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The Sherwin-WIlliams Company Corporate Social Responsibility Report

ISSUE ONE


Our actions are based on a common principle: take care of the world around us. At Sherwin-Williams, positive change is happening. In our plants, in our stores and in our offices, we’re looking at common items and finding uncommon uses for them. We’re diving into processes and recreating them for the benefit of all. We’re reaching out to all of the communities around us, and making a huge difference in every one. Making things better and brighter is what we do. It is the heart of SherwinWilliams, and it’s been ingrained in our organization for 143 years. Yes, as a company we add color to the surfaces around us. But as a corporate citizen, we call on the vibrancy of our people to truly change the face of our world for the better. And they deliver, time and again. That’s our commitment to caring — and it’s as clear as black and white.

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Message from the Chairman and CEO Caring for our world and our people is truly a hallmark of Sherwin-Williams. It is a commitment that was born with our company back in 1866, and spelled out by our founders, Henry Sherwin and Edward Williams. They believed that it was our calling to manufacture and market innovative products while still operating a safe, clean and friendly workplace and observing the highest ethical standards in business. That is why it is with great pride that we share this, our first, Corporate Social Responsibility Report with you - a report that will demonstrate the actions behind our beliefs. So, what does Corporate Social Responsibility mean to a company that is a global leader in the manufacturing, development and distribution of coatings? First and foremost, it means acting in a way that reduces our impact on the world around us. Although we can never fully eliminate our footprint on the environment, we can and will strive to reduce it. Throughout this report, you’ll see quantifiable examples of this. We’ve challenged ourselves to capture how we act as a company, employer, citizen and steward, and we’ve given metrics to those actions. In most cases, this is the first concerted effort to report on many of the metrics we’re using. Behind the numbers is something even more impressive: the work of our people. It’s the programs we’ve implemented at the grass roots level that have made a dramatic change, and it’s the work of every individual in the field that assures these programs are fully embraced. Whether it be implementing a new colorant packaging or developing our company-wide EcoVision initiative that challenges every employee to reduce our impact on the environment, we come together to make change happen.

Best of all, these examples are good for not only the environment and our communities — but also our business and the needs of our customers, consumers and shareholders. Once again, we are proving that it is possible to thrive fiscally while acting responsibly. In this report we will share with you successes from 2008, but our commitment to sustainable innovation is nothing new. It’s one reason we already offer the most comprehensive line of green products of any coatings company. Ground breaking innovations from as early as the 1940’s, when we introduced Kem-Tone® — the first water-based paint — to our latest water based automotive coating AWX®, are proof that acting responsibly is business as usual at Sherwin-Williams. We’re pleased with the results we’ve captured thus far, and know that the future holds even more progress. When it comes to implementing and exploring sustainable practices and acting as a good corporate citizen, I say with full confidence that SherwinWilliams is poised to deliver continued results.

Christopher M. Connor Chairman and CEO March 2009


Highlights The Company

The Employer

The Citizen

The Steward

A brief summary of key aspects of our company.

How we provide a safe and inclusive environment for all of our employees.

Caring for our communities takes many forms.

Our efforts toward sustainability and green products.

Who we are and how we do business began with our founders, Henry Sherwin and Edward Williams.

All of our sites focus on a safe work environment: 26 have been recognized for safety.

Our unique Home Work program trains unemployed people for a career.

Looking for ways to reduce our impact on the environment.

Four sites, five million hours without missing a day of work due to injury.

Foundation grants help homeowners.

Our history with ‘green’ products began in 1941 with Kem-Tone®, the first water-based paint. With operations around the world, we do cover the earth.

Recognizing the value from a diverse mix of employees, customers and suppliers.

We partner with our communities in many ways.

Our lighting project saved 23 million kilowatts and $1.8 million. We offer the most comprehensive portfolio of environmentally responsible products.

