We Drive Sustainable Solutions

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We Drive Sustainable Solutions We drive sustainable solutions Dr. Tim Balensiefer Investor Relations Allianz Investor Day Frankfurt, June 5, 2018 1 Cautionary note regarding forward-looking statements This presentation contains forward-looking statements. These statements are based on current estimates and projections of the Board of Executive Directors and currently available information. Forward-looking statements are not guarantees of the future developments and results outlined therein. These are dependent on a number of factors; they involve various risks and uncertainties; and they are based on assumptions that may not prove to be accurate. Such risk factors include those discussed in the Opportunities and Risks Report from page 111 to 118 of the BASF Report 2017. BASF does not assume any obligation to update the forward-looking statements contained in this presentation above and beyond the legal requirements. 2 Sustainability along the value chain Our commitments Suppliers BASF Customers We source We produce safely We drive responsibly for people and sustainable the environment solutions We produce efficiently We value people and treat them with respect 3 Sustainable development UN Sustainable Development Goals and material aspects provide strategic frame BASF material Energy Food Water Resources Responsible Products Partnering Employment aspects and and eco- production and and employ- BASF particularly climate systems solutions ability contributes to: 1 No poverty 2 No hunger 3 Good health 4 Quality education 5 Gender equality 6 Clean water and sanitation 7 Affordable and clean energy 8 Decent work and economic growth 9 Industry, innovation and infrastructure 10 Reduced inequalities 11 Sustainable cities and communities 12 Responsible consumption and production 13 Climate action 14 Life below water 15 Life on land 16 Peace and justice 17 Partnerships for the goals Match High Medium Low 4 Sustainability along the value chain Our commitments Suppliers BASF Customers We source We produce safely We drive responsibly for people and sustainable the environment solutions We produce efficiently We value people and treat them with respect 5 We source responsibly Enhancing sustainability along the supply chain . Joint initiative “Together for Sustainability” of leading chemical companies since 2011 . Standardized and shared supplier evaluations and audits . Implementation of follow-up processes, development of action plans . Sustainability assessments for 513 suppliers received from an external service provider in 2017 . 120 raw material supplier sites audited on EHS in 2017 . 2020 goal: evaluation of 70% of the relevant suppliers with regard to their sustainability performance (status 2017: 56%) 6 Sustainability along the value chain Our commitments Suppliers BASF Customers We source We produce safely We drive responsibly for people and sustainable the environment solutions We produce efficiently We value people and treat them with respect 7 Verbund – unique competitive advantage Actively managed in line with market requirements Geismar Nanjing Antwerp Ludwigshafen Freeport Kuantan . Combined heat and power plants Synergies and integrated energy in and Verbund prevented logistics >€1 billion 6.5 million tons infrastructure, of cost savings minimization of per year of CO2 emissions waste in 2017 8 Waste management BASF Verbund helps to prevent and reduce waste Waste is managed based on the following hierarchy: Global waste volume 2017 (million tons) 1. Avoid 2. Reuse Recycled or Incinerated or thermally recovered disposed of 3. Recycle 0.8 2.1 1.3 4. Energy recovery (e.g., waste-to-energy incineration) 5. Other incineration 6. Disposal such as surface or underground landfills 9 Resource efficiency Responsible use of carbon sources . We are committed to resource efficiency and climate protection . BASF uses carbon raw materials responsibly: 82% of carbon converted to products, 17% consumed for process energy and 1 converted to CO2, 1% waste . Comparisons with European emissions trading benchmarks show that our chemical plants operate at above-average energy efficiency . 23 million tons of CO2 emissions by BASF worldwide in 2017 compared to 10–30 million tons p.a. for one coal-fired power plant . Customers’ use of BASF’s climate protection products sold in 2017 avoided 570 million tons of CO2 equivalents (thereof 6% attributable to BASF)2 . In 2017, BASF achieved CDP leadership status once again 1 BASF carbon mass balance calculation (2017, non-audited) 2 Based on the chemical industry standard of the International Council of Chemical Associations (ICCA) and the World Business Council for Sustainable Development (WBCSD) 10 Energy efficiency Greenhouse gas emissions halved and volumes of sales products doubled since 1990 Greenhouse gas emissions . Specific greenhouse gas emissions per ton of sales product (indexed1; base 1990) declined by −75% (status 2017) since 19901 250 . 