Feedback on 2010 Report

Ongoing improvement is a fundamental aspect of Baxter's sustainability reporting process. To ensure the company continues to deliver stakeholders the most relevant information, Baxter solicited feedback on its 2010 Sustainability Report from numerous experts:

SustainAbility, a strategy consultant/think tank;
Ceres¹,a national coalition of investors and public interest groups addressing sustainability, and its select coalition members with expertise in areas of focus for Baxter; and
Bureau Veritas, Baxter's verification body, for the EHS, Supply Chain, and Product Transport sections.

Baxter also received feedback from more than 50 readers through its Sustainability Survey. The company considered input from all of these sources in the preparation of this report.

Ceres and its coalition members also provided Baxter input during the content development process of this report for 2011 (similar to last year). Their review and comments focused on detailed outlines of progress made for each of the company's nine sustainability priorities. Baxter welcomed the opportunity to hear and consider input on report content while still in a position to act on it.

These organizations and stakeholders cited several areas of strength from the 2010 report, including the following (paraphrased):

The report is comprehensive and clear, and covers a wide range of activities and goals.
The business case for sustainability is strong where provided (and the Environmental Finance Statement is a leadership example).
Baxter demonstrates a commitment to transparency and accountability by including feedback on its past report and changes made as a result.
The company effectively describes how it uses reporting as a tool for internal and external engagement.
The emphasis on Baxter’s nine sustainability priorities and goals helps readers understand how the company perceives its core responsibility.
The report effectively cross-links vast amount of information to improve accessibility.
Abundant performance data show commitment to continuous improvement (especially in the Environment, Health and Safety section).
Stakeholders applaud Baxter’s progress on issues such as water, as well as its inclusion of areas such as the safety “near misses”.
Stakeholders appreciate Baxter’s continued commitment to report greenhouse gas emissions for its entire value chain.
Stakeholders are pleased to see the disclosure on options for employees to seek guidance and report concerns, including through Baxter’s Ethics and Compliance Helpline, as well as the number of inquiries.
The report effectively addresses GRI Core Indicators.

Feedback on the 2010 report as well as on an outline for the 2011 report also included numerous opportunities for improvement. The following table summarizes several of those comments and describes changes made to this report.

Feedback	Enhancement to Baxter 2011 Sustainability Report
General
Include more examples from outside of the United States and mainland Europe.	Included two case studies about India: Making a difference in India and Using Biofuels at Baxter Facilities in India.
Baxter should provide more information about how it is leveraging its leadership to influence its peers and suppliers.	Included updated information about supplier programs including e-Impact in the Supply Chain section.
Articulate Baxter’s long-term sustainability vision and how it connects to the company’s overall business strategy and objectives.	Included related information in CEO letter.
Priorities and Goals
Improve and streamline presentation of progress against Baxter’s sustainability priorities to show readers performance at a glance.	Developed an interactive dashboard with summary performance information for each goal.
Further consider the interrelationships between the company’s priorities and demonstrate how Baxter is approaching its sustainability work with a systems thinking-based approach.	Included examples that illustrate relationship between multiple areas such as Making a difference in India case study (access to healthcare and volunteerism) and the Green Buildings case study.
Provide more information on the process for identifying its priorities, including how often they are revisited to ensure emerging issues are being taken into account.	Described reasons for broadening supply chain priority to “Baxter will Drive a Sustainable Supply Chain,” from “Baxter will Drive a Green Supply Chain”.
Expand on the context for Baxter’s approach to sustainability.	The report and accompanying brochure include descriptions of the external context of Baxter’s sustainability priorities.
Governance, Ethics and Compliance
Expand reporting on human rights indicators and adopt a human rights policy grounded in internationally recognized human rights codes and conventions.	Added a sub-section about human rights to the Ethics and Compliance section.
Employees
Disclose concrete steps Baxter is taking to build upon previous years’ commitments and activities in diversity and inclusion.	Included information about Business Resource Groups as well as several examples of inclusion and diversity-focused initiatives during the year.
Environment, Health and Safety
Clarify corporate environmental reporting requirements to facilities.	Issued a new EHS policy that addresses reporting requirements.
Expand reporting on water usage to include additional risk factors beyond scarcity.	Baxter has initiated a study to better understand the full water risk at each location, broadly defining water risk in three categories: cost and regulatory risks, access and growth-constraint risks, and reputation and right-to-operate risks.
Describe if Baxter is looking at any programs that focus on watershed restoration and management.	With the help of Water Advocates, Baxter has begun to explore partnership opportunities with local non-governmental organizations to implement projects to help protect vulnerable watersheds or provide communities with enhanced access to clean water and sanitation.
Product Responsibility
Increase reporting about sustainable product design (including how Baxter’s efforts are impacted by industry regulations).	Included new examples in Product Responsibility section.
Baxter should increase focus on both the safety and security of its supply chain, entailing initiatives such at ensuring its products are safe from outside interference and/or negligence, with special attention to the company’s pharmaceutical drugs.	Added a Product Integrity page to the report, with expanded content describing an array of supply chain, product design and packaging, and risk management strategies Baxter pursues in this area.
Access to Healthcare
Make “access to healthcare” content more cohesive and accessible.	Given the importance of this issue to Baxter and the industry, elevated Access to Healthcare to a standalone section in the report.

Ceres is an advocate for sustainability leadership, bringing together a powerful network of companies, investors and public advocacy groups to expand the adoption of sustainable business practices and solutions to build a healthy economy. Baxter is a member of the Ceres network of companies, and has committed to work with Ceres on various aspects of its sustainability performance and disclosure. Being a Ceres company is not a certification or stamp of approval. The Ceres stakeholder team designated to work with Baxter is an independent group of individuals drawn primarily from the Ceres coalition and represents a range of constituencies that have expertise in environmental, social and governance issues. In the review of Baxter's 2010 Sustainability Report, the Ceres stakeholder team provided a diverse group of Baxter executives its feedback on the company's sustainability priorities, performance and key impacts, and had a robust discussion about goals, initiatives, data and reporting. Baxter considered this feedback in the preparation of this report.