BASF

Reference: page 114-119, 128-131, 288.

BASF SE has a two-tier management system: the Board of Executive Directors (six members at year end, expanding to seven planned) manages the company and defines corporate strategy including the sustainability strategy, while the Supervisory Board (12 members, split equally between shareholder and employee representatives) supervises and appoints it. Risk management and the internal control system are the responsibility of the full Board of Executive Directors; global opportunity and risk management sits with Corporate Finance (reporting to the CFO), and sustainability-related impacts are analyzed by Corporate Sustainability. The Supervisory Board's Strategy Committee was closely involved in the 2024 strategy process, and the full Supervisory Board was regularly informed of implementation status in 2025. The Board of Executive Directors meets the diversity concept in full; one of six members is a woman (16.7%). Corporate governance and due diligence responsibilities are also anchored in the G1 Business Conduct chapter (page 288).

Reference: page 128-129.

Sustainability topics are discussed regularly and managed collectively by the Board of Executive Directors, which continuously factors sustainability evaluations into its decisions, monitors implementation of strategic plans and target achievement, and is briefed regularly by the Supervisory Board on individual topics, targets and progress. As part of the "Winning Ways" strategy communicated in September 2024, the Board identified transformation toward a more sustainable portfolio as a strategic lever. Where planned investments carry potential negative impacts, these are presented transparently in internal decision-making with possible mitigation measures, and the Board again took "appropriate and careful account of compromises" on impacts, risks and opportunities in significant transactions in 2025, discussing them with the Supervisory Board. Investment, acquisition and divestiture decisions of material significance require Supervisory Board consent.

Reference: page 133, 178.

Since the 2024 business year the short-term incentive (STI) is 25% and the long-term incentive (LTI) 41% of Board of Executive Directors total target compensation. The STI's non-financial component (25% of the STI formula) includes employee engagement, occupational and process safety, and strategic projects, of which the first two are sustainability-related, making 16.7% of the entire STI formula sustainability-related. The LTI includes reduction of Group Scope 1 and 2 CO2 emissions as one of three equally weighted (33.3%) strategic goals, anchored as the most important nonfinancial KPI in BASF's steering and compensation systems since 2020. For senior executives in operating business units, sustainability targets carry a combined 16.7% weighting within the STI. The Supervisory Board's compensation carries no variable component and is not linked to target achievement.

Reference: page 289-296.

BASF's due diligence approach is anchored in the Chief Compliance Officer, who also acts as Chief Human Rights Officer and reports to the Chairman of the Board of Executive Directors, supported by a cross-unit Human Rights Expert Working Group and external Human Rights Advisory Council. Due diligence obligations are addressed across the topical chapters: Corporate Governance (page 114), E1 Climate Change, E2 Pollution Prevention, E3 Water, E4 Biodiversity, E5 Resource Use, S1 Own Workforce, S2 Workers in the Value Chain and S3 Affected Communities. Core elements include the BASF Code of Conduct, the Policy Statement on Human Rights, the risk-based Business Partner Due Diligence process, and the Compliance Hotline as a grievance channel open to employees, suppliers and affected communities. Business partner reviews cover corruption, human rights violations and noncompliance with ESG standards, using an IT solution to screen sales intermediaries.

Reference: page 152-153.

BASF's internal control system (ICS) for sustainability reporting reflects the COSO Internal Control - Integrated Framework and covers the Nonfinancial Statement under section 315b HGB, with five components: control environment, risk evaluation, control activities, information and communication, and monitoring. Scope 1 and 2 emissions, as a key steering KPI, are monitored using the same method as financial reporting; other topics rely on organizational safeguards such as dual control and segregation of duties. BASF has begun compiling a central risk catalog covering risks such as incomplete double materiality assessment methodology, incorrect reporting boundaries, and untimely upstream or downstream data. A Group-wide uniform assessment of ICS appropriateness and effectiveness has been rolled out step by step since the 2025 business year, starting with Corporate Center units, alongside the Sustainability Reporting Sounding Board.

Reference: page 154-158.

BASF's "Winning Ways" strategy centers on being "the preferred chemical company to enable our customers' green transformation." The company serves around 75,000 customers, mostly business-to-business, across six segments (Chemicals, Materials, Industrial Solutions, Nutrition & Care, Surface Technologies, Agricultural Solutions), works with more than 70,000 Tier 1 suppliers, and reported sales revenue of €59,657 million in 2025 (2024: €61,444 million). None of its activities involve controversial weapons or fossil-fuel exploration. Portfolio sustainability is steered through the TripleS method, which segments products into Pioneer, Contributor, Standard, Monitored and Challenged; Sustainable-Future Solutions reached 48.5% of relevant sales revenue in 2025 (2024: 46.3%) against a >50%-by-2030 target adopted in 2023 (base year 41.4%).

Reference: page 159-162.

BASF engages continuously with customers, suppliers, investors, employees, communities and societal stakeholders, coordinated by Corporate Development, Corporate Human Resources and Corporate Investor Relations respectively. Formats include the Human Rights Advisory Council (four independent experts) and Nature Advisory Council (five members at end-2025), both of which discussed the 2025 double materiality assessment findings; the Civil Society Forum, established 2024; community advisory panels; and case-by-case ESG Councils for major investments. Outcomes cited include 357 supplier evaluations under Together for Sustainability, a global Engagement Index of 77% (2024: 79%), and €29 million in societal engagement spending. Political advocacy is based on "transparent requirements" and publicly stated positions; BASF does not financially support political parties, though the U.S. BASF Corporation Employee PAC, an independent employee-funded body, operates under U.S. law.

Reference: page 163-171.

