Integrating sustainability: putting

every unit to workCSR Asia

Hong Kong – September 2016

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What does sustainability mean to you?

2

Growing demand is putting an increasing

strain on our planet

3

SUPPLY DEMAND

1976 2010

Annual

regenerative

capacity

of the planet

Human beings now

demand more from

the Earth than can be

regenerated

Earth’s

resources

Consumption of Earth’s resources

+

Source: Accenture

Expectations for sustainable business are

increasing

Consumer awareness is rising

Global regulations are evolving

NGOs are launching global

campaigns

Social media is eliminating the

distance between people and

ideas

Taken together, these trends are

ushering in a new era of radical

transparency

4

Global regulations are redefining the business

landscape

Comprehensive regulations

Registration, Evaluation, Authorization

and Restriction of Chemical (European

Union)

Provisions on Environmental

Administration of New Chemical

Substances (China)

Chemical Safety Improvement Act

(United States)

Act on the Registration and Evaluation

of Chemicals (Korea)

Hazard Substances Notification

(Thailand)

5

International regulations affect Asian business

Consumers expect sustainability to be part of

business-as-usual

In Asia:

91% of consumers surveyed

are willing to switch to a brand

associated with a good cause

87% consider a firm’s CSR

when deciding products

55% have already boycotted

products because of the

producer’s irresponsible

behaviors

43% have paid more for

socially responsible products

6

Sources:

2013 Cone Communications/ Echo Global CSR Opportunity Study

& Neilson global corporate responsibility survey

NGOs are spurring companies to address

sustainability in supply chains

In 2016:

Rainforest Action Network vs. Abercrombie & Fitch (viscose production in rainforests)

Greenpeace vs. Mars (unsustainable seafood in pet feed)

Human Rights Watch vs. tobacco companies (child labor at Indonesian farms)

Amnesty International vs. Huayou(child labor in cobalt mining)

International campaigns affect Asian businesses

7

Now what?

Food for thought …

Should certain industries be more concerned about sustainability than

others?

Which business functions are most important when it comes to

sustainability?

How should the sustainability manager address these questions?

8

BASF’s journey

From making chemicals to creating chemistry

9

BASF – We create chemistry

Our chemistry is used in almost all

industries

We combine economic success, social

responsibility and environmental

protection

Sales 2015: €70,449 million

EBIT 2015: €6,248 million

Employees (as of December 31,

2015): 112,435

6 Verbund sites and 338 other

production sites

10

Chemistry as enabler

Setting the stage for the future

Meeting societal demands within the limits of the planet

Nine billion people in 2050 but only one earth

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Resources, Environment &

Climate

Food & Nutrition Quality of Life

Putting chemistry to work to meet societal

needs

12

… more food needed

by 2050… more primary energy

consumption by 2050

… of the world population

will live in cities by 2050

Agriculture Health & nutrition

Energy & resources

Transportation Construction & housing

Consumer goods

… people by 2050

70% 50%~10bn

Electrical & electronics

30%

Chemistry as enabler for current and future needs

Rising stakeholder expectations

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Our sustainability understanding

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We create chemistry

for a sustainable future

Sustainable development is about balancing economic, environmental and

social needs – today and tomorrow

Sustainable Development

Environment Social Responsibility

Economy

Evolution of societal expectations

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Importance for stakeholder

very highhigh extremely high

extremely high

very high

high

Importance for BASF

Establish materiality

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Distill key material issues

17

Energy & Climate

Resources & Ecosystems

Food

Partnering

Water

Operational Excellence

Products & Solutions

Employment & Employability

Make sustainability commitments throughout

the business

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Material

aspects

We

drive sustainable

solutions

CustomerBASFSuppliers

We produce safely

for people and

the environment

We

source

responsibly

We produce

efficiently

We respect people

and treat them fairly

Make sustainability commitments throughout

the business

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Material

aspects

We

drive sustainable

solutions

CustomerBASFSuppliers

We produce safely

for people and

the environment

We produce

efficiently

We

source

responsibly

We respect people

and treat them fairly

Make sustainability commitments throughout

the business

20

Material

aspects

We

drive sustainable

solutions

CustomerBASFSuppliers

We produce safely

for people and

the environment

We

source

responsibly

We respect people

and treat them fairly

We produce

efficiently

Make sustainability commitments throughout

the business

21

Material

aspects

We

drive sustainable

solutions

CustomerBASFSuppliers

We produce safely

for people and

the environment

We

source

responsibly

We respect people

and treat them fairly

We produce

efficiently

Put sustainability in each unit

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Strategy Process

Sustainability

integrated in our

business strategiesSustainability Analysis SD measures &

milestones defined

Sustainability

anchored in our

organization Stakeholder Advisory Council

Chair: Kurt Bock

Corporate Sustainability Board

Chair: Margret Suckale

Chair: Dirk Voeste

Sustainability Core Team

Operating divisions

Regions

Functional units

Central functions

Sustainability Communities

Board of Executive Directors of BASF SE

Roll out through networks

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Training

Events

Internal example sharing

Customer collaboration

Break Out

Each function’s contribution to sustainability

25

Production

Sales & Marketing

Procurement

Logistic, Supply Chain

Finance & Controlling

Legal & Regulatory

Human Resources

Communications

IT

Engineering

Research & Development

EHS

Customer service

Resources &

EcosystemsWater

Operational

Excellence

Products &

Solutions

Energy &

ClimateEmployment Partnering Food

… … … … … … … …

… … … … … … … …

… … … … … … … …

… … … … … … … …

… … … … … … … …

… … … … … … … …

… … … … … … … …

… … … … … … … …

… … … … … … … …

… … … … … … … …

… … … … … … … …

… … … … … … … …

Example: Role of Procurement

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Material

AspectRole

Potential

KPI

Energy &

Climate

…

...

Employment /

society

…

…

Profitability

…

What are the aspects relevant to your company? (add

more if relevant)

Example: Role of Procurement

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Material

AspectRole

Potential

KPI

Energy &

Climate

…

...

Employment /

society

…

…

Profitability

…

What role does this

function have to play?

Example: Role of Procurement

28INTERN

Material

AspectRole

Potential

KPI

Energy &

Climate

…

...

Employment /

society

…

…

Profitability

…

What metrics could be

used to track progress?

GH

Example: Role of HR

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Material

AspectRole

Potential

KPI

Energy &

Climate

…

...

Employment /

society

…

…

Profitability

…

Break out session

30

Brainstorming

sustainbility KPIs

per function

For your table’s “function” …

Complete the materiality factors on the

left of the page for your company

Brainstorm individually

Share / compare with the group

INSTRUCTIONS

20 mins

Summary / wrap up

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