Bayer Aktiengesellschaft (BAYN) Earnings Call Transcript & Summary

Good afternoon. Good evening, everybody. Thank you so much for joining our ESG Update in 2024. This is the fifth time since 2019 that we come back to you with an event dedicated to the ESG topics, and I'm very excited together with my colleagues to dive deeper into the progress we made against Bayer's ESG agenda. Before I'm going there, I want to draw your attention to the next slide, which is the cautionary statement that many of you have seen many times. I just want to make sure that you take notice of this cautionary statement. And on that note, let me introduce the attendees of today's call. My introduction will be followed by: Bill Anderson, who then hand over to Frank. Bill, of course, is our Chief Executive Officer, but he also serves in the role as Chief Sustainability Officer. Frank leads our sustainability activities for the Crop Science business. Daniella has a similar role in the Consumer Health business. Claus represents our Pharmaceuticals business. I'm especially excited to then also introduce, Chitkala Kalidas to you, who has just joined us in a new role as Head of ESG. And then finally, I will walk you through our climate transition plan before we will get into a Q&A, which will be moderated by Ute Menke. Many of you have known Ute from your interactions in recent years with us. So it's 1 year that Bill as the new CEO of Bayer. He also agreed to take on the role as the Chief Sustainability Officer, and I'm particularly pleased to have him joining our call, and I would like to hand it over to you, Bill, to walk us through the introductory comments and the key note related to today's call.

Well, thanks very much, Matthias, and hello, everyone. I appreciate you joining today's webinar. And on behalf of everyone that you're going to hear from today, we really appreciate you all taking the time to listen and to ask questions about ESG at Bayer. So today's topic, Environmental, Social, Governance. It's a very important topic. It's also one that's gotten a lot of attention in the media, in the public eye. These 3 words they often get distilled into a 3-letter acronym, and that acronym becomes symbolic for a particular agenda or ideology. It means a lot of different things to different people, and it starts to pop up in houses of Parliament, in headlines, in the names of departments. And then pretty soon, the conversation is focused on something very removed from the important intrinsic role that the environment, the social fabric and sound governance play in the workings of a healthy company. And so, I hope that what you'll see and hear from my colleagues, Matthias, Frank, Daniella, Claus and Chitkala over the next 90 minutes, is an exhibit of how Team Bayer has installed ESG really into the heart of our operations. Not just as a symbol or a 3-letter acronym, but is an intrinsic part of how we operate. And that's the primary reason why I'm not just Bayer's CEO, but also the company's Chief Sustainability Officer. Those 2 roles are inextricably linked. And to be honest, I consider them equally important in shaping the company's future. Bayer is a company that claims a mission of Health for All, Hunger for None. That's a mission that's bigger than us and it spans beyond the lifetimes of any one of us on this call, but realizing that mission requires a healthy planet. It requires a flourishing society with fundamental human rights secured for all. And it requires a mode of governance that's both courageous; dynamic; compliant; it's got to be smart and iterative. We're not going to get it all perfect the first time, and resourceful. So simply put, we don't see ESG as an add-on to Health for All, Hunger for None, but rather it's a foundation for it, and it's really woven into it. And that mission pushes us to improve agricultural production, while preserving or even restoring nature. It drives us to reach today's patients with important medical therapies, but we also have to fund the development of new previously unimaginable medicines for the patients of tomorrow, and it compels us to take everyday health products with strong scientific profiles from skincare to allergy sprays to nutritional supplements and make them available to hundreds of millions of people all around the world. Access to health. Farms that feed the world and restore the planet. This work is core to Bayer's mission. It is Bayer's mission. And without it, Earth becomes a much less sustainable place. So precisely because of the essential nature of this work, we have a special focus on reaching people who need our products the most. Each of our 3 businesses has articulated a tangible, really concrete target to reach 100 million people in underprivileged populations by 2030. Smallholder farmers, women and mothers in underserved communities. These people aren't just the bedrock of their communities. They're the multipliers of development that much of the rest of the world depends on. In low- and middle-income countries, small holder farmers grow up to 80% of their country's food supply. So where do we stand in our 100 million targets? At the end of 2023, we reached 46 million women in low- and middle-income countries with modern contraception. In Agriculture, we reached 53 million smallholder farmers, including 40 million in Asia Pacific with Agricultural Solutions. And we reached 75 million people in economically or medically underserved communities with self-care. Those are big contributions to food security and health equity, and that makes a big difference. So beyond that, we're also taking climate action. In the same 2030 horizon, we're also committed to curbing our impact on the planet. At the end of last year, we reduced our own emissions by 20% versus 2019. We're committed to becoming climate-neutral by 2030, and we aspire to hit net 0 by 2050. Now Bayer defined these goals years ago, and they're not going to change. These targets are -- they're not a marketing tactic that will scrub from the website when the goal becomes a stretch. We're accountable to them. Our progress is validated and audited by external parties, and they influence my pay and the compensation of other leaders in the company. So today, we're strengthening that accountability with more transparency and more dialogue. In conjunction with this call, we've published our first transition and transformation plan. It's a holistic overview of how we aim to reach net 0 in 26 years, and how our businesses are exploring new sustainable value pools that will yield the next generation of Health and Agricultural Solutions, and we welcome your input on this journey. In my first year with the company, I've been challenged and encouraged by my exchange with stakeholders and experts like those on our Sustainability Council. We want more of that feedback, and we will let it shape the way we operate. In fact, we're looking at ways that investors can ratify our climate action, the same way you can weigh in on our financial and our strategic progress. And this is a time of great change at Bayer, and we're reorganizing every project, every process, every role at the company, so that our people can have a bigger impact on the mission that I opened my remarks with, Health for All, Hunger for None. It's not a pie in the sky slogan. For us, it's a real tangible challenge. It's a challenge to us, and we know it's a challenge for the planet. So in the face of that challenge, each one of our businesses has defined a tangible vision that will guide every part of how they work. This isn't their ESG vision, it's their vision for the division. So in Crop Science, we want to help farmers produce more while restoring nature, that's the impetus for important projects like Direct-Seeded Rice, a breakthrough that's behind one of the world's nutrition staples. This advancement doesn't just signify reduced emissions in rice farming, it opens up new avenues for financing for smallholder farmers. In Pharmaceuticals, our vision drives us to invest in areas like cell and gene therapy, where we see potential to offer hope to patients suffering from diseases like Parkinson's, where hope is currently hard to find. And in Consumer Health, we have a vision to exponentially grow the number of people who have access to everyday health products with trust and scientific backing. We're overhauling the company to focus on this important work, and it's going to be good for our customers, but also good for the planet, and we hope it will yield great returns for you. That's what you can expect to hear from my colleagues over the next 90 minutes. So on behalf of everyone at Team Bayer, thanks for your interest and our work. Thank you for your feedback on our efforts, and we look forward to a prosperous and abundant journey with all of you. So with that, let me hand it over to Frank from our Crop Science team.

