assured 2011
Assurance Statement

To the Management Board of Bayer AG, Leverkusen

Our engagement

We have been engaged to perform a limited assurance engagement on all parts of the Bayer Sustainable Development Report (hereinafter: the report) for the reporting period from January 1, 2011 to December 31, 2011. The report is published both as a printable version and as an online version on Bayer’s web presence www.sustainability2011.bayer.com and http://www.nachhaltigkeit2011.bayer.de/ respectively.

Limitations of our engagement

Our engagement is exclusively limited to the German and English printable version as well as to the German and English online version on Bayer’s web presence www.sustainability2011.bayer.com and http://www.nachhaltigkeit2011.bayer.de/ respectively. Any data or links that refer to sections beyond these websites were not part of our limited assurance. Our engagement also did not include any prospective statements or statements from external experts on pages 11, 14, 18 and 20 in the printable version and on the online version respectively.

Criteria

We assessed the report against the criteria set out in the Sustainability Reporting Guidelines Vol. 3.1 issued by the Global Reporting Initiative and the reporting principles presented on the front flap of the report. We believe that these criteria are suitable for our assurance engagement.

Responsibility of the Management Board of Bayer AG

The Management Board of Bayer AG is responsible for the preparation and the content of the report in accordance with the above-mentioned criteria. This responsibility includes the design, implementation and maintenance of internal controls for the preparation of a report that is free from material misstatements, in accordance with the above criteria and based on suitable methods for gathering source data.

Our responsibility

Our responsibility is to issue an assurance report on the report based on our work performed. Our responsibility in performing our assurance activities is to the management of Bayer AG only and in accordance with the terms of reference agreed with them.
We conducted our limited assurance engagement in accordance with the International Standard on Assurance Engagements (ISAE) 3000. This standard requires that we comply with our professional duties and plan and perform the assurance engagement to obtain a limited level of assurance to preclude that the report is not in accordance, in material respects, with the aforementioned reporting principles and criteria. In a limited assurance engagement the evidence gathering procedures are more limited than in a reasonable assurance engagement and therefore less assurance is obtained than in a reasonable assurance engagement.
We performed the engagement in accordance with the independence requirements of the IFAC Code of Ethics for Professional Accountants.

Procedures

Within the scope of our engagement, we requested evidence on a sample basis based on risk and materiality criteria to obtain a limited level of assurance on the compliance of the report with the reporting principles and criteria. The nature and scope of our work was based on our professional judgment and we have performed all the procedures deemed necessary to provide a basis for our conclusions. The performance of our engagement mainly involved the following work:
  • Assessment of the suitability of the underlying criteria and their consistent application.
  • Inquiries of employees responsible for data capture and preparation of the Sustainable Development Report designed to assess the sustainable development reporting system, the data capture and compilation methods as well as internal controls to the extent relevant for a review of the Sustainable Development Report.
  • Inspection of the relevant documents and systems for gathering, analyzing and aggregating data from the areas Health, Safety & Environment (HSE) and Human Resources in the reporting period as well as tests on a sample basis.
  • Inspection of the relevant documents and systems for determining and calculating direct and indirect CO2 emissions data in accordance with the internationally acknowledged Greenhouse Gas Protocol Corporate Accounting and Reporting Standard (GHG Protocol) in the areas Scope 1 and Scope 2.
  • Analytical considerations at Group level, subgroup level and the level of significant reporting units with regard to analysis and aggregation of data in the preparation of the report.
  • Inquiries and inspection of documents on a sample basis relating to the collection and reporting of HSE data during site visits for the following 10 reporting units: Bayer CropScience Kansas City (United States of America), Bayer CropScience Roussillon (France), Bayer CropScience Vapi (India), Bayer HealthCare Garbagnate (Italy), Bayer HealthCare Kiel (Germany), Bayer HealthCare Turku (Finland), Bayer MaterialScience Filago (Italy), Bayer MaterialScience Darmstadt/Weiterstadt (Germany), Bayer Business Services Leverkusen (Germany), Currenta Krefeld-Uerdingen (Germany).
  • Review of material qualitative statements in the report with regard to consistency and plausibility.
  • Inquiries of employees from selected departments at the Group’s headquarters, at subgroup level and the service companies and at the sites visited relating to significant qualitative statements made in the report as well as inspection of underlying documents.
  • Review of selected press articles to ascertain whether they reflect company-specific topics of relevance for sustainable development considered in the report.

Our conclusion

Based on our procedures performed, nothing has come to our attention that causes us to believe that the printable version of Bayer’s Sustainable Development Report 2011 and the online version on Bayer’s web presence www.sustainability2011.bayer.com and http://www.nachhaltigkeit2011.bayer.de/ respectively are not presented fairly, in material respects, in accordance with the reporting principles and criteria.

Recommendations

Without qualifying our conclusion above, we recommend for the further development of Bayer’s sustainability management and reporting the following:
  • For Bayer, ensuring adequate nutrition for a steadily growing global population is one of the most challenging megatrends of the 21st century. The company is investing significantly in research and development to generate products and services that increase the sustainability and productivity of agriculture. We recommend the systematic implementation of the four elements of the growth strategy recently formulated for the Bayer CropScience subgroup and the company to actively seek transparent dialogue with the population and other stakeholders.
  • Bayer assigns high priority to environmental protection and the conservation of natural resources. Material and energy efficiency in particular is an essential control factor that leads both to ecological and economic improvements. To make progress measurable, since 2010 Bayer has reported the degree of coverage of activities with HSE management systems at certified and/or validated sites by way of production volume and energy consumption. Owing to the heterogeneous corporate structure and range of products involved, we consider energy consumption to be the more meaningful parameter that better reflects the degree of coverage and thus recommend that it is the only one used in the future.
  • One focus of the current strategic alignment of the Group is on growing markets, particularly in Asia. This increases the significance of sites that were previously less the focus of attention. To continue to ensure balanced reporting on sustainability issues we recommend the development of an information system that allows access to site-specific data.

Peter Nolden                            Annette Johne

Wirtschaftsprüfer                     Wirtschaftsprüferin
[German Public Auditor]         [German Public Auditor]

Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
Düsseldorf, May 28, 2012
http://www.sustainability2011.bayer.com/en/assurance-statement.aspx

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Last updated: June 6, 2012