Business success tomorrow means creating value for the environment, society and business. This is why sustainability has been reinforced as a cornerstone of our updated corporate strategy. Using the various tools of our sustainability management, we carry out our company purpose: “We create chemistry for a sustainable future.” We systematically incorporate sustainability into our business. We understand future sustainability trends and derive appropriate measures for our business to 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 composed of the heads of our business, corporate and functional units, and regions. A member of the Board of Executive Directors serves as chair. We have also established an external, independent Stakeholder Advisory Council. Here, international experts from academia and society contribute their perspectives to discussions with BASF’s Board of Executive Directors, helping us expand our strengths and identify potential for improvement.
We identify relevant topics and trends as well as potential opportunities and risks along our value chain through dialog with stakeholders, supported by continuous, worldwide big data analysis. In 2018, we also co-published a study identifying long-term sustainability trends between now and 2030, based on an analysis of more than 900 studies from academia, think tanks and market analyses.
We have defined sustainability focus areas in our corporate strategy to position ourselves in the market and at the same time, meet the growing challenges along the value chain:
Relevant topics resulting from these commitments – such as energy and climate protection, portfolio management, supply chain responsibility, employee engagement, resource efficiency, responsible production and water – form the focal points of our reporting.
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 steering tool for our product portfolio, based on the sustainability performance of our products, is the Sustainable Solution Steering method.
By the end of the 2018 business year, BASF had conducted sustainability assessments and ratings for 96.5% of its entire relevant portfolio1 of more than 60,000 specific product applications – which account for €56.2 billion in sales. These 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, 27.7% (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 66.9% 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 5.3% 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 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 13.1 million MWh of fossil fuels and prevented 2.6 million metric tons of carbon emissions in 2018. 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 18.5 million MWh in 2018, which translates to 3.7 million metric tons less CO2 released into 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 6.3 million metric tons of carbon emissions in 2018.
BASF has participated in CDP’s program for reporting on data relevant to climate protection since 2004. CDP is an an international organization representing more than 650 investors with over $87 trillion in assets and 115 major purchasing organizations with $3.3 trillion in purchasing power. After achieving a score of “A–” for several years, thus attaining “Leadership” status, BASF was included in CDP’s “Climate Change A List” with the highest possible rating of “A” in 2018. Companies at this level are distinguished by the completeness and transparency of their reporting, their approaches for managing the opportunities and risks associated with climate change, and clear corporate strategies to reduce emissions. BASF has also reported on water management to CDP since 2010 and was again acknowledged as a global leader in sustainable water management in 2018. The organization awarded BASF an “A–” rating in recognition of its actions to manage water more sustainably.
BASF continued to be included in the MSCI ESG Ratings in 2018 with a score of “AA.” The analysts highlighted BASF’s Verbund system as a key competitive advantage for resource-efficient processes. BASF’s emissions intensity for greenhouse gases and air pollutants – one of the lowest compared with competitors in the chemical industry – was also assessed positively.