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Acting responsibly is ingrained in our culture. When Henry Sherwin started the company in 1866 he instinctively built a company steeped in what today we call Corporate Social Responsibility. From safety measures in our factories, to helping out our communities and our employees, to our original code of principles, he balanced being an effective, sustainable business enterprise with being a responsible corporate citizen. For 143 years, Sherwin-Williams has continued to act responsibly for a simple reason: it’s not only the right thing to do, it makes us a more effective organization. Left: Henry Sherwin and Edward Williams Right: Our newest store, displaying our new image.

2008: Our Guiding Values

Our Guiding Values act as a compass: setting the direction for how we carry out our responsibilities to one another, our customers, our shareholders and the communities where we live. Integrity Quality Growth

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People Performance

Service Innovation

The World We Live In

With a worldwide presence, we understand how important it is to reduce our impact on the earth.

• 30,000 employees • 3,887 company-operated paint stores and global branches • 100 manufacturing and distribution facilities in 20 countries • Sales in over 70 countries


Get the Lead Out

The Brands We Take To Market

As an international company, we take great pride in protecting homes and businesses around the world with our portfolio of well-known brands. Part of that protection also includes the world around us. We believe we have the most comprehensive line of environmentally responsible products. The wide variety of products in this group photo is a sampling of the products that have earned our GreenSure™ or Green Cert designations. We also have a number of other brands sold around the world that seek to reduce their impact on the environment. We have included a sampling of those products in the individual product photos here.

The Company We Keep

We believe it’s important to participate in healthy discussions — and create action plans — with input from those around us. That is why we are actively engaged with government agencies and industry organizations that value sustainable practices as much as we do. •U  .S. Environmental Protection Agency (EPA) Climate Leaders Program •N  ational Paint & Coatings Association Coatings Care Program • CLEARCorps National Lead Extraction Program •E  PA Smart Ways Fuel Efficient Transportation Program • U.S. Green Building Council •N  ational Association of Home Builders Green Building Council

When interior lead paint was made and sold more than 50 years ago it was a legal product — demanded by master painters, widely recommended, and often specified by federal and state governments for its superior quality and durability. Today, federal and state agencies agree good maintenance is the best way to deal with existing lead paint on older homes. We know that enforcement of current laws requiring property owners to keep their properties in a safe condition — including leadsafe — is the best way to protect children from lead hazards in the home. Parents also play a vital role in reducing their children’s exposure to lead by cleaning and maintaining their homes, by having their children’s blood lead levels regularly checked, and by promoting proper nutrition. Strong enforcement efforts combined with an aggressive educational outreach program targeting those most at risk and those who can help address the problem has resulted in a 98% reduction since 1978 in the number of children with elevated levels of lead in their blood. “It has been a remarkable decline,” said study co-author Mary Jean Brown of the Centers for Disease Control. “It’s a public health success story.” Sherwin-Williams supports these efforts through our ongoing sponsorship of national organizations such as CLEARCorps USA, Rebuilding Together and the National Organization of African Americans in Housing.

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Recruiting and protecting our greatest asset: Our Employees Whether you look at the diversity efforts we employ, or the safety processes we have ingrained in our culture, Sherwin-Williams has always made the health and welfare of our employees, suppliers and customers a top priority.

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Health & Safety: Caring for Employees Has Been a Priority Since 1866

Safety Measures In Our Plants: SMART, VPP & ISO

Our legacy of creating a safe environment for employees began with our founders, Henry Sherwin and Edward Williams. Early factories had automatic sprinkler systems, first aid kits and established protocols with local hospitals in case of emergency. Employee health and safety was the first order of business then and remains so today. Our management systems and practices assure consistent results worldwide and our Paint Stores Group uses extensive new-hire and on-going training to keep safety top-of-mind.

SMART (Safety Means Awareness, Responsibility and Teamwork) in the early 1990’s to establish fundamental principles of what makes up a safe environment. The process creates a common goal: everyone goes home the same as when they came in. Each plant employs daily behaviors and metrics — such as a “red-yellow-green” safety monitor — to assure this goal is met.

