GHG Emissions Across the Value Chain

Global warming and resulting climate change is one of the most pressing sustainability challenges facing the world today. Although many natural forces have contributed, it is clear that since the beginning of the industrial revolution around 1750, humans have caused the release of additional greenhouse gas (GHG) emissions into the atmosphere. The impacts of climate change are felt through extreme weather events such as flooding, droughts and intense storms. These events are increasing in intensity, and only represent the visible signs of climate change. Other consequences include loss of biodiversity and ecosystems, acidification of oceans, sea-level rise and shifts in agricultural patterns. While gradual, these trends are expected to have more profound effects in the future.

Multinational companies can help to address climate change by understanding their impacts and decreasing GHG emissions through innovative emissions reduction programs. These are core elements of Baxter's sustainability efforts.

Baxter’s GHG Emissions Management Program

Baxter began reporting its Scope 1, Scope 2 and certain Scope 3 GHG emissions in 1997 and contributed to the development of the initial version of the GHG Protocol, a collaboration of World Resources Institute and the World Business Council for Sustainable Development. Companies generally have the greatest control over and ability to impact Scope 1 emissions (associated with their own fuel usage, use of refrigerants and other factors) and Scope 2 emissions (associated with purchased energy/electricity), such as through energy conservation and use of renewable energy. Baxter has a long history of focusing in these areas.

In 2010, Baxter consulted a draft of the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (finalized in 2011) to better understand its overall GHG emissions. Since then, Baxter has worked to better quantify its Scope 3 emissions, which the company estimated to be 4.1 million metrics tons carbon dioxide equivalent (CO₂e) in 2011 (including Upstream and Downstream Scope 3 Emissions).

Baxter estimates its total global value chain GHG emissions (including Scope 1, Scope 2 and Scope 3) at 4.8 million metric tons CO₂e. The emissions reported below are presented in accordance with guidance provided by the GHG Protocol (Scope 1 and Scope 2) and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard.

Baxter reports its emissions in three principal categories: Upstream Scope 3 Emissions, Baxter Operations (Scope 1 and Scope 2 Emissions) and Downstream Scope 3 Emissions. Scope 1 and Scope 2 emissions have a high level of certainty and are verified by an external third party. Scope 3 categories such as Purchased Goods and Services (supply chain), Downstream Transportation and Distribution (logistics) and Use of Sold Products include certain assumptions and estimates. Baxter continues to refine its understanding of total company value chain GHG emissions and to implement emissions reduction strategies.

Click on each segment of this graphic to learn more about the company's activities and performance in that area.

Upstream Scope 3 GHG emissions

The GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard define eight upstream Scope 3 categories. Baxter has estimated GHG emissions for seven of these, summarized below, and continues to evaluate possible emissions associated with the remaining one.

Purchased Goods and Services

Baxter worked with a UK-based firm in 2009 and 2010 to model estimated GHG emissions associated with the company’s global supply chain – from the acquisition and processing of raw materials to the delivery of products to Baxter. The firm based its estimate on data from other companies in the healthcare sector and representative suppliers as well as publicly reported Baxter financial and environmental data.

Based on this analysis, the estimated emissions in this category attributable to Baxter’s business equaled 1,121,000 metric tons CO₂e in 2011, 23.1% of Baxter’s total value chain GHG emissions. This included an estimated 266,000 metric tons CO₂e for Baxter’s first-tier suppliers, and an estimated 855,000 metric tons CO₂e from sub-tier suppliers. Following the new Scope 3 guidance, Baxter reports supply chain transportation-related GHG emissions under Upstream Transportation and Distribution emissions (see below).

See Global Sustainable Supply Chain for more detail about Baxter’s efforts to encourage suppliers to improve their environmental performance, including reducing GHG emissions.

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Capital Goods

Greenhouse gas emissions associated with the procurement of capital goods, such as manufacturing equipment and new or renovated facilities, are estimated at 96,000 metric tons CO₂e in 2011, 2.0% of Baxter’s total value chain GHG emissions.

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Fuel and Energy-Related Activities

This category includes emissions related to the production of fuels and energy purchased and consumed by the reporting company in the reporting year that are not included in Scope 1 or Scope 2.¹ Baxter continues to evaluate possible emissions associated with this category

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Upstream Transportation and Distribution

Baxter estimates upstream transportation and distribution GHG emissions relating to its supply chain at 124,000 metric tons CO₂e in 2011, 2.6% of Baxter’s total value chain GHG emissions. This includes first tier suppliers’ transportation and distribution emissions of 29,000 metric tons CO₂e, and an estimated 95,000 metric tons CO₂e for sub-tier suppliers.

