A recognized leader in ESG

The non-profit organization CDP has again ranked BASF as one of the world’s leading companies for its measures and transparent reporting on climate protection, water and forest management. BASF received an A- rating in all three categories.

BASF once again achieved an “A-” rating on CDP’s climate list in 2023. Among other things, the assessment considers the transparency of emissions reporting, the handling of risks and opportunities arising from climate change, the climate protection strategy and CO₂ reduction measures. BASF has been participating in CDP’s reporting on climate protection-relevant data since 2004.

After receiving an ‘A’ rating last year, BASF was awarded an ‘A-’ this year for water security. The reason for the downgrade is a new CDP guideline that stipulates that companies that manufacture products containing hazardous substances cannot receive an ‘A’ in the water security category. CDP’s assessment takes into account how transparently companies report on their water management activities and how they reduce risks such as water scarcity. CDP also evaluates the extent to which product developments can contribute to sustainable water management for customers of the companies assessed. BASF is introducing sustainable water management at all relevant production sites by 2030. This includes the major Verbund sites and sites in water stress areas.

In 2023, BASF was again evaluated by CDP for its efforts in forest protection and was ranked A-, as in the previous years. The CDP assessment is conducted based on detailed insights into the palm value chain and activities that impact ecosystems and natural habitats. Palm kernel oil and its primary derivatives are among the company’s most important renewable raw materials. BASF has once again fulfilled its voluntary commitment to source only RSPO-certified palm oil and palm kernel oil. The company is aware of the importance of protecting forests for the well-being of the environment and society. BASF’s position paper on forest protection sets out the company’s commitment to preserving biodiversity in areas of High Conservation Value such as High Carbon Stock forest areas and peatlands in the procurement of renewable raw materials. BASF reports transparently on these activities in its current Responsible Sourcing Report.

ISS ESG has rated BASF again in the category Prime. Prime Status is awarded to leaders in the respective industry that succeeded in the rating process according to industry-specific criteria in terms of social and environmental compatibility. Among other things, BASF received special recognition for having addressed material sustainability topics such as business ethics, environmental management system and energy efficiency with a comprehensive set of measures and processes.

In the 2023 MSCI ESG ratings, BASF scored an “A.” The analysts highlighted that BASF is present in clean tech markets and has a robust carbon mitigation strategy. In addition, governance risks were perceived as relatively low.

BASF belongs to the best category for “diversified chemicals” with a medium ESG risk and was recognized for its strong risk management, e.g., in the areas of CO₂, emissions, wastewater and waste as well as occupational health and safety.

In the rating by Vigeo Eiris, the ESG rating unit of Moody’s, BASF received a total score of 60. Vigeo Eiris awarded high scores to BASF, amongst others, in the areas product safety, social and environmental standards in the supply chain and environmental strategy. The raters saw potential for improvement, for example, in the areas of atmospheric emissions and the impact of its products and services.

Ensuring adequate agricultural production to feed a growing population is an integral part of BASF’s vision for sustainable agriculture and environmental stewardship. Bees and other pollinators play a crucial role in this process, and it is essential that crop protection products support this role rather than being at odds with it. According to the Food and Agriculture Organization of the United Nations (FAO), over 75 percent of the world’s food crops depend on pollination from animal pollinators including bees, making reports of declines of bees and other pollinators and insects a major concern. Drivers of pollinator decline are complex, and misuse of pesticides is only one of the contributing factors.

While we are convinced of the safety of the products we sell when used according to label instructions, misuse cannot be completely excluded. We support immediate action to implement evidence-based measures to protect and enhance pollinators alongside food yield, which is why we have specific product stewardship guidelines to prevent harm to bees and other pollinators.

We are also working towards better understanding and resolving the barriers to farmers implementing pollinator-friendly practices on farm within a pilot project in Brazil with an aim to create a world-first nature-based market.

Our crop protection products undergo many years of extensive and stringent testing to ensure that there are no adverse impacts to the environment, including bees. Tests must meet regulatory standards, and authorities carefully evaluate the results and the impact on the environment before they approve a product to be marketed.

