Management of impacts, risks and opportunities in relation to reducing greenhouse gas emissions and energy
As part of our double materiality assessment, we regularly calculate and assess our positive and negative impacts and the risks and opportunities in relation to climate change. This helps us manage our actions and improve our performance. We have identified negative impacts through greenhouse gas emissions and energy consumption resulting from production activities, mining and along the entire value chain. There are also negative impacts as a result of the use of fossil raw materials to produce energy along the value chain, particularly in the chemical industry. Beyond our direct sphere of influence, there are further potential environmental impacts due to greenhouse gas emissions along the agricultural value chain for which we offer crop protection products and seeds. Greenhouse gas emissions are generated along the agricultural value chain through, for example, industrial agriculture, including changed land use, food, animal feed and biofuels. Positive impacts are produced by our innovations in the areas of seeds & traits, crop protection and digital farming and the promotion of our concept of regenerative agriculture. Through this, we help to reduce greenhouse gas emissions within the downstream agricultural value chain. Reducing these greenhouse gas emissions and improving soil health through carbon capture present opportunities for new activities in the area of regenerative agriculture.
In the area of greenhouse gas emissions reduction measures, there are transitory risks necessitating significant investment to adapt production processes to the envisaged ambition level and ensure compliance with possible new regulations, laws and guidelines, such as those related to the emission of greenhouse gases during production processes as part of emissions trading systems. In connection with our reduction targets for greenhouse gas emissions, we have assessed and budgeted for our capital expenditure requirement through 2029. The capital expenditures needed to achieve our ambitious climate target of net zero greenhouse gas emissions in 2050 are subject to various uncertainties due to the long timeframe, which is why we currently are not publishing any possible capital expenditure costs for the years after 2029. We are continuously monitoring the markets and technologies so we can respond to this risk. For more details on our capital expenditure requirements related to the reduction of greenhouse gas emissions, please see the section “Transition: reducing greenhouse gas emissions” in Chapter A 4.2.2 Climate Change.
Policies related to the reduction of greenhouse gas emissions and energy [E1-2]
Our most important framework for the management principles we utilize to make decisions in the area of climate mitigation and adaptation is our Transition and Transformation Plan. This plan is a central element of our overall strategy and establishes targets and actions for the transition to low-carbon business activities, including the reduction of our greenhouse gas emissions in line with the Paris Agreement with the objective of limiting global warming to 1.5 °C compared to the preindustrial value. For this reason, we do not report on any other concepts in the area of climate change mitigation. For more information on our Transition and Transformation Plan, please see the section “Our Transition and Transformation Plan for climate protection [E1-1].”
Actions in relation to reducing greenhouse gas emissions for Scope 1 and Scope 2 through 2029 [E1-3]
To attain our ambitious climate target of net zero greenhouse gas emissions in 2050, we have recently developed a roadmap through 2029. This roadmap defines various reduction levels and identifies actions to decrease our greenhouse gas emissions. The most important actions in our roadmap through 2029 to reduce total Scope 1 and Scope 2 greenhouse gas emissions comprise the procurement of electricity from renewable energy sources, the optimization of energy efficiency in our production plants, facilities and buildings, the decarbonization of our sites, and the conversion of our vehicle fleet to electromobility.
Procurement of electricity from renewable energy sources
We are currently converting our power supply and plan to derive all our externally procured electricity from renewable sources by 2029. Here we take into account specific criteria such as additionality and geographic proximity to our sites. For further information, please see “Renewable Electricity Quality and Portfolio Definition” on our website. We currently already procure 51.2% of our total purchased electricity from renewable energy sources.
We expect to achieve a further 12% reduction in our total Scope 1 and Scope 2 greenhouse gas emissions by 2029 (compared to the base year 2019) by converting our electricity procurement to renewable energy sources. This measure encompasses the global procurement of electricity from renewable sources to reduce our dependency on fossil fuels and increase the sustainability of our energy supply. We plan to transition completely to electricity from renewable resources if regulatory and local circumstances allow this. This measure is scheduled to be fully completed by 2029. We assume we will purchase more electricity in the future due to the electrification of various processes and other actions.