SMART: Sherwin-Williams employees created

VPP: The United States Occupational Safety and

Health Administration (OSHA) looks out for the health and welfare of employees nationwide. Their Voluntary Protection Program (VPP) awards “Star” status to facilities that are deemed to have implemented a comprehensive safety and health management system. Sherwin-Williams was the first paint company in the United States to obtain Star status with our Chicago plant, and we have the greatest number of VPP Star or Merit sites (20) of any coatings company.

International Standards: Occupational Health

and Safety Assessment Series (OHSAS) 18001 is the internationally recognized assessment specification for occupational health and safety management systems. This system helps companies with a worldwide presence by giving guidance on how to meet global safety standards. Sherwin-Williams is proud that six of our plants have registered as OHSAS 18001 sites.


Creating Safe Work Environments Around the World

Five Million Hours Without a Disabling Injury We chose to feature VPP and OHSAS recognition because it speaks to the greater effort of creating a safe work environment for all employees. Sites are either striving to achieve or working to maintain their status — which means every employee is focused on safety for themselves and for their fellow employees. One key outcome of a safe workplace is the avoidance of an “away from work” day (AFW) where an employee misses a day of work as a result of an accident. Currently we have four sites that have accumulated over 1 million hours without an AFW day:

• Breen Technology Center – 1 million • Coffeyville, KS – 1 million • Holland, MI – 1 million • Richmond, KY – 2.5 million Since 2004, there have been seven sites (Coffeyville, Richmond and five others) that have not had an AFW day; in fact Coffeyville’s tenure without an incident is 16 years. This speaks to the attitude and dedication of every employee at these plants. We involve them in every aspect of the safety process and they in turn create and maintain the safe environment we all want. Once they are actively participating in how we run our business they are also helping to create a more productive work environment.

Site

Status

Year Achieved

Chicago, IL Emulsion Plant

Star

1999

Olive Branch, MS

Star

2001

Waco, TX DSC/CTS

Star

2003

Atlanta, GA DSC/CTS

Star

2005

Garland, TX

Star

2006

Flora, IL

Star

2007

Holland, MI

Star

2007

Fredericksburg, PA DSC/CTS

Star

2007

Effingham, IL DSC/CTS

Star

2007

Andover, KS

Star

2008

Atlanta, GA

Star

2008

Morrow, GA

Star

2008

Memphis, TN

Star

2008

Crisfield, MD

Star

2008

Sierra, NV DSC/CTS

Star

2008

Lawrenceville, GA

Star

2008

Orlando, FL

Star

2008

Greensboro, NC

Star

2008

Portland, OR

Star

2008

Winter Haven, FL DSC/CTS

Star

2009

Sumare Plant, Brazil

18001

2008

Grimsby Powder Plant, Canada

18001

2008

Taboao da Serra, Brazil

18001

2007

Lazzuril Automotive, Brazil

18001

2007

Johor Bahru, Malaysia Recertified

18001

2005 2008

Richmond, KY Recertified

18001

2005 2008

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Diversity Diversity In Our Business

Diversity In New Employee Hiring

As large and multi-cultural as our constituents are, it is important we reflect that diversity in our company. Through a more diverse work force and supplier network, we are able to better understand and meet the diverse needs of customers around the globe. Diversity is not a requirement to us, it is a business imperative. That’s why we not only seek to recruit a more diverse workforce, but also to retain and strengthen the skills of our employees with ongoing training and educational programs.

With one of the best employee retention rates in corporate America, we look to new-hire statistics as a more accurate reflection of tracking our progress in diversifying our workforce.

Notable recent accomplishments include: • We designed and implemented tracking systems to improve the management of our recruiting, training and retention systems. • We have executive participation in Northeast Ohio’s Commission for Economic Inclusion and the Minority Business Council - both initiatives support minority-owned and women enterprises. • We were named the Diverse® magazine’s list of Top 30 Most Effective Companies in Recruiting Divers Talent. •O  ur Paint Stores Group continues to implement Diversity Action Plans for every district, tied to incentive goals and performance reviews of management. Diversity training is also provided to all 19,000 field managers and employees.

