Economy

The products of BASF, as well as its production system characterized by the Verbund and responsible procurement, are key to linking environmental and social responsibility with economic success.

The Verbund is one of BASF’s key strengths. The company implemented Verbund structures at its Oppau site near Ludwigshafen, where ammonia synthesis commenced operations in 1913. Here, the pipework that is now so typical characterized the outer appearance of the site from the beginning; the facility today belongs to the northern part of the Ludwigshafen site. At its main site, BASF systematically expanded the Verbund concept in the 1960s, and is still optimizing it today. On top of this, BASF also exported its successful concept for the first time during this period – to Antwerp. Today, BASF operates six Verbund sites worldwide – in Ludwigshafen, Antwerp (Belgium), Nanjing (China), Kuantan (Malaysia), Freeport (Texas) and Geismar (Louisiana).

In terms of sustainability, the advantage of this is that the Verbund creates efficient value chains. Furthermore, the secondary products of a plant can be used as feedstock elsewhere, allowing chemical processes to be run in a resource-efficient way with a low energy input and a high product yield.

Sustainability starts with procurement. For BASF, responsible actions are important throughout the entire supply chain. Therefore, the company also increasingly included the assessment of suppliers in its sustainability management. This started with the worldwide environmental and safety assessments of suppliers that BASF conducted from 1998. In 2000, BASF included social aspects – i.e. the adherence to minimum social standards in the supply chain – in its catalog of requirements and enshrined them in its international terms and conditions for purchasing. In addition to this, BASF has committed its suppliers to a code of conduct since 2007.

With the “We create chemistry” strategy of 2011, BASF increasingly focused on sustainability along the entire value chain and, in doing so, also brought purchasing to the fore. In this connection, the company fundamentally revised its concept of sustainability in purchasing, added relevant aspects (e.g. anti-discrimination and anti-corruption requirements) and summarized them as environmental, social and corporate governance (ESG) standards using a holistic approach. Since then, these standards have acted as a guideline for the selection and assessment of suppliers and are reflected in the code of conduct for suppliers, which was last revised in 2018. 

In order to verify compliance with its standards, BASF conducts assessments and audits of its suppliers. Since 2011 these have been performed as part of the Together for Sustainability (TfS) initiative co-founded by BASF. In 2018 alone, 100 locations of BASF raw materials suppliers were audited with respect to sustainability standards. Some 546 suppliers were assessed by an external service provider. By doing so, BASF realizes sustainability-oriented management in its supply chain.