Performance Report

Economics

Bayer’s goals are a strong innovative and business performance and a sustained increase in the value of the company. Our core competencies are in health care, nutrition and high-tech materials, and our business is aligned to attractive growth markets.

Earnings targets achieved

2008 was a successful year for us despite the increasingly difficult economic conditions. Operationally, our key financial data were slightly better than in the previous year and we achieved our earnings targets. Bayer thus clearly benefited from its alignment to the life-science businesses HealthCare and CropScience, which are less dependent on global economic trends. Group sales grew 1.6 percent to €32.9 billion in 2008, compared with €32.4 billion in 2007. Adjusted for currency and portfolio effects, sales rose by 4.4 percent. While Bayer HealthCare and Bayer CropScience reported sound sales growth of 6.9 percent and 13.9 percent respectively, sales declined 4.6 percent at Bayer MaterialScience.

Income before income taxes rose from €2.2 billion to nearly €2.4 billion. Group net income was €1.7 billion, well below the 2007 level of €4.7 billion. However, the figures are not fully comparable as Group net income for 2007 contained one-time tax income of over €900 million, and a gain of €2.4 billion from the divestment of the diagnostics business, H.C. Starck and Wolff Walsrode. The return on equity declined from 31.8 percent in 2007 to 10.4 percent in 2008.

At the same time, core earnings per share from continuing operations rose to €4.17 and the dividend per share for 2008 was increased from €1.35 to €1.40.

Economic data for the Bayer Group* (€ million or percent)

	2004	2005	2006	2007	2008
Net sales	23,278	24,701	28,956	32,385	32,918
Sales outside Germany	86.9%	84.4%	84.4%	85.1%	85.4%
Income before income taxes	1,222	1,912	1,980	2,234	2,356
Income from continuing operations after taxes	749	1,374	1,526	2,306	1,720
Income from discontinued operations after taxes	-67	221	169	2,410	4
Income after taxes	682	1,595	1,695	4,716	1,724
Return on equity	6.1%	14.4%	14.1%	31.8%	10.4%
Net debt (total)	5,422	5,494	17,539	12,184	14,152
Income taxes		-538	-454	72	-636

* Figures for 2004 – 2007 as last reported

Net debt was €14.2 billion as of December 31, 2008 (2007: €12.2 billion). The increase was partly the result of a rise in working capital, acquisitions costing €0.9 billion and changes in key exchange rates against the euro, which accounted for €0.6 billion.

Further key figures can be found here

and in the Annual Report 2008

A clear commitment to research and development

Our mission statement “Bayer: Science For A Better Life” underscores our goal, as an inventor company, of setting trends in research-intensive fields. We are continuing this strategy even in difficult economic conditions. Bayer has the necessary resources to realize further opportunities for the future through research and development. In 2008 we spent around €2.7 billion on research and development (R&D) – more than any other company in the German chemical and pharmaceutical industries. That represented a further three percent rise in R&D spending compared with 2007, and total R&D expenses in 2008 were equivalent to 8.1 percent of sales.

Bayer has around 12,300 R&D employees, supported by an international network of partner companies, leading universities and public research institutions. In the present crisis, we stand by our obligation to invest in high-performing scientific and research systems. Together with other leading companies we have therefore documented our commitment by signing the “Berliner Appell” of the “Stifterverband für die Deutsche Wirtschaft,” a not-for-profit organization dedicated to promoting research and higher education.

We are planning to raise R&D expenditures to approximately €2.9 billion in 2009 and remain committed to strong R&D in the future. For example, Bayer HealthCare will be investing around €100 million in a new research and development center in Beijing, China, in the next five years. Bayer CropScience intends to invest a total of €3.4 billion between 2008 and 2012 in the research and development of innovative crop protection agents and new solutions for the seed and plant biotechnology areas. Further details of the global R&D activities of our subgroups can be found in the Annual Report 2008

Public funding is becoming an increasingly important factor, especially in fundamental research. Bayer utilizes such funding and takes part in project consortia, for example for the development of a new generation of solar cells produced cost-effectively using a pressure process, which receive public subsidies amounting to €3.8 million as part of a project of the BMBF (German Federal Ministry of Education and Research). Overall, Bayer received public-sector funding of around €10 million for 80 projects in 2008.