BASF's 2025 double materiality assessment built on its 2024 assessment and confirmed E1, E2, E3, E4, E5, S1, S2, S3 and G1 as material, with S4 Consumers and End Users assessed not material because only a small share of products is sold directly to end users. Across the topical standards the assessment identified material impacts and material risks/opportunities per topic (for example eleven material climate impacts, six climate risks and two climate opportunities for E1; three material impacts and two risks for E2; four biodiversity impacts and one risk for E4). Changes from 2024 include newly identified E1 impacts (raw materials extraction from fossil sources, use-phase and end-of-life emissions), new E5 risks/opportunities around circular-economy regulation, and a newly identified S2 impact (forced labor risk in specific supply chains).

Reference: page 163-165.

BASF's double materiality process identified and validated company-specific impacts, dependencies, risks and opportunities with internal subject matter experts, focusing on value-chain steps with elevated potential for negative impacts, and scored items on a 5-point scale against a defined materiality threshold, weighted more heavily toward negative impacts. Likelihood of occurrence was estimated for potential impacts; irremediability was additionally assessed for negative impacts. Opportunities and risks drew on BASF's Group-wide opportunity and risk management and were assessed for financial magnitude and likelihood using existing risk-management criteria. An interdisciplinary review by opportunity and risk reporting experts ensured consistent application Group-wide, before the Board of Executive Directors, Supervisory Board, Group Works Council and BASF Works Council Europe were informed of the process and outcome.

Reference: page 145-148, 297-300.

BASF publishes a full ESRS content index (pages 145-148) mapping each covered Disclosure Requirement (GOV-1 through G1-4) to its location in the report, and a separate appendix table of data points derived from other EU legislation (SFDR, Pillar 3, the Benchmark Regulation and the EU Climate Law, pages 297-300) that cross-references, among others, board gender diversity, involvement in fossil-fuel and chemical activities, GHG targets, and gender pay gap and CEO pay ratio data points, flagging several (e.g. "sustainable oceans and seas," "excessive CEO pay ratio," S4-related data points) explicitly as not material. IRO-1 and SBM-3 findings are also reported within each topical chapter (E1 through G1), consistent with the double materiality assessment on page 163 onward.

Reference: page 179-181.

BASF's transition plan targets a 25% reduction in Scope 1 and 2 emissions by 2030 versus a 2018 base year and net-zero by 2050, compatible with 1.5°C per the IEA's Net Zero by 2050 study. Four emission-reduction levers are named: renewable energy (up to 3.2 million metric tons of CO2 reduction by 2030), low-emission steam generation (up to 0.6 million metric tons), operational excellence (up to 0.6 million metric tons) and climate-smart technologies (up to 1.1 million metric tons); no climate scenarios were used to identify the levers, which instead derive from an analysis of emission sources. The plan is embedded in financial planning and approved by the Board of Executive Directors and Supervisory Board, backed by around €0.6 billion of Scope 1 investment between 2026 and 2029 within a wider €1.2 billion green-transformation envelope, adjusted downward given a slower market-driven transformation pace. BASF is not excluded from EU Paris-aligned Benchmarks.

Back-filled from ESRS 2 IRO-1, where this content is disclosed in the FY2025 report (pages 172-174). This disclosure requirement did not exist under the 2023 ESRS the report was prepared against.

BASF assesses physical risks at site level against IPCC scenarios, using a high-warming scenario (IPCC SSP5-8.5) as the worst case over 5-10 year and 30-year horizons, applying a €10 million materiality threshold; this identified a material long-term risk from low water levels on the River Rhine affecting raw-material and product transportation, and potential materiality at coastal Mexican sites from drought. For transition risks, BASF has "defined and quantified global long-term scenarios up to 2050," including a net-zero scenario limiting warming to 1.5°C for the EU and U.S. by 2050 and globally by 2060; these scenarios also feed BASF's internal carbon-pricing model (page 198). Key assumptions are societal preferences and climate/economic policy objectives; the scenarios are reviewed and adapted regularly rather than on a fixed schedule. Climate-specific risk identification and scenario analysis is also presented under E1-2 (2025 ESRS numbering).

Back-filled from ESRS 2 SBM-3, where this content is disclosed in the FY2025 report (pages 165, 172-174). This disclosure requirement did not exist under the 2023 ESRS the report was prepared against.

BASF states that "the double materiality assessment is closely interlinked with our opportunity and risk management" and that resilience reviews became "an even more integral part" of strategy processes from 2024, with primary focus on BASF's own business; value-chain resilience is considered "only as necessary." A comprehensive resilience analysis of the Ludwigshafen site's plants was carried out in 2024, finding most plants well positioned, a short-to-medium-term competition risk for 16% of plants (addressed through targeted measures including possible closures) and a long-term risk for 6% (addressed through market-oriented measures). No single uncertainty range or capacity-to-adjust figure is quantified beyond these site-level findings; the transition plan's staggered, step-by-step investment approach (page 177) is presented as the primary lever for adjusting to different future paths. Climate resilience is also discussed under E4 Biodiversity (page 221 onward) for a related but separate dependency.

Reference: page 177-178.

BASF has no single overarching climate policy document; instead it relies on the Responsible Care Management System's global standards on CO2 emissions, energy data and energy efficiency, plus its procurement requirement, Supplier Code of Conduct, and principles for responsible sourcing of renewable raw materials, all referenced from the General Disclosures chapter (page 150). Climate change adaptation is addressed through the centralized physical-risk assessment process (page 173) rather than a written policy, because adaptation needs "differ considerably" by site and regulatory context, so "an overarching policy therefore does not exist." Value-chain emissions guidelines underpin the Scope 3.1 raw-materials target. Governance and incentive-scheme details, including the Scope 1/2 emissions weighting in Board of Executive Directors compensation, are set out under GOV-3 (page 178).

