E3 Water

Strategy and Governance

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Explanations of our overarching policies in respect of scope of application, accountability, impacts in the value chain, global applicability, accessibility to stakeholders and engagement thereof, see General Disclosures in our Sustainability Statement. These include, among other things, our Responsible Care Management System and, as part of this, our global standards in terms of environmental protection, product safety and transportation safety. BASF’s position on water protection, our risk-based sustainability management for procurement and the Supplier Code of Conduct can also be found there.

Water protection in our production

We aim to reduce negative impacts on water availability caused by water abstraction in our own production. Likewise, we also strive to reduce water pollution from regular emissions to water. This requires a holistic approach and continuous control.

That is why we have established comprehensive management and control systems for our own production. BASF is actively involved in the International Council of Chemical Associations’ (ICCA) global Responsible Care^® initiative. Our Responsible Care Management System, based on the eponymous initiative, not only encompasses occupational health and safety requirements and standards (see S1 Occupational safety and health), but also environmental protection. The responsible use of water as a resource is a core element of our Responsible Care Management System and an important part of our commitment to the United Nations’ Sustainable Development Goals (SDGs). This is also reflected in our position paper on water protection. We use Responsible Care audits, including in areas such as environment (air, water, waste), to monitor compliance with our Responsible Care Management System.

• More information on our position paper on water protection

A key component of our strategy for many years now has been the introduction and implementation of sustainable water management, for which we have set a global target (see Global Target). We have reviewed our water target in 2024 and assessed it as important for implementing our strategy. This is also consistent with recent scientific findings, such as the Planetary Boundaries reassessed in 2023 (Richardson et al. (2023); Stockholm Resilience Centre). We want to protect water as a resource, continuously improve water use efficiency and reduce emissions. These efforts focus on our Verbund sites and production sites in water stress areas.¹ We look at water availability, water quality and the impact of our water use on the environment and other users. For this, we use the standard of the Alliance for Water Stewardship (AWS) as guidance. AWS is a global multistakeholder organization that promotes the responsible use of water, which we are a member of.

Our water consumption is low compared with the total water volume sourced (see information on Water balance) and therefore not a material topic for BASF in terms of the double materiality assessment.

Our global standards and guidelines for water are defined in the Group-wide requirement Corporate Requirement Environmental Protection. Among other things, these stipulate that water protection concepts must be implemented at all production sites to prevent emissions and the pollution of surface or groundwater. The requirements also cover the aspects of process and transportation safety in order to prevent production and transport-related product spills and leakages into water bodies as effectively as possible. Our sites and Group companies are responsible for implementing and complying with internal requirements, accessible via an internal BASF database, and legal requirements. The Corporate Environmental Protection, Health, Safety & Quality unit in the Corporate Center conducts regular audits to monitor this. During these audits, a safety and environmental profile is created, which shows if we are addressing the existing hazard potential properly. If this is not the case, corrective measures are determined, which are to be implemented within a specific time frame depending on the identified hazard potential. We monitor this in follow-up audits, among other things. BASF’s global network of experts shares information, insights and best practices on the responsible use of water on an ongoing basis. Our requirements and guidelines are continuously updated on a regular basis. To this end, we also exchange information with authorities, associations and international organizations.

In developing our business strategies, we also consider the resilience of our business models with regard to economic, ecological and social aspects as well as their impacts, risks and opportunities. As part of our opportunity and risk management system, strategic risks connected with material economic, ecological and social matters are evaluated, among other things (for additional information, see Opportunities and Risks). The strategies of our business units are updated on a regular basis. This is done either individually at business unit level or as part of the overarching divisional strategy and involves specialists from the business unit or operating division concerned and from our central strategy unit. In 2024, we have piloted a method to address material topics in the strategies of the business units over the next ten years. Depending on the extent of the strategy revision, resilience reviews, regulatory aspects and stakeholder expectations can be included to estimate future market developments. Upstream and downstream value chains can also be considered in the analysis. In addition, we use our TripleS methodology (Sustainable Solution Steering) to review the resilience of our product portfolio with regard to environmental and social aspects.

In the wake of advancing climate change, the resulting water shortages and extreme weather events, climate resilience measures are becoming increasingly important for our production (for more information on our risk management, see E1 Resilience and scenario analyses). To ensure our supply of raw materials and transportation via water, we rely on early warning systems and, at the Ludwigshafen site in Germany, for example, on special vessels for low water levels on the Rhine River. Further measures at our sites are aimed at reducing our demand for water, for example, through recycling, intelligent cooling water systems and water treatment. Depending on the subsequent use of the water (from cooling or production processes), varying levels of treatment may be required using sand filtration, membrane filtration or reverse osmosis. When water is reused for cooling processes, it is often cooled through evaporation in recooling plants before being used again.