Research and development expenses (€ million)*

	2004	2005	2006	2007	2008
Total	1,927	1,729	2,297	2,578	2,653
of which BHC	996	834	1,426	1,700	1,742
of which BCS	679	664	614	637	649
of which BMS**	236	214	227	209	221
of which reconciliation***	16	17	30	32	41

* Figures 2004 – 2007 as last reported

** Excluding R&D undertaken jointly with customers

*** Not directly allocable to the subgroups, e. g. expenditures of the service companies

Patent protection is essential for innovation

Reliable global protection of intellectual property is essential for an inventor company like Bayer because it is vital for innovation.

Without effective global patent protection, companies like Bayer would have no way of recouping the substantial amounts they spend on research into new solutions. Ohterwise, the commercial incentive would be lacking, as would funding for further innovation.

Patented products and technologies account for around 40 percent of the sales generated by each of our three subgroups. We therefore vigorously defend our intellectual property.

For example, since the end of 2008 Bayer has been engaged in a dispute with the Drugs Controller General of India (DCGI), WHO has granted an Indian company marketing approval for a generic version of Bayer’s cancer drug Nexavar® despite valid patent protection. Bayer therefore would have to bring individual court cases to prevent marketing of this me-too product before expiry of the patent. That would be extremely expensive and time-consuming. And we could make better use of such resources – for example, for research and the provision of effective local assistance.

Wide-ranging innovations for sustainable solutions

Innovation is a key growth driver for us as a research-based company and is therefore a focal point of our corporate strategy. Bayer wants to find innovative solutions to help tackle global challenges such as climate change, health care provision and improving the world’s supply of food. Developing new products to strengthen our core business has especial priority, as has optimizing our production processes.

In 2008, our subgroups and service companies again succeeded in launching a wide range of innovations that bring us closer to our goals of sustainable development and sustainable growth. Further evidence of our progress comes from the consistently large number of patent applications submitted over many years. In 2008, we filed 649 patent applications (excluding the corresponding foreign patent applications).

All of Bayer’s subgroups work closely with Bayer Technology Services to develop new technological solutions, particularly in the fields of process technology, plant engineering, automation and product development. Bayer Technology Services develops new production processes, for example in collaboration with Bayer MaterialScience, to make more efficient use of energy and raw materials and thus help the subgroup maintain and strengthen its technological edge and cost leadership. This collaboration includes the central development of cross-subgroup technologies such as nanotechnology and biotechnology. Knowledge of mathematical simulations and data mining helps Bayer HealthCare and Bayer CropScience reduce the time-to-market for new products. A key strategic element in this is gaining access to international know-how, from country-specific expertise in implementing capital expenditure projects through global access to innovations and public-sector research funds, to recruiting of top international personnel.

A cornerstone of our innovation management is Bayer Innovation GmbH, which focuses on areas not covered by the core activities of our subgroups. Its goal is to identify and develop new growth areas for Bayer and thus pave the way for us to enter new markets. Bayer Innovation covers areas that dovetail with our mission statement “Bayer: Science For A Better Life” and draws on the competencies of our subgroups, often in conjunction with external partners such as universities, institutes, start-ups and other companies. The current areas of focus are medical technology and the production of plant-based medicines.

We also foster the sharing of ideas between R&D units within the Bayer Group. 35 research and development specialists attended the first Expert Club Meeting in Leverkusen, Germany, at the invitation of the Board of Management and meetings are to be held regularly from now on.
Our “Triple-i” innovation initiative encourages employees around the world to submit ideas for possible new products and thus play an active role in innovation at Bayer. By March 2009, employees had submitted more than 7,700 ideas, many of which are still being screened for potential by our subgroups. Some approaches such as using polycarbonates for special applications in boat-building have already been launched successfully on the market.