Reference: page 183-188.

Renewable electricity's share of total consumption rose to 36% in 2025 (2024: 26%), driven by the new Zhanjiang, China Verbund site (fully renewable-powered, with an associated 500-megawatt offshore wind joint venture) and long-term power purchase agreements across China, Singapore, Korea, Taiwan and the Hollandse Kust Zuid offshore wind farm in Europe. Operational-excellence projects (550+ measures in 2025) cut emissions by around 240,000 metric tons of CO2. Low-emission steam initiatives include a world-scale industrial heat pump under construction at Ludwigshafen (up to 100,000 metric tons of CO2 saved annually from 2027) and a geothermal partnership with Vulcan Energy. Climate-smart technology pilots include electrically heated steam crackers with SABIC and Linde, methane pyrolysis with ExxonMobil, and a 54-megawatt PEM electrolyzer commissioned in March 2025. Value-chain actions include the Supplier CO2 Management Program (over 2,200 validated Product Carbon Footprints) and long-term low-carbon gas supply from Equinor.

Reference: page 189-191.

BASF targets a 25% reduction in Scope 1 and 2 emissions by 2030 versus 2018 (from 21.9 to 16.4 million metric tons of CO2e), a science-based, 1.5°C-aligned target covering 96% of gross Scope 1 and 99% of gross Scope 2 emissions, plus net-zero by 2050. A separate Scope 3.1 (raw materials) target, set in 2023, aims to cut specific emissions 15% by 2030 versus a 2022 base year (from 1.64 to 1.39 kg CO2 per kg of purchased raw material), covering around 92% of Scope 3.1 emissions and excluding battery materials, which are targeted for future inclusion as recycling scales up. In 2025, Scope 1/2 emissions reached 16.1 million metric tons CO2e (2024: 17.0 million) and specific Scope 3.1 emissions were 1.62 kg CO2/kg (2024: 1.58 kg/kg), an increase attributed to a shift in the raw-materials portfolio.

Reference: page 192-193.

BASF's total energy consumption was 74.3 million MWh in 2025 (financial control basis; 2024: 74.8 million MWh, restated), of which 6.9% came from renewable sources (2024: 4.8%), driven mainly by purchased renewable electricity, heat, steam and cooling (5.1 million MWh). 93.0% of consumption came from fossil sources, dominated by natural gas (36.3 million MWh) and other fossil sources (24.3 million MWh); nuclear-sourced energy was 0%. Energy intensity was 1.17 million MWh per billion euros of sales. Combined heat-and-power generation and BASF's Verbund system prevented an estimated 5.2 million metric tons of CO2 emissions in 2025 (2024: 6.1 million) compared with separate, non-integrated fossil generation.

Reference: page 193-194.

BASF's corporate carbon footprint totaled 17.270 million metric tons of CO2e for Scope 1 and 2 combined in 2025 (2024: 17.952 million, restated), of which 89% was Scope 1 and 11% Scope 2; gross Scope 1 emissions alone were 15.369 million metric tons. Scope 3 emissions were calculated at around 94 million metric tons of CO2e (2024: 92 million), of which purchased raw materials, technical goods and services (category 3.1) contributed the largest share at 53 million metric tons, followed by end-of-life disposal of sold products at 27 million metric tons. Only 25% of Scope 3 emissions were calculated using primary data in 2025. Calculations follow the Greenhouse Gas Protocol and the WBCSD's chemical-sector guidance; detailed category-by-category methodologies are set out on pages 196-198.

Reference: page 192.

BASF did not use any carbon credits in the 2025 business year. For the residual emissions it expects to remain after its net-zero pathway (2050), the company plans to neutralize them through "nature-based measures such as reforestation" and technical options like long-term storage of biogenic carbon, assessed via third-party rating agencies (BeZero, Sylvera) and frameworks including the Integrity Council for the Voluntary Carbon Market's Core Carbon Principles, Verra, Gold Standard, Article 6 of the Paris Agreement, and the EU's Carbon Removal and Carbon Farming Certification Framework. BASF is developing internal standards for evaluating climate-protection projects and considering developing its own.

Reference: page 198.

BASF applies scenario-dependent internal (shadow) carbon prices, reaching up to €365 per metric ton of CO2e depending on the year, differentiated by region (Europe, Asia, North America) and derived from the same three long-term scenarios used for transition-risk analysis (page 174). The shadow price is applied to all Scope 1 emissions caused by capital expenditure investments worldwide and factored into investment cost calculations, favoring low-emission projects; Scope 1 and 2 emissions are also weighted in target-achievement assessment. Because the pricing applies only to future investment-related emissions, the Scope 1, 2 and 3 emissions covered by shadow prices in the current reporting year are 0 metric tons. External forecast and spot CO2 prices, not the shadow price, are used for IFRS financial-statement purposes.

Reference: page 200-203.

Pollution prevention is governed through the Responsible Care Management System, with global requirements for emissions to air and water, process, product and transportation safety, and remediation of contaminated sites, applying to "substances that have a potentially harmful impact on the environment." Water protection concepts are mandatory at all production sites. 130 Responsible Care audits were performed in 2025 (2024: 121), covering Organization & Management, Product Stewardship, Transportation Safety, Process Safety and Environment (Air, Water, Waste), on a three-to-six-year risk-based cycle. Downstream, safe handling is governed through safety data sheets (provided in around 40 languages) and product-launch testing; substances of concern are managed under EU REACH and TripleS-based substitution planning (page 210).

