BASF

The Combined Declarations of Corporate Governance of BASF SE and the BASF Group, pursuant to sections 289f HGB and 315d HGB comprise the chapters Corporate Governance Report (see page 111) including the description of the diversity concept for the composition of the Board of Executive Directors and the Supervisory Board (except for the disclosures required by takeover law), G1 Business Conduct (see page 317) and Declaration of Conformity Pursuant to Section 161 AktG (see page 145).

The Board of Executive Directors will focus on topics that are important to BASF as a whole: strategy, portfolio management, capital allocation and talent development. By contrast, individual divisions will have greater ownership of specific business decisions and accountability for business success.

As part of the implementation of the new strategy, the Catalysts division was restructured, effective January 1, 2025; as a result, the Surface Technologies segment will now comprise three standalone businesses going forward instead of two. Additionally, the chemical and refining catalysts business, formerly part of the Catalysts division, will be reported as part of the Performance Chemicals division in the Industrial Solutions segment from now on.

We see sustainability as a decisive factor for our long-term business success. Scope 1 and 2 CO2 emissions remain the most important sustainability-related key performance indicator at Group level.

Since 2024, variable compensation for senior executives has been based on targets derived from the key performance indicators for the steering of the respective business unit and the BASF Group. We plan to introduce this differentiated bonus system for all other employees over the course of 2025. This underscores the further increased autonomy of the divisions as part of the "Winning Ways" strategy and their accountability for business success.

We will further develop the performance management system for our leaders and employees and establish a closer link between incentives and unit-specific performance.

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.

## GOV-5: Risk management and internal controls over sustainability reporting

The section on opportunity and risk management also includes risk pursuant to Disclosure Requirement GOV-5 and presents disclosures on our opportunity and risk management system and internal controls of sustainability reporting (from page 87 onward).

### Data collection and validation process

Our data on environmental protection and safety is collected based on the recommendations of the International Council of Chemical Associations (ICCA) and the European Chemical Industry Council (CEFIC). Data relating to the environment, health and safety (EHS) and to human resources (HR) is recorded in a central database. The EHS data is captured for each site and company based at the respective site; the HR data is captured for each company. Environmental data (on emissions or water volumes, for example) is determined by measurements, calculations or estimations according to the regulatory requirements or legal obligations. The data collection method selected depends on technical limitations (high temperatures do not always allow the use of sensors for direct measurement), the ability to derive data from data already collected, and the proportionality of efforts to take measurements in relation to the emission in question (such as volume flow, operating hours). 

To increase the robustness of our data, we apply a two-step process in which sustainability data is first recorded and then validated in accordance with the principle of dual control. Additional plausibility checks are carried out by the responsible Corporate Center units, after which the data is evaluated based on the respective consolidation criteria and aggregated in the database.

### External validation and reporting period

Whenever metrics, or their methods of measuring or calibrations are additionally validated by external sources, we indicate this in the respective chapter. In the absence of any such indication, the metrics or methods were not subjected to external validation beyond the voluntary audit of this report.

The reporting period is the 2024 business year. We include relevant data made available up to preparation of this report by the Board of Executive Directors at the accounts meeting on March 17, 2025 (editorial deadline).

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.

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.

Business Model

At BASF, we create chemistry for a sustainable future. Our ambition is to be the preferred chemical company to enable our customers' green transformation. We combine economic success with environmental protection and societal responsibility. Our portfolio is structured into core businesses and standalone businesses.

BASF had 111,822 employees in 92 countries in the 2024 business year and operated 235 production sites worldwide. These include six Verbund sites, which are located in Ludwigshafen, Germany; Antwerp, Belgium; Freeport, Texas; Geismar, Louisiana; Kuantan, Malaysia; and Nanjing, China. A seventh Verbund site is currently under construction in Zhanjiang, China.

Our Strategic Levers

Focus: Under the Focus lever, we have redefined our portfolio management approach. BASF now makes a distinction between core businesses and standalone businesses, which serve specific industries and operate independently. The core businesses comprise the Chemicals, Materials, Industrial Solutions and Nutrition & Care segments.

Accelerate: With the Accelerate lever, BASF is targeting more speed in value creation. We will streamline the way in which we collaborate and complete tasks at BASF and become faster as a result.

Transform: The Transform lever represents shaping and successively implementing our market-oriented green transformation toward a more sustainable product portfolio. Going forward, we will intensify our focus on products with sustainability attributes where we see increasing customer demand.

Win: The Win lever is how we want to drive change in corporate culture throughout the entire company. Our "Winning Culture" is based on three cultural topics – Accountability (Own it!), Speed (Drive it!) and Improvement Mindset (Excel in it!).

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

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

In identifying, prioritizing and validating material sustainability-related topics, we are guided by the principle of double materiality, taking into consideration financial materiality and impact materiality (see page 167 onward).