Plants as a source of active substances

Bayer Innovation GmbH is conducting research on tobacco plants to establish how to produce therapeutic proteins in plants. Tobacco plants have the advantage, for example, that they are not used as food for humans or animals. Modified tobacco mosaic viruses transport the blueprint for a medicine to the plant. The plant uses this to develop large quantities of the required protein in its cells. This method can be used to produce antibodies for the treatment of cancer, along with hormones, vaccines and enzymes for technical applications.

Examples of sustainable innovations by Bayer’s subgroups and service companies

Product	Description
Bayer HealthCare
Xarelto® is an anticoagulant that sets new milestones in the prevention of dangerous thromboses.	In tests on patients after elective hip or knee replacement, Xarelto® has shown better efficacy than the present standard therapy and has a comparable safety profile. Xarelto® has been approved in the European Union for the prophylaxis of venous thromboembolism in adults following elective hip or knee replacement surgery. Further registrations have since been granted in more than 20 countries, including Australia, Canada, China, Mexico and Singapore
The contraceptive pill Qlaira® is the first in a new class of oral contraceptives.	Qlaira® is the first oral contraceptive based on estradiol, which is identical to the estrogen produced by the female body. The drug approval procedure for Europe was completed in October 2008 and Qlaira® received national marketing approval for Germany in January 2009. Europe-wide launch starts in May 2009.
Bayer CropScience
Movento® is the only modern insecticide that has systemic two-way efficacy. It protects, for example, many vegetable, fruit and nut crops from hidden pests that are difficult to control.	Movento® moves up and down through the entire plant system so it can control insects in inner leaves and in the bark of fruit trees. Moreover, it does not harm beneficial insects such as ladybugs. Movento® was approved for the key U.S. and Canadian markets in July 2008. The intention is to introduce it in more than 70 countries.
Adengo® corn herbicide sets new standards in modern integrated weed control. This product combines good long-term action with high biological performance.	The ready-to-use formulation marketed under the brand name Adengo® is effective against a wide range of weeds. It was approved for marketing in Romania in 2008 and market launch in the main European corn-growing countries, the United States and Argentina is planned for 2009.
InVigor®, a new hybrid Canola seed with significantly improved yield.	The new InVigor® hybrid seed 5440 achieved the highest yields in a series of independent tests* on conventional seeds and other hybrid varieties in Canada. *Canola Council of Canada
Bayer MaterialScience
The BayVision® brand pools expertise in climate-friendly automotive glazing.	The polycarbonate glazing developed under the competence brand BayVision® helps to reduce weight and thus cuts CO₂ emissions from vehicles. Bayer MaterialScience is working closely with well-known names in the automotive industry who are testing the use of polycarbonate glazing in new models.
Bayer MaterialScience is building the world’s largest production facility for carbon nanotubes (Baytubes®) at chempark Leverkusen in Germany.	These minute products are far tougher than steel, have better thermal conductivity than diamonds and conduct electricity better than copper. The new pilot plant in Leverkusen will have a capacity of 200 metric tons p. a. and will create 20 new jobs. Applications for nanotubes include ultra-light, high-performance rotor blades for wind turbines.
Bayer Business Services
Bayer Business Services supports the objectives of the Bayer Climate Program through its innovative Green it activities.	Environment-friendly information technologies and energy-saving use of equipment can make a major contribution to increasing energy efficiency at Bayer. Bayer Business Services (BBS) is aiming to increase the energy efficiency of its data centers by a total of 20 percent by 2012. BBS is also supporting customers in the resource-friendly configuration of it workstations. By carefully applying the energy-saving functions of computers and monitors, several million kilowatt hours of electricity can be saved worldwide every year. Moreover, by adopting a more restrained approach to the use of printers, paper consumption will also be reduced significantly.
Baysis®4 REACH, a new data entry and management system facilitates communications along the supply chain.	The E.U.’s Chemical Regulation reach requires companies to register all chemical substances they use and place on the market. Baysis® 4 REACH, a new software program from Bayer Business Services, helps companies enter and evaluate the necessary information on their supply chain and fosters efficient dialogue between suppliers and customers on reachrelated issues.
Bayer Technology Services
Bayer Technology Services’ innovative uvivatec® technology improves the reliability and cost-efficiency of production processes for pharmaceuticals.	This new technology developed by Bayer Technology Services inactivates viruses in biopharmaceuticals through ultraviolet irradiation. Bayer has signed an exclusive cooperation agreement with Sartorius Stedim Biotech GmbH on the manufacture and marketing of uvivatec® products.
CURRENTA
The Sludge Redox pilot project sponsored by the E.U. has shown that industrial sludge can be used to produce biogas.	In a pilot facility, CURRENTA has shown that dehydrated industrial sludge from chemical wastewater treatment plants and aqueous waste from chemical production processes can be used to produce biogas after treatment by a new, specially developed combined process. currenta is testing the profitability of a facility in order to use up to 20,000 metric tons p. a. dehydrated sludge from wastewater treatment to produce energy for the chempark sites.