Thank you, Bill. And also from my side, good morning and good afternoon to everyone, and thanks for taking the time and spending the next 90 minutes with us. So last year in June, we shared more about the tremendous opportunity in our pipeline and how we are envisioning the farm of the future at our Innovation Summit in New York. And today builds on that vision and is a continuation of our efforts to scale Regenerative Agriculture. Our vision has 3 key parts: produce 50% more; restore nature; and ultimately, scale Regenerative Agriculture. And as with any vision, there's a time horizon, it's an aspiration and a journey. Short term, and largely today's focus on producing more with less. Medium term about restoring more and our 2030 sustainability commitments. And long term, of course, bringing Regen Ag to really hundreds of millions of acres globally to really make a difference for the planet. Producing 50% more actually refers to the FIO estimate of what the world needs in 2015. So we have aligned our vision and our ambition with that target from the food and agricultural organization. And while it's not only our target, it is a very strong commitment, of course, to over -- our [ over ] mission, Health for All, and in particular Hunger for None. Restoring nature refers to the existing 4 sustainability commitments where we have defined very concrete quantitative targets. And we are making good progress towards our sustainability commitments. For example, our 30% environmental impact reduction commitment where we have reported a 12% reduction already in this period against the baseline of 2014. You can find further details of all of our 4 commitments and their progress in our 2023 Sustainability Report. Lastly, scaling Regenerative Ag over time through our global reach is where we see the future of farming. This Regen Ag vision as a customer and a value chain focus. And it's complemented by our sustainability efforts for Bayer's own operation and enabled by innovation and digital as well as our new operating model dynamic shared ownership. So let's talk a little bit about our definition of Regen Ag on the next slide. And for us, Regenerative Agriculture is all about outcomes. And the only way to achieve these outcomes is through a system approach that integrates existing and new solutions at Bayer's portfolio. What's key here is, the way to deliver regenerative outcomes is through a multi-season and a multi-crop system approach. So not individual products or solutions or 1-year options. This means that we are combining our innovations in breeding, in crop protection, in digital to deliver a holistic set of solutions tailored to each individual farm and its specific soil conditions, because we know the reality on the ground differ from farm to farm, and we treat each farm as an ecosystem itself and think about the right mix of solutions adapted to the conditions on that ground. So farmer-centricity is therefore key to understanding and properly addressing farmers' needs. Importantly, there are 2 key enablers that power this entire system, scientific innovation and digital technology. And you will see a few examples of those in a moment. So then how does all this translate into a business opportunity for Bayer? The Crop Science business is -- our Crop Science business is industry-leading, delivering solid growth from the core business outpacing both of our peers and the broader market in 2023 and also in the first quarter of '24. And we have plans, obviously, to continue to outperform the market with the sustainable competitive advantages. Our pipeline provides us to scale Regenerative Agriculture. We intend to live up to that vision by delivering world-class innovation. And we have been and we are expected to continue to be the leaders in key technologies, we are wrapping these solutions together with our leading digital platform. In the near term, we see us outperforming the crop input market, our traditional positioning, but more importantly, we expect to grow into what we call, adjacent spaces, which will significantly increase the relevant market for us. So adjacent segments driven by advancements in scientific technology and digital technologies, such as Crop Fertility, Digital Platforms and Marketplaces, Carbon Farming, Biofuels and Precision Application will give us the opportunity to move our company our position from that traditional EUR 100 billion plus market for crop inputs into a much bigger EUR 200 billion plus market for new solutions for Regenerative Agriculture. So let's look at some of the specific business examples that showcase the importance of our core portfolio to scaling Regenerative Ag, but also some of the new opportunities. And we are actually very, very excited about now these signs where we have 10 blockbuster products in our pipeline that we are able to launch into the market during the next 10 years to come. And this is actually quite extraordinary for us, where we defined a blockbuster product in agriculture by a business potential of more than EUR 500 million, and you don't have these that often actually in your pipeline. We actually now have 10 of those big blockbuster products that will be able to come to the market and we'll be able to serve our customers during the next 10 years to come. So let's take a quick look at some of these, and you will see and notice that actually some of the innovation in our core business are actually -- are coming in more broader system solutions and economic systems that will offer our farmers, our growers opportunities to move into additional value pools, many of them driven by sustainability elements that will help them to achieve their targets. So on the left-hand side, a couple of examples, driven originally by our core business. Bill already talked about Direct-Seeded Rice, a very important economic system for rice production in Asia Pacific with a huge potential for these rice growing countries to; on the one hand side, significantly reduce their water needs and water consumption, their carbon or methane emissions; and on the other side, driving yield and with that also well-being for our growers; and for communities in India and other countries. So very exciting innovation, again, which shows our innovation in the core can drive significant value also in adjacent spaces coming from sustainability features. Same is true for our new short stage of corn system, Preceon, which comes with some key benefits that help farmers to protect their yield better to have longer access to their crop. And with that, actually be more targeted in their nutrition and disease management. But also very importantly, increase and drive yields per acre, which gives them margin opportunities and helps also to -- let's say, helps with the [ FOO ] target of producing 50% more food by the year 2050. We are also quite excited about innovation coming from our new Crop Protection portfolio approach, where we are moving from selecting molecules to designing molecules with an excellent -- actually fit for the environmental profiles. And we are very, very proud that just last Monday. We announced also the official name of our new herbicide, Icafolin, which is the first new mode of action in [ work ] crops in 30 years. So we are very, very excited actually to drive this innovation further and getting this to our customers towards the end of this decade. As I said earlier, actually, we see a huge potential in building these more holistic solutions here driven by some key anchor innovation in our core. But we are also investing directly into some of these adjacent spaces and creating value there for our customers, but also for ourselves. We talked about carbon in previous in previous meetings with you. So today, I just want to highlight biofuels where we see really huge momentum here, in particular in North America, where farmers, as we speak, adopt regenerative system, which are unlocking new value streams because of the opportunity and the growing -- also capacity for biofuels in North America. So we invested last year actually into a start-up, which is called CoverCress, where we acquired a majority share. And this actually will enable the farmers in the Midwest, too, for the first time, grow a cover crop in between soybeans and corn which will allow farmers to protect their soil during winter time, but then also create cash, but -- by delivering this to offtakers that then transform this feedstock into low-carbon biodiesel and then towards sustainable aviation fuel. There's actually quite a number of additional opportunities there. And we are currently moving winter oilseed rape or winter canola as one would say in North America as an additional low-carbon feedstock and we have a European [ breeding ] program with a good fit for North America. So this is another exciting opportunity for us here. So wrapping up, we are very excited to contribute to scaling Regenerative Agriculture systems across geographies. And we believe that our innovation in both the core, so with 10 blockbusters coming in the next 10 years and the adjacencies can play a significant role in advancing Regenerative Ag system, globally. So now in order for farmers to do this work, they need to be healthy. And therefore, next, I hand it over to Daniella, who will talk about how we are working to advance health equity for farmers and other people in underserved communities around the world. Thank you very much.

