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Strategy and Governance

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For explanations of BASF policies that we reference in more than one chapter, please see General Disclosures in the Sustainability Statement. These include disclosures regarding scope, accountability, impacts in the value chain, global applicability, accessibility to stakeholders and engagement thereof.

Human rights due diligence

The basis of our social responsibility is respect for human rights, including workers’ rights – in our own activities as well as in our business relationships. BASF is a founding member of the U.N. Global Compact and a member of the Global Business Initiative on Human Rights. Our long-term voluntary commitment guides our engagement in human rights. We are committed to respecting internationally recognized human rights in our own activities and promoting them along our value chains. We are very careful to neither cause nor contribute to human rights violations in our own business activities. BASF is also active in initiatives such as Together for Sustainability (TfS) and Responsible Care^®.

We consider human rights due diligence to be an important and comprehensive task and have set up our organization accordingly. That is why our responsibility for human rights has been in our Code of Conduct for many years and is set out in our Policy Statement on Human Rights.

Our corporate value “responsible” (see Our Strategy) includes striving to apply high standards for responsible labor and social standards as well as protecting health and safety worldwide. All employees and leaders are responsible for putting these standards into practice and respecting human rights. To fulfill this obligation, we developed a systematic, integrated and risk-based due diligence approach as well as clear processes for monitoring and managing human rights risks.

The implementation of human rights due diligence is an ongoing task requiring a robust management system and the corresponding organizational structure. Effective cross-functional collaboration with strong teamwork is an essential component. We want to ensure that we:

• Identify, weight and prioritize our human rights risks through scheduled and incident-related analyses
• Address risks with effective preventive measures and with appropriate remedial actions in the case of violations
• Integrate the actions into all relevant functions and operational processes and regularly review their effectiveness

The head of our legal and compliance organization also acts as Chief Human Rights Officer, who oversees the overarching risk management system and reports regularly to the Board of Executive Directors and the Audit Committee on human rights issues. The overarching governance of human rights due diligence at BASF is the responsibility of our Compliance unit. In addition, various specialist units are responsible for steering specific human rights topics. Experts in the fields of international labor and social standards, environmental protection, health and safety, as well as corporate security work on a risk-oriented basis to ensure that we respect the relevant human rights in our own activities.

We have integrated human rights-related assessments into our governance and decision-making processes, for example for investments and acquisitions. Our internal cross-unit Human Rights Expert Working Group, managed by the Compliance unit, facilitates close collaboration between the above mentioned specialist units, which also include specialists from the areas of Procurement, Legal, Human Resources, Sustainability, Communication and Government Relations. They regularly discuss the latest topics and developments related to human rights, provide support in the improvement of our internal processes, offer training and advise on challenging issues. Our concept also includes structured collaboration with the operating divisions to identify and actively address division-specific risks. Our Human Rights Advisory Council is a source of additional external human rights expertise for us. The Council, which comprises independent international human rights experts, meets several times per year. The trust-based dialog on human rights topics helps us to better understand different perspectives and to deal more openly with critical situations.

Human rights due diligence is an ongoing task for us. We therefore review our processes and measures in this area on a regular basis and improve them as needed. Our strategies relating to our workforce are in accordance with the following internationally recognized standards for responsible business conduct:

• United Nations’ (U.N.) Universal Declaration of Human Rights
• U.N. International Covenant on Civil and Political Rights
• U.N. International Covenant on Economic, Social and Cultural Rights
• Declaration on Fundamental Principles and Rights at Work of the International Labour Organization (ILO)
• Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy of the ILO
• The Ten Principles of the U.N. Global Compact
• U.N. Guiding Principles on Business and Human Rights
• OECD Guidelines for Multinational Enterprises
• Responsible Care^® Global Charter of the International Council of Chemical Associations (ICCA)

As a global company with more than 100,000 employees around the world, we are exposed to a number of inherent human rights risks with regard to international labor and social standards, especially in countries with higher human rights risks. We have established clear principles, guidelines and processes to identify and address these risks accordingly.

We mainly approach our responsibility to act in compliance with international labor and social standards using three elements: the Compliance Program (including the BASF Compliance Hotline, see G1 Monitoring adherence to our compliance principles), close dialog with our stakeholders (such as with employee representatives or international organizations, see also Engaging with employees and their representatives) and our requirements on adherence to international labor and social standards, applicable Group-wide.

Part of our central due diligence system is a global, risk-based management process, whereby we monitor relevant changes in national laws of the countries where BASF operates and evaluate them for compliance with international labor and social standards. The results of this comparison as well as any measures taken to implement our requirements on international labor and social standards are tracked and documented. The evaluation is carried out regularly for selected BASF Group companies based on country-specific risk assessments. If there is a heightened inherent risk of violations of workers’ and human rights in a country, the Group companies located there are evaluated more frequently. If national laws contain no or lower requirements compared to labor and social standards defined by BASF, action plans are developed to bridge these gaps. If conflicts with national laws or practices arise, we aim to uphold our values and strive to adhere to our internationally recognized standards, all while ensuring compliance with the laws of the respective country.

Individual elements of our requirements on international labor and social standards are audited internally (Responsible Care audits) at selected BASF Group companies. In addition, international labor and social standards are an integral part of the Corporate Audit unit’s compliance management audits (see G1 Corporate Audit). Furthermore, audits are performed on specific matters.

