Our climate change mitigation strategy is directly related to our double materiality assessment and is based on our scenario analysis. At the core of Bayer’s climate strategy is the Transition and Transformation Plan, which was published for the first time in 2024 and represents an update of our climate program from 2020. This plan is geared toward driving forward our climate change mitigation efforts and ensuring that our strategy and business model are commensurate with the goal of a sustainable economy and with limiting global warming to 1.5 °C compared to the preindustrial level in accordance with the Paris Agreement.
Our Transition and Transformation Plan for climate protection [E1-1]
Our climate strategy comprises two subject areas – the reduction of greenhouse gas emissions (climate change mitigation) and climate change adaptation, with the latter including the issue of access to our products and services as part of the solution. Both areas are incorporated into our transition and transformation strategies.
Transition: To mitigate climate change, we are pursuing the goal of achieving net zero greenhouse gas emissions (net zero target) by 2050, including the entire value chain1. This means an at least 90% reduction in absolute Scope 1, 2 and 32 greenhouse gas emissions compared to the base year 20193. We intend to offset the remaining 10% greenhouse gas emissions through long-term emission credits4. In our Transition and Transformation Plan, we describe reduction levers, the policy for climate protection certificates, cooperation with special interest groups and the resilience of our value chain.
Transformation: Transformation encompasses the market potentials we see in the areas of healthcare and agriculture as a result of climate change adaptation, access to our products and services, and a socially just transition. At the same time, we aspire to reduce global greenhouse gas emissions from agriculture in the long term with the offer of innovative solutions.
Through our Transition and Transformation Plan, we support the Paris Agreement and the objective of limiting global warming to 1.5 °C compared with the preindustrial level.
Our climate strategy is anchored in our business strategy. The Chairman of the Board of Management (CEO) holds responsibility for climate protection in his role as Chief Sustainability Officer (CSO). The leadership teams of the individual divisions assume responsibility for the transformation of our business fields and the creation of value from the changing conditions. The attainment of our Group targets for reducing greenhouse gas emissions is factored into the long-term compensation of the Board of Management and Bayer’s LTI-entitled managerial employees. The compensation-relevant target is based on Bayer’s necessary contribution to a Science Based Targets initiative (SBTi)-validated 1.5 °C scenario. Due to the SBTi revalidation in 2024 and the implementation of new emissions factors, the calculation of Scope 3 greenhouse emissions changed in some categories. In this connection, the number of target-relevant Scope 3 categories increased from 5 to 15. For more information, please see the section “Greenhouse gas emissions of Scope 1, 2 and 3 and total greenhouse gas emissions [E1-6]” in Chapter A 4.2.2 Climate Change. The calculation of long-term compensation is still based on the original five Scope 3 categories and the original calculations and data sources for emissions factors. As a result, greenhouse gas emissions for some Scope 3 categories in this reporting differ from those used in the calculation of long-term compensation.
The establishment and implementation of our strategy and the related activities are overseen by the ESG Committee of the Supervisory Board. In addition, the independent external Sustainability Council advises the company in all sustainability matters – including climate protection. The Board of Management is supported by the Public Affairs, Sustainability & Safety Enabling Function in cooperation with the sustainability and specialist departments of the divisions. The divisions handle the operational implementation of the measures at their sites, in the research departments and in the strategy departments, with the support of the enabling functions. We have formed Group-wide working groups for the strategic and operational implementation of climate-change-related measures and a special working group to analyze various climate scenarios and their impacts on our business. The Transition and Transformation Plan has been confirmed by the Chairman of the Board of Management (CEO) and the ESG Committee of the Supervisory Board.
In developing the Transition and Transformation Plan, we utilized the standards of the Transition Plan Taskforce and CDP (formerly Carbon Disclosure Project).
Transition: reducing greenhouse gas emissions
A core element of our Transition and Transformation Plan is the reduction of greenhouse gas emissions compared to the base year 2019. We already reduced total direct greenhouse gas emissions (Scope 1) and indirect greenhouse gas emissions (Scope 2, market-based) by 25.9% between 2019 and 2025 at those of our sites with an annual energy consumption exceeding 1.5 terajoules and/or annual water withdrawal that is greater than or equal to 50 Tm3.
