122 2021 ESG Report Transparency Appendices Responsible supply chain Product impact Climate change Introduction Healthy workforce and communities How risks and opportunities have influenced our strategy and financial planning processes The aspects of climate change that have most influenced our strategy are: • ph ysical risks to operations and supply chain; • mark et risks due to increasing cost and/or availability of raw materials; • av ailability of water for our operations; and • the incr easing expectations of our customers, and reputational considerations in both the short- and the long-term. These risks have translated into our 2030+ commitments and goals across the areas of climate change, product impact and a responsible supply chain, and our public commitment to the UN Race to Zero. Opportunities such as customer preferences for environmentally preferable products have resulted in our 2030+ commitment to reducing the environmental impact of our portfolio and addressing the sustainability needs of our customers. While our 2030+ commitments and goals are managed at the corporate level by various central teams, the integration of these goals into business strategy varies among our company’s segments because of diverse geographic locations and product portfolios. All business segments work toward the same 2030+ commitments and goals to increase operational efficiency, but certain segments have a heavier emphasis on product sustainability. For example, the BD Medical segment produces drug delivery systems (such as needles, syringes and catheters) that are primarily single-use, in order to prevent the spread of infection. Therefore, environmentally preferable product considerations such as less material and recycled content (where possible) are a heavier area of focus for this segment. In other business segments where instruments are part of the portfolio, the use phase has the greatest impact, and more consideration is given to the energy efficiency of products. Our work to establish baseline Scope 3 emissions from the use and end-of-life disposal of our products, as well as increased utilization of life-cycle assessments, will provide insights to identify areas of opportunity to reduce emissions and environmental impact across our portfolio. The following describes where and how specific risks and opportunities have influenced our strategy and financial planning. Part of the value chain Description of influence Products and services How our strategy has been influenced: Some suppliers, facilities or product lines could be impacted by the risk of climate-related issues in products and services. Carbon regulation and the rise of raw-material costs due to acute and chronic climate change events could impact the cost of products. At BD, we view climate change as an issue affecting the health of the global population, which will likely disproportionately impact vulnerable populations such as those without access to healthcare. The global greenhouse gas (GHG) emission trajectory is expected to increase the frequency and intensity of some extreme weather events and, along with increasing temperatures, these factors will bring about a range of health risks and population impacts. Heat-related fatalities and illnesses, such as heat stroke and respiratory illnesses, will increase due to rising temperatures and levels of air pollution. Increased flooding will affect waterborne illnesses and the spread of vector-borne diseases, such as malaria, Zika virus and West Nile virus. These factors will place strain on the healthcare infrastructure, so we believe it is imperative that we take steps not only to reduce GHG emissions from our own operations, but also to manage—and where possible mitigate—the potential risks and negative impacts of climate change across our value chain. Finally, improvements to our products and solutions to reduce their carbon footprint across their life cycle will support our customers in pursuit of their sustainability goals. This could include designing electrical equipment to be more energy-efficient, considering alternative materials and making our supply chain networks more efficient. The magnitude of this impact has been small compared to revenue from other types of products and services in our portfolio. Time horizons covered include short- and medium-term. Case study of substantial strategic decisions: Inherent in our Purpose of advancing the world of health ™ is working to meet emerging or unmet health needs that our products, solutions and expertise can address. We have a portfolio of solutions that can help detect and diagnose illnesses that will be exacerbated by climate change, such as antimicrobial resistance (AMR). Additionally, chronic disease risks are likely to increase with climate change. Our growth strategy will focus on transformative solutions to positively impact the treatment of chronic disease.