Our contribution to regional economic development

Bayer is a key driver of social and economic development in many regions. As an employer we have for many years played a significant role in strengthening the communities around our sites, mainly by increasing purchasing power and social security. In 2008, our expenditures for pensions and pension obligations amounted to some €22 billion worldwide. We also make a contribution to the common good through our tax payments.

Personnel expenses and pension obligations* (worldwide, € million)

	2004	2005	2006**	2007	2008
Personnel expenses	6,026	5,318	6,630	7,571	7,491
of which pension and social security contributions	1,204	1,009	1,414	1,611	1,513
Pension obligations***	13,581	15,561	16,708	15,022	14,910

* Figures for 2004 – 2007 as last reported

** The 2006 figures only contain Schering from June 23, 2006.

*** Present value of defined-benefit obligations for pensions and other post-employment benefits

The procurement volume in the systems of our Group’s Procurement Community is also a significant development factor in many regions. Bayer sources goods and services totaling around €13.5 billion from some 80,000 suppliers in around 70 countries. 13 percent of expenses go towards purchases in NON-OECD countries.

Percentage of suppliers and expenses according to economic region

	Suppliers (percent)	Expenses (percent)
NON-OECD	24	13
OECD	76	87
TOTAL	100	100

Source: Procurement Community Business Warehouse 2008

In many regions, especially in Central America and Latin America, Bayer CropScience supports fruit and vegetable-growers in economical production methods and international product marketing. Through food chain partnerships, Bayer contributes innovative crop protection solutions and technical expertise and gives extensive advice to help farmers safeguard harvests, raise yields and ensure quality.

The Brazilian “Flavor Guarantee” program is an example of a successful partnership. In collaboration with the non-governmental organization HortiBrazil, Bayer CropScience provides support for small farmers in Brazil WHO grow and market table grapes, melons and pineapples. Around 500 producers have joined the project since it was introduced in May 2007 and have received advice on crop cultivation, marketing information and certification support from Bayer. Interest in the crops produced under this program in the central market in São Paulo is so high that there are plans to extend it to other types of fruit and other growers.

Our proactive site development in many regions is evidence of Bayer’s sense of responsibility for the local community. Bayer HealthCare’s commitment in Madagascar is a good example. The company organizes the production of organic cosmetics and promotes local infrastructure by investing in schools, water supply, electrification and logistics.

The German CHEMPARK, which has sites in Leverkusen, Dormagen and Krefeld-Uerdingen, is well-prepared for the future. Investment by companies at these locations was around €500 million in 2008.

Worldwide commitment to compliance

Bayer is fully committed to compliance. Lawful and responsible conduct is mandatory for all employees and we do not tolerate infringements of the law.

