Double Materiality Assessment

ESRS-Kennzeichnung:

Material impacts, risks and opportunities and their interaction with strategy and business model

Process

We once again carried out a double materiality assessment in accordance with ESRS requirements in 2025. This built on the double materiality assessment from 2024. The materiality assessment identifies the sustainability matters that are material for our company based on potential and actual material impacts, risks and opportunities. We plan to update this assessment on an annual basis.

We identified and validated company-specific impacts, dependencies, risks and opportunities together with internal subject matter experts. We focused on activities, sites and steps in the value creation process that have an elevated potential for negative impacts and risks. Our assessment was carried out at BASF Group level along our value chain. Stakeholder interests were considered based on both direct and indirect inputs. Direct feedback was obtained (for example, from our Advisory Councils, from the BASF Civil Society Forum and via discussions in multistakeholder networks, see General Disclosures) as well as indirect input (for example analyses of the interests of customers and capital markets based on big data analysis tools or perception studies). To identify sustainability-related opportunities and risks, we drew on findings from BASF’s Group-wide opportunity and risk management, among other sources. Opportunities and risks were identified from the impacts. In addition, opportunities and risks independent of impacts were examined. Since 2024, we have been systematically identifying material sustainability topics based on ESRS requirements as part of our standard risk management process. Furthermore, our impacts and dependencies were reviewed by subject matter experts to identify additional potential risks and opportunities.

Subsequently, we scored impacts, risks and opportunities on the basis of predetermined criteria on a 5-point scale and classified them as material whenever they exceeded a defined threshold. A uniform assessment framework was used to review impacts in terms of their severity, consisting of scale and scope. In the case of negative impacts, we additionally assessed the extent to which an impact was irremediable. We estimated the likelihood of occurrence for potential impacts. To identify material impacts, we established a uniform threshold based on the sum of the factors assessed. This threshold was assigned a higher weighting to negative impacts. The internal subject matter experts used predefined criteria to assess the opportunities and risks with regard to their financial magnitude and likelihood of occurrence. Existing risk management methods and assessment criteria were used as a basis. Our objective here is to ensure that a uniform methodology is applied when assessing financial risks and sustainability-related risks. We prioritize risks based on the severity of their impact and the likelihood of occurrence and thereby look at both financial and sustainability-related risks. In the identification and review process, we work closely with our opportunity and risk management. The findings from the materiality assessment will serve as the basis for documenting opportunities and risks going forward, thus validating them at the same time.

ESRS-Kennzeichnung:

In a subsequent iterative process, our assessment was reviewed by interdisciplinary experts as well as the experts responsible for corporate opportunity and risk reporting. This process ensured that the assessment logic used in the materiality assessment was applied in a consistent manner throughout the BASF Group and across all specialist units. Finally, the Board of Executive Directors, the Supervisory Board, the Group Works Council and the BASF Works Council Europe were informed about the process and the outcome of the materiality assessment.

After identifying the material impacts, risks and opportunities, each was assigned to a specific sub-subtopic, subtopic or topic (in line with the ESRS 1 Application Requirement 16) with the aim of determining materiality across all topics. The responsible subject matter experts subsequently allocated all applicable Disclosure Requirements and resulting qualitative as well as quantitative data points to the material sustainability matters. In the following step, the subject matter experts worked with experts for the overarching materiality process to assess the “materiality of information” at the disclosure requirement and data point level using the European Financial Reporting Advisory Group (EFRAG) criteria of “decision-usefulness” and “stakeholder relevance” according to ESRS 1 Appendix E. This aims to increase the informational value of our reporting at the data point level with a view to the purpose of the regulatory policy, which is to promote financing of the transition toward sustainable development.

