BASF Report 2021 Management’s Report – Energy and Climate Protection 127 We offer our customers solutions that help prevent greenhouse gas BASF Group’s greenhouse gas emissions according to the Greenhouse Gas Protocola Million metric tons CO equivalents emissions and improve energy and resource efficiency. More than 2 60% of our annual research and development spending1 goes 2018 BASF operations 2021 2020 (baseline) toward developing these products, optimizing our processes, and Scope 1b toward research projects to make our processes more energy and CO (carbon dioxide) 17.234 16.860 17.025 resource-efficient and to prevent greenhouse gas emissions. 2 N2O (nitrous oxide) 0.418 0.609 0.677 CH f We continuously analyze potential risks to our business operations 4 (methane) 0.034 0.023 0.027 arising in connection with the topics of energy and climate pr otection HFC (hydrofluorocarbons) 0.034 0.031f 0.091 and derive appropriate measures. We support the recommenda- SF6 (sulfur hexafluoride) 0.001 0 0 tions of the Task Force on Climate-related Financial Disclo- Scope 2c sures (TCFD). Since the 2019 reporting year, BASF’s annual report CO 2.464 3.279 4.067 has included an overview showing the sections and subsections in 2 f which TCFD-relevant information can be found (see page 19). We Total 20.185 20.802 21.887 also participate in the program established by the international Offsetting 0 0 0 nonprofit organization CDP for reporting on data relevant to climate f Total after offsetting 20.185 20.802 21.887 protection and have done so since 2004. BASF achieved a score of Sale of energy to third parties (Scope 1)d A– in CDP’s 2021 climate change questionnaire, again attaining f CO 0.947 0.845 0.773 Leadership status. Companies on the Leadership level are distin- 2 f guished by factors such as the completeness and transparency of Total 21.132 21.647 22.660 their reporting. They also pursue comprehensive approaches in Use of biomasse managing the opportunities and risks associated with climate change CO 0.091 0.024 n/a 2 as well as strategies to achieve company-wide emission reduction goals. a BASF reports separately on direct and indirect emissions from the purchase of energy. Scope 1 emissions encompass both direct emissions from production and generation of steam and electricity, as well as direct emissions from the generation of steam and electricity for sale. Scope 2 emissions comprise indirect emissions from the purchase of energy for BASF’s use. b Emissions of N O, CH and HFC have been translated into CO emissions using the Global Warming Potential, or GWP, factor. GWP factors are based on the Intergovernmental Panel on Climate Change (IPCC) 2007, errata 2 4 2 table 2012 for the 2018 and 2020 reporting years, and IPCC 2014 for the 2021 reporting year. HFC (hydrofluorocarbons) are calculated using the GWP factors of the individual components. c Market-based approach. Under the location-based approach, Scope 2 emissions were 3.362 million metric tons of CO in 2020 and 3.670 million metric tons of CO in 2021. We report on greenhouse gas emissions in accordance with the 2 2 d Includes sales to BASF Group companies; as a result, emissions reported under Scope 2 can be considered twice in some cases. Greenhouse Gas Protocol as well as the sector-specific standard for e Emissions are reported separately from Scope 1 and Scope 2 in accordance with the Greenhouse Gas Protocol. f The comparative figure for 2020 has been adjusted to reflect updated data. the chemical industry. Climate protection is a shared task. This is why we support various supply chain and will provide the basis for a Scope 3 target-setting national and international initiatives and are involved in partnerships. methodology for the chemical sector. For instance, in 2021 we worked with Together for Sustainability For more information on climate protection, see basf.com/climate_protection (TfS), the World Business Council for Sustainable Development (WBCSD) and the World Economic Forum’s Low-Carbon Emitting Technologies Initiative (LCET) to harmonize the methodological approaches used to calculate Scope 3 emissions. This will help increase the transparency of greenhouse gas emissions along the 1 Costs not relevant to the calculation of this share include research expenses in early innovation stages of the phase-gate process, patent costs and expenses for supporting services.