The main levers we have identified to further reduce total direct emissions (Scope 1) and indirect emissions (Scope 2, market-based) in the period from 2026 to 2029 are described below:
Through the conversion to electricity from renewable energies, we expect a further 12 percentage points contribution to reducing total Scope 1 and Scope 2 greenhouse gas emissions by 2029 (compared to the base year 2019).
Through energy efficiency and production process optimization and electrification, we expect a further reduction contribution in total Scope 1 and Scope 2 greenhouse gas emissions of 2 percentage points by 2029 (compared to the base year 2019).
Through decarbonization of purchased indirect energy sources (heating, cooling), we expect a further reduction contribution in total Scope 1 and Scope 2 greenhouse gas emissions of 2 percentage points by 2029 (compared to the base year 2019).
By 2030, we aim to switch our fleet over to electric vehicles wherever technically and economically feasible. We expect a reduction contribution in total Scope 1 and Scope 2 greenhouse gas emissions of 1 percentage point here by 2029 (compared to the base year 2019).
We reduced greenhouse gas emissions in the value chain (Scope 3) by 12.0% between 2019 and 2025. The main levers we have identified to further reduce emissions in the value chain in the period from 2026 to 2029 are described below:
We plan to reduce our Scope 3 greenhouse gas emissions by up to 9.3 percentage points by 2029 in cooperation with our suppliers (compared to the base year 2019).
Additional reductions in emissions of 3.5 percentage points are expected by the end of 2029 (compared to the base year 2019) as a result of electrification both in the upstream and downstream value chain and in business travel and due to changes in energy supply (Scope 3.3) e.g. through the switch to renewable energies.
In addition, new technologies – including carbon capture and storage (CCS) – will be needed both for our own sites and along our value chain to achieve the net zero greenhouse gas emission target by 2050.
To achieve our total Scope 1 and Scope 2 greenhouse gas emissions reduction target by 2029, capital expenditure in our buildings, plants or processes at the sites will also be necessary in the future. Scope 1 greenhouse gas emissions from the burning of fossil fuels and Scope 2 greenhouse gas emissions from the use of secondary energy sources can be reduced through more modern and energy-efficient buildings, plants and processes. The necessary capital expenditures are incurred, for example, through the renovation of buildings and the replacement of plants or production machinery. We implemented diverse projects of this type between 2019 and 2025 that had a positive impact on our Scope 1 or Scope 2 greenhouse gas emissions overall. We expect the capital expenditures necessary for investment in our buildings, plants or processes at our sites to achieve further reductions through 2029 to be at least €100 million in the coming years. This amount is accounted for in our divisions’ capital expenditure budgets. In 2024, we published an estimation that the capital expenditure in our plants and buildings necessary through 2029 to achieve our climate targets would be around €200 million. Due to the changed economic situation – a challenge many companies are having to contend with – we have had to adjust our estimated capital expenditures for the period up to 2029 to at least €100 million. At the same time, we expect that through the use of power purchase agreements (PPAs) it will be possible to achieve a greater contribution to reducing greenhouse gas emissions than we had originally assumed. We do not expect the reduced investment in our own sites to jeopardize the attainment of our climate targets. Even though capital expenditures have been reduced in absolute terms, we will continue to expect relevant greenhouse gas reductions through existing projects (e.g. process improvements and decarbonization of indirect energy sources for the cooling system at our Dormagen site, supplemented with additional ventilation improvements). 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. No capital expenditures are currently planned for the coming years to implement our short-term measures to reduce Scope 3 greenhouse gas emissions because most of these measures involve specific requirements for our suppliers, such as the use of renewable energies for their production processes, or they pertain to a switch in suppliers that we will initiate.
We review the future viability of our product portfolio, processes and activities, including as regards climate change. Like other manufacturing companies, we have potentially locked-in greenhouse gas emissions in connection with production at our sites. We currently expect that our potential locked-in emissions will not jeopardize the attainment of our 2029 climate targets. We will examine the potential locked-in emissions through 2050 in the future.
