The impacts of global warming and climate change became more evident in 2010, underscoring the importance of reducing absolute greenhouse gas (GHG) emissions. The Earth’s average surface temperatures during 2010 tied 2005 as the hottest in 131 years of recordkeeping.¹ During the year a drought in Russia severely impacted food production,² and the worst flooding in Pakistan in 80 years displaced 10% of the country’s citizens.³ These may be signs of a warming world.

Companies have a central role to play in addressing climate change. Baxter’s focus includes energy conservation, use of high-efficiency technologies such as cogeneration of heat and electricity, use of bio-fuels and other renewable energy sources, and purchase of carbon credits. The company strives to demonstrate robust disclosure of GHG emissions and is working with its business partners to do the same (see Product Transport and Global Green Supply Chain).

In 2010, Baxter’s GHG emissions from operations equaled 739,000 metric tons of carbon dioxide equivalent (CO₂e), a 29% reduction indexed to revenue compared to 2005, and an absolute reduction of 7%. This includes emissions from Baxter-operated facilities and vehicles, as well as the subtraction of purchased renewable energy certificates (RECs), carbon credits, and carbon offsets.

Energy use represents approximately 96% of Baxter’s GHG emissions from operations, so energy conservation is the cornerstone of the company’s emissions reduction program (see Natural Resource Use for detail).

Baxter complements its efforts with the purchase of RECs, carbon credits and carbon offsets, representing 62,000 tons of CO₂e in 2010. In 2010, the company bought 78,300 megawatt hours of 100% certified renewable power in Austria and Spain and 51,500 megawatt hours of certified RECs in the United States, making Baxter the 23rd largest corporate purchaser in the United States.

Baxter supports the application of market-based carbon trading programs to reduce GHG emissions. The company has participated in the Chicago Climate Exchange (CCX, now IntercontinentalExchange) since 2003 (as a founding member), including its direct emissions from all operations in Canada, Mexico, Puerto Rico and the United States. Baxter also has one facility involved in the European Union Emissions Trading Scheme (since 2005).

Through the purchase of RECs and carbon credits, Baxter has achieved carbon neutrality related to its onsite fuel consumption and electricity use at three locations, including its corporate headquarters in Deerfield, Illinois, United States.

In 2010, 18% of Baxter’s energy use in operations was from renewable sources, an increase from 17% in 2005. Of this, 8% was from a wood boiler the company uses to produce steam at its site in Marion, North Carolina, United States, and 10% was the renewable energy component of purchased electricity, the purchase of RECs, and electricity generated by onsite solar systems.

The installation of onsite renewable energy projects continues to be a challenge for Baxter. This is primarily due to relatively low project payback periods, even though the company has reduced its minimum required internal rate of return for energy projects.

1	U.S. National Aeronautics and Space Administration (NASA) Research Finds 2010 Tied for Warmest Year on Record, Goddard Institute for Space Studies (GISS), New York, New York, United States.
2	United Nations Environmental Programme, Global Resource Information Database, 2010 drought and associated fires destroyed 20 percent of Russia’s wheat crop.
3	United Nations Department of Public Information, News and Media Division, New York, New York, United States.