Material topics along the value chain form the focal points of our reporting and define the limits of this report. In identifying, prioritizing and validating material sustainability-related topics, we are guided by the principle of double materiality, taking into consideration financial materiality and impact materiality (see page 167 onward).

The results of our double materiality assessment are included in the presentation of external factors and impacts of our business activities. A comprehensive explanation of the impacts, risks and opportunities identified as part of our double materiality assessment can be found from page 170 onward.

Double Materiality Assessment

Material impacts, risks and opportunities and their interaction with strategy and business model

Process

We carried out a double materiality assessment in accordance with the ESRSs for the first time in 2024. The assessment was performed on the basis of previous double materiality assessments, but with an increased level of granularity and more extensive documentation. The materiality assessment identifies the sustainability matters that are material for our company based on potential and actual material impacts, risks and opportunities. We plan to update this assessment on an annual basis.

The materiality assessment was performed in three steps:

First, we compiled a list of potential sustainability matters that might impact our own business and the associated customer industries, or that could be relevant to our stakeholder groups. Where applicable, we paid particularly close attention to areas of business or value chains that are subject to risk. Our assessment was carried out at BASF Group level along our value chain. Stakeholder interests were considered based on both direct and indirect inputs. Direct input was obtained, for example, from our Advisory Councils, from the BASF Civil Society Forum and via discussions in multistakeholder networks. Indirect input consisted of big data analyses of the interests of customers and capital markets, for example.

Based on the compiled sustainability matters, we worked with in-house experts and selected stakeholders in our Nature Advisory Council and our Human Rights Advisory Council to identify and validate the risks and opportunities associated with the company's impacts and dependencies. We focused on activities, sites and steps in the value creation process that have an elevated potential for negative impacts and risks. To identify sustainability-related opportunities and risks, we drew on findings from BASF's Group-wide opportunity and risk management, among other sources. Material sustainability matters have been systematically integrated into this process for many years. Furthermore, our impacts and dependencies were reviewed by subject matter experts to identify additional potential risks and opportunities.

Opportunities and risks were assessed in terms of their financial magnitude and likelihood of occurrence. In-house subject matter experts used predefined criteria to score opportunities and risks based on existing risk management methods and assessment criteria. Our objective here is to ensure that a uniform methodology is applied when assessing both financial risks and sustainability-related risks. We look at our financial risks and our sustainability-related risks and prioritize them based on their severity and likelihood of occurrence. In the identification and review process, we work closely with our opportunity and risk management organization. The findings from the materiality assessment will serve as the basis for documenting opportunities and risks going forward, thus validating them at the same time. New risks and opportunities will be incorporated into the materiality assessment via their inclusion in the opportunity and risk management process.

In the last step, we scored impacts, risks and opportunities on the basis of predetermined criteria on a 5-point scale and classified them as material whenever they exceeded defined thresholds. A uniform assessment framework was used to review impacts in terms of their severity, scale and scope. In the case of negative impacts, we additionally assessed the extent to which an impact was irremediable. In addition, we estimated the likelihood of occurrence for potential impacts. To identify material impacts, we established a uniform threshold based on the sum of the factors assessed. This threshold was assigned a higher weighting to negative impacts.

In a subsequent iterative process, our assessment was reviewed by interdisciplinary experts as well as the experts responsible for corporate opportunity and risk reporting. This process ensured that the assessment logic used in the materiality assessment was applied in a consistent manner throughout the BASF Group and across all specialist units. Finally, the Board of Executive Directors, the Supervisory Board, BASF's Joint Works Council and the BASF Works Council Europe were informed about the process and the outcome of the materiality assessment.

After identifying the material impacts, risks and opportunities, each was assigned to a specific topic, subtopic or sub-subtopic according to the list of sustainability matters in ESRS 1 AR 16 with the aim of determining materiality across all topics. The responsible subject matter experts subsequently allocated all applicable Disclosure Requirements and qualitative as well as quantitative data points to the material sustainability matters. In the following step, the subject matter experts worked with experts for the overarching materiality process to assess the "materiality of information" at the disclosure requirement and data point level using the European Financial Reporting Advisory Group (EFRAG) criteria of "decision-usefulness" and "stakeholder relevance" according to ESRS 1 Appendix E. This aims to increase the informational value of our reporting at the data point level with a view to the purpose of the regulatory policy, which is to promote financing of the transition toward sustainable development.

Results

The previous double materiality assessments were designed to meet all legal requirements in place at the time. The new ESRS requirements, in combination with the implementation guidance published, required a more in-depth analysis of subtopics and sub-subtopics for the 2024 business year. Moreover, an additional level of granularity was created by working with potential and actual impacts, risks and opportunities. Due to the methodological differences, our previous assessments are only comparable with the assessment of double materiality performed in 2024 at the highest level of abstraction, the topic level. This comparison shows a high degree of correlation between earlier assessments and the results reported for the 2024 business year (see page 49 of the BASF Report 2023). No entity-specific topics beyond the ones defined in the ESRSs were identified in the assessment for 2024.

