Limited Assurance Report of the Independent Auditor regarding the Integrated Non-Financial Group Statement1

To the Supervisory Board of BASF SE, Ludwigshafen am Rhein

We have performed an independent limited assurance engagement on the integrated non-financial group statement of BASF SE according to §§ 315b, 315c in connection with 289c to 289e of the German Commercial Code (HGB), (further „integrated non-financial group statement”) of BASF SE, Ludwigshafen am Rhein (further „BASF“) for the business year from January 1 to December 31, 2018.

Management’s Responsibility

The legal representatives of BASF are responsible for the preparation of the integrated non-financial group statement in accordance with §§ 315b, 315c in connection with 289c to 289e HGB.

This responsibility of the legal representatives includes the selection and application of appropriate methods to prepare the integrated non-financial group statement and the use of assumptions and estimates for individual disclosures which are reasonable under the given circumstances. Furthermore, this responsibility includes designing, implementing and maintaining systems and processes relevant for the preparation of the integrated non-financial group statement in a way that is free of – intended or unintended – material misstatements.

Independence and quality assurance on the part of the auditing firm

We are independent from the company in accordance with the requirements of independence and quality assurance set out in legal provisions and professional pronouncements and have fulfilled our additional professional obligations in accordance with these requirements.

Our audit firm applies the legal provisions and professional pronouncements for quality assurance, in particular the Professional Code for German Public Auditors and Chartered Accountants (in Germany) and the quality assurance standard of the German Institute of Public Auditors (Institut der Wirtschaftsprüfer, IDW) regarding quality assurance requirements in audit practice (IDW QS 1).

Practitioner’s Responsibility

Our responsibility is to express a conclusion on the integrated non-financial group statement based on our work performed within a limited 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” published by IAASB. These standards require that we plan and perform the assurance engagement to obtain limited assurance whether any matters have come to our attention that cause us to believe that the integrated non-financial group statement for the period from January 1, 2018 to December 31, 2018, has not been prepared, in all material respects, in accordance with §§ 315b and 315c in conjunction with 289c to 289e HGB. We do not, however, issue a separate conclusion for each disclosure. 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 procedures is subject to the auditor’s own judgement.

Within the scope of our engagement, we performed amongst others the following procedures:

  • Inquiries of personnel on group level who are responsible for the materiality analysis to get an understanding of the process for identifying material topics and respective report boundaries for BASF
  • A risk analysis, including a media research, to identify relevant information on BASF’s sustainability performance in the reporting period
  • Evaluation of the design and implementation of systems and processes for the collection, processing and monitoring of disclosures on environmental, employee and social matters, respect for human rights, and combating corruption and bribery, including data consolidation
  • Inquiries of personnel on group level who are responsible for determining disclosures on concepts, due diligence processes, results and risks, the conduction of internal controls and consolidation of the disclosures
  • Evaluation of selected internal and external documents
  • Analytical evaluation of data and trends of quantitative disclosures which are reported by all sites on group level
  • Assessment of local data collection and reporting processes and reliability of reported data via a sampling survey at the sites Ludwigshafen am Rhein (BASF SE, Germany), Schwarzheide (BASF Schwarzheide GmbH, Germany), Shanghai/Caojing (BASF Chemicals Company Ltd., China) and Middle Georgia (BASF Corporation, USA)
  • Reconciliation of disclosures in the integrated non-financial group statement to the consolidated financial statements and management report
  • Assessment of the overall presentation of the disclosures

As described in the integrated non-financial group statement, BASF engaged external providers to perform sustainability assessments and audits on suppliers. The adequacy and accuracy of the conclusions from these external assessments were not part of our limited assurance engagement.

Conclusion

Based on the procedures performed and the evidence obtained, nothing has come to our attention that causes us to believe that the integrated non-financial group statement of BASF SE for the period from January 1 to December 31, 2018 is not prepared, in all material respects, in accordance with §§ 315b and 315c in conjunction with 289c to 289e HGB.

Restriction of Use/Clause on General Engagement Terms

This report is issued for purposes of the Supervisory Board of BASF SE, Ludwigshafen am Rhein, only. We assume no responsibility with regard to any third parties.

Our assignment for the Supervisory Board of BASF SE, Ludwigshafen am Rhein, and professional liability is governed by the General Engagement Terms for Wirtschaftsprüfer and Wirtschaftsprüfungsgesellschaften (Allgemeine Auftragsbedingungen für Wirtschaftsprüfer und Wirtschaftsprüfungsgesellschaften) in the version dated January 1, 2017 (https://www.kpmg.de/bescheinigungen/lib/aab_english.pdf). By reading and using the information contained in this assurance report, each recipient confirms notice of provisions of the General Engagement Terms (including the limitation of our liability for negligence to EUR 4 million as stipulated in No. 9) and accepts the validity of the General Engagement Terms with respect to us.


Frankfurt am Main, February 20, 2019

KPMG AG
Wirtschaftsprüfungsgesellschaft
[Original German version signed by:]

Bock
Wirtschaftsprüfer
[German Public Auditor]

Hell

1 Our engagement applied to the German version of the integrated non-financial group statement 2018. This text is a translation of the Independent Assurance Report issued in German, whereas the German text is authoritative.