BASF Report 2021 Management’s Report – We Drive Sustainable Solutions 141 We Drive Sustainable Solutions In this section: Steering Our Product Portfolio Innovations based on chemistry are key to solving global challenges such as climate change or resource scarcity. Circular Economy They can play a pivotal role in reducing emissions or decoupling growth and resource consumption, for example. Product Carbon Footprint Targeted research and development is the foundation for sustainable solutions and an important growth driver for BASF. Steering Our Product Portfolio Classification of assessed portfolio according to the Sustainable Solution Steering method GRI 102, 416, 417 Accelerator Accelerator sales SUPPLIERS BASF CUSTOMERS Substantial sustainability contribution 2021: €24,103 million in the value chain 2020: €16,740 million We take advantage of business opportunities by offering our cus- tomers innovative products and solutions that support their sustain- Performer Performer sales ability goals. We ensure that the business units follow standard Meets basic sustainability standards 2021: €39,033 million processes to evaluate and take into account relevant sustainability on the market Assessed 2020: €30,519 million criteria when they develop and implement strategies, research portfolio Transitioner €71,041 million Transitioner sales projects and innovation processes. Specific sustainability issues which are 2021: €7,879 million being actively addressed 2020: €6,799 million Accelerator products make a substantial sustainability contribution in the value chain. These include catalysts that reduce emissions to Challenged Challenged sales the environment, biodegradable mulch films for agricultural applica- Significant sustainability concern identified and 2021: €26 million tions, and high-performance insulation materials for higher energy action plan in development or implementation 2020: €72 million savings and reduced material use in building construction. Based on our corporate strategy, we have set ourselves a global target: We aim to make sustainability an even greater part of our enables us to systematically improve them. We review the cate- tributions to sustainability, in 2018 we started phasing out all innovation power and achieve €22 billion in Accelerator sales by gorization of the portfolio at least every four years. This includes Challenged products within five years of their initial classification at 2025. We met this target already in 2021. Consequently, we will analyzing the portfolio in workshops. the latest. We strive to offer products that make a greater contribu- update our product portfolio steering target over the course of 2022. tion to sustainability in their area of application to live up to our own If, during reassessment of our portfolio, we identify products with commitments and meet our customers’ demands. That is why an A significant steering tool for the product portfolio, based on the significant sustainability concerns, we classify these as “ challenged.” adapted version of our Sustainable Solution Steering method is sustainability performance of our products, is the Sustainable Solu- We develop and systematically implement action plans for all used in areas such as our research and development pipeline, and tion Steering method. It considers our products’ applications in products in this category. These include research projects and in merger and acquisition projects. The results and any measures various markets and customer industries. Transparently classifying reformulations to optimize products, or even replacing the product required are part of our business strategies. our products on the basis of their contribution to sustainability with an alternative. To systematically align our portfolio with con-