Science For A Better Life

CEFIC European RC ForumAchieving Credibility through Industry Commitment –case study Bayer

Holger OhstBruxelles , 24-02-2010

GOING SUSTAINABLEGOING SUSTAINABLEGOING SUSTAINABLEGOING SUSTAINABLECreating business opportunitiesin a changing environment

Sustainability has a long tradition at Bayer

1976First Bayer Report on environment and society

1901Foundation of the "Abwasser-Commissionder Farbenwerkezu Leverkusen"

1986"Policy guidelines for environmental protectionand safety"

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

2000Founding member of UN Global Compact

2001Guidelines for Responsible Care implemented

2006Sustainable Development Policy

2005Partnership TB Alliance

2007 Bayer Human Rights Position

Bayer Climate Program

2009Bayer 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)

Bayer’s Sustainability Definition

Sustainability

Environmentalprotection

Socialresponsibility

Economicresponsibility

„

Voluntary Social

Engagement

Products& Innovation

Business Activities

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

� Foundations� Voluntary projects

(Education, health, sports, environment)

Main examples

� HR policy� Safe operations

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

� Compliance� Sustainable sourcing

Sustainability management is integrated into all levels of the Bayer Group

Group level - general:

Bayer values Leadership principles Policies

Group level - sustainability:

SD policyUN Global CompactRC Global CharterHuman Rights Position

Subgroups & service company level (incl. countries & regions)

SD initiativesStrategy programsRisk managementHSEQ systems & audits

Community Board Sustainable Development

Chair: Group Management Board Member responsible for Innovation, Technology & Environment

Members:Members of the subgroup management boardsHeads 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 & innovation

Sustainability Reporting evolves as sustainability is integrated into business

� Stakeholders state to be influenced by Bayer's SD report, ~ 85% in a positive way

Impact

Key elements of reporting

�Objectives� KPIs/performance� Standards (e.g. GRI)� External assurance

Relevant reporting formats

http://www.bayer.com/en/Responsiblehttp://www.bayer.com/en/Responsible --Care.aspxCare.aspx

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

International guidance documents andResponsible Care Global Charter

“All hazardous installations or products should com ply with the same overall safety objectives, irrespective of size, lo cation or other factors”

Associations and enterprises share the overall approach of Responsible Care in all regions

Associations and enterpriseshave to act complimentary:

National associations adopt the GC RC to local needs including cultural aspects

International companiesspread standards globallyand 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 need ed by all stakeholders committed to credibility of our industry expressed in our RC initiative !

Interested parties, their needs, expectationsand international standards to address them

Customers, suppliers and partners•Quality, price and delivery performance of products•Mutual benefits and continuity

Society•Environmental Protection•Ethical behaviour•Compliance with statutory and regulatory requirements

Employees in the organization

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

EnterpriseCommitments

Owners / shareholders•Sustained profitability•Transparency

ISO 9001

ISO 14001OHSAS 18001

Promises have to be kept ! Walk your talk to susta ined success !

GMP

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 stake holders

Health care is a Human right. In many countries health systems cannot guarantee adequate care for the population.

Bayer aims to play an active rolein 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 EFPIA´s AIMS(Access, Innovation, Mobilization, Security) program, a roadmap of priorities of pharmaceutical companies and their association.

Example: “Social Health Care Programs” at Bayer HealthCare

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

www.efpia.org

Example: Responsible Care at Bayer CropScience

Global key requirements and expectations are setfor 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 s tandards around the globe.

Example: Global Product Strategy (GPS) at Bayer MaterialScience

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

GPS page to complement ResponsibleCare on the Bayer Group internet site supporting the supply chain dialogue.

Focus is on “chemicals in commerce”, andtherefore on activities at Bayer MaterialScience.

GPS at Bayer builds on the long establishedtradition of our BayCare Product Stewardship Program started in 2000 in USA.

Bayer is focused on bringing product safetyinformation in local language to everybodyinvolved in the product chain and to the public.

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

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

Credibilitycreates trust

Dialogue:Public Perception,

Technology Acceptance,Product Safety

Cooperation:Politics, Academia,

Industry

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 Bayer’s 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, innovat ion is credibility for the future.