Management of impacts and risks related to workers in the value chain
Through our double materiality assessment, we have identified material impacts and risks related to the monitoring of our suppliers and adherence to human rights. Monitoring gaps could lead to undetected illegal practices such as forced and child labor, as well as health and safety problems, which in turn can result in potential human rights violations in our value chains, operational disruptions, as well as legal and financial consequences.
There is also a risk of human rights violations when clinical trials are outsourced, which means compliance with relevant standards and the appropriate transparency regarding the conduct of scientific studies is extremely important. We publish information on our standards for conducting clinical trials, which apply both to us and to clinical research organizations (CROs) contracted by us, in Chapter A 4.3.4 Consumers and End-Users, particularly in the section “Ethical standards for conducting clinical trials in drug development.” For information on our disclosure measures to ensure transparency of clinical trials, please see the section “Disclosure measures to ensure transparency of clinical trials” in Chapter A 4.3.4 Consumers and End-Users.
In general, financial risks can arise when human rights violations take place within our value chains or our suppliers violate sustainability-related provisions of the Bayer Supplier Code of Conduct. We therefore consider effective management of these aspects to be very important.
Policies related to value chain workers [S2-1]
Through our Bayer Supplier Code of Conduct, our Human Rights Policy and guidelines on safety at our sites, we want to minimize the potential impacts and risks related to workers in our value chains.
Our Bayer Supplier Code of Conduct
To counter human rights violations in our value chains, our Bayer Supplier Code of Conduct stipulates requirements for suppliers as regards human rights.
We want to respect the human rights of all workers in the upstream value chain and work to ensure that
Suppliers respect the human rights of their employees, local communities and vulnerable people, and treat them with dignity and respect and
Suppliers take appropriate precautions to ensure the health and safety of their employees, customers, visitors, contractors and other persons who could be affected by their activities
In addition, our comprehensive global guidance document on the Bayer Supplier Code of Conduct provides concrete examples of good practices and benchmarks that suppliers can use, as well as references such as the regulatory frameworks and standards governing our sustainability efforts.
The Bayer Supplier Code of Conduct and the related guidance document contain the main expectations regarding the topics of protection against child labor, freedom from slavery, serfdom and forced labor, fair and favorable working conditions, right to freedom of association, and responsible management of resources. For more information on the Bayer Supplier Code of Conduct, please see the section “Holistic policies for managing material sustainability matters [MDR-P]” in Chapter A 4.1 General Information on the Sustainability Statement.
Human rights due diligence
In our Human Rights Policy, we state that we are committed to respecting human rights in the supply chain, and that we work with a human rights due diligence approach based on the UN Guiding Principles on Business and Human Rights (UNGPs), the Declaration on Fundamental Principles and Rights at Work of the International Labour Organization (ILO) and the OECD Guidelines for Multinational Enterprises. We take steps to ensure human rights are respected both within our own company and along our entire value chain, and thus as regards our suppliers and their employees. The safety of clinical trials conducted in-house or by clinical research organizations (CROs) contracted by us is also of particular importance to us. Research conducted on humans is subject to strict scientific and ethical principles and uniform global standards. These standards are followed in compliance with legal requirements as well as local and international law. Corporate policies, processes, and management and monitoring systems are in place to govern the implementation of human rights standards. We are aware that the implementation of human rights due diligence is a process that must be continuously adapted and improved.
Guided by our human rights strategy and Group-wide management systems, our due diligence process comprises a declaration of principles, risk identification and assessment processes, prevention and mitigation measures, remedial measures, and measures for determining effectiveness and reporting, along with access to grievance mechanisms. In this way, we respect the obligations of internationally recognized standards such as the United Nations Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. We have no indications of notifications in 2025 of noncompliance in our value chains with the international frameworks that we take into account.
Engagement with workers in the value chain takes place indirectly at the global level through dialogue with supplier representatives, and directly both through notifications to our grievance mechanisms and at the site level through conversations with employee representatives of our suppliers or the employees themselves.
We use a risk analysis to identify potentially detrimental impacts of our business activity on human rights throughout our value chain. In doing so, human rights risks are identified, evaluated and prioritized, from an overarching risk analysis for the entire company to detailed analyses in selected areas. One of these areas is Procurement, which conducts a detailed risk analysis to also evaluate the potentially detrimental impacts on our suppliers’ employees.
