Background

Common use of the term "sustainability" began in 1987 with publication of the World Commission on Environment and Development report, “Our Common Future” (a.k.a., the Brundtland Report). This document defined sustainable development as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs." This concept of sustainability encompasses ideas, aspirations and values that continue to inspire public and private organizations to become better stewards of the environment and that promote positive economic growth and social objectives. Sustainable development joins together two important themes: (1) environmental protection does not preclude economic development; and (2) economic development must be ecologically viable now and in the long run.

Sustainability and Schering-Plough's Business Strategy

Schering-Plough is an innovation-driven, science-centered global health care company. Through investments in biopharmaceutical research, development and manufacturing, the company creates therapies that help save and improve the lives of people around the world. By applying the principles of sustainable development in all phases of our operations, we can help to stimulate technological innovation, advance competitiveness and improve our quality of life.

Through our combination with Organon BioSciences and continued progress toward successful completion of the Action Agenda, Schering-Plough has set forth a business strategy — Growing Stronger, Growing Better — which has a close correlation with the principles of sustainable development (as explained below). This business strategy is three pronged:

• Grow the Top Line
• Grow the Research and Development Pipeline
• Contain Costs and Invest Wisely

Sustainability from a Safety, Health and Environment (SHE) Perspective

In looking at sustainable development from a safety, health and environment (SHE) perspective, we can identify many activities that support the company's business strategy:

Grow the Top Line — SHE professionals have been actively engaged in supporting the participation of our Consumer HealthCare (CHC) business in Wal-Mart's sustainability initiative. We are also re-evaluating our packaging policies and making changes, where possible, to reduce our environmental footprint.

Grow the Research and Development Pipeline — SPRI has strongly endorsed the principles of Sustainable (Green) Chemistry and their global application throughout our operations and facilities to make them more efficient. The importance of sustainability to the company is exemplified in many ways, including:

1. Holding symposiums to promote the application of green chemistry for the development of drug substances in a manner that will reduce or eliminate the use and/or generation of hazardous substances and environmental and human health risks;
2. The establishment of an internal annual Environmental Achievement Award for Green Chemistry to recognize facilities or teams of employees that have applied the principles in their operations; and
3. Continually tracking raw material usage and waste generation through the new product development process with a "Process Sustainability Index."

Contain Costs and Invest Wisely — The company has implemented:

1. A formal SHE assessment program applicable to its third-party external manufacturers/suppliers to reduce potential environmental and safety liabilities.
2. A Technology Transfer program to reduce costs by being more efficient.
3. Energy management programs that reduce greenhouse gas emissions and make us more energy efficient (i.e., a solar power project in Summit and a trigeneration project in Singapore).
4. A real estate/site remediation program to reduce potential liabilities associated with the acquisition or disposition of property.

Sustainability and Schering-Plough's Social Issues Priorities

Social issues are integral to the pharmaceutical industry, which has a special responsibility to society because drugs are essential to prolonging and improving the quality of life. The prioritization of social issues is incorporated in all aspects of our work. We are able to identify pressing social issues, respond appropriately, and maximize the impact of the resources we can bring to bear on these issues.

Following are several of Schering-Plough's Social Issues Priorities for 2008–2009 and some examples of relevant SHE responses to specific issues:

• Patient Safety — provided guidance on the safe and proper disposal of products.
• Occupational Health and Safety/the Environment/Security — Schering-Plough strives to achieve the highest standards of SHE performance and ranks in the first quartile of its industry sector in occupational safety and health. The company has also upgraded and fortified security practices to include chemical security measures.
• Promote Scientific Expertise and Innovation — implemented green chemistry and technology transfer programs.
• Diversity — implemented a comprehensive SHE assessment program for external manufacturer and suppliers.
• Corporate Governance — developed and implemented a Corporate Environmental and Safety Council (CESC) to provide corporate-wide oversight and direction on SHE matters and to address emerging issues that may have a material impact on the company.