BASF’s answers to the CDP Questionnaire Climate Change 2020
A recognized leader in ESG
BASF shares are particularly attractive for investors looking for businesses with strong performance regarding the environment, society and governance (ESG). In the analyses of leading ESG rating agencies, BASF is often recognized as benchmark within the chemical industry. They specifically highlight our integrated sustainability reporting, business ethics and the development of sustainable products.
We actively participate in a wide array of ESG ratings. Below is an overview of our current ratings, underlining our position as a leader in sustainability.
BASF has published information on opportunities and risks for the company related to climate change and the use of water and forests via the respective CDP programs. CDP is an international organization representing over 560 investors with US$106 trillion in assets, and more than 150 major purchasers with over US$4 trillion in procurement spend.
BASF has participated in CDP’s program for reporting on data relevant to climate protection since 2004. In 2020, BASF achieved a score of “A–”, thus attaining Leadership status again. In the scoring framework used by CDP in 2020, BASF is ranked among the best 25% of the participating chemical companies. In their assessment of the company’s climate protection efforts and disclosure, the analysts identified, for instance, some potential for further development in the area of power supply from renewable energy sources. In order to achieve the company's climate goal of CO2-neutral growth by 2030, BASF is continuously optimizing existing processes, increasingly using renewable energy sources and developing fundamentally new low-emission production processes. The company is bundling these activities in an ambitious carbon management program.
Recognition of sustainable water and forest management
In the CDP assessment for sustainable water management, BASF achieved the top grade of “A” and thus Leadership status. The assessment takes into account how transparently companies report on their water management activities and how they reduce risks such as water scarcity. CDP also evaluates the extent to which product developments can contribute to sustainable water management for customers of the assessed companies. BASF is introducing sustainable water management at all relevant production sites. This includes the major Verbund sites and sites in water stress areas.
In 2020, BASF for the first time participated in the CDP’s “Forest” assessment. BASF received the grade “A-”. As an actor in various value chains, BASF is committed to ending deforestation in these supply chains. One of BASF's measures to protect the forests is its voluntary commitment to palm oil: BASF has committed to source 100 percent of its palm (kernel) oil from certified sustainable sources by 2020.
BASF has been listed in FTSE4Good Index Series since its launch in 2001
BASF is also again listed in the FTSE4Good Index Series. Only companies that meet stringent criteria in social, environmental and corporate governance (ESG) and manage to continuously confirm or develop these in regularly conducted assessments are listed in these indices. BASF is top class in terms of ESG among chemical companies belonging to the index.
ISS ESG has rated BASF again in the category Prime. Prime Status is awarded to leaders in the respective industry that succeeded in the rating process according to industry-specific criteria in terms of social and environmental compatibility. Among other things, BASF received special recognition for having addressed material sustainability topics such as climate change, raw material sourcing and business ethics with a comprehensive set of measures and processes.
BASF continued to be rated in the MSCI ESG Ratings in 2020 with a score of AA. The analysts highlighted that BASF is present in clean tech markets and operates its processes with a low carbon intensity. In addition, governance risks were perceived as relatively low.
In its annual ranking, Sustainalytics awarded BASF Outperformer status. Sustainalytics recognized BASF for its strong performance in the areas of governance and social issues, which significantly exceeded industry average. In addition, the raters favorably noted BASF’s strong R&D competence which allows it to create products that are more sustainable than the industry standard. Following the Sustainalytics assessment, the inherent risk exposure of manufacturing chemical products is managed well by BASF with a strong risk management.
In the rating by Vigeo Eiris, a subsidiary of Moody’s, BASF ranks in the category “Advanced Performance.” In the chemicals sector, BASF received a total score of 60 (average: 48). Vigeo Eiris awarded high scores to BASF in the areas of pollution prevention and control, environmental strategy and the integration of environmental factors in the supply chain. The raters saw potential for improvement, for example, in the area of waste management and management of environmental impacts from transportation.