There is no standardized approach to determine the value contribution of a company. Worldwide there is a lack of consistent standards for measuring the overall impact of companies, covering economic, environmental and social aspects of business activities along the value chain.
For this reason, we developed the Value to Society approach in 2013 together with external experts to close this methodological gap and have been publishing annual evaluations since then. They enable us to gain a fundamental understanding of our contribution to a sustainable future. They also enable us to compare the significance of financial and non-financial impacts of our business activities on society and to highlight their interactions.
We show how chemistry enables sustainable growth.
By measuring and monetary evaluating our business activities, we can understand the significance of financial and non-financial impact on society even better than before, compare them directly with each other and highlight their interactions. This transparency supports our integrated approach and thus contributes to BASF's long-term success.
The results show that the positive contributions clearly outweigh the negative effects at BASF and in our value chain. The driving positive factors are taxes paid, wages, social benefits, employee training and net income. The negative contribution results from environmental impacts such as CO2 emissions, land use and emissions to air, soil and water, as well as health and safety incidents.
We aim to increase our positive contributions and minimize the negative impact of our business activities. The Value to Society approach enables us to create transparency of our value contribution, to monitor progress on an ongoing basis, and to complement our existing concepts for assessing risks and business opportunities with a macro perspective.
The Value Balancing Alliance (VBA) is an initiative co-founded by BASF that aims to use the knowledge and practical experience of commercial enterprises to close the methodological gap and introduce an accounting and reporting standard. Over the next three years, the aim is to work together to develop a standardized methodology with which companies can present their economic, social and ecological value contributions in such a way that they can be compared with the performance of other companies. BASF's Value to Society approach is a first step on this path and makes a significant contribution to achieving the alliance's goal.