Water protection in the value chain

We are also aware of and want to mitigate the negative impacts on water availability in our upstream and downstream value chains caused by water abstraction and consumption, as well as the deterioration of water quality from regular emissions to water.

Our procurement organization has established a global risk-based management system for our upstream value chain that specifies how we implement our due diligence processes. We have defined the standards for this in a global requirement. We continuously enhance this requirement and our structures and processes in order to adapt to changing conditions. Procurement requirements and targets are set centrally and are binding for all employees with procurement responsibility worldwide. We endeavor to ensure compliance with these guidelines using a multistage control process. The unit-specific risk management systems of our business units are supported and monitored during implementation according to minimum standards set by the Corporate Center units. The Corporate Audit unit, as the third instance involved, monitors the effectiveness and compliance with risk management. Our management processes are activated in the event of specific incidents (see S2 Assessing and growing our suppliers and S2 Dealing with specific incidents). Our expectations of suppliers are set out in our global Supplier Code of Conduct (see S2 Strategy and Governance), which is part of our risk-based management system and integrated into our procurement conditions. It is based, among other things, on the Ten Principles of the United Nations Global Compact initiative and ICCA’s Responsible Care^® program and also includes the responsible use of water as a resource. When selecting suppliers and assessing new and existing supplier relationships, economic criteria and particularly ESG standards are relevant. We expect our suppliers to reduce water emissions and minimize impacts on water scarcity. We arrange for third parties to evaluate suppliers with a high sustainability risk. Supplier assessment is mainly performed as part of the chemical industry’s Together for Sustainability initiative (TfS), either through on-site audits by TfS-approved auditors or through sustainability assessments based on online assessments via the rating agency EcoVadis. Depending on business requirements, we perform our own Responsible Care audits at selected contract manufacturers if material risks have been identified with respect to environmental protection. This also includes water use.

In our downstream value chain, we continuously collaborate with our customers on innovations and the development of water-related solutions that are designed to enable their green transformation and make a significant contribution to sustainability (for more information on steering the sustainability performance of our product portfolio using the TripleS methodology, see General Disclosures, Sustainable steering of our product portfolio). We offer our customers solutions that help purify water and use it more efficiently and reduce pollution.

We report transparently and comprehensively on how we use water. For instance, in 2024, we again participated in the program established by the nonprofit organization CDP for reporting on data relevant to climate protection on the topic of water. BASF again achieved leadership status with an A- rating in the final assessment. CDP evaluates how transparently companies report on their water management activities and how they reduce risks such as water scarcity. The assessment also considers the extent to which product developments can contribute to sustainable water management also at the customers of the evaluated companies.

In addition, we have established relevant global management systems in our downstream value chain, such as in the area of product and transportation safety. Our product stewardship experts identify potential risks related to transportation, handling, usage and disposal of our products and provide advice to minimize potentially negative impacts. We work continuously with all relevant stakeholders to ensure that our products do not pose any risk to people or the environment when used as intended and responsibly (for more information, see E2 Substances of Concern or of Very High Concern).

Actions

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Our actions in the area of sustainable water management are often decentralized activities, projects and initiatives. Like our management and monitoring systems, they aim to ensure continuous optimization and further development and fall within the responsibility of the sites and Group companies. This goes hand in hand with the BASF approach to sustainability steering (see General Disclosures). For this reason, we have not defined an action plan with central resource allocation for sustainable water management.

Actions in our own production

An important part of our sustainable water management is the continuous analysis and the implementation of actions for improvement. This can include site-based projects to improve water efficiency or wastewater quality as well as off-site measures in collaboration with third parties to improve the water situation in the catchment area.

Thanks to our focus on operational excellence (see also E1 Operational excellence), we continuously design our plants and processes to be more efficient and resource-saving. This creates direct incentives for investing in efficiency projects and contributes to reducing emissions.

Corresponding projects address all levels of the mitigation measure hierarchy: Prevent, reduce, recapture and reuse, restore and regenerate. The extraction, treatment, transportation and recooling of water is often associated with a high energy demand. We are constantly working to optimize our energy consumption and the amount of water we use, and to adapt to the needs of our operations and the environment.

