Glossary

B

Biodiversity and ecosystems

Biodiversity refers to the diversity of all life forms on earth. It encompasses the diversity of ecosystems, the different species that inhabit these ecosystems and the genetic diversity within these species. Ecosystems are communities of living organisms (plants, animals, microorganisms) and their physical environment (air, water, soil) that interact within a specific space. Ecosystems can be very diverse, from forests and deserts to oceans and urban areas.

C

Circular economy

The circular economy is a regenerative system in which economic growth is decoupled from the consumption of finite resources. The circular economy is based on the fundamental principles of preventing waste and pollution, using products and materials for as long as possible and regenerating natural systems at the same time.

CO₂ equivalents

CO₂ equivalents (CO₂e) are units for measuring the impact of greenhouse gas emissions on the greenhouse effect. A factor known as the global warming potential (GWP) shows the impact of the individual gases compared with CO₂ as the reference value.

D

Differentiated Steering

In order to increase the competitiveness of its operating divisions, BASF is introducing a set of measures. These include the introduction of new financial steering indicators tailored to each business. Additionally, our operating divisions are continuing to adjust their specific business models and processes, supported by adapted process structures, IT systems and governance frameworks.

Double materiality

Double materiality as defined by the European Sustainability Reporting Standards (ESRS) is a concept that is applied in the materiality assessment. The principle of double materiality looks at sustainability aspects from two perspectives: 1. Impact materiality, which determines the actual and potential positive and negative impacts of business activities have on various sustainability topics. 2. Financial materiality, which considers the opportunities and risks of sustainability topics for a company’s financial position.

E

Eco-Efficiency Analysis

The Eco-Efficiency Analysis is a method developed by BASF for assessing the economic and environmental aspects of products and processes. The aim is to compare products with regard to profitability and environmental compatibility.

ESRS

The European Sustainability Reporting Standards provide a framework for companies to report on environmental, social and governance topics. The standards were developed by the European Financial Reporting Advisory Group (EFRAG) and are binding for all companies subject to the Corporate Sustainability Reporting Directive (CSRD).

• Comprehensive overview of the abbreviations and definitions used in the ESRS

EU taxonomy

The European Union (EU) strives to be climate neutral by 2050 as part of the Green Deal. The EU taxonomy serves as an instrument for that purpose. It provides a common classification system for economic activities based on their substantial contribution to environmental objectives. The EU Taxonomy Regulation obliges large companies, among others, to disclose sales revenues as well as capital and operating expenditures that contribute to at least one of the six environmental objectives listed in the taxonomy system.

F

Formulation

Formulation describes the combination of one or more active substances with excipients like emulsifiers, stabilizers and other inactive components in order to improve the applicability and effectiveness of various products, such as cosmetics, pharmaceuticals, agricultural chemicals, paints and coatings.

J

Just transition

Just transition refers to a concept for a socially just transformation of a social and economic order toward climate neutrality. To this end, ecological, economic and social challenges are to be given equal consideration, with a particular focus on vulnerable populations.

P

Peak sales potential

The peak sales potential of the Agricultural Solutions pipeline describes the total peak sales forecast for individual products in the research and development pipeline. Peak sales are the highest sales value to be expected from one year. The pipeline comprises innovative products that have been on the market since 2024 or will be launched on the market by 2034.

Policy

In this report, we use the word policy or requirement to describe internal frameworks that set out the fundamental guidelines of our company. At BASF, policies are set by the Board of Executive Directors and define principles relating to a specific topic. Separate requirements define the processes for implementing a policy.

Steam cracker

A steam cracker is a plant in which steam is used to “crack” naphtha (petroleum) or natural gas. The resulting petrochemicals are the raw materials used to produce most of BASF’s products.

Substances of concern or very high concern

Substances of concern (SoC) are chemical substances which, if handled improperly, may have potentially harmful effects on human health or the environment and which, based on their properties, have a harmonized classification under the European CLP Regulation. Substances of very high concern (SVHC) are a specific category of substances that are characterized by their serious properties, such as carcinogenic, mutagenic or reprotoxic effects. These substances are identified, included on a candidate list and specially monitored under the EU chemicals regulation REACH. According to REACH, suppliers are obliged to indicate substances that have been included in the candidate list and are contained in products on the safety data sheet.

T

Traits

Traits are commercial plant characteristics, such as an inherent resistance to certain herbicides or an inherent defense against certain insects.

V

Value Chain

A value chain describes the successive steps in a production process: from raw materials through various intermediate steps, such as transportation and production, to the finished product.