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Identification and Management of Sustainability Topics

Materiality analysis

A materiality analysis helps BASF to recognize and assess key sustainability topics by examining the expectations and needs of external stakeholders - such as customers, investors, suppliers, politics and NGOs - and internal stakeholders. We use the results of our materiality analysis to constantly enhance our sustainability management by raising awareness for stakeholders’ needs and changes in their perceived importance of sustainability topics. The materiality matrix also provides a basis for guiding corporate processes to identify and manage potential opportunities and risks.

Materiality matrix 2019

Comprises climate change, emissions of greenhouse gases and energy consumption.
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The responsibility of an organization to ensure customer satisfaction and consumer rights.
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Mechanisms, procedures, and rules concerning the internal control, supervision, reporting, and decision making system of a company.
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Health, welfare and safety of people at work, and the environmental, social, health, and safety impacts related to a product.
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Internationally shared fundamental rights ensuring basic conditions for individuals to live in dignity, as well as labor rights.
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The stability of a company’s finances, long-term value, reputation, human resources and production processes.
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Supply chain activities and operations, as well as flows of resources and information along the value chain.
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Material management and resource usage, efficiency, and waste management & recycling.
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Interaction with people or groups who may affect or be affected by the entity's activities and decisions.
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The use of water, including availability, distribution and quality.
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Release of substances into air and soil as a result of human activities.
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Transformation of business activities, processes, and models through the use of digital technology and the protection, integrity and availability of data.
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Technological development of new products, services, and business models.
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Financing and investments integrating non-financial topics and aiming to generate both financial and sustainable value.
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Variety of life on Earth and foundation for ecosystem services that are essential for nature and human well-being.
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Initiatives, policies, procedures, rules, and cultural elements concerning life in the workplace as well as the heterogeneity of an entity's workforce and equal opportunity and remuneration for employees of different backgrounds.
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The recording, reporting and analysis of business transactions beyond financial issues e.g. non-financial reporting / accounting.
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Responsible business conduct based on values, principles and practices.
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We identified around 100 potentially relevant topics and selected and clustered them in the course of the materiality assessment process into topics of particular importance for BASF. To assess the relevance of these topics for BASF from an external perspective, we applied big data analytics tools that harvest information from millions of data points of various sources representing the different stakeholder voices. In addition, we conducted interviews with individual key stakeholders with a holistic ESG understanding and knowledge of BASF. To assess the BASF perspective, we sent questionnaires to internal experts from various units, regions, and functions and combined these results with findings from an internal strategic impact evaluation. The results of the external and internal assessment are combined in the materiality matrix. Topics are categorized in “societal challenges” and “corporate measures to tackle societal challenges”. The first have an impact on BASF and are also impacted by BASF, whereas the latter give guidance on how to deal with these societal challenges. 

BASF conducts a comprehensive materiality assessment about all three years. To reflect the dynamic and changing ESG landscape in between, we are using big data analytics tools to monitor the changing relevance of the topics for our stakeholders. Therefore, we adjust existing topics and subtopics and search for upcoming ones. In 2020, due to the current Covid-19 pandemic, "Global Threats" was included in our topic list. This new topic covers physical disasters & failures as well as political & societal risks that span the globe. Topics that have risen most in importance for our stakeholders in the past months are: Digitalization & Data Security, Health & Safety/Product Stewardship, Innovation and Organizational Resilience.