Harnessing Business Opportunities and Measuring Value Added by Sustainability

• Cross-industry initiative established to standardize how companies’ value contributions are assessed

We take advantage of business opportunities by offering our customers innovative products and solutions that contribute to sustainability. We ensure that our business units automatically evaluate and take into account relevant sustainability criteria when they develop and implement strategies, research projects and innovation processes.

We want to measure the value proposition of our actions along the entire value chain. We are aware that our business activities have an impact on the environment and society, and so we strive to increase our positive contribution and minimize the negative effects of our business activities.

To achieve this, we need to even better understand how our actions impact society and the environment. We already have many years of experience of this from evaluating our products and processes using methods such as Eco-Efficiency Analysis, the Sustainable Solution Steering portfolio analysis, or BASF’s corporate carbon footprint. The methodology of the SEEbalance^® analysis to evaluate the sustainability of different product and process alternatives was enhanced and refined in 2019. The social analysis component now contains two modules, which we use to assess social risks along the value chain and identify negative impacts on the United Nations’ Sustainable Development Goals.

We also developed a method together with external experts to perform a monetary assessment of the economic, ecological, and social impacts of our business activities along the value chain – the Value to Society approach. This allows us to compare the significance of financial and nonfinancial effects of our business activities on society and show interdependencies. The results of these assessments are helpful in our discussions with stakeholders.

In 2019, we founded the value balancing alliance e.V. together with other international companies. With the support of major auditing firms, the Organisation for Economic Co-operation and Development (OECD), leading universities and other partners, the cross-industry alliance aims to develop an accounting and reporting standard within the next three years that makes the value companies provide to society transparent and comparable. The aim is to present the financial, ecological, and social impacts of business activities in monetary terms on the basis of a standardized, uniform framework.

We contribute our approach and expertise to debates on assessing the monetary value of the economic, ecological and social impact of business decisions on an ongoing basis. We share our experiences in networks and initiatives such as the Impact Valuation Roundtable. We are also involved in the corresponding standardization processes within the International Organization for Standardization (ISO).