Strategy and goals
- Detect opportunities and risks as early as possible
- Take measures to limit business losses
- Avoid risks that threaten the company’s continued existence
- Support managerial decisions
The goal of BASF’s risk management is to identify and evaluate opportunities and risks as early as possible and to take appropriate measures in order to seize opportunities and limit business losses. The aim here is to avoid risks that pose a threat to BASF’s continued existence and to make improved managerial decisions to create lasting value.
We understand risk to be any event that can negatively impact the achievement of our short-term operational or long-term strategic goals. We define opportunities as possible successes that exceed our defined goals.
Short- and long-term effects on earnings of key opportunity and risk factors
- The most significant causes of opportunities and risks are the development of the economy and important customer industries as well as the development of raw material prices, and volatility in exchange rates and margins
- Considerable risks arise from the national debt crises in Europe and the United States
- No threat to the continued existence of the BASF Group
We expect the global economy to continue to grow in the next two years. However, the national debt crises in Europe and the United States as well as inflationary trends in Asia all pose considerable risks. A new economic crisis could result if market uncertainty continues or demand is negatively impacted by extensive fiscal austerity measures. Important opportunities and risks for our earnings are also associated with uncertainty regarding the development of key customer industries and raw material prices, as well as volatility in foreign currency exchange rates and margins.
According to our assessment, there are still no significant individual risks that pose a threat to the continued existence of the BASF Group. The same applies to the sum of individual risks, even in the case of another economic crisis.