Supplier Management

Setting Standards for Good Relations

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Our procurement function ensures the timely, global supply of goods and services at suitable market conditions, in the required quality and in accordance with the Group’s ethical, ecological and social standards.

Bayer regards adherence to these sustainability standards within its supply chain as a crucial factor in the value chain. By acting responsibly in collaboration with our suppliers, we aim to minimize risks and create stable, long-term business relationships with our partners. For this reason, we apply not just economic standards, but also environmental, social and corporate governance (ESG) standards in choosing new suppliers or continuing our relationships with existing ones. These standards are defined in Bayer’s Supplier Code of Conduct, which is based on the principles of the United Nations Global Compact and our Human Rights Position.

To help our suppliers practice sustainability in their daily business, we have developed a Supplier Code of Conduct Guidance. This 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.

Positive impact through sustainability efforts when purchasing raw materials

In the areas of palm oil and soy we support the certified sustainable production of these raw materials as a purchaser of plant oil derivatives, which is especially important in Southeast Asia and South America. We are member of the renowned organizations “Roundtable on Sustainable Palm Oil” (RSPO) and “Round Table on Responsible Soy” (RTRS), and purchase so-called “credits” according to the quantities we use. The financial value of these credits rewards farmers who undertake to grow palm oil and soy in a legal and ecologically, socially and economically sustainable way and who demonstrate this as part of an audited certification process.

Crop Science also cooperates with the RTRS to provide mutual support in the certification of Brazilian soybean producers according to the high ecological, social and economic criteria of the RTRS.

At Pharmaceuticals, a number of hormones are synthesized based on sterols that result during the production of plant oils from soybeans, for example, as well as during wood processing. We additionally purchase various steroids that are manufactured from diosgenin or its intermediate stages. This substance is usually obtained from yam grown in countries such as China. We also use raw materials such as water, glucose, yeast, soybean starch, castor oil and corn steep water in our fermentation processes.

Consumer Health uses extracts of plants to manufacture plant-based pharmaceuticals. We take great care in the cultivation and extraction of raw materials, which are performed according to local or international standards, e.g. the GACP (Good Agricultural and Collection Practice) guidelines.

Further information about sustainability in supplier management can be found in the Procurement section.

Promoting Human Rights

We unequivocally promote the realization of human rights. We firmly believe that respect for people is essential to achieving lasting business excellence. The main areas we address are: 'Employees and working conditions', 'Harassment and discrimination', 'Freedom of association and collective bargaining', 'Child labor', and 'Health and safety'.

We see ourselves as a responsible corporate citizen. We support the United Nations Universal Declaration of Human Rights and a number of globally recognized declarations for multinational corporations. We fully endorse the principles of the United Nations Global Compact Initiative, of which we are a founding member. We naturally also respect the sovereignty of individual states in implementing human rights.

Meeting due diligence obligations related to conflict materials

As the procurement of minerals originating from unstable regions of the world can contribute to the financing of conflicts and the violation of human rights, we work to ensure that so-called conflict materials are procured responsibly.

As such additional verification processes were established for the fulfillment of further international regulations such as those requesting companies to disclose the origin of certain raw materials. This concerns, for example, so-called conflict minerals from regions such as the Democratic Republic of the Congo or neighboring countries. We use the "Conflict Minerals Reporting Template" to survey our 154 relevant suppliers in order to identify the use, sources and origins of certain minerals in our supply chain. From regular exchanges of information with other companies, we derive measures for timely initiation of process improvements. Due to customer requirements, we increased the response rate of the suppliers we identified in 2019. Thereby, we support our customers in fulfilling the due diligence requirements regarding the origin of certain raw materials in their supply chain. It was agreed with the suppliers that are not yet conflict-free that they must comply with the requirements. It is planned to evaluate the outstanding suppliers by mid of next year.

Explicit expectations of our suppliers are spelled out in our Supplier Code of Conduct. Suppliers shall ensure that products supplied to Bayer do not contain metals whose raw materials originate from conflict regions that directly or indirectly help to finance or support armed groups and cause or foster human rights abuses.

Tackling child labor in our supply chain

An important topic is tackling child labor in the seed supply chain of the Crop Science Division. Our position on child labor is unequivocal: Child labor is strictly prohibited at Bayer in accordance with the core labor standards of the International Labour Organization (ILO). We therefore also obligate our suppliers to strictly refrain from employing children.

For further information please visit the section child labor on our human rights website.

Combating modern slavery in our value chain

Bayer sets clear signals against slavery and servitude, forced and compulsory labor and human trafficking in its value chain. This is demonstrated through our policy on human rights, our Supplier Code of Conduct, as well as our statement regarding the UK Modern Slavery Act.