Strategy

Targets and Performance Indicators

With the first integrated Annual Report in 2013, we have adopted a new program of non-financial targets based on the Group strategy. This enables us to highlight the challenges we see in our core business within the context of sustainable development and identify the continuous improvements we are endeavoring to make throughout the Group. This is achieved through clearly defined targets and indicators along the value chain. These are used to monitor our progress in Innovation, Supplier Management, Resource Efficiency, Safety, Product Stewardship, Compliance and Employees.

Definition of Target Target Year Target Attainment in 2014 New Target for 2015 Explanations of Target
Supplier Management
Evaluation of all strategically important suppliers 2017

66%. A total of 253 strategically important suppliers were evaluated by the end of 2014.

Unchanged Strategically important suppliers are those with a major influence on business, including in terms of procurement spend and long-term collaboration prospects (3-5 years). Sustainability performance is evaluated in assessments and audits.
Evaluation of all potentially high-risk suppliers with significant Bayer spend 2020

61%. A total of 157 potentially high-risk suppliers were evaluated by the end of 2014.

Unchanged Risk definition is based on a country- and material-based approach. We define significant procurement spend as > €1 million p.a.
Development and establishment of a new sustainability standard for our supply base 2020 In implementation Unchanged The sustainability standard for our suppliers is to be driven forward in tandem with relevant industry initiatives. We are currently working with the “Together for Sustainability” initiative and the Pharmaceutical Supply Chain Initiative. The goals include standardizing and sharing sustainability assessments and audits of suppliers in the same industry and describing clear expectations regarding sustainability so as to establish appropriate sustainability practices among our suppliers.
Resource Efficiency
Improvement of 10% in Group-wide energy efficiency. Reference
year 2012: 3.50 MWh/t
2020 3.37 MWh/t (3.8% improvement) Unchanged Energy efficiency is defined as the quotient of energy consumption in MWh per t manufactured sales volume.
Reduction of 20% in Group-wide specific greenhouse gas emissions. Reference year 2012: 0.98 t CO2/t 2020 1.02 t CO2/t (+4.3%) Unchanged Specific greenhouse gas emissions: measured in CO2 equivalents per t manufactured sales volume; special factor in 2014: inclusion for the first time of the energy-intensive site in Maasvlakte in our environmental reporting. This exclusively produces intermediates that according to our definition are not included in the manufactured sales volume.
Establishment of water management at all sites in water-scarce areas (35 sites) 2017 In the first stage, 80% of the identified sites were inspected to determine whether water management is in place, and if so, in what form. Unchanged The definition of water management is based, among other standards, on ISO 14001; identification of water-scarce areas according to WBCSD Global WaterTool™. As part of our analysis, we examined, for example, whether water-relevant strategies, targets and initiatives and an appropriate risk management system were already in place, for example. Based on this examination, specific steps to improve water management at the individual sites will be agreed beginning in 2015.
Safety
Reduction of 35% in occupational safety incident rate. Reference year 2012: RIR 0.49 2020 RIR 0.43 (-12.1%) Unchanged RIR (Recordable Incident Rate): number of reportable occupational injuries affecting Bayer employees with and without lost workdays per 200,000 working hours. Until the end of 2015, we will continue reporting on our success in achieving our LTRIR (Lost Time Recordable Incident Rate) target, which covers only occupational injuries with lost workdays per 200,000 working hours. The 2015 target is an LTRIR of 0.21. The level in 2014 was 0.22.
Reduction of 30% in transport incidents. Reference year 2012: 6 incidents 2020 12 (+100%) Unchanged Transport incidents relate to both our own chemical transport movements and those we commission and pay third parties to perform on our behalf.
Reduction of 30% in process and plant safety incidents. reference year 2012: LoPC-IR 0.38 2020 LoPC-IR 0.23 (-38%) Unchanged LoPC-IR (Loss of Primary Containment Incident Rate): number of incidents in which chemicals leak from their primary container, such as pipelines, pumps, tanks or drums, per 200,000 working hours in areas relevant to plant safety.
Product Stewardship
Conclusion of assessment of hazard potential of all substances (> 99%) used in quantities exceeding one metric ton per annum 2020 55%. Approx. 32,000 substances had been assessed by the end of 2014. Unchanged This globally harmonized Bayer standard also covers assessment of such substances that are not subject to the REACH regulation (No. 1907/2006). If no relevant datasets are generated within the scope of REACH, substance information and the ability to provide data on key substance properties are to be determined to ensure and document responsible handling of the substances (including in terms of substance characteristics, purity, intended use, toxicological data).
Compliance
Conducting of precautionary risk assessments in all three subgroups 2015 In implementation Unchanged Risk assessments are based on the integrated compliance management method developed by Ernst & Young. Integrated Compliance Management@Bayer (ICM@Bayer) preventively assesses and addresses risks in the following compliance areas: fairness in competition, integrity in business dealings, product-related communication at BHC, BHC price reporting, insider trading, foreign trade law, separation of corporate and private interests, fair and respectful working conditions, and data protection.
From 2015 annual compliance training for all Bayer managerial staff (> 99%)

Annu-

ally

In preparation Unchanged Managers will participate in specific training courses depending on the risk area.

The current status of our targets can be found in the Annual Report 2014.

Last updated: March 4, 2016 Copyright © Bayer AG
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