BASF’s international labor and social standards stipulate the fundamental principles and rights at work with regard to freedom, equity, security and dignity (see graphic):

These principles are applicable at BASF worldwide and are the responsibility of Corporate Human Resources, which reports directly to the Board of Executive Directors. We expect compliance from all leaders and employees and provide internal target group-specific training sessions on labor and social standards on a regular basis.

The following provides a more in-depth description of some of the fundamental principles and rights regarding international labor and social standards at BASF:

No child labor and no forced labor

BASF expressly prohibits any form of child or forced labor, including slavery and human trafficking. This is also specified in the BASF Group’s Policy Statement on Human Rights. These topics are part of our analyses and requirements because we operate in countries where forms of child and forced labor exist. To prevent incidents of child or forced labor within our company, we identify and address these risks and take the appropriate preventive measures (see Human rights due diligence). In 2024, there were no indications of individuals in our company being subjected to forced labor or child labor. Our disclosures on any incidents, complaints and severe human rights impacts can be found in the Metrics section.

No discrimination, harassment or other forms of workplace distress

The BASF Group’s Policy Statement on Human Rights contains our commitment to a fair, diverse and inclusive working environment characterized by mutual trust and respect as well as respectful interaction between all employees. This is also an integral component of our globally applicable Code of Conduct for all employees.

We are committed to equal opportunities whereby no one is at a disadvantage due to race, gender, age, skin color, nationality, disability, religion or worldview, sexual orientation, ethnicity, social status, marital status, gender identity or expression, political opinion, pregnancy, maternity, parental status or any other characteristics protected by law. This includes equal pay for equal work. We embrace the diversity of our employees.

We take the risk of discrimination very seriously and are aware that discrimination can occur in companies. At BASF, we expect human resources-related decisions to be made based on objective criteria. We do not tolerate discrimination, harassment or any other form of abuse. If, however, incidents come to our attention, for example via our grievance channels, we aim to act immediately and take the appropriate remedial actions (see Processes to remediate negative impacts and channels for own workers to raise concerns and Metrics). Based on external definitions such as those provided by the Federal Ministry for Economic Cooperation and Development, we consider individuals to potentially be at particular risk: people – especially women – belonging to minorities, nonemployee workers, people with disabilities, underage employees and expectant mothers and parents. In addition, employees with a migrant background may face a heightened risk of human rights violations and discrimination. This can manifest in various ways, such as the denial of rights, harassment, and unequal treatment when it comes to job applications or promotions.

As part of our initiative against sexual harassment and discrimination, we launched a communication campaign in May 2024 at the Ludwigshafen site in Germany to raise awareness about the fact that discrimination and harassment have no place at BASF. This campaign will continue at additional BASF Group sites in 2025.

We take into account the unique challenges parents face, particularly with regard to the health and well-being of expectant and nursing mothers. Our goal is to protect their health and shield them and their children from harm (see maternity protection). We are committed to acting with particular care toward mothers and ensuring that they are treated with respect. Working women should be protected from all forms of discrimination related to their pregnancy or status as a mother.

An additional global requirement stipulates the promotion of diversity and inclusion within the BASF Group with a focus on the corporate value of “open” (see Our Strategy).³ It defines standards for a fair working environment and emphasizes the importance of equal opportunities and compliance with antidiscrimination laws. The objective is to establish a diverse and inclusive working environment in which our employees enjoy working. The requirement is supported through national or local actions.

When identifying leadership talents, we also take into account the promotion and appreciation of diversity, for example when it comes to women. Furthermore, we have committed to increasing the proportion of women in leadership positions to 30% by 2030.⁴ As of December 31, 2024, the proportion of women working in the BASF Group was 27.1%. The proportion of women in leadership positions with disciplinary responsibility worldwide was 29.3% (2023: 28.4%) as of December 31, 2024. BASF’s management reviews the status of this target achievement on a regular basis via a global dashboard.

• More information on diversity and inclusion at BASF
• More information on how we promote diversity, equity and inclusion

Effective recognition of the rights to freedom of association and collective bargaining

We recognize the right to freedom of association, promote collective bargaining and support social partnerships. All employees have the right to form, join or support legally recognized labor unions or other forms of worker representation in accordance with applicable legal regulations. This fundamental right should never be denied or restricted. BASF supports the rights of employees to participate in collective bargaining through their chosen labor organizations. We also do not tolerate any discrimination or retaliation against employees based on their membership, nonmembership or involvement in labor unions. For more information on the implementation of these principles, see the section Engaging employees and their representatives.

• More information on our Policy Statement on Human Rights and our human rights commitment and approach

In the following section, we discuss the material topics according to the results of our double materiality assessment.

Adequate wages

The Corporate Center’s Corporate Human Resources unit provides a globally consistent framework for employee compensation. We offer our employees appropriate, performance-related and market-oriented compensation, supplemented by attractive additional benefits. Compensation is based on global compensation principles according to position and function, market environment and performance. These principles are stipulated in three BASF Group-wide requirements (compensation by position and function, market-oriented compensation, performance-based compensation). Among other things, they serve to ensure that equivalent positions are compensated in a comparable way regardless of gender, ethnic background or any other characteristics, and that the local market conditions of the respective site and differences in employee performance are considered accordingly. In many countries and companies, our additional benefits exceed legal requirements and include, for example, company pension benefits, supplementary health insurance and share programs. We want to attract engaged and qualified employees and motivate them to achieve top performance with this comprehensive package that includes individual development opportunities and a good working environment. Our global compensation concepts help shape fair and competitive remuneration for employees in accordance with our requirements on international labor and social standards.

