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

3

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

6

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)

7

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

9

Renewables

Resource efficiency

Customer needs are met with our Accelerators

Fuel additives

Catalysts

Lightweight plastics

Integrated coating processes

10

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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