As a manufacturing company, the main impacts of our business relate to climate change (mainly due to our energy requirements), other environmental matters (emissions to air, water and biodiversity) and our company's workforce. The opportunities and risks identified have financial effects that affect the presentation of our financial position, financial performance and cash flow as disclosed pursuant to our accounting policies. In 2024, financial effects arose in connection with a risk identified in the S3 Affected Communities standard (see page 304). The risk describes the negative financial effects that may arise, for example, as a result of legal proceedings. For more information, see the Notes to the Consolidated Financial Statements on page 411.

Our double materiality assessment (see page 167) found that ESRS S4 Consumers and End Users was not material, hence we do not report on it. This evaluation is based on the fact that as a B2B company, we market only a very small portion of our products directly to consumers and end users. We report on material aspects of product safety that impact our customers and end users in the chapter E2 Pollution Prevention.

Strategies to manage impacts, risks and opportunities

In developing our business strategies, we also consider the resilience of our business models with regard to economic, ecological and social aspects, as well as their impacts, risks and opportunities. As part of our opportunity and risk management system, strategic risks connected with material economic, ecological and social matters are evaluated (for additional information, see page 87 onward). The strategies of our business units are updated on a regular basis. This is done either individually for the business unit or as part of the overall division strategy. When updating the strategies, we consult with experts from the business units or the operating divisions as well as with the Corporate Center's Corporate Strategy & Sustainability unit. In 2024, we piloted a method to address material topics in the strategies of the business units over the next ten years. Depending on the extent of the strategy revision, resilience reviews, regulatory aspects and stakeholder expectations can be included to estimate future market developments. Upstream and downstream value chains can also be considered in the analysis. In addition, we use our TripleS methodology (Sustainable Solution Steering) to review the resilience of our product portfolio with regard to environmental and social aspects.

We provide more information on the results of our resilience assessment with respect to these two topics in the chapters E1 Climate Change (on page 178 onward) and E4 Biodiversity and Ecosystems (on page 231 onward). We also report on the disclosure requirement ESRS 2 IRO-1 in accordance with the ESRSs requirements in the chapters E2 Pollution Prevention, E3 Water, E5 Resource Use and Circular Economy as well as G1 Business Conduct.

The following tables list the material impacts, risks and opportunities associated with our business. Additional information of the impacts, risks and opportunities associated with each of the ESRS topical standards is provided in the relevant chapter of this Sustainability Statement.

The ESRS index can be found directly online at basf.com/esrs_index.

As a new acknowledged reporting framework in accordance with section 289d, we are voluntarily applying the first set of the European Sustainability Reporting Standards (ESRS), published as a delegated act in the Official Journal of the EU on December 22, 2023, for the first time in full – due to their importance as a reporting standard adopted by the European Commission.

Transition plan for climate change mitigation

Scope and targets

We are pursuing ambitious climate protection targets. We want to reduce greenhouse gas emissions from our production processes (Scope 1) and our energy purchases (Scope 2) by 25% by 2030 compared to the base year of 2018, and are aiming to achieve net-zero greenhouse gas emissions by 2050. Our target focuses on emissions caused by our production and includes around 96% of our Scope 1 emissions and 99% of our Scope 2 emissions. It is compatible with limiting global warming to 1.5°C based on the emission reduction pathways described by the International Energy Agency (IEA) in its study entitled "Net Zero by 2050." Already today, the emissions intensity of our plants for producing basic chemicals such as ammonia, methanol and high value chemicals is below the values defined by the IEA for 2030.

Above and beyond our own production, we take responsibility for emissions along our value chain. This is why we set ourselves a target for our raw materials-related Scope 3.1 emissions in 2023 that includes around 92% of our Scope 3.1 emissions. Raw materials-related emissions from battery materials are initially excluded from the target. By 2030, we want to reduce these Scope 3.1 emissions in relation to the purchasing volume specifically by 15% compared to the 2022 base year.

Paris alignment and SBTi validation

Our target is compatible with limiting global warming to 1.5°C based on the emission reduction pathways described by the International Energy Agency (IEA) in its study entitled "Net Zero by 2050." The IEA's Net Zero by 2050 study reflects a scenario that, measured in accordance with the IPCC Special Report on Global Warming of 1.5°C, is consistent with a 1.5°C scenario for 2030 with a low temperature overshoot and with a 1.5°C scenario in which there is no overshoot for 2050.

In addition, we support various national and international initiatives and are involved in partnerships. For example, we engaged in close dialog with the Science Based Targets initiative (SBTi) to derive science-based climate protection targets for the chemical sector.

Decarbonization levers

To achieve our climate protection targets, we have developed a transition plan that shows our emissions reduction path based on the most important levers. We are focusing on the following emission reduction levers to reduce our greenhouse gas emissions from our own production and energy purchases (Scope 1 and 2):

Renewable energy: We are increasingly meeting our electricity needs from renewable sources.

