BASF Report 2021 Management’s Report – Our Sustainability Concept 46 1, 2 Our organizational and management structures Identifying and assessing sustainability topics We are constantly working to broaden our contributions to key Materiality BASF evaluation approach dimension sustainability topics and reduce the negative impact of our busi- ness activities. Together with decentrally organized specialists, the Corporate Strategy & Sustainability unit in the Corporate Center Impact of BASF is responsible for integrating sustainability into core business Value to Society method: activities and decision-making processes. This unit’s tasks include – Monetization of positive and the global steering of climate-related matters. negative effects along the value chain Complete list of potentially relevant – Topics with impacts that cannot be topics (around 100) based on expressed in monetary terms included The new Net Zero Accelerator project organization has reported based on relevance for external directly to the Chairman of the Board of Executive Directors since – Prior materiality analyses stakeholders and on assessments of – Value to Society results internal experts January 2022. It focuses on the further acceleration and implemen- – External inquiries tation of existing and new projects to achieve CO reduction targets Material topics 2 Impact on BASF (within the meaning of section at company level worldwide and drives them forward. Prioritization and grouping in – Business units surveyed as part of 289c HGB or relevant under internal workshops strategy development the Global Reporting Initiative) – Positive and negative effects of individual The Board of Executive Directors and the Supervisory Board are sustainability trends on the businesses regularly briefed on the current status of individual sustainability analyzed based on meta-study topics. The Board of Executive Directors incorporates the results and recommendations from sustainability evaluations of business Relevance for – Big data analysis based on processes into its decisions, for example, on proposed investments our stakeholders external publications and acquisitions. It makes decisions with strategic relevance for the – Results complemented and confirmed by surveys and interviews with Group and monitors the implementation of strategic plans and tar- external experts get achievement. The Corporate Sustainability Board, which is composed of heads of business and Corporate Center units and 1 Our stakeholders also confirmed the materiality of the nonfinancial topics that the Value to Society method identified as having an impact along the value chain. regions, supports the Board of Executive Directors on sustainability 2 Quantitative thresholds for defining material topics have not been set due to the complexity of the assessment methods used for each dimension of materiality. The final list of topics is based on an expert comparison of the results of all the assessment approaches described. topics and discusses operational matters. A member of the Board of Executive Directors serves as chair. In 2018, we established our Sustainable Finance Roundtable, which developing recommendations on how the SDGs should be consid- discusses topics related to sustainable finance. Here, experts from ered in financial decisions and in interactions with investors. We systematically evaluate sustainability criteria, including the departments such as Finance, Corporate Strategy, Investor Rela- For more information on our financial and sustainability targets, see pages 36 and 37 effects of climate change, as an integral part of decisions on acqui- tions and Communications discuss upcoming new legal require- For more information on our risk management, see pages 151 to 160 sitions and investments in property, plant and equipment or financial ments. The interdisciplinary group analyzes the steadily growing For more information on the organization of our sustainability management, see assets. In this way, we not only assess economic dimensions, but requirements, assesses the impact on BASF and drives forward the basf.com/sustainabilitymanagement also the potential impacts on areas such as the environment, human necessary change processes as well as the concrete implementa- For more information on compensation structures, see the compensation report at basf.com/compensationreport rights or the local community. We evaluate both the potential tion of measures. In a U.N. Global Compact task force, we are impacts of our activities here as well as which effects we are exposed to.