Sustainability is an integral part of our corporate strategy. Using the various tools of our sustainability management, we carry out our company purpose: “We create chemistry for a sustainable future.” Sustainability is integrated into our core business, in line with our strategic principle “We drive sustainable solutions.” This is how we seize business opportunities and minimize risks along the value chain.
We have created structures to promote sustainable, entrepreneurial actions all the way from strategy to implementation. The Corporate Sustainability Board is BASF’s central steering committee for sustainable development. It is comprised of the heads of our business, corporate and functional units as well as of the regions. A member of the Board of Executive Directors serves as chair.
Through our materiality analysis, constant dialog with stakeholders, and our many years of experience, we are continuously developing a better understanding of significant topics and trends as well as potential opportunities and risks along our value chain.
We were already using a materiality analysis back in 2013 to identify such topics as energy and climate, water, resources and ecosystems, responsible production, and employment and employability. A strategic evaluation process built upon this in 2015 and 2016 to define new focus topics along the value chain.
Energy and climate, water, resources and ecosystems, responsible production, as well as employment and employability.
Since 2007, BASF publishes an integrated report combining economic, environmental and social performance. Using specific examples, we illustrate how sustainability contributes to BASF’s success and how we as a company create value for our employees, shareholders, business partners, neighbors and the public.
A significant lever for the steering of our product portfolio, based on the sustainability performance of our products, is the Sustainable Solution Steering® method.
By the end of the 2017 business year, BASF had conducted sustainability assessments and ratings for 97.5% of its entire relevant portfolio of more than 60,000 specific product applications – which account for €58.4 billion in sales. We consider the products’ application in various markets and
industries. Because of increasing sustainability requirements on the market, we regularly conduct reassessments of existing product categories as well as of the relevant portfolio.
The product applications we analyzed were arranged into four categories: “Accelerator,” “Performer,” “Transitioner” and “Challenged.” Of the analyzed products, 27.3% (by sales) turned out to be Accelerators. They contribute particularly to sustainability in the value chain. Performers are solutions that meet all of the market’s standard sustainability requirements. Around 68.3% of BASF’s analyzed product portfolio matches this description. A Transitioner is a product for which specific sustainability requirements have been identified and plans of action have been defined. These recommendations are being carried out. Approximately 4.3% of the analyzed products fall under this category. Applications that do not sufficiently fulfill significant sustainability criteria are labeled Challenged. BASF is developing plans of action for these products in order to find better solutions, which can include research projects, reformulations or even replacing one product with an alternative product. Currently, this applies for 0.1% of the analyzed products.
Accelerator products make a substantial sustainability contribution in the value chain. By 2025, we will increase the sales from Accelerator products to €22 billion (2018: €15 billion).
Gas and steam turbines in our combined heat and power plants enable us to fulfill more than 70% of the electricity demand of the BASF Group. Compared with separate methods of generating steam and electricity, we saved 12.7 million MWh of fossil fuels and prevented 2.6 million metric tons of carbon emissions in 2017. The Verbund system is an important component of our energy efficiency strategy: Waste heat from one plant’s production process is used as energy in other plants. In this way, the Verbund saved us around 19.2 million MWh in 2017, which translates to 3.9 million metric tons less of CO2 released to the environment.
With combined power and steam generation as well as our continuously enhanced Energy Verbund, we were thus able to prevent a total of 6.5 million metric tons of carbon emissions in 2017.
Since 2004, BASF has participated in the CDP’s program for reporting on data relevant to climate protection. The international organization CDP represents more than 800 institutional investors who manage over $100 trillion in assets. BASF again achieved a score of A- in 2017, awarding it “Leadership” status. Companies on this level are distinguished by factors such as the completeness and transparency of their reporting. They also have approaches in place for managing the opportunities and risks associated with climate change as well as corporate strategies to reduce emissions. BASF has also reported on water management to CDP since 2010 and was again included in the CDP Water A List in 2017. This assessment includes how transparently companies report on water management activities, the degree to which risks are reduced and the extent to which product developments contribute to sustainable water management at customers. Efficient water use and the development of sustainable local solutions are important elements of BASF’s water stewardship strategy.
BASF continued to be included in the MSCI ESG Ratings in 2017 with a score of AA. MSCI made special mention of BASF’s leading environmental protection programs. The analysts recognized that BASF has made further progress in reducing greenhouse gas emissions and has one of the lowest emissions intensities in the chemical industry.