Results

ESRS-Kennzeichnung:

Our ESRS materiality assessment largely confirmed the results from 2024. The following changes were observed compared to the previous year:

Changes in the double materiality assessment compared to the previous year
E1 Climate Change
Impact eliminated in 2025		Newly identified impacts in 2025
Climate-damaging emissions from oil and gas business		Raw materials extraction from fossil sources
		Emissions during use phase
		Emissions at the end of use phase
		Adaptation of sites and infrastructure
		Impacts of failure to adapt
		Newly identified risks in 2025
		Production losses and costs due to insufficient climate adaptation
		Collapse in demand due to rising energy prices
E2 Pollution Prevention
Impacts eliminated in 2025
Chemical leakages
E4 Biodiversity and Ecosystems
Impacts eliminated in 2025		Newly identified impacts in 2025
Land use by BASF sites		Contribution of production sites to global drivers of biodiversity loss
The use of industrial chemicals and their distribution in the environment may have a negative impact on species
Need for land use due to the cultivation of renewable raw materials
E5 Resource Use and Circular Economy
		Newly identified risks and opportunities in 2025
		Growth through circular economy
		Challenges due to new regulatory requirements
S1 Own Workforce
Impacts eliminated in 2025		Newly identified impacts in 2025
Training and skills development		Promoting health and safety awareness
		Newly identified opportunities in 2025
		Unlocking potential through strong leadership
S2 Workers in the Value Chain
		Newly identified impacts in 2025
		Risk of forced labor in specific supply chains

In chapters E2 Pollution Prevention and E5 Resource Use and Circular Economy, impacts that were previously listed individually in each value chain step have been aggregated for better readability. This year, impacts relating to water pollution are listed in chapter E2 Pollution Prevention for better readability and to avoid repetition. In chapter S3 Affected Communities, the potential impact with regard to the possible restriction of Indigenous peoples’ right to free, prior and informed consent has been expanded to include potential land-related impacts in the value chain. As a manufacturing company, the main impacts of our business relate to climate change (mainly due to our energy requirements), other environmental matters (emissions to air, water as well as biodiversity) and our company’s workforce. The risks and opportunities identified have financial effects that affect the presentation of our financial position, financial performance and cash flow as disclosed pursuant to our accounting policies (see Note 23 to the Consolidated Financial Statements). Affected communities were not involved in the identification of material topics for the Biodiversity and Ecosystems cluster.

Strategies to manage impacts, risks and opportunities

As a company that is active in a very wide variety of different regions and business areas, we take a diversified approach to ensure the resilience of our strategy and our business models. The double materiality assessment is closely interlinked with our opportunity and risk management, so that the results of this assessment are incorporated into both the operational and strategic risk management processes and enable structured assessment by our operating divisions (for additional information on our opportunity and risk management, see Opportunities and Risks). We analyze climate-related physical risks and existing resiliences centrally for our sites (see E1 Climate Change). In developing our business strategies, we also consider the resilience of our business models with regard to economic, environmental and social aspects as well as their impacts, risks and opportunities. Our operating divisions update their strategies at regular intervals and involve experts from the relevant division as well as from the Corporate Strategy and Corporate Sustainability units. The material topics for the duration of the strategy are identified and evaluated as part of an opportunity-risk analysis. Depending on the extent of the strategy revision, resilience reviews, regulatory aspects and stakeholder expectations are included in order to estimate future market developments. Upstream and downstream value chains can also be taken into account. In addition, we use our TripleS method to review the resilience of our product portfolio with regard to environmental and social aspects. We believe we are currently in a position to address and mitigate the risks identified as material, while at the same time striving to consistently utilize material opportunities.

We provide information on the results of our resilience assessment with respect to these two topics in the chapters E1 Climate Change and E4 Biodiversity and Ecosystems. We also report on the disclosure requirement ESRS 2 IRO-1 in accordance with the ESRS requirements in the chapters E2 Pollution Prevention, E3 Water, E5 Resource Use and Circular Economy, S1 Own Workforce, as well as G1 Business Conduct. The following tables list the material impacts, risks and opportunities associated with each topical standard. Additional information on the impacts, risks and opportunities associated with each of the ESRS topical standards is provided in the relevant chapter of this (Consolidated) Sustainability Statement.

