AgBalance® is an assessment methodology developed by BASF for the holistic measurement and analysis of sustainability in agriculture and food production. Ecological, economic and social indicators are employed to create specific recommendations for sustainable production methods. AgBalance received independent validation from global auditors in 2011.
Audits are a strategic tool for managing safety and environmental protection standards. During a site or plant audit, a profile is created using clearly defined environmental, safety or health criteria.
A back-up line is a confirmed line of credit that can be drawn upon in connection with the issue of commercial paper if market liquidity is not sufficient, or for the purpose of general corporate financing. It is one of the instruments BASF uses to ensure it is able to make payments at all times.
Barrel of Oil Equivalent (BOE)
A Barrel of Oil Equivalent is an international standard for comparing the thermal energy of different fuels. A BOE is the equivalent of one barrel of crude oil or 6,000 cubic feet or 169 cubic meters of natural gas.
This term covers all processes and products that use living organisms, for example bacteria and yeasts, or their cellular constituents.
CO2 equivalent is a parameter describing the effect of greenhouse gas emissions. A factor known as the global warming potential (GWP) shows the effect of the individual gases compared with CO2 as the reference value.
Coil coatings are specialty coatings that can be applied to steel and aluminum bands creating a composite material that incorporates the traits of the metal and the coating material. The composite material is especially resistant to corrosion and can be easily formed, for instance. Coil coating sheets are mainly used in the construction industry.
Commercial paper program
The commercial paper program is a framework agreement between BASF and banks regarding the issuing of debt obligations on the financial market (commercial paper). The commercial paper is issued under a rolling program for which the terms can be determined individually. This requires a good rating.
Compliance is an important element of corporate governance. It refers to the company’s behavior in accordance with laws, guidelines and voluntary codices.
Conflict minerals describe minerals listed in the U.S. Conflict Minerals Trade Act. These include tantalite (coltan), cassiterite (tin ore), wolframite, gold, or their derivatives, by which conflicts in the Democratic Republic of Congo or neighboring states are financed.
Consumer goods sector
The consumer goods sector includes, for example, the textiles and leather industry, the electric industry and domestic appliance manufacturing, as well as the paper industry and the personal care and cleaners sector.
Dow Jones Sustainability World Index (DJSI World)
The Dow Jones Sustainability World Index (DJSI World) is the world’s most important sustainability index. It lists the top 10% of the largest 2,500 companies which appear in the Dow Jones Global Index in terms of economic, ecological and social criteria.
Drilling describes the creation of boreholes to explore for and develop deposits.
Earnings Before Interest and Taxes (EBIT) – at BASF, EBIT corresponds to the income from operations.
EBIT after cost of capital
EBIT after cost of capital is calculated by deducting the cost of capital from the EBIT. The cost of capital thereby reflects the shareholders’ expectations regarding return (in the form of dividends or share price increases) and interest payable to creditors. If the EBIT after cost of capital has a positive value, BASF has earned a premium on the return expected by its creditors and investors.
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) – at BASF, EBITDA corresponds to the income from operations before depreciation and amortization.
The EBITDA margin is the margin that we earn on sales from our operating activities before depreciation and amortization. It is calculated as income from operations before depreciation and amortization as a percentage of sales.
The Eco-Efficiency Analysis is a method for the evaluation of products and processes considering economic and environmental aspects. The aim is to compare products with regard to profitability and environmental performance.
Econsense, Forum for Sustainable Development of German Business e.V., is an association of leading, globally active companies and organizations in German business specializing in sustainable development and corporate social responsibility (CSR). BASF is one of the forum’s founding members. Econsense’s top concern is to encourage a political framework that fosters sustainable innovation related to business, environment and society.
According to our definition, emerging markets comprise the region Asia Pacific (excluding Japan, Australia and New Zealand), South and Central America, Eastern Europe, the Middle East and Africa.
Emollients are nurturing oil components that give skin a velvety feel. They are a common ingredient in skin and hair care products, such as creams and hair masks.
An Exploration and Production Sharing Agreement (EPSA) is one of the prevalent types of contract between a national oil company and an international oil company in the exploration and production of hydrocarbons.
The equity method is an accounting technique used to include BASF’s investments in companies in which it has significant influence in the Consolidated Financial Statements. The book value of the investment changes depending on the equity of the company in question.
European Water Stewardship (EWS) Standard
The European Water Stewardship Standard enables businesses and agriculture to assess the sustainability of their water management practices. The criteria are: water abstraction volumes, water quality, conservation of biodiversity and water governance. The EWS Standard was developed together with NGOs, governments and businesses.