Skill development

Attracting and retaining the best employees is crucial to our success. Technological change is leading to new demands being placed on our employees. Demographic change is also increasing the effort involved in recruiting skilled employees. This can lead to skill gaps and vacant positions in the workforce. Both of these can result in lower employee motivation, posing new challenges for us when it comes to recruiting and retaining skilled employees. Skill development is a key instrument in this context. We want to boost employees’ satisfaction, productivity and innovative power through the ongoing improvement of their skills and expertise.

The Corporate Center’s Corporate Human Resources unit provides a globally consistent framework for employee skill development and leadership excellence. A Group-wide requirement defines our process for employee development and the corresponding instruments and responsibilities. It also defines the degree of freedom the divisions have in this process in order to ensure comparable conditions for employees and address the different needs in our organization. Employee development at BASF is based on the principle that all employees have the opportunity to expand their skills and experience through learning or changing positions and are supported in doing so. Learning takes place according to individual and job-specific requirements and can be accomplished in different ways: independent study during work hours, social learning through exchange with others or formal learning in settings such as training and further education courses. Additionally, our requirements on international labor and social standards prohibit discriminatory practices that could restrict or prevent the personal and professional development of employees based on inadmissible criteria.

Our leaders play an important role in the engagement and development of our employees. We have therefore stipulated in a Group-wide requirement how BASF defines excellent leadership based on our values and what behavior we expect from our leaders. We thus place particular emphasis on the desired leadership behavior in our leadership development and assessment.

We are currently adjusting our corporate requirements for leadership and employee development to reflect our new strategy. We are monitoring the implementation of these requirements through regular surveys of employees and leaders. This also provides us with feedback from our workforce on development opportunities (see Skill development, training and further education).

Recruitment of skilled employees

Due to the intense global competition for the best skilled employees and leaders as well as demographic change, especially in North America and Europe, there is a risk that vacant positions may not be filled or only with a delay. We also see the risk of not being able to reach, hire and retain enough talent.

The shortage of skilled employees in many industries is also making it more difficult to attract and retain staff. We are therefore stepping up our recruitment and onboarding efforts. This is particularly the case for people with expertise in the fields of IT, artificial intelligence, production, engineering or natural sciences. In addition, a tense macroeconomic situation combined with structural adjustments at BASF may have a negative effect on employee engagement and loyalty to the company.

The Corporate Center’s Corporate Human Resources unit provides a globally consistent framework for recruiting skilled employees and obtaining feedback. A global talent acquisition requirement stipulates how we position BASF as an employer and want to attract employees for our company. It defines the corresponding principles, roles and responsibilities and is aimed at all employees, including leaders (see Recruitment of skilled employees). We offer an attractive comprehensive package to be a compelling choice as an employer (see Adequate wages). We monitor compliance with the talent acquisition requirement via the Employee Voices survey which enables employees to express their feedback on their working environment and corporate culture.

By regularly conducting this survey we implement the global requirement to actively involve employees in shaping their working environment, thereby monitoring the implementation of many of the topics discussed above as well as the development of our employees’ engagement. For more information on this and how employees and their representation are generally involved in shaping their workplace, see Engaging with employees and their representatives.

Occupational safety and health

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We regard health and safety as our highest priorities and are aware of the material potential negative effects for our employees. To that end, the Corporate Center’s Corporate Environmental Protection, Health, Safety & Quality unit sets globally binding standards for occupational safety and health. Our safety and health management includes all employees worldwide. We have established comprehensive management and control systems based on the guiding principles of the global Responsible Care^® initiative of the International Council of Chemical Associations and focused on protecting the lives and health of all employees in the workplace. We also want to ensure compliance with our requirements through our control systems.

Our safety concepts are designed to provide highest level of protection for our employees in our company. At the same time, these concepts should ensure compliance with legal requirements. Our sites and Group companies are responsible for implementing and ensuring compliance with both Group-wide requirements and local guidelines. They are supported in this task by global networks of experts. The Corporate Center’s Corporate Environmental Protection, Health, Safety & Quality unit reports directly to the Board of Executive Directors and conducts regular audits to review compliance with guidelines, while sites and Group companies implement these guidelines locally. We follow a risk-based approach and continuously update our requirements. For this reason, we also maintain a dialog with government institutions, associations and international organizations.

Due to our many years of expertise in the field of occupational safety, we place a particular focus on employees who handle hazardous substances and operate complex assets and machinery due to their work in laboratories or production plants. We have set ourselves clear goals to reduce the potential risk for our employees to a minimum (see Global targets). We have comprehensive actions in place for this, which are described from Occupational safety and health onward.

• More information on occupational health and safety

Secure employment

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The Corporate Center’s Corporate Human Resources unit is responsible for the aforementioned requirements regarding the BASF International Labor and Social Standards. These apply globally, and all leaders and employees are expected to comply with them. We monitor adherence to the requirements through a global risk-based management process for international labor and social standards at BASF (see Human rights due diligence). We recognize that stable employment and working conditions are crucial for our employees. A tense macroeconomic situation combined with structural adjustments within the company may unsettle employees, leading to lower engagement and employee retention to the company as well as unplanned staff turnover. The principles outlined in the following section serve as the foundation for employment at BASF. They align with our core principles and rights concerning international labor and social standards at BASF. In the context of secure employment, we additionally uphold the rights to freedom of association and collective bargaining as well as the right to maternity protection. These principles are described here.

