Innovating Sustainability 2011 Report “SEE”ingChange:2008ProgressReport a Business Roundtable (BRT) is an association of chief executive officers of leading U.S. companieswithnearly$6trillioninannualrevenuesandmorethan13millionemployees.BRT member companiescomprisenearlyathirdofthetotalvalueoftheU.S.stockmarketand invest morethan$114billionannuallyinresearchanddevelopment—nearlyhalfofallprivate U.S. R&Dspending.Ourcompaniespaymorethan$179billionindividendstoshareholders. BRT companiesgivenearly$9billionayearincombinedcharitablecontributions. Copyright©2011byBusinessRoundtable Innovating Sustainability 2011 Report April 2011 DEAR BUSINESSLEADERSANDSTAKEHOLDERS: On behalf of the members of Business Roundtable, I am proud to share with you Business Roundtable’s2011SustainabilityReport—Innovating Sustainability.n I it,youwillfindhow115 chief executiveofficersareaddressingsustainabilityusinginnovativeapproachesthataresmart business choicesandraisethequalityoflifeonourplanet.Sustainablebusinessstrategiesare no n longera option;theyarenowrootedinacorporation’scorebusinessplan. Each andeveryday,BusinessRoundtablemembercompaniesarechallengingthemselvestodo things better,smarterandwithresultsthatimprovethelifewelive.Theirsuccessstoriesare toldn i thisreport.Therangeofchallengesandopportunitiestheyfaceismetwithcreative, innovative thinkingthatsolvesproblemsandprovidesforprofitableeconomicgrowth—the essencef o asustainablebusiness. I hopeyouwillenjoyreadingInnovating Sustainability andlearningaboutthetechnologies, strategies andprogramsthatleadingU.S.companiesareusingtomaketheiroperationsandtheir value chainsmoresustainable. Sincerely, Michael G. Morris ChairmanandChiefExecutiveOfficer AmericanElectricPowerCompany,Inc. BusinessRoundtable I TABLE OF CONTENTS A.. O SmithCorporation 1 ABB, Inc. 2 Abbott 3 Accenture 4 ACE Limited 5 The AESCorporation 6 Aetna, Inc. 7 AK SteelCorporation 8 Alcoa, Inc. 9 The AllstateCorporation 01 Altec, Inc. 11 American ElectricPowerCompany,Inc. 21 Amgen, Inc. 31 Anadarko PetroleumCorporation 41 Apache Corporation 51 AT&T, Inc. 61 Avery DennisonCorporation 71 BayerG A 81 Bechtel Group,Inc. 91 BNSF RailwayCompany 02 The BoeingCompany 12 C.V. Starr&Co.,Inc. 22 CA Technologies 32 Caesars EntertainmentCorporation 24 Caterpillar, Inc. 52 CB RichardEllisGroup,Inc. 62 CH2M HillCompanies,Ltd. 72 Chevron Corporation 82 Cisco Systems,Inc. 92 The Coca-ColaCompany 03 Cognizant TechnologySolutionsCorporation 13 ConocoPhillips 23 Computer SciencesCorporation(CSC) 33 CSX Corporation 43 Cummins, Inc. 53 DaVita, Inc. 63 Deere &Company 73 Deloitte ToucheTohmatsu 83 II InnovatingSustainability Dominion Resources,Inc. 93 The DowChemicalCompany 04 Duke EnergyCorporation 14 DuPont 24 Eastman ChemicalCompany 34 Eastman KodakCompany 44 Eaton Corporation 54 Eli LillyandCompany 64 EMC Corporation 74 Ernst &Young,L.L.P. 84 Exxon MobilCorporation 94 FedEx Corporation 05 Freeport-McMoRanCopper&Gold,Inc. 15 General ElectricCompany 25 General Mills,Inc. 35 W.W. Grainger,Inc. 45 The HartfordFinancialServicesGroup 55 Hasbro, Inc. 65 The HertzCorporation 75 Honeywell International,Inc. 85 Humana, Inc. 95 IBM Corporation 06 Ingersoll-Randplc 16 Intel 26 InternationalPaperCompany 36 ITT Corporation 46 Johnson &Johnson 56 Johnson Controls,Inc. 66 Kelly Services,Inc. 76 KPMG LLP 86 Life TechnologiesCorporation 96 Macy’s, Inc. 07 MassMutualFinancialGroup 17 The McGraw-HillCompanies 27 McKesson Corporation 37 Medco HealthSolutions,Inc. 47 Medtronic, Inc. 57 Merck &Co.,Inc. 67 Meritor, Inc. 77 Motorola Mobility 87 BusinessRoundtable III Motorola Solutions,Inc. 97 National GypsumCompany 08 Navistar InternationalCorporation 18 NextEra Energy,Inc. 28 Norfolk SouthernCorporation 38 Nucor Corporation 48 Owens Corning 58 Peabody EnergyCorporation 68 Praxair, Inc. 78 PricewaterhouseCoopersLLP 88 Principal FinancialGroup,Inc. 98 The Procter&GambleCompany 09 QUALCOMMIncorporated 19 R.R. Donnelley&SonsCompany 29 Rockwell AutomationCorporation 39 Rockwell Collins,Inc. 49 SAP 95 Sara LeeCorporation 69 SAS Institute,Inc. 79 Siemens Corporation 89 Southern Company 99 State FarmInsuranceCompanies 100 Suffolk Construction 101 Target Corporation 102 TE ConnectivityLtd. 