Exploration refers to the exploration and investigation of an area in the search for mineral resources such as crude oil or natural gas. The exploration process involves using suitable geophysical processes to find structures that may contain oil and gas then proving a possible find by means of exploratory drilling.
Field development is the term for the installation of production facilities and the drilling of production wells for the commercial exploitation of oil and natural gas deposits.
Free cash flow
Free cash flow is cash provided by operating activities less payments related to property, plant and equipment and intangible assets.
Global Product Strategy (GPS)
The Global Product Strategy aims to establish global product stewardship standards and practices for companies. The program, initiated by the International Council of Chemical Associations (ICCA), strives to ensure the safe handling of chemicals by reducing existing differences in risk assessment.
Greenhouse Gas Protocol (GHG Protocol)
The Greenhouse Gas Protocol, used by companies from different sectors, NGOs and governments, is a globally recognized standard to quantify and manage greenhouse gas emissions. The reporting standards and recommendations for the implementation of projects to reduce emissions are jointly developed by companies, governments and NGOs under the guidance of the World Resources Institute and the World Business Council for Sustainable Development.
Health Performance Index (HPI)
The Health Performance Index (HPI) is an indicator developed by BASF to provide a more detailed insight into the application of health management. It comprises five components: reported cases of occupational disease, medical emergency planning, first aid, preventive medicine and health promotion.
HPPO is the acronym describing technology to produce propylene oxide (PO) from hydrogen peroxide (HP). HPPO technology is more environmentally friendly and economically viable than conventional PO methods of production, because no by-products are produced besides water. PO is an intermediate, for example, in the production of polyurethane.
IAS stands for International Accounting Standards (see also IFRS).
International Financial Reporting Standards (IFRS) (until 2001: International Accounting Standards, IAS) are developed and published by the International Accounting Standards Board (IASB) headquartered in London, United Kingdom. In accordance with the IAS Regulations, IFRS are mandatory for listed companies headquartered in the European Union since 2005.
ILO Core Labor Standards
The ILO Core Labor Standards are laid out in a declaration of the International Labor Organization (ILO). It comprises eight conventions which set minimum requirements for decent working conditions. BASF has a Group-wide system to monitor employees’ and suppliers’ adherence to these labor standards.
The International Standard on Assurance Engagements 3000 (ISAE 3000) is published by the International Audit and Assurance Standards Board (IAASB). It provides guidelines for comprehensive audits, which contain non-financial data, for example for the audits of sustainability reports.
ISO 14001 is an international standard developed by the International Organization for Standardization (ISO) that determines the general requirements for an environmental management system for voluntary certification.
ISO 14045 is an international standard developed by the International Organization for Standardization (ISO) that determines the general requirements for the eco-efficiency analysis.
ISO 19011 is an international standard developed by the International Organization for Standardization (ISO) that determines requirements for audits of quality management and environmental management systems.
ISO 26000 SR
ISO 26000 SR is a guideline that provides organizations with recommendations and guidance on social responsibility (SR).
We define joint ventures as all activities in which other partners besides BASF hold a stake. The accounting method applied for those activities depends on the circumstances of the respective investment.
BASF uses materiality analysis to analyze and evaluate societal interest in sustainability topics as well as their potential significance for the company. The aim is to develop strategies at an early stage to address potential new risks and opportunities.
MDI stands for diphenylmethane diisocyanate and is one of the most important raw materials for the production of the plastic polyurethane. This plastic is used for applications ranging from the soles of high-tech jogging shoes, to car shock-absorbers, refrigerator insulation and even insulation for buildings.
Monitoring systems and tools serve to measure and ensure the adherence to standards. One area that is monitored is our voluntary commitments, such as the adherence to human rights and internationally recognized labor standards.
MSCI World Chemicals Index
The MSCI World Chemicals Index is a stock index that includes the world’s biggest chemical companies. It measures the performance of the companies in the index in their respective national currencies, thus considerably reducing currency effects.
Definitions vary worldwide for nanomaterials. For regulatory purposes, BASF supports the definition given by the International Council of Chemical Associations (ICCA). This states that nanomaterials are solid, particulate substances which are intentionally manufactured and have a weight-based cutoff of either 10 weight% or more of nano-objects or 50 weight% or more of aggregates or agglomerates consisting of nano-objects.
Naphtha is petroleum that is produced during oil refining. Heavy naphtha is the starting point for gasoline production. Light naphtha is the most important feedstock for steam crackers.
NMVOCs (non-methane volatile organic compounds)
VOCs (volatile organic compounds) are organic substances that, at low temperatures, are present in the air as gas. These include some hydrocarbons, alcohols, aldehydes and organic acids. NMVOCs are VOCs from which methane is excluded.