Results of the double materiality assessment for the 2025 business year: Material impacts
ESRS standard	Topic/subtopic in the standard	Evaluation/classification	Time horizon (short-, medium-, long-term)	Position in the value chain	Material impacts	Short description of material impacts
E1 More information	Climate protection	Negative	Medium, long-term	Upstream value chain	Land use change due to sourcing plant-based raw materials	Our procurement of plant-based raw materials creates an incentive to cultivate certain plants and expand the production environment for material loops. This negatively impacts land use.
	Climate protection	Negative	Short-, medium-, long-term	Upstream value chain	Environmental impact of raw materials required for electrification	The manufacture and use of renewable energy requires minerals and metals whose mining and subsequent processing could negatively impact the environment. In addition, their mining poses a risk of inappropriate working conditions in some regions.
	Climate protection	Negative	Short-, medium-, long-term	Upstream value chain	Raw materials extraction from fossil sources	Chemical production uses fossil raw materials that have a negative impact on the environment due to their energy-intensive extraction, as well as the associated land use changes and greenhouse gas emissions.
	Climate protection	Negative	Short-, medium-, long-term	Downstream value chain	Emissions during use phase	Some BASF products, such as propellants or fuel additives, cause emissions that have a negative impact on the environment during use.
	Climate protection	Negative	Short-, medium-, long-term	Downstream value chain	Emissions at the end of use phase	The use of BASF products made from carbon-based raw materials generates greenhouse gases at the end of their life – if recycling is not possible – and thus harms the climate and environment.
	Energy	Negative	Short-, medium-, long-term	Upstream value chain	Climate-damaging emissions due to the use of fossil fuels in our upstream value chain (Scope 3)	The extraction and procurement of fossil energy causes greenhouse gas emissions, air and water pollution and habitat destruction in our upstream value chain.
	Energy	Negative	Short-, medium-, long-term	BASF’s own operations	Climate-damaging emissions due to the use of fossil fuels for our production (Scope 1 and 2)	Our own production of energy in the form of steam and electricity using fossil fuels leads to emissions of greenhouse gases and other pollutants and thereby impacts the climate and the environment.
	Energy	Positive	Short-, medium-, long-term	Upstream and downstream value chain	Accelerated transition to climate neutrality through energy transformation	By investing in renewable energy, we can offer our customers products with a reduced Product Carbon Footprint (PCF) and contribute to the transition toward climate neutrality by reducing upstream emissions.
	Climate change adaptation	Negative, potential	Short-, medium-, long-term	BASF’s own operations; upstream and downstream value chain	Adaptation of sites and infrastructure	Structural changes and technical adjustments at BASF sites around the world that are necessary in order to protect against extreme weather events – especially in North America, Europe and Asia Pacific – could have a negative impact on the environment and affected communities due to construction activity, the associated land use and increased energy demand.
	Climate change adaptation	Negative, potential	Medium, long-term	BASF’s own operations; upstream and downstream value chain	Impacts of failure to adapt	If BASF sites around the world are insufficiently adapted to climate change and the associated extreme weather events, this could lead to negative impacts on employees, local communities and the environment.
	Climate change adaptation	Positive	Short-, medium-, long-term	Upstream and downstream value chain	Innovations as a lever for climate protection and climate change adaptation	Innovations in chemistry and new technologies can contribute materially to climate protection and adaptation. We use our TripleS method (Sustainable Solution Steering) to steer our product portfolio on the basis of our products’ sustainability performance.