Clearly defined working conditions

A clearly defined and mutually agreed-upon employment relationship forms the foundation of a fair and trusting collaboration between the company and its employees. It should establish the rights and responsibilities of both parties, helping to prevent conflicts and misunderstandings. Our goal is to inform employees in an easily accessible and understandable manner about their working conditions, for example regarding compensation, benefits, working environment and learning and development opportunities. We aim to ensure that both parties are aware of their obligations and treat each other with trust and respect. A global talent acquisition requirement, also overseen by Corporate Human Resources, stipulates that all current and potential future employees must be informed of their working conditions. We monitor compliance with this requirement via the Employee Voices survey, which among other things measures our employees’ engagement.

Fair dismissal

BASF acknowledges every individual’s right to social security. We are aware of the risks associated with a sudden loss of employment and income, which can lead to precarious situations for employees and their families. To counteract this, we strive to adhere to internationally recognized principles for fair dismissals. This includes engaging in dialog with the relevant employee representatives or unions to ensure that employees are treated fairly and respectfully.

Fair disciplinary measures

Disciplinary measures must be fair, proportionate and conducted with respect for the dignity of all involved. This means considering the personal circumstances of employees and their families when deciding on how BASF responds to misconduct. Disciplinary measures should never be arbitrary or discriminatory. We foster a culture of fairness even in cases of misconduct. This approach helps us resolve compliance incidents and disputes (see also the following section).

Engaging with employees and their representatives

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Openness is one of BASF’s corporate values. That is why our stakeholder dialog is based on honesty, respect and mutual trust.

Trust-based cooperation with employee representatives is an essential component of our corporate culture (see Our Strategic Levers: Win). Our open and ongoing dialog lays the foundation for balancing the interests of BASF and our employees, even in challenging situations. Dialog formats differ depending on region and the subject matter of the discussion. There are dedicated committees that discuss topics identified as material in the sense of the ESRSs. Employee representatives are involved according to local legal conditions. Dialog results can be used to implement actions, which also address the material impacts in this area. Operational responsibility for the involvement of and dialog with employee representatives lies with the management of the relevant Group company or its equivalent depending on the company’s legal form. BASF maintains constructive relationships with employee representatives which is reflected in trust-based cooperation. BASF provides the necessary human and financial resources for this dialog. There are numerous agreements with employee representatives that are applied according to local conditions in countries or Group companies. By aligning committee structures with local and regional situations, we take into account the different challenges and legal conditions for each site. In this context, we address a wide range of topics in areas such as working conditions and health and occupational safety. Involving employee representatives gives BASF deeper insight into employees’ key interests and perspectives. We consider agreements such as the successful renegotiation of the 2024 collective agreement for the chemical industry in Germany, in which BASF representatives took part, to be a positive result of this dialog. The BASF Europa Betriebsrat (BASF Works Council Europe) addresses cross-border matters in Europe. In South America, we foster the dialog with employee representatives in the Diálogo Social. It most recently took place in 2023, and the next exchange is scheduled for early 2025.

In accordance with locally applicable legal conditions, our employees have the right to form, join and support legally recognized unions or employee representation. These are entitled to represent employees and their interests, for example in collective bargaining. BASF upholds these rights and has embedded them in the Group-wide requirements on adherence with international labor and social standards. We are also committed to social dialog with employee representatives where freedom of association is not guaranteed under national law to the same extent as in European legal systems. In such cases, individual Group companies use alternative dialog formats, such as informal meetings where employees can exchange ideas.

In the case of organizational changes, if restructuring leads to the elimination of positions, or in the case of other codetermination-relevant topics, we involve employee representatives in accordance with existing participation rights to consult on socially responsible solutions. Meetings take place regularly as well as on a case-by-case basis in which employee representatives are informed of general topics such as the current economic situation. This would also apply if structural adjustments or other adverse effects on employees were to arise due to our transition to climate neutrality. We also rely on our leaders to explain changes regarding organizational changes or structural measures. BASF supports affected employees, for example, with the development of their skills and finding other positions within our company. Our aim is to act in accordance with the relevant legal regulations, existing agreements and company conditions.

We involve employees in corporate processes by offering dialog on company topics using various internal communication channels. We use these to inform them of upcoming company changes and engage them in discussions about them. For example, we generally hold a quarterly global information event with members of the Board of Executive Directors which employees can participate in on-site or virtually. Following a presentation of strategically important content by the Board of Executive Directors, employees have the opportunity to ask questions.

To actively involve employees in shaping their working environment, we are committed to multiple feedback instruments. Their use is stipulated in a global requirement which is overseen and implemented globally by Corporate Human Resources. We employ two key instruments. The FEEDback&forward format provides leaders with regular feedback from their employees so that they can reflect on their leadership behavior. Additionally, all employees are invited on a regular basis to give feedback on their working environment and the corporate culture as part of our Employee Voices survey. We provide dedicated human resources as well as financial resources as needed for these surveys. The results of Employee Voices are communicated to employees, leaders, the Board of Executive Directors, the Supervisory Board and others using various dialog formats (see previous paragraph). The organizational units’ results are evaluated centrally and aggregated to provide leaders with concrete indications of positive feedback and improvement potential. Results are evaluated using statistical and qualitative analytics and discussed between leaders and employees, for example in workshops. This allows questions to be clarified and necessary measures to be discussed. Through a decentralized approach, we can address the multifaceted needs of our organization with different strengths and areas of development. The results can also be considered in strategic decisions. For example, the 2024 survey indicated that processes were perceived to be too complex or bureaucratic. This was one reason we focused on simplifying processes and empowering employees with greater accountability in our new strategy (see Our Strategic Levers: Win). Overall, we are satisfied with the results of the survey for the 2024 business year. We nearly achieved our target of exceeding 80% employee engagement in our company with 79% (see Targets and Target Achievement).

