Steering of Product Portfolio Based on Sustainability Performance

• Increase sales from Accelerator products

A significant steering tool for the product portfolio, based on the sustainability performance of our products, is the Sustainable Solution Steering method. By the end of the 2020 business year, we had evaluated 98.4%¹ of the relevant portfolio.² This refers to the BASF Group’s sales from products in its strategic portfolio to third parties in the business year concerned. By the end of 2020, sustainability analyses and assessments had been conducted for more than 57,000 specific product applications, accounting for €54.1 billion in sales. These consider the products’ application in various markets and sectors. New market requirements arise as a result of the continuous development of new product solutions in the industry or changing regulatory frameworks. This has an effect on comparative assessments, which is why we regularly reassess our product portfolio.

Transparently classifying our products on the basis of their contribution to sustainability enables us to systematically improve them. Accelerator products make a substantial sustainability contribution in the value chain. These include catalysts that reduce emissions to the environment, biodegradable mulch films for agricultural applications, and high-performance insulation materials for higher energy savings and reduced material use in building construction. Based on our corporate strategy, we have set ourselves a global target: We aim to make sustainability an even greater part of our innovation power and achieve €22 billion in Accelerator sales by 2025.

Classification of relevant portfolio² according to the Sustainable Solution Steering method

In 2020, we generated sales of €16.7 billion with Accelerator products (2019: €15.0 billion). Accelerator products account for 30.9% of the evaluated relevant portfolio. Performer products account for 56.4% and Transitioner products for 12.6% of the solutions assessed. Sales of Accelerator products rose by 11% compared with the previous year. This is primarily attributable to the positive development of Accelerator sales in the Surface Technologies and Agricultural Solutions segments. In the Agricultural Solutions segment, the first-time assessment of the seed business acquired from Bayer contributed to the increase.

If, during reassessment of our portfolio, we identify products with substantial sustainability concerns, we classify these as “Challenged.” Challenged products account for around 0.1% of the evaluated relevant portfolio. We develop and implement action plans for all products in this category. These include research projects and reformulations to optimize products, or even replacing the product with an alternative. To systematically align our portfolio with contributions to sustainability, as of 2018, we will phase out all Challenged products within five years of initial classification as such at the latest. We strive to offer products that make a greater contribution to sustainability in their area of application to live up to our own commitments and meet our customers’ demands. This is why our Sustainable Solution Steering method is used in areas such as our research and development pipeline, in business strategies as well as in merger and acquisition projects.