Baxter 2021 Corporate Responsibility Report 64 Appendix 2030 Corporate Responsibility Goals Corporate Responsibility Commitment Empower Our Patients Protect Our Planet Champion Our People and Communities Introduction Cross-Cutting Commitments MATERIALITY ASSESSMENT FINDINGS 1 In this report, we are not using the terms “material” and “materiality” as defined for the purposes of financial and SEC reporting in the United States. Instead, the terms refer to environmental, social and economic issues that are of significant importance to our stakeholders and to the company. These “material” issues inform our corporate responsibility strategy, priorities and goals, and reporting. The issues in this table are listed in alphabetical order. The listing does not reflect the presumed importance or “materiality” of any particular issue to Baxter or our stakeholders. BAXTER DATA SUMMARY 1 Excluding the Financial Performance section, metrics included in this Baxter Data Summary do not reflect Hillrom activity. 2 Differences compared with data on FDA websites may be due to timeframe (the date Baxter takes an action may differ from the date FDA classifies that action), definition of “recall” (FDA data includes actions taken even if the product is not removed or corrected), and classification by product group vs. product code (FDA counts each impacted product code within a product family as a distinct recall). 3 Product Recall Rate is defined as the number of unique product codes corrected or removed from the market per total Baxter owned unique product codes sold globally. 4 As of 2021, Baxter had 55 FDA-registered establishments available for inspection. 5 The regional breakdown of the data included in this section reflects the structure of the Environmental, Health, Safety and Sustainability (EHS&S) organization and the categorization of data in the EHS&S global information management system through 2021. Some data for 2019 and 2020 are updated from data reported in the Baxter 2020 Corporate Responsibility Report, to improve accuracy and in the case of GHG emissions to reflect updated GHG emission factors. Some totals vary from sum of items in category, due to rounding. 6 Excludes energy consumption associated with Baxter-operated mobile sources and renewable electricity generated on site. 7 Baxter’s Lean Energy Program began in 2007. Early in 2016, we introduced new Lean Energy Program requirements and updated some existing ones to better align the program with ISO 50001 requirements for energy management. 8 In some cases, segments do not add up to 100% due to rounding. Data may differ slightly from the totals stated in the Baxter Operations Total line of the Baxter Value Chain Energy Usage and GHG Emissions table due to rounding. 9 Number includes Scope 3 emissions plus Scope 1 emissions for product transport. Some totals vary from sum of items in category, due to rounding. 10 “ Water usage ” aligns with the definition of “ water withdrawal ” in GRI 303: Water and Effluents 2018: “ Sum of all water drawn from surface water, groundwater, seawater, or a third party for any use over the course of the reporting period. ” 11 Water usage from Baxter’s 49 sites with the greatest use, representing 96% of the company’s total annual water usage. The WRI water tool defines baseline water stress as the total annual water withdrawals (municipal, industrial and agricultural) expressed as a percentage of the total annual available flow. Higher values indicate more competition among users. Low—Less than 10% of the water available to agricultural, domestic and industrial users is withdrawn annually. Low-Med—Between 10 and 20% of the water available to agricultural, domestic and industrial users is withdrawn annually. Med-High—Between 20 and 40% of the water available to agricultural, domestic and industrial users is withdrawn annually. High—Between 40 and 80% of the water available to agricultural, domestic and industrial users is withdrawn annually. Extremely High—More than 80% of the water available to agricultural, domestic, and industrial users is withdrawn annually. 12 Estimated total water pollutant levels for treated wastewater discharged directly into waterways. Data do not include one facility that operates zero-discharge systems in accordance with local regulatory requirements. BOD 5 refers to five-day biological oxygen demand; COD refers to chemical oxygen demand; TSS refers to total suspended solids. When actual performance data were not available, estimates are based on performance at similar facilities or on other measured performance indicators. 13 Fiscal year basis (Oct. 1 through Sept. 30 of the year noted). 14 United States and Puerto Rico. Data for 2019 and 2020 are fiscal year basis (Oct. 1 through Sept. 30 of the year noted). Data for 2021 are calendar year. Accounts payable data are sent to a third party, which categorizes spending. Other categories include disability-owned, service-disabled veteran–owned, LGBT-owned, small disadvantaged and HUBZone-certified businesses. HUBZone is a U.S. Small Business Administration program for small companies that operate and employ people in Historically Underutilized Business Zones. Spending with suppliers that qualify for more than one category may be included in the totals for each of the relevant categories. 