2007 Sustainability Report - Baxter Sustainability Report

Supplier DiversityBaxter tries to develop mutually beneficial relationships with small and diverse suppliers,and plans to continue expanding the diversity of its supplier base. Planned activities for 2008include internally promoting information resources to identify potential small and diversesuppliers, attending more external outreach events, educating Baxter purchasing personnelon Baxter’s supplier diversity initiatives, inviting guest speakers from peer companies toshare best practices, and reviewing current spending to identify opportunities to increasepurchasing from small and diverse suppliers.2007 Supplier Diversity PerformanceIn 2007, Baxter spent $399 million with small businesses in the United States and PuertoRico, which was approximately 16 percent of Baxter’s total supplier spending of $2.5 billionin those markets. The company spent $95 million with women-owned businesses and$23 million with minority-owned firms. Veteran-owned, service-disabled veteran-owned,small disadvantaged and HUBZone-certified businesses represented approximately$10 million, $3 million, $7 million and $2 million, respectively. The decrease in spending withsmall and minority-owned suppliers in 2007 resulted from a business-unit divestiture andthe reclassification of some suppliers.BAXTER SupplierDiversity SpendinG 1(dollars in millions)2003 2004 2005 2006 2007Small Businesses $435 $445 $454 $504 $399Minority-Owned Businesses 46 44 36 40 23Women-Owned Businesses 39 35 68 95 951 United States and Puerto Rico. Fiscal year basis (October 1 through September 30). Accounts payable data are sent to a third party, which categorizesspending. Other categories in total include veteran-owned, service-disabled veteran-owned, small disadvantaged and HUBZone-certified businesses.Sustainability PriorityBaxter willdrive a greensupply chainSee page 5 for a summary ofBaxter's sustainability prioritiesGreening the Supply ChainBaxter recognizes that environmental impacts related to its business extend beyond itsdirect operations and into its supply chain. Although the company has limited control overthese impacts, it is improving its systems to track supplier environmental informationand collaborating with those suppliers to improve their performance. For example, one ofBaxter's 2015 goals is to incorporate green principles into its purchasing program with itstop 100 suppliers (by spend).Managing Supplier InformationBaxter is developing a product stewardship database to better manage environmental andother information related to all new products. This will include information about productmaterials content, which will help Baxter evaluate supplier compliance to the European UnionRestriction of Hazardous Substances (RoHS) Directive, the impending Registration, Evaluationand Authorisation of Chemicals (REACH) legislation and similar emerging regulations relatedto product materials in other parts of the world. In 2008, Baxter is developing a globalscorecard for suppliers. Building on existing scorecards that Baxter already uses at the plantlevel, this will include criteria related to supplier sustainability programs.Building Supplier CapabilitiesBaxter has a long history of strong environmental performance within its own operations(see the Environment, Health and Safety section). The company considers its key suppliers anextension of its business and is committed to building partnerships to share knowledge andhelp improve supplier environmental performance. This can save suppliers money and reducewaste while improving the environmental impact of Baxter’s products.28 BAXTER 2007 sustainability report | Supply Chain