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Diversity In Our Supplier Network Our vendor network has always helped us achieve our goals as an organization. Assuring that the talents we employ reflect the diversity of society as a whole helps us have a competitive point-of-view. In 2009, we launched our first database system for minority business entity metrics, helping us track and monitor our supplier relationships. Specifically, we looked at dollars spent with women and minority-owned businesses, and how these compare to our overall supplier prices.

Celebrating Diversity Wins Customer Business Stores are encouraged to target their communities with signage and other marketing tactics to acknowledge and attract business from their diverse customer base. Our employees demonstrate one to the many initiatives to diversify our customer base. Their new shirts say, “Hablo espanol” which means, “I speak Spanish.”

% Women % Multi-Ethnic Hired Hired

2007 Paint Stores Automotive Chemical Coatings

19% 14.5%

23% 22%

13%

15%

25% 11%

28% 31%

22%

11%

2008 Paint Stores Automotive Chemical Coatings

Diversity Mission Statement Sherwin-Williams is committed to fostering a culture of openness, respect and inclusion that invites and values differences among employees, customers and suppliers resulting in improved business performance.


Making our communities stronger and more vibrant. Sherwin-Williams and our employees have always been committed to giving back to our communities. While the table below captures cash contributions and some in-kind donations from both the corporation and our operating units, we also recognize that our employees provide so much more. Our employees across the world volunteer their time in immeasurable ways. The photo to the right is one of many examples of employees using their time and talent to rehab the home of a family. Combined with an in-kind donation of paint and other materials, the team completely redecorated a house in one day. Many of our executives and employees also serve in leadership roles: from organizing local fund-raisers to serving on boards of local, national and international organizations.

The Sherwin-Williams Foundation Since 1964, The Sherwin-Williams Foundation has supported organizations and programs that improve the quality of life for our employees and the communities in which they live. In 2007, the Foundation launched the Sherwin-Williams Grant, a $50,000 cash award given annually to a charity committed to either children’s health or educational programs that lead to economic independence. The first recipient of the Grant, presented in May 2008, was The Cleveland Housing Network — an organization that develops affordable housing for low- and moderate-income families in the Greater Cleveland area. In addition to Grant dollars awarded, Sherwin-Williams employees assisted with one of the Housing Network’s home rehabs.

Charitable Contributions

2007

2008

The Sherwin-Williams Foundation Community contributions to various non profits

$988,420

$1,056,481

Operating Division Contributions Cash contributions from operating divisions

$1,674,245

$1,097,227

(as of October 2008)

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Home Work: Giving Unemployed Men and Women Hope As a corporation, we look for ways to help the who used Thompson’s® WaterSeal® on their community project proudly display their work. community at every turn, utilizing the skills of our people and the performance of our products. One of our flagship endeavors is the nationally recognized Home Work program, started at Sherwin-Williams in 2004 and managed nationally by one of our retirees. Working with public housing authorities, we train residents to become professional painters — thereby improving the quality of life in low-income communities. The cities supply us with the trainees, and Sherwin-Williams supplies the trainers: retired employees. Currently, Home Work is in 28 cities across the United States, with new cities added every year. The program has a 67% placement rate, and has received recognition from organizations including the U.S. Conference of Mayors and the National Organization of African Americans in Housing. As of December 2008, more than 1,688 residents have received training and several of those individuals now operate their own paint contracting companies.

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Supporting Our Employees, Supporting Our Nation We are proud to support dozens of Sherwin-Williams employees who serve in active duty for the U.S. Military. At one point during 2008 we had as many as 54 employees in service. No surprise, once they are on location, our employees can be found helping out their new local communities. Jim Manter provides relief supplies to a refugee camp in Afghanistan. To the right, troops who used Thompson’s® WaterSeal® on their community project proudly display their work.

