Interests and Views of Our Stakeholders

ESRS 2 SBM-2

The acceptance and support of our stakeholders is crucial for our business success. Through continuous dialog, we leverage the expertise of our stakeholders in global networks, worldwide initiatives and our own advisory bodies and actively contribute our expertise.

For more than 25 years, we at BASF have engaged in continuous dialog with other companies, nongovernmental organizations, international organizations and multistakeholder initiatives to better understand different perspectives and address conflicting goals. Our stakeholders’ expectations are taken into account when deciding on the company’s strategic direction, discussing targets and making business decisions, thereby determining the company’s sustainability strategy to a significant extent. A stakeholder dialog takes place regularly, for example with representatives from civil society, employees and shareholders. The Corporate Development Corporate Center unit is responsible for all formal communication with societal representatives, while the Corporate Human Resources is the Corporate Center unit in charge of all communication with employees. Investor Relations is the Corporate Center unit tasked with engaging with shareholders. The aforementioned Corporate Center units report to the Chairman of the Board of Executive Directors.

Sustainability topics are discussed and managed by the Board of Executive Directors. Stakeholder expectations are taken into account in these discussions. The Board of Executive Directors also engages with stakeholders directly in discussions as part of our stakeholder engagement activities. When making its decisions, the Board of Executive Directors considers the results and recommendations from sustainability evaluations of business processes. It makes decisions with strategic relevance for the Group and monitors the implementation of strategic plans and target achievement. The CFO and the heads of Group Reporting & Performance Management, Corporate Audit and Corporate Compliance regularly report in detail to the Audit Committee on sustainability-related topics. Moreover, the Supervisory Board is briefed by the Board of Executive Directors on the progress of sustainability topics on an ongoing basis.

An overview of our most important stakeholder expectations and the platforms we use to engage them is provided in the following:

We have been a member of the U.N. Global Compact since its establishment in 2000. BASF consistently supports the Ten Principles of the U.N. Global Compact for responsible business conduct and the Sustainable Development Goals. We are active around the world in local Global Compact networks, in some cases in a leadership role. BASF has been an active member of the World Business Council for Sustainable Development (WBCSD) since 1999. We cofounded the Global Battery Alliance (GBA) in 2017. The aim of the GBA is to develop standards and tools to steer a sustainable value chain for batteries. In 2019, we cofounded the Alliance to End Plastic Waste (AEPW) to drive forward solutions that reduce and avoid the disposal of plastic waste in the environment, in particular in the ocean.

If our transition to climate neutrality were to result in structural changes or have other significant social impacts on employees (for example, organizational restructuring or other issues relevant to codetermination), we would consult with employee representatives to find socially responsible solutions in accordance with existing participation rights. Together with other companies and the European CSR Europe network, we have worked on the topic of responsible social transition to climate neutrality (just transition). We have contributed to both the development of a European road map and an associated toolbox.

In order to involve our stakeholders more intensively and to dive deeper into specific sustainability topics, we use our own independent advisory bodies. In 2023, we introduced a new stakeholder engagement format with our Sustainability Lab, where around 100 external and internal experts discuss, among other things, the complex challenges of climate change. Our intention with the Sustainability Lab is to shed light on particular topics and issues related to sustainability from different perspectives. Furthermore, we are expanding the circle of external and internal experts with whom we want to discuss and think through the ever more complex topics. This external input helps us to critically examine and continuously develop our sustainability approach. Our employees were able to follow the Sustainability Lab discussions virtually. The idea is to involve our employees more actively in the topic of sustainability. We plan to continue conducting the Sustainability Lab format on an event-driven basis in the future.

Additionally, it is important for us to further strengthen our dialog with civil society to gain a better understanding of public opinions on potentially controversial topics. Not only do we invite members of civil society to participate in formats such as the Sustainability Lab, but we also founded the BASF Civil Society Forum in 2024. The forum permits us to discuss sustainability topics with representatives of nongovernmental organizations and the trade union spectrum in a confidential setting.

We address current and important issues regarding specific topics with councils. The trustful exchange within the Human Rights Advisory Council helps us to appropriately fulfill our roles and responsibilities, particularly in challenging human rights situations. The Nature Advisory Council focuses on exchanging information on topics relating to the protection of biodiversity and ecosystems. We discussed the findings from our double materiality assessment with both councils in 2024. For more information on how we take advantage of these councils and other formats in the context of affected communities, see S3 Contribution to the positive development of communities.

We use the information obtained through stakeholder engagement to critically evaluate and enhance BASF’s sustainability strategy, including its targets. For instance, we rely on discussions in our councils to identify areas for improvement with regard to human rights due diligence and the consideration of biodiversity in new investment projects.

We bear a particular responsibility toward our sites’ neighbors. We promote continuous dialog between residents and our site management and strengthen trust in our activities with community advisory panels. Our globally binding guidelines for community advisory panels are based on the grievance mechanism standards in the U.N. Guiding Principles on Business and Human Rights.

Our political advocacy is conducted in accordance with transparent requirements and our publicly stated positions. The same applies to our activities in associations. Our Industry Associations Review compares the energy and climate protection positions of BASF and the most important associations of which we are a member, with explanations on our approach. BASF does not financially support political parties, for example, through donations in cash or in kind. This is codified in global requirements. In the United States, employees at BASF Corporation have exercised their right to establish a Political Action Committee (PAC). The BASF Corporation Employee PAC is an independent, federally registered employee association founded in 1998. It collects donations from employees for political purposes and independently decides how these are used, in accordance with U.S. law.

• More information on our requirements for responsible lobbying
• More information on the Industry Associations Review