Our risk analysis is aligned with the Chemie3 standard of the German chemical industry. The analyses are conducted at least once per year and on an ad hoc basis. The results of this human rights risk analysis are communicated to relevant internal decision-makers, such as the Board of Management, the Supervisory Board and the heads of the affected business areas, and, in cases where the threshold values are exceeded, incorporated into the Bayer risk portfolio of our Group-wide, integrated risk management system. There, decisions on risk mitigation measures are also documented. The risk portfolio is regularly reviewed by the Assurance Committee. For more information on our Human Rights Policy, please see the section “Holistic policies for managing material sustainability matters [MDR-P]” in Chapter A 4.1 General Information on the Sustainability Statement.
Safety at our sites for workers in our value chain
It is very important to us to take into account the interests of workers potentially affected by impacts of our activities. To prevent health and safety problems at our sites and thus also minimize the risk for contractors in our own operations, we issue permits for hazardous work. The “work permit for hazardous work” process describes our risk management approach in connection with dangerous work at our sites. The necessary safety measures are ensured prior to, during and following the performance of work, and all activities with a potentially heightened risk in a unit or at a site that require a permit are discussed with the supplier, implemented, reviewed and assessed in a controlled manner. Implementation should take place safely and with the necessary flexibility to account for the specific needs of the sites or units. This includes work that may involve risks that can have a higher-than-normal potential to cause severe injury, death or damage to property or the environment and that must be appropriately managed using a work permit for hazardous work. The work permit process has been universally used for several years throughout our company to maintain the health and safety of contractors (and our own employees) in routine and nonroutine tasks. The process is mandatory for all sites worldwide as well as all employees, supervised contractual partners and unsupervised contractual partners who carry out potentially hazardous work at one of our sites. The work permits are subject to spot checks during routine occupational health and safety audits conducted at our sites. The work permit process is prescribed by the DGUV (German Social Accident Insurance) and anchored in the HSE Key Requirements Policy, which was approved by the global Head of ESG Management System & Reporting.
Prevention and mitigation through measures related to value chain workers [S2-4]
Grievance management (Speak Up Channel) and supplier audits are available to us as a primary means of identifying corrective and remedial measures. The information from the grievance management system, the audit reports from Bayer’s internal HSE auditors and the audits conducted by external auditors according to the standards of the industry initiatives TfS and PSCI are reviewed and analyzed to obtain reference points for corrective and remedial measures.
There are two types of on-site supplier audit:
Audits conducted by Bayer’s internal HSE auditors according to the company’s audit protocol
Audits conducted by external auditors according to the standards of the industry initiatives PSCI and TfS
We also verify compliance with the requirements of the Bayer Supplier Code of Conduct using EcoVadis online assessments.
In addition, cases that are brought to our attention via other sources, such as inquiries from authorities, cases from the media or grievances from nongovernmental organizations (NGOs), are also taken into account. In 2025, individual violations in the areas of disregard for occupational safety and work-related health hazards, prohibition of unequal treatment in employment and withholding an adequate wage were reported in our upstream value chain. No severe human rights violations were observed in 2025.
The audited suppliers are responsible for implementing corrective measures as well as, where necessary, preventive measures for all audit findings identified in the audit. The measures encompass technical aspects (such as installation of local measures), organizational aspects (such as development of and training in a new work procedure), and personal aspects (such as the stipulation of personal protective clothing). Suppliers receive a corrective action plan based on their sustainability performance and are requested to verify their performance improvement via a re-evaluation after a reasonable period. Particularly critical audit reports of suppliers lead to inclusion in the internal Sustainability Supplier Development Program managed by Procurement.
In this program, specific improvement measures are jointly defined with the supplier, and these are documented in an action plan. We support our suppliers with targeted measures to build up knowledge and competency and a structured monitoring process to track activities and progress. The entire audit process is deemed concluded when all agreed corrective measures have been carried out and approved. This involves carrying out spot checks as part of follow-up audits to determine whether agreed corrective measures have been sustainably implemented. We reserve the right to terminate a supplier relationship if no improvement is observed during a re-evaluation.
A total of 123 suppliers were included in the development process in 2025 (2024: 122 suppliers) within the scope of the Supplier Development Program. Some 50 suppliers (2024: 34 suppliers) have already completed the development and conducted a re-evaluation, with a 92% rate of successful improvement (2024: 97%).
Furthermore, we utilize the activities and training offerings of the industry initiatives TfS and PSCI to address and ideally sustainably prevent frequently reoccurring issues such as noncompliance with occupational safety measures. The TfS Academy is a practice-oriented learning environment for suppliers and our procurement employees. It covers topics such as ethical aspects, conflict minerals, waste management and anti-corruption measures.