Operational excellence: Our operational excellence activities are continually improving the energy and process efficiency of our plants.

Low-emission steam generation: In the future, we will increasingly rely on electrification for steam generation and hence also tap previously unused waste heat potential.

Climate-smart technologies: We are developing completely new emission-free and low-emission processes, and are assessing and piloting new technologies for more sustainable chemistry.

Roughly half of BASF's Scope 1 and Scope 2 emissions are attributable to energy produced to operate our plants. Scope 2 emissions can be reduced by up to 3.2 million metric tons of CO2 by 2030 using the "renewable energy" lever. Additional emission reductions of up to 0.6 million metric tons of CO2 (Scope 1) are possible in the period up to 2030 using the "low-emission steam generation" lever. In the long term, new steam generation technologies such as heat pumps and e-boilers not only enable emission reduction but will also enable decoupling of highly efficient steam and power generation in combined heat and power plants. The electricity generated from this today can then also be provided using renewable energy. The other half of our Scope 1 and Scope 2 emissions arise in our production processes. One way of reducing these emissions is the continuous improvement of our plants (operational excellence). We see a reduction potential of up to 0.6 million metric tons of CO2 (primarily Scope 1), which we aim to achieve by 2030. Furthermore, we are working to develop and implement climate-smart technologies so as to facilitate lower-emission production. This will result in further potential reductions of up to 1.1 million metric tons of CO2 (Scope 1) by 2030. Our emission reduction levers enable the reduction of growth-related CO2 emissions that will be added by 2030, which are associated with organic growth and the investment in our new Verbund site in southern China. All reduction measures implemented are to be regarded as long-term. We will counteract growth-driven emission increases between 2030 and 2050 primarily using the "climate-smart technologies" and "low-emission steam generation" levers.

Transition plan strategy approach

The transition plan reflects the market-driven transformation approach set out in our new strategy, which was published in the reporting year and in which we have adopted a step-by-step approach. In the first phase, we already succeeded in securing access to larger volumes of electricity from renewable energy and tested new, climate-smart technologies. Now, in the second phase, we are focusing on customer needs, on Scope 1 reduction actions offering specific opportunities for our business, and on securing our license to operate. At the same time, we are assessing new business models and new technologies. Major investments in scaling up climate-smart technologies will largely be made in the third phase after 2030.

For the progress made in implementing our transition plan, clustered by the relevant emission reduction levers, see "Actions" (page 189). We evaluate and prioritize specific actions for emission reduction and target achievement on an ongoing basis from an economic and technological perspective. We also continuously analyze our portfolio. Consequently, the representation in the graphic depicts the current status of our planning, but will be updated going forward. We will only consider external offsetting measures for our Scope 1 and Scope 2 emissions as a temporary measure in the medium term if our activities were not to make the desired contribution to reducing emissions.

Locked-in emissions and stranded assets

As an energy- and emissions-intensive sector, the chemical industry today has a significant amount of potential locked-in greenhouse gas emissions. This also applies to BASF and was taken into account when assessing our emission reduction levers. Since significant financial resources will be needed to transform our plants, locked-in emissions from assets jeopardize the achievement of our targets in principle. Potential locked-in emissions are factored into our investment decisions, such as the plans for our new Verbund site in southern China. From 2025 onward, the latter will be supplied exclusively with electricity from renewable sources and will serve as a model for sustainable chemical production.

Scope 3 and value chain emissions

Few of our products lead directly to CO2 emissions during their use phase. Nevertheless, we also aim to reduce these emissions even further by constantly looking for new, more sustainable solutions and have already achieved significant emission reductions as a result (see the reduction in Scope 3.11 in "Actions along our value chain" on page 192).

We are focusing on procurement-specific actions to reduce our raw materials-related emissions (Scope 3.1) and are working closely together with our suppliers. In recent years, we have been able to considerably increase the data availability and thereby the transparency of our raw materials-related emissions, and aim to steer these more precisely via our resulting Scope 3.1 target.

What is more, we are taking responsibility for our other emissions along the value chain. Reducing Scope 3 emissions – which account for the majority of our total emissions – presents us with particular challenges, as these are only partly within our own direct sphere of influence and are influenced by a large number of external factors.

We are also increasingly focusing on circularity in the form of renewable and recycled raw materials and raw materials based on the use of CO2 in order to move from linear value creation to closed-loop material cycles. In future, we will drive forward sourcing of renewable raw materials and deploy a make and buy approach similar to that with which we source renewable energy. Feeding in greater amounts of bio-based and recycled raw materials in our existing plants will allow us to leverage the unique strengths of our Verbund and to offer our customers products with lower Product Carbon Footprints (PCFs).

CapEx and investment commitments

The transition plan is embedded in our financial planning and was approved by the Board of Executive Directors and the Supervisory Board. It is based on investments of around €300 million in Scope 1 measures and €250 million in renewable energies between 2025 and 2028. These are part of BASF's green transformation expenditure of €600 million each year on average.

