Environmental Incidents and Fines

It is Schering-Plough’s policy to promptly correct any noncompliance findings issued by a regulatory agency and to resolve any outstanding issues, including the payment of fines and penalties, as soon as possible. The company paid $8,400 in EHST-related fines and penalties in 2008, compared to $9,100 in 2007 and $13,000 in 2006. None of these environmental fines or penalties had a material impact on the company’s financial performance or operations.

Schering-Plough measures its global environmental performance on a monthly basis using an internal index based upon the number of incidents (e.g., exceedances, spills, etc.) which require external reporting to an agency or meet a more rigid internal reporting threshold. Although former Schering-Plough sites reduced their environmental incidents by 56 percent versus 2007, the number of reportable environmental incidents in 2008 increased significantly over the 2007 performance, with the inclusion of all former Organon BioSciences (OBS) sites in the Schering-Plough metrics database. Since 2003, however, the company has reduced environmental incidents by 54 percent. Progress has also been made in 2009 with the number of incidents down by 27 percent compared to 2008 performance. See the figure below.

Toxics Release Inventory (TRI)

Based upon data submitted to the U.S. Environmental Protection Agency by July 1, 2009, for reporting year 2008, the number of Schering-Plough facilities using toxic chemicals for which TRI reporting is required increased from seven to nine relative to the previous year with the addition of U.S.-based OBS facilities to the inventory. However, the number of toxic chemicals for which reporting is required decreased from 12 to 10.

In comparing 2008 with the previous reportable year (2007), total releases increased by 108 percent, primarily because production doubled at one of the company’s major facilities. However, since 2002, total releases have been reduced by 34 percent. Since 2000, total releases have been reduced by 53 percent.

The figure below shows the performance achieved by Schering-Plough in reducing TRI releases since the year 2000.

Greenhouse Gas Emissions

Schering-Plough’s emission inventory of greenhouse gases comes primarily from the consumption of energy in terms of carbon dioxide, which is the most significant greenhouse gas. A contracted utility bill pay system is used to collect, verify and log data worldwide. Based upon this system, the company’s carbon dioxide emissions increased by 79 percent from 2007 to 2008 (0.56 to 1.00 million metric tons). The large increase is due to the addition of former Organon BioSciences/Intervet facilities into the database in 2008 through their acquisition in late 2007 as well as increased production levels at several of our facilities. Similarly, over the past five years, 2004 to 2008, emissions have increased by 59 percent (0.63 to 1.00 million metric tons). On a normalized basis (per dollar of sales), emissions increased by 22.5 percent from 2007 to 2008 as net sales increased from $12.690 billion to $18.502 billion.

Carbon dioxide emissions are shown in the figure below for the years 2004 to 2008.

Waste Management

Metric tons of hazardous waste generated by Schering-Plough facilities in 2008 increased by 32 percent compared to 2007. Non-hazardous waste tonnage also increased by 74 percent from 2007 to 2008. In both cases, the increases are due to the addition of OBS/Intervet facilities into the database. However, in comparison to 2004, Schering-Plough’s generation of hazardous waste in 2008 decreased by almost 15 percent even with the expanded database, while non-hazardous waste increased by 29 percent. The figure below shows the waste generated by Schering-Plough facilities from 2004 to 2008.

Wastewater Management

The volume of wastewater generated by facilities increased by 62 percent from 2007 to 2008. The large increase is due to the addition of OBS/Intervet facilities into the database. The 2008 volume also represents an increase of 26, 23 and 43 percent in comparison to 2004, 2005 and 2006, respectively. The figure below shows the volume of wastewater generated by Schering-Plough facilities from 2004 to 2008.

Water Usage

The figure below shows the amount of water used by Schering-Plough facilities in manufacturing processes, for sanitation services and for general facility use for the period 2004 to 2008. Potable water usage in 2008 increased by 69 percent in comparison to 2007 due to the addition of OBS/Intervet facilities into the database. Similarly, well water usage increased by 25 percent from 2007 to 2008. Compared to 2004, 2005 and 2006, potable water, well water and total water usage all increased in 2008 because of the additional facilities.