Strategy and Management

Sustainability Management

We safeguard our societal and economic viability through sustainable action. Understood in this context and as a part of our corporate strategy, sustainability is integrated into our work procedures. We underline our mission as a company that acts sustainably through our commitment to the U.N. Global Compact and the Responsible Care™ initiative, as well as through our involvement in the World Business Council for Sustainable Development (WBCSD). In our sustainability reporting we have followed the guidelines of the Global Reporting Initiative (GRI) for many years.

Bayer is committed to the U.N. Sustainable Development Goals (SDGs) and has published a company position paper detailing this. Our innovations, products and services contribute to overcoming some of the biggest global challenges, including the goals of “Zero Hunger” (SDG 2) and “Good Health and Well-Being” (SDG 3) in particular.

Clearly defined responsibilities and structures

As part of Bayer’s corporate strategy, sustainability is firmly established at Board level. Responsibility for the Group’s sustainable orientation lies with the Board of Management member responsible for Human Resources, Technology and Sustainability in his role as Chief Sustainability Officer, and with the Sustainable Development Committee (SDC) under the auspices of the Corporate Health, Safety & Sustainability function. The SDC sets targets and draws up initiatives, management systems and corporate policies, and reviews their implementation. Operational implementation is effected with the help of nonfinancial targets and performance indicators throughout the value chain, based on a clear definition of responsibilities in the corporate structure and the identification of key areas of activity using a materiality analysis. Corporate policies ensure our sustainability principles are firmly established in business operations and are implemented through corresponding management systems, committees and processes. The review and revision of these regulations and internal audits ensure that our management systems are continuously improved and aligned to the respective requirements. The operational implementation of sustainability management in our acquired agriculture business is the responsibility of the Crop Science Division.

Structure of Sustainability Management

Structure of Sustainability Management (chart)

Materiality analysis and areas of activity

We regularly analyze the expectations and requirements of our major stakeholders and compare these with our own assessment of their relevance for Bayer. This enables us to identify at an early stage the latest developments along with sustainability-related opportunities and risks, which we can then incorporate into our strategy. In view of the Monsanto acquisition, we examined our areas of activity in 2018 (see above graphic “Structure of Sustainability Management”). Using a comprehensive materiality analysis, we con-ducted a worldwide survey of external stakeholders with specialist expertise and internal man-agers from various areas of the company. The areas of activity listed below were identified. These are to form the basis for a new sustainability strategy and new nonfinancial targets that we shall present in the course of 2019.

Results of the Materiality Analysis

Results of the Materiality Analysis (chart)

On our sustainability website we include a table showing our areas of activity that are relevant to this report and as they applied until the end of 2018 with definitions and the corresponding Group targets and GRI aspects. A detailed GRI content index with the corresponding UNGC principles can also be found online.

Stakeholder dialogue promotes acceptance and business success

As a company, Bayer is a part of society and of public life. Through open dialogue with our stakeholders we aim to build trust in our actions, our products and the social value of our services, because the expectations and viewpoints of our stakeholders affect public acceptance of Bayer and thus our commercial success. How we create direct financial value for our stakeholders worldwide with our business activities is shown by the value creation graphic on our sustainability website.

Stakeholder dialogue helps us to recognize important trends and developments in society and our markets at an early stage and take this information into account when designing our business. The integration of various stakeholder groups is planned within the scope of our stakeholder engagement process. This process also includes monitoring the results of individual dialogue measures. In strategic decision-making processes such as investment projects and launches of new products, Bayer approaches key social and political players right from the start of a new project to canvass their support. The open dialogue makes it possible to identify opportunities and risks early on. This process is in line with our Stakeholder Engagement Guideline and is supplemented by an internal information platform.

We fundamentally distinguish four stakeholder groups with which we engage in discussing different issues in various dialogue formats.

Our Most Important Stakeholder Groups

Our Most Important Stakeholder Groups (chart)

Diverse stakeholders in focus

Our stakeholder engagement process describes how the expectations of our stakeholders can be taken into account in a specific project, for example, and dialogue with them steered. We regularly review the engagement process based on social trends.

Stakeholder Engagement Process

Stakeholder Engagement Process (chart)

Collaboration formats aimed at specific target groups

Our regular stakeholder activities range from dialogue at local, national and international level and active involvement in committees and specialist workshops all the way through to comprehensive information programs, issue-related multi-stakeholder events and participation in international initiatives and collaborations.

The selected topics described below provide insights into our engagement with respect to our most important stakeholder groups. We always focus on a fact-based dialogue.

As part of the process of acquiring and integrating the agriculture business, we held wide-ranging talks with representatives of nearly all our stakeholder groups in 2018. Examples included the Capital Markets Day for investors and a Bayer AG parliamentary evening as well as intensive media relations work including joint interviews with a Bayer executive manager and a critic in leading publications (e.g. Board of Management member Liam Condon and Robert Habeck, head of Germany’s Green Party, in the German magazine Capital).

Our approaches for addressing the glyphosate debate included launching a transparency initiative and publishing safety studies; participating in topic-specific talks around the world (Liam Condon at the World Food Convention, for instance); and creating an online platform to answer questions about glyphosate, crop protection, agriculture and genetic engineering.

In the political realm, we conducted discussions with political decision-makers, and collaborated in specialist committees and cooperation projects. Active participation by Bayer in political decision-making processes is explicitly sought by the key players involved. The company’s Public and Governmental Affairs Committee develops the principles for the alignment of Bayer’s political lobbying. In 2018, Bayer’s global lobbying work focused on the issues of “innovation,” “access,” “reputation” and “freedom to operate.”

We prioritize being a reliable partner that is aware of its societal responsibility toward the communities adjacent to our sites. To this end – at our production sites in particular – we maintain open dialogue between local management and community members, which is supported by the respective country organization. This dialogue includes personal discussions with residents, citizens’ initiatives, representatives of religious communities and the regional press. This community dialogue is anchored in a globally valid corporate policy on site management.

In 2018, our everyday business once again included dialogue with our customers – especially with respect to their satisfaction with our products and services. In this context, our segments navigate very different regulatory frameworks. As a consequence, direct contact between Pharmaceuticals or Consumer Health and the respective customer environment, and especially patients, is regulated in very different ways for each segment. With regard to the collection of customer satisfaction data, different legal requirements apply for prescription medicines from Pharmaceuticals than for nonprescription medicines, for example. The primary market research and data research that must be conducted, including systematic internet analysis, strictly adhere to the legal requirements, which can vary significantly depending on the market. At Crop Science, customer-centricity is achieved throughout the value chain by way of the 500-plus projects of the food chain partnerships, for example, or through direct cooperation with farmers, as demonstrated by the Bayer ForwardFarms. These programs emphasize innovative crop solutions and services for sustainable agriculture.

For more information on dialogue with stakeholders, please refer to the chapters Investor Information, Employees (Communication at all levels), Procurement and Supplier Management (Training measures and dialogue on the issue of sustainability), Sustainability Management (International Initiatives), Societal Engagement (Universities / Schools) and Product Stewardship (Commitment); see also our sustainability website.

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