95 2021 ESG Report Transparency Appendices Responsible supply chain Product impact Climate change Introduction Healthy workforce and communities 2030+ goal: Reduce Scope 1 and 2 emissions by 46% by 2030 (from 2019 baseline, absolute) Carbon-neutral across direct operations by 2040 Current status: Decreased by 7% (market-based, excluding unbundled REC purchase) in FY 2019, increased by 23% (market-based, including unbundled REC purchase) in FY 2019, In previous years, we have purchased additional unbundled Renewable Energy Credits (RECs) to offset greenhouse gas (GHG) emissions at our U.S. facilities. However, due to the significant increase in the market price for RECs in FY 2020, we purchased and retired nearly 150,000 metric tonnes CO 2 e of carbon offsets. (These offsets are not reflected in the data provided above). In FY 2021, we chose to divert funds set aside for the purchase of RECs to activities to establish baseline emissions for our significant sources of Scope 3 emissions. Over the coming years we will continue to develop our strategy for achieving our stated commitments to carbon neutrality. Data tables Scope 1 and 2 GHG emissions — Scope 1 and 2 (market-based*) FY 2019 baseline FY 2020 FY 2021 Metric tonnes CO 2 e, absolute emissions Scope 1* 147,434 144,005 152,299 Scope 2 254,961 346,603 342,202 Total Scope 1 and 2 402,395 490,609 494,501 reduction from baseline 22% (increase) 23% (increase) GHG emissions – Scope 1 and 2 (market-based) excluding FY 2019 unbundled RECs FY 2019 baseline FY 2020 FY 2021 Metric tonnes CO 2 e, absolute emissions Scope 1 147,434 144,005 152,299 Scope 2 382,377 346,603 342,202 Total Scope 1 and 2 529,811 490,609 494,501 reduction from baseline 7% 7% * Mark et-based (MB): quantifies Scope 2 GHG emissions based on GHG emissions emitted by the generators from which the reporter contractually purchases electricity bundled with contractual instruments, or contractual instruments on their own (e.g., utility-specific emission factors, renewable energy certificates). ** Emissions r elated to our sales fleet were previously included in Scope 3 Category 6; it is now included in Scope 1. Data for FY 2019 and FY 2020 has been restated accordingly. Method of calculation Data represents Scope 1 (direct) and Scope 2 (indirect from electricity) energy sources. BD has used emission factors that are temporally, geographically and technologically accurate for each site and source within its operational boundary as specified by the WRI/WBCSD GHG Protocol. This includes updating electric power emission factors to reflect changes in the grid mix for areas in which BD operates. As many utilities have ceased publishing emission factors, we have used regional emission factors and restated across all years to ensure consistency. In general, historical emission factors remain consistent with the publication that was most recent at the time of original reporting.