1

Global Product Strategy (GPS)Implementation at BASF

Striving beyond Compliance

Dr. Jens-Olaf Eichler (CZ/ZT)Product Stewardship Manager BASF Intermediates

2

Challenges and how to address them

� Globalized product flows

� Our world is drawing closer together,on political and environmental issues.

� Problems related to product safety areno longer restricted to country of origin.

� As a response the chemical industry has expanded its voluntaryproduct stewardship programs

� A balanced combination of regulations and voluntary initiativesis the best way to achieve safe management of chemicals.

3

BASF PSStrategy

BASF PSStrategy

Product Stewardship – Global Drivers

From Compliance to Product StewardshipPressure & Expectations are rising

Awareness Requests Consequences

NGOsIneffective exposure control, shouldreduce hazards through substitution

RegulatorsCurrent systems might be insufficient to adequately protect the consumer

Public / ConsumerLarge number of chemicals in

commerce, inadequate knowledge onhazards and exposure

Customers / InvestorsRequest safe products & superiors services,

transparent access to information onchemicals to make informed decisions

4

GPS Guidance on Risk AssessmentWhy do we need ProductStewardship?

� Chemical products contribute to enhance and improve life allover the world (solution provider / enabling technology)

� Potential of adverse effects to people or the environment, ifnot used and controlled properly

5

GPS Guidance on Risk AssessmentChallenges of Product Stewardship

� In science

� uncertainties

� In governmental policy

� non-harmonized global regulations

� In the market place

� down stream requests, steadily changing framework

� In public opinion

� individual cases of poor Product Stewardship)

� Pre-market costs rise

6

� Create and maintain a partnership relation to your customers,authorities and the public

� Increase productivity

� Improved cost-efficiency ofinternal management

� Stay ahead of regulations

� Reduce liability issues

� Secure a competitive advantagefor your company

Product Stewardship is „license to operate“

Economic Evaluation –Product Stewardship is Creating Value

7

� Improve global product stewardship performance and, in turn,improve public confidence in chemicals.

� Globalization of markets requires improved harmonization ofchemical management systems (even level playing field )

� Differences in national regulatory requirements lead to increase incosts / time and to distortions in international competition

� Global harmonization of chemicals management systems willhelp to reduce trade barriers and trade restrictions.

� Influence upcoming regulations positively, by achieving abalance between regulation and voluntary industry initiatives

Global Product Stewardship –Benefits Beyond the Company Level

8

Product Safety Directive

REACH

Globally Harmonized Systems (GHS)

Country-specific legislation (e.g TSCA)

Product Stewardship Directive

Responsible Care

Global Product Strategy (GPS)

Goal 2020 (Risk Assessment)

Goal 2008 (Data Gathering)

Regulatory Compliance“License to Operate”

BASF Voluntary Action“Striving Beyond Compliance”

Product Stewardship

Reducing Risk Creating Value

BASF Priority Issue –Product Stewardship

9

GPS Guidance on Risk AssessmentExpectations for ProductStewardship

� Know possible risks of using your products

� Characterize the risks

� Design appropriate Risk Management Measures (RMMs)

� Communicate risks and RMMs in the value chain

� Communicate to the public, taking into account public concerns

� Monitor and re-evaluate your activities

� Improve performance

„Plan – Do – Check – Act“ Circle

10

GPS Guidance on Risk AssessmentKey Principles for ProductStewardship

� Management Process Approach (vs. project approach)

� View PS as a process (similar) to quality management

� Integration into existing business processes, no add-on

� Allocate ownership throughout the business function s

� Management, R&D, Procurement, Sales / Marketing, etc.

� Develop organization together with other business functions

� Overall improvements of product portfolio in the fo cus

� (More) sustainable products are a strategic market focus

� Innovation, growth opportunities

11

GPS Guidance on Risk AssessmentPS Management System

Gather Product InformationIdentification of products and their applications

Conduct Risk CharacterizationEvaluation of Information about Hazard, Exposure and Public Concern

Risk ManagementEvaluation of current RMM and their communication in the Value Chain

Management Leadership and SupportCommunication and resource allocation to achieve Product Stewardship objectives,

making it a line management responsibility

Public CommunicationDevelopment and Publication of Product Stewardship Information Summary

Monitoring, Re-Evaluation, Improvement

12

GET Goal 2020/GPS –Organization and Responsibilities

Global Expert Team GPS / G 2020 (GET GPS / G 2020)

Coordination and steering of implementation

OD-Coordinators = Coordinators for GPS / G 2020

(C GPS / 2020)

Point of contact to each operating unit of BASF Group

Competence Center Global Procurement

and Logistics

Competence Center Environment, Safety

& Health

Product Stewardship Expert Group (PSS EG)

Generalcoordination

Global Expert Team Goal 2020/GPS (GET Goal 2020/GPS)

