A significant amount of Baxter's broader environmental impacts occur within its supply chain. Baxter concentrates its efforts to green its supply chain on minimizing transportation-related emissions, procuring raw materials and other goods and services with reduced environmental impacts, and promoting suppliers improving their environmental performance.

In 2010, Baxter's U.S. car fleet emitted 10,200 metric tons carbon dioxide equivalent (CO₂e) of greenhouse gas (GHG) emissions. Baxter's average GHG emissions per mile declined by 0.3% below the 2007 baseline, mainly due to a shift to the use of four cylinder vehicles from six cylinder vehicles.

Baxter began adding four cylinder vehicles to its fleet in 2008 and is increasingly doing so as cars come up for renewal. Baxter expects to see ongoing incremental improvements in GHG emissions from its auto fleet as this trend continues.

Starting in 2010, Baxter only offered SmartWay™ certified vehicles on its main selection list, covering 95% of the company's United States car fleet upon replacement. Baxter also implemented a pilot of hybrid vehicles with its sales force in 2011.

Baxter has faced challenges in making progress against this goal, such as meeting driver requests while maintaining costs and reducing emissions. In 2009, Baxter found that the actual fuel efficiency varied from manufacturers' claims on a new model that many U.S. drivers had in 2009, which negatively impacted progress against the goal. To address this, Baxter selected new vehicle manufacturers in 2010 and only selected model types more than one year old to ensure reliable data exist on the model. Baxter also continued its benchmark against other companies through Baxter's fleet management partner to determine best practices.

In 2010, Baxter continued to roll out its Global Supplier Sustainability Program, which includes an initiative to procure products and services that help the company reduce its environmental impact while maintaining continuity of supply and managing costs. Approximately 70% of the initiatives comprising the Global Supplier Sustainability Program are implemented at the regional or country level.

In 2010, Baxter created an internal Global Supplier Sustainability Council to provide oversight for implementing the company's Global Supplier Sustainability program worldwide. The Council meets quarterly to encourage employee engagement and address obstacles in implementing the program locally.

Since 2009, Baxter has incorporated 20 green criteria into its purchasing procedures to provide its procurement organization a framework to evaluate suppliers' sustainability initiatives. Baxter structured these criteria to fall into four categories that align with Baxter's own sustainability efforts. In 2010, Baxter added a fifth category to evaluate suppliers' protection of human rights since Baxter considers this an important component of suppliers' sustainability commitments. Baxter conducted its second annual survey of its select 100 suppliers in 2010 to evaluate suppliers' performance against these green criteria (see table and discussion).

Baxter Annual Supplier Sustainability Survey Results
	% Green*
	2009**	2010
Environmental / Sustainability Program Example criteria: Measures and reports environmental information	34%	30%
Protection of Human Rights Example criteria: Has goal and programs to prevent & reduce work-related injuries	(added in 2010)	88%
Reductions in Carbon Footprint Example criteria: Has a goal and program to reduce GHG emissions	46%	61%
Reduction in Natural Resources Use Example criteria: Has a goal and activities to reduce waste generation	61%	55%
Enhanced Product Stewardship Example criteria: Uses a product stewardship / life cycle approach	24%	35%

*	Suppliers considered green in category when responding positively ("yes" or "in progress") to 90% of those questions in category.
**	2009 Results modified to include suppliers responding positively to programs "in progress."

Baxter continued its e-Impact program to recognize employees and suppliers for impactful environmental initiatives. (See Case Study: Baxter Recognizes Suppliers through e-Impact Program for recent examples.)

Integrating sustainability language in request for proposal (RFP) and supplier contract templates is another core aspect of Baxter's program. In 2010, Australia, Brazil, Colombia, Mexico, and New Zealand implemented these changes, in addition to Canada and the United States which had done so previously.

Baxter's efforts to drive a sustainable supply chain extend beyond these two 2015 goals. Please see the Supply Chain section in this report to learn more, including regarding the company's material compliance project, water scarcity strategy, efforts to reduce product transport-related emissions, and participation in the U.S. Customs-Trade Partnership Against Terrorism (C-TPAT) program.