Reference: page 204-208.

Actions are decentralized rather than governed by a central action plan. In own production, examples include a membrane bioreactor at the Freeport, Texas Verbund site (first reuse test phase in 2025) and wastewater-reuse collaboration with water supplier AITASA at Tarragona, Spain. On process safety, BASF targets a High Severity Process Safety Incident (hsPSI) rate of no more than 0.10 per 200,000 working hours by 2030, and recorded 0.04 in 2025 (2024: 0.03); the overall Process Safety Incident rate was 0.22 (unchanged from 2024). A new Emergency Response Center began construction at Ludwigshafen in 2025 (completion planned 2028). Value-chain actions include TripleS-based portfolio steering and the Smart Stewardship program for crop protection products, including farmer safety hotlines and updated product labeling.

Reference: page 208.

BASF states plainly that it "does not have a specific reduction target for emissions to air (excluding greenhouse gases) and water"; relevant indicators are instead monitored and published (page 209 onward). Pollution-related effectiveness is tracked indirectly through the process safety target (hsPSI rate below 0.10 by 2030) and other environmental corporate targets, including climate protection, circular economy, sustainable water management, TripleS and responsible procurement targets. In 2025, environmental impacts from process safety incidents began being systematically recorded in a global database (as already done for transportation incidents); one process safety incident with significant environmental impact and no transportation incidents with significant environmental impact were recorded in 2025 (2024: none).

Reference: page 209-210.

Across more than 200 production sites, key 2025 air emissions (excluding GHGs) included nitrogen oxides at 7,715,633 kg (2024: 7,793,697 kg), non-methane VOCs at 2,456,845 kg, and carbon monoxide at 2,003,743 kg. Water emissions included total nitrogen at 2,085,556 kg, chlorides at 314,265,963 kg (up from 243,528,382 kg in 2024, driven by a technical measure at one site) and total organic carbon at 2,948,482 kg. Total emissions to air were "almost unchanged" year on year; total emissions to water increased, mainly on the chloride figure. Figures reflect only emissions above the Annex II thresholds of EU Regulation (EC) No 166/2006, so annual totals can fluctuate with site-level activity.

Reference: page 210-212.

BASF states that "a portion of our products ... contain substances of concern or of very high concern," managed through product safety systems, safety data sheets in around 40 languages, and Globally Harmonized System (GHS) labeling, adapted for regional frameworks such as the EU's CLP Regulation. Compliance targets national and international regulations including REACH; the TripleS method incorporates substances of concern into proactive portfolio and substitution planning (page 157). BASF participates in initiatives such as the European Centre for Ecotoxicology and Toxicology of Chemicals (ECETOC) to advance risk assessment methods. The chapter flags a material risk that continually expanding restricted-substance lists could affect future raw-material availability and customer market behavior, though changes are typically signaled well in advance.

Reference: page 214-215.

BASF states that "our water consumption is low compared with the total water volume sourced ... and therefore not a material topic for BASF in terms of the double materiality assessment," while water withdrawal and availability remain material. Water management follows the Responsible Care Management System and a Group-wide Corporate Requirement Environmental Protection, using the Alliance for Water Stewardship (AWS) standard as guidance and BASF's public Position on Water Protection. The company's central water target, "Introduction of sustainable water management," has run since 2011 and was reaffirmed as important to the "Winning Ways" strategy in 2024, informed by the 2023 Planetary Boundaries reassessment (Richardson et al.). Upstream, suppliers are expected to minimize water-scarcity impacts under the Supplier Code of Conduct and are evaluated via Together for Sustainability audits.

Reference: page 216-218.

Actions are decentralized, without a centrally allocated resource plan. Examples include a membrane bioreactor at Freeport, Texas (first reuse test phase in 2025), process optimization at General Lagos, Argentina, and a since-2011 partnership with Fundação Eco+ and local authorities at Guaratinguetá, Brazil, that has reduced surface runoff and soil erosion through reforestation and improved soil management. Upstream, the since-2016 Pragati project promotes efficient water use in castor-bean farming in India, and BASF participated (through spring 2025) in the Responsible Lithium Partnership examining hydrological conditions in Chile's Salar de Atacama. In agriculture, a 2024-launched Global Carbon Field Trial Program with the International Rice Research Institute, published September 2025, found that direct seeding of rice can cut water consumption without reducing yields.

Reference: page 218.

BASF's target is to introduce sustainable water management at all Verbund and water-stress-area sites by 2030, covering roughly 90% of total water withdrawal, using the World Resources Institute's Aqueduct Water Risk Atlas to identify water-stress areas. In 2025, BASF achieved 73% of the target (2024: 65%), with sustainable water management introduced at eleven additional sites (2024: eight). The target is voluntary, not legally binding, and focuses on efficient use (reuse, alternative or less-sensitive sources) rather than reducing consumption outright, since consumption is not itself material. Sites reassess their catchment-area water situation at least every five years using the AWS Standard.

Reference: page 219-220.

BASF's water withdrawal totaled 1,521 million cubic meters in 2025 (2024: 1,507 million), with water use of 7,050 million cubic meters and 5,714 million cubic meters recycled and reused. 88% of withdrawal was for cooling, discharged with no product contact; around 12% went to production processes. Water consumption (not returned to source) was around 74 million cubic meters (2024: 76 million), mainly through cooling-system evaporation. 33% of production sites were located in water-stress areas in 2025, accounting for 19 million cubic meters of withdrawal (1% of the total) and 8 million cubic meters of consumption; 23% of sites sat in areas of high or extremely high overall water risk. Water intensity was 1,170 cubic meters per million euros of net revenue (2024: 1,171).

