Margret Suckale Member of the Board of Executive Directors SRI Roadshow Netherlands October 1, 2015 150 years We drive sustainable solutions Innovations for a sustainable future
Cautionary note regarding forward-looking statements 150 years This presentation may contain forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. Forward-looking statements may include, in particular, statements about future events, future financial performance, plans, strategies, expectations, prospects, competitive environment, regulation and supply and demand. BASF has based these forward-looking statements on its views and assumptions with respect to future events and financial performance. Actual financial performance could differ materially from that projected in the forward-looking statements due to the inherent uncertainty of estimates, forecasts and projections, and financial performance may be better or worse than anticipated. Given these uncertainties, readers should not put undue reliance on any forward-looking statements. The information contained in this presentation is subject to change without notice and BASF does not undertake any duty to update the forwardlooking statements, and the estimates and assumptions associated with them, except to the extent required by applicable laws and regulations. 2
Sustainability along the value chain Suppliers BASF BASF operations Customer We source responsibly We produce safely for people and the environment We drive sustainable solutions Material aspects* as derived from materiality analysis We produce efficiently We respect people and treat them fairly * Material aspects as defined in BASF Report 2014, page 30 3
Partnerships drive sustainability Together for sustainability initiative Joint initiative by leading chemical companies since 2011 Standardized and shared supplier evaluations and audits Where needed, implementation of targeted follow-up processes Enhancing sustainability along the supply chain 4
We source responsibly Our supply chain and sustainability goals and KPIs assessments initiated* through an external 538sustainability service provider 120 supplier sites audited on EHS* Goal: 70% of relevant suppliers evaluated with regard to their sustainability performance by 2020 Clear targets for supplier evaluation defined, immediate actions implemented * In 2014 5
Sustainability along the value chain Suppliers BASF Customer We source responsibly We produce safely for people and the environment We drive sustainable solutions Material aspects* We produce efficiently We respect people and treat them fairly * Material aspects as defined in BASF Report 2014, page 30 6
Verbund advantages lead to reduced environmental impact 150 years Verbund avoided 3.6 million metric tons of carbon emissions in 2014 Geismar Antwerp Ludwigshafen Nanjing Freeport Kuantan. Efficiency drivers: Steam and heat integration; process control and integration 7
Energy efficiency and climate protection New energy management goal allows better steering x2 Production volume doubled :2 Greenhouse gas emissions halved Energy efficiency Energy efficiency has been improved by +19% vs. 2002 Goal: Introduction of a certified energy management system at all major sites* by 2020 Greenhouse gas emissions Goal: By 2020, reduction of our greenhouse gas emissions per ton of sales product by 40%** GHG emissions halved and production volume doubled since 1990 * Representing more than 90% of primary energy consumption ** BASF operations excluding Oil & Gas/baseline 2002 8
Emissions to water strongly reduced New water stewardship concept established -85% Nitrogen -65% Heavy metals -80% Organic substances Emissions to water* Emissions to water were lowered by 65-85% in the three main categories (2002-2014) Goal: Introduction of sustainable water management at all relevant BASF sites** by 2025, i.e. at our Verbund sites and in severe water stress areas Achieved goals set the basis for an enhanced integrated water stewardship * BASF operations excluding Oil & Gas ** Represents 92% of BASF s water intake 9
More ambitious process safety goal Clear commitment to reduce incidents 2.1 PSI rate in 2014 Process safety goal Reduction of Process Safety Incidents (PSI) to prevent severe impacts Same safety standards at all sites globally Goal: Reduction of the worldwide rate of PSIs per one million working hours to 0.5 by 2025 Continuous reduction of PSIs minimizing risk of large or severe incidents 10
Steering our performance Existing sustainability goals Energy & climate protection* Status 2014 Goal 2020 Greenhouse gases -33.9% -40% Energy efficiency +19.0% +35% Emissions to air & water* Air pollutants -63.2% -70% Organic substances -79.5% -80% Nitrogen -85.4% -80% Heavy metals -64.8% -60% Water Drinking water for production -26.3% -50% Sustainable water management in water stress areas 29.7% 100% Safety, health and security Status 2014 Goal 2020 Lost-time injuries -54.5% -80% Transportation accidents -64.3% -70% Risk assessment of products 61.4% >99% Health Performance Index** 0.91 >0.9 Employees Women in leadership positions 19.1% Non-German senior executives 34.3% Senior executives with international experience 83.0% >80% * Per metric ton of sales products/excluding oil and gas production ** Highest possible score 1.0 11
Sustainability along the value chain Suppliers BASF Customer We source responsibly We produce safely for people and the environment We drive sustainable solutions Material aspects* We produce efficiently We respect people and treat them fairly * Material aspects as defined in BASF Report 2014, page 30 12
BASF s Sustainable Solution Steering New methodology to screen and steer our portfolio 74.1% 23% 2.6% 0.3% Substantial sustainability contribution in the value chain Meets basic sustainability standards in the market Specific sustainability issue which is actively addressed Significant sustainability concern, action plan in development 60,000 product applications analyzed representing sales of 66.3 bn (data 2014) 23% ranked as Accelerators: outgrow their markets by 2-10% deliver >10% margins above average BASF s R&D pipeline: >60% Accelerators 74% classified as Performers <1% ranked as Challenged: Individual action plans (implemented in 2015) Goal: Increase the share of Accelerators from 23% to 28% by 2020 13
Substantial sustainability benefits Multibore Ultrafiltration membranes (Accelerator) Example: Multibore For turning dirty water into clean water Multibore membranes contain pores 3,000 times smaller than the diameter of a human hair blocks solids, bacteria and viruses Application: Ultrafiltration solutions help to produce clean drinking water in a sea water desalination plant for 500,000 people in Ghana Picture: Vestergaard Frandsen 14
Sustainable Solution Steering in practice From a Challenged product to a business opportunity Example: Paper coating 1. Identification of Challenged : Polyfluorinated substances as coatings for paper packaging (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 15
Steering our performance Sustainability goals along the entire value chain Suppliers BASF Customer Evaluation of 70% of relevant suppliers with regard to their sustainability performance by 2020 Energy & climate protection Greenhouse gas reduction* of 40% by 2020 (base 2002) Energy efficiency: Introduction of certified energy management system at all major sites by 2020 Water Introduction of sustainable water management at all relevant sites by 2025 Safety, health and security Risk assessment of products by 2020 >99% Health Performance Index** (annual goal) >0.9 Lost-time injuries*** by 2025 0.5 Reduction of process safety incidents*** by 2025 0.5 Employees Women in leadership positions Non-German senior executives Senior executives with international experience >80% Increase the share of Accelerators from 23% to 28% by 2020 * Per metric ton of sales products/excluding oil and gas production ** Highest possible score 1.0 *** Per one million working hours 16
Products and solutions for a sustainable future 150 years Xemium next blockbuster fungicide SLENTITE high performance insulation material Trilon M high performance phosphate alternative ecovio biodegradable polymer solution Green Sense resource efficient concrete production Four-Way Conversion Catalyst removes pollutants & particulates 17
We create chemistry for a sustainable future 150 years Sustainability is a core part of our strategy and fully integrated into our management systems We understand sustainability as an integrated approach together with all our stakeholders along the value chains Sustainability delivers growth opportunities in the market By 2020, Accelerators will represent 28% of our sales 18
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