Sustainable Portfolio Management

Our customers can expect from BASF the consistent and innovative solutions they have always received. At the same time, they are looking to contribute to a more sustainable future where being environmentally and socially responsible goes hand in hand with running a profitable business. Therefore, BASF has embedded sustainability in its corporate purpose: “We create chemistry for a sustainable future.” This ambition is directly linked to a number of business factors:

• Growing customer needs to differentiate with sustainability
• New laws and standards in all value chains related to sustainability
• Changing societal and business environments prompting demand for sustainable products

We therefore cooperate with our customers in creating and driving more sustainable solutions, which makes good business sense for both.

By identifying key drivers and issues in our customers’ industries, we are able to assess the sustainability contribution of each of our products in its specific application.

With our approach we evaluate the entire value chain considering industry- and region-specific views in our markets. We strive to achieve a balance between the three dimensions of sustainability:

• Economy: e.g. potential cost savings for customers through the use of our products
• Environment: e.g. ensuring standards are met, developing environmentally sound solutions
• Society: e.g. enhancing safety in production, use or end-of-life, stakeholder perception of solutions

Finally each solution is assigned to one of four categories (Accelerator, Performer, Transitioner, Challenged) according to its contribution to sustainability. Although different industries vary in their specific needs, we are able to cluster our Accelerator solutions into predefined universal sustainability benefits (e.g. resource efficiency).

This detailed analysis and transparent classification allow us to both improve individual solutions and steer the entire portfolio. It also enables further integration of sustainability into our strategic, R&D and customer support processes. The goals are:

• Increase our portfolio of innovative and sustainable solutions making customers more successful
• Reduced environmental impact along the value chain, contributing to improved quality of life
• Better mitigation of risks associated with sustainability

All of this helps us to ensure long-term business success – an integral part of our “We create chemistry“ strategy.

The whole approach has been assured by PricewaterhouseCoopers AG Germany (PwC).

Accelerator products make a substantial sustainability contribution in the value chain. Based on our corporate strategy, we have therefore set ourselves a global target: We aim to make sustainability an even greater part of our innovation power and achieve €22 billion in Accelerator sales by 2025. In 2021, we generated sales of €24.1 billion with Accelerator products (2020: €16.7 billion) – already reaching our target for 2025. Accelerator products account for 33.9% of the assessed relevant portfolio. Sales of Accelerator products rose by 44.3% compared with the previous year. This is primarily attributable to the positive development of Accelerator sales in the Surface Technologies
and Chemicals segments. Performer products account for 54.9%, Transitioner products for 11.1% and Challenged products for 0.1% of the solutions assessed.

To systematically align our portfolio with contributions to sustainability, as of 2018, we will phase out all Challenged products within five years of initial classification as such at the latest. We strive to offer products that make a greater contribution to sustainability in their area of application to live up to our own commitments and meet our customers’ demands. This is why our Sustainable Solution Steering method is used in areas such as our research and development pipeline, in business strategies as well as in merger and acquisition projects.