Sustainability at BASF

Balancing the economy, the environment and society

BASF has committed itself to the principle of sustainable development as one of its corporate goals. Realizing this principle on a day-to-day basis at a global company is a major challenge because the economic, environmental, social and cultural framework differs from country to country.


What does BASF understand by sustainability?

Sustainable development aims to achieve a balance between the economic, environmental and social needs of the modern world without impairing the development opportunities of future generations. BASF is committed to this principle. In its comprehensive sustainability reporting – which consists of the Annual Report/Financial Report; the Environment, Safety Health Report; and the Social Responsibility Report – the company provides detailed information on the economic, environmental and social aspects of its activities.

BASF’s Sustainability Council

In June 2001, BASF became one of the first companies in the world to establish a Sustainability Council with the aim of integrating sustainable ideas and activities even more firmly in the company’s goals and strategies. The task of the Council, which is headed by Board member Eggert Voscherau, is to establish tools and

structures for the sustainable development of the company. “In doing so, we are incorporating the principle of sustainability in our day-to-day business,” says Voscherau. “We see this as a signpost to the future and a means of supporting and expanding our economic success.”

Structures and tools for sustainable development

The eco-efficiency analysis determines how BASF’s products of the future should look according to economic and environmental criteria. This method, which was developed by BASF experts together with the consultants Roland Berger + Partner, looks at the entire lifecycle of a product from the extraction of raw materials and energy consumption during the production process to disposal after use. The aim of the eco-efficiency analysis is to offer the best possible products which are also environmentally sound – at the best possible price. The method involves a comparison of products and processes. “If the analysis shows that a product is not eco-efficient, then we look for alternatives,” says Voscherau. BASF is currently working to include social criteria in its eco-efficiency analysis.

Social factors are now also to be included in the audits and inspections that have been carried out since the mid-1980s to ensure uniform standards at all BASF sites. In concrete terms, the inclusion of the social aspect means that audits will check that human rights and fundamental labour standards are respected. BASF also voluntarily ensures that the wages paid at all BASF Group companies are in excess of the minimum standard required by law. BASF also demands that its suppliers observe minimum social standards. If contractors fail to do so, BASF reserves the right to terminate the contract prematurely if necessary.

Sustainability criteria also play an important role when it come to decisions on investments. For example, experts at BASF are currently developing a tool that takes into account feasibility studies, eco-efficiency analyses and social factors. The tool is to be used to assess both investments in plant and equipment as well as approve research projects.

Sustainability projects in the BASF Group

As well as introducing specific management systems and tools, BASF’s Sustainability Council also provides impulses for activities implemented by the company’s operating divisions and units. Local implementation ensures that decisions made at the global level are in line with local circumstances at an individual BASF site without infringing globally valid standards.

One example the To Grow project (Projeto Crescer) in Brazil: The project was established in 1982 and aims to improve the chances of 14- to 18-year-olds from poor families. In 2001 alone, BASF invested approximately euro 260,000 in the project. The company also encourages its employees to support the project – for example by allowing them to take paid leave for voluntary work. The young people receive training for their future career. In addition, the project improves their general education through workshops on health-related or social topics as well as cultural activities such as theater visits, presentations and concerts. Since the project started, BASF has help around 430 young people. An independent study has demonstrated the success of the project: 76 percent of its graduates are currently employed and more than 70 percent earn significantly more than the minimum wage in Brazil.

With the To Grow project, BASF is playing a concrete role in the development of society in Brazil. In Morocco, the company’s activities in the area of sustainability focus on providing the country with an environmental benefit. The eco-efficiency of several textile dye works will be determined with the help of a software program that uses key technical data to calculate how the production process can be improved. The review is based on BASF’s eco-efficiency analysis. In this way, Moroccan companies in the textile sector can set a course toward products and processes that make both business sense and are environmentally friendly. With its 200,000 employees, the textiles industry plays a key role in Morocco’s economy and accounts for 40 percent of exports.

The eco-efficiency project in Morocco is a pilot project that BASF is conducting together with the United Nations’ organizations UNIDO (United Nations Industrial Development Organization) and UNEP (United Nations Environmental Program). The results from this first phase will serve as a foundation for comparable projects in other countries. With these activities, BASF is making an active contribution toward the Global Compact initiative under the leadership of United Nations Secretary General Kofi Annan. In this initiative, global organizations and companies commit themselves to promote fundamental principles worldwide in the areas of human rights, labour standards and environmental protection. Together with approximately 50 other companies and organizations, BASF is one of the founding members of the Global Compact.

The results of the eco-efficiency pilot project will be presented at the World Summit on Sustainable Development in Johannesburg, South Africa. They are an example of how the business world can develop innovative solutions for current and future problems that are both environmentally and socially sustainable.

World Summit on Sustainable Development in Johannesburg, South Africa

“Several years of groundwork were needed before the various groups and countries around the world reached a common understanding of the principle of sustainability,” says Voscherau. “We must now define the resulting demands in more concrete terms and act accordingly on a day-to-day basis. The World Summit in Johannesburg provides us with an excellent platform for this. Ten years after Rio, the Johannesburg summit will further promote and strengthen understanding of sustainability. To this end, we must define a global framework in which industry, politics and organizations can address the issue of social responsibility. In order to shape the globalization process in partnership and in a responsible manner, we need joint strategies to benefit mankind and the environment, both now and in the future.”

BASF is the world’s leading chemical company. It aims to increase and sustain its corporate value through growth and innovation. BASF offers its customers a range of high-performance products, including chemicals, plastics, coatings systems, dispersions, agricultural products, fine chemicals as well as crude oil and natural gas. BASF’s distinctive approach to integration, known in German as “Verbund,” is its strength. It enables the company to achieve cost leadership and gives it a decisive competitive advantage in the long term. BASF acts in accordance with the principles of Sustainable Development. In 2001, BASF had sales of euro 32.5 billion (circa $29 billion) and over 90,000 employees worldwide. BASF shares are traded on the stock exchanges in Frankfurt (BAS), London (BFA), New York (BF), Paris (BA) and Zurich (BAS). Further information on BASF is available on the Internet at www.basf.com.

Note to editors

You can find further information on BASF’s activities in the field of sustainability on the Internet at www.basf.de/sustainability.

Issued by:

Karin Moeschke

Phone: +49 621 60-20732

Fax: +49 621 60-92693

E-mail: karin.moeschke@basf-ag.de

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