In 2024, we invested €59 million (taxonomy-aligned capital expenditures/capex) in constructing a water electrolysis plant for producing hydrogen at our Ludwigshafen site in Germany.

Furthermore, we invested €149 million, which are attributable to gas-related economic activity. In addition to investments made to achieve our emission reduction target, we are also investing in steam generation at our Verbund site in Zhanjiang, China, which is under construction. Part of steam production there will come from a natural gas fired boiler, alongside to the future use of process waste heat steam.

Carbon credits and removals

As part of the above stated targets, we have committed to reducing our Scope 1, 2 and 3.1 emissions to net zero by 2050. Despite all our efforts, we expect there to be a residual share of emissions in 2050 that cannot be abated using technical or economic approaches. We are aiming to offset all remaining emissions by 2050 inclusive through high-quality, high-credibility nature-based and technical measures, such as the sequestration of CO2 into the soil through farming (carbon farming). We are planning to use ratings such as BeZero and Sylvera, and initiatives such as the Integrity Council for the Voluntary Carbon Market (ICVCM), its Core Carbon Principles and carbon credits assessed using them. At the same time, we are developing internal standards for evaluating projects and considering whether to develop our own projects. We are also evaluating using/developing a project under the European Carbon Removal and Carbon Farming Certification Framework (CRCF). In view of this situation, we will likely use a portfolio of different credits, and will rely on well-known standards such as Verra and Gold Standard, but also credits under Article 6 of the Paris Agreement and the CRCF. BASF did not use any carbon credits in the past business year.

EU Taxonomy alignment

BASF is not an undertaking that is excluded from the EU Paris-aligned Benchmarks in accordance with the exclusion criteria stated in Articles 12(1), points (d) to (g) of Commission Delegated Regulation (EU) 2020/1818 (Climate Benchmark Standards Regulation).

Policies related to climate change mitigation and adaptation

BASF has established comprehensive management and control systems to minimize negative environmental impacts and protect the environment in relation to climate change mitigation and adaptation.

Responsible Care Management System

Scope: Group-wide, covering environmental protection and energy in addition to health and safety

Key content:

• Global environmental protection standards serve to assess environmental impacts such as those resulting from CO2 emissions
• Implementation of technical, operational and administrative measures to control and minimize environmental impacts
• Ensures compliance with national and local environmental legislation
• Global energy standards specifically aimed at reaching Scope 1 and Scope 2 climate protection targets
• Continuous improvement of energy efficiency of operating procedures through energy management systems
• Resource-saving and economic production at sites
• General guidelines for optimizing existing energy supply structures and developing new energy supply concepts
• Evaluation of low-emission and emission-free alternatives such as electricity and steam from renewable sources
• Requirements for systematically collecting and monitoring emissions and energy data as the basis for improving sustainability performance and managing climate protection targets

Governance:

• The Corporate Environmental Protection, Health, Safety and Quality unit in the Corporate Center defines Group-wide management and control systems and monitors compliance with internal requirements and legal regulations
• Sites and Group companies implement requirements locally
• Regular audits of performance and progress to ensure effectiveness of requirements
• Requirements and guidelines are continuously updated

Monitoring:

• Regular audits of performance and progress
• Global network enables information and insights to be shared across the BASF Group on a regular basis

International standards:

• BASF is actively involved in the global Responsible Care® initiative established by the International Council of Chemical Associations
• Energy management systems certified according to DIN EN ISO 50001 at all relevant production sites

Compliance Program and Code of Conduct

Scope: Group-wide, all employees and members of the Board of Executive Directors

Key content:

• Global employee Code of Conduct embeds mandatory standards into everyday business
• Members of the Board of Executive Directors are expressly obligated to follow these principles

Purpose: Aims to ensure adherence to legal regulations and the company's internal guidelines

Sustainable Solution Steering (TripleS) Method

Key content:

• Steers the sustainability performance of product portfolio
• Material element in the process of enhancing transformation topics relating to climate change, energy, resource efficiency and the circular economy
• Actively drives forward adaptation and development of new production processes to reduce environmental footprint of products
• Criteria for reducing CO2 emissions are a key part of the evaluation process
• Products with sustainability concerns are identified and action plans developed to optimize them or replace them with alternative solutions

Monitoring:

• Products are continuously evaluated for severe sustainability challenges

Actions and resources in relation to climate change policies

Overall approach and resources

BASF consistently aligns its actions with climate protection targets based on comprehensive emissions analysis. The transformation toward low-emission chemistry is closely linked to customer transformation. The company is focusing its transformation approach on development and needs of various customer markets, prioritizing projects with growing customer demand and willingness to pay for low-emission and emission-free solutions.