Reference: page 222-224.

BASF's 2025 biodiversity resilience assessment, run by its biodiversity expert group and discussed with the internal Biodiversity Sounding Panel and externally with the Nature Advisory Council, used the WWF Biodiversity Risk Filter (BRF) to conclude that fossil raw-material supply carries low biodiversity risk while renewable raw materials (under 10% of BASF's raw-material base) show no critical accumulated risk due to geographic and supplier diversification. Water is identified as BASF's most important ecosystem-service dependency. BASF has no dedicated biodiversity transition plan or target; it is "reviewing whether we can derive a separate target" (page 230). Overall, BASF assesses its business model as showing "high resilience" to biodiversity-related risks due to market, raw-material and supplier diversification and proactive portfolio steering via TripleS, with regulatory change flagged as the main material risk.

Reference: page 224-227.

Biodiversity governance draws on the IPBES five drivers of biodiversity loss, the Kunming-Montreal Global Biodiversity Framework, and UN SDGs 2 and 15. Key instruments include the BASF Palm Sourcing Policy (covering forest protection, traceability, Indigenous rights and smallholder inclusion), the global Position on Forest Protection (updated in 2025 to reflect the EU Deforestation Regulation), adherence to the Nagoya Protocol on genetic-resource access, and certification standards such as ISCC and RSPO. BASF has no dedicated site-level biodiversity policy, relying instead on its Responsible Care Management System for exploration and development standards. BASF again achieved CDP Forests leadership status (A rating) in 2025.

Reference: page 228-230.

Key actions are TripleS-based portfolio steering and certified palm-based raw material sourcing. BASF has been an RSPO member for over 20 years, monitors deforestation risk via the Palmoil.io platform, and since 2024 has partnered with Indonesian NGO Kaleka to support smallholders in Central Kalimantan; it also works with Solidaridad in Indonesia, Malaysia and (with Fedepalma) Colombia. A grievance mechanism reflects BASF's No Deforestation, No Peat, No Exploitation policy. Downstream, around 40,000 products are assessed via TripleS, and 228,904 people participated in Agricultural Solutions biodiversity training in 2025 (2024: 199,427). About 20% of BASF's roughly 1,200 sites are production plants, whose impacts are monitored through the environmental database rather than a centrally managed biodiversity action plan.

Reference: page 230.

BASF has not set an overarching biodiversity and ecosystems target, but tracks a 2015 commitment to source 100% certified sustainable palm oil and palm kernel oil from 2020; in 2025 the company reached 79.2% (2024: 98.1%), missing the target due to insufficient RSPO-certified palm kernel oil availability, compounded by the EU Deforestation Regulation tightening European-market supply. About 98% of BASF's global palm footprint was traced to the oil mill in 2025 (2024: 97%). A related target is 100% certified palm-oil derivatives by 2030 (2025: 8.4%; 2024: 10.2%). BASF also references its Loop Solutions sales target (€10 billion by 2030, page 237) as an indirect lever for reducing raw-material extraction pressure.

Reference: page 231.

Using globally recognized databases such as Natura 2000, UNESCO World Heritage Sites and IUCN protected areas, BASF assesses production sites within a three-kilometer radius for proximity to biodiversity-sensitive areas. In 2025, 29% of production sites bordered a biodiversity-sensitive area, and none of those sites reported negative impacts on the area. The measurement method was adjusted in 2025, so BASF states the 2025 figure "can no longer be meaningfully compared" with the prior year and has chosen not to publish the 2024 comparative. Where a direct negative impact does become known (for example a product leak or habitat disturbance from construction), BASF investigates the cause and reviews mitigation actions.

Reference: page 233-234.

BASF's circular-economy strategy is governed through the procurement requirement (with its risk-based sustainability management), the principles for responsible sourcing of renewable raw materials, the BASF Palm Sourcing Policy, the Supplier Code of Conduct and the Responsible Care Management System. Reducing the use of fossil raw materials is explicitly "not part of our requirements"; BASF instead pursues circularity targets to substitute fossil feedstock with renewable or recycled material and relies on the integrated Verbund concept for resource efficiency. Waste management is governed by the Group-wide Corporate Requirement Environmental Protection, following the hierarchy of prevention, reuse, recycling, energy recovery, incineration, disposal, implemented locally by sites and Group companies and audited by the Corporate Environmental Protection, Health, Safety & Quality unit.

Reference: page 234-237.

Since 2019, BASF teams have developed more than 50 circular-economy initiatives, organized around responsible sourcing of renewable raw materials, the mass balance approach (verified by third parties such as TÜV Nord under REDcert2 or ISCC PLUS), chemical recycling partnerships, and TripleS portfolio steering. Under ChemCycling®, pyrolysis oil substitutes for fossil feedstock at sites in Asia Pacific, Europe and North America; a 2025 pilot with cooperation partners demonstrated using automotive shredder residue via gasification for new steering-wheel feedstock. BASF commissioned the world's first commercial loopamid® plant (textile-to-textile polyamide 6 recycling) at Caojing, Shanghai, in March 2025, and expanded its mass-balance portfolio to include Ccycled® food packaging and biomass-balanced products.

Reference: page 237-238.

BASF targets more than 50% of TripleS-relevant sales from Sustainable-Future Solutions by 2030 (2025: 48.5%, 2024: 46.3%) and a separate target of €10 billion in Loop Solutions sales by 2030, adopted by the Board of Executive Directors in 2024; in 2025 Loop Solutions sales reached €5.8 billion (2024: €5.7 billion). Loop Solutions are TripleS Pioneer or Contributor products based on renewable or recycled raw materials, or supporting recycling and durability. BASF states there are "no plans to introduce a dedicated waste management target," focusing instead on raw-material efficiency in its plants to indirectly reduce waste volumes.

