Emersons Environmental Report

Our Commitment to the

Environment

Our Commitment to the Environment

At Emerson, responsible environmental stewardship is an integral part of sound business policy and practice.

Responsible environmental stewardship is a key corporate policy that supports and enhances Emersons leadership in many areas. Environmental accountability is integrated into our commitment to developing and delivering next-generation solutions and technological innovations to our customers while maintaining cost-effective operations and high shareholder value. From the oors of our factories to the design centers where we research and create new products, environmental responsibility is a basic guiding principle in our efforts to also improve our efciency and productivity, and our management process. Whether we are developing a new system for cleaning parts that eliminates the need to use hazardous chemicals or simply reusing packing materials in a concentrated recycling program, we are constantly searching for new ways of incorporating environmentally responsible practices into our operations and making them essential tactics in day-to-day business.

Our environmental performance

Emersons environmental performance begins with regulatory compliance but by no means ends there. Ongoing business practices include an internal environmental audit program, training, and responsiveness to environmental situations when they arise and voluntary participation in programs with the U.S. Environmental Protection Agency and other bodies. Our commitment stretches across a broad horizon from protecting the Earths natural environment and preserving its resources to meeting the expectations of our shareholders, customers, employees, and neighbors in the communities in which we operate.

No single metric can measure the contributions made by our integrated, systematic approach to environmental responsibility. We ne-tune our environmental programs, identify potential for improvement, develop innovative solutions, and sustain a sense of vigilance that promotes continuous improvement.

Sharing knowledge and expertise across businesses is another way we continually sharpen our environmental focus and performance. Most important, Emerson people make the difference, and we have learned that we can count on their ingenuity and determination to solve the toughest challenges with the best solutions for our customers, our shareholders and our environment.

Recognized success
The 33/50 program conducted by the EPA demonstrates our approach. Participants in this voluntary program were urged to reduce releases or transfers of 17 highpriority chemicals by 33 percent over four years and 50 percent over seven years. When the program ended, Emerson had achieved a 77 percent reduction in the key chemicals, far exceeding the programs goals.

David N. Farr Chief Executive Ofcer

Environmental Principles

Emersons commitment to the environment is outlined in 10 environmental principles that dene the philosophy we have adopted and the practices we require of ourselves to ensure that we conduct ourselves in an environmentally responsible manner. These principles have been translated into numerous languages and are posted in Emerson facilities throughout the world.

source reduction and recycling. All wastes will be handled and disposed of through safe and responsible methods.

as changes in relevant laws and regulations, pollution prevention and waste minimization practices, and technological developments.

3 | The Company will minimize

the environmental, health, and safety risks to its employees and the communities in which it operates through safe technologies, facilities, and operating procedures and by being prepared for emergencies. The Company will encourage all of its employees to be alert to such risks and to report them promptly to management so that appropriate remedial measures may be taken.

7 | The Companys operations

will be periodically audited to determine compliance with this policy.

8 | The Ethics and Environmental

Policy Committee of the Company is responsible for overseeing the strategy the Company is pursuing as evidenced in its environmental principles and policy, and will periodically report to the Audit Committee of the Board of Directors.

1 | Emerson is guided by a
belief that all corporations have a responsibility for the environment. This belief is reected in a commitment by the Company to avoid creating unacceptable risks to the environment. This commitment is an integral part of the Companys management process and benets the Companys shareholders and employees, as well as the communities in which the Company operates.

| The Company will conserve

energy and work to improve the efciency of the products it manufactures and of its own internal operations.

9 | The Company will seriously

consider and reasonably cooperate with government agencies in voluntary waste reduction and energy conservation programs.

| The primary responsibility

for implementing the Companys environmental principles rests with the Companys division presidents. The Corporate Environmental Affairs Department shall assist the division presidents in this endeavor.

10 | The management of the

Company will strive to protect the investment of the Companys shareholders by reducing the Companys potential environmental liability, as well as altering its manufacturing operations to minimize waste generation, thereby saving costs.

2 | The policy of the Company

is to not only comply with all applicable laws and regulations but also reduce and, where possible, eliminate hazardous waste through

6 | The Company will conduct

an annual training program for the environmental managers of the Companys sites, particularly manufacturing operations. The programs will address such matters

Environmental Accountability

Responsibility for environmental stewardship reaches from the Board of Directors to every plant, where a manager is designated to monitor environmental performance and ensure compliance with internal and external standards.

We believe environmental stewardship is everyones responsibility, starting with the Board of Directors. The Board's Audit Committee reviews and provides oversight to Emerson's environmental programs and projects. The Ethics and Environmental Policy Committee, composed of corporate ofcers, oversees all of Emersons environmental activities and reports to the Board of Directors. A corporate vice president of environmental affairs and a staff of professionals work closely with the Company divisions around the world to develop and implement environmental programs. In addition to managing training and audit programs and environmental projects, the Environmental Affairs Department serves as a clearinghouse for the divisions, sharing successful environmental case histories from inside and outside the Company, relevant materials on environmental issues, and literature on new environmental products and alternative manufacturing processes. It is also the responsibility of each division president to ensure that the guidelines and procedures are being followed and carried out at the operating level. The Emerson environmental program could not be effective without the hard work of all Company employees.

