Sustainability at BayWa
Global challenges
BayWa is a company with international operations and a broad-based portfolio in the energy, agriculture and building materials sectors. As a project manager and provider of solutions, BayWa serves the basic human needs for food, energy, warmth and mobility. But these basic needs can only be met in the long term if they are in harmony with the environment and human rights. BayWa is aware of this responsibility and aims to develop sustainable solutions along the entire value chain. For BayWa, doing business responsibly means it will be fit for the future and at the same time offers business and growth opportunities.
Group and sustainability strategy
Sustainability is a core topic of our new “Sustainable Solutions for Life” Group strategy. Alongside our sustainable growth target of generating €470 million to €520 million in EBIT by the end of 2025, BayWa aims to increase the share of EBIT from green activities to over 50% and to reduce its own greenhouse gas emissions by 22% (compared with base year 2017). To achieve these goals, BayWa AG introduced an internal CO2 price as at 1 January 2023 to accelerate decarbonisation within the Group. The climate budgets of the individual segments will be based on their respective annual emissions. Additionally, the segments will be responsible for defining appropriate measures to help them reduce their own carbon emissions. This will make it possible to drive forward decarbonisation throughout the Group.
BayWa enhanced its sustainability strategy in 2021 in order to rise to the global challenges The strategy sets the business’s strategic direction on the topic of sustainability for the next ten years, with the goal of making the company climate neutral by 2030. The sustainability strategy is based on four action areas: Value Creation, Environment & Climate, Employees and Society. Each action area is underpinned by relevant core topics and strategic objectives.
ESG ratings
BayWa AG is an international trailblazer in the trade sector when it comes to implementing environmental, social and governance (ESG) measures. This status has repeatedly earned the company positive recognition from rating agencies. External ratings provide orientation on sustainability performance, which ultimately makes them a crucial factor in financing and investment decisions.
Carbon Disclosure Project (CDP): B rating
The Carbon Disclosure Project (CDP) awarded BayWa AG a climate rating of B for 2022 for its coordinated measures in response to environmental and climate action issues. This means that the company maintained its strong showing from the previous year. BayWa’s commitment to sustainability remains above the global and industry average.
MSCI ESG Research: AA rating
MSCI ESG Research again gave the BayWa Group an AA rating at the end of 2022, classifying BayWa as a “Leader”.
ISS ESG Rating: Prime C+
ISS ESG, one of the world’s most reputable ESG rating agencies, awarded the BayWa Group Prime C+ status in recognition of its sustainability performance. According to ISS, BayWa is one of the leading companies in all three ESG dimensions in its industry.
Sustainable finance
Sustainable finance plays an important role for BayWa because the Group makes use of a variety of sustainable financing instruments. After issuing a €500 million green bond in 2019, BayWa took out a €1.7 billion ESG-linked syndicated loan and placed a €350 million ESG-linked bonded loan in the financial year 2021. The terms of both the ESG-linked syndicated loan and the ESG-linked bonded loan are tied to the Group’s sustainability performance. As a result, sustainable and green financial products now account for more than 50% of BayWa’s borrowing portfolio. The significance of sustainability as our strategic guiding principle is thus reflected in the company’s financing.