Sustainability within the Supply Chain. Supply Chain Days 2015

Transcription

1 Sustainability within the Supply Chain Supply Chain Days 2015 June 2015

2 Group Structure 119,478 employees Full year sales: 42.2 billion 302 subsidiaries R&D expenditures: 3.6 billion Holding company Group Management Board Corporate Center As of December 31, 2014 / Employees: March 31, 2015 Business areas Service areas Bayer HealthCare Bayer Business Services Bayer CropScience Bayer Technology Services Bayer MaterialScience Currenta Slide 2 Bayer Sustainability within the Supply Chain June, 2015

3 Sustainability is an Integral Part of our Corporate Strategy For Bayer, sustainability means achieving commercial success while meeting the needs of our employees and society and protecting the environment and natural resources. Sustainability drives top line growth by identifying business opportunities, improves the bottom line by mitigating risks and reducing costs, and gains societal acceptance by enhancing our reputation. Effective sustainability management is tantamount to modern risk management which ensures Bayer s license to operate. External stakeholders regard proficient sustainability management as a proxy for the overall quality of a company s management. Slide 3 Bayer Sustainability within the Supply Chain June, 2015

4 Our Sustainability Strategy Our goal: to generate economic, ecological and social benefit through the integration of sustainability Responsible business practices are the foundation of the Bayer Group s sustainable alignment. We can identify and mitigate risks at an early stage by implementing this alignment in the areas of: compliance (e.g. anticorruption and responsible marketing) human resources policy product stewardship health, environmental protection and safety and supplier management. Slide 4 Bayer Sustainability within the Supply Chain June, 2015

5 Partnerships for a Sustainable Supply Chain In order to effectively address the wide-ranging challenges of a sustainable supply chain and to leverage synergies, Bayer joined two industry initiatives: the Pharmaceutical Supply Chain Initiative (PSCI) and Together for Sustainability (TfS), an initiative that was co-founded by Bayer. Bayer drives collaboration with PSCI and TfS to establish new sustainability standards for the company s supply base. Both initiatives are integral elements of Bayer's commitment to sustainability in the supply chain. Slide 5 Bayer Sustainability within the Supply Chain June, 2015

6 Together for Sustainability (TfS) Enhancing Sustainability within the Supply Chain

7 What is Together for Sustainability? The initiative was founded in 2011 by six multinational chemical companies. The purpose of the TfS Initiative is to develop and implement a global audit program to assess and improve sustainability practices within the supply chains of the Chemical Industry. The initiative intends to grow membership over time. The current members are: Members in onboarding : Slide 7 06/2015

8 Together for Sustainability focuses on environmental, social and governance issues in sustainable sourcing Sustainable sourcing: Suppliers are no longer assessed purely on the basis of price, quality and on-time delivery Sustainability topics such as health & safety, labor and environmental issues are additional business criteria Supply Chain focus from... to Management Price On-time Delivery Product Quality Price On-time Delivery Sustainability Product Quality Environment Health & Safety Labor & Human Rights Governance TfS members want key sourcing markets to know that: They care about supplier s sustainability performance They aim to identify and mitigate sustainability risks in their supply chains They engage with suppliers to focus on a process of continuous improvement Slide 8 06/2015

9 Together for Sustainability Objectives TfS aims to build the industry s standard for sustainable supply chains Join forces to create standards for sustainable supply chains Share sustainability assessments and audit results Raise awareness and initiate continuous improvements Exchange and promote best practices Engage beyond own operations Efficient webbased database for buyers Support suppliers in making progress Interactive Platform for Members An audit for one is an audit for all Slide 9 06/2015

10 Together for Sustainability Joint Vision by all TfS member companies As multinational companies we strive for sustainable development and support the principles of the United Nations Global Compact and Responsible Care. We take responsibility for our own operations and in our supply chains' sphere of influence to support adherence to existing regulations and to respond to the needs and expectations of consumers and society. We join forces to harmonize requirements and to manage complexity and risk in our global value chains for the benefit of all stakeholders. We engage in open and constructive dialogue with our suppliers and relevant stakeholders to improve the working and environmental conditions in global supply chains and to shape sustainable business models. To use resources more efficiently and reduce the bureaucratic burden for suppliers, we share supplier sustainability assessments and audit data. We operate in transparency and continuously monitor compliance with applicable laws and regulations. Slide 10 06/2015

11 Sharing of sustainability assessment and audit results Two key processes of TfS A shared infrastructure for a collaborative approach to build more sustainable supply chains EcoVadis External rating agency for suppliers, regarding sustainability Execution by accredited, well-renowned third-party auditing companies Slide 11 06/2015

12 Together for Sustainability Sharing of assessment and audit results An audit for one is an audit for all Benefits: Sharing of results with multiple customers on one platform provides efficiency and effectiveness Avoid double audits and assessments Assessment / audit quality & consistency is assured High quality, best practice through selected and qualified partners Engage with customers on sustainability requirements and challenges Build up long-term business relationships with customers Build internal and external capability & awareness Slide 12 06/2015

13 Growing momentum for TfS: New members, new legal entity, expansion to high growth sourcing markets Stages of development Jul 2012 Jun 2013 Beyond 2015 Growth Phase Broadening of Membership Base and Development of TfS to become a Standard for the Industry Jul 2013-Jun 2015 Expansion Phase Further Sourcing Markets (e.g. China, Brazil, India) Onboarding of New Members Foundation of a legal entity (association under Belgian law) Pilot Phase Implementation of TfS Program for audits and assessments, Online Training Tools & Helpdesk, Marketing Materials Jan 2012 Jun 2012 Build Phase Design of Audit Program, Select Platform Partner, Legal Review Jun 2011 Dec 2011 Initiation Phase Cross-company Alignment, Questionnaire and Business Case Slide 13 06/2015

14 For information on the TfS Initiative, please visit

15 Thank you for your attention!

16 Disclaimer Forward-Looking Statements: This presentation may contain forward-looking statements based on current assumptions and forecasts made by Bayer Group or Subgroup management. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Bayer s public reports, which are available on the Bayer website at The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments. Legal Notice: The product names designated with are brands of the Bayer Group or our distribution partners and are registered trademarks in many countries.