Bayer ‘intensifies cooperation with suppliers’ as it halves green capex

Bayer says it will step up its efforts to decarbonise its supply chain, whilst halving the budget for making its own assets greener.

In its latest annual report, the German pharmaceutical and biotech firm revealed it had cut Scope 1 and market-based Scope 2 emissions from its most carbon-heavy sites by 25.9% between 2019 and 2025.

It reduced emissions from its value chain by 12.0% over the same period, according to the document.

To hit its 2029 Scope 1 and 2 target, Bayer will have to renovate its buildings and replace plants and production machinery for greener or more energy efficient versions.

“We expect the capital expenditures (capex) necessary for investment in our buildings, plants or processes at our sites to achieve further reductions through 2029 to be at least €100m in the coming years,” it said.

In 2024, Bayer estimated that figure to be around €200m, but said that “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.”

Last year, €284m of the firm’s capex was recorded as being eligible under the EU’s Taxonomy Regulation – down from €549m the previous year – while its non-taxonomy-eligible spending increased.

While its green spending has dropped, Bayer said it expected power purchase agreements to contribute more to its decarbonisation goals than it had originally assumed.

Partly as a result of this, it does not expect “the reduced investment in our own sites to jeopardise the attainment of our climate targets”.

Supplier engagement  

On Scope 3, Bayer claims to be “intensifying [its] cooperation with suppliers, particularly as regards the transition to the use of renewable energies”.

It wants suppliers to use only renewables-based electricity by 2030, and to continuously improve their energy efficiency.

“The current emissions reduction targets of our suppliers are still insufficient to attain our Scope 3 emissions reduction target,” it continued, adding that only 36 of its 200 “most important” suppliers have near-term targets validated by the Science Based Targets initiative.

Bayer has been developing “a CO2 price approach” for its Scope 3 emissions, it added.

“Our goal is to apply in the future a CO2 price component during sourcing events to inform decision-making and serve as an incentive for suppliers to develop and offer products with a lower carbon footprint.”

Elsewhere, the firm alludes a “switch in suppliers that we will initiate” as part of its efforts to reduce its Scope 3 emissions.