Thank you, Frank, and welcome, everyone. So you've just heard about our systems approach to Regenerative Agriculture. And we also recognize that key to a successful transition is a just transition that includes the people most impacted by climate change, whether that's smallholder farmers who produce 1/3 of the food for the world, or women who make 90% of their family's health care decisions. So for us to leave no one behind, we need a world with accessible health care at its core. And of course, that's not a reality today. So many of the same communities living in health deserts are also on the front lines of climate change, and that's adding to their health challenges. We know that when you don't have access to a doctor, self-care is also your first line and your last line of care. So it is a true health lifeline. So in Consumer Health, while we're certainly working to make our consumer health products more environmentally sustainable, the biggest impact we can uniquely have is by addressing the health care gap within underserved communities, and that's our core focus. So Bill shared earlier our new consumer health vision, and I'll just underscore 2 key aspects, which are at the heart of our strategy. The first is billions. We cannot help billions of people unless we expand access to self-care for more people. And then the second is, to help them really live healthier lives. We are focused on our most trusted science-based solutions that are efficacious and safe. So meeting the needs of underserved consumers, this is a core focus for us, and bridging the access to health care gap for underserved consumers requires a radical focus on what they need. So that for us means things like intentionally designing our research, our innovation, our partnerships and our policy priorities to put the consumer at the center. So we're laser-focused on knowing this consumer who is often female and knowing her inside and out, and we're mindful of the challenges she faces. So I want to share with you what a typical underserved consumer may look like. So if I think about a consumer named Maria who has a 2-hour track to see a doctor, she doesn't have access to a pharmacy in her community, and she prioritizes work and family over everything else, which can usually puts her own health last. Some of our work to help Maria includes things like working with partners like reach52 in Africa, so we can get Maria, access to health education and quality care, close to her home. We've made our products like Flanax and Talcid available in mom-and-pop shops so Maria doesn't it need to leave her community to get the treatment that she can trust. And we've also helped to improve the entire health system for Maria. So we're supporting the United for Selfcare Coalition's work to advance the first-ever World Health Organization resolution on self-care, which ultimately will be a step change in health care policy. So all of this is part of our end-to-end approach, and we do have this laser focused on the underserved consumer. And I will say this has also been a growth driver. So as you saw in 2023, our accessible portfolio accounted for 12% of net sales for the division, and we reached 75 million people in underserved communities. We expect the opportunity also to continue to grow given that over-the-counter medicine is expected to double in emerging markets and also outpace that growth in high income ones. So to meet this growing need, we're tackling these end-to-end approaches to bridge the health care gap for all of the Marias in the world. And this strategy really helps to address the root causes of critical issues like malnutrition and cardiovascular disease and helps Maria to tackle prevention and diagnosis and also bring treatment and care within reach. So I want to zoom into 2 ways that this is coming to life. The first example I want to share is the Nutrient Gap initiative. How we're putting this into practice through our signature program, the Nutrient Gap initiative, our approach is to improve access to essential vitamins and minerals for 50 million people in underserved communities by 2030. And that's the full continuum from nutritious food, fruit, vegetables, healthy grains on through the safety net supplementation. So while malnutrition impacts all -- people all over the world, we know that women and children are among the most vulnerable. A recent UNICEF study shows that 1.2 billion women and girls of reproductive age globally suffer from vitamin and mineral deficiencies. Also, we know that climate change is intensifying this health challenge and it's reducing the level of nutrients in food. So with our leadership in agriculture and nutrition, we're really the only company that can help meaningfully address malnutrition at scale, and it's at exactly that crossroads of Health for All, Hunger for None. So we've looked a lot to understand what are the challenges in underserved populations are facing around essential nutrients. There are 3 key challenges: one is, many cannot afford them or find them nearby; two is, around nutrition education, they may not know how to achieve a balanced diet; and three is, in many communities, it's just not a part of the standard of care that's set by the government. So with the Nutrient Gap initiative, we're tackling all 3 of these. Last year, we reached 30 million people, and we were ranked #1 for Nutrition by the World Benchmarking Alliance. And we can really only do this by uniting kind of the expertise and skills of both of our divisions. And to give you an example, I want to zoom in on India. I think India paints a good picture of how we're working to close this nutrient gap. India is the epicenter of the malnutrition crisis. It's impacting both population health and prosperity. And our approach aims to deliver full nutrition solutions to these underserved communities. So to give you an idea, the typical Indian diet can only meet 70% of someone's nutritional needs. And this can impact their immunity, their work capacity and their overall health. So we're tackling this in 2 ways. First, by making fruit and vegetable seeds more accessible and giving smallholder farmers education and tools to improve their ability to grow them. We're also adapting our supplementation portfolio to bridge this gap. For example, we're making our multivitamin Supradyn accessible to a broader segment of the population. And in the future, we also plan to help make food more nutritious. So for instance, we recently entered into a partnership to develop a tomato that's nutritionally enhanced with vitamin D. So I want to go back for a moment. If you remember the 1.2 billion women and girls I mentioned, we know that the nutrient gap is magnified during pregnancy. So we've placed a particular focus on this population. We know also that under-nourishment during pregnancy can have a negative health outcomes for both the mother and the child, and that can often create that intergenerational cycle of poverty. So we're focused on this and to help solve this global health challenge, we've partnered with Vitamin Angels in India and in 20 other underserved markets to expand access to multiple micronutrient supplementation or prenatals, and we're working with local clinics where we provide pregnant women 180-day supply of prenatals. That's coupled with education on nutrition during pregnancy, and we've also launched a continuing medical education program to train health care providers on the importance of prenatals that's already launched in 3 countries and more are coming. We're also working, I mentioned the policy piece before. We're working with Vitamin Angels and local governments to update the national framework to make multiple micronutrient supplementation part of the standards of antenatal care. And through these efforts, we're already seeing some good progress. One example is Indonesia, the Indonesian government and Ministry of Health has committed to policy change, and there's an announcement expected this summer, and this has the possibility to impact 10 million pregnant women in Indonesia, annually. So I want to move now to another example, and this is on the cardiovascular side and how we're trying to save hearts and lives with Aspirin. So of course, cardiovascular disease, it continues to be the #1 cause of death globally. It's becoming even more prevalent due to increasing temperatures and pollution. And we're on a mission to create a model that cracks the code of prevention to help save more lives. So our focus is on the 3 As: Awareness, Action and Access. On Awareness, one of the biggest challenges that we've identified is in preventing heart disease is actually being aware of the risk. This can involve going to a doctor, getting extensive blood tests, lots of screenings. And we know that, that is especially challenging for people living in underserved communities, given a lot of the barriers that I talked about earlier. That's why we've partnered with the tech company HUMA to develop a heart risk assessment tool. It uses AI to personalize care and provide [ affordable ] access. And it's also helping people understand their risk without any invasive tests and with 90% accuracy. The second A is, Action. Once you find out you're at risk, you need a plan. And we know health care providers are critical here, but they're often out of reach for underserved communities. So we're working across sectors with partners like the Ministry of Health in Egypt or with Women Heart in the U.S. to make resources and access to health care providers more accessible. And lastly, once you've received the diagnosis, you need Access to a treatment. And we have one of the most accessible cardiovascular treatment already in our portfolio, and that's Aspirin. So we're working to make it even more accessible for more people and we're doing that through last mile delivery. So as I close here, I just wanted to say as we path -- as we chart our path towards our 2030 sustainability commitments and our vision of serving billions of consumers, we see a clear opportunity to accelerate Health Equity for All. And as you saw today, our strategy revolves around a radical focus on serving the underserved consumer and working in partnership to develop these end-to-end ecosystems to meet and exceed her needs while impacting health systems. Now above and beyond self-care, we're also working in partnership to enable access to prescription medicines and to remove even more barriers to care. And so with that, I'll turn it over to Claus, who will share how we're making health care more accessible through our Pharmaceuticals portfolio. Claus, over to you.