At each division, at least one manager has been appointed to oversee and coordinate environmental activities. In addition, each plant has a designated staff member who is responsible for day-to-day environmental compliance matters.

Environmental programs are implemented at Emerson facilities worldwide.

Environmental Training and Audit Programs

A vigorous training program and rigorous audits are the centerpieces of Emersons commitment to the environment.

Comprehensive training and audit programs are the centerpieces of Emersons environmental programs, ensuring that environmental policies and practices are carried out consistently and uniformly throughout our worldwide operations. The training and audit programs are supported by a detailed Emerson Environmental Management Practices Manual

Environmental Training Program

Our Environmental Training Program is the foundation of our commitment to the environment. The training conferences, conducted by Corporate Environmental Affairs staff and outside consultants and attorneys, focus not only on compliance but also on efforts division managers can take to prevent pollution, reduce waste, and conserve energy beyond those activities mandated by law.

Emerson environmental managers conduct regular on-site reviews to ensure compliance with environmental regulations.

that outlines standards and goals in areas from regulatory compliance, to housekeeping, to equipment and materials management. The manual has been distributed around the world in English, Dutch, German, Chinese, Japanese, French, Italian, and Spanish. In North America, information regarding new regulations and practical compliance strategies is periodically distributed.

Each year, more than 350 employees, including plant environmental managers, division environmental coordinators, and plant managers, attend the training sessions, which have been held around the world in the United States, Canada, Europe, India, China, Japan, Brazil, and Mexico.

The program has two primary goals:

Environmental Audit Program

inspections of the facility and environmental records. The purpose of the audits is to evaluate environmental regulatory compliance, as well as the overall environmental management practices of each plant. The audit process encourages plant environmental managers to look beyond basic compliance to explore ways to implement innovative and productive environmental management practices. In any year that a domestic site is not formally audited, the division environmental coordinator visits the plant and completes a comprehensive checklist to ensure compliance with environmental regulations. Corporate environmental staff oversees this annual process.

+ Give employees a practical

understanding of the requirements of environmental laws and regulations as they apply to the Company

Each year, about 20 percent of Emerson facilities are audited by outside consultants for environmental compliance, a practice recommended by the Ethics and Environmental Policy Committee in the early 1990s. Under this continuing program, all Emerson manufacturing facilities no matter where they are on the globe are audited. Prior to an on-site inspection by the environmental consulting rm, each plant is required to complete a detailed questionnaire provided by the Corporate Environmental Affairs Department. Following the formal audit, the outside auditor prepares a written report that is forwarded to the division president. The Corporate Environmental Affairs Department then works with the division president and facility personnel to ensure that all audit ndings are addressed. In addition to regularly scheduled audits, a number of surprise audits are conducted each year at Emerson's facilities in the United States, Europe, Canada, and Mexico. Either scheduled or surprise audits take at least one day and may take several days, depending on the size of the facility, as auditors conduct detailed

+ Share ideas on how to reduce the

generation of waste and enhance the quality of the environment The training conferences cover a broad range of topics, including:

+ Emersons environmental principles

and policies

+ Good environmental management

practices

+ Legal and regulatory requirements + Management of chlorouorocarbons

and related materials subject to international conventions and agreements

+ New developments in environmental

laws (by country)

+ Issues in European Union policy

and regulation

+ Pollution prevention and

waste minimization This thorough training program gives many Emerson employees a better understanding of environmental issues as they affect the Company and its facilities. It also provides an opportunity to reiterate the importance of Emersons environmental commitment and the role employees play.

Environmentally Friendly Products and Operations

Across Emerson, products and operations are evolving in environmentally friendly ways.

Emerson continuously improves its manufacturing process and product line in ways that benet the environment. The Company encourages all of its divisions to reduce consumption of energy and to institute recycling programs that minimize emissions and conserve resources. Here are some examples of how Emerson is using to the latest technological advancements across the Company to live up to its commitment to the environment.
Thermostat Recycling

second-largest manufacturer of alternators used in windmills in the world, with the goal of becoming No. 1 in the near future. With Emerson technology driving this growth, it is beneting the environment across the globe.

Emerson Climate Technologies Emerson has teamed up with industry competitors to establish the Thermostat Recycling Corporation (TRC), an organization that collects old mercury-switch thermostats returned by heating, ventilating, and air conditioning contractors. This program ensures that the mercury inside old thermostats will not nd its way into the environment.
Power Generation
Emerson alternators offer the world a cleaner, friendlier way to generate power.

