Portfolio segmentation – milestone on the way to more sustainability

Partnership Conference – Steering a portfolio towards sustainability, January 28th, Berlin

Margret Suckale Member of the Board of Executive Directors of BASF SE

BASF’s sustainability journey

2

Society

Environment

Economic

1865 1960s - 1970s

1970s - 1980s 1990s - 2000s

Safety

+ Emission control

+ Climate

protection

+ Social

responsibility

Business and portfolio integration

Beyond 2010

(Founded by F. Engelhorn)

2000s

Our company purpose

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We create chemistry for a sustainable future

If the world were a village …

4

2014 (100 inhabitants) 2050 (134 inhabitants)

Asia Africa Europe South America North America Australia + Oceania

1

60 15

10

9 5

1

73 33

10 11 6

Source: Datenreport der Stiftung Weltbevölkerung 2014

We translate megatrends into products - our contribution to sustainability needs

5

Industry / Market Needs / Chemical Industry Megatrends

Middle class growth

Population increase

Aging population

Urbanization UN Millennium Development Goals

Health and safety

Water Resource efficiency

Emission reduction Energy

Climate change Renewables

Biodiversity Cost savings downstream

Chemie hoch 3 – joint sustainability initiative of German chemical industry

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German Federation of Chemical Employers’ Associations

Mining, Chemical and Energy Industrial Union

German Chemical Industry Association

Chemical initiative ‘Together for Sustainability’ – focus on supply chain

Founding members: BASF, Bayer, Evonik, Henkel, Lanxess, Solvay

Common industry approach focused on suppliers performance (e.g. environmental protection, health and safety, labor and corporate governance)

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An audit for one is an audit for all

Suppliers Customers Suppliers Customers

One approach

for assess-ments

and adits

We categorized all our products into four categories

8

Our goal: Increasing the sustainability contribution of our solutions

21.6%

73.4%

4.5% 0.5%

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

We constantly improve the sustainability performance of our portfolio

Example: 1. Identification of “Challenged”

polyfluorinated substances (environmental concern)

2. Development of action plan: start of research project

3. Launch of “Accelerator” recyclable Epotal® SP-101 D and biodegradable ecovio® paper coating

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Renewables

Resource efficiency

Customer needs are met with our Accelerators

Fuel additives

Catalysts

Lightweight plastics

Integrated coating processes

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Partnership conference – benefits

Common understanding: Discuss different tools, approaches and needs regarding portfolio segmentation and steering

Partnering: Opportunity to cooperate with leading companies for further common activities in Portfolio segmentation

Agenda setting: Opportunity to shape sustainability topics

Relationship building: Strengthen relationships with front running and trendsetting stakeholders

Business opportunity: Lay foundation for long-term business success

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