Risk mitigation measures are applied for the safe use of crop protection products and product registrations may impose their mandatory use. Depending on the circumstances of the individual case, these measures can include for example:

• buffer zones between treated and natural areas
• use of specific tools to minimize spray drift to adjacent areas
• use of special machinery for treated seeds to minimize product abrasion and dust drift
• restricted application times (e.g., apply only when bees are not actively foraging)

Going beyond regulatory requirements, we have also defined and implemented product stewardship measures, which contribute to the protection of bees (e.g., training and correct application technology). An example of such a stewardship activity is this e-learning tool: Pollinator Protection

Neonicotinoids

We understand concerns about the well-being of pollinator populations in connection with modern agriculture practices. Both honeybees and plant protection products play a crucial role in the production of agricultural goods. It is in our own interest to ensure that the responsible and correct use of our products – within the broader framework of sustainable agriculture – is compatible with beekeeping and wild bee populations.

However, more than 10,000 species of plant-eating insects and 3,000 species of roundworms can attack farmers’ crops around the world leaving food, fuel and fiber crops damaged and unusable.  Farmers need tools to fight insect pests, or they will lose substantial amounts of their harvests.

Neonicotinoids which are used as a seed treatment, are important to help growers improve productivity and realize crop health outcomes. They are a vital part of Integrated Pest Management (IPM) programs and alternative products with an equivalent level of efficacy are limited. Seed treatments present an effective measure to help reduce the contact of an insecticide with pollinators and thus reduce risk of exposure. Planting seeds pre-treated with neonicotinoids has reduced the amount of foliar applications of insecticides required during establishment of healthy crops.

We are convinced that neonicotinoids can be used safely in seed treatment. Our crop protection products undergo many years of extensive and stringent testing to ensure that there are minimal adverse effects to the environment, including pollinators, if used according to label directions. We will continue to engage in extensive training and other stewardship activities to ensure that seed treatment products are handled and applied safely.

At the beginning of 2023, an internal audit of our joint venture operations in Korla, China, was carried out to verify compliance with the BASF Code of Conduct and the requirements embedded in it to respect human rights as well as key labor and social standards.
This investigation, as well as past audits, did not reveal any evidence of human rights violations in the two joint ventures. We have obtained written confirmation from key suppliers, including our joint venture partners, that they accept our Supplier Code of Conduct. Nevertheless, reports from spring 2024 on the joint venture partner in Korla contain serious allegations that indicate activities that are not compatible with BASF’s values. Consequently, we will accelerate the process already started at the end of 2023 to divest our shares in the two joint ventures in Korla for strategic reasons, subject to negotiations and the required approvals from the relevant authorities.

Detailed statement and news release available at: https://www.basf.com/global/en/who-we-are/sustainability/we-produce-safely-and-efficiently/audits/xinjiang

• Since August 2019, BASF Corporation, a subsidiary of BASF SE, has been named as one of many defendants in complaints involving PFAS substances filed in various states.
• In the complaints filed to date against BASF Corporation, the company has been generally named as a successor in interest to Ciba Specialty Chemicals Inc., which was acquired by BASF in 2009.
• The plaintiffs have identified numerous manufacturers of PFOS, PFOA, aqueous film-forming foam (AFFF) and related products, as defendants. Neither BASF nor its predecessor Ciba made AFFF, PFOS or PFOA.
• On May 20, 2024, BASF Corporation announced that it had agreed to a settlement with a nationwide class of public water systems that detected PFAS in their drinking water sources, which they allege to be associated with the use of Aqueous Film Forming Foam (“AFFF”) products. Under the terms of the agreement, BASF has agreed to contribute $316.5 million ($312.5 million to resolve the PFAS claims, plus $4 million toward settlement administration costs). This settlement was entered in connection with the previously disclosed AFFF multi-district litigation (“MDL”) being overseen by the United States District Court for the District of South Carolina (the “MDL Court”). 
• BASF paid $4 million on July 18, 2024, and will pay $312.5 million on March 1, 2025. BASF has a significant amount of insurance through a number of insurers and is pursuing recovery of its settlement payment under those policies.
• On November 22, 2024, the MDL Court granted Class Counsel’s motion for final approval of the BASF settlement. Parties who opted-out of this settlement have until December 13, 2024, to withdraw their opt-outs.
• The settlement does not constitute an admission of liability or wrongdoing by BASF or Ciba. BASF intends to continue to defend itself in all remaining AFFF matters in the MDL and all other PFAS-related matters.