Bayer’s Climate Commitment: Net Zero by 2050

As a science-based company, Bayer has recognized the risks posed by global climate change. We aim to continuously reduce Greenhouse gas emissions (GHG) within our company and along our entire value chain in accordance with the UN Sustainable Development Goals (SDGs) and the Paris Agreement to limit global warming to 1.5 degrees Celsius.

Our climate strategy can be divided into transition and transformation activities. The transition focuses on us as a company and the commitments we have made. We are reducing our emissions in line with the Paris climate goals and adapt for the consequences of climate change.

The transformation goes beyond our corporate boundaries and puts our business areas at the centre. We have unique potential to help reduce global greenhouse gas emissions with our products and services. At the same time, we provide our customers with the opportunity to adapt to the effects of climate change.

Together, transition and transformation form our ambitious climate strategy. It is integrated into our business strategy to leverage potential and to take advantage of the opportunities. You can download our entire transition and transformation plan here: Bayer Transition and Transformation Plan (PDF).

We have set ourselves the target to achieve net zero GHG emissions including our entire value chain¹ by 2050 or sooner and signed the Business Ambition for 1.5°C.

• We will reduce our Scope 1 & 2² emissions by 42% until end of 2029 compared to our 2019 baseline. This target has been approved by the Science Based Target initiative as aligned with a 1.5°C pathway. To accomplish this, we will combine measures, such as more efficient inward and outward ventilation systems, a move to climate-neutral technologies, such as geothermal energy for heating and cooling and a switch to 100% purchased electricity from renewable sources.
  
  Bayer has set out specific criteria for its own procurement of green energy. These criteria include the proximity of energy production facilities to Bayer sites, the use of new sources of generation and a focus on wind and solar power. They are based on the “next generation green power” guidelines from the WWF (World Wide Fund For Nature).
   
• Bayer is on a path to become climate neutral by 2030 in its own operations. The remaining emissions after reduction will be offset by purchasing certificates from climate protection projects with recognized quality standards. The offset projects are related to our business. Based on our business purpose we focus on Natural Climate Solutions relating to forest and agriculture. Additionally, we invest in innovative projects and foster development of voluntary carbon markets.

• We aim to reduce greenhouse gas emissions along the up- and downstream value chain (Scope 3³) through cooperation with suppliers and customers by at least 12.3% in 2029 compared to 2019. This target has been approved by the Science Based Target initiative. As such a target cannot be achieved by acting alone, Bayer has joined with other ambitious companies to drive progress as part of the chemical industry’s “Together for Sustainability” initiative. We are also a member of the CDP Supply Chain Initiative and are in direct contact with key suppliers.

• In addition, Bayer is working with farmers to reduce the ecological footprint of agriculture, which currently accounts for about 22 percent of greenhouse gas emissions worldwide. We aim to enable our farming customers to reduce their on-field greenhouse gas emissions per mass unit of crop produced by 30% compared to the overall base year emission intensity⁵. This applies to the highest greenhouse gas emitting crop systems in the regions Bayer serves with its products.⁶ This includes Bayer helping farmers to use climate-friendly methods, such as reducing plowing and using digital solutions, to reduce CO2 emissions.
• Bayer is also engaging in further climate-related and environmental efforts – such as reducing the environmental impact of crop protection products by 30 percent by 2030 – , supporting projects to preserve (rain) forests and using more environmentally friendly packaging materials.

By 2024 we want to reduce our Scope 1&2² emissions by 20% and our Scope 3³ emissions by 6% along our Science Based Target commitments (base year 2019)

• Bayer is committed to phasing out, all capital expenditure in new unabated carbon intensive assets or products.
• We align our capex spending with our ambition to achieve net zero GHG emissions by 2050, in line with the global goal to limit global warming to 1.5C. Bayer plans to invest EUR 500 million in energy efficiency and climate-friendly measures until 2030.
• To anticipate climate-related business risks and opportunities and drive internal change, we have set ourselves an internal carbon price of €100 per metric ton when calculating our capital expenditure projects.
• This incentive applies to all CO_² emission reduction initiatives with the exception of emissions from purchased electricity, which are to become zero with the 2030 target of 100% purchased electricity from renewable sources. Reduction of electricity consumption nevertheless continues as part of the company’s improvement and cost management measures.
• When fixing the internal price at EUR 100 per ton, Bayer took into consideration cost abatement curves for emission reduction, costs for high-quality energy attribute certificates for renewable gas, and energy taxation trends. The price and the framework of the incentive scheme will be reviewed after two years to ensure effectiveness and revalidate market assumptions. This shadow pricing approach improves the net present value (NPV) of climate-friendly projects and gives them a higher priority.
• Additionally, we conduct ecological assessments of relevant investments.

