We drive sustainable solutions - BASF · We drive sustainable solutions Dr. Stefanie Wettberg, Senior Vice President Investor Relations. ... may not prove to be accurate. Such risk

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We drive sustainable solutionsDr. Stefanie Wettberg, Senior Vice PresidentInvestor Relations

Dr. Tim Balensiefer,IR Manager Sustainability

HSBC ESG DayFrankfurt, June 14, 2018

Cautionary note regarding forward-looking statements

This presentation contains forward-looking statements. These statements are based on current estimatesand projections of the Board of Executive Directors and currently available information. Forward-lookingstatements are not guarantees of the future developments and results outlined therein. These are dependenton a number of factors; they involve various risks and uncertainties; and they are based on assumptions thatmay not prove to be accurate. Such risk factors include those discussed in the Opportunities and RisksReport from page 111 to 118 of the BASF Report 2017. BASF does not assume any obligation to update theforward-looking statements contained in this presentation above and beyond the legal requirements.

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Sustainability along the value chainOur commitments

We drivesustainableproducts andsolutions

We produce safelyfor people andthe environment

We produce efficiently

We sourceresponsibly

Suppliers BASF Customers

We value people and treat them with respect

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Sustainable developmentUN Sustainable Development Goals and material aspects provide strategic frame

LowMediumHighMatch

Energyand

climate

Food Water Resources and eco-systems

Responsible production

Products and

solutions

Partnering Employment and employ-

ability

1 No poverty2 No hunger3 Good health4 Quality education5 Gender equality6 Clean water and sanitation7 Affordable and clean energy8 Decent work and economic growth9 Industry, innovation and infrastructure10 Reduced inequalities11 Sustainable cities and communities12 Responsible consumption and production13 Climate action14 Life below water

15 Life on land

16 Peace and justice17 Partnerships for the goals

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BASF particularly contributes to:

BASF materialaspects




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We drivesustainableproducts and solutions




We source responsiblyEnhancing sustainability along the supply chain

Joint initiative “Together for Sustainability” of leading chemical companies since 2011

Standardized and shared supplier evaluations and audits

Implementation of follow-up processes, development of action plans

Sustainability assessments for 513 suppliers received from an external service provider in 2017

120 raw material supplier sites audited on EHS in 2017

2020 goal: evaluation of 70% of the relevant suppliers with regard to their sustainability performance (status 2017: 56%)

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Verbund – unique competitive advantageActively managed in line with market requirements

.

Antwerp

Freeport

Geismar

Kuantan

Nanjing Ludwigshafen

Combinedheat and power plantsand integrated energy

Verbund prevented 6.5 million tons

of CO2 emissions in 2017

Synergiesin logistics and infrastructure,

minimization of waste

>€1 billionof cost savings

per year

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Waste managementBASF Verbund helps to prevent and reduce waste

Waste is managed based on the following hierarchy:

1. Avoid

2. Reuse

3. Recycle

4. Energy recovery (e.g., waste-to-energy incineration)

5. Other incineration

6. Disposal such as surface or underground landfills

Global waste volume 2017(million tons)

Recycled orthermally recovered0.8

Incinerated ordisposed of

1.32.1

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Resource efficiencyResponsible use of carbon sources

We are committed to resource efficiency and climate protection

BASF uses carbon raw materials responsibly: 82% of carbon converted to products, 17% consumed for process energy and converted to CO2, 1% waste1

Comparisons with European emissions trading benchmarks show that our chemical plants operate at above-average energy efficiency

23 million tons of CO2 emissions by BASF worldwide in 2017 compared to 10–30 million tons p.a. for one coal-fired power plant

Customers’ use of BASF’s climate protection products sold in 2017 avoided 570 million tons of CO2 equivalents (thereof 6% attributable to BASF)2

In 2017, BASF achieved CDP leadership status once again

1 BASF carbon mass balance calculation (2017, non-audited) 2 Based on the chemical industry standard of the International Council of Chemical Associations (ICCA)

and the World Business Council for Sustainable Development (WBCSD)

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Energy efficiencyGreenhouse gas emissions halved and volumes of sales products doubled since 1990

0

50

100

150

200

250

1990 2017

Volumes of sales products

Absolute GHG emissions

Specific GHG emissions

Greenhouse gas emissions(indexed1; base 1990)

1 BASF Group excluding Oil & Gas; International Financial Reporting Standards 10 and 11 since 2013; figures for 2012 restated; no restatement for 2011 and earlier

2 Representing 90% of BASFʼs primary energy demand

Specific greenhouse gas emissions per ton of sales product declined by −75% (status 2017) since 19901

2020 goal: Reduction of specific greenhouse gas emissions per ton of sales product by −40% versus 2002 (status 2017: −35.5%)1

2020 goal: Introduction of energy management system ISO 50001 at all relevant sites2 (status 2017: 54.3% of BASF’s primary energy demand)

+104%

−48%

−75%

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Global water stewardshipStrong commitment to local water management