15 Excludes waste associated with U.S. Renal Home Care operations, since patients dispose of unused product rather than returning it to Baxter for disposal. Also excludes construction and demolition debris, remediation waste, wastewater treatment sludge and discarded manufacturing and process-related machinery or equipment. Removing these waste categories from the company total allows for more consistent evaluation of facility performance and trends over time. 16 Excludes production by-products reused on-site, construction and demolition debris, wastewater treatment and discarded manufacturing and process-related machinery or equipment. Includes discarded/returned products (such as intravenous solution, dextrose solution, etc.) that are nonhazardous in nature but may be classified as regulated in some countries. Excludes waste associated with U.S. Renal Home Care operations, since patients dispose of unused product rather than returning it to Baxter for disposal. 17 Excludes waste recycled on-site, remediation waste, construction and demolition debris, and wastewater treatment sludge. Includes certain waste streams (such as waste oils, batteries, fluorescent lamps, light ballasts and asbestos) not classified as regulated in some locations. 18 Values correspond to the U.S. Environmental Protection Agency Toxics Release Inventory (TRI) Program data reported for reporting years 2019 and 2020. It includes facilities in the continental United States and Puerto Rico only. Data for 2021 are not available as of report publication date. 19 Includes air emissions associated with on-site energy generation. Emission factors from the U.S. Environmental Protection Agency publication “Compilation of Air Pollutant Emission Factors,” AP-42, Fifth Edition, Volume 1: “Stationary Point and Area Sources.” 20 The Baxter 2020 Corporate Responsibility Report stated that Baxter received six Notices of Violation for 2020. During 2021, we received a cancellation notice for one of those Notices of Violation, so updated the 2020 value to five. 21 In some cases, segments do not add up to total due to rounding. 22 Includes product donations as well as Patient Assistance Programs. Variations in Baxter’s annual product donations are due to fluctuations in community needs, the need and volume of disaster relief response, the regulatory environment, manufacturing processes and changes in product mix and marketing. We identify opportunities to donate and respond to community and humanitarian aid partner requests as appropriate. Value of products donated (provided at no cost) is provided by partners based on wholesale acquisition cost at the time of donation. This number may be greater or less than the value of Baxter products distributed during the year by our relief partners. See Invest in Underserved Communities Globally . 23 Contributions to U.S.-based 501(c)(3) organizations for programs within and outside of the United States. 24 The regional breakdown of the data included in this section reflects the structure of the Environmental, Health, Safety and Sustainability (EHS&S) organization and the categorization of data in the EHS&S global information management system through 2021. 25 Work-related injuries or illnesses requiring medical attention beyond first aid, including cases with days lost. All rates based on 100 full-time employees working one year, which equals 200,000 work hours. For tracking purposes, Baxter follows U.S. Occupational Safety and Health Administration recordkeeping requirements worldwide. Thus, in cases where an injury occurs and conflicting medical opinions arise as to the number of days away and/or restricted days that should be recorded, we record on the basis of the most authoritative physician’s opinion. We include occupational diseases and illnesses, such as hearing loss and ergonomic disorders, within our broader categories of cases, but do not track or report those items separately. Due to privacy regulations in our Europe, Middle East and Africa region, we do not classify or report injuries by gender. Supervised contracted employees are included in the injury statistics reported below and are not tracked separately. Independent contractors are not included in Baxter’s injury data, because they are supervised by other organizations. BAXTER DATA SUMMARY ( CONTINUED ) 26 Work-related injuries or illnesses that cause an employee to lose at least one full day after the date of the incident. 27 The number of days lost (including weekends and holidays) recommended by the most authoritative physician’s opinion due to work-related injuries or illnesses. We do not count the date of injury and date of return to full duty as lost days. 28 The number of days recommended by the most authoritative physician’s opinion that an employee or supervised contractor is unable to work full duty (including weekends and holidays) due to a work-related injury or illness. We do not count the date of injury and date of return to full duty as restricted days. 29 Americas includes the United States (with Puerto Rico), Canada and Latin America. 30 “Professional” includes individual contributors. 31 “Other” includes American Indian/Alaska Native, Native Hawaiian/Other Pacific Islander and two or more races. 32 “Technical/Clerical” includes employees in operational and administrative/clerical roles. 33 Scores indicate the percentage of survey participants who responded favorably to statements related to each of the categories listed. Baxter did not administer a Best Place to Work survey in 2020 due to impacts related to the COVID-19 pandemic. 