2011 Sustainability Report

Growth and Stabilization of the Core

n 2011, Stanley Black & Decker continued to drive growth through acquisition. As we focused on the

integration of the new additions to the organization, we progressed forward in the areas of supplier sustainability and sustainable product design. Across our company and throughout the EHS organization, we apply Stanley Fulfillment Systems to improve our speed and agility to maintain the strength of our core operations. GROWTH The Global EHS Summit. 165 participants from 25 countries met to: exchange Best Management Practices, certify 1st Responder, OSHA 10 Construction Safety training, Forklift Train-the-Trainer standards, Restricted Materials Council, Responsible Waste Management and to forge the strong professional relationships key to organizational excellence. Integration. We expanded our scale of operations in 2011 with the acquisition and integration of AutoMagique, Cribmaster, Microtec, and Niscayah along side the ongoing integration of CRC-Evans. We posted an additional 8 million hours worked across 183 new sites. Sustainable Waste Management Council. In 2011, we focused on obtaining a broader understanding of each facility’s final waste disposition in order to implement a global waste disposal policy. The Stanley Business System’s waste reporting functionality was expanded to allow our facilities to now report the locations of final waste shipments. Final locations were then reviewed for acceptability based on available audit reports.

Consolidation of Environmental Liabilities. With the continued integration of legacy BDK and legacy SWK operations came a new consolidated liability management process providing technical, site-specific updates as well as financial projections on a quarterly and yearly basis across the entire SBD liability pool. The integrated methods achieved a higher level of standardization, accuracy and assurance when it comes to resolving the environmental liabilities created from legacy contamination. Supplier Sustainability. We continued the expansion of our Supplier Sustainability Program in 2011 with the implementation of the new supplier auditing process. During 2011, SBD performed 195 Asian supplier sustainability audits, of which 127 were first time audits, covering over 80% of our Asian spend. These audits allowed us to define a sustainability performance benchmark for our supply base and rank suppliers based on a traffic light system, enabling us to pinpoint areas where supplier education and awareness could be focused to promote improvement. Partnering to Develop Sustainable Product Standards. We turned our attention outward as well in 2011, leveraging key partners including:

• The US Department of Energy (DOE), to help develop a federal battery test standard

• The National Institute of Standards and Technology (NIST), to help develop a federal sustainable standard for discrete part manufacturing, and

• The American Home Appliances Manufacturers (AHAM) trade association, to help propose a sustainable standard for portable and floor care appliances.

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External Sustainability Transparency. As part of continuous improvement efforts as well as to increase access to SBD’s sustainability actions and results we have upgraded the Sustainability page located at www.stanleyblackanddecker.com. Our SBD external webpage now includes our Sustainability Guiding Principles, Progress Reports and Recognition, and EHS Annual Reports. STABILIZATION Repeatability and Reproducibility. 2011 was a “re-baseline” year, with the application of a new 3-year cycle of reset roadmaps and scorecards to an expanded facility population including manufacturing, distribution, field services, SG&A, remanufacturing and retail. Our 2011 Corporate EHS goals were directed at the repeatability and reproducibility of 2010 Key Performance Indicators, and by-and-large we exceeded those goals. Sector-Specific Road Map Goals. In 2011 we increased the granularity of our Road Map goals down to the sector level, whereby expanding the number of facilities held accountable for Road Map performance by 325%. We tailored each sector Road Map to inherent operations, with guidance towards an effective EHS management system plan. Field Services. 2011’s acquisitions added about 100 new field service branches, essentially doubling the footprint of our distributed workforce to nearly 20% of our global total. We ranked our field services branches for the 1st time on the basis of roadmap (program) performance. Managing business engagement from the top down while also driving accountability from the ground up. Machine Safety Excellence - Year 1: Machine Guarding Auditor University. We licensed machine-specific ANSI machine safety references in 2011 to

increase the rigor of our internal machine guarding requirements beyond minimal regulatory performance-based standards. The result was our 1st Machine Safety Assessment course at Stanley Black & Decker for corporate EHS staff from around the globe. Site Energy Audit Program – Year 1. We completed wall-to-wall energy audits at 5 of our top 20 energy-consuming manufacturing sites, chosen on the basis of business and geographic considerations. These audits yielded 50 potential Energy Conservation projects that could deliver more than $1MM in annual savings and 21% reduction in greenhouse gas (GHG) at those sites. Policy Deployment. We published 3 internal EHS policies in 2011:

1. Restricted Materials Policy incorporating ES100118. A policy designed to ensure that all materials used in our products are compliant with applicable banned or restricted substance legislative requirements.

2. EHS Partner Consultants Policy. To ensure successful EHS compliance projects and/or remediation / transactional initiatives our renewed policy restricts the use of EHS consultants to a short list of 12 approved firms.

3. Sustainable Waste Management Policy. A policy communicating our restricted list of company-approved waste disposition suppliers.