Resources allocated (2024):

• €59 million (taxonomy-aligned capex) invested in constructing a water electrolysis plant for producing hydrogen at Ludwigshafen site, Germany
• No other significant capital and operating expenses within the meaning of EU taxonomy were incurred in 2024 for the actions described

Action 1: Renewable energy supply transformation

Scope: Own operations

What it does: Converting energy supply from fossil to renewable sources, particularly electricity supply. Using a "make and buy" approach.

Time horizon: Short, medium and long term

• Target: Source more than 60% of power needs from renewable sources by 2030

Current performance:

• Electricity from renewable sources: 26% of total electricity consumption in 2024 (2023: 20%)

Specific projects and resources:

Hollandse Kust Zuid offshore wind farm (operational)

• Joint project with Vattenfall and Allianz
• Commissioned successively in 2024, fully operational since summer 2024
• 139 turbines with 1.5 gigawatts capacity
• One of the largest subsidy-free offshore wind farms in the world

Nordlicht 1 and 2 offshore wind farms (planned)

• Contractual agreement with Vattenfall to purchase 49% of shares
• Total capacity: 1.6 gigawatts
• Construction start: 2026 (subject to final investment decision expected in 2025)
• Expected full operation: 2028
• Built without government subsidies
• Just under half of electricity to supply European production sites, particularly Ludwigshafen

Zhanjiang offshore wind farm, China (planned)

• Joint venture with Mingyang for development, construction and operation
• Capacity: 500 megawatts
• Location: Zhanjiang, Guangdong province, southern China
• Scheduled operation date not specified
• Purpose: Fully supply Verbund site in Zhanjiang (currently under construction) with renewable electricity

Action 2: Supplier CO2 Management Program

Scope: Upstream value chain (Scope 3.1 emissions)

What it does: Achieve transparency and reduce emissions from raw materials through Product Carbon Footprints (PCFs)

Time horizon:

• Launched: 2021
• Next phase launched: 2024 (PCF reduction pathways with suppliers)

Implementation details:

• Requested PCFs from more than 1,900 suppliers (accounting for ~80% of raw materials-related GHG emissions)
• After ~3 years: validated PCFs for more than 1,700 raw materials (~30% coverage of raw materials-related GHG emissions)
• 2024: Launched next phase to agree PCF reduction pathways with suppliers
• Dialog forums and BASF Supplier Days held in 2024 in Ludwigshafen (Europe) and São Paulo (South America)
• Format to roll out to Asia Pacific and North America in 2025
• Enhancing purchasing processes with PCFs as relevant criterion

Non-financial resources:

• Responsible Care audits at selected contract manufacturers
• Knowledge sharing on assessment and calculation methods

Specific raw materials projects:

• Long-term purchase contract for certified biomethane with ENGIE (2024) for use at Antwerp and Ludwigshafen Verbund sites
• Agreement with Graphit Kropfmühl (AMG subsidiary) to supply Guarantees of Origins for renewable electricity, reducing graphite PCF for use in Neopor® insulation material

Action 3: Scope 3 emissions reduction along value chain

Scope: Downstream value chain (Scope 3.9, 3.11, 3.12)

What it does: Targeted measures to reduce emissions from transport, product use, and product disposal

Key initiatives:

Transport emissions (Scope 3.9)

• Monomers division developed shipment emissions dashboard
• Enables sharing standardized, reliable data on shipment-related emissions with customers
• Identifies most sustainable means of transportation

Use of sold products (Scope 3.11)

• Product adaptations (e.g., largely dispensing with climate-damaging blowing agents for foaming polyurethane foams)
• Outcome: ~73% reduction in Scope 3.11 emissions since 2018

Product disposal (Scope 3.12)

• Increased use of renewable raw materials
• Circular solutions (see page 247)

Action 4: Hydrogen production electrolysis plant

Scope: Own operations

What it does: Construction of proton exchange membrane electrolyzer for emission-free hydrogen production

Location: Ludwigshafen site, Germany

Time horizon: Commissioning in coming years

Resources allocated:

• €59 million capex in 2024 (taxonomy-aligned)
• €14.8 million grant from Germany's Federal Ministry for Economic Affairs and Climate Action (BMWK) under Decarbonization in Industry funding program
• Financed by European Union via NextGenerationEU fund
• Funded by BMWK and Federal State of Rhineland-Palatinate

Link to targets: Contributes to climate change mitigation and supports renewable energy transition

Taxonomy-aligned activities summary

2024 Taxonomy alignment:

• Sales revenue: 1.2% of total (manufacture of batteries: 0.9%)
• Capital expenditures: 3.7% of total investments
  • Manufacture of batteries: 2.6%
  • Emission-free hydrogen plant investment also reported
• Operating expenditures: 1.7% of total (manufacture of batteries: 1.1%)

Notes: Taxonomy-aligned portion remains considerably lower than taxonomy-eligible portion due to various factors (e.g., only small proportion of plastics in primary form contain renewable raw materials above 5% threshold).

