Strategy and Management

Our sustainability management

Bayer is committed to the concept of sustainable development: Economic, ecological and social matters are goals of equal rank in our corporate policy. To implement this balance worldwide, we have developed effective steering mechanisms and defined specific goals by which we measure ourselves. Our sustainability management is based on long-term values and clear policy guidelines that are valid for all parts of the company.

Sustainability as a strategy for success

In economically difficult times, it is more important than ever to increase the value of the company in harmony with social needs and goals. Bayer’s sustainability concept is consistently aligned to this goal: With its products Bayer wants to help effectively address societal megatrends and challenges such as climate change, inadequate global health care or the scarcity of water and food. We also consistently align our own business processes to sustainable development criteria along the entire value chain. Through our social responsibility, furthermore, we also contribute to improving living conditions in the communities in which our sites are located and supporting the future prospects of others.

In order to be able to act in a goal-oriented manner in this environment, we must identify social trends and needs at an early stage. Our sustainability concept is therefore based on close, sustained dialogue with our stakeholders and society at large. In this way, we not only minimize our business risks, we can also work together with these dialogue partners to identify opportunities and fields of action, and thus lastingly enhance our company’s competitiveness and ability to thrive in the future.

Our mission statement and values

Sustainable business means allowing oneself to be guided by long-term values. That’s why sustainability is a key element of our values and leadership principles, which include a will to succeed and a passion for our employees, business partners, stockholders and society. Other values spelled out in our mission statement “Bayer: Science For A Better Life” include integrity, openness and honesty; respect for people and nature; and sustainability of our actions. Our mission statement is supplemented by the Bayer Sustainable Development Policy, our positions on human rights and working conditions, our Corporate Compliance Policy, our commitments to the global Responsible Care initiative of the chemical industry and the 10 principles of the United Nations Global Compact.

Bayer is a member of society that makes important contributions through products, business activities and a voluntary social commitment. Social trends, needs and objectives for their part influence our activities on these three levels, however.

Group-wide directives as a framework of action

On this basis, we develop Group-wide directives that provide a clear framework of action for all parts of the company. The implementation of these directives is supported in all subgroups and service companies by efficient management systems for health, safety, environmental protection and quality (HSEQ), for example

. In addition, the subgroups enact systems and standards that address their specific requirements. The steering of opportunities and risks – our risk management – is also an integral part of the Group-wide corporate governance system.

In 2008 we revised our Corporate Compliance Policy, which now emphasizes the theme of sustainability more intensively than before. Its implementation is based on specific organizational structures within the company. In Germany, each Group management company has a Compliance Committee; worldwide there is at least one Compliance Officer and often a local Compliance Committee in each country in which we operate. The reports from the countries are compiled in an annual Activity Report produced by the individual subgroups and service companies. In this way, our Corporate Compliance System supports, for example, the observation of our position on human rights and working conditions. What’s more, the Corporate Auditing Department regularly verifies adherence to the policy

On January 1, 2009, furthermore, a Group-wide code of conduct for responsible lobbying went into effect that binds all lobbyists and consultants of the company to clearly identify themselves as such and to represent the company’s business interests

The Bayer Community Board for Sustainable Development (CB SD) is responsible for steering our sustainability strategy throughout the Bayer Group. Based on the Group-wide sustainability strategy, this body each year defines goals, determines the corresponding Group directives and monitors the implementation of these measures. The CB SD is supported and advised by our Community Council for Sustainable Development (CC SD), which succeeds the previous Sustainable Development Planning Group. Both bodies were restaffed in 2008. The Chairman of the CC SD works together closely with the sustainability officers in the subgroups and service companies. The CC SD also regularly confers with other Group bodies, such as the Community Council for Health, Safety, Environment & Quality (CC HSEQ) and the Community Council for Politics, which is responsible for the alignment and prioritization of political activities at Bayer. The global organization is supplemented by bodies at the regional and subgroup levels. Group-wide cooperation is defined by our Sustainable Development (SD) Policy.

