Integration of Sustainability

Strategy

• Sustainability as part of steering, compensation systems and business models
• Updated materiality matrix shows key sustainability topics

We achieve long-term business success by creating value added for the environment, society and the economy. Sustainability is at the core of what we do, a driver for growth and value as well as an element of our risk management. That is why sustainability is firmly anchored into the organization as part of governance, compensation systems and business models.

Based on our corporate strategy and the global targets derived from this, from the 2020 business year onward, we will integrate the sustainability targets (CO₂-neutral growth until 2030 and achieve €22 billion in Accelerator sales by 2025) into short-term Group-level steering as well, as most important key performance indicators. We started to establish the necessary steering mechanisms and control systems in 2019.

Materiality analysis to identify and assess sustainability topics

Nature of the challenge

2/2 selected

Societal challenges

Corporate measures to tackle societal challenges

We present the relevance of sustainability topics for our stakeholders and the impact of these topics on our business in a materiality matrix. We selected and clustered key sustainability topics from a list of around 100 potentially relevant topics identified using tools such as the Value to Society approach.

The relevance of these topics for our stakeholders was assessed using a big data analysis, based on external publications. The results were complemented and confirmed by surveys and interviews with external experts.

Business units were surveyed to determine the impacts of sustainability topics on BASF. The evaluation also took into account the result of an analysis where business units assessed the positive and negative impacts of individual sustainability trends on their business. This analysis was based on a metastudy on sustainability trends. We also validate the impacts of our business activities along the value chain with our Value to Society approach. This enables us to quantify positive and negative impacts along the value chain in monetary terms. Topics with impacts that cannot be expressed in monetary terms, or only with difficulty (for example, human rights), are included based on expert assessments. Our stakeholders also confirmed the materiality of the nonfinancial topics that the Value to Society approach identified as having an impact along the value chain.

The societal challenges that we have identified as having an impact on our business, and which we also have impact on, are therefore material within the meaning of the Nonfinancial Statement.

More information on our Value to Society approach
More information on the metastudy on sustainability trends

In addition to the two climate protection and Accelerator sales targets, we have also set ourselves further sustainability targets on responsible procurement, engaged employees, women in leadership positions, occupational health and safety, process safety and water management.

We help our customers to be more sustainable and develop sustainable solutions to grow our customer relationships and attract new customers. One example of this is the ChemCycling™ project to drive forward chemical recycling of plastic waste and in this way, strengthen the circular economy for plastics. We want to promote societal acceptance of our business activities by acting in a responsible, resource-conserving, respectful, safe and efficient way.

Our products, solutions and technologies help to achieve the United Nations’ Sustainable Development Goals (SDGs), for example through climate protection measures. We also contribute to other goals, such as No poverty (SDG 1) and Zero hunger (SDG 2), Good health and well-being (SDG 3), and Clean water and sanitation (SDG 6).

In 2019, we updated our materiality analysis, which is used to identify and evaluate sustainability topics. Based on this analysis, our material topics include climate and energy, health and safety/product stewardship, and human rights (see box Materiality analysis). We integrate these material topics into our long-term steering and operational management processes. They are also reflected in the focus areas for our reporting. We continuously monitor and assess emerging sustainability topics so that we can adapt steering and management processes as needed.

We are constantly working to broaden our positive impact on key sustainability topics and reduce the negative impact of our business activities. The integration of sustainability into core business activities and decision-making processes is steered by the Corporate Development unit, which is part of the Corporate Center as of 2020. From 2020 onward, we will also bundle the global steering of climate-related matters in this unit, such as the coordination of measures to reach our climate protection target. The Board of Executive Directors is regularly informed of the current status of individual sustainability topics as well as of sustainability assessments as part of other business processes (such as investment plans), makes decisions on these with strategic relevance for the Group, and monitors the implementation of strategic plans and target achievement. The Corporate Sustainability Board, which is composed of the heads of business, corporate and functional units, and regions, supports the Board of Executive Directors on sustainability topics and discusses operational matters. A member of the Board of Executive Directors serves as chair.

We also established an external, independent Stakeholder Advisory Council in 2013. Here, international experts from academia and society contribute their perspectives to discussions with BASF’s Board of Executive Directors, helping us expand our strengths and address potential for improvement.

We systematically evaluate sustainability criteria as an integral part of decisions on acquisitions and investments in property, plant and equipment or financial assets. In this way, we not only assess economic dimensions, but also the potential impacts on areas such as the environment, human rights or the local community.