2016-17 Corporate Social Responsibility Report 04 06 10 14 18 20 GUIDING IMPROVING ASSOCIATE AND ENVIRONMENT, INTEGRITY AND CORPORATE PRINCIPLES QUALITY OF COMMUNITY HEALTH AND COMPLIANCE GOVERNANCE LIFE THROUGH ENGAGEMENT SAFETY INNOVATION STEWARDSHIP From Our CEO This has been a year of transformation for Danaher, as we prepared for and navigated the spin-off of Fortive Corporation into an independent public company, welcomed Pall Corporation and other new businesses into the Danaher family, and began an exciting next chapter with the articulation of Our Shared Purpose: Helping Realize Life’s Potential. Our Shared Purpose inspires us to focus all that we do for the benefit of our shareholders, the development of our associates, and the good of our customers, our communities and our planet. This 2016-2017 Corporate Social Responsibility (CSR) Report, the follow-up to our 2014-2015 report, is an ideal opportunity to showcase it in action. As you know, Danaher’s tradition of CSR extends far beyond the publication of our first official report two years ago. For more than three decades, it has been woven into the fabric of our Core Values, the Danaher Business System (DBS) and our team-oriented culture, which set a high bar for professional growth, innovation and continuous improvement in the service of our stakeholders. On a daily basis, our businesses improve health and safety around the world. Our products and services assist in life-saving research and diagnostics, protect consumer packaging and contribute to environmental stewardship in substan- tive ways. In these pages, you’ll see how Laetus helps protect consumers around the world by making it easy and efficient to comply with pharmaceutical tracing regulations. You’ll read about Leica Microsystems’ innovative, award-winning packaging that reduced its carbon footprint by approximately 60 tons per year. And you’ll learn about Radiometer’s unique approach to providing healthcare teams in developing countries access to important diagnostic tools. We carry this important work forward, as we have always done, with a focus on the highest standards of honesty and integrity at every level of our organization, and a deep commitment to safe working conditions for every associate. We are placing a greater emphasis on complementing our external performance with internal initiatives that ensure supportive, diverse and inclusive work environments worldwide—places where our associates can be themselves, engage deeply with their work and seize opportunities to realize their own potential through professional development. We are proud of our progress since the publication of our last CSR report, but at Danaher, our dedication to continuous improvement means that we can always do better. We will keep pushing ourselves, in the spirit of Our Shared Purpose, Core Values and DBS, to bring lasting and meaningful value to the world. This is just the beginning. Thank you for your support as we work together to Help Realize Life’s Potential. THOMAS P. JOYCE, JR. President and Chief Executive Officer December 2016 BACK TO COVER Company Overview We are a science and technology innovator committed to solving our customers’ most complex challenges, and improving quality of life around the world. 4 MORE THAN OPERATING COMPANIES SEGMENTS 20 OUR BUSINESSES Life Sciences Every day, scientists around the world are studying chronic diseases and infections at the cellular level to understand causes, identify treatments and test new drugs and $ vaccines. Danaher’s Life Sciences companies help make this leading-edge scientific research 3.3 possible at clinical research facilities, academic institutions and government agencies. Our BILLION capabilities extend beyond research to include the world’s most advanced filtration, separation and purification technologies, which help power the creation of biopharmaceuticals, microelec- tronics and more. Diagnostics Wherever health care happens—from a family physician’s office to leading $ trauma hospitals, laboratories and critical care units—Danaher’s Diagnostics businesses help 4.8 safeguard patient health and improve diagnostic confidence with the most advanced tools and BILLION software available. As our global population expands, we help the medical field keep pace through powerful preventative and predictive care and automated processes. Dental If you have ever sat in a dentist’s chair, your experience was likely made better by $ Danaher businesses. Our precision tools and powerful lights help clinicians work accurately and 2.7 efficiently. Our software powers comprehensive, digital diagnostics and treatment planning to BILLION keep teeth and gums healthy. Our advanced restoratives, implants and orthodontic offerings help correct smiles quickly and