The purpose of the PSCI is to define, establish and promote responsible supply chain practices, human rights, environmental sustainability and responsible business along the pharmaceutical supply chain, using the PSCI Principles for Responsible Supply Chain Management as a blueprint for responsible practice. In 2023, PSCI introduced the e-learning platform Learnster, which allows organizations to create their own interactive and engaging courses.
Other measures we use to prevent and mitigate our negative impacts on the employees of direct suppliers include:
The development and implementation of suitable procurement strategies and purchasing practices (demand management, duration of contractual relationships and purchasing prices)
The integration of expectations into the supplier selection (prequalification based on defined sustainability indicators)
Obtaining contractual assurance for meeting and implementing expectations along the supply chain (systematic integration of the Bayer Supplier Code of Conduct into the Group-wide electronic ordering system)
Training and continuing education to assert contractual assurance (training offering through industry initiatives and our own training offerings)
Beyond the general measures, we have drafted a specific measure to protect against child labor. We work to prevent child labor through our Child Care Program. The program is currently established in India, Bangladesh, Thailand, Indonesia and the Philippines. Through our Child Care Program, we continuously raise awareness of the problem of child labor among our suppliers and clearly communicate our requirements. It involves systematic and repeated inspections of individual seed producers in their fields by local Bayer employees during the growing season. Graduated sanctions are applied to our suppliers for noncompliance with our prohibition on child labor. These range from written warnings to termination of the contract in the case of repeated noncompliance. Thanks to a stringent monitoring system and the support provided by local information and educational initiatives, no cases of child labor have been identified in India, Bangladesh, Indonesia, the Philippines and Thailand to date since the 2021/2022 growing season. There are no plans to end the program.
We are currently working on a concept for measuring the effectiveness of our human rights due diligence approach. The design of the individual measurement systems is being further advanced, taking into account established measurement systems such as supply chain monitoring.
Processes for engaging with value chain workers about impacts [S2-2]
Although we currently do not have a general process for direct engagement with value chain workers, we want to perform due diligence for constructive stakeholder involvement and therefore strive to comprehensively understand the interests and perspectives of workers in our value chain. Our direct dialogue with suppliers and other stakeholders helps us to develop our stakeholder management concept.
We also regularly engage in dialogue with stakeholders on the topic of human rights and actively participate in committees and initiatives established to ensure their observance. We do this, for example, in the corresponding working groups of econsense, where we have overseen the themes of human rights and industry since 2022, and participate in the Business for Social Responsibility (BSR) initiative. As part of such initiatives, we discuss best practices, challenges and experiences in implementing human rights and the UNGPs with the member companies from various industries.
Continuously raising awareness of child labor in the agriculture sector requires extensive measures and the involvement of various stakeholders. Against this background, we joined with other seed companies back in 2019 to establish the Enabling Child and Human Rights with Seed Organizations (ECHO) initiative in India, a multi-stakeholder forum for the promotion of children’s rights and decent work (such as fair wages, as well as healthy and safe working conditions).
Processes to remediate negative impacts and channels for value chain workers to raise concerns [S2-3]
We pursue various approaches to prevent and mitigate potential negative impacts on workers in the value chain and thus attempt to indirectly improve the working conditions of workers in our supply chain. One approach is the grievance mechanism for raising concerns through our global Speak Up Channel. The Speak Up Channel is open to both our own employees and any third party, such as workers in the value chain, who would like to report a potential compliance violation. This is defined in the Bayer Supplier Code of Conduct, which is a part of each supplier agreement. Furthermore, suppliers are encouraged by the Bayer Supplier Code of Conduct to offer their own grievance mechanism. This applies irrespective of whether the third party has a business relationship with us or whether the company’s own rights are affected. For more information on the grievance mechanism, please see the section “Processes to remediate negative impacts and channels for own workers to raise concerns [S1-3]” in Chapter A 4.3.1 Own Workforce and the section “Corporate culture and business conduct policies [G1-1]” in Chapter A 4.4.1 Business Conduct.
In accordance with legal obligations, such as the German Supply Chain Due Diligence Act (LkSG), and our own efforts to continuously improve existing systems, a functionality and accessibility test was carried out in 2025 for Bayer’s grievance mechanism, the Speak Up Channel. The test focused on countries with a generally high human rights risk and confirmed the proper and intended function of the grievance mechanism overall. At the same time, further improvement potential was identified that is now being taken into account.
A conclusive and comprehensive evaluation of the degree of trustworthiness of the grievance procedure from the viewpoint of employees in the supply chain is not practicable due to the number of people who can access the tool.