Bayer Issues Its Annual Sustainability Report
Tuesday, June 12th, 2012
The Bayer Group is well on the way to implementing its comprehensive Sustainability Program. This is underlined by the company's new 68-page Sustainable Development Report, which contains countless facts and figures and is now available. "We are making good progress in all core areas - health, nutrition, and climate protection and resource efficiency," remarked Prof. Wolfgang Plischke, member of the Board of Management of Bayer AG responsible for Innovation, Technology and Sustainability. "We systematically strive to implement our qualitative and quantitative objectives on a step-by-step basis in the fields of innovation & product stewardship, ecology, employees, management & corporate governance and social commitment."
The review of 2011 documented in the report also shows that sustainability is an important part of the company's corporate strategy. "We do not see this as merely a trend. Sustainability is firmly embedded in our core business and, for us, essentially means future viability," said Plischke. He added that Bayer places particular emphasis on innovative strength and partnership models so as to operate successfully and sustainably. This is reflected year after year in the company's high research and development budget, which - at around EUR 3 billion in 2012 - is once again the highest in the German chemical and pharmaceutical industry. Plischke: "This commitment to innovation and sustainability is also at the heart of our mission: 'Bayer - Science For A Better Life.'"
The current report is available in German and English. It is aligned to the international standards of the United Nations Global Compact and the Global Reporting Initiative (GRI), which confirmed that it was in conformance with the highest possible rating of "A+". The report was also certified by corporate auditors Ernst & Young. An online version of the report and more detailed information are available at www.sustainability2011.bayer.com.
The Sustainable Development Report 2011 is the 13th report to be published by Bayer on the topic of sustainability. "The importance of this issue on the international agenda is also reflected in the forthcoming 'Rio+20' UN conference. As well as setting binding targets, this must be used as a forum to find concrete solutions. We, as a company, are also playing a part in this process through innovative production processes and products," said Plischke.
Focus issue health
Bayer faces two structural challenges with regard to its sustainability commitments in the area of health: on the one hand, the lack of basic medical care in developing countries where populations are on the rise and, on the other, health care requirements in industrialized countries with aging populations as a result of demographic change.
In developing countries, especially in Africa, access to contraceptives is still limited and there is a lack of knowledge about family planning and sexual health. Bayer HealthCare is pursuing the goal of providing 119 million cycles of oral contraceptives per year to developing countries. To safeguard distribution and develop the sales structures that are often lacking, Bayer works with partners such as USAID (United States Agency for International Development), which it offers medication at reduced prices. Its partner on health education issues is the German Foundation for World Population. In the long term, Bayer hopes to tap new markets in countries such as Ethiopia, Uganda and Tanzania, where middle classes with corresponding purchasing power are emerging.
In 2011 Bayer was one of the first companies to sign the "London Declaration on NTDs (Neglected Tropical Diseases)" established by the Bill & Melinda Gates Foundation, which has set itself the goal of eliminating neglected tropical diseases such as Chagas' disease and African sleeping sickness by 2020. The company has been working with the World Health Organization (WHO) in this field for many years and provides free medication. In 2011 more than 5,700 patients were treated with drugs provided free of charge by Bayer. To tackle Chagas' disease, the Group is doubling its supply of tablets containing the active ingredient nifurtimox to the WHO from 500,000 to 1,000,000 tablets per year for five years through to 2017. Bayer also provides a total of USD 1.5 million for the distribution of this medication and the logistics linked to this.
In emerging and industrialized countries, Bayer has established patient aid programs and developed a pricing system based on the general level of income. This system ensures that people who are not covered by health insurance or who would otherwise be unable to afford treatment receive therapy - for example, treatment for cancer or multiple sclerosis, which is cost-intensive due to the high research costs involved. In 2011 just under 40,500 patients in the United States benefited from these access programs, which have also been introduced to other countries and regions including China, southern Asia, south-eastern Europe and Brazil.
Focus issue nutrition
In the field of nutrition, Bayer focuses on new cultivation methods and sustainable practices along the entire value-added chain. In emerging markets such as India, demand for high-quality food is rising. The interaction between the various players in the food industry - from farmers and processors to dealers - is playing an increasingly important role in satisfying requirements in terms of quality, volume, price, and social and ecological compatibility. The Food Chain Partnerships established by Bayer CropScience aim to address this issue. In India alone, the company supports 125 partnerships for vegetables involving 65,000 farmers with a total of 50,000 hectares of cultivated land. Thanks to higher yields and better quality of produce the farmers have increased their income by up to 40 percent. The company has also established more than 100 other partnership programs for fruit and vegetables, primarily in China, southern Europe, Africa and Latin America.
To cultivate crops, Bayer CropScience uses innovative technologies that increase yields while protecting the environment. For example, a new process for growing rice that enables the direct seeding of pregerminated rice instead of labor- and resource-intensive preplanting is increasing yields by around 10 percent for farmers in Indonesia. At the same time, it reduces water consumption by around 20 percent and emissions of the greenhouse gas methane by around 30 percent. Bayer CropScience plans to introduce the new technology to other major rice-producing countries such as China and India.
