3Rs principle (replace, reduce, refine)

Replace: prior to each project, Bayer checks whether an approved method is available that does not rely on animal studies and then applies it. Reduce: if no alternative method exists, only as many animals are used as are needed to achieve scientifically meaningful results based on statutory requirements. Refine: Bayer ensures that animal studies are performed in a way that minimizes any suffering.


is the abbreviation for alternative performance measure; see chapter “Alternative Performance Measures Used by the Bayer Group” for more information.


are substances and products that control pests such as insects, mice and rats, as well as algae, fungi and bacteria.


is a nonprofit organization that works on behalf of institutional investors to compile annual rankings of detailed environmental data, especially in respect of greenhouse gas emissions (CDP-Climate) and water management (CDP-Water), from the top 500 publicly listed companies in the world. According to CDP, more than 800 investors representing fund assets of around US$100 trillion currently draw on this information for their investment decisions.

Conflict minerals

are those mined in conflict regions. They include tin, tungsten and tantalum ores, gold or their derivatives. Armed conflicts over the control of these resources occur particularly in the eastern part of the Democratic Republic of Congo and neighboring countries.

Continuing operations

Sales and earnings reporting for continuing operations pertains only to business operations that are expected to remain in the company’s portfolio for the foreseeable future; opposite of discontinued operations.

(Corporate) compliance

comprises the observance of statutory and company regulations on lawful and responsible conduct.

Corporate governance

comprises the long-term management and oversight of the company in accordance with the principles of responsibility and transparency. The German Corporate Governance Code sets out basic principles for the management and oversight of publicly listed companies.

Corruption Perceptions Index (CPI)

Since 1995, NGO Transparency International has produced an annual index of countries – 176 in 2016 – by the perceived level of public-sector corruption. The CPI ranks countries according to the extent to which public servants and politicians are believed to engage in bribery and to grant or accept undue advantage.

Credit default swaps (CDS)

are tradable insurance contracts used to hedge against the default of a borrower.

Debt Issuance Program (DIP)

Formerly the multi-currency European Medium Term Notes (EMTN) program, DIP is a documentation platform that enables Bayer to flexibly issue notes in various currencies and with different maturities.


designates the variation within the workforce in terms of gender, origin, nationality, age, religion, sexual orientation and physical capability.

Foreign exchange

Claims for payments in foreign currencies traded on foreign exchanges, usually in the form of balances with foreign banks or bills of exchange or checks payable abroad; banknotes and coins denominated in foreign currencies are not considered to be foreign exchange.

GHG Protocol

The Greenhouse Gas Protocol is an internationally recognized tool for recording, quantifying and reporting greenhouse gas emissions. Its standards cover all emissions within a company’s value chain. Bayer aligns itself to the Corporate Standard for direct (Scope 1) and indirect (Scope 2) greenhouse gas emissions and also to the Corporate Value Chain (Scope 3) Accounting and Reporting Standard, which covers further indirect emissions along the value chain. Dual reporting was introduced in 2015 with the updating of the GHG guidelines for Scope 2. Indirect emissions have now to be reported using both the location-based and the market-based methods. The location-based method uses regional or national average emissions factors, while the market-based method applies provider- or product-specific emissions factors based on contractual instruments.

Global commercial paper program

Commercial paper (CP) issued under Bayer’s program is a short-term, unsecured debt instrument normally issued at a discount and redeemed at nominal value. It is a flexible way of obtaining short-term funding on the capital market. Bayer’s commercial paper program allows the company to issue commercial paper on both the U.S. and European markets.

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).


is a collective term for all guidelines that govern “good working practice” and are particularly relevant for the fields of medicine, pharmacy and pharmaceutical chemistry. The “G” stands for “Good” and the “P” for “Practice,” while the “x” in the middle is replaced by the respective abbreviation for the specific area of application – such as Good Manufacturing Practice (GMP), Good Laboratory Practice (GLP), Good Clinical Practice (GCP) or Good Agricultural Practice (GAP). These guidelines are established by institutions such as the European Medicines Agency or the U.S. Food and Drug Administration.


stands for health, safety, environment, quality.

