Dirk Voeste | @BASFCorporation Vice President of Sustainability Strategy BASF

How  a  Breakthrough  Product  Por1olio  Assessment  is  Changing  Business  Strategy  and  Yielding  New  Value

#SB15London

150 Jahre

Dirk Voeste, Sustainability Strategy Sustainable Brands London | November 18, 2015

How a Breakthrough Product Portfolio Assessment is Changing Business Strategy and Yielding New Value

150 Jahre

We create chemistry for a sustainable future.

150 Jahre

We create chemistry for a sustainable future Our sustainability levers

Strategy & organization

Assets & operations

Business & innovation

Stakeholder & commu-nication

Employees & engagement

Our commitments along the value chain

Material aspects

We drive sustainable solutions

Customer BASF Suppliers

We produce safely for people and the environment

We produce efficiently

We source responsibly

We respect people and treat them fairly

We establish goals to address sustainability along the value chain

Customer BASF Suppliers

Evaluation of 70% of relevant suppliers with regard to their sustainability performance by 2020

Energy & climate protection §  Greenhouse gas reduction of 40% by 2020 §  Energy efficiency: Introduction of certified energy

management system at all major sites

Increase the share of Accelerators to 28% by 2020

Water §  Introduction of sustainable water management

at all relevant sites by 2025

Safety, health and security §  “Risk assessment” of products by 2020 >99% §  Transportation accidents by 2020 -70% §  Health Performance Index >0.9 §  Lost-time injuries by 2025 -80% §  Red. of process safety incidents by 2025 0.5

Employees §  Women in leadership positions §  Non-German senior executives §  Senior executives with int. experience >80%

We screen all assets and investments for relevant sustainability improvements

Sustainability Team

Division + Result

Improved sustainability in investments, financial assets and real estate

Sustainability statement n  Evaluates fit with

sustainability strategy & criteria

n  Identifies sustainability opportunities or risks

n  Suggests improvements

We use a holistic approach to assess investments projects on sustainability

BASF´s economic success

BASF´s social responsibility

BASF´s corporate reputation & brand credibility

BASF´s environmental protection

BASF´s values & principles

„How we act“

Market & value chain?

Competitive technology?

Attractive & responsible sourcing?

Suitable location?

Fit to strategy?

Beneficial use & product stewardship?

Sustainable Solution SteeringTM

“We drive Sustainable Solutions”

1,000+ action plans in place

>60 % of R&D budget spent on projects contributing to sustainability

2,000+ sustainability experts in extended networks

14,000 products contributing substantial to sustainability

with about

>15 bn € sales

60,000+ solutions assessed

150 Jahre

We integrate sustainability in our business strategies

Step 1

Analysis of sustainability needs and trends in the value chains

Step 2

Evaluation and categorization of product sustainability performance in the market application

Step 3

Development of action plans for strategies, R&D, and market approach

150 Jahre

We categorized all our products into four categories

Substantial sustainability contribution in the value chain

Meets basic sustainability standards in the market

Specific sustainability issue which is actively addressed

Significant sustainability concern identified and action plan in development

2014 % of analyzed sales to 3rd parties

TM

150 Jahre

TM

We increase the sustainability contribution of our solutions

〉  60,000 product applications analyzed representing 66.3 bn € in sales (data 2014)

〉  23% ranked as Accelerators: - outgrow their markets - deliver higher margins above average - BASF´s R&D pipeline: >60% Accelerators

〉  74% classified as Performers

〉  <1% ranked as Challenged. Individual action plans (implemented in 2015)

28%

150 years

Sustainability is Business Leverage the potential

Sustainability yields new value

〉  Sustainability drives profitable growth

〉  Increased long-term business success � market differentiation � risk mitigation � innovation

〉  Full integration in investment decisions and portfolio management as major lever

150 Jahre

150 years