In accordance with locally applicable legal conditions, we offer employees the opportunity to become involved with one of our many Employee Resource Groups. That includes groups of individuals who potentially experience more frequent discrimination. For example, there is a global resource group for women at BASF, various groups for people in the LGBTQI+ community and local networks for people living with disabilities. All interested employees can get involved in these networks.

As part of the 2024 Employee Voices global survey, we again used the inclusion index as a relevant point of reference for the inclusion of our employees and provided our leaders with suggestions for follow-up measures.

Processes to remediate negative impacts and channels for own workers to raise concerns

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BASF’s Compliance Hotline serves as a grievance mechanism and is open to all BASF employees as well as external stakeholders, particularly workers in our value chains. For more information on how the issues raised and addressed are tracked and monitored, see G1 Monitoring adherence to our compliance principles. In addition to our grievance mechanisms, employees can reach out to their leaders, their compliance officers or the human resources department as well as their respective employee representatives to ask questions or raise concerns about potential misconduct.

Our compliance training program, which includes regular global and local information campaigns as well as details about our Compliance Hotline, is mandatory for all employees worldwide. Training and informational offerings that provide specific knowledge on human rights and international labor and social standards to various target groups worldwide also cover compliance topics and the BASF Compliance Hotline.

Actions

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We address the impacts, risks and opportunities that we identified as material through various actions, which we outline below using the subtopics material to this chapter. We employ the following central measures:

• Annual compensation level review
• Employee dialogs and continuous meaningful conversations
• Wide range of training options
• The Skill Transformation Project
• Mandatory health and safety training for employees
• Additional training on safe handling of chemicals and the correct use of personal protective equipment
• Analysis of accidents and potential incidents
• Global health management activities such as BASF health checks

The Corporate Center’s Corporate Human Resources and Corporate Environmental Protection, Health, Safety & Quality units set the framework for regulating key topics through requirements and providing resources for central actions. Additional resources to implement the actions are made available by the Global Business Services unit as well as teams working in the operating divisions and at our sites. For example, local recruiting activities and education programs as well as health initiatives are carried out at the respective sites based on target groups.

Adequate wages

Adequate compensation is an important component of the package we offer to employees that makes us a compelling choice as employer. Our central action in this area is our annual review of our compensation levels worldwide using external market data, among other things. This allows us to aim for market-oriented and appropriate compensation in the respective countries or markets and to analyze the effectiveness of adjustments to our compensation levels as part of the process.

As a rule, compensation comprises fixed and variable components as well as benefits. In many countries, these benefits exceed legal requirements and include, for example, company pension benefits, supplementary health insurance and share programs. We oversee implementation of our requirements regarding compensation through the processes described below.

According to defined globally consistent criteria, positions are assigned BASF job grades independent of individuals; these form the basis for compensation. Job grades are assigned according to the demands of the respective function. In this way, we want to make positions comparable on a worldwide basis and create a foundation for compensation commensurate with function. We use the BASF Group’s return on capital employed (ROCE) to measure economic success for the purposes of variable compensation. This links variable compensation to our ROCE target. Individual performance is assessed as part of a globally consistent performance management process. In numerous Group companies, our “plus” share program ensures employees’ long-term participation in the company’s success through incentive shares. Corporate Human Resources reviews compliance with the regulations described above and works closely with local units to do this. If changes are necessary, they are made in accordance with the relevant local laws. In addition, we will introduce an enhanced performance management system that provides a closer link between incentives and unit-specific achievements.

In the annual employee dialog, employees and leaders can discuss performance over the past year and expectations for the current year (see Skill development, training and further education). Employees and leaders determine what level of detail is necessary when the results are recorded.

We are committed to the U.N. Global Compact’s goal of paying our employees a living wage to support them and their families by 2030. To this end, we review on a regular basis whether employees around the world receive a wage sufficient to cover their and their families’ basic cost of living under the respective general conditions. If any potential gaps are identified, we work to remedy them. We report the results of our review of whether employees are receiving adequate wages in accordance with the ESRSs in the Metrics section.

Skill development, training and further education

At BASF, we consider learning and development to be key success factors in retaining and improving the required skills and expertise of employees. In this way, we also want to counter the risks associated with insufficient skill development and employee turnover in the context of demographic change (see Results of the double materiality assessment). Our skill development actions are based on the principle of nondiscrimination (see No discrimination, harassment or other forms of workplace distress). We monitor the effectiveness of our actions by assessing employee engagement as part of the annual Employee Voices survey (see Engaging with employees and their representatives and Global Targets).

The previous BASF competencies and CORE Leadership Values were replaced by Winning Behaviors as part of our “Winning Ways” strategy. These are applicable to all employees and leaders and are being phased into employee development. The development of employees is always planned together with their leader. A central element for this is regular feedback discussed in annual employee dialogs (see Adequate wages) and continuous meaningful conversations throughout the year. Both actions are carried out globally to establish a foundation for open communication between leader and employee as well as for further development. Employees and their leader conduct continuous meaningful conversations to reflect on performance and behavior, discuss expectations and can also agree on development objectives and individual learning needs. Learning goals should be adapted to the specific job requirements and the employee’s development needs. Learning can take place in various formats and locations.