“Sherwin-Williams seems to attract a certain type of person … there is a certain pattern of action all employees seem to share. None is more clearly reflected than in their public service.” -Kevin Marchman Former Executive Director, National Organization of African Americans in Housing

“Sherwin-Williams Home Work program is one of the best examples of publicprivate partnership I have seen. A lot of companies have big ideas but never follow through. Sherwin-Williams is different. They have done what they said they would do and have continued to do so since 2004. It’s an impressive track record.” -Christian Science Monitor, 1959


A Sampling of Community Projects From Around the World Minwax® Community Craftsman Award

Freshmen FIRST

This award honors individuals and organizations that have demonstrated a dedication to the betterment of their communities through exemplary achievements in woodworking.

In Tupelo, MS, where high school dropout rates reach 40%, this program helps freshmen gain lifelong trade skills. Sherwin-Williams employees create programs and speak at the students’ schools about topics like resume-building and the importance of graduating from high school.

Graffiti Hurts® In partnership with Keep America Beautiful, Sherwin-Williams developed a program called Graffiti Hurts. Since 1997, Graffiti Hurts has been working to provide resources to help community leaders initiate graffiti-prevention activities and educate our youth, as well as adults, about the impact of graffiti on neighborhoods.

Company-Wide Support of United Way Employees pull together in support of the United Way across the country, staging local fund-raisers. At corporate headquarters in Cleveland, the combined giving from area employees exceeded $552,300 — a 5% increase over 2007 gifts.

Children Have the Leading Role in Sherwin-Williams Argentina’s Social Responsibility From donating money on casual Fridays to recycling paper or plastic to raise money for children’s hospitals, SherwinWilliams Argentina employees keep children a top social priority. In one effort, employees recycle plastic caps to raise money (poster to the right). Employees collect caps at restaurants, pubs and other establishments and deposit them at the receptacles located in every meeting room. The extra money is donated to the Garrahan Children’s Hospital, which helps pay for the children’s medical treatment.

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A Sampling of Community Projects From Around the World (continued from page 11) Thompson’s® WaterSeal® Very Important Places (VIP)

Ronseal® and Purdy® Plant Trees to Offset Carbon Footprint

Through the donation of product and dollars, the VIP program supports the building and maintenance of some of America’s natural gems, including projects at Niagara Falls State Park, Yellowstone Park and Glacier National Park.

Although oceans apart, Purdy and Ronseal have similar ideas on how to restore our planet. Throughout 2008, we planted a tree for every Ronseal Eco product bought and registered online. Purdy has implemented a similar policy, teaming up with the American Forests Global ReLeaf program. For every Purdy EcoPro™ Roller Cover or Painting Kit purchased, a new tree is planted. These two programs will produce a combined 33,000 new trees around the world!

Helping Earthquake Victims Employee contributions of $9,400 matched dollar for dollar by our foundation, were given to the Shanghai Red Cross in support of earthquake victims in China. This was in addition to an $8,200 gift from our Chemical Coatings business in Asia. Restoring a National Treasure 3,200 gallons of paint were donated to protect the new Gettysburg National Military Park Visitor Center, opened in April 2008. Employees at the Gettysburg-Straban store spent countless hours mixing and delivering the paint. The donation totalled $100,000 worth of merchandise.

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Zero is a BIG number. Zero liquid waste. Zero solid waste. Even zero energy consumption. Are they possible? Are they realistic? We don’t really know — but what we do know is we should explore the potential. We believe we have an obligation to help minimize and eliminate our impact on the environment, and we’re creating measurements, processes and products that make it possible. And, if our history has shown us one thing, it’s that we are driven to achieve our goals, no matter how big in scope. This is our EcoVision — and it is spreading throughout the company.

Every Employee Plays a Role: Our EcoVision Program

Our Push Toward Zero: The EcoMet Database

In July 2008, we launched EcoVision, an internal company wide initiative that challenges every employee to look for and implement ways to reduce our impact on the environment. We communicated a clear mission and defined our principles related to EcoVision, encouraging every employee to get personally involved in the cause. Already, EcoVision has resulted in several employee-led initiatives, including a new metrics tracking system in our plants — the EcoMet database.

