Agilent appreciates stakeholder feedback. We have already received comments on this year's Environment and Social Responsibility Report from Business for Social Responsibility (BSR).

Business for Social Responsibility comments on the Agilent 2004 Environment and Social Responsibility Report

January 2005

This is the fourth year in which BSR has provided feedback and public commentary on the Agilent Environment and Social Responsibility Report.

BSR has been asked to highlight strengths and weaknesses and provide suggestions for improvement in both reporting methodology and social and environmental performance.

BSR’s comments do not verify or express an opinion on the accuracy, materiality or completeness of the information provided in the Agilent report. Rather, BSR’s comments represent a perspective based on our experience in the field of social and environmental performance and on our familiarity with Agilent’s work to date.

BSR commends Agilent for continuing to produce high-quality social and environmental reports and for maintaining a strong commitment to corporate citizenship through its recent transformation. Agilent’s efforts over a number of years are now paying dividends in terms of improved social and environmental performance:

• Reductions in both energy use (24.5% since 2000) and CO2 emissions (greater than 10% since 2002) are headline environmental achievements
• BSR also welcomes the adoption and implementation of a code of conduct for labor standards in the supply chain. It is clear that Agilent has not just made a policy commitment but is also making good progress implementing these standards with its first-tier suppliers
• The Health and Safety data also shows notable improvements in reportable cases, injury/illness rates and lost workdays
• Numerous awards and achievements, such as being ranked number 9 in the 100 Best Corporate Citizens by Business Ethics Magazine and being selected for the Dow Jones Sustainability Index for the fourth consecutive year.

It is clear from these results that good social and environmental progress is being made at Agilent.

The report also contains a number of helpful innovations, including a detailed Global Reporting Initiative Index, a section focused on the specific needs of investors and an in-depth look at important issues such as climate change and supply chain labor standards. There is good consistency with the Agilent Corporate Report, which includes a description of Agilent’s social and environmental performance highlights.

However, there are a number of priorities for Agilent if it is to continue to improve its social and environmental performance and strategy:

• Enhance its corporate citizenship management framework by more clearly publicly identifying and articulating its most important social and environmental issues, metrics and objectives
• Take the implementation of its supply chain labor standards code of conduct to the next stage – for example, through training and development of suppliers, investigating areas of high risk further down the Agilent supply chain and considering opportunities for joint implementation with other industry players.

In terms of reporting, the current Environment and Social Responsibility Report contains a great amount of detail about Agilent’s activities, but could benefit from greater analysis and discussion:

• What are the highlights and lowlights, the key issues arising during the year and the main challenges ahead? How does Agilent feel about its performance during 2004, and what are its prospects during 2005?
• For investor audiences Agilent could provide a business case, a description of key risks and opportunities going forward and an analysis of which social and environmental issues are of most material concern to Agilent’s future business prospects and why. In short, how does corporate citizenship help deliver the Agilent business strategy?
• Including more information on Agilent’s corporate social responsibility governance framework, such as how often the cross-functional Citizenship team meets, whether it reports to the Board, a description of its Charter or Terms of Reference and a summary of issues discussed
• Agilent rightly identifies that the use of its products and services represents one of its most significant environmental impacts. However, Agilent can provide more information about how the use of its products and services can contribute to social and environmental progress and what strategies Agilent has in place to maximize this contribution.

Finally, as in previous years, BSR recommends that Agilent reviews and presents its plans in relation to external verification and assurance.