Being a great company requires more than financial success. It requires acting as a responsible corporate citizen and making a difference in communities worldwide.
Baxter plays a unique role in healthcare. Virtually every product we make is used to treat a critical, life-threatening condition. Our therapies are infused, injected or inhaled an estimated six million times a day, in more than 100 countries, to save and sustain the lives of people with hemophilia, immune disorders, end-stage kidney disease and other critical illnesses.
The sustainability challenges we face as a society are no less critical. Poverty, hunger, climate change, resource depletion, and lack of access to quality healthcare and education are just some of the threats to the well-being of future generations. At Baxter, we are committed to applying the same dedication and spirit of innovation to improving the health of the planet as we do in developing new and better therapies for patients.
We define sustainability as a long-term approach to including our social, economic and environmental responsibilities among our business priorities. Baxter’s efforts in this area align with and support our mission of saving and sustaining lives.
Driving Sustainability for 30 Years
Baxter’s leadership in sustainability goes back more than three decades, to 1977, when the company established a formal environmental program that went beyond compliance to proactively set higher standards for managing Baxter’s environmental performance. Since then, we have come to view sustainability more broadly.
For example, our improved financial strength has allowed us to increase our research-and-development (R&D) investment by more than 65 percent since 2004, fueling a pipeline of new technologies designed to expand access to life-saving therapies for people around the world. It also has enabled us to create thousands of new jobs, both domestically and internationally, in the last few years despite a recessionary environment.
Another component of sustainability is providing employees a great place to work and develop their careers. At Baxter, we are privileged to work in an industry that allows employees to derive meaning and fulfillment from the work they do, knowing they are making a difference in the lives of people with serious medical conditions worldwide.
Sustainability is also about creating an inclusive work environment that recognizes and values the diverse qualities we all have and bring to our roles. It’s about understanding and appreciating our interconnectedness with the communities around the world in which we operate.
This is the 10th year that Baxter has published a sustainability report on its social, economic and environmental performance. In all of our sustainability-related activities, whether it’s corporate giving, expanding access to healthcare, strengthening education or other areas you can read about in this report, we strive to be leaders, setting the pace for others to follow.
Establishing Sustainability as Part of our Culture
Since joining Baxter as chairman and chief executive officer in 2004, I have been highly supportive of accelerating Baxter’s sustainability efforts, and I am proud of the progress we’ve made in making sustainability part of our culture.
Our formation in 2006 of an executive-level Sustainability Steering Committee to guide our global sustainability efforts was a significant step forward. It further institutionalized sustainability at the company and elevated accountability for sustainability across the company and to the highest levels of management.
The creation of nine sustainability priorities in 2007 was the next step in this process. These priorities, which are the focus of our print report this year, define what we consider to be the most important sustainability areas as a company and help us channel our resources where we can maximize our impact. Since then, we have added long-term 2015 goals for each priority to further clarify our expected progress. Advancement toward these targets is measured quarterly and reported to management.
Our sustainability priorities tie to larger societal goals. For Baxter, increasing access to healthcare, promoting diversity and inclusion, strengthening education and reducing our environmental impact are all areas where Baxter’s success contributes to a greater good while also benefiting us as a company. Acting with integrity, ensuring the health and safety of our employees, and developing partnerships with suppliers to foster a “greener” supply chain are equally important to industry leadership.
In early 2009, we added to our product stewardship priority an animal welfare goal to identify additional opportunities to replace, reduce and refine (“3Rs”) the use of animal testing. While we have long-standing policies and practices designed to minimize animal testing, the addition of this goal reflects our continuing commitment to build on our history of conscientious action and innovation in this area.
2008 Sustainability Highlights
Baxter had numerous sustainability highlights in 2008. More detail is contained in our full sustainability report online, as well as our print report. These highlights include:
- Baxter was named to the Dow Jones Sustainability Index for the 10th straight year, and was the Medical Products Industry Leader for the seventh time. Innovest Strategic Value Advisors named Baxter one of the Global 100 Most Sustainable Corporations in the World for the fifth straight year, making Baxter one of just four healthcare companies globally, and the only U.S.-based healthcare company, to be on the list each year since it was established in 2005. In early 2009, we were named one of the 100 Best Corporate Citizens by Corporate Responsibility Officer magazine, the eighth time Baxter has been included on this list.
- We issued a new Code of Conduct, reinforcing our commitment to the highest standards of business ethics and integrity. The new Code reflects changes in industry practices and provides additional resources to help our employees make responsible business decisions. The Code is available in 20 languages and all employees will receive training on the updated content.
- In recognition of our continuing commitment to diversity and inclusion, Baxter received a Catalyst Award for our progress in developing and advancing women in the Asia Pacific region. Since 2004, women in management and executive positions increased from 31 percent to 50 percent across the region’s 14 countries. This is the second time Baxter has won the Catalyst Award and the first time Catalyst has recognized a company’s efforts across the Asia Pacific region.
- On the environmental front, we made progress toward our water, energy and greenhouse gas reduction goals. We also introduced more fuel-efficient fleets to deliver our products, applied Lean manufacturing principles to conserve water and other resources, and incorporated green-building design principles at several sites, including our new European headquarters in Zurich, Switzerland, and our new R&D facility in La Plaine, Belgium.
- Product donations, cash contributions and grants from Baxter and The Baxter International Foundation to help people in need worldwide totaled nearly $44 million in 2008. Product donations went to organizations in 58 countries for disaster relief and humanitarian aid.
- Demonstrating our commitment to math and science education, the company made a substantial donation to fund biotechnology education in the Chicago Public Schools. The investment has the potential to impact hundreds of teachers and thousands of students in underserved areas of Chicago, Baxter’s headquarters community.
Looking Ahead, Moving Forward
Despite these accomplishments, sustainability is not about yesterday’s achievements. It is about creating a better world for tomorrow. We must continue to engage our customers, suppliers, employees, communities, other business sectors, and regional and national governments if we are truly to make the progress necessary to meet the challenges we face.
We are in the midst of one of the most difficult economic crises in our lifetimes. While no company, including Baxter, is immune to the issues affecting the global economy, we remain committed to making a positive impact on the health and well-being of our local and global communities.
As a society, the biggest problem we face in tackling our most pressing sustainability challenges is simply the scope and enormity of the task. Successfully addressing these challenges requires the cooperative effort of governments, businesses, interest groups and individual citizens.
I believe corporations can play a lead role in making a difference. I encourage all stakeholders to join us in appreciating today’s sustainability challenges and contributing toward long-term solutions. Working together, we can create a better world for future generations.
Robert L. Parkinson, Jr.
Chairman and Chief Executive Officer
June 2009