The Program for Legal Compliance and Corporate Responsibility at Bayer issued in 2004, which has to date formed the core of our commitment to compliance, was revised in 2008. The result is a new Corporate Compliance Policy which continues to integrate all the basic principles set out in the previous program. These include a strict ban on corruption and anti-competitive practices, creating and safeguarding fair and respectful working conditions and a clear commitment to respect intellectual property rights. The new policy puts greater emphasis on sustainability.

A brochure outlining the new policy, which was translated into 36 languages, has been distributed to all employees in the Bayer Group – with the exception of those at CURRENTA. CURRENTA will issue its own compliance brochure in the course of this year. In parallel with this, we launched a communication drive to heighten awareness of compliance issues. Using the motto COMPLIANCE W.I.N.S. it comprises posters displayed at sites around the world, presentations for use at employee meetings and team workshops and articles in internal media. Information on compliance is available to employees via the Intranet in German, English, French and Spanish, together with details of how to contact the compliance officers and the phone numbers of local compliance hotlines, which have now been set up in 66 countries in which Bayer operates. Where we have not been able to set up a local compliance hotline for legal or organizational reasons, this function is fulfilled by ombudsmen or compliance officers.

In 2008, we continued to train employees worldwide in compliance and have now achieved a training ratio of around 77 percent. We will be continuing our systematic training policy in the future to raise this figure even further.

In order to identify any infringements of the regulations, Bayer employees have an obligation to report suspected violations of the compliance policy. Incidents reported are investigated and action is taken where necessary. This may range from issuing formal warnings to actual dismissal, and may also result in alterations in business processes. Owing to the particular nature of the French legal system, this reporting obligation does not apply to Bayer employees in France. There, it is left to the discretion of every employee to report potential compliance violations by contacting the German compliance hotline or the local compliance officer to initiate an investigation.

Despite our extensive commitment to compliance, Bayer employees breached the regulations in the past. In such cases Bayer cooperates closely with the relevant authorities.

Following investigations into corruption, the Bayer Group and a former service-provider terminated at the end of 2008 the dispute that had begun at the beginning of 2007 in connection with investigations by the public prosecutor’s office concerning employees of the two companies. A mutual settlement was reached, including a ruling on damages for the Bayer Group. link

Legal proceedings against Bayer are pending in several countries and some cases were concluded in 2008. The class-action lawsuit brought against Bayer by stockholders in connection with Lipobay / Baycol was concluded through an out-of-court settlement involving a total payment of us$18.5 million. In the investigation of the marketing of blood glucose meters, Bayer has agreed to a settlement with the U.S. Department of Justice to avoid long-drawn-out litigation. Without acknowledging liability, Bayer agreed to pay US$97.5 million to the U.S. government. In Europe, the European Commission imposed fines on Bayer in antitrust proceedings on several rubber products in recent years. In another case, it granted it full amnesty. In May 2008, Bayer accepted a fine of €10.34 million imposed by the German Federal Cartel Office in connection with an investigation into resale prices in pharmacies. The litigation referred to here does not represent an exhaustive list. An overview of other pending litigation can be found in our Annual Report

Our compliance principles

Fair competition
Integrity in business dealings
Commitment to sustainability
Upholding foreign trade laws
Safeguarding equal opportunity in securities trading

Proper record-keeping and transparent financial reporting
Fair and respectful working conditions
Protection of the fruits of our endeavors and the legally recognized rights of others
Separation of corporate and personal interests
Cooperation with authorities

Code of conduct for our political work

The basic conditions in which we operate are influenced to a great extent by politics and legislation. Bayer therefore regards lobbying as an important and legitimate way of contributing its expertise and participating in the political decision-making process. The rules applicable for all employees and consultants of the Bayer Group in such matters are set out in a Group-wide code of conduct for responsible lobbying, which was issued on January 1, 2009. All lobbyists and consultants are obliged to identify themselves as representatives of the Bayer Group and to disclose the company’s business interests. Moreover, no lobbyist or consultant may induce public servants to breach the rules, obtain information in an unlawful manner or endeavor to influence decisions in an unlawful manner. Bayer was one of the first companies in the chemical and pharmaceuticals sector to be entered in the European Commission’s lobby register and discloses the relevant overall costs of its lobbying work in the E.U.. In 2008, these amounted to €1 million.

