Baxter 2021 Corporate Responsibility Report 29 Protect Our Planet Corporate Responsibility Commitment Introduction 2030 Corporate Responsibility Goals Empower Our Patients Appendix Champion Our People and Communities Cross-Cutting Commitments Managing Procurement Risks To improve our corporate responsibility performance, we integrate supplier sustainability into our overall supplier management processes and conduct periodic assessments of key suppliers to evaluate cost, delivery, quality and risk. As part of this process, we also examine the financial risk of suppliers to help ensure we avoid disruptions in supply. We work with suppliers who receive low scores in the areas of quality and delivery to develop continuous improvement plans. Scores from our annual Supplier Corporate Responsibility Survey (see table at right) feed directly into this assessment. In 2021, we defined the scope for more in-depth sustainability risk mapping for all our suppliers based on location, performance, and goods and services provided. This will help us prioritize suppliers with the greatest corporate responsibility-related risk factors for additional due diligence, corrective action plans and/or on-site audits. In addition, using a trusted third-party service, we receive near-real-time notifications when disruptions occur in areas of the world where our suppliers are located. These could include natural disasters, fires, major weather events or geopolitical activity. Using this information, we are able to respond quickly to help ensure supply continuity. Supplier Audits In 2021, more than 630 audits of Baxter suppliers were conducted related to management systems for product quality. Learn more about our approach to product quality . In addition, we are increasing our capacity and developing our capability to audit suppliers’ sustainability management systems and performance related to environment, labor and human rights, ethics and sustainable procurement. To accomplish this, we are exploring the possibility of developing our internal sustainability auditing capabilities or collaborating with third-party auditors. Expanding the scope of our auditing will improve our understanding of our supplier base and help us identify areas for improvement. We plan to begin conducting these corporate responsibility audits in 2023. Supplier Corporate Responsibility Survey Baxter collaborates with business sustainability ratings firm EcoVadis to conduct an annual survey of our suppliers’ corporate responsibility programs and performance. The assessment covers environment, labor and human rights, ethics, and sustainable procurement. Results in 2021 included data from 369 Baxter suppliers, an increase from 211 suppliers in 2020. Of the 369 participating suppliers in 2021, 47% are from Europe, Middle East and Africa (EMEA); 41% from the Americas; and 11% from Asia Pacific (APAC). 1 Suppliers have access to detailed scorecards on the EcoVadis platform, including information about strengths and benchmark comparisons, as well as actionable improvement areas. We use these score - cards to drive ongoing improvement and anticipate increased participation as we expand supplier engagement in the coming years. We also include survey scores in our business reviews with strategic suppliers for ongoing discussion and monitoring. In the future, we plan to further leverage the EcoVadis system to create corrective action plans for suppliers falling below our performance standards and deter - mine when on-site audits are necessary. MOVING FORWARD >> Baxter will continue investing in our people, technology and processes to integrate our sustainable procurement strategy throughout our supply chain and put systems in place to help us more efficiently and effectively measure progress and improve performance over time. In the coming years, we will roll out a robust supplier audit program that complements our risk mapping process. We are also working to further integrate supplier sustainability considerations throughout our procurement functions. Industry Collaboration Baxter collaborates with other healthcare companies and organizations to improve efficiency and advance responsible procurement. For example, we are a member of the Pharmaceutical Supply Chain Initiative , an organization that facilitates knowledge sharing in support of responsible supply chain practices. In addition, to establish a secure supply chain, we participate in programs such as the Customs Trade Partnership Against Terrorism (CTPAT) program, which supports a secure and reliable supply of lifesaving medical products. This includes shipments of raw materials and finished products both to and from various Baxter locations, foreign suppliers, distributors and customers. As an importer and exporter, Baxter has been recognized as a Tier III Partner (the highest level possible) in the program since 2011. SUMMARY OF SUPPLIER CORPORATE RESPONSIBILITY SURVEY SCORES, 2019 – 2021* * The performance categories presented in this table align with the EcoVadis methodology. “Advanced” indicates structured and proactive corporate responsibility (CR) approach; policies and tangible actions on major topics with significant CR reporting. “Moderate” indicates structured and proactive CR approach; policies and tangible actions on major topics with basic CR reporting. “Partial” indicates no structured CR approach; few tangible actions on selected topics; certifications related to sites and/or products are only partial. “Insufficient” indicates no engagements or tangible actions regarding CR. Data from 2019 are based only on the survey for that year. Data for 2020 reflect suppliers participating in Baxter’s supplier sustainability monitoring program, as of March 2, 2021. Data for 2021 reflect suppliers participating in Baxter’s supplier sustainability monitoring program, as of Jan. 31, 2022. In some cases, segments do not add up to 100% due to rounding. Environment 36% 36% 40% 47% 43% 38% 17% 20% 19% 1% 2% 1% Labor and Human Rights 23% 22% 28% 54% 54% 51% 23% 23% 20% 1% 1% 1% Ethics 15% 19% 24% 58% 51% 55% 27% 27% 20% 1% 3% 2% Sustainable Procurement 22% 17% 20% 43% 39% 37% 33% 36% 36% 3% 8% 7% Overall 27% 27% 28% 55% 50% 53% 18% 23% 19% 1% 1% 0% Cross-Industry Average 3% 4% 5% 39% 41% 42% 54% 51% 48% 4% 4% 4% 2019 2020 2021 2019 2020 2021 2019 2020 2021 2019 2020 2021 Advanced Moderate Partial Insufficient PERCENT OF PARTICIPATING SUPPLIERS