BASF Report 2025

Corporate Governance Report

The content of this section is not part of the statutory audit of the annual financial statements but has undergone a separate limited assurance by our auditor.

The content of this section is voluntary, unaudited information, which was critically read by the auditor.

Corporate governance refers to the entire system for managing and supervising a company. This includes its organization, values, corporate principles and guidelines as well as internal and external control and monitoring mechanisms. Effective and transparent corporate governance ensures that BASF is managed and supervised responsibly with a focus on value creation and sustainability.

The fundamental elements of BASF SE’s corporate governance system are: its two-tier management system, with a transparent and clear separation of company management and supervision between BASF’s Board of Executive Directors and the Supervisory Board; the equal representation of shareholders and employees on the Supervisory Board; and the shareholders’ rights of coadministration and supervision at the Annual Shareholders’ Meeting.

Commitment to the German Corporate Governance Code (GCGC)

BASF advocates responsible corporate governance that focuses on sustainably increasing the value of the company. BASF SE follows all of the recommendations of the GCGC in the version dated April 28, 2022 (Code 2022), the version in force at the time of submitting the Declaration of Conformity on December 18, 2025. In the same manner, BASF follows all of the nonobligatory suggestions of the GCGC.

The joint Declaration of Conformity 2025 by the Board of Executive Directors and Supervisory Board of BASF SE is rendered under Declaration of Conformity Pursuant to Section 161 AktG.

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.
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.
Green transformation
In order to enable our customers’ green transformation, BASF systematically develops and offers solutions that minimize negative environmental and social impacts while maximizing positive outcomes. This involves our efforts to reduce carbon emissions, conserving resources, and using renewable energy and feedstocks. According to the three dimensions of sustainable development, we place ecological and economic balance as well as social responsibility at the forefront of our actions.
Renewable raw materials
Renewable raw materials are materials made from renewable resources that can be replenished by natural or artificial processes within a reasonable time frame. These include both bio-based feedstocks from biomass and bio-attributed materials, to which raw materials from biomass are attributed via certified processes such as mass balance.
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 distinct group of chemicals identified by their severe hazardous properties, including carcinogenic, mutagenic or toxic effects on reproduction. 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.
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.

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Published on February 27, 2026

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