HSBC ESG Day Frankfurt

We drive sustainable solutions Dr. Stefanie Wettberg, Senior Vice President Investor Relations Dr. Tim Balensiefer, IR Manager Sustainability HSBC ESG Day Frankfurt, June 14, 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 Wesource Weproducesafely Wedrive responsibly for people and sustainable the environment products and solutions Weproduceefficiently Wevalue peopleand 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 BASF particularly aspects and and eco- production and and employ- climate systems solutions ability contributes to: 1No poverty 2No hunger 3Good health 4Quality education 5Genderequality 6Clean water and sanitation 7Affordable and clean energy 8Decent work and economic growth 9Industry, 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

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

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 logistics and >€1 billion Verbundprevented infrastructure, 6.5 million tons of cost savings of CO emissions minimization of per year 2 waste in 2017 8

Waste management BASF Verbundhelps to prevent and reduce waste Global waste volume 2017 Waste is managed based on the following hierarchy: (million tons) 1. Avoid Recycled or Incinerated or 2. Reuse thermally recovered 2.1 disposed of 3. Recycle 0.8 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 converted to CO , 1% waste1 2  Comparisons with European emissions trading benchmarks show that our chemical plants operate at above-average energy efficiency  23 million tons of CO emissions by BASF worldwide in 2017 2 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 massbalance 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 1 1 (indexed ; base 1990) declined by −75% (status 2017) since 1990 250 +104%  2020 goal: Reduction of specific greenhouse gas emissions per 1 ton of sales product by −40% versus 2002 (status 2017: −35.5%) 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 0 −75% 1990 2017 Volumes of Absolute GHG Specific GHG 1 BASF Group excluding Oil & Gas; International Financial Reporting Standards 10 and 11 since 2013; figures for 2012 restated; no restatement for 2011 and earlier sales products emissions emissions 2 Representing 90% of BASFʼsprimary 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 1 Process safety incidents (PSI) 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 2 70% 56% Risk assessment of products >99% 76.2% assessment of relevant suppliers Employees Energy & climate protection 2020 goal 2017 2021 goal 2017 3 Greenhouse gas emissions −40% −35.5% Women in leadership positions 22-24% 20.5% Introduction of ISO 50001 energy management Long-term goal 2017 system4 90% 54.3% Non-German senior executives 38.9% Water 2025goal 2017 Senior executives with >80% 84.6% Sustainable water management at Verbund sites international experience and sites in water stress areas 100% 45.2% Production 2025 goal 2017 Products & solutions 2020 goal 2017 1 ≤0.5 2.0 Process safety incidents 5 Proportion of sales generated by “Accelerators” in 28% 27.3% Lost-time injury rate1 ≤0.5 1.4 product portfolio Annual goal 2017 1 Per one million working hours 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

® Sustainable Solution Steering Methodology to steer our portfolio  >60,000 product applications analyzed Substantial sustainability (€58.4 billion in sales, 97.5% of BASF’s portfolio) 27.3% contribution in the value chain  27.3% Accelerators −strong growth in their markets Meets basic sustainability −deliver margins above the average standards on the market −represent majority of BASF’s R&D pipeline 68.3%  68.3% Performers 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 Vault biological seed treatment FWC™ Four-Way Conversion solution for enhanced nitrogen fixation catalyst removes particulates 17

We drive sustainable solutions Systematic sustainability performance assessments since 1996 Advanced Eco-Efficiency Investment Sustainable IT solutions Analysis ® evaluation Solution Steering® for customers Value-to-Society SEEBALANCE Carbon Footprint AgBalance™ 2017 2015 2013 2012 2007 2011 2004 Corporate 1996 Portfolio and digital solutions Products in the value chain 19

Value-to-Society: changing the perspective Assessing and valuing how business changes the well-being of people Traditional reporting Impact valuation / Value-to-Society Quantified output (€, CO e, LTI…) Valued financial and pre-financial impacts (€) 2 Input – raw materials Output – tCO e Outcome –climatechange Impact –costs of floods etc. 2 20

Impact valuation gains momentum It is not a question of if, but rather when impact valuation is implemented Business examples Disclosure Standardization  WBCSD Redefining Value  CDP (formerly Carbon Disclosure  Natural Capital Protocol  Impact Valuation Roundtable Project)  Social Capital Protocol  Increasing number of companies  Reporting schemes started the  Natural and Social Capital Sector is piloting in all sectors discussion Guidance  First companies go public  ISO 14007 and 14008 21

Value-to-Society: a comprehensive assessment Economic, social and environmental impacts in monetary terms based on a PwC model Contributions to gross domestic product Contributions to society (value added) beyond gross domestic product Net income Air emissions GHG Wages Human capital Amortization Water emissions Land use Taxes Health & safety Depreciation Water consumption Waste Economic Social Environmental Impact categories Value chain  Consistent application at corporate, project,  Corporate level: “production cycle” – supply chain, own operations, customer industries and product level  Project and product level: use phase and end-of life integrated on a case-by-case basis 22