BASF provides global access to a wide range of training offers on various learning platforms to support employees in expanding their skills flexibly and thus acquire additional competencies. Furthermore, numerous local and specialized academies offer training within the operating divisions and service units. For example, the Data & AI Academy expanded its offer in 2024 to help our employees develop a basic understanding of data and artificial intelligence (AI) and utilize it in work processes.

The annual talent discussions held in BASF’s divisions are another steering element in the development of our employees. In these workshops, the development potential and goals of employees in the respective unit are discussed and possible development steps are defined. The main focal point is the development of potential leaders and employees who qualify for positions in other operating divisions.

To support employees in the context of demographic change and rapidly shifting skill requirements, we piloted the Skill Transformation Project in selected divisions of the company in Germany in 2024. The focus was on promoting current skills and preparing employees for the rapidly changing demands of the market. A key project result was a skill framework which will enable necessary skill profiles to be identified within the company. This gives leaders valuable insight into the skills in their teams and allows them to identify any possible skill gaps. With the help of AI, this transparency enables us to match personalized training options based on the individual needs of employees and teams. In a follow-up project, we are now reviewing how to integrate the findings into our standard processes globally.

Leaders are tasked with creating a suitable environment for the development of their employees, supporting them and taking their individual situations into account. BASF therefore employs a holistic leadership development approach to support leaders in their tasks in the best possible way. To identify and further develop leadership talents early, BASF also employs potential assessments. In this way, we can help identify qualified potential leadership candidates and offer them concrete development options. To support new leaders from the beginning of their leadership career, the Leadership Essentials standard was created in 2024, a new consistent standard for leadership skills which will serve as a basis for training offerings. Aimed particularly at senior executives and talents identified as potential leaders, we offered inspiration and learning opportunities in 2024 under the theme “Activate and Connect for Growth” on topics such as positive and inspiring leadership, coping with change, and energy and top performance.

Regular feedback plays an important role in the individual development of leaders. In addition to the continuous dialog, the majority of our leaders with disciplinary responsibility received feedback on their leadership behavior and development recommendations as part of the FEEDback&forward global leadership survey in 2024 (see Engaging with employees and their representatives).

Recruitment of skilled employees

Offering an attractive and compelling comprehensive package for employees is increasingly important given the strong global competition for the best qualified employees and leaders. For this reason, we have various ongoing processes and projects in place. For example, we revised our global comprehensive offering in 2024 to better meet the needs of employees and BASF job applicants. We are constantly working to improve talent recruitment worldwide. To that end, we use digital platforms such as our country-specific career websites, global and regional social networks as well as a mix of on-site and digital events. Our external HR marketing and talent acquisition processes focus on the target groups discussed above (see Strategy and Governance Recruitment of skilled employees). We are also developing our global employer brand, aimed at consistently presenting ourselves as an attractive employer both inside and outside the company. Our actions to recruit skilled employees are based on the principle of nondiscrimination (see No discrimination, harassment or other forms of workplace distress).

To improve our recruitment process, we completed the rollout of a new digital tool worldwide in 2024, thereby establishing a global talent acquisition process. The new system offers improved user-friendliness and accelerates the hiring processes. Interview guidelines support a skill-based and fair recruitment process. AI features enable people applying to BASF to match their CV with all job offers. Additionally, the global tool gives all employees a transparent view of current vacancies so as to foster their development through a job change.

Training skilled employees is a central investment in BASF’s competitiveness. This is why we have been counting on our own junior skilled employees for many years and are particularly committed to our apprenticeship programs in Germany. In cooperation with our partners, we support apprentices on an individual basis, preparing them for the modern working world. We train them in future-oriented technologies, working procedures and methods. We also prepare them for the challenges of lifelong and independent learning. To continue filling our apprenticeship positions with qualified candidates in the future, we provide school students in Germany with insight into the various apprenticeship options at BASF during their career orientation phase. We offer a dual vocational training model at numerous sites. At production sites in the United States, for example, we provide up to three years of dual-track vocational training under the North American Apprenticeship Development Program (NAADP). This program involves local colleges.

To combat the shortage of skilled employees in production and technical areas in Ludwigshafen, Germany, we increasingly used social media channels to alert qualified specialists to career prospects at BASF in 2024. We also cooperated with the German employment agency, for example, to target skilled employees at informational events and to recruit suitable candidates for BASF who are currently available on the labor market or will be in the near future.

To ensure the availability of skilled employees and safeguard existing know-how, we offer leaders at BASF SE analyses of the demographic situation for various company job profiles. On this basis, we also provide specific measures for succession planning, knowledge sharing and moderated knowledge transfer.

Occupational safety and health

To prevent potential negative effects on the health and safety of our employees and prevent work-related injuries, for example, we require and promote risk-conscious and safe working practices, learning from incidents and the ongoing exchange of experiences. We are constantly refining and enhancing our global requirements and training offers. In addition to the legally required training, BASF requires new employees worldwide to complete mandatory health and safety training. Employees at our production sites also receive regular training on how to handle chemicals safely and how to use personal protective equipment correctly.

We do everything we can to prevent injuries and use our findings to take appropriate measures to prevent these from happening again, as far as possible. These include regular campaigns and informational events to raise employees’ awareness. For several years now, we have been using Safety Moments, a short illustrative presentation on the topic of safety which can be shown routinely at the beginning of meetings or events. In 2024, use of this format increased as part of the EHS Culture of Excellence initiative in North America. This focused, for example, on competency building in EHS.