For fiscal 2025, we were unable to identify any EU taxonomy-aligned sales, capital expenditures or operating expenditures related to climate. We therefore cannot correlate our capital expenditures and funding for the implementation of the Transition and Transformation Plan described to the taxonomy-specific performance indicators. We also did not disclose any capital expenditure plans according to Commission Delegated Regulation (EU) 2021/2178. We have not been notified for 2025 that we have been excluded from the EU Paris-Aligned Benchmark.
With the greenhouse gas emissions reductions achieved so far, we are currently on track to meet the SBTi-validated decarbonization targets. We reduced Scope 1 and Scope 2 greenhouse gas emissions by 25.9% and Scope 3 greenhouse gas emissions by 12.0% compared to the base year 2019. To attain our long-term targets pertaining to net zero greenhouse gas emissions in 2050, we are dependent on the development of the industry as a whole and on political framework conditions.
Extreme weather events or changing climatic conditions can have negative impacts at upstream production sites in the supply chain, at our own sites and in the downstream supply chain. To reduce these impacts and maintain the availability of our products, we take this into account for relevant cases in business continuity plans, take out insurance coverage, invest in modernization measures and undertake other activities, for example in our procurement strategies. These risks are factored into our company-wide risk management process as part of our enterprise risk management (ERM) system.
Transformation: product innovations as a solution and opportunity
Our business areas can be part of the solution when it comes to adapting to the effects of climate change. This is how, through our products, we can help our agricultural customers to adapt better to the negative impacts of climate change. In our Crop Science Division, we are working on numerous innovations, particularly in the areas of new varieties, biotechnology, small molecules, biologicals, digital farming and systems for our concept of regenerative agriculture. Through this approach, we want to contribute to ensuring long-term food security by helping farmers to produce more while delivering a positive impact on nature with our concept of regenerative agriculture. Climate change also has significant impacts on human health. In the Pharmaceuticals and Consumer Health divisions, we are therefore working closely with external experts from a wide range of backgrounds on innovative solutions. Our research and development activities in this area focus on the cardiovascular system, women’s healthcare, cardio-renal-metabolic health, respiratory diseases, allergies and nutritional supplements. Through our Leaps by Bayer program, we invest in future-oriented ideas across all divisions that also address the challenges presented by climate change. For further information, please see the section “Leaps by Bayer” in Chapter A 1.3. Focus on Innovation. Both the transition and the transformation of industry and society are a societal task that we are working on across value chains together with our stakeholders.
Material impacts, risks and opportunities and their interaction with strategy and business model [E1.SBM-3]
Three climate risks were identified through our double materiality assessment:
Physical climate risk: disruption of the value chain and production processes due to extreme weather events and climate-related natural disasters caused or exacerbated by climate change
Physical climate risk: decline in demand and associated losses of sales for certain products because the current product range is not fully aligned with the future requirements resulting from the effects of climate change (such as shifts in cultivation regions for certain plants and shifts in demands on products)
Transitory climate risk: capital expenditure requirement for adaptation of product processes to our reduction targets depending on regulations, legislation or availabilities, e.g. as regards the emission of greenhouse gases during production processes (such as emissions trading systems)
For several years now, we have conducted a climate-based scenario analysis that covers both physical and transitory climate risks. This analysis encompasses elements of a resilience analysis and enables us to analyze the impacts, risks and opportunities of climate change for our business from various perspectives. In our analysis, we focus on the impacts on our business activities, especially in agriculture. This enables us to assess the findings relative to our company and integrate them into our business strategy, enterprise risk management system and actions. The applied climate scenarios, which assume a rise in and increasing intensity of extreme weather conditions and a shift in climatic zones, are in conformity with the climate-related assumptions in the financial statements. This is evident partly in the fact that potential financial consequences resulting for our sites due to climate-related natural events are hedged through insurance coverage to the extent customary in the industry. At the same time, we demonstrate our understanding of the need to adapt to the impacts of climate change through, for example, our research and development activities for product innovations, which are accounted for accordingly in our financial business planning. We do not currently see any restrictions on the ability to rededicate, modernize or close existing assets, shift product and service portfolios, and retrain the workforce. Indeed, we see possible opportunities for our products and services when they are used by our customers as part of climate adaptation strategies, such as in the seed business.
