BASF’s Value-to-Society: Results 2013-2017 at Group level

BASF’s Value-to-Society: Changes from 2016-2017

Compared to 2016, our net Value-to-Society has grown by 9% in 2017. This development is accounted for by stronger economic and social benefits to society, which have overcompensated the increase of environmental cost.

The overall impact to society is driven by our 7 billion € sales volume growth (+12%) leading to a positive contribution to society in the economic (+15%) and in the social area (+9%) compared to 2016. The negative contributions to society increased by 24% compared to 2016. Main drivers for higher costs are updated valuation coefficients for environmental impacts and health and safety. In addition, volume growth causes higher negative impacts to society, e.g. resource use, emissions, health and safety incidents.

• Supply chain: Due to our intensified purchase activities and higher volumes, the enabled net contribution from our external suppliers increased by 12%. The main changes compared to 2016 are observed in profits, wages, greenhouse gases and waste.
• BASF operations: The results show a net increase by 14% of our net contribution. The main positive drivers are profits and taxes, the main negative drivers are environmental costs (mainly caused by updated valuation coefficients).
• Customer industries: Due to our grown product sales volumes, the enabled net contribution by our customer industries increased by 3%. The positive developments in profits and wages are reduced by the higher costs in water consumption, waste and land use due to the updated valuation coefficients.

BASF’s Value-to-Society: Changes from 2015-2016

Compared to 2015, our net Value-to-Society 2016 decreased as expected by 28%. The main driver is our reduced sales volume by 13 billion €. The major share of the sales decrease is caused by the divestment of our gas trading and storage business to Gazprom, which contributed 10.1 billion € to our total sales in the previous year.

• Suppliers: Overall, the net contribution from our external suppliers decreased by 35%. The main driver is the divestment of the gas trading and storage business resulting in a substantially lower total purchase volume from the oil and gas sector with specific downside effects on profits, wages and taxes. This decrease was lessened by reduced environmental impacts (e.g. waste, GHG) to society.
• BASF operations: The results show an increase by 3% of our net Value-to-Society contribution – mainly driven by increases in profits, amortization and depreciation as well as wages. In addition, some cost factors declined, such as water pollution.
• Customers: Overall, the enabled net contribution by our customer industries decreased by 12%. As main driver the divestment of the gas trading and storage business accounted for substantially lower sales volumes into the energy and utility sector with specific downside effects on profits and wages. This decrease was lessened by lower costs to society due to reduced GHG emissions.

BASF’s Value-to-Society: changes from 2014 to 2015
Due to a decrease in volume, BASF’s Value-to-Society (full supply chain, BASF operations and customer industries) decreased by 9%.

• Suppliers: The sales volume caused a lower purchase volume leading to lower profits, taxes and wages for BASF’s external suppliers. In addition, this development was amplified due to a change in the portfolio of the external supplier value chains with a relatively lower intensity in profits, taxes, and wages. Overall this results in a 14% lower net contribution from our external suppliers.
• BASF operations: The increase in wage payments in combination with stable employment in BASF Group overcompensated the decrease of profits, taxes, and GHGs. The slight increase of the social cost of carbon (GHGs) is driven by a higher monetary valuation multiplier compared to 2014 (the quantitative emissions volume in tons of CO₂ emissions decreased by 2%). Overall, BASF operations have a slightly increased net positive contribution in 2015 – overall 1% net contribution.
• Customers: The lower sales volumes reduced profits, taxes and wages in customer industries. In addition, due to higher sales in agribusiness the negative impact to society by land use increased. Overall, this resulted in a 5% lower net contribution.

BASF’s Value-to-Society: Changes from 2013 to 2014
Due to a sales volume growth BASF’s Value-to-Society (full supply chain, BASF operations and customer industries) increased by 2%.

• Suppliers: The net contribution decreased by 0.5%. This reflects a constant contribution within the limits of measurement accuracy.
• BASF operations: The 3% increase of the net contribution is driven by higher sales and related higher production volumes.
• Customer industries: The 6% higher net contribution is reasoned by higher sales volumes. The related increase in profits and wages substantially overcompensated the increasing costs to society by GHGs and land use. The net positive contribution of customer industries was amplified by a relative shift to a more profit and wage intense country and sector split of BASF’s sales portfolio.