Independent Assurance Report
Independent Practitioner’s Limited Assurance Report on the Sustainability Information
To Bayer AG, Leverkusen
PricewaterhouseCoopers AG Wirtschaftsprüfungsgesellschaft has performed a moderate assurance engagement on the German version of the augmented online version of the Annual Report of Bayer AG and issued an independent assurance report, authoritative in German language, which has been translated as follows:
We have been engaged to perform a limited assurance engagement on the sustainability information marked with “limited assurance” in the online annexes of the augmented online version of the Annual Report of Bayer AG, Leverkusen, (hereafter: the “Company”) for the period 1 January 2016 to 31 December 2016 (“Annual Report 2016 – Augmented Version”; hereafter: “Online Version”).
The Company’s Management is responsible for the preparation and presentation of the Online Version in accordance with the criteria as set out in the G4 Sustainability Reporting Guidelines of the Global Reporting Initiative (GRI GRI (Global Reporting Initiative) is a nonprofit organization that works to promote the dissemination and optimization of sustainability reporting. The GRI guidelines are considered the most frequently used and internationally most recognized standard for sustainability reporting. These guidelines are evolved in a multi-stakeholder process. GRI was established in 1997 by Ceres (Coalition for Environmentally Responsible Economies) and UNEP (United Nations Environment Programme). ) (hereafter the “GRI Criteria”) and for the selection of the information to be assessed.
This responsibility includes the selection and application of appropriate methods to prepare the Online Version as well as the use of assumptions and estimates for individual sustainability disclosures which are reasonable in the circumstances. Furthermore, the responsibility includes designing, implementing and maintaining systems and processes relevant for the preparation of the Sustainability Report, which is free of material misstatements due to intentional or unintentional errors.
Audit Firm’s Independence and Quality Control
We have complied with the German professional provisions regarding independence as well as other ethical requirements.
The audit firm applies the national legal requirements and professional standards – in particular the Professional Code for German Public Auditors and German Chartered Auditors (“Berufssatzung für Wirtschaftsprüfer und vereidigte Buchprüfer”: “BS WP/vBP”) as well as the Institut der Wirtschaftsprüfer (“Institute of Public Auditors in Germany; IDW”): Requirements to quality control for audit firms (“Entwurf eines IdW Qualitätssicherungsstandards 1 “Anforderungen an die Qualitätssicherung in der Wirtschaftsprüferpraxis” (IdW EQS 1)”) – and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
Our responsibility is to express an opinion on the sustainability information marked with “limited assurance” in the Online Version based on our work performed.
Within the scope of our engagement we did not perform an audit on external sources of information or expert opinions, referred to in the Online Version.
We conducted our work in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised): “Assurance Engagements other than Audits or Reviews of Historical Financial Information” published by IAASB. This Standard requires that we plan and perform the assurance engagement to obtain limited assurance whether any matters have come to our attention that cause us to believe that the sustainability information marked with “√” in the Online Version has not been prepared, in all material respects, in accordance with the GRI Criteria.
In a limited assurance engagement the evidence-gathering procedures are more limited than for a reasonable assurance engagement and therefore significantly less assurance is obtained than in a reasonable assurance engagement. The procedures selected depend on the practitioner’s judgement. This includes the assessment of the risks of material misstatements of the sustainability information marked with “limited assurance” in the Online Version with regard to the GRI Criteria.
Within the scope of our work we performed amongst others the following procedures:
- Obtaining an understanding of the structure of the sustainability organization and of the stakeholder engagement
- Inquiries of personnel involved in the preparation of the Online Version regarding the preparation process, the underlying internal control system and selected sustainability information
- Site visits as part of the inspection of processes and analysis of selected data at the following Bayer sites: Pharmaceuticals, Bergkamen, Germany; Consumer Health, Myerstown, USA; Crop Science, Frankfurt, Germany; Crop Science, Kansas City, USA; as well as the Covestro site Baytown, USA; and the Currenta sites Leverkusen, Dormagen, Krefeld-Uerdingen, Germany;
- Analytical procedures on selected sustainability information of the Online Version
- Comparison of selected sustainability information with corresponding data in the consolidated financial statements and in the group management report
- Assessment of the presentation of selected sustainability information in the Online Version regarding the sustainability performance
Based on our limited assurance engagement, nothing has come to our attention that causes us to believe that the sustainability information marked with “limited assurance” in the Online Version of the Company for the period 1 January 2016 to 31 December 2016 has not been prepared, in all material respects, in accordance with the GRI GRI (Global Reporting Initiative) is a nonprofit organization that works to promote the dissemination and optimization of sustainability reporting. The GRI guidelines are considered the most frequently used and internationally most recognized standard for sustainability reporting. These guidelines are evolved in a multi-stakeholder process. GRI was established in 1997 by Ceres (Coalition for Environmentally Responsible Economies) and UNEP (United Nations Environment Programme). Criteria.
Emphasis of Matter – Recommendations
Without qualifying our conclusion above, we make the following recommendations for the further development of the Company’s sustainability management and sustainability reporting:
- Further alignment of the sustainability reporting in consideration of the changing focus topics of a life science Life Sciences This term describes Bayer’s activities in health care and agriculture and comprises the Bayer Group excluding its legally independent subsidiary Covestro. It refers to the businesses of the Pharmaceuticals, Consumer Health and Crop Science divisions and the Animal Health business unit. company;
- Further development and formalization of internal controls and systems for non-financial indicators particularly at decentralized level, as well as increasing implementation of automated system interfaces and controls
Restriction on Use and Distribution
We issue this report on the basis of the engagement agreed with the Company. The review has been performed for purposes of the Company and is solely intended to inform the Company about the results of the review. The report is not intended for any third parties to base any (financial) decision thereon. We do not assume any responsibility towards third parties.
Essen, February 21, 2017
(German Public Auditor)
ppa. Juliane v. Clausbruch