Reference: page 238-239.

BASF purchased 30.1 million metric tons of raw materials in 2025 (2024: 30.4 million), of which 1.1 million metric tons were renewable (mainly vegetable oils, fats, grains and sugar), 21% of the renewable share certified (RSPO, REDcert-EU, ISCC PLUS; 2024: 24%). Recycled raw materials totaled 7.2 metric kilotons (0.02% of purchases), down from 11.3 kilotons (0.04%) in 2024, including chemically recycled pyrolysis oil. Petrochemical feedstocks such as naphtha and benzene remain the largest-volume inputs. BASF's independent Environmental Catalyst and Metal Solutions (ECMS) division recycles precious metals (platinum, palladium, rhodium), and a battery recycling plant for Black Mass began operation at Schwarzheide in June 2025, recovering lithium, nickel, cobalt and manganese from end-of-life lithium-ion batteries.

Reference: page 239-240.

BASF generated 2.18 million metric tons of waste in 2025 (2024: 2.18 million, unchanged). Of this, 1.32 million metric tons found new uses (recycling or thermal recovery, 2024: 1.09 million) and 0.86 million metric tons were disposed of (2024: 1.09 million); 1.65 million metric tons (75.7%) could not be recycled (2024: 1.70 million, 77.8%). By waste category: 1.44 million metric tons of hazardous waste (0.15 million recycled, 0.68 million thermally recovered, 0.61 million disposed) and 0.74 million metric tons of nonhazardous waste (0.37 million recycled, 0.12 million thermally recovered, 0.25 million disposed). Nonrecyclable hazardous waste sent to landfill is mainly contaminated construction waste that legal requirements prevent recycling.

Reference: page 239-240.

BASF's total waste generation was 2.18 million metric tons in 2025, flat versus 2024. Recovery routes accounted for 0.83 million metric tons of hazardous waste (0.15 million recycled, 0.68 million thermally recovered) and 0.49 million metric tons of nonhazardous waste (0.37 million recycled, 0.12 million thermally recovered); disposal routes accounted for 0.61 million metric tons of hazardous waste (0.38 million incinerated without energy recovery, 0.12 million to surface landfill) and 0.25 million metric tons of nonhazardous waste. Overall, 75.7% of total waste generated could not be recycled (2024: 77.8%). Hazardous waste sent to landfill is mainly contaminated construction waste that cannot legally be recycled. BASF has no dedicated waste-reduction target, relying instead on raw-material efficiency actions (page 238) to limit volumes generated.

Reference: page 249-252.

BASF's workforce policies center on the BASF Group Policy Statement on Human Rights and a Group-wide requirement setting out ten fundamental labor principles, including no child or forced labor, no discrimination or harassment, freedom of association and collective bargaining, fair compensation and dismissal, and protection of vulnerable groups. Human rights due diligence is led by the Chief Human Rights Officer (also the Chief Compliance Officer). Occupational safety and health policy is set by the Corporate Environmental Protection, Health, Safety & Quality unit under the Responsible Care initiative; compensation, skill development, leadership and talent policy sit with Corporate Human Resources. Where national law and BASF's international labor standards diverge, BASF states it "always strive[s] to uphold the higher standard" without breaching local law.

Reference: page 254.

BASF describes trust-based cooperation with employee representatives as "an essential component of our corporate culture," with dedicated committees discussing ESRS-material topics; the BASF Works Council Europe and BASF Group Works Council are informed of double materiality assessment results, and representative involvement follows local legal conditions. Operational responsibility sits with individual Group companies' management. A cited example of dialog outcome is the 2025 introduction of a new performance management system, developed with employee and company representatives. Beyond formal representation, engagement channels include quarterly global information events with the Board of Executive Directors and voluntary Employee Resource Groups (for example for women and LGBTQI+ employees).

Reference: page 255-256.

The BASF Compliance Hotline serves as the primary grievance mechanism, open to employees and external stakeholders, offering anonymous reporting; the compliance training program covering it is mandatory for all employees. Beyond the hotline, employees can raise concerns with leaders, compliance officers, human resources or employee representatives. Handling of reports (investigation, remedial measures up to termination, and protection from retaliation) is described under G1 Business Conduct (page 293 onward), which S1-3 explicitly cross-references. BASF does not report a separate own-workforce-specific remediation channel beyond this shared, Group-wide compliance infrastructure.

Reference: page 256-258.

Key actions include safety and health training, risk assessments and root-cause incident investigations, global health management (including the BASF health check program and a Mental Health Alliance platform), an annual compensation-level review against external market data, feedback talks between employees and leaders, and leadership development. In 2025 BASF's focus areas included mental health, women's health and influenza prevention (more than 4,300 employees vaccinated at Ludwigshafen); a 2025 AI-supported skills and competencies management pilot was rolled out in selected HR areas. The Corporate Center units Corporate Environmental Protection, Health, Safety & Quality and Corporate Human Resources set the conceptual framework, implemented locally by operating divisions and sites.

Reference: page 259-261.

BASF targets a High Severity Injury (HSI) rate of no more than 0.05 per 200,000 working hours by 2030; the 2025 rate was 0.01 (2024: 0.02), against a 2023 reference of 0.03. The Health Performance Index (HPI) target is 0.9 annually (2018 base: 0.96); BASF achieved 0.97 in 2025 (2024: 0.97). The Engagement Index target is above 80%; the 2025 survey (75% participation, nearly 85,000 employees) recorded 77% (2024: 79%), a slight decline BASF says leaves "room for improvement." BASF states it has "not set ourselves specific targets for all aspects of material impacts as well as risks and opportunities for our company's workforce" (page 261).