1 Representing 93% of BASF’s entire water abstraction

Further increase of water stress areas expected worldwide (climate change, population growth and economic development)

Growing competition among water users expected(e.g., households, agriculture, industry)

In 2017, BASF was again awarded with the top “A” leadership grade for sustainable water management from CDP

2025 goal: Introduction of sustainable water management at Verbund sites and sites in water stress areas2 (status 2017: 45.2%)

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Process safety and occupational safetyGlobal safety standards at all sites to minimize risk and impact of incidents

Process safety incidents (PSI)1

PSI rate: 2.0 in 2017

2025 goal: reduction of the worldwide PSI rate to ≤0.5

Lost-time injuries (LTI)1

LTI rate: 1.4 in 2017

Average LTI rate in the German chemical industry: 9.4 (in 2015)

2025 goal: reduction of the worldwide LTI rate to ≤0.5

1 BASF Group, per one million working hours; global alignment of reporting systems 2014

0

0.5

1

1.5

2

2.5

2010 2011 2012 2013 2014 2015 2016 2017

Process safety incidents (PSI) Lost-time injuries (LTI)

Gobal safety standards(rate1)

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We create chemistry for a sustainable futureSustainability goals – overview and status 2017

Procurement 2020 goal 2017

Sustainability performanceassessment of relevant suppliers 70% 56%

Employees 2021 goal 2017

Women in leadership positions 22-24% 20.5%

Long-term goal 2017

Non-German senior executives 38.9%

Senior executives with international experience >80% 84.6%

Production 2025 goal 2017

Process safety incidents1 ≤0.5 2.0

Lost-time injury rate1 ≤0.5 1.4

Annual goal 2017

Health Performance Index >0.9 0.97

Product stewardship 2020 goal 2017

Risk assessment of products2 >99% 76.2%

Energy & climate protection 2020 goal 2017

Greenhouse gas emissions3 −40% −35.5%

Introduction of ISO 50001 energy management system4 90% 54.3%

Water 2025 goal 2017

Sustainable water management at Verbund sites and sites in water stress areas 100% 45.2%

Products & solutions 2020 goal 2017

Proportion of sales generated by “Accelerators”5 in product portfolio 28% 27.3%

1 Per one million working hours2 For products >1 metric ton per year 3 Per metric ton of sales products; excl. Oil & Gas, baseline 20024 At all relevant sites (primary energy demand, local energy prices)5 Products with substantial contribution to sustainability

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Sustainable Solution Steering®Methodology to steer our portfolio

Substantial sustainability contribution in the value chain

Meets basic sustainability standards on the market

Specific sustainability issues which are being actively addressed

Significant sustainability concern,action plan in development

27.3%

68.3%

4.3% 0.1%

>60,000 product applications analyzed (€58.4 billion in sales, 97.5% of BASF’s portfolio)

27.3% Accelerators− strong growth in their markets − deliver margins above the average− represent majority of BASF’s R&D pipeline

68.3% Performers

<1% Challenged products

2020 goal: increase the share of Accelerators from 23% (2014) to 28%

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Innovations for a sustainable futureExamples with significant contributions to sustainability

FWC™ Four-Way Conversion catalyst removes particulates

Acronal® MB from biomass to dispersions

Trilon M® alternative to phosphate for dishwashing detergents

SLENTITE® high-performance insulation material

ecovio® biodegradable polymer solution

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Vault® biological seed treatmentfor enhanced nitrogen fixation




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We drive sustainable solutionsSystematic sustainability performance assessments since 1996

SEEBALANCE®

Advanced IT solutions

for customersAgBalance™Sustainable

Solution Steering®Eco-Efficiency

AnalysisInvestmentevaluation Value-to-SocietyCarbon Footprint

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Products in the value chain

Portfolio and digital solutions

Corporate1996

2004

20072011

2012

2013

2015

2017

Value-to-Society: changing the perspectiveAssessing and valuing how business changes the well-being of people

Traditional reporting

Quantified output (€, CO2e, LTI…)

Impact valuation / Value-to-Society

Valued financial and pre-financial impacts (€)

Output – tCO2eInput – raw materials Impact – costs of floods etc.Outcome – climate change

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Impact valuation gains momentumIt is not a question of if, but rather when impact valuation is implemented

StandardizationDisclosureBusiness examples

Natural Capital Protocol Social Capital Protocol Natural and Social Capital Sector

Guidance ISO 14007 and 14008

CDP (formerly Carbon Disclosure Project)

Reporting schemes started the discussion

WBCSD Redefining Value Impact Valuation Roundtable Increasing number of companies

is piloting in all sectors First companies go public

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Value-to-Society: a comprehensive assessmentEconomic, social and environmental impacts in monetary terms based on a PwC model

Net incomeWages

Health & safety

Human capitalAir emissions

Land use

Water consumption

Water emissions

GHG

Waste

Amortization

DepreciationTaxes

Impact categories Consistent application at corporate, project,

and product level

Value chain Corporate level: “production cycle” – supply chain, own operations, customer industries Project and product level: use phase and end-of life integrated on a case-by-case basis