Through our emergency preparedness and emergency response measures, we want to be as prepared as possible for crisis situations at global, regional and local level – from process safety incidents to product leakages and emergencies. Our emergency and crisis management focuses on protecting people and the environment as well as ensuring the safety of our plants (see E2 Actions in our own production). Through our Responsible Care audits (see Occupational safety and health), we regularly monitor compliance with our guidelines and the effectiveness of our occupational safety measures. BASF thoroughly investigates incidents, analyzes the root causes, and uses the findings to develop appropriate measures and achieve ongoing improvements. If heightened risks for employees are identified, we implement the appropriate corrective actions.

Leaders play an important role in modeling the safety culture. Those in production bear particular responsibility for such topics and regularly receive specific training to be able to fulfill their responsibilities. Newly appointed senior executives must attend a one-time mandatory dialog on health, safety and environmental protection with the head of the Corporate Center’s Corporate Environmental Protection, Health, Safety & Quality unit.

Our global network enables the continuous exchange of information and findings within the BASF Group. To further improve our processes and methods, we analyze accidents and potential incidents and share knowledge and best practices within our global network of experts and as part of safety initiatives. We also seek dialog with government institutions and are actively involved in external occupational safety initiatives and networks around the world led, for example, by the European Chemical Industry Council (CEFIC) or national associations such as the German Chemical Industry Association and the American Chemistry Council.

• More information on process safety
• More information on occupational safety

BASF’s global corporate health management serves to promote and maintain the long-term and holistic health and performance of our employees. BASF health checks form the basis of our global health promotion program and are offered to employees at regular intervals. These checkups include a thorough assessment of employees’ current health status and personal risk factors. We also systematically raise employee awareness of health topics with offerings tailored to specific target groups. In 2024, we chose a decentralized approach in which the regions and sites could focus on locally relevant health aspects. For example, the focus in Europe was on promoting mental health. The Mental Health Alliance, consisting of various specialist units in the region, launched an employee learning and information platform on this topic. Another key focus in 2024 was on influenza prevention. BASF employees had the opportunity to be vaccinated against the seasonal flu at various sites around the world. At the Ludwigshafen site in Germany, for example, more than 3,700 employees participated in the influenza vaccination campaign.

• More information on occupational health and health management

Secure employment

BASF introduced a plan for our company’s long-term success in 2024, with the “Winning Ways” strategy (see Our Strategy). When our business grows, we lay the foundation for job security and create added value for our investors.

Regularly surveying the entire workforce (see Engaging with employees and their representatives) helps us learn whether employees perceive their jobs as secure. Feedback from this survey and from our dialog with employee representatives gives us specific indications as to where we can make further improvements in this context (see Engaging with employees and their representatives and Global Targets). Employees have various internal communication channels to stay informed, such as company assemblies, and find necessary information about their employment, for example, in our intranet.

Global Targets

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We consider employee engagement to be a decisive indicator of the success of our measures. We use surveys and pulse checks as feedback instruments to actively involve employees in shaping their working environment. We measure employee engagement as part of the regular Employee Voices⁵ survey using five central questions. The aim of our engagement index is to understand whether employees enjoy and are proud of working here, whether they recommend BASF as an employer, and whether they would stay with us if they received a similar offer from another company. These questions help us identify potential for improvement. They were developed by BASF based on an analysis of scientific findings and benchmarks. In accordance with employee codetermination rights, we engage with employee representatives in the course of approving the Employee Voices questionnaire regarding the design of the engagement index.

We set ourselves the target of achieving employee engagement of more than 80%. More than 90,000 employees worldwide participated in the survey in 2024 (participation rate: 78%). The survey showed global engagement of 79%, which is stable compared with the previous year (2023: 79%). Our aim is to get this score back to the defined target of higher than 80%. We identified the target based on an external benchmarking. Based on a correlation analysis, the main factors influencing engagement are identified using the survey results and then closely examined to determine possible measures. This analysis is carried out at global and decentralized levels. Measures are implemented locally to reflect the different needs and conditions of our organization. The results analysis is taken into account for strategic decisions. For example, the survey conducted in 2024 indicated that processes are perceived to be too complex or bureaucratic. This was one reason why we focused on simplifying processes and empowering employees with greater accountability in our new strategy. For more information on these results and how they are communicated, see Engaging with employees and their representatives onward.

We review the positive impact of adequate wages on a regular basis through specific actions, which are described under Adequate wages onward. We are countering the potential negative impact on employees of increased demands in terms of skills and demographic change as well as our risks associated with secure employment, insufficient skill development and skilled employee recruitment with concrete measures (see Skill development, training and further education, Recruitment of skilled employees and Secure employment). We have not set ourselves specific targets for all material impacts and risks to our company’s workforce. For more information on how we measure the effectiveness of actions implemented, see the section on Actions.

