Foreword

We are aiming for sustainability in everything we do.

Werner Wenning, Chairman of the Board of Management of Bayer AG

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Werner Wenning, Chairman of the Board of Management of Bayer AG

Dear readers,
The global financial and economic crisis has clearly shown that short-term thinking and actions can have dramatic consequences. Aligning business to sustainable success has been top priority at Bayer for a long time, and this strategy is proving effective even in a difficult environment.

Our overriding goal is to operate both successfully and sustainably. To achieve this, we want to achieve commercial success on the basis of solid business models in a way that is compatible with meeting the needs of our employees and society and protecting the environment and natural resources. We are thus committed to the tenets of sustainable development and to the 10 principles of the United Nations Global Compact. In short, we are aiming for sustainability in everything we do.

We are looking to tackle this broad challenge on three levels. Firstly, with our products and services: These are designed to be innovative, benefit people and improve their quality of life. Secondly, we want to act responsibly across the entire value-added chain – in relation to all our interest groups, especially our employees, customers, suppliers and stockholders. Thirdly, we also want to meet our responsibility to society by becoming socially involved as a good corporate citizen.

In essence, sustainability means future viability. For that reason we are investing specifically in a sustainable future – both through our social and through our business activities. Despite the economic crisis, we plan to increase research and development spending in 2009 to the record level for Bayer of approximately €2.9 billion, which is the third-highest ratio of R&D expenditures to revenue generated of any German company. That is how we safeguard growth, jobs and prosperity. Success tomorrow demands investment today. The time to compete for tomorrow’s best products and technologies is now.

In this connection, we are focusing clearly on the global megatrends – including in particular the development of the world population and the associated issues of safeguarding food supplies, health care provision, energy efficiency and effective climate protection. We are aligning our portfolio and our sustainability management to these challenges. And we offer innovative strategies, products and solutions across the entire spectrum of these issues of the future.

The climate program we initiated at the end of 2007 clearly signalizes that Bayer wants to be a world leader in climate protection. In the Bayer Climate Check, for example, we have introduced an innovative tool for the comprehensive analysis of energy efficiency that helps us to achieve our ambitious global goals with respect to achieving further reductions in greenhouse gas emissions. We have since already analyzed more than half of our facilities worldwide that are of relevance from an emissions standpoint.

Safeguarding the future also involves investing more heavily in education. Society at large needs to pay special attention to this task. Bayer for many years has trained more young people than it needs for its own operations, and supports numerous school projects through the Bayer Science & Education Foundation. Particularly as regards young people, it is important to us that we live the principle of sustainability as an integral element of our mission statement. Only in this way can we impart enthusiasm in tomorrow’s top performers. After all, for increasing numbers of talented young people, value-based corporate governance is a key criterion when choosing a job.

Also at the top of our agenda last year was the issue of legal compliance and corporate responsibility. We revised our Corporate Compliance Policy and introduced it to all Group employees through a global communication campaign. We want to steadily improve in this area, too, so as to maintain our company’s good reputation.

The success of our business and sustainability strategy has been confirmed for many years by international sustainability indices and funds. For example, Bayer was once again included in the Dow Jones Sustainability World Index (DJSI World) for the 2008/2009 period – the company’s tenth consecutive listing in the world’s most important sustainability index. Bayer is also the first European chemical and pharmaceutical company to be listed for the fourth consecutive time in the Carbon Disclosure Leadership Index – the world’s first climate protection index.

We are very pleased to receive such recognition. It serves as an incentive for us to continue coming up with the right answers to address the long-term global challenges with solution-oriented products and services, and thus exploit the associated business opportunities for our company – fully in keeping with our mission statement “Bayer: Science For A Better Life.”