Yes. Thank you. Thank you, Daniella, and welcome to everyone on the call here also from my end. You've heard a lot about the great work that Daniella and team are doing to tackle health inqualities in underserved community -- in underserved communities. I start by showing an orientation slide that actually summarizes our sustainability goals and commitments as in support of SCG-3 and 5. So our core activity, of course, and you've heard it in the ingoing comments from Bill is that we want to reach 100 million women annually with modern contraception in LMICs. That's the core activity. And I think it's fair to say that we are among the key protagonists in the family planning ecosystem worldwide. We've become the United Nations Population Fund's, first private sector strategic partner. And we have spun a broad, broad network of partnerships and activities across the globe in pursuit of this goal. The second commitment that we've done is to support the World Health Organization and the eradication of some of the most prevalent and burdensome neglected tropical diseases that's been actually a laid down in the so-called Kigali Declaration that we're also supporting and endorsing. We are among the few manufacturers worldwide that actually provides essential medicines to tackle neglected tropical diseases. And we continue to have R&D programs in support of finding new solutions for patients in need, particularly in Africa. All of that leads us to some of the goals we have. We always said that one of the key goals is that we would like to be recognized as a top 10 company by the Access to Medicine Index and the foundation assessments. And we've made our way from rank #16 to rank #9 in a couple of iterations. And the next assessment is due in November. We have triggered a broad array of activities to support access in low- and mid-income countries. We have introduced tier pricing for the entire portfolio of biopharmaceuticals and it's supplied, it's used and it fuels significant growth in countries such as India or Mexico. So for our ophthalmology portfolio, we have been able to increase the number of Eylea patients from a couple of hundred to more than 13,000 in just 18 months. So it shows that these activities work and that they contribute to the business. So I would like to go on the next slide into some more details of our 100 million challenge. As you can see here, we have a geographical breakdown of our reach. It's heavily skewed towards Africa, where we are pretty successful by reaching nearly 30 million women in 2023. I'm just attending an African health care forum and we really get the feedback from all our partners, ministries and NGOs that we're doing a great job. But of course we need to do more in pursuit of 100 million challenge. And in order to do this, we will increase our activities in the next few years in the Asia Pacific region, where we find a significant unmet need. For example, in India alone, 49 million women don't have access to modern contraception as of today, although they would desire to have that access. So we're working with UNFPA and local and other partners to really fix that and to make our products more broadly accessible. In 2024, we expect to have the biggest year-over-year absolute growth in user numbers. So we will probably be able to reach an additional 67 million women in -- by the end of this year, which really speaks also to all the efforts that we put behind this goal. When we move on to the next slide, you see a bit more on what we have achieved so far in the area of NCDs and NTDs. As I previously mentioned, we have introduced tier pricing for all our products, including our launch brands. And what we can see is that this has also led to an acceleration of worldwide approvals and submissions to authorities from our buyer teams worldwide. We already have 31 registrations for Kerendia in LMICs and 26 for Nubeqa, our prostate cancer product. So that really speaks to the massive early effort and that we don't want to see this huge time gap in terms of availability and accessibility of our products. And in addition, these products have had a fantastic start into the market in countries such as India and Mexico, again fueling significant growth. We have actually achieved roughly close to 6 million patients with PAPs, that's Patient Affordability Programs in the 3-year horizon, again fueling the growth of many of our country organizations. As I mentioned in the context of entities, we are still vetted into R&D for these products, together with the Swiss Tropical and Public Health Institute, we are developing Emodepside for a tapeworm infection that is prevalent especially in Eastern Africa. We have just moved the asset into Phase III. That's also a cofinancing by the Swiss Institute to complete the clinical program. And we have been instrumental and have played a pivotal role in eliminating African sleeping disease. So it meets the global threshold of eradication as laid out by the WHO. And there's only small nests and of prevalent cases that we're still trying to fight with our products. And as I said, this has actually led -- and ultimately led to us being moving up in the Access to Medicines Index by [ separate ratings ] to the 9th rank. So when we go to the next slide, we will actually evolve and introduce a new business model for more than 50 underserved markets worldwide. As you learned previously, we have had significant efforts in support of, especially middle-income countries. Spoke to India or South Africa is another example. But there are some countries where we don't have any Bayer presence as a Pharmaceutical division. These are a little more than 50 markets worldwide. And we have developed a new social business model in which we will kind of merge all the activities that we have with our sustainability goals and commitments. And we call it the Global Health Unit, which will make our products more broadly accessible. So we will increase patient reach, but we will also support the division with top line increase and also cash flow at a reasonable profitability. We have learned a lot from the family planning business model over the past few years and we will extrapolate that to some extent to our NCD, NTD and Oncology portfolio. And whilst we continue to of course support middle-income countries in their growth journey, we want to really establish a new business model for these underserved markets. The way to do it will be with Public-Private Partnerships. We will engage more in tenders, both local and supranational. Of course we will work on affordability topics. And last but not least, as we've seen for example with our Ghana Heart initiative, we are also supporting capacity building in the countries. So this will ultimately lead to us reaching more patients, also gaining more turnover. And one of the first proof points is summarized on the next slide right after the foundation of the Global Health Unit, we have been able to sign a significant deal with Hayat Biotech who is actually helping the Emirates government to support African countries. We have signed a double-digit million value contract that will include both capacity building activities, but also reaching 0.5 million women in need of modern contraception in 5 African countries. And I'm very sure and look forward to it that there is more to come in the coming months and years. So watch out for what we will do on the Social Business side of things. So with this, I want to thank you for your attention and turn it over back to Matthias for the introduction of our new team member. Matthias over to you.

Claus, thank you very much, and thank you for walking us through quite a few topics that are relevant and also Chitkala's previous role. We talked a lot about India on this call. We also talked about the Access to Oncology products, both areas where you Chitkala already worked quite intensively in the area of sustainability. Bill at the beginning of this call, talked about the importance of the changes to how we operate at Bayer. Dynamic shared ownership is our new operating system. And as a team, we have been one of the front-runners in establishing the new ways of working. And as part of the changes in the team, we are also very pleased to be able to introduce Chitkala to you today, who will be our new Global Head of ESG and support all of us in driving the sustainability agenda, most prominently in integrating sustainability in our business strategy. Chitkala, over to you.