In order to use water as efficiently as possible, we rely on measures such as intelligent cooling water systems, increased water reuse and multimodal transportation concepts with combined transportation methods. For example, process optimizations such as the use of modified valves or the recycling of low-temperature cooling water at the General Lagos site in Argentina have led to water savings of 22% since 2018. At our Verbund site in Freeport, Texas, we commissioned a membrane bioreactor for treating wastewater in 2023, which improved the capacity and cleaning performance of the wastewater treatment plant. In the medium term, the treated wastewater is to be reused, thereby reducing the need for freshwater. Depending on the local situation, we also implement actions together with other stakeholders. For example, at the Tarragona site in Spain, we are working with our water supplier AITASA and other companies to further expand wastewater reuse in the medium term. Through results such as reduced water use or the replacement of higher-quality water with alternative sources, our activities contribute to sustainable water management. At our Guaratinguetá site in Brazil, we have collaborated with local authorities, the Fundação Eco+ and other partners since 2011 on the Incentivo ao Produtor de Água program: Through improved soil management and the reforestation of primary forests, surface runoff and soil erosion in the Ribeirão Guaratinguetá catchment area have since been significantly decreased.

Actions along the value chain

We advocate the responsible use of water as a resource along the entire value chain.

We audit supplier compliance with environmental standards in the upstream value chain worldwide as part of our regular supplier assessments (see S2 Assessing and growing our suppliers). Where improvement is necessary, we support suppliers in developing and implementing appropriate measures, such as the correct handling of wastewater. We have also been involved in a wide range of initiatives to promote sustainability in the supply chain, for example since 2016 in the Pragati project for an efficient water use concerning more sustainable farming of castor beans in India (see S2 Renewable raw materials).

Another example is our effort with regard to lithium sourcing. Together with the BMW Group, Mercedes-Benz AG, Fairphone B.V., Daimler Truck AG and the Volkswagen Group, we have been a member of the Responsible Lithium Partnership since 2021. This initiative, which is scheduled to run until 2025, campaigns for the responsible use of natural resources in the Salar de Atacama salt flat in Chile. This region is home to the world’s largest lithium brine reserves and a significant share of global production. With this in mind, the German Agency for International Cooperation (GIZ) was commissioned with organizing a local multistakeholder platform, also comprising Indigenous communities, on the water-related opportunities and risks of lithium and copper extraction and other commercial activities as well as with driving forward action plans. BASF participated in a study organized by BMW together with experts from the University of Alaska and the University of Massachusetts to examine the hydrological conditions in Salar de Atacama. The results of this study are incorporated as an important component of the Responsible Lithium Partnership’s work.

We also impact the availability of water resources in our downstream value chain, for example, through our products, solutions and their application.

With TripleS, we have established a steering tool for our product portfolio based on the sustainability performance of our products (for more information, see General Disclosures, Sustainable steering of our product portfolio). Based on this, we review our relevant global product portfolio continuously, but at least every four years. In 2022, we updated this method in order to further steer our product portfolio toward climate protection, climate neutrality and circular economy. In addition to implementing new regulatory requirements, we are actively driving forward the adaptation and further development of our production processes with the aim of reducing the environmental footprint of our products. Part of the evaluation process includes criteria for water protection, such as more efficient water use in production, new approaches to water treatment and lower water consumption. If products with sustainability concerns are identified, we classify them as part of TripleS either as Monitored, or in the case of significant concerns, as Challenged. A description of potential actions is mandatory for both categories. In the event of significant challenges, we develop action plans to optimize the products or replace them with alternative solutions. These include research projects and reformulations to optimize products or replace them with alternative products. To make our portfolio more sustainable, we are generally phasing out all Challenged products within five years of their initial classification.

• More information on TripleS

Agriculture is one of the highest water-consuming sectors worldwide. That is why we offer our customers targeted solutions to help use water more efficiently, such as yield-enhancing products, water-saving cultivation methods and crops that require less water. A specific example is the artichoke variety with the name Green Queen, which, compared with conventional varieties, delivers higher yields with the same water usage. The implementation of new crop management for Green Queen can reduce water demand by 20% to 35%. Green Queen is mainly sold in Spain and the United States, where the regions of Murcia and California are increasingly affected by periods of drought. We are currently conducting a project for Green Queen to evaluate a combined solution of AI technology and genetics.

We work with numerous partners along the value chain and from civil society to protect water as a resource, deepen our knowledge and share it with others. We are a member of the Alliance for Water Stewardship (AWS), whose 2022–2030 strategy aims for sustainable water use and promotes collective action to tackle shared water challenges. In addition, we are continuously involved in networks such as the Alliance to End Plastic Waste (AEPW), the World Plastics Council and Operation Clean Sweep^® to prevent waste from plastic production from entering water bodies. In South America, we support sustainable development activities, including in the area of water, through Fundação Eco+.

