Science For A Better Life

CEFIC European RC Forum Achieving Credibility through Industry Commitment case study Bayer Holger Ohst Bruxelles , 24-02-2010
GOING SUSTAINABLE Creating business opportunities in a changing environment

Sustainability has a long tradition at Bayer

1901 Foundation of the "AbwasserCommission der Farbenwerke zu Leverkusen"

1986 "Policy guidelines for environmental protection and safety"

2000 Founding member of UN Global Compact

2007 Bayer Human Rights Position 2005 Partnership TB Alliance Bayer Climate Program

1976 First Bayer Report on environment and society

1999 "Guidelines for Legal Compliance and Corporate Responsibility at Bayer"

2001 Guidelines for Responsible Care implemented

2006 Sustainable Development Policy

2009 Bayer Sustainability Program

Sustainability means to balance commercial success, environmental protection and needs of society

Sustainability means achieving commercial success on the basis of solid business models in a way that it is compatible with meeting the needs of our employees and society and protecting the environment and natural resources. Sustainability is an integral part of our corporate strategies and not an add on. It drives our top line growth by creating business opportunities and improves our bottom line by mitigating risks and reducing costs (e.g., for resources)

Environmental protection

Sustainability Economic responsibility Social responsibility

Bayers Sustainability Definition

Sustainability encompasses our products, business activities and our voluntary social commitment

Main examples Foundations Voluntary projects (Education, health, sports, environment) HR policy Safe operations Compliance Sustainable sourcing

Voluntary Social Engagement

Business Activities Products & Innovation

Climate and resource friendly products Innovation as driver of sustainability Provide solutions for our customers

Sustainability management is integrated into all levels of the Bayer Group

Group level - general: Bayer values Leadership principles Policies Group level - sustainability: SD policy UN Global Compact RC Global Charter Human Rights Position Subgroups & service company level (incl. countries & regions) SD initiatives Strategy programs Risk management HSEQ systems & audits

Community Board Sustainable Development Chair: Group Management Board Member responsible for Innovation, Technology & Environment Members: Members of the subgroup management boards Heads of Corporate Center: Environment & Sustainability, Investor Relations, Corporate Development, Corporate Office, Human Resources & Organizations, Communications, Law & Patents Heads of BTS and BBS

Community Council Sustainable Development Chair: Head of Environment & Sustainability

Sustainability Reporting evolves as sustainability is integrated into business

Key elements of reporting Objectives KPIs/performance Standards (e.g. GRI) External assurance Impact

Relevant reporting formats

Stakeholders state to be influenced by Bayer's SD Sustainability & innovation report, ~ 85% in a positive way
http://www.bayer.com/en/Responsible-Care.aspx http://www.bayer.com/en/Responsiblehttp://www.bayer.com/en/position-on-global-product-strategy.aspx

International guidance documents and Responsible Care Global Charter

All hazardous installations or products should comply with the same overall safety objectives, irrespective of size, location or other factors

Associations and enterprises share the overall approach of Responsible Care in all regions
Associations and enterprises have to act complimentary: National associations adopt the GC RC to local needs including cultural aspects International companies spread standards globally and bridge national associations Specific attention must be paid to the size of enterprises (e.g. OECD guidance for HSE in SME, PRISME2 approach of CEFIC) Not one size fits it all coordinated approach needed by all stakeholders committed to credibility of our industry expressed in our RC initiative !

Interested parties, their needs, expectations and international standards to address them
Customers, suppliers and partners
Quality, price and delivery performance of products Mutual benefits and continuity

ISO 9001

GMP

Employees in the organization

Good work environment Job security Recognition and reward Occupational health/safety

Enterprise Commitments

Society
Environmental Protection Ethical behaviour Compliance with statutory and regulatory requirements

OHSAS 18001

ISO 14001

Owners / shareholders
Sustained profitability Transparency

Promises have to be kept ! Walk your talk to sustained success !

Implementation of RC within Bayer Group by individual subgroups and service companies

Minimize HSEQ risks to the people, environment and the company Integrate Health, Safety, Environmental and Quality (HSEQ) requirements into business strategies and processes Promote HSEQ awareness and an incident-free culture Promote dialogue on Responsible Care with our stakeholders

Example: Social Health Care Programs at Bayer HealthCare

Health care is a Human right. In many countries health systems cannot guarantee adequate care for the population. Bayer aims to play an active role in global initiatives like Global Access to Medicines and developed a strategy for global health care, the Social Health Care Programs (SHCP). The SHCP corresponds to EFPIAs AIMS (Access, Innovation, Mobilization, Security) program, a roadmap of priorities of pharmaceutical companies and their association.

www.efpia.org

http://www.sustainability2008.bayer.com/en/global-access-to-medicines.aspx#

Example: Responsible Care at Bayer CropScience

Global key requirements and expectations are set for Product Stewardship and management of QHSE. Thus standards of BCS are shared globally.

Example: Responsible Care at Bayer MaterialScience

All BMS sites and products are expected to be managed according to the standards of the BMS Integrated Management System in conformance with the internationally recognized standards ISO 9001, ISO 14001 and OHSAS 18001. The system consists of 26 processes and procedures addressing all aspects of quality, environmental and safety management, supported by global expert networks. Specific attention is paid to the smaller legal entities of Bayer MaterialScience. A separate organizational unit, the Center of Excellence, with dedicated support of good HSEQ practice according to the identified needs and risks. BMS has a global matrix certificate according to ISO 9001 covering 42 locations/sites. In addition, some sites have 3rd party certificates of ISO 14001 and OHSAS 18001. With its practices BMS contributes to spread HSEQ standards around the globe.

Example: Global Product Strategy (GPS) at Bayer MaterialScience

GPS page to complement Responsible Care on the Bayer Group internet site supporting the supply chain dialogue. Focus is on chemicals in commerce, and therefore on activities at Bayer MaterialScience. GPS at Bayer builds on the long established tradition of our BayCare Product Stewardship Program started in 2000 in USA. Bayer is focused on bringing product safety information in local language to everybody involved in the product chain and to the public.

http://www.bayer.com/en/position-on-global-product-strategy.aspx

GPS needs globally consistent approaches for international companies, supported by association-driven regional approaches and initiatives regarding content/ timelines

Product Stewardship along the life cycle Cooperation, Dialogue and Innovation are key elements

Cooperation: Politics, Academia, Industry

Dialogue: Public Perception, Technology Acceptance, Product Safety

Credibility creates trust

Innovation: Many product applications in fields with high importance for society Where trust is missing, there will be uncertainty or even fear. Fear about the future is definitely not the way to win the future. Johannes Rau, Former German Federal President

Conclusions: Achieving Credibility through Industry Commitment

Sustainability is fundamentally integrated in Bayers business strategy. Not one size fits all: many ways can be chosen to implement Responsible Care activitities meeting the expectations of its interested parties,in a balanced way, over the long term. Industry commitment as given in our Responsible Care Initiative and the Global Product Strategy is the key for achieving credibility of society. Credibility of industry commitments depends on: Keep the promises that are made Comply with the same HSEQ and sustainability objectives, irrespective of size, location or other factors Consistently meet or exceed internationally recognized standards. Performance is credibility for the present, innovation is credibility for the future.