In 2025, we continued strategically with our established climate-related scenario analysis at a business area level. As part of our continuous improvement process, we will expand this analysis in a targeted manner in the coming years, in particular with regard to the evaluation of the climate resilience of our production sites.
In the climate-related scenario analysis, which also covers the resilience of our business fields, we go beyond the 10-year horizon of our ERM system and the horizon of the double materiality assessment, and use the following time horizons:
Short-term: through 2027
Medium-term: from 2028 through 2035
Long-term: from 2036 through 2050
Our scenario analysis, which encompasses elements of a resilience analysis, has a twofold focus:
Overarching opportunity and risk assessment for the Bayer Group and its individual business areas, including the upstream, downstream and our own value chains
In our Crop Science Division, we additionally use agricultural climate modeling based on a comprehensive climate change ensemble dataset to inform research, development and product strategies. This includes potential climate effects on breeding programs or the development of long term regional product placement strategies to safeguard long-term, sustainable and profitable operations for farmers through resilient agricultural systems tailored to local climate and soil conditions.
To conduct the scenario analysis, we deployed a cross-functional and cross-divisional team to evaluate the possible impacts of climate change based on two scenarios. First of all, the scenarios were described, then the most important impact drivers were established, and, finally, actions were defined to reduce risks and realize opportunities. Examples here include the implementation of our net zero strategy and the focus on our concept of regenerative agriculture.
We have based our scenario descriptions on Assessment Report 6 of the Intergovernmental Panel on Climate Change (IPCC) and supplemented them with further sources relevant to our business areas. The basis comprises the optimistic climate change scenario envisaging warming of below 1.5 °C – the Green Road SSP1-1.9, which equates to the fulfillment of the climate goals of the Paris Agreement (temperature increase of 1.4 °C by 2100 compared with the preindustrial age) – and a high-greenhouse-gas-emission climate scenario that reflects current global behavior – the Rocky Road SSP3-7.0 (temperature increase of 3.6 °C).
Green Road (SSP1-1.9)
The Green Road scenario assumes a rise in average global temperature compared with the preindustrial age of 1.6 °C by between 2041 and 2060. Between 2081 and 2100, the temperature is likely to have risen by 1.4 °C compared with the preindustrial age.
This scenario is marked by the rapid implementation of ambitious and globally coordinated climate-related laws and rules that can also include transformational requirements and new regulations for companies in the short term. The rapid reduction in greenhouse gas emissions leads to less severe weather- and climate-related effects.
Rocky Road (SSP3-7.0)
The Rocky Road scenario assumes the rise in average global temperature compared with the preindustrial age to be around 2.1 °C by between 2041 and 2060, and probably 3.6 °C by between 2081 and 2100.
In this scenario, we expect less ambitious laws and provisions that vary widely from one region to another. That leads to a slower pace of emissions reduction and thus more intensive weather- and climate-related changes in all regions of the world. The varying levels of ambition also lead to additional trade barriers that can be manifested in measures such as a Carbon Border Adjustment Mechanism (CBAM).
We use both scenarios, Green Road SSP1-1.9 and Rocky Road SSP3-7.0, to understand the impacts of climate change on our business and to identify measures for mitigating climate-related risks and leveraging opportunities. This is how we also assess the future viability of our business areas. We also further developed our own agricultural climate model in 2025 by producing a climate change ensemble dataset based on CMIP6 (Coupled Model Intercomparison Project, or CMIP). The goal here is to enhance the usability of climate risks and opportunities in the model.
The results and strategic implications of the climate-related scenario analysis are directly fed into our climate strategy and thus into our Transition and Transformation Plan. Based on the scenario description, we have identified 10 impact drivers of materiality to enable us to analyze the impacts transitory and physical changes will have on our business in more detail. The transitory drivers are regulatory requirements, CO2 prices/taxes and border adjustment, agricultural innovation and cultivation methods, commodity prices, end-consumers and customers, and food security. As regards the physical drivers, we take into account acute extreme weather events and three chronic physical drivers, namely the water cycle, diseases and temperature changes.
