Bayer

Sector: Corporate

Employees:

> 115,000 employees working in 350 distinct companies spread across every continent

Carbon Footprint:

> 3,900,000 metric tonnes CO₂e (2005)

TARGETS

> Reduce CO₂ emissions to 53% below 1990 levels by 2010 in Germany
> Reduce CO₂ emissions to 50 % below 1990 levels by 2010 worldwide
> Emissions of acid gases are to be further reduced through the use of various technical measures and by outsourcing and relocating production to modern plants
> Improvement of energy efficiency worldwide
> Further reduction of CO₂ emissions within the investment cycle

Achievements

> Reduced overall greenhouse gas emissions 60% below 1990 levels by 2004, even as overall production rose 16%
> Cut consumption of electrical energy in chlorine production by 30%
> Avoided the release of 4 million tonnes of CO₂ equivalent by incinerating N2O (a potent greenhouse gas)

Benefits

> Significant greenhouse gas reductions achieved while the company’s overall production increased 16% between 1990 and 2004

Low Carbon Solutions

Background

The Bayer Group is a chemical and pharmaceutical holding company headquartered in Germany, and is one of Europe’s hundred biggest companies. The company has 115,000 employees working in 350 distinct companies spread across every continent, and makes more than 10,000 products, many of them highly specialized and requiring substantial consumption of energy.

Bayer has its origins in the 19th century, and over its long history, has gradually evolved internal environmental management mechanisms. It is a leading greenhouse gas reducer, with strategically integrated practices that have produced exceptional results without financial dislocation or competitive disadvantage.

Bayer “…have both a horizontal and vertical structure for sharing information internally, and for monitoring external developments that have an impact on our businesses, so that we remain responsive.” In addition, annually, the company hosts a sustainable development conference.

Perhaps the most ambitious effort Bayer has mounted to address its greenhouse gas emissions has been the replacement of the two coal-fired power generation plants the company operated in Dormagen (2000). Using a contracting model, Bayer solicited bids from power companies to install and run a new gas powered facility. The company estimates annual savings of 600,000 tons of CO₂ equivalents from the switch from coal to gas.

Bayer acknowledges that under current circumstances, with the higher cost of gas it would be cheaper to operate coal-fired energy plants, but financial considerations are not the only drivers of decision-making. “It makes no sense to invest in old technology”, said Wolfgang Große Entrup, Head of Governmental and Product Affairs.

Embedded within the management infrastructure of Bayer’s many companies are mechanisms and expectations for consideration of both economic and environmental costs and benefits. In addition, an active and varied group of stakeholders closely watch the company.

The head of Innovation, Technology and Environment, currently Mr. Udo Oels, has one of four seats at the company’s Group Management Board, headed by Bayer’s chairman, Mr. Werner Wenning. From his perch, Mr. Oels chairs the company’s Corporate Sustainability Board, which in turn is supported by the company’s Sustainable Development Working Group, an interdisciplinary team of managers that cut across the entire organisation. These internal structures draw appropriate managers into planning processes from the company’s business units, production sites, and the government and product affairs department.

Bayer is committed to developing products which contribute to climate protection. The company calls this ‘product-integrated environmental protection’. For example, the company has developed more efficient insulating materials and boards that will help its many customers save on energy consumption. The company has also developed a less road-resistant form of rubber for tires that cuts down on fuel consumption; lighter-weight plastic for cars; and plastic frames for the manufacture of solar power-generating units, which makes them less expensive to produce. Bayer also has conducted life-cycle assessments on roughly 20 percent of its products, and has instituted a program called Eco-Check to measure products for their resource efficiency, safety and environmental compatibility.

Because Bayer is a chemical company, environmental management has been a primary concern of the corporate culture, and the company has had long experience of target setting from which to draw.

Bayer set a target in 2000 to reduce its greenhouse gas emissions by 53% below 1990 levels by 2010, an ambitious target beyond the potential demands of Kyoto. By 2004 Bayer was able to reduce greenhouse gas emissions by 60%, even as overall production increased 16%. This is a level of reduction that many believe must be matched on a global scale over the next 50 years if climate catastrophe is to be avoided.

“Bayer has been committed to keeping the air clean and thus to climate protection for many years”, said Udo Oels, Member of the Bayer Management Board, responsible for Innovation, Technology and the Environment. “Since the signing of the Kyoto Protocol we have invested around EUR 1 billion and have already more than achieved our ambitious targets: emissions of greenhouse gases have been cut by over 60 percent worldwide.”

The Bayer Group is a chemical and pharmaceutical holding company headquartered in Germany.

Bayer reduced overall greenhouse gas emissions 60%, even as overall production rose 16%.

Since 1993, Bayer estimates that the release of 4 million tonnes of CO₂ equivalents have been avoided through the two-stage incineration process.

The company estimates annual savings of 600,000 tons of CO₂ equivalents from the switch from coal to gas.