E2 More information	Air pollution	Negative	Short-, medium-, long-term	BASF’s own operations; upstream and downstream value chain	Regular emissions to air (excluding greenhouse gases; GHG)	Emissions to air (excluding GHG), such as nitrogen oxides, particulate matter and volatile organic compounds (VOCs), are generated in connection with the procurement, production, use and disposal of our products. These emissions contribute to air pollution.
	Water pollution	Negative	Short-, medium-, long-term	BASF’s own operations; upstream and downstream value chain	Regular emissions to water	Emissions to water, such as nitrogen compounds, organic substances and heavy metals, are generated in connection with the procurement, production, use and disposal of our products. These emissions contribute to water pollution.
	Substances of concern or of very high concern	Negative, potential	Long-term	Downstream value chain	Impact on human health and the environment of substances of (very high) concern	Due to the sale of products containing substances of concern or of very high concern, irresponsible and improper handling of these products in the downstream value chain could result in water or soil pollution or to an adverse impact on the environment or human health.
E3 More information	Water withdrawal and consumption	Negative	Short-, medium-, long-term	BASF’s own operations; upstream and downstream value chain	Limited availability due to water withdrawal and consumption	Our activities impact water availability through water withdrawal in our own production, as well as water withdrawal and consumption along the entire value chain – particularly in water stress areas.
E4 More information	Impacts on the extent and state of ecosystems	Negative	Short-, medium-, long-term	Upstream value chain	Impact on land degradation due to the sourcing of raw materials	By sourcing raw materials, we provide impetus for their cultivation and extraction. In some cases, this leads to land degradation.
	Drivers of biodiversity loss	Negative	Short-, medium-term	BASF’s own operations	Contribution of production sites to global drivers of biodiversity loss	BASF production sites can have a negative impact on biodiversity and ecosystems through their contribution to climate change, land use, pollution and resource consumption.
	Population size of species, global extinction risk of species	Negative, potential	Short-, medium-term	Downstream value chain	The loss of biodiversity may be facilitated by the use of crop protection products	In the downstream value chain, the use of crop protection products across large agricultural areas could result in a reduction of biodiversity.
	Land use change	Positive	Short-, medium-term	Downstream value chain	More sustainable intensification of farming	The use of our products, including crop protection products in agriculture, enables farmers to increase their productivity, thus supporting food production.
E5 More information	Resource inflows, including resource use	Negative	Short-, medium-, long-term	Upstream value chain	Sourcing and use of fossil or renewable raw materials	We negatively impact overshooting of the planetary boundaries by sourcing and using fossil and renewable raw materials, for example through emissions, land use and environmental pollution.
	Resource outflows in connection with products and services	Negative	Short-, medium-, long-term	BASF’s own operations; upstream and downstream value chain	Use of fossil or renewable raw materials	We negatively impact overshooting of the planetary boundaries by using, processing and incinerating fossil and renewable raw materials, for example through emissions, land use and environmental pollution.
	Waste	Negative	Long-term	BASF’s own operations; upstream and downstream value chain	Resource consumption through waste	We negatively impact the planetary boundaries by the waste generated throughout our value chain through procurement, production, use and disposal.
S1 More information	Adequate wages	Positive	Short-, medium-, long-term	BASF’s own operations	Adequate and competitive compensation	Our market-oriented compensation and corresponding additional benefits create attractive working conditions for our employees and make a positive contribution to society.
	Health and safety	Negative, potential	Short-, medium-, long-term	BASF’s own operations	Potential health and safety risk	Our employees are exposed to a potential health and safety risk if they work in laboratories and production plants and handle chemicals, including hazardous substances. This is particularly the case if occupational health and safety instructions or regulations in our production processes are not followed.