We procure electricity from renewable energy sources in various ways, depending on local conditions and legal requirements. In 2023, for example, we signed a long-term, structured renewable energy credit (REC) purchase agreement with Cat Creek Energy. Under the agreement, our contract partner is required to build several facilities to produce power from renewable energies, as well as energy storage systems. The agreement is set to allow Bayer to secure 40% of its global and 60% of its US-purchased electricity demand out of renewable sources. As the corresponding power generation facilities are not yet operational, no RECs were purchased in 2025 under the agreement. Full capacity is expected to be reached during 2028, subject to some uncertainties. To nonetheless meet demand, RECs were purchased by other means as an offset.
Optimization of energy efficiency in our facilities and buildings
To reduce our greenhouse gas emissions, we plan to drive forward our energy efficiency and process optimization by 2029. The actions involve increasing the energy efficiency of our plants and buildings through process innovations, efficient technologies and optimized energy management systems. Certifications according to the international standards ISO 14001 (environmental management) and ISO 50001 (energy management) help to identify energy consumption savings potential both in existing production processes and in the development of new production processes and the conversion of existing ones. These certifications enable us to manage and reduce energy consumption at our production sites. Each year, various of these measures are implemented at many of our sites. We expect a further 2% reduction in our Scope 1 and Scope 2 greenhouse gas emissions by 2029 (compared to the base year 2019). The implementation of the measures depends on local circumstances, as well as technological developments. In 2025, we invested in heating, ventilation and air conditioning technology, and various process improvements at the sites, among other things. We continuously evaluate the projects for reducing our energy consumption and their influence on our total greenhouse gas emissions. We currently expect the capital expenditures needed to attain our targets to amount to at least €100 million in the period up to 2029. These capital expenditures are accounted for in the capital expenditure budgets of the divisions. Operating expenditures related to energy efficiency are not being tracked separately.
Emissions reduction at our sites through the purchase of energy for heating and cooling
To achieve our ambitious climate target of net zero greenhouse gas emissions in 2050, we must also reduce emissions at our sites from utility services, particularly for heating and cooling. By 2029, we want to conclude individual agreements at various sites to procure low-greenhouse-gas-emission utility services or have them generated from renewable energies. Implementation of this measure is scheduled to be fully completed by 2029. We expect the future measures to reduce total Scope 1 and Scope 2 greenhouse gas emissions by a further 1% (compared to the base year 2019). The implementation of the measures depends on local circumstances, as well as technological developments.
Conversion of our vehicle fleet to electromobility
To further reduce our greenhouse gas emissions, we want to convert our vehicle fleet to electromobility by 2030 wherever technically and economically feasible. This affects about 22,000 vehicles worldwide. To validate our activities in line with the criteria, we have joined the EV100 initiative of the Climate Group. So far, we have begun transitioning to electromobility in 50 countries (including Germany) that account for about 86% of our entire vehicle fleet. The proportion of hybrid and electric vehicles in our fleet at the end of 2025 was approximately 20%. The conversion will make an approximately 1% contribution to the reduction of our Scope 1 and Scope 2 greenhouse gas emissions. We do not expect the conversion of our vehicle fleet to have a significant impact on capital and operating expenditures. The implementation of the measures depends on local circumstances (including availability of suitable vehicles and charging infrastructure), as well as technological developments.
Complementary climate protection certificates
We will offset the remaining greenhouse gas emissions from our own operational processes (Scope 1 and Scope 2) by 2030 by purchasing certificates from verified climate protection projects. We have established specific criteria for procuring certificates from climate protection projects. In this process, we focus on nature-based climate solutions, preferably concerning forest conservation and agriculture projects. We currently mainly purchase certificates from projects focused on forest conservation and reforestation. Beyond this, we want to invest in innovative projects to promote the development of voluntary emissions trading. The most important factors in the procurement of climate protection certificates for us are the contribution they make to climate protection and the additionality of the supported project. The implementation of the measures depends on local circumstances, as well as the quality and availability of the certificates.
As protecting forests is one of the most important measures in terms of climate protection and conservation of biodiversity, we are a participant in the LEAF (Lowering Emissions by Accelerating Forest Finance) coalition. This also includes further developing agricultural practices in Brazil to prevent further deforestation. Certificates from activities undertaken in connection with LEAF will be part of our certificate portfolio for the first time in 2026.
