Merck has made it a priority to reduce our demand for energy since establishing our first corporate energy policy in 1994.

We established a Center of Excellence (COE) in Energy that is responsible for identifying and implementing best practices for reducing energy use across the company. Because the majority of Merck's demand for energy occurs at manufacturing, warehousing, laboratory and major office facilities, we target these types of facilities in our energy demand reduction program. We also evaluate how we use energy for employee business travel to find opportunities to reduce costs and environmental impact.

In 2008, our Energy COE developed efficiency metrics for all major energy-using systems at Merck and plans to use these metrics to help improve performance. We also continue to improve our Best Practices Evaluation Tool, which sites use to evaluate how well they meet best practices and identify opportunities to improve. The tool looks at 14 categories of energy demand, including HVAC, steam distribution, meters, lighting and compressed air, among others. Our approach is rooted in the idea that the cleanest energy is the energy we don't use.

In 2005, Merck adopted a corporate goal to reduce the intensity of its energy demand at our research, manufacturing and major office facilities by 25 percent per unit area (measured in millions of BTUs [MMBtu/ft2]) by the end of 2008, from a baseline year of 2004. We not only achieved the goal but exceeded it, reducing our energy demand by 28 percent in that timeframe. In 2009, we established a 10 percent improvement target for the period of 2009 to 2015, using 2009 performance as a baseline.

To maintain this trend, we expect to continue improving our energy efficiency and reducing our reliance on fossil fuels by establishing goals, implementing global projects, developing tools, sharing best practices, and encouraging behavioral changes. Projects include multiple renewable energy initiatives (e.g., solar and wind), installation of variable speed drives; reassessment of production, green research and office buildings; and the use of free cooling and heat recovery from recirculating water systems.