External Reporting Standards

Global Reporting Initiative

Baxter recognizes the importance of external sustainability reporting standards to promote relevant, transparent and comparable disclosure of company performance. The company was one of the first to pilot the Global Reporting Initiative (GRI) Guidelines in 1999 and has served as a GRI Organizational Stakeholder since the program’s inception in 2004.

The Guidelines provide a valuable perspective to Baxter in its reporting process. GRI reporting principles (see below) offer a framework to test whether the company addresses key aspects of effective disclosure. Reviewing report content against the range of GRI performance indicators helps Baxter to identify possible reporting and performance gaps and areas that may warrant further disclosure, and compare the company against reporting leaders and others in the industry.

This report aligns with the GRI G3 Guidelines, application level B. Baxter provides a detailed GRI Index online.

The following table describes how Baxter addresses GRI G3 reporting principles.

GRI G3 REPORTING PRINCIPLE RELEVANCE TO BAXTER
Principles for Defining Report Content
Materiality – The information in a report should cover topics and Indicators1 that reflect the organization's significant economic, environmental, and social impacts, or that would substantively influence the assessments and decisions of stakeholders. Baxter continually refines its approach to identifying and reporting on its material sustainability issues. This report includes a summary of Baxter’s sustainability priorities and related performance goals, as well as a progress update for each priority.
Stakeholder Inclusiveness – The reporting organization should identify its stakeholders and explain in the report how it has responded to their reasonable expectations and interests. Baxter outlines and describes its key stakeholder groups, and references examples of how it interacts with each, in the Stakeholder Engagement section.
Sustainability Context – The report should present the organization's performance in the wider context of sustainability. The Chairman and CEO letter presents Baxter’s performance in this manner. Most sections begin with a brief description framing the importance of the issue and its relevance to sustainability.
Completeness – Coverage of the material topics and Indicators and definition of the report boundary should be sufficient to reflect significant economic, environmental, and social impacts and enable stakeholders to assess the reporting organization's performance in the reporting period. Baxter continues to improve its reporting to more fully address the range of sustainability issues. In addition to extensive coverage of Baxter’s priorities, this report includes expanded sections such as Public Policy, Product Responsibility and Greening the Supply Chain.
Principles for Ensuring Report Quality
Balance – The report should reflect positive and negative aspects of the organization's performance to enable a reasoned assessment of overall performance. Baxter reports on a consistent set of core performance indicators (see Summary Data Table) and the company’s sustainability priorities and goals to illustrate positive as well as negative performance trends.
Comparability – Issues and information should be selected, compiled, and reported consistently. Reported information should be presented in a manner that enables stakeholders to analyze changes in the organization's performance over time, and could support analysis relative to other organizations. When possible, this report provides five years of performance data, including relevant breakdowns and progress against targets on an absolute and normalized basis, to allow readers to evaluate the company's performance. Data is generally included under performance graphs for clarity, and key information is stated in a Summary Data Table for ease of use. Industry performance data are included for comparison when available, such as occupational illness and injury rates and share performance.
Accuracy – The reported information should be sufficiently accurate and detailed for stakeholders to assess the reporting organization's performance. Baxter uses a combination of internal processes and external verification (see Assurance page) to improve the reliability of information presented in this report. Significant restatements of data are noted.
Timeliness – Reporting occurs on a regular schedule and information is available in time for stakeholders to make informed decisions. Baxter produces its Sustainability Report annually, as soon as is feasible after data is compiled and analyzed and in the case of environment, health and safety (EHS) data, verified.
Clarity – Information should be made available in a manner that is understandable and accessible to stakeholders using the report. Baxter strives to present the information in this report in clear and concise language. The company continues to enhance the report web site to further increase accessibility. The report includes an interactive graphic illustrating Baxter’s priorities and related performance goals, and the Web and print versions include a Summary Data Table. The report versions provide varying levels of detail, to meet a range of audience needs.
Reliability – Information and processes used in the preparation of a report should be gathered, recorded, compiled, analyzed, and disclosed in a way that could be subject to examination and that establishes the quality and materiality of the information. ERM Certification and Verification Services verifies the EHS section of this report. In addition, much of the financial data included in this report is taken from the consolidated financial statements contained in the Baxter International Inc. 2008 Annual Report. These financial statements are audited by Baxter's independent registered public accounting firm, PricewaterhouseCoopers LLP.

1 According to GRI: indicators elicit comparable information on the economic, environmental, and social performance of the organization.

Good EHS Reporting Principles

Baxter also follows the Good EHS Reporting Principles (GERP). Baxter developed GERP with the assistance of Ceres and other organizations and first published in accordance with GERP in 1998 . These principles provide a standardized approach to compiling and reporting EHS data and complement the GRI guidelines.

Sustainability Priority Updates and Case Studies

In addition to sections describing the company’s programs, policies and performance across the range of sustainability, the Baxter 2008 Sustainability Report also includes the following: