Our Strategy

Chemistry is our passion. We set a new direction for ourselves with the introduction of the “Winning Ways” strategy in September 2024: Our ambition is to be the preferred chemical company to enable our customers’ green transformation. We aim to grow profitably and create value for our shareholders with our broad portfolio of chemicals businesses as well as our product and process innovations.Simultaneously, we are driving the shift toward a performance culture – a decisive factor to successfully implement our “Winning Ways” strategy. We are systematically integrating sustainability topics into our strategy and business as well as into our assessment, steering and compensation systems. This principle remains embedded in our corporate purpose: We create chemistry for a sustainable future.

Humankind is facing enormous challenges in its efforts to preserve a world worth living in for future generations. The climate is changing, natural resources are becoming scarcer, pressure on ecosystems is increasing and our growing world population needs to be fed. More and more urgently than ever, solutions are needed for a more sustainable future. Chemistry is of key importance as an essential part of our everyday lives and the foundation of nearly all industries. It can pave the way to greater sustainability and accelerate the transformation needed to achieve this.

Competitive conditions in the chemical industry are changing. Our customers are also adapting their business models – to increasingly reflect a world with lower CO₂ emissions and a more circular economy. The speed of this green transformation varies across regions and customer industries. We expect demand for chemical products with sustainability attributes to surpass supply in the medium term, which in turn will lead to greater willingness to pay for low-emission solutions. Because our customers are at the center of everything we do, our ambition goes beyond the green transformation of our own production. We want to be the preferred chemical company to enable our customers’ green transformation.

This is also where we see the main driver of our profitable growth: Our goal is for customers to be successful in their respective markets thanks to our innovations. Our products, solutions and technologies help protect the environment and climate by contributing to the more efficient use of raw materials, reducing waste, and enabling healthy and affordable food as well as climate-smart mobility. In providing our customers with the best solutions and processes, we also want to grow profitably and create shareholder value. Simultaneously, we are driving the change of our corporate culture toward a performance culture. We have defined four levers to ensure the successful implementation of our “Winning Ways” strategy: Focus, Accelerate, Transform and Win.

As part of its new strategy, BASF has updated its shareholder distribution policy and set medium-term financial targets for the first time (for more information on the global targets). We remain committed to our climate protection targets and other global sustainability-related targets, including the alignment with our TripleS (Sustainable Solution Steering) portfolio assessment methodology. We have defined a new circular economy target and we have adjusted our supplier target and are now focusing on improving the sustainability performance of those suppliers whose audit results were inadequate.

In the future, BASF will place a greater focus on cash generation. We aim to demonstrate a high degree of capital discipline through considerably lower capital expenditures and the consistent implementation of our cost savings programs (for more on capital and resource allocation).

As an international chemical company, we will continue to operate in markets and countries with different requirements and conditions. We are guided by our values and our global standards in order to act responsibly and secure our license to operate. The main guidelines are summarized primarily in our BASF policies on compliance, human rights, labor and social standards and in the Supplier Code of Conduct. With appropriate management and monitoring systems, we want to ensure that we act in line with the applicable laws and uphold our responsibility to the environment and society.

Customers, shareholders, partners and employees can rely not only on the high quality of our products, but also on the way in which we conduct business to fulfill our corporate purpose: We create chemistry for a sustainable future.

With our CORE values, we combine economic success with the creation of value for the environment and society and stand for respectful interaction with each other and with our customers and partners:

C – creative: We make great products and solutions for our customers. This is why we embrace bold ideas and give them space to grow. We act with optimism and inspire one another.

O – open: We value diversity, in people, opinions and experience. This is why we foster feedback based on honesty, respect and mutual trust. We learn from setbacks.

R – responsible: We value the health and safety of people above all else. We make sustainability part of every decision. We are committed to strict compliance and environmental standards.

E – entrepreneurial: We focus on our customers, as individuals and as a company. We seize opportunities and think ahead. We take ownership and embrace personal accountability.

Our standards are based on, and in some cases, exceed existing laws and regulations and take internationally recognized principles into account. We respect and promote:

• The Universal Declaration of Human Rights of the United Nations (U.N.) and the two U.N. Human Rights Covenants
• The Ten Principles of the U.N. Global Compact
• The core labor standards of the International Labour Organization (ILO) and the Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy
• The OECD Guidelines for Multinational Enterprises
• The Responsible Care^® Global Charter of the International Council of Chemical Associations
• The German Corporate Governance Code 

Business and competitive environment

As a global company, BASF is present in a large number of markets and operates in the context of various local, regional and global developments. These include:

• The global economic and political environment
• Legal and political requirements
• International trade agreements
• Industry standards
• Environmental agreements (such as the EU Emissions Trading System)
• Social aspects (such as the U.N. International Bill of Human Rights)

BASF supplies products and services to around 74,000 customers¹ from various sectors in almost every country in the world. Our customer portfolio comprises mainly major global customers and medium-sized enterprises. We focus on a business-to-business model and on being a partner for a wide range of downstream industries throughout the world.

We work with over 70,000 Tier 1 suppliers² worldwide. They provide us with important raw materials, chemicals, investment goods and consumables, and perform a range of services.

Our most important global competitors include Arkema, Bayer, Celanese, Clariant, Corteva, Covestro, Dow, DSM-Firmenich, Eastman, Evonik, Huntsman, LyondellBasell, SABIC, Sinopec, SYENSQO, Syngenta, Wanhua and many hundreds of local and regional competitors. We expect competitors from Asia, North America and the Middle East in particular to gain increasing significance in the years ahead, especially as a result of advantageous raw materials and energy prices.

BASF is a top-three market leader in roughly 75% of its core businesses. Equally, our standalone businesses have good to leading positions in their respective markets.
 

¹ The number of customers refers to all external companies (sold-to parties) that had contracts with the BASF Group in the business year concerned under which sales were generated.

² BASF considers all direct suppliers of the BASF Group in the business year concerned as Tier 1 suppliers. These are suppliers that provide us with raw materials, investment goods, consumables and services. Suppliers can be natural persons, companies or legal persons under public law.