Coordination and steering of implementation

OD-Coordinators Goal 2020/GPS

Point of contact to each operating unit of BASF Group

Competence Center Global Procurement

and Logistics

Competence Center Environment, Safety

& Health

CCRC Expert Group Product Stewardship (PSS EG)

General coordination

13

BASF Global Product Stewardship Goals

� BASF has complete the “Base Set of Information” for all substancesproduced or sold worldwide in quantities of more than 1 metric ton(Goal 2008 ) which was extended to products (Goal 2008 Plus )

� BASF has launched two additional global Product Stewardship goals

� Risk characterization for all substances produced or sold worldwidein quantities of more than 1 metric ton until 2018 (GPS) and

� Risk characterization for all products produced or sold worldwidein quantities of more than 1 metric ton until 2020 (Goal 2020 ).

14

How does BASF implement Goal 2020and GPS ?

� Due to the extensive overlap in scope and timing GPS and the internalBASF Product Stewardship goals 2020 will be implemented as joint,integrated project Goal 2020 / GPS (substances and products).

� For the EU portfolio REACH timelines will not be affected, the CSRdossier will serves as basis for the GPS Safety Summaries.

� Until the end of 2018 the risk assessment for substances is foreseento be finished and the GPS Safety Summaries will be published onthe BASF internet site.

� Until end of 2020 the assessment of products is expected to befinalized.

15

How GPS prioritizes non-EU Substancesfor assessment

Does the chemical have intrinsic hazard?Does the chemical have intrinsic hazard?

Yes No

Chemical has wide and dispersive

industrial, professional or end consumer use?

Chemical has wide and dispersive

industrial, professional or end consumer use?

Chemical has limited industrial or

professional use?

Chemical has limited industrial or

professional use?

Chemical has wide and dispersive industrial, professional or end

consumer use?

Chemical has wide and dispersive industrial, professional or end

consumer use?

Yes No

Tier 1Top Priority for

Assessment

Tier 1Top Priority for

Assessment

Tier 22nd Priority forAssessment

Tier 22nd Priority forAssessment

YesNo

Tier 33rd Priority forAssessment

Tier 33rd Priority forAssessment

Tier 22nd Priority forAssessment

Tier 22nd Priority forAssessment

Tier 4No immediate further actions

Tier 4No immediate further actions

Conditions of use can be strictly controlled

Conditions of use can be strictly controlled

16

Synergies & Differences of GHS / GPS

Hazard Data Exposure Data

Hazard Assessment Exposure Assessment

Risk Assessment /Safety Assessment

Risk Management

Classification

Labelling

ExistingClassification

Inventories, e.g.EU, Japan

Globally Harmonized System (GHS)

Global Product Strategy (GPS)

17

Status of the project – May 2011

� Develop Goal 2020 / GPS Implementation Concept

� Analyze BASF Portfolio to be included in Goal 2020 / GPS

� Estimate Resources required

� Develop Prioritization Tool for further risk characterization

� Define Risk Characterization Process for Goal 2020 / GPS

� EU substance portfolio covered by REACH (no changes)

� Remaining portfolio to undergo a targeted risk assessment(based on hazard / exposure prioritization)

� Publish GPS Safety Summaries (hazardous and non-hazardous)

����

����

����

����

����

����

Ongoing / Finalized

����

(����)

18

Summary 1Product stewardship at BASF

… is part of the responsible care® management system

… includes

� Product information management

� Hazard assessment/ risk characterization

� Review and improvement

� appropriate risk management

� Communication of risk characterization and Riskmanagement throughout the value chain

� Public communication

… is part of the responsible care® management system

… includes

� Product information management

� Hazard assessment/ risk characterization

� Review and improvement

� appropriate risk management

� Communication of risk characterization and Riskmanagement throughout the value chain

� Public communication

19

Summary 2Product Stewardship is added value

Means of Product Stewardship

� Evaluation of toxicological threats and regulatory boundaries for a product orproduct portfolio: Assisting product development, product testing strategy, riskassessment, product defense, communication to public, authorities etc.

Value for the Business and R&D

� Identifying up-coming threats and alternatives before competitors do(opportunities). Marketing and sales advantage by having alternatives or aresponse available when needed.

What does Product Stewardship do?

� Provides strategies in parallel to the product portfolio strategies in order toidentify potential opportunities and threats in a highly regulated environment

20

� Toxic effects of a product and risk at product use is independent fromcountry borders

� Globalization of markets requires improved harmonization of chemicalmanagement systems (even level playing field; reduce trade barriers)

� GPS improves global product stewardship performance and, in turn,improve public confidence in chemicals and may influence upcomingregulations positively.

� GPS is added value to a companies business

� BASF has recognized this and has launched several global Product Stewardship projects including GPS!

Summary 3Global Product Safety (GPS)

21

22

23