%

Other GHG17% Natural Gas

33%

2009 GHG Emissions by Source

2006 2007 2008 2009

Annual Emissions

Absolute MT GHG Emissions (Direct + Indirect)

3-Year Rolling Average

GHG Intensity Summary(Kg GHG Emitted / Kg Product Sold)

2006 2007 2008 2009

Annual Emissions

3-Year Rolling Average

2006 2007 2008 2009

GHG Efficiency Summary$ Sales / Metric Ton GHG (Adjusted for Inflation)

Annual Emissions

3-Year Rolling Average

0

0.4

0.8

1.2

1.6

Illness and Injury Rate

Number ofIllness andInjuries

2006 2007 2008 2009

Illness and InjuryRate

0

0.2

0.4

0.6

0.8

Lost Time Rate

Number of DAFW

2006 2007 2008 2009

DAFWRate

Environmental Events

2006 2007 2008 2009

corporate citizenship-

Interlocking responsibility with pride

in today’s global economy, being a good corporate citizen includes responsiveness to neighborhoods, communities and employees around the world. At Momentive we are working to create a culture that nourishes these relationships through community support, training and ethical behavior.

We share experiences together as employees and give back to our communities in five different ways:

1) sponsorship of events; 2) financial donations; 3) product donations; 4) team Momentive; and 5) mutual aid.

Momentive embraces the efforts of well-known charitable organizations, and we encourage each and every employee to participate.

in the united states, team Momentive was created to help employees support the causes they believe in, from walkathons to building playgrounds to cleaning parks or bringing meals to seniors. These activities benefit the communities near our facilities, build teamwork and encourage interaction between our employees and the local communities.

training employees

our employees are our most important assets. We are determined to provide them with the training and career development support they need to achieve their career goals. For this reason, Momentive recognizes that employee training is a critical element of our sustainability program.

to ensure that our employees receive the training needed to fulfill both their career goals and the company’s goals,

Momentive has developed an extensive employee training program. Key elements of employee training include instruction about our corporate code of conduct, company procedures applicable to their position, and key legislation such as antitrust and ehs laws.

in 2009, our global learning and development leader was awarded the gold vanguard award from chief Learning Officer magazine in recognition of the development of a comprehensive Momentive training program that supports our business globally. 1,200 courses are available to employees in their local languages via personal home pages. the courses embrace a number of learning styles and cultural approaches to ensure that core company values and skills are communicated consistently around the world.

Momentive expects that 100% of the legally required training will be completed each year. in order to insure that employees complete the identified training beyond what is legally required, we monitor each employee’s training and identify track percentage completion of each training element across the company.

attractive employer

as an industry leader in silicon and quartz technology for 70 years, we are committed to making Momentive an attractive employer for people around the world. this is accomplished by offering competitive pay and benefits packages and a winning atmosphere, where people can learn and grow in their careers. We are a global company in which employees have the opportunity to interact with colleagues in 35 countries.

Our employees take pride in our commit-ment to embracing sustainable business practices. this initiative is changing how we prioritize our use of company resources, in terms of capital investment and human resources, and will allow us

to emphasize those products that enable sustainability.

corporate code of conduct

conducting business in a compliant and ethical manner is the foundation upon which our entire company is built, and is crucial to our success.

ethical behavior is an essential com-ponent of our company culture that is reinforced through training. guidelines for appropriate and compliant conduct are consistently communicated to employees in every country, and our expectation is 100% compliance. We have also created a process that allows employees to report concerns on an anonymous basis. We investigate every reported concern and, when necessary, take appropriate actions to correct any problems and prevent such problems from occurring in the future.

Facility enhancement

Facility enhancement at Momentive will extend beyond those improvements that enable greater efficiencies or re-duced energy expenditure. Momentive is planning ongoing efforts to create pleasant work environments with the amenities that our employees need and deserve.

connecting today to the Future

the future of Momentive is heavily dependent upon our sustainability program. We are an enduring company that is here to succeed by practicing sustainable decision-making.

our sustainability program will help our constituencies and our employees understand our focus.

it will guide us in evaluating potential adverse impacts on the environment and our communities.

it will allow us to continue to move beyond compliance as a measure for success.

it will allow us to gain synergy among functions, making us a faster, more streamlined company, able to be proactive and ahead of regulatory requirements, emerging trends and customer needs.

It is a strategy that will keep us at the forefront of the industry and ultimately provide more value to our shareholders, employees and the community.

Momentive performance Materials. our rich, blended 70-year heritage of innovation and market firsts provides product portfolios and technical competencies that link custom technology platforms to opportunities for our customers.

the science behind the solutions.*

ed strattonglobal hr leaderWe use best practices drawn from some of the most well-known and successful companies in the world.

* NXT, StatSil, Silwet, Silsoft, SAG, NIAX, CoatOSil and GE Silicone II are trademarks of Momentive Performance Materials Inc.* Silopren is a trademark of Bayer AG, used under license.* Momentive, the M-design logo, and ’The science behind the solutions.’ are trademarks of Momentive Performance Materials Inc.

Copyright 2010 Momentive Performance Materials Inc. All rights reserved.

200-001-00E-GL

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