Reference: page 261-262.

BASF employed 108,251 people as of December 31, 2025 (2024: 111,822), a decline attributed to cost-savings-related departures and the divestiture of the Brazilian decorative paints business; 9,928 were part of the discontinued coatings business. Regionally, Europe accounted for 65,073 employees, Asia Pacific 21,592, North America 15,652, and South America/Africa/Middle East 5,934; Germany, Greater China and the U.S. each represented at least 10% of the workforce. By gender, 78,717 employees were male and 29,534 female; 103,593 were permanent employees, 1,995 temporary, and 2,663 apprentices. Employee turnover was 7.5% in 2025 (2024: 7.2%), covering voluntary and involuntary leaves, retirements and deaths in service.

Reference: page 263.

BASF states that it "reviewed adequate wages at BASF Group companies in accordance with the ESRS definition," covering base salary and fixed guaranteed additional payments for the 2025 business year; the calculation is not based on an annual target value. The review concluded that all employees received adequate wages in 2025. Adequate and competitive compensation is separately identified as a material positive impact in BASF's double materiality assessment (page 168), reviewed annually against external market data, and supplemented by additional benefits such as company pension schemes, supplementary health insurance and share programs in many countries.

Reference: page 263.

In 2025, BASF recorded zero fatalities from work-related injuries or ill health (2024: zero), a recordable work-related injury rate of 3.94 per million working hours (2024: 3.78), 772 recordable injuries (2024: 753), 17 cases of recordable work-related ill health (2024: 33), and 5,861 days lost to work-related injuries (2024: 6,223, restated to 7,671). BASF states "no fatal work-related injuries were recorded in 2025" and that it "rel[ies] on extensive measures to prevent further work-related injuries." These metrics sit alongside the separately tracked High Severity Injury rate and Health Performance Index reported under S1-5 (page 259-260).

Reference: page 263.

In 2025, 82 cases of employee-experienced discrimination were reported (2024: 79), relating to gender, age, nationality, disability, religion, sexual orientation or ethnicity, including racist incidents; a further 263 complaints related to ESRS S1 paragraph 2 social factors (working conditions, equal treatment, other work-related rights) were submitted via the Compliance Hotline (2024: 225). BASF reports "no fines, sanctions or compensation payments" connected to these incidents in 2025 and "no severe human rights-related incidents in relation to workers in our company" (2024: 0). BASF also states no indications of forced or child labor involving its own employees were identified in 2025 (page 250).

Reference: page 265-267.

BASF's value-chain worker policies flow from the Code of Conduct, Policy Statement on Human Rights, Supplier Code of Conduct and procurement requirement, plus a dedicated requirement for responsible sourcing of battery materials (covering child and forced labor, binding for the Battery Materials division, reported annually to the Board of Executive Directors and Corporate Compliance). Governance for human rights due diligence, including under the German Supply Chain Due Diligence Act (LkSG), sits with the Chief Human Rights Officer. The Supplier Code of Conduct, based on the UN Global Compact's Ten Principles and the Responsible Care initiative, covers human rights, child and forced labor exclusion, labor and social standards, antidiscrimination and anticorruption, and is embedded in electronic ordering systems and purchasing conditions Group-wide.

Reference: page 268.

BASF engages workers in the value chain through dialog forums and advisory councils, including the Human Rights Advisory Council and Nature Advisory Council, and the Civil Society Forum (established 2024, which discussed children's rights and child labor in the seed business in fall 2024). Direct dialog formats are used in higher-risk business areas such as the seed business and castor-oil procurement, and insights are also gathered through multistakeholder initiatives (Cobalt for Development, Global Battery Alliance, Responsible Mica Initiative) and the econsense network, where BASF is topic sponsor for Human Rights & Value Creation. Effectiveness is assessed through supplier evaluations and follow-up reviews.

Reference: page 268-269.

The BASF Compliance Hotline is the key grievance channel, open to external stakeholders "especially workers in our supply chains," offering confidential and anonymous reporting on concerns including health, occupational safety, and child or forced labor. It is set out in the Supplier Code of Conduct and made available to partners via BASF's electronic ordering system. Handling and monitoring of reports is described under G1 Business Conduct (page 294 onward). No separate value-chain-specific grievance infrastructure beyond this Group-wide hotline is described.

Reference: page 269-273.

Key actions include supplier ESG risk analysis, EcoVadis-based evaluations and on-site audits under the Together for Sustainability (TfS) initiative (100 audits in 2025, 2024: 118; EcoVadis assessments for 257 suppliers, 2024: 328), and supplier training via the TfS Academy (1,019 supplier employees trained, 2024: 990). Local initiatives include the WISH project in India's vegetable seed sector (with Syngenta and Arisa; more than 1,450 training sessions in 2024-2025 reaching over 600 farmers), the Cobalt for Development initiative (third phase from spring 2025), the Global Battery Alliance and Responsible Mica Initiative. In 2025 BASF terminated one direct business relationship (effective March 2026) over standards violations and sold its Xinjiang, China joint-venture shares.

Reference: page 273-274.

BASF's global responsible procurement target aims for 80% of suppliers with prior inadequate sustainability evaluation results to show improvement annually by 2030; in 2025 the figure was 77% (2024: 76%). BASF "has not set itself a specific target for the Workers in the Value Chain topic" beyond this broader responsible-procurement commitment. Since 2024, a tracking process involving Compliance organization specialists has monitored suppliers with inadequate results and their corrective-measure implementation, with a new evaluation cycle every three years.