Sustainability check: “Sustainability Value Balance”

Societal megatrends such as population growth or climate change require detailed analysis to determine their importance for our portfolio and our activities. That’s why Bayer joined forces with a renowned institute for future research to develop a tool that helps us to more closely align our activities to the challenges posed by these trends: the “Sustainability Value Balance” tool. With the help of this tool, Bayer will regularly evaluate the global megatrends and how they relate to its own product portfolio. In other words, we analyze exactly how the megatrends relate to our business and how we as a company can help society to master the risks associated with them. To this end, we assess our products, processes and projects using uniform sustainability criteria in order to identify the areas in which we can have the greatest impact through our innovation capability. With this in mind, pilot projects are being conducted, one of which was completed by Bayer CropScience in 2008.

Sustainable procurement management

We expect our business partners to mirror in their conduct our commitment to sustainability and corporate compliance. Bayer’s procurement guideline clearly supports the principles of the UN Global Compact, our values and leadership principles and Bayer’s position on human rights and working conditions. To ensure that our purchasing activities are in line with the Group’s sustainability strategy, the spokesman for the Procurement Community has also since 2008 been a fixed member of the Community Council for Sustainable Development.

In 2008 the Bayer Procurement Community further optimized the strategy for implementing sustainability in purchasing. To this end, a code of conduct detailing basic standards of sustainability among other aspects was compiled for suppliers to improve their awareness of the issue of sustainability. The code, which will be implemented step by step from mid 2009, also provides the basis for systematic supplier evaluation and development. The implementation of the corresponding measures as well as our information management and sustainability reporting will be supported by it systems and processes. By informing and training our purchasing employees we ensure that our sustainability strategy becomes anchored in day-to-day purchasing practice all over the world. Where deviations from our standards are observed, the Procurement Community examines how the supplier involved can be supported in complying with them more effectively. The concept behind this strategy is illustrated in the modules A-F shown in the figure below.

REACH implementation

The E. U. chemicals policy REACH has been in effect since June 1, 2007. As prescribed by reach, Bayer had pre-registered more than 1,000 substances with the European Chemicals Agency (ECHA) in Helsinki by December 1, 2008. Thus we fulfilled the central requirement for continuing to work with these substances in the future. We also worked closely with our suppliers in this respect to ensure supply security. The next step is now to compile registration dossiers for the substances required in particularly large amounts. For the registration of these substances, which must be completed by 2010, Bayer strives to form consortia with its competitors to promote the exchange of data and avoid the need for additional animal studies.

Our Sustainability Program

Our Sustainability Program is a key steering tool for the implementation of our sustainability strategy. It comprises the specific sustainability goals of the Bayer Group, all subgroups and service companies, and the measures defined for the achievement of these goals. The program focuses on five fields of activity: innovation, product stewardship, excellence in corporate management, social responsibility and responsibility for the environment.

The implementation of the measures is monitored by the management boards and management teams of the various subgroups and service companies, as well as by our SD committees. A detailed overview of the current status of the program and of our individual target achievement can be found at the following page

. We consistently align our sustainability management to new challenges. Where necessary we set new goals, as demonstrated by our climate goals for 2020. Our current Group Sustainability Program 2006+ will run over a period of five years. We are currently working on a realigned program for the period after 2010.

Key Bayer Group sustainable development goals through 2010 (unless described otherwise)

Details of the sustainability program can be found on our overview.

Therapeutic proteins
Development of patient-specific medicines by 2015 through the expression of therapeutic proteins from tobacco plants (plant-made pharmaceuticals).
Cancer therapy
Expansion of the scope of application for the cancer drug Nexavar® to include the indications liver, lung and breast cancer.
Energy-efficient production process
Optimization of a production process for monomeric diisocyanate with the goal of reducing energy consumption by about 15 percent.
Occupational safety
Reduction in the incidence of industrial injuries with lost working days to less than two per million hours worked.
Emissions into water
Reduction in the discharge of total organic carbon (TOC) and nitrogen into receiving waters by 10 percent per metric ton of sales product.
Emissions into air
Reduction in voc (volatile organic compounds) emissions by 30 percent per ton of sales product.
Climate protection
Restriction of global greenhouse gas emissions (metric tons CO₂ equivalents) to the 2007 level through 2020 despite an increase in production. See this page for detailed figures for the individual subgroups.
Protection of the ozone layer
Adherence to a maximum threshold of less than 20 metric tons of ODS (ozone-depleting substances) emissions per year (CFC-11 equivalents).
Waste
Reduction in the volume of waste requiring special supervision (hazardous waste) to less than 2.5 percent per metric ton of sales product.