	Health and safety	Positive, potential	Short-, medium-, long-term	BASF’s own operations	Promoting health and safety awareness	High standards of occupational safety and health have a positive effect on the well-being, safety and resilience of employees. Health programs and safety training enable us to promote safety and health awareness that extends beyond the working environment.
S2 More information	Health and safety	Negative, potential	Short-, medium-, long-term	Upstream value chain	Increased health and occupational safety risks when handling chemical raw materials	In the production of chemical raw materials, there are increased health and safety risks in our upstream value chain, particularly if required safety measures are not complied with. This is a common problem primarily in countries whose national laws do not include any, or low requirements with respect to labor protection standards.
	Child labor	Negative, potential	Short-, medium-, long-term	Upstream value chain	Risk of child labor in specific supply chains	Child labor is a particular risk in critical and less transparent supply chains and in countries with little state control and low incomes. This applies, for example, to our upstream supply chains for renewable raw materials, minerals and seeds. Smallholder farms and artisanal mines are particularly affected.
	Forced labor	Negative, potential	Short-, medium-, long-term	Upstream value chain	Risk of forced labor in specific supply chains	Sourcing minerals or renewable raw materials from countries with little state control may be associated with the risk of forced labor. Workers in regions with poverty and inequality are particularly affected.
S3 More information	Other social and economic rights	Negative, potential	Short-, medium-, long-term	BASF’s own operations; upstream and downstream value chain	Potential adverse effects on health associated with the production and use of chemicals	The production and use of chemicals in our own operations and in our value chain could impact the health of people and communities.
	Other social and economic rights	Positive	Short-, medium-, long-term	BASF’s own operations	Contribution to the positive development of communities	Through our business activities, our stakeholder engagement and our societal engagement, we exert a positive economic, social and cultural influence on communities.
	Land-related impacts	Negative, potential	Short-, medium-, long-term	Upstream value chain	Land-related impacts in the supply chain	Our business activities – especially in the sourcing of raw materials – could lead to changes in land use, limited access to land and resources, and violations of land rights for affected communities. This could affect Indigenous communities in particular, for example through disregarding their right to free, prior and informed consent (FPIC).
	Adequate nutrition	Positive	Short-, medium-, long-term	Downstream value chain	Positive contribution to food supply	Our crop protection products and our seeds help to ensure that crops produce good yields in light of increasing disease and pest pressure, so that people benefit from an adequate food supply.
G1 More information	Corporate culture	Positive	Short-, medium-, long-term	BASF’s own operations; upstream and downstream value chain	Global Code of Conduct	Our global Code of Conduct has a positive impact on the workforce in our company and on our value chains.
	Protection of whistleblowers	Positive	Short-term	BASF’s own operations; upstream and downstream value chain	Global compliance measures and systems	Our global compliance measures and systems have a positive impact on our own workforce and other employees in our value chains.
	Prevention and detection of corruption and bribery	Positive	Short-, medium-, long-term	BASF’s own operations	Anticorruption training	In the mandatory trainings, employees learn how to be vigilant in order to prevent any form of bribery or corruption. In this way, we contribute to a business environment in which corruption and bribery are not tolerated. By being perceived and valued as a trustworthy company, BASF can help to reduce corruption and bribery.