Thank you, Matthias, for the introduction. Hello, everyone. It is a real pleasure for me to be here. I would like to thank everyone who has taken the time to join our webinar today. I am thrilled to be in this newly created role of the Global Head of ESG at Bayer, as I firmly believe that Bayer is uniquely positioned to have real positive impact on a number of topics that are relevant to the lives of people around the world and as a result, on the global economy. In my role, I will have the opportunity to lead an incredibly talented community of colleagues who are passionate about meeting ESG and sustainability, an integral part of our business strategies. As Bill said, we will not have ESG goals that are just separate off to the side. But in fact, what we have done and will continue to do is to integrate these goals as part of our business strategies to deliver products that serve our customers. The scope of the ESG organization will include investor engagement activities, environment and climate strategy, health and safety, internal and external reporting on ESG, human rights and chemical regulatory affairs. By way of my introduction, I would like to share that I was born and raised in India and came to the U.S. nearly 30 years ago to do my PhD, and have since worked with colleagues from many countries and cultures always at the intersection of science and business. My training as a scientist and my exposure to global product development, along with my personal background, bridging India and the U.S. have shaped my professional and personal outlook. I have always had a strong interest in addressing access gaps that people around the globe face when it comes to health, food security, nutrition and innovative technologies. Almost always, these access gaps are also linked to Environmental and Social challenges. For example, excess heat, water scarcity only complicate barriers to -- access to good health care, for example. In my most recent role at Bayer as the Global Head of Oncology Regulatory Affairs and Oncology Sustainability, I led a talented team of regulatory professionals to enable precedent-setting approvals in over 75 countries for innovative medicines from Bayer that treat cancer. Along with these product approvals, I have also led several innovative public-private partnerships in underserved communities facing cancer care disparities, both in the U.S. and outside the U.S., in countries like India, Egypt, Ghana, Nigeria and Ukraine. I'm happy and proud to share that Bayer's oncology sustainability initiatives are contributing to the U.S.-India Cancer Dialogue and have been recognized by the U.S. White House Cancer Moonshot Team and by the Ministries of Health in Egypt, Ghana and India. Looking to the future, I am energized by the opportunities ahead of us to co-create and deliver innovative solutions that address the needs of farmers, patients and consumers and also have a positive impact on the planet. As part of this journey, I look forward to continuing to engage closely and in a transparent manner with investors who are important partners for our success. Thank you once again for joining us today, and I look forward to our continued interactions. I will now turn it over to Matthias.

Thank you, Chitkala. And again, thank you for joining our team. We look very much forward to working with you in the next couple of years. It's quite exciting to see what has been possible in the past when you are not fully in charge of sustainability. I think now that you are at the helm of a lot of these initiatives, it's going to be even more exciting. Bayer mentioned earlier today that we have published our first climate transition plan earlier in advance of this call. And my role for the next couple of minutes is to walk you through our thinking when it comes to the climate transition. In 2015, the world came together in Paris and agreed that it would be necessary to keep global temperature rise by the end of the century, well below 2 degrees, many are looking at 1.5 degrees as the key target here. Looking at the climate transition around the world, looking at what governments are doing, looking at consumption trends and also looking at the activities of business, we fear that we are closer to 3 degrees than we are to 1.5 degrees, which leads us to double down on 2 activities. First of all, as Bayer, we want to stick to our commitment to stay within what has been agreed in Paris. So our climate mitigation plan for our own operations is aligned with the climate targets that have been agreed in Paris. And we are committed to continue on that route. Basically, to stay in line with the Paris agreed targets, you need to cut your emissions in half in each of the next 3 decades, you need to find credible offsets for the remaining emissions. And in addition to that, you need to grow in a way that is carbon neutral. We believe that it's very hard to achieve path, but it's possible. We also see that many companies, including some of our suppliers, struggle to deliver climate path that are in line with Paris. Which brings me to the second topic where we can make a huge difference, and that is the adaptation topic. I think we need to do both. We need to reduce carbon emissions. We need to remove carbon out of the atmosphere, but we also need to adapt to a changing climate. And we see that need for adaptation when it comes to human health and the topic of extreme need. We also see it in our plant breeding programs or in our efforts to make our crop systems more resilience against rapidly changing and quite extreme weather events. So for us, mitigation and adaptation belong together. And then, of course, the third component is the access component. Now you have heard on this call that we are committed to provide access to our technologies, be it in crop, be it in health, to underserved communities. That's our contribution to what's in the climate discussions coined as a just transition. So when it comes to our transition plan, to what is in our control, you will see very clear commitments and we are grateful for the support of you, as our investors, to also include those commitments as part of the remuneration of our Board of Management. The much bigger contribution we can make in the space of transformation, especially when it comes to agriculture, we have a huge lever to transform the realities of our customers. And in that world, we can help to enable reductions that are, orders of magnitude, higher when it comes to greenhouse gas emissions to what Bayer is currently emitting. Looking at what's possible, we believe that if our value chain responds positively and continues to commit to reductions of carbon emissions that our products and services, the innovations we have, have a potential to reduce 1 billion tons of carbon emissions, which would be a very significant contribution. And the 10 blockbuster projects or products that Frank talked about earlier in this call, will build the foundation, our world-leading plant breeding program will build a foundation and innovative business models like the one we've seen in CoverCress where we partner with companies like Chevron or Bunge to deliver raw materials for sustainable aviation fuel solutions are examples of our transformation potential. The biggest area where we have an opportunity is to ensure that more carbon has been drawn down from the atmosphere, which is supposed to an agriculture where no-till farming is a key solution. Globally, no-till farming draws down the carbon emissions equivalent to 750 million -- I repeat, 750 million cars on the road. That is a gigantic lever we have. And as Bayer, we are very happy that countries like China, like Nigeria this year have committed to introducing biotechnology that would ultimately enable no-till farming solutions. I think there is a huge contribution agriculture can make. And we are committed not only to enable it, but also to ensure that financing goes in the directions of farmer customers who actually help to reduce carbon emissions. Frank talked about PRO Carbono, that's the other example where we can make a difference. The better we ensure that farmers can grow more on less land, the better we protect our forests because they play a crucial role in achieving the Paris climate agreements I've talked about earlier. And on that note, I would like to walk you through the second slide, which very much talks to our commitments. What this climate transition plan provides for you is our decarbonization path for our Scope 1 and 2 emissions, but also our commitment to work with our suppliers to reduce an equal amount of emissions in our supply chain. What you can see in our climate transition path is that we have made great progress in betting on renewable energies, in betting on electrons that are produced without the need to additional carbon emissions. One of the projects I'm particularly proud of has been launched last year. It's a partnership with Cat Creek Energy and Idaho in the United States. We have a 1.4-terawatt hour energy production kind of realized in that project. The first part of this project hopefully go online this year and already help us to reduce emissions. But we've done it in a very innovative way in partnership with rural communities in ways that in addition to producing green energy also creates tax revenues for rural communities and improve their access to water. And these kind of projects are very important for us. And they are at huge scale. I spoke about 1.4-terawatt hour just last week, the largest ever installation in China and renewable solar is producing 5 terawatt hours. It gives you a flavor of how big this project actually is. So betting on renewable energy is a cornerstone of what we are doing. The next phase between mid of this decade to end of this decade will be harder. And you can see that in the bridge on the slide, it will be harder because just replacing current electricity sources is a fairly easy way to move forward. It's also economically very sound. If you look at the calculations, the renewable project we invest in beat all other energy sources by a wide margin. When it comes to heat, when it comes to renewable steam, it's going to be a much more complicated process, and we are looking forward to also discussing with you, as investors, who demand from us to be on a Paris-aligned path, how to make those changes happen. But I have to say, I'm incredibly proud of our engineers, of our supply community and also of our community and the procurement teams in how they find creative solutions, innovative solutions that allow us to do good on the climate side, but also in a way that is financially very attractive for Bayer. And that's the kind of solutions we are looking for. We are also very firm in the belief that we need to be a front runner to avoid the competition with others later on. If you look at the energy needs for artificial intelligence alone, we are quite comfortable in our choice to early on -- agree on new projects in the area of renewable energy because there will be an even harder competition with the tech companies going forward, who, like Bayer, have very ambitious climate commitments, but who have an enormous growth in electricity needs going forward. I already talked about some of our reduction levers. Let's not forget that the smartest reduction lever is, of course, to produce in a more efficient way. To look at new solutions, for example, Icafolin as one example that Frank talked about, that can be produced with less -- much less carbon emissions inherent in the process than other herbicides in the space. So also looking at this kind of innovative solution is important. What's clear is that there will be emissions left in our value chain for quite a long time. And what you can see in the green bar on the slide is our commitment to nature-based solutions to permanently or for a very long time, remove carbon emissions out of the atmosphere to achieve climate neutrality and ultimately end up on a net zero path. This will never be the majority of our efforts, but I'm very glad that in the political realm, it's no longer cutting emissions or removing emissions. It's really doing both simultaneously. And it's important also that in the political realm, standards for how to do that in a credible way, for how to remove carbon emissions with nature-based and farm-based solutions in a credible way is endorsed. So that's a very important field for us. And of course, it's an income source for our customers on farming level as well. Our plan is to discuss this climate transition plan with you and also to look at your agreements to the path we are undertaking because this path has consequences. It will transform our business. It will inform our priorities and you, as investors, should have a say in how we are planning on doing that, and we are looking forward to a dialogue in the second half of this year on whether or not we should go down the route and also for your support at the next AGM for the transition plan that is being described here. We will also give you more insights into all the material topics that are relevant for us in sustainability, which stay tuned for that is also something we're going to share with you in advance of our upcoming conversations. With that, I want to close and I want to hand it over to Ute, who will now lead the Q&A.