How can we track our progress towards zero? With clear and consistent measurements on things that matter most: natural resource usage, energy usage, waste generation and recycling rates. On a monthly basis, 70 Sherwin-Williams plants, distribution centers and other large facilities compile and enter relevant data into our newly created EcoMet database. These sites represent our primary manufacturing and distribution capability and currently include facilities in 20 countries across the globe, including China, Brazil, England and India. We augment EcoMet data with information from other databases for the thousands of other smaller sites (e.g., retail stores). The five major metric categories we measure are Production, Energy, Natural Resources, Waste and Recycling. Each of these broad categories contains numerous sub-categories including: electrical use, diesel consumption, water usage, solid waste generation and cost. There are over 120 sub-categories in all.

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Our Push Toward Zero Given the inaugural nature of our EcoMet database, we focused on initially reporting the key data represented in the following tables. Conservation and waste minimization are not new to SherwinWilliams, but using EcoMet to track this information on a global basis is. We acknowledge this is not a complete data set, but have included sites that have been verified internally by our EcoMet team. Our intent is to continually update this data and to report other metrics. Initial data presented includes: domestic electricity and natural gas consumption (~99.8% sites reporting); miles per gallon (MPG) for domestic distribution fleet tractors equipped with satellite MPG monitoring systems (~85% of diesel fleet); liquid and solid waste generation rates reported in pounds per 100 pounds of production and the corresponding recycle rates for the sites reporting.

Adhering to International EMS Standards Through ISO 14001 Certification We believe our existing environmental management systems (EMS) have been an effective cornerstone for our environmental programs and performance to date. As part of our continuous improvement efforts we have initiated a program to adopt a multi-site corporate ISO 14001 program based on the International Environmental Standard for all manufacturing and distribution facilities.

The following 12 Sherwin-Williams facilities are currently certified to the ISO 14001:2004 standard:

USA – Cleveland, OH (Headquarters);

Greensboro, NC; Greensboro, NC; Morrow, GA; Richmond, KY; Andover, KS

Uruguay – Montevideo China– Shanghai

Mission

Sherwin-Williams is committed to being a recognized leader in the development of sustainable processes, products and activities that are profitable, preserve natural resources and contribute to social improvement.

Principles Conservation Respect

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Innovation Responsibility

Accountability

Brazil – Sumaré; Taboão da Serra; and Sao Burnado (Lazzuril)

United Kingdom – Sheffield (Ronseal)


Reducing our Carbon Footprint

Lighting Retrofit Project

We recognize the importance of knowing our carbon footprint and are actively seeking to reduce our greenhouse gas emissions (GHG). Since 2005, we have been voluntarily reporting to the Carbon Disclosure Report, part of a Global Reporting Initiative. We have also initiated a number of projects to help reduce our footprint — a notable example being the lighting project story below. In September 2008, we joined the EPA’s Climate Leaders program — a voluntary program to inventory GHG emissions and to set an aggressive reduction goal. Since then we have been actively working with the EPA to establish an approved methodology for measuring our footprint. Given that the final methodology could vary from our current methods and therefore results, we have opted to not publish data at this time. Look for more on our Web site.

Saving Over $1.8 Million a Year in Energy Costs and So Much More

Solid Waste Generation Rate and Recycle Rate

Energy Consumption Electricity 2007 – Total kWh 2008 – Total kWh Manufacturing 172,699,394 162,694,815 Distribution

38,260,314

34,966,335

Retail

244,398,167

235,473,438

Administration 56,306,264

60,624,341

Natural Gas 2007 – Total MMBTU 2008 – Total MMBTU Manufacturing 761,941 735,018 Distribution

77,973

75,928

Retail

684,127

705,893

Administration 129,995

146,117

Diesel Fuel Distribution

2007 Solid Waste lbs ∕ 100 lbs produced Generation Manufacturing 0.4319 Distribution

0.0269

Administration 0.0238 2007 Solid Waste Recycle Rate Manufacturing 29.3% Distribution

