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“We measure our contribution to a sustainable future”

March 9, 2017

Dr. Dirk Voeste, Vice President Sustainability Strategy at BASF

As an industry leader and contributing member of society, BASF strives to create value for society at large. But what does this mean, what does it encompass and is there a way to assess it? For the first time, BASF has released the results of its ‘Value-to-Society’ assessment which reflects BASF’s financial and non-financial impacts on society in monetary terms. In an interview, Dr. Dirk Voeste, Vice President Sustainability Strategy at BASF, explains this new approach and how its results can support BASF in living up to its corporate purpose.

BASF recently disclosed its so-called ‘Value-to-Society’ assessment in its Report 2016. What was the motivation for this initiative and what is it about?

Dr. Dirk Voeste: Our company purpose states ‘We create chemistry for a sustainable future’. We do so for example by ensuring safe production patterns, resource efficiency in the Verbund and delivering sustainability benefits for our customers and society at large with our products and solutions. Still we are often asked how exactly BASF contributes to a sustainable future and how this contribution is measured. What benefits and costs do our business activities generate for society?

The first challenge of course was how to define our value contribution to society. We wanted to assess the ‘real’ impact our business activities have on society, the lives and well-being of people. This goes beyond measuring financial results, KPIs or the output of BASF’s operations. It includes, for example, the benefits of newly created jobs, but also the costs that are associated with our use of natural resources.

What are the results for BASF Group?

We found that BASF’s value contribution to society is significantly net-positive overall. Positive means that the social and economic benefits of our business activities like job creation or benefits that come through the use of our products, substantially exceed our costs to society. The latter are measured in areas such as emissions, waste, land use, or resource depletion.

Thanks to the efforts of a small, cross-divisional team, which worked for about three years on the understanding and set-up of the model, we have robust results for 2013, 2014 and 2015. This data demonstrates a stable positive contribution of our economic, social, and environmental impact along the value chain.

BASF business activities are connected to both positive and negative impacts on the environment and society. The Value-to-Society approach enables BASF to perform the first monetary assessment of these economic, ecological, and social impacts of its business activities along the value chain.

BASF has been assessing its contribution to sustainability for many years, with tools like the corporate carbon footprint, life-cycle assessment and Sustainable Solution Steering®. What is really new with the Value-to-Society approach?

Value-to-Society calculations contain three main innovations. First, they give us the chance to assess the impact of BASF’s business activities in a holistic way. For example, when calculating the societal costs of climate change we assess aspects like human health, changes in the environment or economic disruptions through extreme weather events.

Second, the results for every aspect are calculated in Euro terms. This allows us to compare the relevance and interdependencies of different economic, social, and environmental impacts against one another.

Finally, Value-to-Society provides an end-to-end assessment of our business activities. It covers the relevant aspects along the value chain including our external suppliers, our own operations and our customers.

What are the benefits of Value-to-Society for BASF and its stakeholders?

The new approach looks at our contribution from a broader perspective and provides us with a comprehensive view. These additional insights support strategic decision making. For example, we can calculate the impact to society of a newly constructed production plant by looking at different scenarios. Depending on the location, such an investment would create different impacts, for example by adding value through employment or contracted local construction services. In addition to decision-making, the tool also supports in monitoring the development of positive and negative impacts our business has over time.

For our stakeholders it provides a new and tangible way of evaluating our contribution to a sustainable future.

Our Value-to-Society approach in a nutshell

- We show how chemistry is enabling business to generate sustainable growth.
- We have a macro-societal perspective on our economic, social, and environmental benefits and costs along the value chain.
- We visualize our significant net positive Value-to-Society with our partners.
- We share our approach, experiences and learnings with our stakeholders and standard setting communities.
- We have a pragmatic, efficient, auditable and transferable approach.

Birgit Hellmann
Global Sustainability Communications