By 2030, we want to reduce our CO2 emissions from production (Scope 1) and energy purchases (Scope 2) by 25% compared with 2018 (2018: 21.9 million metric tons, 2030 target: 16.4 million metric tons). In the 2024 business year, this figure was 17.0 million metric tons of CO2 equivalents (2023: 17.0 million metric tons).

By 2030, we want to reduce the specific CO2 emissions from the purchase of our raw materials (Scope 3.1) by 15% compared with 2022 (2022: 1.64 kilograms of CO2 per kilogram of raw materials purchased, 2030 target: 1.39 kilograms). Our specific Scope 3.1 emissions in 2024 amounted to 1.58 kilograms of CO2 per kilogram of raw materials purchased (2023: 1.67 kilograms).

By 2050, we endeavor to reach net-zero greenhouse gas emissions (Scope 1, 2 and 3.1).

Energy consumption and mix

Total energy consumption

BASF's total energy consumption amounted to 75.6 million MWh in 2024 (2023: data not disclosed in excerpts for prior year total). Total energy consumption includes fuel demand for the company's own energy generation and production plants, plus power and steam imports for own use.

Energy consumption and mix (2024)

The following table presents BASF Group's energy consumption disaggregated by source, reported under both financial control and operational control consolidation approaches:

¹ Residues from chemical production plants that cannot be reused in the BASF Verbund.

² Only contracts aimed at the use of nuclear energy are included.

³ Energy intensity is determined on the basis of the "manufacturing" high climate impact sector. The sales revenue from high climate impact sectors corresponds to the sales revenue in the report on the Results of Operations.

Renewable electricity share

In 2024, electricity from renewable sources as a share of total electricity consumption rose to 26% (2023: 20%). This figure relates specifically to electricity consumption and differs from the overall renewable energy share of 4.8% in total energy consumption shown above.

Methodology and scope

• Consolidation basis: Data presented under both financial control and operational control approaches as per GHG Protocol.
• Total energy consumption adjusted to include by-product streams used as energy sources in process plants (adjustment made compared to prior-year reporting).
• Renewable electricity sourced through long-term supply agreements with plant operators (PPAs), Guarantees of Origin, renewable energy certificates, and company investments in offshore wind farms.
• Scope: Group-wide consumption including production sites and energy generation facilities.
• Market-based approach used for electricity sourcing categorization.

Gross Scopes 1, 2, 3 and Total GHG emissions

Greenhouse gas emissions (Scope 1 and Scope 2)

BASF reports its greenhouse gas emissions according to the Greenhouse Gas Protocol, covering Scope 1 (direct emissions) and Scope 2 (indirect emissions from purchased energy). The figures exclude the sale of energy to third parties.

*The figure for 2023 has been adjusted to reflect updated data.

Target: By 2030, reduce CO₂ emissions from production (Scope 1) and energy purchases (Scope 2) by 25% compared with 2018 baseline (from 21.9 to 16.4 million metric tons).

2024 actual: 17.0 million metric tons of CO₂ equivalents.

Scope 3.1 emissions – Purchased goods and services (raw materials)

BASF tracks specific CO₂ emissions from the purchase of raw materials (Scope 3.1):

**The figure for 2023 was adjusted due to increased data availability.

Scope: Scope 3.1, raw materials excluding battery materials, services and technical goods, excluding greenhouse gas emissions from BASF trading business. Future adjustment of the baseline in line with the "Together for Sustainability" guideline (TfS) possible depending on the availability of further primary data. The base year is 2022. In the reporting year, the baseline was adjusted in line with the TfS guideline due to the availability of further primary data.

Target: By 2030, reduce the specific CO₂ emissions from the purchase of raw materials (Scope 3.1) by 15% compared with 2022 (from 1.64 to 1.39 kg CO₂ per kg of raw materials purchased).

Scope 3 – Other categories

BASF does not provide a comprehensive breakdown of Scope 3 emissions by all 15 GHG Protocol categories in the excerpts provided. Only Scope 3.1 (purchased goods and services – raw materials) is reported with specific metrics.

Total GHG emissions

The report does not provide a single combined figure for Scope 1 + Scope 2 + Scope 3 total GHG emissions in the excerpts provided. The stated ambition is to reach net-zero greenhouse gas emissions (Scope 1, 2 and 3.1) by 2050.

GHG intensity

No GHG intensity metric (e.g., tCO₂eq per million euros of revenue) is disclosed in the provided excerpts.

Methodology notes

• Greenhouse gas emissions include CO₂, N₂O, CH₄, HFC, PFC, SF₆ converted into CO₂ equivalents according to the Greenhouse Gas Protocol.
• Scope 1 and Scope 2 figures exclude direct emissions from the generation of energy for third parties.
• Scope 3.1 excludes battery materials, services, technical goods, and emissions from BASF trading business.
• Figures are subject to adjustments based on updated data availability and alignment with TfS guidelines.