Uniform communication with political decision-makers is coordinated by our Politics Community Council, which is responsible for defining and prioritizing the company’s political affairs activities.

Bayer collaborates closely with national and international industry associations on key political plans in the interests of a consensus-based approach. We also maintain close contact with other stakeholder groups in society, for example in the environmental and health care areas. Good collaboration with local initiatives and organizations close to our sites is also important to us.

In line with its directives, Bayer does not make any donations to political parties, related institutions, politicians or candidates for political office. In the United States, individual employees make private donations to the Bayer Corporate Political Action Committee (BayPac) which supports individual candidates for election to parliament. In 2007 / 2008 a total of US$306,100 was donated to various candidates in federal and state election campaigns. The associations to which we belong make any donations on their own initiative, in compliance with the relevant statutory regulations, especially laws on party political activity. As in the past, German employees WHO are elected to a local council, regional parliament, the German parliament or the European Parliament are covered by the Officeholders Directive introduced in 2005.

Responsible risk management

Business operations necessarily involve opportunities and risks. Effective risk management is therefore a key factor in maintaining the company’s value over the long term. The management of opportunities and risks at Bayer is an integral part of the Group-wide corporate governance system, not the task of one particular organizational unit. Key elements of the risk management system are the planning and controlling process, Group regulations and the reporting system. At regular conferences the company’s results and potential opportunities and risks are discussed, and targets and necessary controlling action are agreed upon. The Bayer Group’s risk management principles are set out in a directive. Our subgroups and service companies and the organizational units at the holding company have named risk officers at top management level and risk management coordinators to ensure the efficiency of the risk management system. Corporate Auditing is responsible for coordinating Group-wide identification and documentation of risk factors and for ongoing development of the risk management system. The effectiveness of the risk management system is evaluated at regular intervals by internal auditors. In addition, during the year-end audit the external auditor of the Annual Report assesses the risk management system and briefs the Group Management Board and the Supervisory Board on the outcomes of these evaluations. These outcomes are taken into account in the continuous process of enhancing our risk management system.

One area which is becoming increasingly important from a risk management viewpoint is climate change. Since it operates globally, Bayer has production facilities in more than 100 countries. Some of these could be exposed to extreme weather conditions such as storms, flood and drought in the future or by a rise in sea levels in the medium term. The Baytown production facility in the United States had to declare force majeure for nine days in August 2008 due to the damage caused by hurricanes Ike and Gustav in the Houston region. This also affected some suppliers’ plants in Texas and Louisiana. Other production locations that are potentially at risk from severe hurricanes and typhoons are Map Ta Phut in Thailand and Caojing in China. Bayer takes these risks very seriously. An emergency response system (Bayer Emergency Response System, BayERS) to ensure the safety of employees, the environment and production plants is a mandatory component of the integrated HSEQ management systems at production sites.

A threat of shortages of water and fossil resources could also potentially represent a considerable business risk for Bayer in the medium term. We are therefore endeavoring to reduce the water and fossil resources consumed by our production processes and increase the use of renewable resources. We take account of climate change in the alignment of our portfolio and are investing in solutions with which we want to make a considerable contribution to ensuring full supply of food, water and medication.

As part of the global effort to counter climate change, regulatory conditions for companies are constantly changing, such as through emissions trading. Since around 70 percent of direct and indirect emissions of climate-relevant gases generated by Bayer are in the European Union, the implications of the European emissions trading system are extremely important for us. Scenario-based calculations suggest that we will have to bear substantial additional expenses up to 2012 for rising energy prices and the purchase of emissions allowances, which could amount to up to 1.5 percent of our EBITDA. However, since it is not clear how U.S. climate policy is likely to evolve, we cannot make any corresponding statements for our facilities in the United States, which account for around 23 percent of our global emissions of climate-relevant gases.