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Waste Generated in Operations

Baxter estimates GHG emissions associated with two elements of this category. For 2011, estimated GHG emissions related to off-site water and wastewater treatment equaled 4,000 metric tons CO₂e and off-site waste management equaled 3,000 metric tons CO₂e. The combined 7,000 metric tons CO₂e represented 0.1% of Baxter’s total value chain GHG emissions.

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Employee Business Travel

Greenhouse gas emissions related to employee business travel equaled 51,000 metric tons CO₂e in 2011, 1.1% of Baxter’s total value chain GHG emissions. These include commercial air travel (44,000 metric tons CO₂e), use of rental cars and public transportation (3,000 metric tons CO₂e) and use of hotel rooms and conference meeting facilities (4,000 metric tons CO₂e). These estimates are based in part on data supplied by Baxter's travel providers.

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Employee Commuting

Baxter estimates GHG emissions associated with employee commuting at 84,000 metric tons CO₂e in 2011, 1.7% of the company’s total value chain GHG emissions. These emissions are based on employee counts by region, approximate average commute distance and commuting mode.

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Upstream Leased Assets

Baxter estimates GHG emissions associated with upstream leased assets at 22,000 metric tons CO₂e in 2011, 0.5% of the company’s total value chain GHG emissions. In addition to leased facilities space, this includes estimated GHG emissions from certain joint business ventures and recent business acquisitions that will be integrated into Baxter within set timeframes.

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Baxter Operations – Scope 1 and Scope 2 GHG Emissions

Greenhouse gas emissions related to Baxter’s operations are due to facility energy use, company-operated business vehicles, and certain refrigerant losses. Baxter’s emissions from operations excluding offsets equaled 794,000 metric tons CO₂e in 2011, 16.4% of the company’s total value chain GHG emissions. This included 336,000 metric tons CO₂e of Scope 1 emissions and 458,000 metric tons CO₂e of Scope 2 GHG emissions. See Baxter Operations GHG Emissions for extensive detail.

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Downstream Scope 3 GHG Emissions

The GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard define seven downstream Scope 3 categories. Baxter has estimated GHG emissions for five of these, summarized below, and continues to evaluate possible emissions associated with the remaining two.

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Downstream Transportation and Distribution

Baxter's Supply Chain and Environmental, Health and Safety organizations worked together in 2009 and 2010 to estimate global GHG emissions associated with delivering finished products to customers. In 2011, Baxter’s Logistics group worked with an outside vendor to refine these calculations. The vendor used emissions factors from the GHG Protocol to calculate GHG emissions for five modes of shipment (truck, rail, air, river barge and ocean), within and between regions. Baxter continues to work with the vendor on this effort.

Baxter estimates the emissions associated with downstream transportation and distribution at 523,000 metric tons CO₂e in 2011, 10.8% of Baxter’s total value chain GHG emissions. This does not include the emissions of Baxter's operated vehicle fleet, including sales and distribution vehicles, which the company includes in its Scope 1 emissions under Operations. See Product Transport for more information about initiatives in this area.

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Processing of Sold Products

This category includes emissions from the processing of sold intermediate products² by third parties (e.g., manufacturers) subsequent to sale by the reporting company. Baxter continues to evaluate possible emissions associated with this category.

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Use of Sold Products

Baxter estimates that GHG emissions associated with the use of its products equaled about 1,955,000 metric tons CO₂e in 2011, 40.3 % of Baxter’s total value chain GHG emissions. Strategies are being explored to mitigate some of these product-related emissions

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End-of-life Treatment of Sold Products

Baxter estimates that GHG emissions associated with end of life treatment of sold products were approximately 57,000 metric tons CO₂e in 2011, 1.2% of Baxter’s total value chain GHG emissions.

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Downstream Leased Assets

This category includes emissions not already included in Scope 1 or Scope 2.from the operation of assets that are owned by the reporting company (acting as lessor) and leased to other entities in the reporting year.³ Baxter continues to evaluate possible emissions associated with this category.

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Franchises⁴

Baxter estimates that GHG emissions associated with franchises were approximately 7,000 metric tons CO₂e in 2011, 0.1% of Baxter’s total value chain GHG emissions.

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Investments

Baxter estimates that GHG emissions associated with investments were approximately 4,000 metric tons CO₂e in 2011, less than one 0.1% of Baxter’s total value chain GHG emissions.

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1	See Category 3 of the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard.
2	Intermediate products are products that require further processing, transformation, or inclusion in another product prior to use. See Category 10 of the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard.
3	See Category 13 the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard.
4	This category includes estimated GHG emissions from the operation of franchises not included in Scope 1 or Scope 2 emissions. A franchise is a business operating under a license to sell or distribute another company’s goods or services within a certain location. See Category 14 the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard.