117 2021 ESG Report Transparency Appendices Responsible supply chain Product impact Climate change Introduction Healthy workforce and communities Where the risk occurs in the value chain Upstream Risk type Market Climate-related driver Availability of raw materials Potential financial impact Increased direct costs Time horizon Short-term Likelihood About as likely as not Magnitude of impact Medium Description A reduction or interruption in the supply of certain raw materials and components could adversely affect our operating results. We purchase many different types of raw materials and components used in our products. Certain raw materials and components are not available from multiple sources. In addition, for quality assurance, cost effectiveness and other reasons, certain raw materials and components are purchased from sole suppliers. The price and supply of these materials and components may be impacted or disrupted for reasons beyond our control, such as extreme weather events. While we work with suppliers to ensure continuity of supply, no assurance can be given that these efforts will be successful. In addition, due to regulatory requirements relating to the qualification of suppliers, we may not be able to establish additional or replacement sources on a timely basis or without excessive cost. The termination, reduction or interruption in supply of these raw materials and components could adversely impact our ability to manufacture and sell certain of our products. Our response This is managed through procurement expertise. BD’s strategic sourcing teams continuously assess our sole-sourced raw materials and maintain business continuity plans with our suppliers. BD’s continuity plans may include securing secondary supply with alternative suppliers, qualification of alternative manufacturing facilities, maintaining contingency stock, internal development of supply and establishment of technology escrow accounts. In 2016, we refined our approach to supplier risk profiling by adding reputational risks into our Enterprise Supplier Risk Management process, for direct suppliers. An initial set of risks were identified, and mitigation plans are in progress. We will continue to refine our risk model and adjust our top risks accordingly. In addition, our 2030+ commitment to creating a supply chain that is adaptable to disruption and able to contribute to strong environmental and social performance includes a goal to partner with strategic/preferred/ critical suppliers to evaluate risk in Tier 2 by 2030.