Focus issue climate protection and resource efficiency
Bayer is pursuing a two-pronged approach to climate protection and resource efficiency. First, the Group plans to further improve the energy efficiency of its own production plants. For example, use of a new technology is cutting indirect greenhouse gas emissions by around 30 percent in the energy-intensive production of chlorine. Bayer is firmly committed to its goal of reducing direct and indirect greenhouse gas emissions by 35 percent per metric ton of product sold by 2020 compared with 2005. By the end of 2011, it had already achieved a reduction of 21 percent. As a result of efficiency enhancement measures in production, energy costs were also cut by EUR 35 million in the period from 2009 to 2011. The company also remains firmly committed to the goal of keeping absolute emissions of direct and indirect greenhouse gases at 2007 levels through to 2020 despite production increases.
Second, the Group is increasingly focusing on the development and marketing of resource-friendly products. Examples include raw materials for building or refrigerator insulation, lightweight plastics for cars and high-quality materials for wind turbine rotor blades. Bayer MaterialScience already generates sales of EUR 2.4 billion per year from resource-friendly products, which is around 20 percent of the subgroup's annual sales. As part of the EcoCommercial Building Program, the network for energy-efficient commercial buildings set up by Bayer in 2007, marketing centers have now been established with 50 partner companies worldwide.
Data on relevant sustainability parameters
The current Sustainable Development Report supplies detailed data on relevant sustainability parameters collected at Bayer sites throughout the world. In addition to greenhouse gas emissions, these include other air emissions, waste, occupational safety and diversity.
Direct and indirect greenhouse gas emissions Group-wide fell by 4.2 percent in absolute terms in 2011 - from 8.50 million metric tons of CO2 equivalents in 2010 to 8.15 million metric tons. Although the volume of products sold in 2011 rose by 5.2 percent, greenhouse gas emissions still fell, mainly due to improvements in energy efficiency and new process technologies. Specific greenhouse gas emissions decreased by almost 13 percent in 2011. The company has therefore made good progress toward the permanent decoupling of greenhouse gas emissions from production.
Emissions of ozone-depleting substances fell by around 21.5 percent in 2011 - from 20.8 to 16.3 metric tons. Bayer is aiming to reduce emissions of ozone-depleting substances by 70 percent by 2015 compared with 2010 levels. By contrast, emissions of volatile organic compounds increased by 6.1 percent - from 2,540 metric tons to 2,690 metric tons. The company nonetheless plans to reduce emissions of volatile organic compounds by 50 percent by 2015 compared with 2010 levels.
Due to production growth, the total volume of waste produced increased by 18.7 percent, from 807,000 metric tons to 958,000 metric tons. The recycling rate was 28 percent, 10 percent up on the previous year.
With regard to employees, Bayer aims to achieve two primary objectives by 2015. On the one hand, it plans to increase the proportion of female managers - a central aspect of diversity - toward 30 percent. In 2011, this figure was 22 percent. On the other, it plans to reduce the occupational injury rate to ≤ 0.21. The internationally accepted indicator for this is injuries with lost workdays per 200,000 employee working hours including work-related illnesses. In 2011 this rate fell from 0.34 to 0.31.
Supplier sustainability ratings
In the field of management & corporate governance, Bayer attaches particular importance to supplier management. The company has integrated aspects of sustainability into its Group-wide procurement guidelines and established a Supplier Code of Conduct. Through audits, for instance, Bayer checks whether selected suppliers conform with ethical, social and ecological standards. By 2015 supplier ratings are to cover at least 75 percent of the total procurement volume.
Social commitment forms an integral part of Bayer's sustainability strategy. The company invested EUR 54 million in charity projects in 2011. In doing so, it is looking to make a valuable contribution to society and, at the same time, help shape the framework for the Group's business activities in a positive manner.
In China, Bayer is working, for example, with the Chinese government to implement a unique health care project. Known as "Go West", the project offers general medical training and further training initiatives for physicians in poor provinces with inadequate health provision in the west of the country, equips hospitals and trains hospital management staff. Between 2007 and 2011, just under 3,500 physicians and 3,100 hospital managers in 18 provinces took part in the program. In 2011 the cooperation with the Chinese government was extended ahead of time by a further five years (2013 to 2017). As in the first phase, Bayer is providing funding of EUR 2.5 million for this public-private partnership.
The Bayer Science & Education Foundation supported schoolchildren and schools, trainees, students, young scientists and leading researchers by providing total funding of EUR 1.2 million in 2011. Around EUR 460,000 alone was invested in 52 school projects throughout Germany in order to make science lessons more appealing. In the communities near Bayer's German sites, the Bayer Cares Foundation provided funding of around EUR 130,000 for 40 social projects involving volunteers from Bayer and the general public. This volunteering program was also extended to an initial 13 counties in Central and South America in 2011.