Feedback on 2007 Report

Continual improvement is a fundamental aspect of Baxter’s sustainability reporting process. To ensure it delivers stakeholders the most relevant information, Baxter has solicited feedback on its 2007 Sustainability Report from numerous experts:

SustainAbility, a strategy consultant/think tank;
Ceres, a U.S.-based environmental organization, and its select coalition members with expertise in areas of focus for Baxter¹;¹ and
ERM Certification and Verification Services, Baxter’s main environment, health and safety (EHS) auditing and certification body, for the EHS section in particular.

These organizations cited several areas of strength from the 2007 report, including the following:

The inclusion of 2015 goals improves reporting from last year, and aligning the goals with Baxter’s priorities shows that Baxter thinks strategically about target setting.
The environmental, health and safety section is especially strong, includes extensive data and makes effective use of graphics (such as the “spider graph”).
The Environmental Financial Statement effectively places environmental performance in a monetary context.
The report conveys a strong commitment to managing sustainability impacts throughout the value chain from material inputs to product use.
The Q&A sections (about the Regional Ethics and Compliance Counsel and heparin contamination) provide a thoughtful view of some external issues affecting the company’s business, set a tone of transparency and show that the company is committed to addressing core problems with honesty.
The report clearly outlines three priority areas for community support that are directly linked to the company’s core business: access to healthcare, critical community needs and employee involvement.
The report includes notable improvements in transparency regarding political contributions and lobbying.

Feedback also included numerous opportunities for improvement. The following table summarizes several of those comments and describes changes made to this report.

FEEDBACK	ENHANCEMENTS TO REPORT
The report could provide more information about how Baxter makes decisions related to sustainability	Added a graphic illustrating the governance and management of sustainability at Baxter
It would be illuminating to include more information about the interrelationship between sustainability issues	Included several examples, such as the relationship between water consumption, energy usage and greenhouse gas emissions and the relationship between access to healthcare and product innovation
In general, the report emphasizes safety and compliance, and would benefit from a more robust discussion of opportunities	Expanded the discussion of opportunities, for example related to the “Base of the Pyramid” in the Access to Healthcare section
The report could further highlight the issues of bribery and corruption	Described Baxter’s expanded approach in the Ethical Conduct and Legal Compliance priority update and the Ethics and Compliance section
More information about global inclusion would be helpful, such as what programs Baxter has to improve in this area and more details about the Global Inclusion Council composition and how it relates to the Sustainability Steering Committee	Included additional information in the Global Inclusion section.
The report could provide more detail about the impacts that climate change might have on Baxter (as opposed to focusing only on Baxter’s impacts in this area)	Included a brief description and link to additional information in the GRI Index, item EC2
The report could expand the product safety section to include more information about policies, programs, and metrics	Expanded Safety section significantly, including numerous examples describing the range of activities at Baxter
Baxter could explain more about the connection between sustainability and sourcing, for example how environmental and social criteria will be used in sourcing decisions and whether suppliers will be audited for sustainability performance	Described expanded efforts to integrate sustainability into sourcing decisions in Managing Supplier Performance
The report does not include much content illustrating the company’s commitment to education (although it is a sustainability priority)	Included priority update about Baxter’s commitment to education
More granular detail about political contributions would be helpful	Significantly expanded data about Baxter political contributions in the Public Policy section

¹ Ceres is the largest U.S.-based coalition of investors, environmentalists and other public interest groups working with companies and investors to address sustainability challenges (www.ceres.org). Baxter has been involved with Ceres since 1997. 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 last 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, targets, systems, initiatives, data and reporting. Baxter considered this feedback in the preparation of this report.

Baxter also received feedback on the company’s 2007 Sustainability Report from more than 50 readers through our Sustainability Survey. These comments were considered in the preparation of this report.