• Sustainability is of outmost importance to Bayer with our CEO being also our Chief Sustainability Officer overseeing all sustainability activities including our climate program. The importance of climate topic is also underpinned by our CEO’s participation in the Alliance of CEO Climate Leaders within the World Economic Forum. The Board of Management holds the overall responsibility for an effective risk management system that also accounts for climate-related risks; our CFO chairs the Bayer Assurance Committee as the relevant committee within the Board.  The Board member responsible for Crop Science manages respective climate related activities of this highly affected division that can contribute to emission reduction, removal, and resilience in agriculture.
• The Supervisory Board endeavors to ensure that its members collectively possess the necessary expertise, skills and professional experience to properly perform their duties. Sustainability including climate change is part of this knowledge. Expertise and experience of shareholder and employee representatives on the Supervisory Board are stated in the Annual Report (chapter 4.1, section "Supervisory Board"). For the assessment, the Supervisory Board primarily considers its members to possess expertise and experience in the corresponding areas if they have completed professional training in that field or have amassed many years of professional experience. The ESG committee of the Supervisory Board discusses the Bayer Sustainability Council’s focal topics with the Co-Chairs of that body, including the status of the sustainability targets, benchmarks and strategies, and Bayer’s contribution to climate protection.
• 20% of long-term incentive (LTI) of all managers incl. the Board of Management is linked to the group sustainability targets which include climate protection targets. Short-term sustainability targets including climate targets are also a fixed component of annual variable remuneration.
• In the past, our board members have participated in international events on climate, such as the World Climate Summit (COP) or the New York Climate Week. Starting in 2024, we conduct regular training on sustainability, including climate issues, for the board of management and supervisory board.

Bayer is dedicated to a climate policy that is in harmony with our ambitious climate targets. Therefore, we advocate for decarbonization measures in line with the Paris Agreement and specifically with the goal to limit global warming to 1.5 degrees Celsius above pre-industrial levels as outlined in our Global Climate Policy Position. Our further climate policy positions and engagement activities related to specific policy initiatives in countries are guided by this global position.

To ensure transparency in our climate policy engagement, we annually publish an overview of our engagement activities on climate policy. Additionally, we regularly examine critically our memberships in relevant industrial associations and their positions and actions affecting climate policy both internally and externally in accordance with our ambitions. 

Consequently, Bayer started publishing its Industry Association Climate Review on a yearly basis in 2021. The review assesses the alignment of our industry associations’ climate positions with our own commitments on climate change. Our industry associations represent us in the public debate, so we need to be transparent about where our climate-change goals are aligned with their actions and where we have different views. In compiling the analysis, we have engaged with Climate Action 100+, an investor-led initiative working with the world’s largest corporation on climate change. Further details on the review approach are provided in the 2021 Report.  

The 2021 review is the first step and forms the basis for Bayer’s continued commitment to advocacy for science-based policies addressing climate change through its member associations. Where we find misalignment between our climate ambitions and those of our industry associations, we will take measures to bridge that gap. To disclose our successes and the work that still lies ahead, please see our Engagement Update 2023 and second comprehensive Industry Association Climate Review 2023.

• We are committed to a transparent communication on our climate targets, progress and implications climate change has to Bayer
• Through continued participation in CDP we disclose a high level of details on our climate related activities and progress
• We are committed to implement the recommendations of the Taskforce on Climate related Financial Disclosure (TCFD) and use the framework as guidance to disclose climate relevant information. We are using two scenarios incl. one Paris agreement aligned scenario for our quantitative scenario analysis (SSP1-1.9 and  SSP3-7.0.)

Bayer is committed to a just transition to a sustainable and climate-neutral economy and advocates for a favorable societal and political environment. We are constantly involving our stakeholders in developing just transition plans adjusted to their and our needs, for example, our relationships with our employees and the worker’s council as well as our supplier engagement. Details can be found in our Just Transition Framework.

¹ Entire Scope 1-3 emissions. Scope 3 includes all categories defined in the GHG protocol

² Scope 1 and Scope 2 (market-based) emissions of the environmentally relevant sites, i.e. those with annual energy consumption of more than 1.5 terajoules, including emissions from the vehicle fleet and are expected to cover more than 95% of our emissions

³ Scope 3 covers all categories defined in the GHG protocol. The SBTi target covers the most relevant categories which account for 88% of our total Scope 3 inventory

⁴ Science-based climate target that complies with the goal of the Paris Agreement to limit global warming to 1.5 degrees Celsius, or well below 2 degrees Celsius

⁵Our reduction target refers to an overall base year greenhouse gas intensity that includes the weighted emission intensities of 18 crop-country combinations. Base years are defined individually for each crop-country combination, using  data from either harvest year 2020, 2021 or 2022 depending on the availability of data.

⁶The crop-country combinations Italy-Corn and Spain-Corn were not selected based on these factors but were additionally included because data were already available.