About this Report

This integrated Annual Report combines our financial and our sustainability reporting. Our aim is to elucidate the interactions between financial, ecological and societal factors and underline their influence on our company’s long-term success. The integrated Bayer Annual Report 2018 is available online as an HTML report, PDF file and app.

Legal principles and reporting standards

The consolidated financial statements of the Bayer Group as of December 31, 2018, comply with the International Financial Reporting Standards (IFRS), as adopted by the E.U., valid at the closing date and with the provisions of the German Commercial Code in conjunction with German financial reporting standards (DRS). With due regard to these provisions, the combined management report provides an accurate overview of the financial position and results of operations of the Bayer Group. The Corporate Governance Report also conforms with the recommendations of the German Corporate Governance Code. The consolidated financial statements and the combined management report are published in the Federal Gazette in line with the statutory disclosure requirement.

GRI Community, Bayer AG, 2019 (Logo)
Global Compact Lead Participant (Logo)

The Bayer Group’s sustainability reporting has been aligned to the guidelines of the Global Reporting Initiative (GRI) and the 10 principles of the U.N. Global Compact (UNGC) since 2000. This report has been prepared in accordance with the GRI Standards: “core” option. The detailed GRI index with the corresponding UNGC principles and Bayer’s areas of activity can be found online. This report also serves as a Communication on Progress in line with the U.N. Global Compact.

We also use, for example, the international recommendations and guidelines of the OECD and ISO 26000 as a guide for defining and selecting nonfinancial indicators and in our reporting. In selecting and measuring our key data, we take into account the recommendations of the Greenhouse Gas Protocol with respect to greenhouse gas emissions and those of the European Federation of Financial Analysts Societies, the World Business Council for Sustainable Development and the European Chemical Industry Council (CEFIC) with respect to other nonfinancial indicators.

Nonfinancial statement pursuant to the German Commercial Code

The nonfinancial statement pursuant to the CSR Directive Implementation Act (Sections 289b et seq. and 315b et seq. of the German Commercial Code) is integrated into the combined management report and covers data for the Bayer Group and Bayer AG as the parent company. As a framework for this, we also apply the GRI Standards (Section 289d of the German Commercial Code). The required disclosures, the corresponding chapters of the combined management report and the corresponding Bayer areas of activity with regard to the aspects prescribed by law are given in the index to the nonfinancial statement. The legality, accuracy and expediency of the nonfinancial statement have been verified by the Supervisory Board.

See Chapter “Index to Nonfinancial Statement” regarding the index to the nonfinancial statement

Data collection and reporting thresholds

In accordance with IFRS 5 (Non-current Assets Held for Sale and Discontinued Operations), financial indicators are given for continuing operations unless otherwise explicitly indicated. The same applies to HR and HSE (health, safety and environment) indicators and our social data.

Reporting of the Group’s HSE data includes all fully consolidated companies in which we hold at least a 50 percent interest. Data on occupational injuries are collected at all sites worldwide. Environmental indicators are measured at all environmentally relevant production, research and administration sites. We consider Environmentally relevant sites are Bayer locations with annual net energy consumption of over 1.5 terajoules. to be all those whose annual energy consumption is more than 1.5 terajoules.

Several nonfinancial indicators (particularly related to employees and procurement) are reported only for our Significant locations of operation A selection of countries that accounted for more than 80% of total Bayer Group sales in 2018 (Argentina, Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Poland, Russia, Spain, Switzerland, Turkey, the United Kingdom and the United States) in line with the requirements of the corresponding GRI indicators. In 2018, this covered 18 countries that accounted for more than 80% of total Bayer Group sales.

We closed the acquisition of Monsanto on June 7, 2018. The integration of Monsanto’s personnel and functions has been concluded such that cross-functional management is ensured by Bayer’s Board of Management. Further integration measures such as the systems and process integration are either being planned or implemented, and are scheduled for completion in the coming years according to the underlying complexity of the individual subject areas. The acquired agriculture business is included in the quantitative and qualitative disclosures except where otherwise indicated.

See Chapter “Corporate Structure”, Chapter “Key Events” and Note “Net sales” for information on the acquisition and the related divestments

External verification

The auditing company Deloitte GmbH Wirtschaftsprüfungsgesellschaft (Deloitte), Munich, Germany, has audited the consolidated financial statements (including the notes thereto) of Bayer AG, Leverkusen, and the combined management report for the fiscal year from January 1, 2018, to December 31, 2018, and has issued an unqualified opinion (reasonable assurance). The audit also includes the disclosures pertaining to the nonfinancial statement pursuant to Section 315c of the German Commercial Code in conjunction with Section 289c of the German Commercial Code. The audit opinion on the combined management report does not pertain to the following, indented text passages and elements of the combined management report:

Section

 

Chapter

Diverse stakeholders in focus

 

Sustainability Management

Collaboration formats aimed at specific target groups

 

Sustainability Management

Binding and transparent compensation structures

 

Employees

Quality management of segments

 

Product Stewardship

Biodiversity in the segments

 

Product Stewardship

Commitment to reducing animal studies

 

Product Stewardship

Global pharmaceutical monitoring system

 

Product Stewardship

Processes in plant biotechnology

 

Product Stewardship

Training of farmers and Bayer employees

 

Product Stewardship

Occupational illnesses

 

Occupational, Plant and Transportation Safety

Other direct air emissions

 

Environmental Protection

Water use in the Bayer Group 2018

 

Environmental Protection

Waste by means of disposal

 

Environmental Protection

Liaison offices – Contact with political stakeholders

 

Compliance

The auditor, Deloitte, subjected these sections to an audit with limited assurance. The pro-forma sales of Crop Science and the declaration of compliance with the German Corporate Governance Code have not been audited by the auditor.

Additional information

As the indicators in this report are stated in accordance with commercial rounding principles, totals and percentages may not always be exact.

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