Global Target

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Our aim is to introduce sustainable water management (for more information, see Strategy and Governance) at our Verbund sites and at all production sites in water stress areas² by 2030, covering around 90% of BASF’s total water abstraction. Water stress areas are identified based on the latest water stress data in line with the World Resources Institute’s Water Risk Atlas.²

In 2024, we achieved 65% of our target³ (2023: 57%).⁴ Sustainable water management was introduced at eight additional sites (2023: seven sites).

The focus of sustainable water management is on efficient water use, not necessarily on reducing water consumption, since the latter, compared with the total volume of water sourced, is not material for BASF in terms of the double materiality assessment. Efficient water use considers, among other things, reuse and the use of alternative or less sensitive water sources.

As part of sustainable water management, our sites regularly assess the water situation in the catchment area, particularly when changes are made to the production infrastructure, but no later than every five years. We look at water availability, water quality and the impact of our water abstraction on the environment and other users. We use the AWS Standard as guidance.⁵ This raises awareness of potential risks and potential impacts such as water scarcity for the population.

Our commitment to sustainable water management also extends to our value chains. We have set out our expectations of suppliers in the global Supplier Code of Conduct (see S2 Strategy and Governance) which, among other things, covers the areas of the Responsible Care^® initiative, including the responsible use of water as a resource. During the reporting year, we refined our target to drive forward sustainability in the supply chain in an even more targeted manner (for additional information, see Targets and Target Achievement). For the downstream value chain, we have established TripleS as a tool for steering our product portfolio based on the sustainability performance of our products (for more information, see General Disclosures, Sustainable steering of our product portfolio). We aim to reduce the environmental footprint of our products, also taking into account criteria for water protection.

• More information on TripleS

We discuss the sustainability topics that are material for BASF at regular meetings with external stakeholders, forming part of our strategic stakeholder engagement activities, and in discussions with investors. Through this, the expectations of our stakeholders are continuously taken into account when setting potential targets.

Metrics

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Water balance of the BASF Group in 2024

Million cubic meters per year

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Abstraction / supply

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Water used in cooling processes

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Water used in production

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Total from production processes, sanitation, rinsing and cleaning in production.

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Discharge

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Consumption

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The difference between the volume of water abstracted and the volume discharged is primarily due to the limited accuracy in measuring water discharge.

Our water abstraction in 2024 amounted to 1,507 million cubic meters. This demand was covered for the most part by freshwater such as rivers and lakes. At some sites, we use alternative sources such as treated municipal wastewater, brackish water or seawater. A small part of the water we use reaches our sites as part of raw materials and steam, or is released in our production processes.

Water use in 2024 totaled 7,102 million cubic meters. The total volume of recycled and reused water in 2024 amounted to 5,734 million cubic meters.

We predominantly use water for cooling purposes (88% of total water abstraction), after which we discharge it back to our supply sources with no product contact. We reduce our water abstraction for cooling purposes mainly by using recooling plants. Around 12% of our total water abstraction is used in our production plants, for example, for extraction and dissolution processes or for cleaning. Here, too, we reduce our demand for water by reusing wastewater. Most of the water used for production purposes is discharged back to water bodies after being treated in our own or third-party wastewater treatment plants.

The BASF Group’s water consumption describes the amount of water that is not discharged back into a water body, meaning that it is no longer available to other users. We calculate water consumption as the sum of evaporation in cooling processes, water content in our sales products and water consumed otherwise at our sites. Consumption is mainly attributable to the evaporation of water in recirculating cooling systems. A smaller amount is from the water contained in our products. Water consumption in 2024 amounted to around 76 million cubic meters.

In 2024, around 30% of our production sites were located in water stress areas.⁶ These sites accounted for 19 million cubic meters, representing 1% of BASF’s total water abstraction. Water consumption at these sites amounted to 9 million cubic meters.

Production sites located in areas affected by high or extremely high overall water risk⁶ (23% of our sites in 2024) accounted for 13 million cubic meters, or 1% of BASF’s total water abstraction. Their water consumption in 2024 amounted to 6 million cubic meters.

A general description of our measurement methods and a description of the data collection process, as well as general information on the estimation or rounding of individual sustainability parameters, can be found in the General Disclosures section of our Sustainability Statement.

Based on net revenue (in million €) and water consumption (in cubic meters), water intensity in 2024 amounted to 1,171 cubic meters per million € net revenue.