Actions in relation to reducing greenhouse gas emissions for Scope 3 through 2029 [E1-3]
Our goal is to reduce our Scope 3 greenhouse gas emissions in the value chain by the end of 2029. Our roadmap for Scope 3 sets out the underlying actions.
Cooperation with and selection of suppliers
To attain our objectives, we are intensifying our cooperation with suppliers, particularly as regards the transition to the use of renewable energies. This is not a one-off measure but instead takes place on an ongoing basis. We therefore continuously strive to reduce the carbon footprint of the products we purchase within the value chain and increase transparency in our reporting on Scope 3 greenhouse gas emissions. Our current assessment shows that the current emissions reduction targets of our suppliers are still insufficient to attain our Scope 3 emissions reduction target. Only 36 of our 200 most important suppliers have currently set themselves “near-term” reduction targets that are SBTi-validated. A supplementary internal maturity segmentation of the climate activities of our suppliers confirms this in addition. We thus continue to interact intensively with selected suppliers and strive to conclude partnerships with suppliers who commit to reducing greenhouse gas emissions and to decarbonization. In 2025, we continued developing a CO2 price approach for Scope 3 greenhouse gases. Our goal is to apply in the future a CO2 price component during sourcing events to inform decision-making and serve as an incentive for suppliers to develop and offer products with a lower carbon footprint. This measure is to be implemented without a significant increase in our specific operating expenditures.
We have also joined forces with other companies within various initiatives. Together, we are working to standardize the calculation of greenhouse gas emissions along the value chains, identify climate risks and develop reduction measures. To do so, we are active in the Together for Sustainability (TfS) initiative of the chemical industry and the Partnership for Carbon Transparency (PACT) of the World Business Council for Sustainable Development (WBCSD). Both initiatives strive to standardize methods, exchange product carbon footprints (PCFs) and provide guidance for calculating PCFs and accounting for Scope 3 greenhouse gas emissions. We are also a member of the Decarbonization Team of the Pharmaceutical Supply Chain Initiative (PSCI). Together with other members of the PSCI, we support the Energize program to increase the use of renewable energies by our suppliers in the pharmaceutical supply chain. We expect to reduce more than 6% of our Scope 3 greenhouse gas emissions through this measure by 2029 (compared to the base year 2019). The success of this measure depends only indirectly on us, with the general regulatory and climate-specific transformation playing a more significant role here.
Procurement of electricity from renewable sources by our suppliers
We expect the transition to electricity from renewable sources to be a crucial lever for decarbonization both in our own operations and in those of our suppliers. For this reason, our suppliers should strive to procure 100% of their electricity from renewable sources by 2030 and continuously improve energy efficiency. Compliance with the procurement requirements defined in our Supplier Code of Conduct is especially important. These are based on the criteria of RE100 (a global initiative that brings together companies that have committed to cover their entire electricity demand from renewable sources). We will support our suppliers in this transition, especially within the context of our meetings with them. In our supplier segmentation, we also integrate the share of electricity from renewable sources that our suppliers use. The implementation of the measures depends on local circumstances, as well as technological developments. We expect to reduce a further 3% of our Scope 3 greenhouse gas emissions through this measure by 2029 (compared to the base year 2019).
We are working together with our suppliers and partners on a number of solutions. In 2025, we switched, for example, from a supplier’s standard solution to an alternative. This alternative utilizes electricity from renewable energies for the electrolysis of an important process step. This reduces CO2 emissions by about 2,500 metric tons annually and does not result in any additional costs.
Reduction of energy-related emissions through the transition to renewable raw materials
We continuously increase the share of renewable energies in our production facilities; this includes the transition to electricity from renewable energy sources as well as the use of liquid and solid biomass and of residues and waste to produce thermal energy and fuel. This transition will also indirectly impact the Scope 3 category by reducing emissions in the upstream chain. We expect to achieve a 1.8% reduction of our emissions in this area by 2029.