Product Compliance. Stanley Black & Decker emphasized its product compliance leadership position in 2011 by cementing the global Restricted Materials Council across all business sectors communicating with business leaders and specialists on all matters concerning the substances and materials that are in our products.

• Restricted Substances Declaration System: We implemented action plans to incorporate this system across our global businesses. The RSDS is an internal tool which allows us to capture, control, analyze and certify suppliers on their compliance with our Restricted Materials Policy, international directives and laws.

RECOGNITION Carbon Disclosure Project (CDP):

• Investor Disclosure We were reassigned to the “Industrial” sector in our 4th year responding to the survey, posting a score of 70.

• Water Disclosure. We again asked

to participate in the survey’s 2nd year, as a non-intensive water use industry, and were recognized in the published list of other responding companies.

• Supply Chain Disclosure. We

participated in this survey for the first time in order to help a customer quantify their Tier I supplier emissions and characterize the level of supplier engagement in GHG reduction. We posted a score of 70 against a responder average of 51.

• Destination Gigaton. We joined 15

other founding S&P 500 corporate sponsors of this partnership between CDP and the World Wide Fund For Nature to drive reduction of US

private sector GHG emissions by 1 billion tons by 2020.

North American Dow Jones Sustainability Index (NA DJSI): 52 internal subject matter experts reporting on our economic, environmental, and social performance earned us a score of 68 and a spot on the NA DJSI for the first time in 2011, representing the Durable Household Goods Sector. Newsweek. In their third annual Green Rankings, we ranked 270 out of 500 large USA public companies, up from 274 in the 2010 survey. THE FUTURE We have set our 2012 sights on the following: Machine Safety Excellence - Year 2: Machine Auditing Tools. We will issue a Machine Guarding Guidance document distilling sets of machine-specific ANSI standards for machine guarding and safeguarding, in conjunction with a web based version of the public domain Proctor Risk Assessment Calculator Site Energy Audit Program – Year 2. We plan to complete remaining energy audits to ensure our understanding of energy efficiency opportunities globally. We will then publish an updated Energy Conservation Guidance document synthesizing findings, proposed energy conservation measures, and Best Management Practices as we continue to shift ownership of energy reduction initiatives to operations. RSDS - Year 2. We plan to continue the staged rollout of the Restricted Substances Declaration System (RSDS) across the remaining business platforms to allow us to continue to leverage its strength on material and substance compliance certifications.

EHS Approach to the Sales, General & Administration (SG&A) Sector. We will apply the same management principles successfully employed across our manufacturing and distribution, field services, and remanufacturing and retail sectors to ensure we have effective EHS coverage and continuous improvement plans for all locations. Understanding Research & Development (R&D) Operations. We will review R&D operations across the globe to understand their aspects and impacts, determine their EHS exposures, and design management systems to support these operations. Behavior-Based Environmental (BBE). We will measure employee behaviors that can prevent or cause environmental incidents, such as violations, spills, noncompliance, waste, and energy inefficiencies which will allow us to eliminate and/or minimize future occurrences. Lithium Ion Battery Transportation. We will be ensuring the safety of our employees and the safe transportation of Li-Ion batteries by launching new roadmaps, creating new web-based training, and expanding auditing coverage. LEED Certification. We will enhance the current Sustainability Roadmap Series by adding a new LEED Building Roadmap and establishing certification goals for existing buildings. Life Cycle Assessments (LCAs). We will bring LCAs in-house via an enterprise-wide, life cycle assessment platform to allow our research, development, and product engineers to operationalize “What if” exercises and model the most sustainable product attributes possible. External Verification. We will engage a third party consultant to externally validate our greenhouse gas inventory and reporting of Scope 1 and Scope 2 emissions sources

according to AA1000AS (2008), the most current global sustainability assurance standard. EHS Website Transformation. We will continue the transformation and standardization of our EHS information system to a higher performing and more efficient management tool. RESULTS 2011 highlights include:

• 18 pounds of waste/$K production, a 13% year-over-year (YOY) decrease in waste generation intensity;

• 319 BTU/$ production, an 18% YOY decrease in energy consumption intensity;

• 84 pounds C02e/$K production, an 18% YOY decrease in carbon footprint intensity;

• 92 gallons water/$K production, an 18% YOY decrease in consumption intensity;

• Total Recordable Incident Rate of 1.20, a 28% YOY decrease, 73% below the USA manufacturing average of 4.4, and 70% below the US construction average of 4.0;

• Lost Time Incident Rate of 0.41, a 42% YOY decrease, 63% below the USA manufacturing average of 1.1, and 73% below the US construction average of 1.5;

• 52 ISO 14001, OHSAS 18001, and/or SA 8000 certifications, 46% of manufacturing | distribution facilities

• 15 new or renewed EHS performance awards from government agencies, 13% of manufacturing | distribution facilities; and

• 97% of manufacturing | distribution facilities underwent third party wall-to-wall EHS compliance audits.