Report of the Supervisory Board BASF Report 2021 Corporate Governance – Report of the Supervisory Board 177 Report of the conditions vital to this, such as the European Green Deal and upcoming regulation of the chemical industry in the E.U., are currently difficult to assess and were the subject Supervisory Board of in-depth discussion. The Supervisory Board expressly supports this approach and is following it closely, both in an advisory capacity and through regular and critical monitoring. It would like to thank the Board of Executive Directors and all employees worldwide for their dedi- cation, extraordinary work and outstanding results in the 2021 business year. We will drive forward change in the Supervisory Board, too. Anke Schäferkordt, Franz Fehrenbach, Denise Schellemans, Waldemar Helber and Roland Strasser will resign from the Supervisory Boar d on conclusion of the Annual Shareholders’ Meeting on April 29, 2022. As a result, its composition will once again change quite significantly compared with the start of the current term of office in 2019. Unfortunately, the new shareholder representatives will again not be able to be elected at a physical Annual Shareholders’ Meeting in 2022. The Supervisory Board deeply regrets this, as it believes that it is the ideal place to discuss BASF’s development with you. However, after intensive consultation, the Supervisory Board concurred with the Board of Executive Directors’ assessment that, from today’s perspective, it will not be possible to hold a physical Annual Shareholders’ Meeting in a responsible manner at the end of April this year given the current situation. BASF’s business developed extremely well in 2021. Growth and earnings were Monitoring and consultation in an ongoing dialog with the Board of considerably higher than expected at the beginning of the year. The Board of Execu- Executive Directors tive Directors decisively seized the opportunities that arose, strengthened BASF’s overall competitiveness and laid important groundwork for the future. They did so in In 2021, the Supervisory Board of BASF SE exercised its duties as required by law and an exceptionally challenging environment, including a sharp rise in raw materials and the Statutes with the utmost care. It regularly monitored the management of the Board energy prices, strained conditions in many international supply chains, and problems of Executive Directors and provided advice on the company’s strategic development with production and volumes in the automotive industry, which is particularly impor- and important individual measures, about which the Supervisory Board was regularly tant for BASF. In addition, political tensions have increased and global economic and thoroughly informed by the Board of Executive Directors. This occurred both activity has become even more demanding overall. Most of these factors will continue during and outside of the meetings of the Supervisory Board and its committees in the to challenge us in 2022. form of written and oral reports on, for example, all of the major financial key perfor- mance indicators (KPIs) of the BASF Group and its segments, the economic situation The Board of Executive Directors has enhanced and refined the portfolio and driven in the main sales and procurement markets, and on deviations in business develop- forward important investments for profitable growth. Above all, it defined ambitious ments from original plans. Furthermore, the Supervisory Board tackled fundamental targets to further reduce CO emissions at an early stage and presented a package questions of corporate planning, including financial, investment, sales volumes and 2 of measures aimed at increasing sustainability in the BASF Group. The underlying personnel planning, as well as measures for designing the future of research and