California Transparency in Supply Chains Act

The California Transparency in Supply Chains Act of 2010 is designed to increase the amount of information made available by manufacturers and retailers regarding their efforts (if any) to address the issue of slavery and human trafficking, thereby allowing consumers to make better, more informed choices regarding the products they buy and the companies they choose to support. The following highlights Bayer’s global efforts in this regard.

Bayer supports the United Nations’ Universal Declaration of Human Rights and a number of globally recognized declarations for multinational enterprises. As a founding member of the United Nations Global Compact initiative, Bayer undertakes to implement the 10 universally recognized principles in the areas of human rights, labor standards, environmental protection and anti-corruption throughout the organization when shaping business processes and strategies.

Promoting human rights standards internally and throughout all of Bayer’s business operations is in line with our Values and Leadership Principles, our Sustainable Development Policy and our group-wide Human Rights Position. Bayer’s commitment to foster the implementation of human rights is supported through our Corporate Compliance Policy. It is in effect at all Bayer locations, and it applies to Bayer’s business operations worldwide. Bayer will use this position as a framework to guide our decision-making and constructive engagement within our sphere of influence, while the responsibility of the governments of the various countries for protection of human rights is respected.

Bayer has combined all of its fundamental sustainability standards and requirements for its suppliers in a Supplier Code of Conduct. This code of conduct comprises the areas of ethics, employee relations, management systems, health, safety, environment, and quality. Our Supplier Code of Conduct emphasizes international labor and human rights standards. Suppliers are expected to protect the human rights of their employees and to treat them with dignity and respect. Supplier employees shall have the right to freely choose employment, the right to associate freely and join or be represented by worker councils or labor unions on a voluntary basis, and the right to bargain collectively as they choose. Workers also have the right to a workplace free of harassment and unlawful discrimination.

In order to effectively address the wide-ranging challenges of a sustainable supply chain and help to establish common standards across companies, Bayer pursues joint approaches in two industry initiatives – the “Pharmaceutical Supply Chain Initiative” (PSCI) and “Together for Sustainability” (TFS), a chemical industry initiative that was co-founded by Bayer. The focus of these two initiatives is on standardizing sustainability aspects in each respective industry. The results of sustainability assessments and audits also are exchanged among the members, providing access to additional evaluations of suppliers that also work with Bayer. This minimizes the administrative burden for both suppliers and the member companies. Both initiatives focus also on providing support and training for suppliers.

The Pharmaceutical Supply Chain Initiative is a group of major pharmaceutical companies who share a vision of better social, economic, and environmental outcomes for all those involved in the pharmaceutical supply chain. This includes improved conditions for workers (including freely chosen employment, no involuntary prison labor, abolition of child labor, and no use of forced, bonded or indentured labor), economic development, and a cleaner environment for local communities.

The Together for Sustainability Initiative is a group of multinational chemical companies which aims at developing and implementing a global supplier engagement program that assesses and improves sustainability sourcing practices, including ecological and social aspects, within the supply chains of the chemical industry. The initiative is based on good practices and builds on established principles – such as the United Nations Global Compact and the Responsible Care Global Charter as well as standards developed by the International Labour Organization (ILO), the International Organization for Standardization (ISO), Social Accountability International (SAI) and others.

Slavery and human trafficking can take many forms, including forced labor and child labor. We follow a clear ‘zero tolerance to child labor’ policy in our business operations worldwide. We do not tolerate child labor in our supply chain either, where we take action against known cases of violations. Our efforts to fight against child labor and forced labor are consistent with the ILO’s core labor standards and the United Nations Global Compact principles.

These efforts include:

  • Supplier agreement: Bayer regards adherence to sustainability standards within the 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 partner. For this reason, Bayer applies not just economic standards, but also environmental, social and corporate governance (ESG) standards in choosing new suppliers or continuing its relationships with existing ones. These standards are defined in our Supplier Code of Conduct, which includes child labor avoidance and no utilization of forced, bonded or indentured labor or involuntary prison labor. It is legally binding and integrated into electronic ordering systems and contracts throughout Bayer. The Supplier Code of Conduct is based on the principles of the United Nations Global Compact and our Human Rights Position.

  • Supplier assessments and audits: We track our suppliers’ adherence to the Supplier Code of Conduct by monitoring their sustainability performance. This is done partly on the basis of on-site audits and partly through online supplier assessments carried out by a leading web-based platform for sustainability performance monitoring (EcoVadis). The EcoVadis methodology relies upon Corporate Social Responsibility (CSR) international standards (e.g. the United Nations Global Compact, ISO 26000). The assessments are based on a web-based, modular questionnaire completed by the supplier, coupled with accompanying verification documents and 360° screening. Suppliers are selected for these assessments based on a combination of country and material risks and procurement volume. Under the Bayer Audit Program, we carry out supplier audits together with an external, independent partner, applying the standard of the respective industry initiatives in which we participate in order to benefit from synergies. We also obtain further audits of Bayer suppliers on an exchange basis as part of our collaboration with the members of the PSCI and TfS initiatives. In addition, Bayer auditors perform inspections focusing on health, safety, environmental protection and sustainability. All assessment and audit results are thoroughly analyzed and documented. If deficiencies are found, Bayer develops action plans together with the respective suppliers to ensure that they observe social, ethical and environmental standards in the future. Where improvement needs have been identified, we work together continuously with our suppliers to achieve these improvements. As a result, we did not have to terminate any supplier relationship in 2013 for reasons related to sustainability performance.

  • Training for purchasers: Training for purchasers at Bayer includes attending courses on sustainability aspects of procurement and our Supplier Code of Conduct. Moreover, our purchasers are thoroughly trained in the EcoVadis sustainability assessment process. The content of these courses is updated regularly and adapted to the needs of the target group. In addition, the subgroups also provide their respective purchasers with supplementary training and information. Bayer procurement staff are also trained on the Bayer Human Rights Policy and the Bayer Corporate Compliance policy.

  • Training for suppliers: We regularly provide information on our understanding of sustainability to our most important suppliers through our Supplier Days. Through this global dialogue we aim to show suppliers the demands we make on sustainable procurement and how they can meet requirements in their own companies. We also offer training courses for our suppliers. The TfS initiative offers e-learning courses to provide suppliers with general information on the initiative and the audit process. The PSCI initiative likewise promotes continuing supplier development by means of the comprehensive information provided on the PSCI website, and by organizing training events and conferences on subjects such as occupational safety.

For more details:

Internet website: http://www.bayer.com/en/supplier-management.aspx

External document Information on Targets (p. 43 in PDF/p. 47 in print out); Supplier Management (p. 74 in PDF/ p. 78 in print out)

Annual Report

External documents Overview of Supplier Management and Sustainability in Procurement practices, as communicated in past Sustainable Development Reports

Additional Details