2020 goal: Reduction of specific greenhouse gas emissions per +104% ton of sales product by −40% versus 2002 (status 2017: −35.5%)1 200 . 2020 goal: Introduction of energy management system ISO 50001 150 at all relevant sites2 (status 2017: 54.3% of BASF’s primary energy demand) 100 −48% 50 −75% 0 1990 2017 1 BASF Group excluding Oil & Gas; International Financial Reporting Standards 10 and 11 since 2013; Volumes of Absolute GHG Specific GHG figures for 2012 restated; no restatement for 2011 and earlier sales products emissions emissions 2 Representing 90% of BASFʼs primary energy demand 11 Global water stewardship Strong commitment to local water management . Further increase of water stress areas expected worldwide (climate change, population growth and economic development) . Growing competition among water users expected (e.g., households, agriculture, industry) . In 2017, BASF was again awarded with the top “A” leadership grade for sustainable water management from CDP . 2025 goal: Introduction of sustainable water management at Verbund sites and sites in water stress areas2 (status 2017: 45.2%) 1 Representing 93% of BASF’s entire water abstraction 12 Process safety and occupational safety Global safety standards at all sites to minimize risk and impact of incidents Gobal safety standards Process safety incidents (PSI)1 1 (rate ) . PSI rate: 2.0 in 2017 . 2.5 2025 goal: reduction of the worldwide PSI rate to ≤0.5 2 Lost-time injuries (LTI)1 1.5 . LTI rate: 1.4 in 2017 1 . Average LTI rate in the German chemical industry: 9.4 (in 2015) 0.5 . 2025 goal: reduction of the worldwide LTI rate to ≤0.5 0 2010 2011 2012 2013 2014 2015 2016 2017 Process safety incidents (PSI) Lost-time injuries (LTI) 1 BASF Group, per one million working hours; global alignment of reporting systems 2014 13 We create chemistry for a sustainable future Sustainability goals – overview and status 2017 Procurement 2020 goal 2017 Product stewardship 2020 goal 2017 Sustainability performance Risk assessment of products2 >99% 76.2% 70% 56% assessment of relevant suppliers Energy & climate protection 2020 goal 2017 Employees 2021 goal 2017 Greenhouse gas emissions3 −40% −35.4% Women in leadership positions 22-24% 20.5% Introduction of ISO 50001 energy management 4 90% 54.3% Long-term goal 2017 system Non-German senior executives 38.9% Water 2025 goal 2017 Senior executives with >80% 84.6% Sustainable water management at Verbund sites international experience 100% 45.2% and sites in water stress areas Production 2025 goal 2017 Products & solutions 2020 goal 2017 Process safety incidents1 ≤0.5 2.0 Proportion of sales generated by “Accelerators”5 in 28% 27.3% Lost-time injury rate1 ≤0.5 1.4 product portfolio 1 Per one million working hours Annual goal 2017 2 For products >1 metric ton per year 3 Per metric ton of sales products; excl. Oil & Gas, baseline 2002 Health Performance Index >0.9 0.97 4 At all relevant sites (primary energy demand, local energy prices) 5 Products with substantial contribution to sustainability 14 Sustainability along the value chain Our commitments Suppliers BASF Customers We source We produce safely We drive responsibly for people and sustainable the environment solutions We produce efficiently We value people and treat them with respect 15 Sustainable Solution Steering® Methodology to steer our portfolio . >60,000 product applications analyzed (€58.4 billion in sales, 97.5% of BASF’s portfolio) Substantial sustainability 27.3% contribution in the value chain . 27.3% Accelerators − strong growth in their markets − deliver margins above the average Meets basic sustainability standards on the market − represent majority of BASF’s R&D pipeline . 68.3% Performers 68.3% Specific sustainability issues . <1% Challenged products which are being actively addressed . 2020 goal: increase the share of Accelerators from 23% (2014) to 28% Significant sustainability concern, action plan in development 4.3% 0.1% 16 Innovations for a sustainable future Examples with significant contributions to sustainability SLENTITE® high-performance Trilon M® alternative to phosphate Acronal® MB – from biomass to insulation material for dishwashing detergents dispersions ecovio® biodegradable polymer Green Sense® resource-efficient FWC™ Four-Way Conversion solution concrete production catalyst removes particulates 17 Sustainability along the value chain Our commitments Suppliers BASF Customers We source We produce safely We drive responsibly for people and sustainable the environment solutions We produce efficiently We value people and treat them with respect 18 We drive sustainable solutions Systematic sustainability
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