Transitory impact drivers: Through our strategy for decarbonization, with a focus on reducing greenhouse gas emissions on the pathway to a 1.5 °C scenario, we are reducing the risk of additional costs caused by the expected regulations. At the same time, the rules, innovations and implementation in agriculture are of particular importance. We continuously analyze the further impacts of regulatory changes and integrate them into our business and planning. Depending on the varying scenarios, our customers and value chains will place different demands on our products. CO2 prices not only affect the cost structure of our value chain but could also impact demand for biomass or biofuels. We also analyzed the issues of raw material prices and food security, as high uncertainty is expected here, particularly in a Rocky Road scenario.
Acute physical impact drivers: Within the context of the scenarios observed, all climate models anticipate an increase in extreme weather conditions (such as drought, heavy rains and storms) that present an elevated risk of crop losses and therefore also pose risks for the agricultural value chain as a whole. In addition to risks, however, climate change can also create opportunities for our business. Our product range and innovative capability – particularly in the agricultural value chain – will create a foundation for leveraging new options and sales opportunities in the future against the background of climate change. As a seed producer, we already offer plants with increased resistance to extreme weather conditions. That includes short-stature corn. Through breeding, we have succeeded in developing seed hybrids that enable the growth of shorter corn plants that have the potential to not bend or break (agronomists call this root and stalk lodging) as easily as corn plants of regular height in the presence of strong winds or heavy rain. Losses in the United States due to bent (lodged) plants amount to between 5% and 25% a year, depending on the severity of weather events. We also enable farmers to react better and more quickly to extreme weather conditions with our FieldView™ digital farming platform.
Chronic physical impact drivers: Climate change brings a wide range of challenges in the context of chronic physical climate risks, especially for agriculture and human health. In agriculture, long-term effects such as shifts in the water cycle (e.g. wetter or drier climates, delayed monsoon seasons), increased spread of diseases and insect pests, and temperature-driven coupling effects pose significant risks to productivity and thereby to food security. To address these, we are developing strategies that help farmers strengthen their resilience – through advanced climate modeling, tailored agronomic solutions and support for reducing greenhouse gas emissions – while enabling healthy crop cultivation. Recognizing that no one-size-fits-all solution exists in agriculture, we offer a diverse portfolio of options adapted to local conditions. On the health front, climate change may intensify risks such as cardiovascular disease due to hotter summers and more frequent heatwaves. We help tackle these emerging health challenges by advancing innovative therapies and preventive solutions to support climate-resilient healthcare.
The results of the scenario analysis are regularly reviewed within the scope of our ERM system. Mitigation measures are established in the respective divisions or enabling functions. Given our current understanding, our scenario analysis did not identify any business activities that are incompatible with the transition to a climate-neutral economy. We will expand and refine our scenario description and analysis specific to the sites in 2026 and thereafter. At the same time, we are deepening our analytical skills and expanding our climate models, for example to better understand how various climatic zones are changing. We expect this to enable us to optimally describe the challenges and opportunities for the future so that we can deduce short-, medium- and long-term mitigation steps.
1 Total Scope 1, Scope 2 and Scope 3 greenhouse gas emissions. Comprises direct (Scope 1) and indirect (Scope 2, market-based) greenhouse gas emissions from Bayer sites with an annual energy consumption exceeding 1.5 terajoules and/or annual water withdrawal that is greater than or equal to 50 Tm3. Scope 3 includes all Scope 3 categories defined in the Greenhouse Gas (GHG) Protocol.
2 When accounting for greenhouse gases, we distinguish between Scope 1 (direct emissions from our own sources), Scope 2 (indirect emissions from the procurement of energy) and Scope 3 (indirect emissions from the entire value chain).
3 Comprises direct (Scope 1) and indirect (Scope 2, market-based) greenhouse gas emissions from Bayer sites with an annual energy consumption exceeding 1.5 terajoules and/or annual water withdrawal that is greater than or equal to 50 Tm3. The target includes biogenic, land-related emissions and the degradation of greenhouse gases from bioenergy raw materials. With respect to our net zero target, all Scope 3 categories are taken into account when calculating the Scope 3 greenhouse gas emissions for the base year.
4 The neutralization of the remaining emissions is carried out in accordance with the standards of the Science Based Targets initiative (SBTi).