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2007 Corporate Social Responsibility Communications Plan January 15, 2007 Overview The plan that follows outlines opportunities for Grainger to centralize information about corporate social responsibility (CSR) and to strategically communicate this information to a variety of audiences, including: • Employees - In addition to being a key audience, Grainger employees play an important role in educating other constituents about CSR at Grainger. • Customers • Communities • Investors Mission/Vision Grainger feels a strong moral, social and business obligation to operate responsibly and to give back to the communities and individuals we serve. As the leading broad-line supplier of facilities maintenance products to businesses and institutions throughout North America and China, Grainger plays a critical role in keeping economies going. Grainger employees make this happen, helping customers save time and money by providing the right products to keep their facilities running. We extend this commitment by using our resources to support our employees’ philanthropic efforts, understand community needs, and partner with local leaders to elevate those communities and the people that comprise them. Objective 1: Employees Generate awareness amongst employees of Grainger’s corporate social responsibility platform and how the company’s philanthropic focus areas complement employees’ primary goal of driving sales through customer service. Foster advocacy and participation. Strategy 1 Use existing communication channels to share information with employees about the purpose and impact of specific CSR programs, highlighting their relationship to company strategy. • Enhance (develop?) an intranet site that centralizes links to the operational components of the company’s CSR strategy: o Community relations programs – outlining the purpose, scope and key messages of each program/donation; providing links to all applicable forms and processes; identifying appropriate contact points; and directing employees to success stories posted in other communications (ex: info such as was created for the Ready When the Time Comes toolkit). o Employee/branding materials – emphasizing the importance of employees to the corporate brand; highlighting the benefits Grainger offers employees and how they’re superior to other companies, survey findings, etc. o Environmental/health/safety – stats, policies and other resources. o Corporate governance/ethics – stats, policies and other resources. o Media coverage and awards related to CSR.


2007 Corporate Social Responsibility Communications Plan January 15, 2007

o Provide link to site that centralizes externally-oriented CSR information (described under Communities). Incorporate CSR messaging into at least half of the issues of Network (high-level), Inside Network (human interest), Leader Update (strategy), blogs/podcasts, messages from management, leadership meetings, field visits, etc. o Use these vehicles to discuss programs/plans that are in the works, and not just final announcements, to engage employees and show connections to business strategy. Conduct a baseline survey of awareness and measure at mid-year and at year end, targeting an overall increase in awareness of 40 percent. o Conduct assessment of intranet site usage (number of hits, time spent on the site.) o Survey readership/meeting attendees on their understanding of key themes.

Strategy 2 Reinforce the message that corporate social responsibility is a field priority and that employees can enhance Grainger’s image with customers by supporting local community relations efforts – “getting it done.” Advocacy • Position senior leaders (Jim Ryan, Mike Pulick, Pat Davidson, Kevin Peters) as corporate social responsibility champions and regional leaders as volunteer role models who encourage participation and facilitate opportunities for involvement. o Incorporate success stories (customer or supplier relationships forged/strengthened through volunteerism or donations) into employee meetings and presentations o Are VPs/other leaders willing to volunteer themselves? • Incorporate community-oriented goals into field managers’ performance evaluations as evidence that CSR is a priority, not just something else to check off. • Share initial survey findings: that commitment to local causes is paramount to employees and that Grainger supports that interest through Regional, Market and Branch Contribution Funds and through matching gifts. Facilitation • Through Leader Update, suggest strategies for managers to use in talking with employees about CSR and its relationship to the business. • Coach branch managers/DBSMs on ways to take ownership of the process of developing community relationships, starting in the Tools for Tomorrow markets, where there is an existing relationship to use as a springboard. • Create online forum for employee volunteers/coordinators/ambassadors to share firsthand experiences or advice that fosters a sense of community and field ownership of local nonprofit relationships. Recognition • Incorporate recognition of volunteers into annual sales & service meeting and more frequently through local meetings; post achievement board in branches/DCs alongside community info that customers can see.


2007 Corporate Social Responsibility Communications Plan January 15, 2007 •

Actively promote use of Branch Contribution Fund (using a progress thermometer in Network/on the intranet?) Recognize annually the region with highest/fastest participation rate (create a traveling trophy?), with a goal of 100% participation.

Strategy 3 Determine framework for effective and ongoing community relations execution in the field. • Establish “labs” in two remote field locations to test the appropriate mix of tools and corporate support necessary to generate sales growth as a result of optimum employee participation and public recognition of community relations efforts. • Establish metrics for measuring impact: sales growth, customer acquisition, etc. • Formalize community relations ambassador role in the field to foster and steward relationships with local non-profit partners. o Create training program to support efforts. • Engage branches/sales reps early in the Tools for Tomorrow process to encourage field involvement and promote opportunities for cultivating sales prospects. Strategy 4 Establish a CSR leadership council comprised of key leaders (VP- or senior director-level and above) that have a stake in the successful implementation of Grainger’s CSR strategy. • Meet quarterly to establish CSR-related metrics and discuss progress against goals, concerns, and opportunities. Could be tied to existing discussions around risk management. Objective 2: Customers Solidify customer association of Grainger as a leader in corporate social responsibility by conveying the depth of the company’s commitment to its employees, its philanthropic focus areas and locally important causes, and the well-being of its customers. Strategy 1 Increase the number and quality of exposures customers have to Grainger’s philanthropic activities. • Develop simple visual aids to communicate CSR priorities (i.e., sales: leave-behind brochure, branches: poster; add CSR statement to invoices, checks, etc.) • Provide CSR messaging to branch and commercial/government sales employees and educate them in ways to converse with customers about how Grainger’s CSR priorities differentiate the company from its competitors. o Draw on framework used to educate employees about communicating market expansion changes. • Incorporate CSR topics into articles in the new Grainger customer magazine. • Insert CSR-oriented questions into questionnaires implemented by the market research team. • Conduct a baseline survey of customer perceptions as well as a year-end follow-up survey, with a goal of 30 percent increase in awareness of Grainger’s CSR activities and focus areas.


