Improving Sustainability Practices in the Supply Chain

By acting responsibly in collaboration with our suppliers, we aim to identify and minimize risks and create stable, long-term business relationships with our partners. It is also an important strategic lever for Bayer in safeguarding both its global competitiveness and the supply of materials and services. For this reason, the company applies not just economic standards, but also environmental, social, and corporate governance standards in choosing new suppliers or continuing its relationships with existing ones. These principles are defined in Bayer’s Supplier Code of Conduct, which generally forms the basis for our collaboration with suppliers. In addition, our comprehensive Supplier Code of Conduct Guidance document aims to provide concrete examples of good practices and benchmarks which suppliers can use, and references such as the regulatory framework and standards governing Bayer’s sustainability efforts.

To improve sustainability practices within the supply chain we follow a 4-step management process:

We continue to expect that all suppliers fulfil our sustainability expectations and adhere to our Supplier Code of Conduct. By engaging more suppliers in sustainability performance evaluations, we get a better understanding of our supply chain and support suppliers with development activities to improve over time.

Bayer works continuously to strategically evolve sustainability topics in Procurement, particularly in relation to environmental and human rights issues and in connection with the Supplier Diversity Program.

We will continue our efforts to reduce Scope 3 emissions in 2025 as per our SBTi commitment. Based on our SBTi revalidation during 2024, we have updated our Scope 3 emission reduction target for 2029 from 12.3% to 25% compared to our baseline in 2019. Our target boundary will be 68% of our overall Scope 3 emissions. The majority of Scope 3 emissions are in Category 3.1 Purchased goods and services. (Bayer Impact Report) We intend to engage with our suppliers to reduce emissions in the value chain together by setting up targets for emission reduction and increasing share of renewable electricity in their business. Until our accounting methods mature with supplier PCF data, we will shift our spend towards suppliers taking action to decarbonize their supply chains. We ask our strategically important suppliers and those who account for a significantly high proportion of our scope 3 emissions to disclose their climate protection program with Bayer.

Bayer continues to track progress against a procurement KPI for Supplier Inclusion & Diversity, and beginning in 2024 we’re aiming to achieve €1 Billion in impact purchasing with small businesses and businesses owned by underrepresented groups. More information about Bayer Supplier Inclusion & Diversity commitments, partners, and awards and can be found here: www.bayer.com/en/procurement/supplier-diversity.

Respecting human rights along the supply chain is anchored in Bayer’s sustainability strategy and procurement plays a key role in implementing all necessary measures. Our human rights strategy is anchored in the UNGP on Business and Human rights and OECD Guidance for Responsible Business Conduct and we commit to comply with mandatory regulations (e.g. SCDDA). We foster social responsible purchasing practices in our sourcing strategy and aim to generate a positive impact to the rightsholders in our supply chain.

For a continuation of our fully integrated sustainability approach, we are further implementing binding sustainability requirements in our global Procurement process landscape since 2023. More information can be found in Bayer Impact Report.