34 These data do not represent all employee training and development but do capture a large portion of training for most employees. BAXTER VALUE CHAIN ENERGY USAGE AND GHG EMISSIONS 1 Baxter used the World Resources Institute and World Business Council for Sustainable Development Greenhouse Gas Protocol to calculate emissions data from fossil fuel use. We used country electricity emission factors published by the International Energy Agency and the U.S. Environmental Protection Agency (EPA) E-Grid U.S. regional electricity emission factors to calculate GHG emissions related to electricity consumption. 2 Apex Companies, LLC verified to a reasonable level Baxter’s 2019–2021 Scope 1 and Scope 2 GHG emissions. Apex Companies, LLC also verified to a limited level Baxter’s methodology for determining 2019–2021 Scope 3 GHG emissions. 3 Some data for 2019 and 2020 are updated from data reported in the Baxter 2020 Corporate Responsibility Report for accuracy and to reflect updated GHG emission factors. 4 We used the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, Revised Edition to determine GHG emissions associated with using biomass fuel, principally wood/wood waste, as a boiler fuel at two Baxter locations. These emissions were calculated as 152,000, 149,000 and 151,000 metric tons CO 2 in 2019, 2020 and 2021, respectively. CO 2 e emissions from CH 4 and N 2 O components of biomass combustion are included in reported Scope 1 emissions. 5 Baxter used the Greenhouse Gas Protocol to estimate GHG emissions associated with reported fuel usage by company-managed sales and distribution fleet vehicles and other vehicles. We estimated fuel usage for international sales and distribution vehicles based on regional sales information. 6 Refrigerant emissions represent reported CFC, HCFC and HFC refrigerant losses by each Baxter location. We calculated associated GHG emissions using actual emission factors for each reported refrigerant. 7 Includes the purchase of electricity generated from 100% certified renewable electricity (Belgium, Brazil, France, Germany, Ireland, Italy, Spain, Sweden, Switzerland, UK and United States). 8 Estimated based on an environmentally extended input-output model from an independent third party and Baxter’s revenue and sector of operation. 9 Estimated based on capital expenditures and the machinery and equipment emission factor from Table 13 - Indirect emissions from the Supply Chain, UK Government Department for Environment, Food & Rural Affairs. 10 Estimated based on Baxter’s actual yearly energy usage by energy type and GHG emission factors for each energy type per GaBi life cycle assessment software. 11 Estimated based on shipment of products to our customers using the EcoTransIT World Software that is compliant with the GHG Protocol and the Global Logistics Emissions Council Framework. 12 Estimated emissions for wastewater treatment by municipalities and off-site waste recycling and disposal based on Baxter’s waste generation by type, UK Government GHG Conversion Factors for Company Reporting and the U.S. EPA WARM model. 13 Estimated based on domestic and international air mileage, rental vehicle CO 2 e emissions or mileage, and hotel room stays provided by Baxter’s global travel providers, and personal vehicle mileage. Emission factors from UK Government GHG Conversion Factors for Company Reporting, Greenhouse Gas Protocol Mobile Combustion GHG Emissions Calculation Tool, and Carbonfund.org Business Travel Calculator. 14 Estimated based on the number of Baxter employees by country and statistics on commuting time and transport mode split into public transport, passenger cars, taxi and motorcycle, and walking or bicycling. Emission factors for each mode were obtained from Defra. 15 Emissions associated with upstream leased assets are included in Baxter’s Scope 1 and 2 emissions. 16 Estimated based on previous Baxter product LCAs as well as the company’s revenue by product type. Category 1 emissions were extrapolated to other categories depending on the product type. 17 Estimated based on an environmentally extended input-output model from an independent third party and revenue from Baxter’s contract services business. 18 Estimated based on production quantities and global warming potential information for certain types of products. Emissions for certain other products estimated based on previous Baxter product LCAs as well as the company’s revenue by product type. Category 1 emissions were extrapolated to other categories depending on the product type. 19 Totals do not include CO 2 emissions from Baxter-owned wood-fired boilers. See endnote 4 above for detail. BAXTER FACILITIES WITH ISO 14001, ISO 45001, ISO 50001 AND GREEN BUILDING CERTIFICATIONS 1 As of Dec. 31, 2021. 2 Facilities transitioned to ISO 45001 from OHSAS 18001. 3 The building with green certification noted is one of several buildings at the designated location. SUSTAINABILITY ACCOUNTING STANDARDS BOARD INDEX 1 Differences compared with data on FDA websites may be due to timeframe (the date Baxter takes an action may differ from the date FDA classifies that action), definition of “recall” (FDA data includes actions taken even if the product is not removed or corrected), and classification by product group vs. product code (FDA counts each impacted product code within a product family as a distinct recall). Appendix: Endnotes (continued)