103 Texas InstrumentsIncorporated 104 Thermo FisherScientific,Inc. 105 Tishman SpeyerProperties,L.P. 106 Tyco International 107 Union PacificCorporation 108 United ContinentalHoldings,Inc. 109 Verizon Communications 110 Wal-Mart Stores,Inc. 111 Western &SouthernFinancialGroup 112 WeyerhaeuserCompany 113 Whirlpool Corporation 114 Xerox Corporation 115 IV InnovatingSustainability A.. O SmithCorporationcontinuestoinnovateinthedevelopmentofenergy-efficientwater heaters andelectricmotorsforresidentialandcommercialuse.In2010,ourproductinnovation efforts concentratedonrenewables,asthecompanyintroducedfournewhigh-efficiencywater heater linesincludingresidentialheatpumpandresidentialsolarthermalunits.Insimilarfashion, we introducednewelectricmotordesignsforair-movingandwater-movingapplicationsthat reduce energyconsumptionsignificantly—insomecasesmorethan50percentcomparedwith www.aosmith.com older technologies. At thesametime,webeganprogramsthathelptopromotemoresustainablebusinesspractices throughoutourglobaloperations.In2010,thecompanyawardeditsfirstChairman’sGreenStar Award. Thisawardisgiventotheplantthatachievesthegreatestyear-over-yearreductionsin natural gasconsumption,electricityusageandwaterconsumption.Weevaluated32company facilities worldwidetodeterminethefirstrecipientofthisaward.Theawardrecipient—our Florence, KY,plant—achieveda16.3percentreductioninnaturalgasusage,a10.3percent reductionn i electricusageanda24.3percentreductioninwaterusagewhencomparedwiththe previous year.Theplant,whichmanufacturesceramiccoatingsusedinwaterheatersandother appliances,hasundertakenamultiyearefforttoconserveenergyandreducewaste. This n focuso energyconservationisnotlimitedtoonefacility.Oneofourlargestwaterheater manufacturingoperationsrecentlyearnedtheENERGYSTAR®certificationandiswellonthe way towardreceivingtheLeadershipinEnergyandEnvironmentalDesign(LEED)certification. Our waterheaterplantinJuarez,Mexico,receivedEnvironmentalComplianceCertificationand Best EnvironmentalPracticesRecognitionlastyear.Thisvoluntaryprogramissponsoredbythe governmentoftheStateofChihuahuathroughtheSecretaryofUrbanDevelopmentandEcology and measuresimprovementsintheareasofemissions,nonhazardouswastemanagementand environmentalimpact. Onef o our corporation’s values is to be a good citizen in the communities in which we do business.e W demonstrate this not only by our commitment to innovative technologies that offer superiorperformanceandenergyefficiency,butalsobyfindingwaystomakeourglobal operationsmoreefficientandsustainable.Wewillcontinuetopursuetheseimportantobjectives againn i 2011. Paul W. Jones ChairmanandChiefExecutiveOfficer BusinessRoundtable 1 ABBs i arecognizedgloballeaderinsustainablebusinesspracticesandhasplayedaleadership rolen i awiderangeofsustainabilityinitiativesaroundtheworld.Thecompanyemploysmore than 400professionalsdedicatedtosustainabilityissues,suchasreducingtheuseofhazardous materials, improvingenergyefficiency,andbolsteringhealthandsafetyatABBfacilities. www.abb.com On acorporatelevel,allABBmanufacturingfacilitiescomplywithISO14001andOHSAS18001 internationalstandardsonthemanagementofenvironmentalandhealthandsafetyrisks.The companys i alsopresentlyengagedinanefforttoreduceenergyconsumptionperemployeeby 2.5 percent. However, manyofthegainsinefficiencyandenvironmentalperformancethatABBhasrealized have comefromourownemployees.A2009initiativeinChina,forexample,producedhundreds of suggestionsfromreducingthenumberofoverheadlightstoturningoffairconditioninghalf an hourbeforetheworkdayends. Our n focuso sustainabilityhasproducedtangibleresults,oftenintheformofsubstantialcost savings. OnefacilityinFlorida,forexample,cutenergyconsumptionby13percentsimplyby more effectivelycontrollingairconditioningandlightingsystems. As substantialastheseaccomplishmentsare,ourgreatestcontributiontomakingtheworlda better placeliesinwhatwedoforourcustomers.Followingarejustafewexamples: ◗◗ High-efficiency electric motors that exceed recently enacted standards in the United States. ◗◗ Drives (motorcontrols)thatsavetheequivalentoftheenergyusedbymorethan30 millionhomeseveryyearandmorethan140milliontonsofcarbondioxide. ◗◗ Informationtechnologysystemsthatenable“virtualpowerplants”madeupofdistributed energyresources,storagedevicesanddemandresponseprograms. ◗◗ Marinesolutionsthatallowshipstoavoidrunningtheirengineswhileinportandimprove fueleconomybyupto20percentwhileatsea. Takens a awhole,ABBtechnologiescanimprovetheefficiencyoftheentireenergysupplychain by0 3 percentfromrawfuelthroughenduse.Thisnotonlytranslatesintosignificanteconomic savings, butalsopaysenormousenvironmentaldividends. Above all,weatABBseeourselvesasengagedmembersoftheglobalcommunityandofthe local communitieswhereour124,000employeesliveandwork.Iamproudofourcontinuing efforto t deliver“powerandproductivityforabetterworld.” Enrique Santacana PresidentandCEO 2 InnovatingSustainability At Abbott,our123yearsofhistoryhavetaughtustoconstantlyprepareforthefutureandthe changest i willbring—whilesustainingourenterprisesothatitcancontinuetodelivervalue to ourmultiplestakeholders.Asourbusinessexpandsaroundtheworld,sodoesourfocuson our fourstrategiccitizenshipandsustainabilitypriorities:innovatingforthefuture,enhancing access, protectingpatientsandconsumers,andsafeguardingtheenvironment. www.abbott.com We recognizethattheseprioritiesareinter-related—andweconstantlyworktoincreaseour