41.4%

Administration 8.4%

2008

lbs ∕ 100 lbs produced

0.3836 0.0201 0.0304 2008 41.9% 72.6% 21.1%

With manufacturing and distribution facilities across the country, running anywhere from 12 to 24 hours a day, lighting costs and energy consumption add up. That’s why in late 2006, Sherwin-Williams put together a crossfunctional team to evaluate the possibilities for retrofitting the facilities with more energy efficient options. Over the course of the next year, 28 of our facilities received a lighting face lift: new, highly efficient fluorescent fixtures and lamps that deliver more than $1.8 million in cost savings and displace more than 23 million kilowatt hours per year. From an environmental impact perspective, the project reduced carbon emissions by an estimated 14,528 tons per year — the equivalent of planting 3,774 acres of trees, removing 3,042 cars from the road or saving 1,884,997 gallons of gasoline annually. The new lighting is not only environmentally conscious — it also creates a better workplace. It mimics natural sunlight, allowing employees to see their

2007 (Average MPG) 2008 (Average MPG) 5.87 MPG 5.76 MPG

work more clearly, enhancing the environment and overall safety.

Money Saved:

Liquid Waste Generation Rate & Recycle Rate 2007 Liquid Waste lbs ∕ 100 lbs produced Generation Manufacturing 1.083

lbs ∕ 100 lbs produced

Distribution

0.042

2008

0.826

2007 Liquid Waste Recycle Rate Manufacturing 61.0%

64.1%

0.019

Distribution

76.9%

76.7%

2008

Dollars: $1,828,264

Methane: 598 pounds

Energy: 23,124,010 kilowatt hrs

Nitrogen oxide: 428 pounds (savings per year)

Carbon dioxide: 14,528 tons

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Innovation Behind the Numbers, Sustainability in Action We launched several innovative programs in 2008 that helped drive resource reduction in our stores and plants. By evaluating our environmental impact at every step in our process — from Research & Development to raw material sourcing to shipping and packaging — we’ve uncovered tremendous opportunities.

Stores Group Explores a Variety of Opportunities

Exploring Ways to Reduce Consumption

With a network of over 3,300 paint stores we see tremendous opportunity to reduce our impact on the environment. We introduced biodegradable shopping bags and a key display area for our green products. Given the visibility and the consumer information available on this display we expect to educate many more consumers. We are also exploring the benefits of a lighting retrofit and are finalizing designs for a LEEDcertified store.

We explored several ways where we might be able to increase our miles per gallon and/or reduce the amount of fuel consumed. One test included replacing diesel fuel with more environmentally friendly biodiesel. Another was to install auxiliary power units in our trucks to not only save fuel but to reduce air and noise pollution as well. In addition our Paint Stores Group is implementing new, more sophisticated software that allows us to plan delivery routes for maximum efficiency.

Plastic Five-Gallon Pail Recycling Program We’re encouraging painting contractors to minimize their waste with a test market recycling program. What began in our Orlando stores is now expanding to the entire state of Florida. Customers receive 25 cents for every five-gallon bucket returned. KB Homes, a home builder and customer of ours, has joined the effort by requiring their contractors to participate.

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Small Bottle Leads to Huge Changes

Kick-Off Challenge Reduces Carbon Emissions, Saves Money

Until recently, we packaged paint colorant in F-style gallon jugs that, when emptied, left behind a significant amount of colorant. In an effort to reduce this waste, we developed a PET (polyethylene terephthalate) bottle that is not only made from recycled materials, but is also recyclable, more durable, less expensive, one-third the weight of F-style jugs and leaves behind less residual colorant. In addition, we can receive 10 times more bottles per truck, saving on freight and fuel costs. To date we have reduced disposal costs by 70% and reduced annual waste by 1.3 million pounds.

Part of the EcoVision introduction was our Kick-Off Challenge, a competition between the three largest employee sites in Cleveland. The idea was to let our employees participate and to see the direct impact they could make on the environment. After only six months, the employees had reduced energy consumption by 1.2 million kilowatts and increased their average recycling rate by almost 25%. We saved $90,000 in energy costs and reduced carbon emissions by 1,088 tons — which is the equivalent of taking 199 cars off the road. The contest was designed to allow other facilities to use the same ideas in their locations and build on the success.

