Bayer says chemicals farmers use to fight insects are safe, but it's more complicated than that, says its ESG head

• Bayer's ESG lead says the company is trying to minimize the effects of its pesticides on nature.
• His comments follow Bayer's decision to update its sustainability strategy in late 2019.

In Klaus Kunz's more than two decades at Bayer, 2018 stood out.

That year, the German company's reputation — once synonymous with making aspirin — took a major blow. Bayer acquired Monsanto and, with it, lawsuits claiming Monsanto's signature weedkiller, Roundup, caused a type of cancer. The European Union, also in 2018, banned some pesticides that Bayer makes because scientists and regulators linked them to deaths of bees.

"It felt like we were on the grill at a barbecue," Kunz, Bayer's head of environmental, social, and governance strategy, told Insider.

While Kunz and Bayer have said Roundup isn't a public-health threat, as have a string of government agencies around the world, Kunz acknowledged that chemicals used to rid farms of weeds and pests can harm the environment. He said Bayer is trying to minimize those impacts while also ensuring farmers can produce enough food for a global population expected to grow by billions this century.

"People said our products are harmful to bees, and our message was, 'Our products are safe to the environment when applied according to label instructions,'" Kunz, who has a doctorate in organic chemistry, said. "This is very legal language. But if you reflect on that — an insecticide is safe for the environment — it's a joke. It's designed not to be safe to the environment. It's designed to interfere with the environment, whatever the label instructions. Basically, it's like making the claim that you can design medicine without side effects."

A Bayer representative told Insider in an email that regulators had assessed the company's products and determined that they did not pose "any unreasonable environmental impact."

Kunz's comments follow Bayer's decision in December 2019 to change its sustainability strategy and target a 30% reduction this decade in the environmental impacts of its "crop protection" products and in the company's greenhouse-gas emissions.

Kunz said the discussion within Bayer had shifted from "How can we produce more?" to "How can you produce more without starving the planet?"

At the same time, Kunz urged critics to acknowledge the trade-offs of reducing or eliminating pesticides. In some cases, it might mean farmers lose crops or produce fewer of them in one harvest, requiring more land to yield the same amount of food.

"We need to protect the land available for nature, not convert nature into agricultural land," he said, adding that doing so could exacerbate biodiversity loss and the climate crisis.

Kunz pointed to a case in Europe among sugar-beet farmers, who were allowed to use seeds treated with neonicotinoids — the pesticides banned in the EU over concerns about bee deaths — under certain emergency-use exemptions. In January, the European Court of Justice ended those exemptions, and some farmers said they no longer have an effective way have to control pests like aphids and weevils that destroy sugar beets.

Bayer and Syngenta AG, another agrochemical maker, fought the ban and lost in 2021. Kunz said Bayer accepted the EU ban on neonicotinoids, but challenged the prohibition on the grounds it violated the law and set precedence.

Bayer still sells neonicotinoids outside Europe, including in the US. The US Environmental Protection Agency in June finished its review of the neonicotinoids and found the chemicals were likely to "adversely affect" many threatened and endangered species. That finding could lead to further restrictions.

Kunz noted that Bayer had implemented measures meant to reduce the harm to bees, outlined in a report last year, such as changing label instructions and testing products earlier in the research-and-development process for toxicity to bees.

"This is important, because it's impossible to protect every beneficial insect," Kunz said. "But it is possible to avoid applications that create irreversible damage."

Beyond neonicotinoids, Kunz said Bayer's strategy to meet its environmental targets involved what he called a more systems-based approach. Farmers can grow a cycle of crops that improve soil health, water consumption, and biodiversity while controlling pests. This, in turn, can reduce the need for fertilizer and pesticides.

Bayer also makes digital tools that help farmers apply fertilizer and pesticides more precisely, which can dramatically reduce how much they're needed, Kunz said. Some 2,600 growers across 10 countries are enrolled in Bayer's carbon-farming programs, which offer financial rewards for adopting practices that store more carbon in the soil.

Bayer's sustainability efforts are attracting at least some ESG investors and ratings firms. Inclusive Capital bought a less-than-1% stake in the company in January, betting that Bayer would develop technology to boost the productivity of farming while decreasing the environmental impact.

Despite the changes, Bayer's stock is still down by more than 40% from where it was before the company, which is nearly 160 years old, acquired Monsanto. Bayer's independent sustainability council, created in 2019 to advise the board on its ESG goals, said in April last year that the company needed to resolve the Roundup litigation because "it continuously and negatively impacts" its reputation. What had been fewer than 100 lawsuits when Bayer closed on its purchase of Monsanto has ballooned to tens of thousands of cases.

The council also said Bayer should lobby governments for stricter policies on pesticide use and redesign its agricultural business with new services for farmers so chemical use is a last resort.

Kunz said he didn't agree with the advice that chemicals be a last choice.

"What plays into that statement is the view that synthetic things are automatically worse than natural things," Kunz said. "You can use chemistry to optimize not only the stability or efficacy of products — you can optimize their safety profile."

"What I agree with," he added, "is that whenever you have the opportunity to throw less chemistry on the field, and have a similar outcome, it's better."