Measuring Sustainability and BASF s Eco-Efficiency Analysis

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1 Prepared by: Bruce Uhlman Senior Sustainability Presented by: Christopher A. Bradlee Market Development Manager, NA Measuring Sustainability and BASF s Eco-Efficiency Analysis 1

2 Have You Seen These Men? Christopher Bradlee Market Development Manager BASF Biopolymers 5/12/2010 Bruce Uhlman Senior Sustainability Specialist BASF Product Stewardship 2

3 We create chemistry for a sustainable future We will integrate sustainability more closely than ever into our business. Sustainability is a core element of our Purpose and Strategic Principles And innovation is the key. Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF SE Sustainability is an integral part of BASF 3

4 BASF understanding of sustainability Weighing the options, pursuing the best solutions Journey need for dialogue & partnership Text Text Text Text Growth driver for our business Balancing economic, environmental and social needs today and tomorrow 4

5 Sustainability: Measuring Being able to measure sustainability is critical to its successful integration into business strategy and strategic decision making AgBALANCE

6 Number of Studies Performed by BASF since Carbon footprints Environmental Impact Assessments Total Cost of Ownership Eco-efficiency Analyses AgBalance NSF Verifications (since 2010) Unique Business Units

7 Eco-Efficiency Analysis Measures Economic and Environmental Impacts Over a life-cycle 5/12/2010 7

8 Example for Car Economics Total costs to own a product throughout its life: purchase depreciation Insurance, taxes consumption maintenance waste fees

9 Economic Impact Categories Raw material costs. Labor costs. Energy (electric and natural gas). Capital & non-capital investment costs. Maintenance. EH&S programs and regulatory costs. Illness & injury costs (medical, legal, lost time). Property protection & warehousing costs. Waste costs (hazardous, non-hazardous) Training costs. Other as applicable

10 Environmental Impact Categories Energy Raw Materials Water Emissions Toxicity Potential Risk Land Use

11 Emissions Impact Categories Emissions Solid Waste Residential, Hazardous, Mining, Construction, Radioactive Air Water COD, Heavy Metals, Total N, PO 4, Chlorides, Hydrocarbons Green House Gases Ozone Depletion Summer Smog Acid Rain CO 2, N 2 O, halogenated hydrocarbons, CH 4 halogenated hydrocarbons Hydrocarbons, CH 4 SO x, NO x, NH 3, HCl

12 Life Cycle Inventory (Ecoprofile): Site questionnaire

13 Eco-Efficiency Methodology: Assessing Environmental Impacts Category Fingerprint Overall Impact Raw Materials Cumulative Energy Demand Relative overall Impact Energy consumption Abiotic Resource Depletion Consumptive Water Use Land Use High Product A Emissions Emissions 0.0 Toxicity Potential Toxicity Occupational Illnesses And Accidents (Risk) Risk potential Product B Product 1 C Land Use 1.0 = greatest environmental burden 0.0 = least environmental burden Low Life cycle data is gathered in seven environmental impact categories and depicted on an environmental fingerprint. The data are then weighted, aggregated and normalized to obtain an overall environmental impact.

14 Eco-Efficiency Methodology: Balancing Costs and the Environment Customer benefit : 1 functional unit for. Environmental Impact (normalized) low eco-efficiency high eco-efficiency Alternative A Alternative B Alternative C The most eco-efficient product has the lowest combined environmental impact and cost. Ecoefficiency is measured from the diagonal line Costs (normalized) 0.0 Alternative B is most eco-efficient.

15 Eco-Efficiency Case Studies Natural Oil polyols vs. petroleum based polyols Application: flexible foam for furniture

16 Eco-Efficiency Case Studies Bio-based materials and Eco-Confusion Bio-based materials may not be Green. Analysis beats Greenwashing! Analysis supports informed decision making! Eco-efficiency portfolio comparing a wide range of applications utilizing bio-based materials

17 Sustainability and Decision Making

18 For More Information: Bruce Uhlman, LCACP BASF Corporation - Product Stewardship Sustainability Programs Tel: (973) bruce.uhlman@basf.com 5/12/