We set ourselves concrete global targets regarding the potential negative impacts on the health and safety of all employees, which we measure annually:

In 2023, we adjusted our occupational safety target and the corresponding reporting in accordance with a Group-wide definition to focus on the number of worldwide High Severity Work Process Related Injuries (HSI). We committed to a global HSI rate of ≤0.05 per 200,000 working hours⁶ by 2030. In 2024, it was 0.02 (2023: 0.03 – our baseline). We therefore achieved our target. BASF developed this target based on recommendations of key stakeholders like the ICCA, CEFIC and the German Chemical Industry Association. For more information on data collection for HSI, please see General Disclosures. Our target is based on the assumption that the data on work-related injuries is complete and correct. We consider potential delays in the reporting and recording of injuries to be a limiting factor. To achieve our targets regarding work-related incidents, we regularly review compliance with our occupational safety requirements and legal guidelines through Responsible Care audits. We thoroughly document and analyze incidents as well as their causes and consequences at on a global scale to learn from them. We consider the systematic hazard assessments and the risk minimization measures derived from them to be an important prevention tool.

We measure our performance in occupational health using the Health Performance Index (HPI). HPI is a key performance indicator that defines and measures our progress in promoting and maintaining the health, well-being and performance of all employees. It comprises the valuation of five equally weighted components: recognized occupational diseases, medical emergency preparedness, first aid, preventive medicine and health promotion. Each component accounts for 20% of the overall result. A maximum total value of 1.0 is therefore possible. Global HPI is calculated based on HPIs of the individual sites. Local HPI used in the calculation is weighted according to the relative share of employees in global headcount. We aim to achieve a global value of more than 0.9 every year. The baseline from 2018 is 0.96. With an HPI of 0.97, we once again achieved this in 2024 (2023: 0.96).

For more information on data collection for HPI, see General Disclosures. The objective of the HPI was developed by BASF based on the requirements of the Global Reporting Initiative™ (GRI) and was first established in 2011. The HPI was adjusted in 2018 and has been used as a global key performance indicator ever since. The HPI target is regularly reviewed and adjusted to ensure continuous improvements. The review also takes place as part of the regular Responsible Care audits in the area of occupational health. The audit report includes a description of the situation and, if necessary, specific recommendations along with deadlines for their implementation. Guidance and support for implementing the recommendations can also be provided if needed. Monitoring the HPI involves multiple steps and methods to ensure that health measures are effective and the defined targets are met. This also includes the analysis of data on incidents and illnesses as well as implementation of new risk minimization measures. We also consult BASF’s global network of physicians when determining this target.

The HPI is based on various central assumptions, such as the recorded health data being representative of the entire workforce. Participation in health programs is comprehensive but voluntary. A further assumption is that the effects of the health programs on the well-being of employees are both measurable and significant.

The index also has certain limitations which must be taken into account when results are interpreted. For example, not all aspects of employees’ health can be comprehensively captured, particularly those that are difficult to measure such as mental illness. In addition, external factors such as economic conditions, social changes or global pandemics, can influence results without being directly attributable to the company’s health measures.

BASF takes various measures to improve performance in occupational safety and health based on the results of the HSI and HPI. For example, an analysis of the HPI helps us to identify that well-trained first aiders can reduce the impact of incidents. We therefore require that employees complete first aid courses on a regular basis to ensure quick and effective responses in case of emergencies. We have concluded from the results of our HSI that safety campaigns and training are effective in raising awareness for occupational safety and promoting safety-conscious behavior.

Metrics

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The data described here is from our annual data validation and quality assurance process for external reporting. The total number of employees as of December 31, 2024, was 111,822. This marks a decline compared with the 111,991 employees as of December 31, 2023. The decline was primarily due to retirements and departures due to dormant employment as well as measures in connection with the cost savings program focusing on Europe. Staff increases in Asia Pacific, especially for the new Verbund site in Zhanjiang, China, had an offsetting effect.

Expenses for wages and salaries, social security contributions and assistance, as well as for pensions in 2024 are reported in Note 27 to the Consolidated Financial Statements.

The following table illustrates the regional distribution of employees. We employed at least 10% of the BASF workforce in each of the three countries Germany, China and the United States.

We use the following definitions globally for employees of our company:

• Permanent employees have an active contract for an unlimited period of time.
• Temporary employees are employed by BASF on the basis of an individual agreement with a temporary employment contract.
• Apprentices are employees who have temporary contract with BASF. In accordance with this contract, apprentices receive in-company vocational training as part of an accredited education program.

The rate of employee turnover according to the ESRS definition – the proportion of employees who left the company in 2024 – amounted to 7.2% globally.

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We reviewed adequate wages at BASF Group companies in accordance with the ESRS definition. The review included the respective base salary and fixed guaranteed additional payments in the business year. Calculation of adequate wages in accordance with ESRS is not based on an annual target value.

For 2024, the review concluded that all employees receive adequate wages. Furthermore, BASF regularly reviews whether our employees around the world receive a wage that affords them and their families an adequate standard of living under the respective conditions (living wage).

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Safety is our top priority. Despite our considerable efforts, there were two fatal work-related injuries in 2024: A contractor was fatally injured on the major construction site in Zhanjiang, China. Another contractor was involved in a fatal traffic accident during a business trip in Vietnam.

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In 2024, 79 cases of discrimination were reported to us. These were related to gender, age, nationality, disability, religion or worldview, sexual orientation or ethnicity; were racist in origin or related to other relevant forms of discrimination based on characteristics protected by law, including harassment as a specific form of discrimination.

In addition, 225 complaints related to the social factors or aspects mentioned in ESRS S1, paragraph 2, including human rights,⁷ were submitted via the BASF compliance grievance mechanism in the reporting period.

In 2024, there were no fines, sanctions or compensation payments in connection with these incidents.

In 2024, we did not identify any severe human rights-related incidents in relation to workers in our company.