Electrification and use of electricity from renewable raw materials in warehousing and freight transport
Our warehousing and logistics suppliers play a major part in decarbonizing our supply chain. We engage in discussions and want to focus more intensively on the use of energy from renewable raw materials and the electrification of their vehicle fleets. At the same time, we want to further optimize logistics and make greater use of digital technologies. As a member of the EcoTransIT World Initiative, we use the EcoTransIT system to calculate transport-related greenhouse gas emissions in a standardized way on the basis of the best available data. We are planning a reduction in air transport and a switch to rail and waterway transport. Road freight accounted for 96.6% of our transportation routes in 2025, while water freight accounted for 1.3%, air freight for 1.9% and rail freight for 2%. The implementation of the measures depends on local circumstances, as well as technological developments. We expect to reduce a further 1% of our Scope 3 greenhouse gas emissions through this measure by 2029 (compared to the base year 2019). Furthermore, this measure will continue to be implemented through 2050.
Efficient use of packaging materials and business travel
An efficient use of packaging materials reduces greenhouse gas emissions in various stages of a product’s life cycle and therefore positively impacts various Scope 3 categories. It reduces greenhouse gas emissions from the production of the material (Scope 3.1), leads to less transportation (Scope 3.4, 3.9) and less waste (Scope 3.5) and thereby also to lower greenhouse gas emissions in the disposal of the packaging material (Scope 3.12). Furthermore, we strive to use more packaging materials based on paper and recycled materials. Together with selected suppliers, we are investing in low-carbon packaging materials and services to accelerate decarbonization. In 2024, we became the first healthcare company to introduce a one-material blister pack made of polyethylene terephthalate (APET) for Aleve™. This reduces the carbon footprint of this packaging by 38% and has further positive environmental characteristics (including with respect to recycling) through the nonuse of polyvinyl chloride (PVC). This is accompanied by the transition from materials of fossil origin to plant-based materials.
We also want to reduce greenhouse gas emissions from business travel. Actions here include increased use of virtual meetings and a special information page for employees on the connection between travel and sustainability. The implementation of these measures depends on local circumstances, as well as further technological developments.
We expect to be able to reduce a further 0.7% of our Scope 3 greenhouse gas emissions through efficient use of packaging materials and business travel by 2029 (compared to the base year 2019). This package of measures will be continuously implemented even beyond 2029 and through 2050.
Actions in relation to reducing greenhouse gas emissions for Scope 1, 2 and 3 through 2050 [E1-3]
The attainment of our ambitious climate target of net zero greenhouse gas emissions in 2050 depends on numerous framework conditions. We have developed a roadmap that shows how we can reach the net zero target by 2050 or earlier. Key actions include the use of innovative and available technologies, the development of new products and the management of residual and unavoidable emissions.
Innovative and available technologies
The availability of renewable energies and innovative technologies, such as carbon capture, storage and utilization, or the use of hydrogen to generate energy at competitive costs is decisive for our long-term greenhouse gas emissions reduction. We monitor this availability continuously, and implementation in our plants and buildings depends on the technological progress and local circumstances. This is not a one-off measure but instead takes place on an ongoing basis.
New products
We work on innovations to continue to reduce the emissions associated with our products in the future, for example by developing new synthesis routes. One example is the research and development (R&D) of new radiology products, for which we have begun to introduce criteria according to a sustainability-by-design approach. Using checkpoints we would like to examine the sustainability-related impacts of future radiology products in various phases of R&D. This is not a one-off measure but rather takes place continuously so as to introduce new products and innovations.
Residual and unavoidable emissions
We expect that there will likely still be some residual, unavoidable greenhouse gas emissions in our value chain in 2050. We plan to offset these emissions through long-term emissions reduction certificates.
Actions in relation to the reduction of greenhouse gas emissions in agriculture [E1-3]
According to a report by the Intergovernmental Panel on Climate Change (IPCC) published in March 2023, agriculture, forestry and other land use account for around 22% of global greenhouse gas emissions. This is both an opportunity and a risk for us. We see market potential for reducing global greenhouse gas emissions by up to one gigaton through regenerative agriculture and agricultural solutions.
Emissions reduction in agriculture
To help reduce greenhouse gases in agriculture, we promote the use of practices and technologies that are more climate-smart. These include high-yielding crop genetics, crop protection products, precision irrigation systems, soil management tactics through no-till and cover crops, crop rotation, fertilization management, microorganisms and soil inoculants, direct seeding and alternate wetting and drying in rice cultivation, and digital and precision farming tools. We are working continuously to implement these measures.