As an exporting company, Bayer is exposed to a wide range of export controls. We respect all national and international foreign trade regulations and support the efforts of the international community to prevent the production and spread of biological, chemical and nuclear weapons and the relevant carrier systems, and to combat international terrorism and the illegal production of narcotics. The obligation to comply with foreign trade law is also embedded in our Corporate Compliance Policy.

Our German and foreign subsidiaries are responsible for ensuring compliance with all international regulations and voluntary obligations on export control. The necessary organizational measures are implemented by their export control officers, WHO can call on the export control office at Bayer Business Services for support and advice.

The organizational framework conditions are set out in a separate directive entitled “Organization of Export Control in the Bayer Group,” which is available to our employees. This directive is also focused on at the compliance training sessions.

Enterprise risk management

Bayer HealthCare (BHC) introduced a new uniform risk management system in the area of product supply in 2008 to identify potential risks as early as possible and thus minimize their impact on business objectives. At all BHC production sites, potential risks are recorded and assessed and – where necessary – action is initiated. Included are risks that could affect production, the fields of hse and quality or procurement along with potential natural disasters. The globally standardized methodology provides a transparent and uniform overview of risks as a basis for decision on any necessary counter-action.

First-class performance in sustainability indices and sustainability funds

More and more investors take our sustainability performance into account. That is particularly true of long-term investors such as pension funds. Bayer is included in a variety of sustainability indices and sustainability funds. For example, we have been listed in the Dow Jones Sustainability Index World (DJSI World) continuously since its establishment in 1999. This index gave Bayer top marks, for example, for its environmental and climate protection performance and sustainability reporting. By contrast, despite an improvement in our performance compared with the previous year, we are no longer included in the European Dow Jones Sustainability Index STOXX because other companies in our sector posted an even better improvement.

In 2008, we were again included in the Carbon Disclosure Leadership Index, the only European representative of the chemical and pharmaceutical sector to be listed for the fourth time in a row. Our strategy of fostering access to sustainable health care was rated ninth out of 20 companies in the Access to Medicine Index which was established in 2008. Our successful performance in these and other sustainability rankings (see table) is an acknowledgement of our business strategy and our commitment to sustainable development.

Our performance in sustainability indices and sustainability funds

Index / Fund / Ranking	Rating agency	Focus of rating	Bayer listing
Index / Fund / Ranking	Rating agency	Focus of rating	2006	2007	2008
DJSI (Dow Jones Sustainability Index) World	SAM – Sustain- able Asset Management (Switzerland)	Corporate governance, risk management, environmental performance HSEQ (health, safety, environment and quality), working conditions, employees, ecological and social reporting
DJSI STOXX (European companies)	SAM – Sustain- able Asset Management (Switzerland)				-
FTSE4Good (Financial Times and London Stock Exchange) Global Index	EIRIS (United Kingdom) and IMUG (Germany)	Environmental management, climate protection, anti-corruption, human rights, working conditions, sustainability of the supply chain
FTSE4Good Europe Index
FTSE4Good Environmental Leaders Europe 40 Index		Overall environmental performance of the company	Had not started
Storebrand Principle Fund	Storebrand (Norway)	Environmental and social criteria, anti-corruption, clear exclusion criteria being tobacco, land mines and violation of human rights
Advanced Sustainable Performance Indices (ASPI) Eurozone	Vigeo and Stoxx Ltd. (France)	Corporate social responsibility, corporate management, relations with customers and suppliers, hseq, employees
Access To Medicine Index (ATM)	Riskmetrics (United States)	Management of ATM measures, R&D, patents policy, pricing policy, donation of medicines	Had not started	Had not started
Carbon Disclosure Leadership Index	Carbon Disclosure Project (United States)	Risks and opportunities, strategies and action on climate change