Yes. Thank you, Matthias, for your presentation and all the other participants. We will now start the Q&A session, and please allow me to explain the procedure. Investors who join via Zoom can actively participate in the Q&A session. It is essential that you specify your first name, last name, and company in the name field in Zoom in order to allow for a correct identification. To ask a question, please click on the raise your hand icon. And if your question has been answered or you wish to cancel your request, please click on the lower your hand icon. When you will be called to ask your question, you first have to unmute yourself by confirming the corresponding prompt that will appear on your screen. Of course, everyone else, including YouTube participants, are invited to listen to the Q&A as well. And I see that the first question comes from [ Pauline ] from Federated Hermes. [ Pauline ], please ask your question.

Fantastic. And for this excellent presentation, it's really good to see that so much work has been done around the key topics. My question, was it possible for Bill Anderson, as CEO and Chief Sustainability Officer, in your introduction, it's very good that you touched on the recommendation of the Sustainability Council. It's something we reviewed every year. And one of their recommendation was to pursue an accelerated regenerative agriculture at scale with a more rapid shift from an input base to an outcome and system-based business model. So I'm very curious to know if you already have an idea of how you will report on the outcomes of your work to restore nature, is that, for example, providing information on the soil health of farmers, do you already have ideas?

Yes. Thanks, [ Pauline ]. We have a number of ideas on that. And some of the things we're doing already, for example, with our digital farming solutions, we have some pretty advanced technology for looking at things like soil health and fertility. Actually, I'll let Frank comment on it a little more, but also using our digital farming platform as a -- in combination with independent third-parties for carbon-level verification. So use of farmland as a carbon sink. Those are just a few of the ideas. The outcome basis also can be things like increased yield with the same amount of input gives basically a more environmental sustainable process. But Frank Terhorst, who's on the line, is really one of our resident experts. So Frank, maybe you could shine some more light on it.

Absolutely. Yes. Thanks for the question. And indeed, we are looking for very concrete KPIs for the new ergonomic systems that I've been talking about. So Short Stature Corn being one example, direct-seeded rice being another. We are next to the economic benefits of our solutions, we are actually also be able to really concretely measure, verify and then report back on the sustainability targets. So the reporting you were talking about will indeed be very closely linked to these new ergonomic system solutions. And we will, for sure, then report back on progress in the future once we have launched them on big scale.

And [ Pauline ], maybe just another thought is, I think it's important for many investors that are really concerned about sustainability, the reporting from companies, but it's actually also very important for us because it's a key part of our offering and our value offering. And so we really need to see the world moving in this direction. We've already invested more than anyone in the agriculture space, including with the systems of -- combinations of seeds and crop protection solutions, but also our digital farming platform which we're by far -- of the agricultural inputs company, we're by far the leader in investment and development in digital farming. But all of these things are available for measuring and driving regenerative farming practices. But right now, sometimes it's harder to get people to buy into them because it's not demanded by the value chain. So for example, the major food companies and things, we need them to be driving their Scope 3 reductions so that there's a more of a use for some of these things that we've invested so much in. So I think what I'm trying to say is I think you can count on Bayer to be very forthcoming with reporting on this because it's not an extra for us. It's a core part of our whole business model.

Okay. Thank you, Bill and Frank, for taking these questions. And the next question comes from Christian Faitz. Christian, go ahead please.

Yes. Hope you can hear me. A question for Frank. Sorry, I missed part of the presentation because I'm traveling. But have you talked about how precision farming contributes to reduction of pesticides but also maybe a reduction of CO2 and what Bayer's role is in precision farming.

Yes. Thanks, Christian. Gladly answering your question. Indeed, I've not been talking a lot about precision farming today. But of course, the way we look at precision application is all about making the use of our products, and this can be the use of crop protection products, but also the use for seeds more targeted and really more precise. And this is in line with our overall vision that I've been talking about in my presentation about really seeing the farm as an own ecosystem where we bring tailored solutions to them to maximize economic benefits but also giving pharmacy opportunity to access some of these new sustainability-driven value pools that we've been talking about. As you know, Christian, we are working on technology, in particular, to make the use of our crop protection products more targeted, more specific. We are making good progress. We actually had a showcase of our service offerings and products in -- or during the Agritechnica last year, which is one of the largest trade shows for equipment in agriculture. This use will make the -- or these technologies will make the use of crop protection products more targeted and to some extent, also will reduce volumes, but this is completely in line with our vision to move from an input provider that sells a bag of seeds or, let's say, volumes of crop protection products towards an outcome-driven value business model. So we believe this is the right thing to do. We don't want to become an equipment manufacturer, but we do believe we want to play a role at that interface of where our products are used and have, therefore, that also as a key priority in our innovation efforts.