Management of impacts, risks and opportunities in relation to the adaptation of our business models to climate change
We have also identified material impacts, risks and opportunities associated with climate adaptation. Global agriculture and food systems in particular are confronted with major challenges, such as climate change, the associated water scarcity and population growth. We therefore promote a concept of regenerative agriculture that is defined as an outcome-driven cropping system aimed at strengthening the resilience of agricultural production. This concept is based on two interconnected objectives: helping farmers maintain or increase yields with reduced application of agricultural inputs for improved social and economic wellbeing outcomes; and regeneration, which prioritizes a positive impact on nature. This second aspect includes efforts such as striving to improve soil health, preserving and restoring biodiversity in areas devoted to agriculture, conserving water resources, reducing field-level greenhouse gas emissions and increasing carbon sequestration. We are only at the beginning of our journey toward regenerative agriculture. We also realize there is not one single solution for every farm but rather a combination of different approaches that enable a regenerative agriculture system and deliver its benefits. The use of our various products and services supports farmers in implementing farming practices contributing to regenerative agriculture. Some of the innovations and solutions we have developed even have the potential to change current production systems toward regenerative agriculture (e.g. short-stature corn, hybrid wheat, direct seeded rice).
In the area of climate change, we face various risks and opportunities that could impact our operating activities. There are acute and chronic physical and transitory risks that could lead to a reduction in demand and corresponding sales losses for certain products in case the current product portfolio does not meet changed customer requirements related to the effects of climate change (e.g. shift in production zones, altered product requirements). In addition, extreme weather events and climate-related natural disasters are causing acute physical risks that could disrupt production processes and business practices along the entire value chain.
At the same time, these challenges also result in opportunities. It is possible that extreme weather events and climate-related natural disasters could result in higher demand for products that are particularly suited to climate change adaptation in agriculture. The perception of the effects of climate change (e.g. extreme weather conditions, low water levels, rising temperatures) can also accelerate the development of new business models that help to reduce greenhouse gas emissions (including carbon farming, low-carbon products and products with low global warming potential). There is also the opportunity of increased demand for products that help to cope with the negative health effects of climate change, particularly in the prescription medicines business of our Pharmaceuticals Division.
Policies in relation to the adaptation of our business models to climate change [E1-2]
Our most important framework for the management principles we utilize to make decisions in the area of climate change adaptation is our Transition and Transformation Plan. This plan is a central element of our overall strategy and establishes targets and actions necessary to strengthen our company’s resilience against the impacts of climate change. As the Transition and Transformation Plan comprises all significant aspects of our adaptation strategy, we do not report on any other concepts in the area of climate change adaptation. For more on our Transition and Transformation Plan, please see the section “Our Transition and Transformation Plan for climate protection [E1-1].”
Actions in relation to the adaptation of our business models to climate change [E1-3]
Global agriculture and food systems in particular are confronted with major challenges, such as climate change, the associated water scarcity and population growth. Climate change also has a major impact on health and healthcare systems. The effects of climate change are already proven and impact global value chains. To meet these challenges, we have taken steps to adapt our business models. Central measures include innovative approaches for the adaptation of agriculture, further developing our product portfolio and ensuring business continuity in the value chain.
Innovative approaches for the adaptation of agriculture
To help shape the adaptation of agriculture, we promote the use of innovative and adapted farming practices and technologies by our agricultural customers. These include high-yielding crop genetics, crop protection products, precision irrigation systems, soil management tactics through no-till and cover crops, crop rotation, fertilization management, microorganisms and soil inoculants, direct seeding and alternate wetting and drying in rice cultivation, and digital and precision farming tools. Combining different levers can lead to customized solutions for our agricultural customers so that they can continue to achieve high yields under changing climatic conditions. We are working continuously to implement these measures.
Development of our product portfolio
We continuously work on our product portfolio and invest in innovation. With regard to climate change, there is the opportunity of increased demand for products that can help to cope with the negative health effects of climate change, for example particularly in the prescription medicines business of our Pharmaceuticals Division.
Business continuity in the value chain
With regard to climate change adaptation, extreme weather events and climate-related natural disasters are causing acute physical risks that could disrupt production processes and business practices along the entire value chain. We cooperate with our suppliers, particularly in the upstream value chain, and take out insurance coverage for our own production sites, subsequently reviewing our activities. We regularly review our actions to safeguard business capability and production.