“ Sustainability is very important to each and every one of us as individuals. I can’t get over the level of enthusiasm I see from everyone in the company; it is greater than anything I ever imagined. Every day more employees are recognizing, in their own way, opportunities to make an impact. It’s also very important to our company. It supports our profitability, our social responsibility and the environment.” — Joe Biber, Staff Scientist and one of five employees who spearheaded the grass roots initiative that lead to EcoVision™

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Making a Difference With the Products We Sell Much of our report to this point has dealt with who we are and how we operate. Yet an important part of our corporate social responsibility is the products we produce and sell. We have challenged ourselves to offer the most comprehensive line of environmentally responsible coatings products in the world. And we have seen tremendous progress in recent years that builds on our history of innovation.

GreenSure and Green Cert Designations Set a High Standard In 2008, to demonstrate to employees and customers alike our commitment to environmentally responsible products, we decided to brand all domestic products that met our green standards with the GreenSure (used on Sherwin-Williams branded products) or Green Cert designations. The reason we have opted for our own designation is to emphasize that these products not only meet regulatory requirements and reduce their environmental impact, they also perform better than any other products. Each product has some requirement based on its industry for VOC limits, aromatic content and chemical composition. Beyond that we also add performance criteria to ensure the product performs better than alternative products. Complete details of every product’s requirements are available on GreenSure.com or GreenCert.com.

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Making a Difference Around the World Definitions and requirements can vary from country to country, but our commitment to environmentally responsible products occurs around the world.

United Kingdom – Ronseal, a wood care company based

in the UK, introduced the Ronseal Eco product set in 2008. It capped 20 years of innovation in water-based stains and varnishes. Virtually 100% of the products are water-based and over 80% achieve VOC ratings of Minimal, Very Low, Low or Medium within the strict EU regulations.

Brazil – With the introduction of Metalatex® Eco Enamel

in 2004, our Metalatex® brand began a brand extension that grew to 10 products by 2008. In 2007, we created the green designation (see logo below next to Green Cert) for any product meeting strict third-party requirements.

Argentina – We have introduced four interior and exterior latex product lines that meet strict third-party standards. We have also introduced waterborne technology into our stains and varnishes.


GreenSure or Green Cert Products (Domestic) — or Low/No-VOC Products for global operations Stores

•ProGreen® 200 • Duration® Home • Harmony® • Builders Solution® • Sherwin-Williams® Water based Industrial Enamel • SherMax™ Sealant • Power House® Sealant • Stampede® Sealant

United States – Our flagship wood care brands Minwax®

Diversified Brands

• Dutch Boy® Refresh™ Paint • Pratt & Lambert Porcelain™ Paint • Conco Pure Low Odor Wall & Ceiling Paint • Krylon Industrial® Atrium™ Interior Paint • Purdy® eco pro™ Rollers and Brushes • Sprayon™ Eco-Grade™ Cleaner • Clearly Clean™ Cleaner

A History of Green Innovation

Automotive • AWX® – a waterborne product line • HP Process™ HPC-15

Europe, North and South America – AWX®, our

premiere water-based automotive product, was developed to exceed the demanding standards found in Europe and the U.S. AWX® decreases VOC emissions by 96% compared to solvent borne coatings. and Thompson’s® WaterSeal ® provide a full range of environmentally responsible products that deliver beauty and protection, while meeting or even exceeding the most stringent environmental regulations. In addition, they are taking measures to minimize our environmental impact in manufacturing, distribution and even how products are used.

1941: The first water-based paint: Kem-Tone® 1995: The first zero-VOC architectural paint: HealthSpec

Chemical Coatings

• Sherwood® Kem-Aqua® Plus • MIL SPEC® MIL-DTL-64159 Type I • Powdura® Powder Coatings

2002: Our first plastic paint container: Twist & Pour

Global

• Ronseal® Eco Varnish (UK) • BIOdeg (Chile) • Metalatex® (Brazil)

2008: The first paint can made of post consumer recycled material

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101 W. Prospect Avenue 1180 Midland Cleveland, OH 44115 www.Sherwin-Williams.com


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