Thank you, Christian, and Frank, for taking that question and giving the answers. So far, we have no further questions. Please let me remind you that you click on the raise your hand icon if you want to raise a question. Oh, I see. Okay. [ Francois Humbert ]. Please go ahead, [ Francois ]. Generale.

Yes. And also, I was interested in a specific vision for each business line. This is not my question. My question is on the Slide 7 on the reduction in crop protection impact on the environment. For me, Bayer has, in the recent figures that you gave, 13% -- has an impact on 13% on arable land. So clearly, this is an area of focus and risk for investors, also in light of the current litigation. It would be very interesting for us to understand where you stand on this with -- yeah, where you stand on this? Let's keep the question [ wide ].

Yes, I can gladly step in here. So indeed, the reduction of environmental impact of our synthetic Crop Protection business is a very important element for us. And there's a couple of elements that we are working on. First, further reducing the environmental impact of our current portfolio. This is also part of one of our 2030 commitments. We are using a model developed by the University of Denmark in Copenhagen, where actually we are already today the company with the most favorable portfolio where we basically have a footprint of around about 18% in terms of value of our global Crop Protection business, but actually less than 2% of the environmental impact coming from our synthetic Crop Protection portfolio. So you see that actually the environmental impact coming from our portfolio is significantly lower than the impact coming from our competitors. And that actually is rewarded also very concretely by value chain partners that prefer our portfolio over the portfolio of others. And the commitment we are talking about is to further reduce that and coming to a 30% reduction within that model we are using compared to baseline. The second very important element is the future. It's all about finding new molecules that have an even better environmental profile and fit. This is where our new approach comes in, which we call CropKey. So a new way to develop synthetic crop protection products, where we move away from selecting molecules to designing molecules. So we are actually looking at certain protein structures in targets. It could be weeds, could be pests, could be fungi where we want to actually only target that specific protein structure. And with artificial intelligence, our scientists actually are then designing molecules where, from the molecule structure, we know that they have a very good environmental profile to actually target only that and nothing else. So Icafolin is one example, which comes out of this new approach. We have 2 other fungicides coming designed with this new approach and then there is obviously a lot more to come. So we are absolutely, let's say, positive about the future role of synthetic crop protection products because we believe we can actually develop products that have significantly lower environmental profile in the future. And then lastly, the third element is also our investments into biologics. So let's say, nature-based products that we already have in our portfolio but will play a significant role for us also in the future. Most of them have actually also a very low environmental profile. We are targeting EUR 1.5 billion business with biologics in 2035. So if you take all of this together, further reducing the impact of our already quite well-positioned existing portfolio, new approaches in synthetic crop portfolio for the next generation and then a further increase of our biologics, we believe we will be able to help agriculture to lower that environmental impact quite significantly during the next 10, 15 years to come.

And if I may, [ Francois ], I also wanted to take the opportunity to thank you for your leadership, both in CA 100, but also in bespoke interaction and helping to organize a group of U.S. shareholders to work with us on improving our governance and also our impact. So for the last 18 months, I think we were in a really great dialogue. We learned a lot from that. We want to encourage you all on this call to continue that dialogue with us because we are very willing to take your perspective into account. As the topic of biodiversity and crop protection is concerned, we are currently in a dialogue with a group of investors organized by ShareAction. And the idea here is that we look at our strategy and get your input because we realize that your perspective on the market can be tremendously helpful. So stay tuned for more in the crop protection and biodiversity space, which, of course, is not only the crop protection topic, but also land use change and the effects of climate on biodiversity, but quite exciting conversations with you are going on at the moment, and we look forward to continuing them in the course of this year.

Thank you, [ Francois ], for that question. I would hand it over to [ Peter Lund from Rafa ], please.

May I ask 2 questions, please? First question is, do you have any plans to play in -- more in the sort of precision fermentation space? I guess the context is, as we're seeing this season, like farming, I would argue, is getting harder with climate volatility and food price inflation and all that and the need to feed people, I would argue, has to move to some degree into the lab. So that's sort of my first question. The second question is, you're kind of teasing us with these 10 products in 10 years, and maybe I've misread it, but perhaps you could just articulate a bit more about kind of why it's taking 10 years? What's the -- is it commerciality? Is it CapEx? Like is that return on investment? Is it just they haven't been invented yet or commercialized? Just any kind of context would be super helpful, please.

Maybe I take the first part of the question, [ Peter ]. As part of our Leaps portfolio companies, we have been looking into and investing into companies that work in the space of fermentation also in the space of cell culture need. We believe that these technologies play a very important role. But looking at the overall growth rates in agriculture, we don't think that they will replace the need to better adapt the agricultural system to a changing climate and to fight not only hunger but also food inflation, which will be felt by all communities around the world. So yes, we are looking into this space. We have some quite promising technology platforms but this is not going to be a panacea. And certainly, it will not help us to get out of this bind that a rapidly changing climate is putting a lot of pressure on yield and thus a lot of pressure on the shoulders of farmers around the world. For the second half of the question, Frank, I would like to hand it over to you.

Yes. Thanks, Matthias. And thanks for the question. Indeed, I mean, the 10 blockbusters during the next 10 years are part of our current pipeline. We just recently updated that. We foresee a peak potential -- sales potential from our pipeline of EUR 32 billion. But more importantly, we are now at a stage where many of these blockbuster products are coming out of development into the regulatory process. So we expect registrations for some key blockbuster innovation in '26, '27. And it just happened to be that we have quite a number now of really, really big innovation coming during the next years to come. You may be aware that we have relatively long development cycles. So developing a new crop protection product usually takes more than 10 years, same for trait. But right now, we are at the beginning of a wave that I have never seen in my 30 years in the industry, and that's very, very exciting for us to really now push through. It also comes with a high responsibility to make this really exciting new technology available for our customers globally. We talked about some of those. So Short Stature Corn in -- will be one of them. We have an update of our soybean trait technologies. We have some very exciting new crop protection products coming. I mentioned Icafolin. There is a new insecticide, Plenexos coming as well, a couple of more fungicides. We have other important trait technologies coming. So what we can share with you is certainly that recent update of our pipeline where you will see all the details. But we are certainly very excited about this wave of innovation, but it's going to come here to the market, to our customers the next years.

Thank you very much, Frank. The next question comes from Varvara from Erste Asset Management, please.

You invest a lot in sustainable products, but not all customers, as you mentioned, they are aware or interested in these more sustainable solutions, especially in countries like low-income economies, where sustainability is not on the top of agenda. So my question is, how do you create market for your regenerative agriculture solutions? And how do you see demand for these products to develop going further?