The Occupational Health and Safety Assessment Series (OHSAS) comprises, among other things, the standard OHSAS 18001 which includes a management system for occupational safety. This system can be integrated into an existing quality and environmental protection management system and certified accordingly.
Patent Asset Index
The Patent Asset Index measures the strength of a company’s patent portfolio. It is made up of two factors: (1) portfolio size (the number of worldwide active patent families) and (2) competitive impact, which is the combination of technology relevance and market coverage (weighted by market size).
THF stands for tetrahydrofuran and is a starting compound for Polytetrahydrofuran (PolyTHF®), an important component for the production of elastomer fibers for textiles. Elastomer fibers are used in sports clothing, for example.
REACH is an E.U. regulatory framework for the registration, evaluation and authorization of chemicals.
Responsible Care refers to a worldwide initiative by the chemical industry to continuously improve its performance in the fields of environmental protection, health and safety.
There are two applications for generated profits: distribution to shareholders or retention in the company.
Return on assets
Return on assets describes the return we make on the average assets employed during the year. It is calculated as income before taxes and minority interests plus interest expenses as a percentage of average assets.
Selective Catalytic Reduction (SCR) technology is used to convert harmful nitrogen oxide, which is found in the exhaust flow of heavy duty diesel engines, into water vapor and nitrogen, a natural constituent of the air.
SEEBALANCE refers to the Socio-Eco-Efficiency Analysis developed by BASF. This analysis considers the three dimensions of sustainability: economy, environment and society. This tool allows the assessment of environmental impact and costs as well as the societal impacts of products and processes.
Seed treatment products
Seed treatment products include crop protection agents and are applied with specific technologies directly onto the seed. This protects crops in the emerging stages against fungal diseases and harmful insects.
BASF’s S.E.T. initiative helps customers to quantify and improve the sustainability, eco-efficiency and traceability of products in their value-adding chain. This comprehensive offer includes strategic sustainability consulting, an eco-efficiency analysis and the implementation of a traceability system along the entire value-adding chain.
Special items describe one-time charges or one-time income that significantly affect the earnings of a segment or the BASF Group. Special items include, for example, charges arising from restructuring measures or earnings from divestitures.
A spot market is a market where an agreed deal including delivery, acceptance and payment occurs immediately. In contrast to forward contracts where the delivery, acceptance and payment occurs at a point in time after the conclusion of the deal.
Stakeholder is the term referring to persons or groups whose interests are interlinked with those of a company in a variety of ways. BASF’s stakeholders include shareholders, business partners, employees, neighbors and society.
A steam cracker is a plant in which steam is used to “crack” naphtha (petroleum) or natural gas. The resulting petrochemicals are the starting materials used to produce most of BASF’s products.
Styrenics is a term describing the styrenic plastics business. The precursor styrene is primarily for captive use (backward integration). Styrenic plastics are used in many areas, for example, in the construction, packaging, automotive, electrical and leisure industries.
The objective of sustainable development is to meet the economic, environmental and social needs of society without harming the development opportunities of future generations.
A swap is an agreement between two parties to exchange goods or payment flows in the future. In an interest swap, a fixed (variable) interest rate is exchanged for a floating (fixed) rate for an agreed nominal amount.
Toluene diisocyanate is a starting material for the production of polyurethane. It is used primarily in the automotive industry (for example, in seat cushions and interiors) and the furniture industry (for example, for flexible foams for mattresses or cushioning, or in wood coating).
TUIS is a German transport accident information and emergency response system jointly operated by around 130 chemical companies. The member companies can be reached by the public authorities at any time and provide assistance over the telephone, expert on-site advice or special technical equipment.
A value-adding chain describes the successive steps in a production process, from the raw materials through various intermediate steps to the finished product.
In the BASF Verbund, production facilities, energy flow, logistics and infrastructure are intelligently networked with each other, in order to increase production yields, save resources and energy and reduce logistic costs. A significant factor in the Verbund concept is the Know-How Verbund. In the latter, know-how is shared among BASF employees worldwide and expert knowledge is pooled in technology platforms.
Water stress areas
Water stress areas are areas in which water represents a scarce resource, and where people abstract more than 60 percent of the water available. The most important factors leading to water scarcity are: low precipitation, high temperatures, low air humidity, unfavorable soil properties and high water abstraction rates.
White technology is an area of biotechnology, also called industrial biotechnology, that uses microorganisms and/or enzymes to produce chemical products, utilized in many levels of the value-adding chain in the chemical industry. This involves, for example, the biotechnological production of chiral intermediates.