EU Taxonomy

Our sustainability targets (please see the section “Strategy, business model and value chain [SBM-1]” in Chapter A 4.1 General Information on the Sustainability Statement) make a crucial contribution to our mission of “Health for all, Hunger for none.” Beyond those targets, we also report on other nonfinancial aspects. These comprise climate change mitigation, climate change adaptation, the sustainable use and protection of water and marine resources, the transition to a circular economy, pollution prevention and control, and the protection and restoration of biodiversity and ecosystems. Company activities are assessed for taxonomy eligibility based on the economic activities described in Annexes 1 and 2 to the Delegated Act of June 4, 2021, and Annexes 1 through 4 to the Delegated Act of June 27, 2023. The simplification of the contents and presentation established in Commission Delegated Regulation (EU) 2026/73 of July 4, 2025, has been taken into account. Thus, what is reported for 2025 is the proportion of turnover (sales) and capital expenditure (CapEx) that is EU taxonomy-eligible and taxonomy-aligned with regard to the environmental objectives of EU taxonomy. Operating expenditure (OpEx) in connection with taxonomy-eligible and taxonomy-aligned activities lies below the materiality threshold of Commission Delegated Regulation (EU) 2026/73 and therefore is not reported in detail.

Duplicate counts are avoided through the application of a clear, highly selective granularity for each KPI (e.g. product level for Pharmaceuticals, products at the country level for Consumer Health and project level for miscellaneous KPIs). Taxonomy alignment is evaluated based on the technical screening criteria for each economic activity, which are also defined in the aforementioned Annexes.

Summary of EU taxonomy KPIs

The following tables show the proportion of turnover, CapEx and OpEx from economic activities that are linked to taxonomy-eligible or taxonomy-aligned economic activities.

Reporting on turnover

The definition of turnover according to EU taxonomy corresponds with the sales reported in our Consolidated Financial Statements (please see Note [6] Sales in Chapter B Consolidated Financial Statements).

To determine the sales that Bayer achieves through taxonomy-eligible economic activities, the technical evaluation criteria of Regulation (EU) 2023/2486 were applied at product level. According to our interpretation, sales generated from medicinal products that are merely resold, repackaged or mixed are not taxonomy-eligible. The economic activity “manufacture of active pharmaceutical ingredients” is classified as nonmaterial, since its proportion of sales of less than 1% is below the materiality threshold according to Article 2 Paragraph 1a of Commission Delegated Regulation (EU) 2026/73.

The taxonomy-eligible sales of our Pharmaceuticals and Consumer Health divisions are assignable to the economic activity “manufacture of medicinal products,” which can contribute to the environmental objective “pollution prevention and control.” Taxonomy-eligible sales amounted to €17,956 million in 2025 (2024: €18,047 million), and taxonomy-non-eligible sales amounted to €27,619 million (2024: €28,559 million). The proportion of taxonomy-eligible sales was thus 39.4% (2024: 38.7%). We were unable to identify any taxonomy-aligned sales.

The total sales identified as being taxonomy-eligible and taxonomy-aligned are shown in the following tables:

Reporting on capital expenditure

The capital expenditure metric is determined according to the requirements of EU taxonomy. The capital expenditure denominator for 2025 comprised investments in and acquisitions of property, plant and equipment and intangible assets. Acquired goodwill is not taken into account under the EU taxonomy. For detailed information, please see Notes [14] Goodwill and other intangible assets and [15] Property, plant and equipment in Chapter B Consolidated Financial Statements.

The taxonomy-eligible capital expenditure is determined by linking the capital expenditure undertaken with the taxonomy-eligible products (Category a). Capital expenditure that cannot be clearly assigned is taken into consideration on the basis of allocation keys. The proportion of actions to reduce greenhouse gas emissions (Category c) lies below the materiality threshold of 10%; taxonomy alignment therefore was not assessed. Activities in the areas of vehicle fleet, water treatment and buildings were classified as nonmaterial because the taxonomy-eligible proportion of the respective economic activities and the associated projects neither represent their main objective nor occur in a scope that would necessitate classification as material.

We evaluate the substantial contribution made to climate change mitigation for each economic activity based on the individual asset, whenever the activity must be classified as material according to Article 2 Paragraph 1b of Commission Delegated Regulation (EU) 2026/73.

Compliance with the minimum safeguards is examined at the Group level. The assessment takes into consideration existing corporate policies and risk management processes relating to human rights, compliance, anticorruption and other aspects.

We incurred taxonomy-eligible capital expenditure (CapEx) of €284 million in 2025 (2024: €549 million). Taxonomy-eligible capital expenditure declined year on year in 2025 in the course of the scheduled completion of ongoing projects and the first-time exclusion of nonmaterial taxonomy-eligible capital expenditure. Taxonomy-non-eligible capital expenditure amounted to €2,918 million (2024: €2,722 million). The proportion of taxonomy-eligible capital expenditure therefore came to 8.9% (2024: 16.7%). We were once again unable to identify any taxonomy-aligned capital expenditure (2024: €0 million).

The total capital expenditure identified as being taxonomy-eligible and taxonomy-aligned is shown in the following tables:

Reporting on operating expenditure

To calculate operating expenditure, noncapitalized costs for research and development (excluding special items), maintenance and repair, and short-term leases were taken into account. Operating expenditure is defined according to the EU Taxonomy Regulation and is not reported in this form in the Consolidated Financial Statements. Taxonomy-eligible operating expenditure is calculated on a pro-rated basis using apportionment formulas.

In 2025, operating expenditure totaling €7,054 million (2024: €7,176 million) was identified. Material taxonomy-eligible and taxonomy-aligned operating expenditure could not be identified. We have not included a table of taxonomy eligibility and alignment for operating expenditure. Although operating expenditure is generally of significance for Bayer, it was classified as nonmaterial in connection with the economic activities “Manufacture of medicinal products” and “Manufacture of active pharmaceutical ingredients” because it came in below the materiality threshold defined in Article 2 Paragraph 1c of Commission Delegated Regulation (EU) 2026/73.