BASF’s Value-to-Society 2017 Net positive contribution to sustainable growth in each step of the assessed value chain 1 2 Full external supply chain Own operations Customer industries Net income Amortization Taxes Wages & benefits Human capital Health & safety Air emissions GHG Land use Waste Water consumption Water emissions -10 0 10 20 30 -10 0 10 20 30 -10 0 10 20 30 billion € Value contribution from BASF procurement Value contribution from BASF operations Value contribution from BASF sales 1 2 Indirect suppliers, direct suppliers Customers in industries supplied by BASF 23

Benefits and limitations of Value-to-Society Complementary information to demonstrate relevance and interdependencies Positioning Progress monitoring Decision making  Communication  Over time  Risk exposures  Reporting  Industry benchmark  Business opportunities  Advocacy  Relevance of impacts Required data accuracy and granularity Required maturity level of quantification and valuation methods 24

Wecreatechemistryfora sustainable future Sustainability is a core part of our strategy and fully integrated into our management systems  Sustainability creates growth opportunities.  We assess our contribution to a sustainable future along the entire value chain.  We improve our understanding of the inter-dependency of financial and non-financial impacts.  Our “Value-to-Society” approach is aligned with existing standards, and is pragmatic and auditable.  We engage in relevant networks to share our learnings. 25

BASF SRI Story, November 2017 26

® SLENTITE High-performance insulation panel for construction SLENTITE®  PU aerogel as solid panel with best in class thermal insulation  Flexible scope of design thanks to very slim panel (25–50% less than industry standard)  Construction solution for reduced energy consumption Perspective ®  Strong growth potential in a market of €1.3 billion te ® nti TE  First boards from pilot plant are being e TI commercialized l N S LE S  Start of large scale production in 2021 1930 1950 1990 2018 1990 27

® Trilon M Chelating agent for more sustainable detergents and cleaners ® Trilon M – alternative to phosphate for automatic dish washing  Fast growing global market demand driven by regulatory changes and consumer demand  2015: Start-up of a new Trilon® M world-scale plant in Alabama, USA  2016: Expansion and flexibilization of production facilities in Ludwigshafen Compared with alternative chelating agents ® M Trilon  is readily biodegradable and shows high performance  meets eco-label requirements  has better eco-toxicology profile 28

Acronal® MB From biomass to dispersion for premium paints Biomassbalanceapproach  First BASF binder for interior paints based on the biomass balance approach launched in 2016  Replacing fossil raw materials with renewable feedstock at the beginning of the production process  Less greenhouse gas emissions Premium paints BASF Verbund productionsteps  Enabling interior paints that combine environmental Feedstock Products responsibility with uncompromising premium quality Renewable Fossil Allocated Conventional  91% of interviewed professional painters in Germany see an increase in sustainability aspects in tenders 29

® ® Epotal and Ecovio paper coatings From a “Challenged” product to a business opportunity 1. Identification of the “Challenged” product: Polyfluorinated substances as coatings for paper packaging (environmental concern) 2. Development of action plan: Start of a research project 3. Launch of “Accelerator” product substitution: Recyclable Epotal® and biodegradable ecovio® paper coating 30

Vault® biological seed treatments Fixing nitrogen for legumous crops Legumouscrops need nitrogen through fixation for highest yield potential  Soybeans need approximately 4.5 lbs of nitrogen per bushel, 50‒60% of which from nitrogen fixation  Nitrogen that is not “fixed” is lost to the air, soil or water ® seed-applied inoculants: BASF’s Vault  Bradyrhizobia japonicum is fermented to develop robust rhizobial inoculants  Vault® inoculants improve root nodulation and architecture for more nitrogen-fixation potential  Results include improved crop yield potential, resource efficiency, and long-term nitrogen use options for growers’ sustainability 31

Four-Way Conversion catalyst (FWC™) FWC™reduces emission of gaseous pollutants and particulates  FWC™ HC Combines a 3-way conversion catalyst with CO integrated filter on a ceramic substrate NOx  Reduces gaseous emissions Particulates Precious metal-based catalytic coating removes N 2 exhaust gases from engine emissions2 CO2  Removes particulates HO 2 Filters and combusts particulates 1 Leading position: Global mobile emissions catalysts patents  Complies with emissions limits 150 Helps OEM meet EU 6c regulatory standards 100  FWC™introduced in 2013 Sustains BASF’s leading technology position 50 0 BASF Competitors 1 2009 – 2013 2 Hydrocarbons, carbon monoxide, nitrogen oxides 32

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