2007 was an important year in the evolution of Genentech's sustainability strategy. During the second half of the year, we completed a sustainability review, which confirmed the strong alignment between sustainability and Genentech's core values, such as trust, integrity and respect. We also learned that business leaders across Genentech consider sustainability to be important to Genentech's business success. The review involved the collection and analysis of a significant body of data that led to a range of strategic recommendations for further enhancing and refining our sustainability program.

These recommendations fall into the following categories:

• Sustainability definition
• Leadership and governance
• Goal-setting
• Decision-making frameworks
• Staff engagement
• Communication and reporting
• Engagement with external stakeholders
• Socially responsible investment

The review involved internal consultation with many leaders from across Genentech's business functions, consultation with a number of external stakeholders, including the California Climate Action Registry and Sustainability Asset Management (SAM)¹, benchmarking of sustainability programs in place at peer companies and analysis of Genentech's sustainability performance by third parties, including Socially Responsible Investment (SRI) analysts.

The review considered questions such as:

• How important is sustainability to Genentech's business — now and in the future?
• Who are the key stakeholders for Genentech's sustainability strategy?
• Which sustainability issues should be given the most attention?
• What are our current strengths and opportunities for improvement?
• How does our sustainability performance compare to that of our peers?

As a result of the review, the following activities were initiated during 2007:

• Identification of projects to further improve our projected energy and water efficiency, in support of our 2010 sustainability goals
• Formalization of Genentech's sustainability data management processes using our internal document management system
• Evaluation and selection of the most significant sustainability issues for Genentech to further refine our sustainability strategy

We will be making progress against many of the other strategic recommendations during 2008 and look forward to reporting on these activities in our next report.

Beyond Environmental Sustainability While our current programs under the "sustainability" banner are focused on reducing our environmental impacts, we understand that sustainability is a broader concept that encompasses not only the environmental, but also the social and economic aspects of our business, often referred to as the triple bottom line. We also understand that as a biopharmaceutical company, the social element is important. Genentech has strong and award-winning programs for the management of a variety of business issues, such as access to medicine, innovation in research, clinical trial practices, and employee welfare and benefits. While this report is focused on the environmental sustainability and employee health, safety and wellness aspects of our business, this year, for the first time, we have provided an index on our website, based on the Global Reporting Initiative framework, that directs readers to information about our performance and programs on sustainability-related issues outside of the Environment, Health, and Safety (EHS) arena. View the index.

 

¹ SAM Group publishes and licenses the Dow Jones Sustainability World Indexes (DJSI), a series of global sustainability benchmarks.