Water Recycling

Emerson Process Management Manufacturing pressure transmitters requires ultrapure water for cleaning. Producing the ultrapure generates a wastewater which was destined for the sewer. Recognizing that the wastewater might be better used elsewhere, Emerson now uses the wastewater as a gray water supply for the facilities restrooms. This allows the facility to avoid using almost one million gallons of water each year.

Emerson Industrial Automation Windmills have long been recognized as an environmentally friendly way to generate power. The use of wind power is growing rapidly, especially in Europe where usage was up 40 percent in 2002. Emerson is currently the

Motor Emissions

Cleaner Boiler Systems

Solderless Processes

Emerson Motor Technologies Emerson is working with Caterpillar to develop new technologies that will help reduce the vehicle emissions that result from the idling of a diesel truck engine. The average diesel truck idles 1,800 hours a year, burning one gallon of fuel for each of those hours. The new engine accessories will help reduce the need for truck idling, providing for signicantly cleaner air quality and reducing fuel consumption.
Power Control

Emerson Process Management Increases in fuel costs, power demands, and the need to reduce power generation costs have forced the electric utility industry to improve efciency. Emerson is helping power plants achieve this objective while also reducing the emissions of green house gasses. The Boiler Combustion Optimizer helps increase boiler efciency while reducing NOx and CO emissions levels.

Emerson Appliance Solutions Solderless manufacturing is occurring inside Emerson as well. In an Emerson plant that manufactures electric motors, a new process eliminates the lead normally used in soldering.
Remote Monitoring

Emerson Climate Technologies Thousands of supermarkets across the country are lled with refrigeration equipment that is necessary to keep food fresh. Emerson has intelligent eld devices that can communicate with a central control center that monitors individual

Emerson Network Power Emerson offers an extensive set of power control systems that keep businesses up and running 365 days a year. Emersons backup electric generators are carefully managed to determine how much power is needed to feed demand and shut down excess supply accordingly. To increase energy efciency up to 80 percent, Emersons ASCO Power Control Systems use system heat, which is a byproduct of a generator, to maximize total output of energy from fuel.
Solderless Tools
New technology developed by Emerson is powering solderless tools that are safer for the environment.

refrigeration cases within a grocery

store. Through this service, Emerson technicians can spot inefcient equipment and immediately have it xed, saving the supermarket and the environment signicant energy consumption.

Emerson Professional Tools Soldering copper tubing has traditionally been a time-consuming job that required lead solder. Emersons ProPress System is a new copper crimp joining method that is easier, faster, and safer than traditional soldering. The system uses water pressure to join pipes, resulting in a more environmentally friendly way to complete construction projects.

By The Numbers

The success of Emersons environmental program is dened by solid results.

The program is making measurable impact and has garnered third-party recognition.

The Companys commitment to personnel training is helping communicate the importance of the environmental principles throughout the organization.

U.S. 33 /50 Chemical Emissions Reductions

Internal Assessment

Recognized by the EPA for its success in reducing chemical emissions, Emerson continues to reduce emissions in the United States long after the voluntary 33/50 program ended.

Emerson assesses a number of facilities each year as part of its rigorous internal evaluation program that ensures compliance with local environmental laws and the Company's guidelines. Each manufacturing location is audited at least once every ve years.

Worldwide Chemical Emissions Compared to Net Sales

Fines and Penalties

Emissions compared to sales have decreased dramatically over the years.

The Emerson Environmental Program has been instrumental in helping the Company meet environmental guidelines, keeping nes and penalties to a minimum.

(in thousands of U.S. dollars)

Worldwide

Emerson

Emerson (GoToEmerson.com) is a global leader in bringing technology and engineering together to provide innovative solutions to customers in electronics and telecommunications; process control; industrial automation; heating, ventilating, and air conditioning; and appliance and tools. The Company has more than 109,000 employees in more than 250 manufacturing facilities around the world. Emerson maintains its market and technology leadership through an emphasis on new-product development and a practice of offering customers integrated solutions that draw on the broad expertise of the Companys divisions. New products account for more than a third of all sales, and the Company continues to invest in engineering and development. Emersons more than 60 divisions produce a wide variety of products, systems, and services for commercial, industrial, and consumer markets. As a result of the emphasis on new-product development and technological superiority, Emerson products often are the leaders in their industries.

For more information on the Companys environmental programs, please contact: Vice President Corporate Environmental Affairs Emerson Mail Station 3800 8000 W. Florissant Avenue
P.O. Box 4100

St. Louis, MO 63136-8506 environmental@emrsn.com GoToEmerson.com

In order to reduce the environmental impact of this report, it was designed for distribution in an electronic format. Paper copies of this report are available upon request.

10

Emerson Corporate Environmental Affairs Mail Station 3800 8000 W. Florissant Avenue
P.O. Box 4100

St. Louis, MO 63136-8506 GoToEmerson.com

The Emerson logo is a trade mark and service mark of Emerson Electric Co.

10-04