safely. Danaher’s Dental companies are committed to making dental care increasingly safe, effective, comfortable and accessible around the globe. Environmental & Applied Solutions From innovative consumer packaging to drink- $ ing water purification, Danaher’s Environmental & Applied Solutions businesses help protect 3.6 precious resources and keep our global food and water supplies safe. Our Product Identification BILLION businesses touch consumer, industrial and pharmaceutical products throughout the supply chain to help ensure freshness, consistency, and accurate labeling and tracking. Our Water Quality businesses deliver precision instrumentation and advanced purification technology to help analyze, treat and manage the world’s water, from municipal and wastewater treatment facilities to lakes, streams and oceans. All data in this report are from continuing operations unless otherwise noted. Data from continuing operations excludes all data related to the Fortive Corporation business that Danaher spun-off in 2016 and the Communications business that Danaher split-off in 2015. 2 BACK TO COVER ANNUAL SALES 2015 2014 2013 $14.4B $12.4B $12.9B WORLDWIDE FOOTPRINT BLUE SHADING REPRESENTS COUNTRIES WITH DANAHER OFFICES BACK TO COVER 3 Guiding Principles Corporate Social Responsibility is deeply ingrained in Danaher’s culture and work, and has been for decades. Our decentralized operating structure gives our operating companies the flexibility and freedom to run their businesses in ways that most effectively serve their customers; however, we are united by our deeply embraced Core Values, Shared Purpose and Danaher Business System: CORE VALUES SHARED PURPOSE Our five Core Values—The Best Team Wins; Cus- Our Shared Purpose—Helping Realize Life’s Po- tomers Talk, We Listen; Kaizen is Our Way of Life; tential—represents our commitment to helping our Innovation Defines Our Future; and We Compete customers achieve amazing things and the high for Shareholders—are centered around people and standards by which we measure our own success. serve as our steadfast foundation. Every day, we We innovate forward-looking technologies to solve challenge ourselves to put the best team on the our customers’ most complex challenges. The im- field, understand our customers’ implicit and explicit pact of Our Shared Purpose goes beyond Danaher. needs and exceed their expectations in innovative It’s an opportunity for each of us to make a mean- ways, strive to be better, and ultimately create value ingful contribution to something larger for our shareholders. than ourselves. The Danaher Business System THE DANAHER BUSINESS SYSTEM (DBS) is our proven system for achieving success and it drives every aspect of our culture and performance. We use it to guide what we do, measure how well we execute, and create options for do- ing even better—even by improv- ing DBS itself. Fueled by Danaher’s Core Values, the DBS engine QUALITY drives us through a never-ending DELIVERY cycle of change and improvement: COST exceptional PEOPLE develop INNOVATION outstanding PLANS and execute those using world-class tools to construct sustainable PROCESS- ES, resulting in superior PERFOR- MANCE. Superior performance and high expectations attract exceptional people, who continue the cycle. Guiding all efforts is a simple philosophy rooted in four customer-facing priorities: Quality, Delivery, Cost, and Innovation. 4 BACK TO COVER Within this report, we cover the elements of corporate social responsibility that matter to our stakeholders—our associates, customers and shareholders: Improving Quality of Life Through Innovation Associate and Community Engagement Environment, Health and Safety Stewardship Integrity and Compliance Corporate Governance BACK TO COVER 5 Improving Quality of Life Through Innovation When Danaher invests in innovation, not only do we seek to gain competitive advantage in our markets, we meaningfully improve quality of life around the world. Our businesses are dedicated to advancing life-saving research, improving health and safety, and promoting environmental stewardship by reducing packaging waste, protecting our water supply and defending fragile ecosystems. COMBATING COUNTERFEIT MEDICINE The lives and safety of consumers and patients worldwide are threatened by an enormous increase in forged drugs. The World Health Organization estimates that over 10% of the medicines consumed in developing nations may be counterfeit. A 2015 INTERPOL-coordinated global operation targeting the criminal networks behind the sale of fake medicines resulted in 156 arrests and the seizure of almost 21 million illicit and counterfeit medicines, worth $81 million. Many governments have reacted by enacting laws that set more stringent traceability standards, but how