Reference: page 277-279.

BASF's double materiality assessment identified four material impacts on affected communities: potential adverse health effects from chemical production and use, land-related impacts from raw-material sourcing (particularly for Indigenous communities' rights under free, prior and informed consent), a positive contribution to community development, and a positive contribution to food supply through Agricultural Solutions products. Governance draws on the Responsible Care Management System, the Policy Statement on Human Rights, and integration of social and human rights assessments into investment, acquisition and divestiture decision-making, with key stakeholders (including affected-community representatives) involved early in major investment decisions.

Reference: page 279-280.

Engagement channels include the BASF Compliance Hotline, community advisory panels at production sites, the Nature Advisory Council and Human Rights Advisory Council, the Civil Society Forum, and case-by-case Environmental Social Governance Councils (ESGC) for major investment decisions, which incorporate the perspectives of vulnerable groups such as Indigenous peoples at an early stage. Central governance sits with the Corporate Sustainability unit under the Chairman of the Board of Executive Directors. In 2025, insights from the councils were incorporated into BASF's procurement process for renewable raw materials.

Reference: page 281.

The BASF Compliance Hotline is publicly accessible as a grievance mechanism for affected communities and their representatives worldwide, with tracking and monitoring described under G1 Business Conduct (page 293 onward). Where violations affecting communities involving BASF's own activities or those of direct suppliers are identified, BASF states it "immediately take[s] the actions required" to examine and end them, expects suppliers to investigate and end violations promptly, supports suppliers in improving performance, and reserves the right to terminate supplier relationships as a last resort for continued violations.

Reference: page 281-286.

Health-related actions include product and transportation safety measures, the Global Personal Protective Equipment initiative, and India's Suraksha Hamesha ("Safety all the time") program, which has reached around 998,000 farmers and 133,000 other users since 2016. Land-rights actions rely on the Human Rights Expert Working Group and free, prior and informed consent (FPIC) principles for Indigenous communities. Community-development actions in 2025 included around €29 million in societal engagement spending, a UNICEF year-end donation campaign (over €375,000, supporting malnourished children in Burundi), nine new Starting Ventures intrapreneurship projects, and more than 180 million Interceptor G2 mosquito nets distributed since 2019, estimated by MedAccess to have helped prevent 360 million malaria cases.

Reference: page 286-287.

Beyond cross-cutting corporate targets that indirectly benefit affected communities (climate protection, responsible procurement, sustainable water management, and safe/resource-efficient production), BASF states plainly that "BASF has not set itself a specific target for the topics identified as material in the area of affected communities." Effectiveness of societal-engagement activities is instead tracked using the internationally established IOOI method (input, output, outcome, impact), with adjustments made where necessary.

Reference: page 289-293.

BASF's compliance culture rests on the BASF Code of Conduct, overseen by the Board of Executive Directors, covering corruption, antitrust, human rights, labor standards, conflicts of interest, whistleblower protection, trade control and data protection, supported by standards such as the UN Global Compact, ILO core labor standards, OECD Guidelines, and the German Corporate Governance Code. The Chief Compliance Officer reports to the Chairman of the Board of Executive Directors and leads a Compliance organization with more than 100 compliance officers and representatives worldwide, reporting to the Supervisory Board's Audit Committee twice a year. In 2025, BASF recorded more than 111,000 Code of Conduct training participations (2024: over 120,000) and over 93,000 training hours (2024: 105,000), with functions-at-risk fully covered.

Reference: page 289-296.

BASF's anticorruption approach centers on mandatory antitrust, money-laundering and trade-control training (repeated every two years), the BASF Compliance Hotline (open globally, anonymous option, available in over 50 languages), and risk-based Business Partner Due Diligence screening of sales intermediaries for corruption, human-rights and ESG-standard risks. Procurement employees, considered highest at risk, are bound by a Zero Gift Policy. In 2025, the Compliance Hotline received 739 reports (2024: 751); the Corporate Audit unit conducted 50 compliance audits Group-wide (2024: 68). Investigations follow principles of objectivity, independence, accuracy, confidentiality and fairness, with outcomes ranging from training to disciplinary action.

Back-filled from the G1 Business Conduct "Global targets" section, where this content is disclosed in the FY2025 report (page 296). G1-3 is a standalone Disclosure Requirement only from the 2025/2026 ESRS; under the 2023 ESRS the report was prepared against, business conduct targets fell under MDR-T.

BASF states plainly: "Even though BASF has not set a specific target for the topics identified as material in the area of business conduct, we nevertheless track the effectiveness of our actions and requirements in this field." Effectiveness tracking is anchored in the internal Corporate Audit unit, which reviews the compliance management system's effectiveness and adherence to compliance principles across all areas where violations could occur; in 2025 Corporate Audit conducted and documented 50 such audits Group-wide (2024: 68). This is MDR-T's second limb (effectiveness tracked in the absence of a stated target), satisfying G1-3-Targets even though no numeric business-conduct target exists.

Reference: page 295.

In 2025, the BASF Compliance Hotline received 739 reports (2024: 751), spanning respect in the workplace, corruption, company-property misuse and EHS issues; violations of the Code of Conduct led to 59 employment terminations (2024: 67). BASF states that, "as in the previous year, in the reporting year there were no court convictions for violations of anticorruption and antibribery regulations." Most substantiated cases related to workplace-respect principles and personal misconduct around conflicts of interest or company-property protection; disciplinary action and, where warranted, claims for damages were pursued on a case-by-case basis.