Economic Social

Contributions to gross domestic product (value added)

Contributions to society beyond gross domestic product

Environmental

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BASF’s Value-to-Society 2017Net positive contribution to sustainable growth in each step of the assessed value chain

Net income

Taxes

Wages & benefits

Human capital

Health & safety

Air emissions

GHG

Land use

Waste

Water consumption

Water emissions

Amortization

Value contribution from BASF procurement Value contribution from BASF operations Value contribution from BASF sales

Full external supply chain1 Own operations Customer industries2

1 Indirect suppliers, direct suppliers 2 Customers in industries supplied by BASF

billion €

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-10 0 10 20 30 -10 0 10 20 30 -10 0 10 20 30

Benefits and limitations of Value-to-SocietyComplementary information to demonstrate relevance and interdependencies

Required data accuracy and granularity

Required maturity level of quantification and valuation methods

Positioning Progress monitoring Decision making

Communication

Reporting

Advocacy

Over time

Industry benchmark

Relevance of impacts

Risk exposures

Business opportunities

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We create chemistry for a sustainable futureSustainability is a core part of our strategy and fully integrated into our management systems

Sustainability creates growth opportunities.

We assess our contribution to a sustainable future along the entire value chain.

We improve our understanding of the inter-dependency of financial and non-financial impacts.

Our “Value-to-Society” approach is aligned with existing standards, and is pragmatic and auditable.

We engage in relevant networks to share our learnings.

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BASF SRI Story, November 2017 26

SLENTITE®High-performance insulation panel for construction

1990

Slen

tite®

1950 1990 20181930

SLEN

TITE

®

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SLENTITE®

PU aerogel as solid panel with best in class thermal insulation

Flexible scope of design thanks to very slim panel (25–50% less than industry standard)

Construction solution for reduced energy consumption

Perspective Strong growth potential in a market of €1.3 billion

First boards from pilot plant are being commercialized

Start of large scale production in 2021

Trilon® MChelating agent for more sustainable detergents and cleaners

Trilon® M – alternative to phosphate for automatic dish washing Fast growing global market demand driven by

regulatory changes and consumer demand

2015: Start-up of a new Trilon® M world-scale plant in Alabama, USA

2016: Expansion and flexibilization of production facilities in Ludwigshafen

Compared with alternative chelating agents Trilon® M is readily biodegradable and shows high

performance

meets eco-label requirements

has better eco-toxicology profile

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Acronal® MBFrom biomass to dispersion for premium paints

Biomass balance approach

First BASF binder for interior paints based on the biomass balance approach launched in 2016

Replacing fossil raw materials with renewable feedstock at the beginning of the production process

Less greenhouse gas emissions

Premium paints

Enabling interior paints that combine environmental responsibility with uncompromising premium quality

91% of interviewed professional painters in Germany see an increase in sustainability aspects in tenders

Renewable

Feedstock ProductsConventionalAllocatedFossil

BASF Verbund production steps

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Epotal® and Ecovio® paper coatingsFrom a “Challenged” product to a business opportunity

1. Identification of the “Challenged” product: Polyfluorinated substances as coatings for paper packaging (environmental concern)

2. Development of action plan: Start of a research project

3. Launch of “Accelerator” product substitution: Recyclable Epotal® and biodegradable ecovio®

paper coating

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Vault® biological seed treatmentsFixing nitrogen for legumous crops

Legumous crops need nitrogen through fixation for highest yield potential Soybeans need approximately 4.5 lbs of nitrogen

per bushel, 50‒60% of which from nitrogen fixation

Nitrogen that is not “fixed” is lost to the air, soil or water

BASF’s Vault® seed-applied inoculants: Bradyrhizobia japonicum is fermented to develop

robust rhizobial inoculants

Vault® inoculants improve root nodulation and architecture for more nitrogen-fixation potential

Results include improved crop yield potential, resource efficiency, and long-term nitrogen use options for growers’ sustainability

Four-Way Conversion catalyst (FWC™)

FWC™Combines a 3-way conversion catalyst with integrated filter on a ceramic substrate

Reduces gaseous emissionsPrecious metal-based catalytic coating removes exhaust gases from engine emissions2

Removes particulatesFilters and combusts particulates

Complies with emissions limitsHelps OEM meet EU 6c regulatory standards

FWC™ introduced in 2013 Sustains BASF’s leading technology position

1 2009 – 2013 2 Hydrocarbons, carbon monoxide, nitrogen oxides

0

50

100

150

BASF Competitors

Leading position: Global mobile emissions catalysts patents1

FWC™ reduces emission of gaseous pollutants and particulates

HC

CO

NOx

N2

H2O

CO2

Particulates

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BASF SRI Story, November 2017 33

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We drive sustainable solutions - BASF · We drive sustainable solutions Dr. Stefanie Wettberg, Senior Vice President Investor Relations. ... may not prove to be accurate. Such risk