Hybrid bond

A hybrid bond is a corporate bond with equity equivalent properties, usually with either no maturity date or a very long maturity. Due to ist subordination, it has a lower likelihood of repayment than a normal bond in the event of issuer bankruptcy.

ILO core labor standards

The eight core labor standards of the ILO (International Labour Organization) that define the minimum requirements for humane working conditions are internationally recognized “qualitative social standards.” They represent universal human rights that are deemed valid in all countries regardless of their economic development status.

Innovative Medicine Initiative (IMI)

is a public-private partnership developed by the European Commission and the European Federation of Pharmaceutical Industries and Associations (EFPIA) with the goal of promoting biomedical research in Europe. IMI finances research projects aimed at overcoming the major bottlenecks in the research and development of new pharmaceuticals. The partnership provides funding to project participants from academic institutes, small and medium-sized businesses, patient organizations and other institutions. The pharmaceutical industry contributes to these projects by donating capacities and resources.

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.

Local procurement

means that the procuring (Bayer) company is located in the same country as the supplier.


are a chemical class of systemic insecticides.


(over-the-counter) designates the business with nonprescription medicines.


is defined as the science of, and activities related to, the identification, assessment, comprehension and prevention of side effects or other problems associated with pharmaceutical products.

Phase I-IV studies

are clinical phases in the development of a drug product. The active ingredient candidate is generally tested in healthy subjects in Phase I, and in patients in Phases II and III. The studies test the therapeutic tolerability and efficacy of active ingredients in a specific indication. Phase IV studies are conducted following the approval of a new drug product to monitor its safety and efficacy over an extended period of time. The studies are subject to strict legal requirements and documentation procedures.

Price / cash flow ratio

The price / cash flow ratio is the ratio of the share price to gross cash flow per share. It shows how long it would take for the company’s cash flow to cover the share price.

Price / earnings ratio

This is the ratio of the current share price to earnings per share (EPS). A high price/earnings ratio indicates that the market assigns a high value to the stock in the expectation of future earnings growth.


The reconciliation records, on the one hand, those business activities not assigned to any other segment (“All Other Segments”), including particularly the services provided by Business Services, Technology Services and Currenta. It also includes “Corporate Functions and Consolidation,” which largely comprises Bayer holding companies and the Bayer Lifescience Center.

Short Term Incentive program (STI program)

is a variable income component for all managerial staff.

Significant locations of operation

A selection of countries that accounted for more than 80% of total Bayer Group sales in 2016 (United States, Germany, China, Brazil, Japan, France, Canada, Italy, Mexico, U.K., India, Spain, Australia, Russia, Switzerland, Poland, Turkey, Argentina and Belgium).

Syndicated credit facility

Credit line agreed with a group of banks; generally used for extensive financing requirements, such as when making an acquisition, to increase available liquidity or as security for the issuance of debt instruments. The credit facility can be utilized and repaid flexibly, either in full or in portions, during its term.

United Nations Global Compact (UNGC)

The United Nations Global Compact is the most far-reaching and important responsible corporate governance initiative in the world. Based on ten universal principles in the areas of human rights, labor, environment and anticorruption, the UNGC pursues the vision of an inclusive and sustainable global economy that benefits people, communities and markets everywhere. By committing to the UNGC, companies agree to document each year their efforts to uphold the ten principles.

Vector control

describes methods for the avoidance or targeted control of organisms that transmit pathogens triggering infectious diseases. Vectors include blood-sucking insects such as the Anopheles mosquito, which can transfer malaria parasites, for example.

Working capital

is the difference between short-term current assets and short-term liabilities; it is calculated by deducting short-term liabilities from current assets (excluding cash and cash equivalents). In the statement of cash flows, the change in working capital is one of the variables used to assess a company’s financial health. The objective of working capital management is to reduce working capital by minimizing the “financing gap” caused by the time lapse between the disbursement of funds (= payment for necessary raw materials) and the receipt of funds for the finished product.