Independent Assurance Report1
To the Executive Board of BASF SE, Ludwigshafen am Rhein
We have been engaged to perform an independent limited assurance engagement on the qualitative and quantitative disclosures on sustainability, published in the Online-“BASF Report 2016” (further “Report”), published under www.bericht.basf.com/2016/en for the business year 2016, of BASF SE, Ludwigshafen am Rhein (further “BASF“). It was not part of our engagement to review product or services related information, references to external information sources, expert opinions and future-related statements in the Report.
Management’s Responsibility for the Report
The legal representatives of BASF are responsible for the preparation of the Report in accordance with the Reporting Criteria. BASF applies the principles and standard disclosures of the G4 Sustainability Reporting Guidelines of the Global Reporting Initiative in combination with the Corporate Accounting and Reporting Standard (Scope 1 und 2), the Corporate Value Chain (Scope 3) Standard of the World Resources Institute/World Business Council for Sustainable Development (WBCSD), the Addressing the Avoided Emissions Challenge- Guideline of the International Council of Chemical Associations and the WBCSD, the recommendations of the European Chemical Industry Council (CEFIC), internally developed criteria for the evaluation method Sustainable Solution Steering, for climate protection products and the related prevented emissions as well as for the Health Performance Index, as Reporting Criteria.
The responsibility includes the selection and application of appropriate methods to prepare the Report and the use of assumptions and estimates for individual qualitative and quantitative sustainability disclosures which are reasonable under the circumstances. Furthermore, this responsibility includes designing, implementing and maintaining systems and processes relevant for the preparation of the Report in a way that is free of intended or unintended – material misstatements.
Independence and quality assurance on the part of the auditing firm
We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants (IESBA-Codex), which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.
The quality assurance system of the KPMG AG Wirtschaftsprüfungsgesellschaft is based on the International Standard on Quality Control 1 “Quality Control for Audit, Assurance and Related Service Practices“ (ISQC 1) and, in addition on national statutory requirements and professional standards, especially the Professional Code for Certified Accountants as well as the joint statement of WPK (Chamber of Public Accountants) and IDW (Institute of Public Auditors in Germany): Requirements for quality assurance in the auditing practice (VO 1/2006).
Our responsibility is to express a conclusion based on our work performed and the evidences obtained on the qualitative and quantitative disclosures within the scope of our engagement.
Nature and extent of the assurance engagement
We conducted our work in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised): “Assurance Engagements other than Audits or Reviews of Historical Financial Information” and the International Standard on Assurance Engagements (ISAE) 3410: “Assurance Engagements on Greenhouse Gas Statements” of the International Auditing and Assurance Standards Board (IAASB). These standards require that we comply with our professional duties and plan and perform the assurance engagement to obtain a limited level of assurance to preclude that the information above is not in accordance, in material respects, with the aforementioned Reporting Criteria. In a limited assurance engagement the evidence gathering procedures are more limited than in a reasonable assurance engagement and therefore less assurance is obtained than in a reasonable assurance engagement. The choice of audit activities is subject to the auditor’s own judgement. This includes the assessment of the risk of material misstatement in the Report under consideration of the Reporting Criteria.
Within the scope of our work, we performed amongst others the following procedures when conducting the limited assurance engagement:
- Inquiries of personnel on corporate level, which are responsible for the materiality analysis,in order to gain an understanding of the processes for determining material sustainability topics and respective reporting boundaries of BASF.
- A risk analysis, including a media search, to identify relevant sustainability aspects for BASF in the reporting period.
- Reviewing the suitability of internally developed Reporting Criteria.
- Evaluation of the design and implementation of the systems and processes for the collection, processing and control of the sustainability disclosures included in the scope of this engagement, including the consolidation of the data.
- Inquiries of personnel on corporate level responsible for providing the data and information, carrying out internal control procedures and consolidating the data and information.
- Evaluating internal and external documentation, to determine whether qualitative and quantitative information is supported by sufficient evidence and presented in an accurate and balanced manner.
- An analytical review of the data and trend explanations submitted by all sites for consolidation at Group level.
- Visits to Ludwigshafen (Germany), Augsburg (Germany), Lampertheim (Germany), De Meern (The Netherlands) and Geismar/Louisiana (USA, as videoconference) to assess local data collection and reporting processes and the reliability of the reported data.
- Reviewing the consistency of GRI G4 in-accordance option ‘Comprehensive’ as declared by BASF with sustainability information in the Report.
- An evaluation of the overall presentation of the sustainability information in the Report.
Based on our limited assurance engagement, nothing has come to our attention that causes us to believe that the qualitative and quantitative disclosures on sustainability for the business year 2016 included in the scope of this engagement and published in the Report are in all material respects not prepared in accordance with the Reporting Criteria.
Purpose of the assurance report
This assurance report is issued based on an assurance engagement agreed upon with BASF. The assurance engagement to obtain limited assurance is issued on purpose of BASF and the assurance report is solely for information purposes of BASF on the results of the assurance engagement.
This assurance report must not be used as basis for (financial) decision-making by third parties of any kind. We have responsibility only towards BASF. We do not assume any responsibility for third parties.
Frankfurt am Main, February 21, 2017
[Original German version signed by:]
[German Public Auditor]
[German Public Auditor]
1 Translation of the independent assurance report, authoritative in German language.