2007 Corporate Social Responsibility Communications Plan January 15, 2007 Strategy 2 Create opportunities for sales generation through increased visibility in the local community. • Engage local leaders in identifying and participating in community organizations that are important to their customers. • Execute regional, market and branch contribution funds to maximize exposure. • Invite branch and sales teams to community relations program events and encourage them to actively develop sales leads with program participants and other interested parties. Partner with sales teams to identify and isolate examples of sales growth resulting from these connections. • Provide training to government sellers on positioning philanthropy as a way of overcoming opposition to Grainger’s presence in small communities. Strategy 3 Develop customer affinity for Grainger by tying philanthropy to their needs. • Promote Grainger’s reliability and how that escalates in times of crisis (employee commitment, product donations, etc.) • Work with marketing to enhance (develop?) a framework for differentiating Grainger by promoting the company’s suite of environmentally aware product and service offerings (green products, recycling, energy audits conducted by supplier partners, compliance with product regulations, etc.) Objective 4: Communities Achieve national and local recognition of Grainger as a corporate leader in disaster relief and technical education by leveraging strategic partnerships. Strategy 1 Operate community-oriented programs that highlight Grainger’s commitment to its charitable focus areas and develop news-worthy angles to elicit media interest. • Partner with the American Red Cross to create a co-branded, national Ready When the Time Comes program and establish 8 to 16 RWTC programs throughout the U.S. o Create database of stats/stories from volunteers/Red Cross chapters to enliven this program and elicit media interest. • Use Regional, Market and Branch Contribution Funds to seed long-term community relationships, particularly in expansion markets. • Partner with the American Association of Community Colleges in marketing and administering the Grainger Tools for Tomorrow vocational education scholarship program in 7 markets. o Create Grainger-branded toolkit with private label tools to increase exposure. • Contribute seed money to two communities impacted by disaster via the Grainger Rebuilding America program. o Follow up with prior grantees to identify opportunities for “before/after” or “key learnings” stories. • Develop model for supplier alliance community sponsorship.


2007 Corporate Social Responsibility Communications Plan January 15, 2007

Strategy 2 Increase visibility of Grainger in public forums connected to disaster relief/technical education and organizations of local importance. • Position Grainger executives as thought leaders in disaster relief through speaking and media opportunities internally and externally. • Participate in Business Roundtable’s Partnership for Disaster Response task force, (Keyser or Ryan), if spot is available. • Develop corps of trained spokespeople (following specifications in departmental plan) to provide Grainger representation in local organizations and a local face for media opportunities or in the event of a crisis. Strategy 3 Develop page on that aggregates or provides direct links for external audiences to all aspects of the company’s CSR efforts. • Annual CSR report (static) • Employee/brand info (corporate culture, benefits, employee retention, profit sharing, etc.) • Community relations info (descriptions of programs and impact) • Corporate governance info (IR site) • Environmental stewardship/safety info o Brief description of activities such as green products, recycling, energy conservation (internally and as a service offering to customers through supplier partners) with links to pages of detailed info on o Employee/facility safety records o Company positions on carbon emissions, product regulations or other hot topics • Media coverage and awards related to CSR Objective 3: Investors Increase awareness among analysts and investors of the connection between Grainger’s business strategy and operational performance and the company’s corporate social responsibility platform. Strategy 1 Differentiate Grainger from other leading corporations through transparency of disclosure. • Incorporate CSR messaging into all IR communication vehicles as part of regular financial/operational updates. • Issue a CSR report outlining the company’s commitment to its employees, the community, and the environment, and the challenges and opportunities facing the company in meeting these goals. • Meet with analysts once a year to discuss CSR issues or incorporate CSR into agenda for existing analyst discussions. Strategy 2


2007 Corporate Social Responsibility Communications Plan January 15, 2007 Demonstrate the role of Grainger’s CSR activities in driving profitability and mitigating future company risks. • Collect and share evidence that the execution and communication of the company’s CSR strategy is having a demonstrable effect on sales (because of improved customer perception), service (due to employee retention) and operations (because of adherence to safety standards and refinements to product offering that minimize exposure to regulatory issues). • Identify, track and proactively share Grainger’s plans for heading off/addressing the most likely scenarios that could damage the company’s reputation or future profitability. ###


Grainger Corporate Social Responsibility Plan