Results of the double materiality assessment for the 2025 business year: Risks and opportunities
ESRS standard	Topic/subtopic in the standard	Evaluation/classification	Time horizon (short-, medium-, long-term)	Material risks and opportunities	Short description of material risks and opportunities
E1 More information	Climate change adaptation	Negative, physical	Medium, long-term	Production losses and costs due to insufficient climate adaptation	If production facilities cannot be adequately cooled during extreme weather events such as drought or aridity, this could lead to partial or complete production disruptions as well as reduced production output.
	Climate protection	Negative, transition	Long-term	Rising product prices, and/or production costs and/or lower market growth	Lower-emission production using raw materials with reduced carbon footprints and renewable energy increases production costs and ultimately also product prices. Coupled with societal pressure to consume less, this could lead to lower market growth.
	Climate protection	Negative, transition	Medium, long-term	Fragmentation in national and regional climate politics – and thus in the market	Pronounced differences in the regulatory framework due to divergent regional climate politics pose particular strategic challenges for us as a globally active company.
	Climate protection	Negative, transition	Long-term	Regulatory volatility leading to competitive risks	Political regulations designed to mitigate climate change, such as those set out in the EU Green Deal, could represent a competitive risk for us due to higher costs, for example as a result of administrative effort, and a high level of volatility.
	Climate protection	Positive, transition	Long-term	Market opportunities through climate-smart products	Our broad product portfolio includes, among other things, solutions for the circular economy and climate protection. Increasing societal demands and resulting regulations would offer additional market opportunities for these products.
	Energy	Negative, transition	Short-, medium-, long-term	Rising energy costs due to climate-related regulations	For BASF as an energy-intensive company, risks arise particularly from regulatory changes such as in carbon pricing on emissions trading systems, in taxes and in energy legislation.
	Energy	Negative, transition	Long-term	Collapse in demand due to rising energy prices	Resource scarcity can lead to rising energy prices. As a result, producer and consumer prices could continue to rise, which could further reduce customer demand. This could jeopardize BASF’s competitiveness and growth.
	Energy	Positive, transition	Short-, medium-, long-term	Advantageous procurement conditions thanks to renewable energies	Investments in own power assets and long-term supply agreements reduce dependencies on volatile global markets and lead to comparatively lower carbon abatement and energy procurement costs.
E2 More information	Water pollution	Negative	Medium, long-term	Increased costs for water treatment due to regulatory changes	Regulatory developments concerning emissions to water may require investments in our infrastructure and upgrades of our systems.
E2 More information	Substances of concern or of very high concern	Negative	Medium-term	Consequences of regulations with respect to substances of (very high) concern for procurement, sale or production	Regulatory changes on substances of concern or of very high concern, such as their restriction, may limit the availability of relevant raw materials and negatively impact market behavior and customer acceptance.
E4 More information	Impacts on the state of species	Negative	Short-, medium-, long-term	Regulatory requirements for the marketing of chemicals	Changes in the law and other regulatory developments related to how chemicals may actually or are likely to affect the state of species, affect our opportunities to market BASF products.
E5 More information	Resource outflows in connection with products and services	Negative	Medium, long-term	Challenges due to new regulatory requirements	New regulatory requirements to protect the environment – especially in Europe, but increasingly also in other regions – are increasing the pressure on BASF’s product portfolio, for example through recyclability requirements or mandatory recyclate content. This can present challenges for us in the sourcing of raw materials, for example due to higher costs and technical restrictions, which in turn can have a negative impact on BASF’s business.
E5 More information	Resource outflows in connection with products and services	Positive	Medium, long-term	Growth through circular economy	New regulatory requirements and societal expectations regarding the circular economy – for example through mandatory recyclate content or recyclability – create potential market opportunities for BASF.
S1 More information	Secure employment	Negative	Short-, medium-term	Challenges for engagement and retaining skilled employees	The current economic situation and any resulting structural adjustments at BASF can lead to uncertainty among employees. This poses challenges for the company, for example in terms of maintaining employee engagement. Any supposed decline in the attractiveness of BASF as an employer can make it more difficult to recruit appropriately qualified specialists and managers in global competition.
	Training and skills development	Negative	Short-, medium-, long-term	Loss of critical skills and competencies	Demographic and technological change, changing competence profiles and intensified competition for skilled employees and leaders can lead to a loss of skills and knowledge in key roles within our workforce or affect our ability to adequately and quickly develop them.
	Training and skills development	Positive	Short-, medium-, long-term	Unlocking potential through strong leadership	We promote excellent leadership through targeted development offers for leaders at all levels. Leaders can positively influence the engagement of their employees and, together with their teams, contribute productively and efficiently to the implementation of our strategic corporate targets.
S3 More information	Other social and economic rights	Negative	Short-, medium-, long-term	Loss of societal acceptance due to potential adverse effects on the health of people and communities	In the event of negative impacts on communities, societal acceptance of our business activities could suffer, trust could be lost in BASF and the risk of litigation could increase.

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.

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 on various sustainability topics. 2. Financial materiality, which considers the opportunities and risks of sustainability topics for a company’s financial position.

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).

Here you can find a comprehensive overview of the abbreviations and definitions used in the ESRS.

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.

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.

BASF Report 2025

Double Materiality Assessment

Material impacts, risks and opportunities and their interaction with strategy and business model

Process

Results

Strategies to manage impacts, risks and opportunities

(Consolidated) Sustainability Statement

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Results for

Double Materiality Assessment

Material impacts, risks and opportunities and their interaction with strategy and business model

Process

Results

Strategies to manage impacts, risks and opportunities

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(Consolidated) Sustainability Statement

Topic filter

Results for