BASF Report 2021 Management’s Report – Raw Materials 114 driving forward white biotechnology for the production of chemical sustainable products in accordance with the RSPO’s mass balance SuCCESS, the Sustainable Castor Association (SCA), which was components from renewable resources. supply chain model. This helps our customers meet their obligations launched in 2019 by the founders of the Pragati initiative, has also to customers, consumers and stakeholders. developed a sustainability code for the wider supply chain. This will Palm oil, palm kernel oil and their derivatives are some of our allow castor beans obtained from the program to be further pro- most important renewable raw materials. We mainly use these raw We source most of our palm-based raw materials from Malaysia and cessed into certified castor oil and derivatives and to be introduced materials to produce ingredients for the cosmetics, detergent, Indonesia. Smallholders account for around one-third of the total into the downstream supply chain. We were able to source the first cleaner and food industries. We aim to ensure that palm-based raw volumes produced there. We have worked together with The Estée certified sustainable castor oil from the program in 2021 following materials come from certified sustainable sources. To this end, we Lauder Companies, the RSPO and Solidaridad in Indonesia since the successful audit of our supply chain by an independent certifica- have endorsed the Roundtable on Sustainable Palm Oil (RSPO) 2019 to expand our supplier base for RSPO-certified palm oil prod- tion body. In the coming years, we want to increase the share of this since 2004 and are engaged in other national and international ini- ucts while strengthening smallholder structures and sustainable oil in our total demand. tiatives, such as the German Forum for Sustainable Palm Oil, the production methods at local level. The project in the province Polish coalition Polska Koalicja ds. Zrównowazonego Oleju of Lampung supports around 1,000 independent smallholders in Our bioactives for cosmetics are based on plants. Through sus- Palmowego and the High Carbon Stock Approach organization. improving their livelihoods and the sustainable production of palm oil tainable sourcing practices, we aim to preserve ecosystems and Based on our Group-wide Supplier Code of Conduct (see page 109), and palm kernel oil. The focus is on efficient and sustainable farming enable sustainable management for those who depend on them. To we have outlined our expectations of suppliers in the palm-based practices and health and safety standards. The goal is for at least this end, we have set up various programs that unite economic, value chain in an additional sourcing policy (BASF Palm Sourcing one-third of program participants to become certified according to ecological and social aspects in holistic approaches. One example Policy). This addresses aspects such as forest and peat conserva- the RSPO Smallholder Standard in three years. is our rambutan program in Vietnam’s Dong Nai province. We have tion, respect of human and labor rights, smallholder inclusion, and been collaborating since 2014 with two local small plantations which certification and traceability standards. The annual BASF Palm Also important for BASF, albeit at a much smaller scale, is castor supply us with sustainably produced, organically certified raw mate- Progress Report reports on our measures and progress toward oil. We use castor oil to manufacture products such as plastics and rials. Upcycling the rambutan tree’s shells, leaves and seeds, previ- more sustainability and transparency in the value chain. ingredients for paints and coatings, as well as products for the ously disposed of as waste, creates new income streams for farmers cosmetics and pharmaceutical industries. With the aim of estab- and expands our portfolio of natural active ingredients. The partner- We purchased 242,946 metric tons of palm oil and palm kernel oil in lishing a certified sustainable supply chain for castor oil, we launched ship focuses in particular on responsible farming practices and 2021 (2020: 227,213 metric tons). We again met our own voluntary the Sustainable Castor Initiative – Pragati in 2016 together with the social inclusion, including gender equality, safe working conditions commitment to source only RSPO-certified palm oil and palm kernel companies Arkema and Jayant Agro and the NGO Solidaridad. The and fair incomes. oil. This avoided more than 330,000 metric tons of CO emissions initiative is intended to improve the economic situation of castor 2 compared with the procurement of conventional palm oil and palm bean farmers in India and, at the same time, raise awareness of Another example of sustainable supply chains and responsible inno- kernel oil. By 2025, we aim to extend our voluntary commitment sustainable farming methods. Around 80% of the world’s castor vation is our Castaline™ product, derived from the leaves of chest- 1 to sustainable procurement to the main intermediate products beans are produced in India, mainly by smallholders. As part of nut trees. These are harvested in late summer by forest owners in based on palm oil and palm kernel oil. We were able to trace 96% Pragati, smallholder farmers receive training on topics such as culti- France. The chestnut forests are organically certified and are mainly of our global palm footprint to oil mill level as of the end of 2021 vation methods, efficient water use, health and the safe use of crop used for the cultivation of chestnuts. By upcycling the leaves as a 2 (2020: 95% ). In addition, we continued to drive forward the RSPO protection products based on a specially developed sustain- by-product of chestnut extraction, we generate additional income supply chain certification of our sites for cosmetic ingredients. At the ability code, SuCCESS. Since the project was initiated, more than opportunities for forest owners and provide our customers with a end of 2021, 26 production sites worldwide were certified by the 5,800 smallholders and over 13,300 hectares of land have been product of completely natural origin. We are pursuing other similar RSPO (2020: 25). In line with raised awareness for sustainability, certified for sustainable castor cultivation. Yields from this land were we continue to see growing demand for certified palm-based prod- 35% higher than average amounts for the region published by the ucts from our customers. We are expanding our range of certified local government for the 2020/2021 harvest cycle. In addition to 1 Fractions and primary oleochemical derivatives as well as vegetable oil esters 2 The figure for 2020 was adjusted from 96% to 95% due to a data correction.