Yes. Maybe I give it a try. Actually, we see a lot of demand in the poorer countries in the world because many of them currently depend on food imports and food imports got very expensive. So when you look at Sub-Saharan Africa, the financial crisis of these countries is partially also a result of an ever-increasing bill they have to pay for importation of food. Now earlier, I spoke about Nigeria, which I think is a stellar example for how we can partner with those countries, how we can give access to innovation because Nigeria is the first country in Sub-Saharan Africa, sort of north of the southern tip, that has approved biotechnology for corn. This will allow the country to really improve their yields in corn and to get closer to the yields that we see, for example, in Brazil over the course of the last 30 years, a true revolution took place in increasing productivity. The same is true for countries like Kenya. What these governments realize is that they need to now welcome the kind of innovation that allows their farming communities to thrive. And no matter what crop you're looking at, be it in the vegetable space, be it in the space of cotton, be it corn, be it wheat. There is a real shift in driving investments into strengthening rural areas. And of course, that's a shift that could present a huge growth opportunity for us. Africa is the continent that is also home to the most underserved communities in the world. And we see a real opportunity in moving into that space. Most importantly, it's no longer us trying to push something, we really get a sense of pull here, and that pull is very promising.

And maybe, Matthias, we can name Better Life Farming as one of the access models for us on the agricultural side, but actually there's also collaboration with consumer health. So basically, a collaboration with other industry and governmental stakeholders to introduce, and we have more than 6,000 by now across Asia which are meant to support smallholder farmers to actually get access to modern seeds, modern crop protection but also link them to the market. So that's, I think, exactly to your question of how we can reach a smallholder farmers to really get access to sustainable innovation, but also in this, I agree, it's very important, link them to offtakers and markets so they can build their business and they can improve their livelihood.

Okay. Thank you so much. The next question would come from Patrick Peura, Allianz. And since we only have a few minutes left, Patrick, one question, please.

Yes. So we've seen good work on transparency of your policy, lobbying and stakeholder influence. These discussions started, Bill before your arrival. But I think many investors are quite appreciative of both through CA 100 and other means. Bill, you also referenced the opening -- during your opening, the little bit wider conversation in society around the appropriation of ESG and sustainability topics and how it could potentially be seen as prioritizing other results. So with your arrival, could you discuss a little bit how you see the role of Bayer on policy topics and also what effects you see or think you should expect from this kind of pushback that we're hearing from some places in order for you to continue to succeed on your strategy, both in your business and also your value chain?

Yes. Yes. It's, I think, a really important topic, and it would be very sad just as the world is really starting to make some progress against some of these goals. And you know we have a long way to go if we got distracted with sort of unconstructive political controversies that derailed companies. I think for us, as we've, I think, probably hopefully made very clear, it's really integral to our -- both our business plan and our values as a company. And so there's -- it's very much in our interest both as global citizens, but also our business interest that these things move forward and that we are moving towards a more sustainable agriculture and other fields. So what we're trying to do is sometimes we modify our language a little bit, do you know? For example, some of our stakeholders, they may not be very impressed with lower carbon, but they are impressed with higher yields. And so we don't have to lead with -- we can modify the message a little bit to the audience. And what we've emphasized is what's important is that we're making the progress. And we're reducing fuel consumption, we're increasing yields, we're reducing chemical impacts. And that's not a very hard message to sell. But if we cloak it in sort of ESG language and lingo and start throwing around cop this and that sort of thing, then we lose part of the audience, and that's unfortunate. So I think we put it in plain English. It's sort of obvious why protecting the soil, increasing fertility of soil, keeping carbon in the ground instead of in the rivers and waterways. I think there's a way to do this that is low on virtue signaling and high on actual progress. And I think Bayer is a good company to do that in part because a large constituency for us is farmers. And farmers are very realist about the earth and the environment. They're -- on the one hand, they're environmentalists, but they're not -- they're certainly not -- they're not elites throwing around a lot of jargon. And that's our native habitat is to be a part of that. And so hopefully, that sheds some light on your question.

Thank you very much, Bill. And the final question with a view to the clock is from Angela Flaemrich from Sustainalytics Engagement, please.

Okay. My final question is to Dr. Kalidas. Congratulations on your new role. I am interested to hear, in terms of corporate culture, how are you planning to drive the corporate culture so that your mandate is really accelerated throughout the organization? Not just tone from the top, but tone from the middle in terms of incentives and any other communication campaigns.

Thank you, Angela, for that question and also for your wishes. We have a new model that -- new model of operating that Bill has articulated very clearly, which really empowers our employees. And we are really focused on the transformation. This is the DSO transformation where we support and encourage self-formed teams to carry out a mission within a very short period of time and then move on to the next mission. I have actually worked in that environment in my previous role that I mentioned, which was actually a combination of 2 roles. One was the oncology regulatory affairs organization, the other was the sustainability. The benefits that we were able to deliver, which were recognized by our external partners and by the Ministries of Health and the Cancer Moonshot Team. Those were things that are very much aligned with what DSO supports and really wants to create within Bayer. And what I mean by that is, this was a team of passionate individuals who believe that it was important for Bayer -- it is important for Bayer to not only develop oncology medicines and register in certain key countries. It is also important to make sure that patients get access in an equitable manner through sustainable business models. And that's why this team came together with that mission and was able to deliver on that mission. And that is also the same thought that's contributing to the creation of the Global Health Unit that you heard Claus refer to, the same thought that Daniella shared in terms of uncommon collaborations or novel collaborations across divisions. So I would say it is very much part of Bayer's culture to drive this type of innovation where employees feel empowered. I mean, I would say I'm a testament to that. I volunteered to do that. I got the support, was able to deliver results. So I am very much energized by our new working model to really drive this concept of integrating ESG as part of our business strategy and to drive business growth and bring value to our customers and also to our investors. I hope that addresses your question.

Thank you, Chitkala. Thank you, Angela. I hand it over to Matthias again for some closing remarks. Matthias?

Yes. Thank you all for joining this call today. I want to thank you, Ute, Chitkala, Daniella, Claus, Frank and of course, Bill, for joining us and for your contributions. I also would like to mention [ Jan and Anna ], who have been not only instrumental in getting this call together, but are also key partners, you, our investors, will meet when it comes to ESG-related questions. And of course, Jost, who leads our Investor Relations team is also a great partner we have in addressing your concerns. We have seen at our AGM that you have lots of questions related to sustainability and our commitment is to answer them as good as we can, but also to work with you to improve forever. We jointly agree that there is a real opportunity to do that. So thank you again for your constructive feedback over the course of last year. And hopefully, also in the next coming months, we will have lots of opportunities to dive deeper into some of the topics we have addressed or to tackle issues that were not part of the lineup you saw today. Have a wonderful rest of the middle of the middle of the week. Happy Wednesday, and I look forward to talking to all of you in the coming weeks. Thank you so much.

Thank you