BASF SE (parent company) – Scope 1 + Scope 2

For BASF SE (the parent company operating primarily the Ludwigshafen Verbund site), greenhouse gas emissions are reported in the nonfinancial disclosures:

These figures are part of the nonfinancial statement for BASF SE and represent a subset of the BASF Group total.

Anticipated financial effects from material physical and transition risks and potential climate-related opportunities

Based on the disclosure requirement index provided, BASF has indicated the following for ESRS E1-9:

Disclosure Status

All data points under ESRS E1-9 are marked as "Not applicable" in BASF's disclosure requirement index.

Policies related to pollution

BASF addresses pollution through several overarching policies and management systems referenced in its E2-1 disclosure:

Responsible Care Management System

Scope:

• Applied globally across BASF operations
• Covers own production sites and Group companies

Key content / principles:

• Encompasses environmental protection, process safety, product safety, transportation safety, emergency and crisis management
• Based on the International Council of Chemical Associations' (ICCA) global Responsible Care® initiative
• Includes global standards for emissions to air and water defined in Group-wide requirements
• Requirements cover process and transportation safety to prevent production and transportation-related product spills and leakages into air and water
• Water protection concepts must be implemented at all production sites to prevent unforeseen emissions and pollution of surface or ground water
• Requirements and guidelines are continuously updated and accessible via internal BASF database

Governance:

• Implementation and compliance responsibility lies with sites and Group companies
• Global BASF network of experts for information exchange

Monitoring:

• Emissions to air and wastewater subject to stringent controls
• Impacts assessed carefully and in compliance with applicable laws and regulations
• Continuous monitoring and analysis of regulatory framework
• Evaluation of whether regulatory developments require infrastructure investments and system development

Position paper on water protection

Key content / principles:

• Sets out responsible handling of water as a resource and sustainable water management
• Aims to reduce negative impacts on water quality

Public availability:

• Available at basf.com/water

Supplier Code of Conduct

Scope:

• Part of risk-based sustainability management for procurement
• Applies to value chain (suppliers)

Note: The disclosure references this policy but details are provided elsewhere in the Sustainability Statement (page 151 onward).

Other referenced policies

The disclosure also references:

• Global standards for environmental protection, process safety, product safety, transportation safety, emergency and crisis management (part of Responsible Care Management System)
• TripleS (Sustainable Solution Steering) method - used for steering product portfolio in response to regulatory changes

BASF states that explanations of overarching policies regarding scope of application, accountability, impacts in the value chain, global applicability, accessibility to stakeholders and engagement can be found in General Disclosures (page 151 onward).

Actions and resources related to pollution

BASF's actions for avoiding and minimizing environmental pollution are primarily decentralized activities, projects and initiatives not assigned to a centrally managed action plan. They fall within the responsibility of individual sites and Group companies and aim for continuous optimization.

Actions in own production

Product design and portfolio management

• Continuous investment in research and development to design products with minimal environmental impacts
• Use of TripleS instrument to steer product portfolio based on sustainability performance
• Review of relevant global product portfolio continuously, at least every four years
• Scope: Own operations
• Time horizon: Continuous/ongoing

Operational excellence and process efficiency

• Continuous design of plants and processes to be more efficient and resource-saving
• Focus on operational excellence creates direct incentives for investing in efficiency projects
• Projects address all levels of mitigation hierarchy: Prevent, reduce, recapture and reuse, restore and regenerate
• Scope: Own operations
• Time horizon: Continuous/ongoing

Air emissions reduction

• Reduction of nitrogen oxide emissions using catalysts
• Feeding waste gases back into production processes
• Scope: Own operations
• Time horizon: Continuous/ongoing

Water emissions and wastewater treatment

• Reduction of wastewater volumes and contaminant loads at source in production processes
• Internal reuse of wastewater and material flows where possible
• Treatment methods include: biological processes, chemical oxidation, membrane technologies, precipitation, adsorption
• Freeport, Texas wastewater treatment project: Membrane bioreactor commissioned in 2023 to improve capacity and cleaning performance; treated wastewater to be reused in medium term to reduce freshwater needs
  • Scope: Own operations (Verbund site Freeport, Texas)
  • Time horizon: Commissioned 2023; medium-term reuse planned
• Tarragona, Spain wastewater reuse project: Collaboration with water supplier AITASA and other companies to expand wastewater reuse
  • Scope: Own operations with external stakeholders
  • Time horizon: Medium term

Risk management and safety

• Regular risk assessments of wastewater
• Demanding safety standards for planning, building and operating plants (meeting and exceeding local legal requirements)
• Safety concepts for every plant covering safety, occupational health and environmental protection aspects
• Regular implementation checks at intervals dependent on risk potential
• Regular updates of safety systems
• Scope: Own operations
• Time horizon: Continuous/ongoing

Effectiveness evaluation

• Responsible Care audits covering: Organization and management system, Product stewardship, Transportation safety, Process safety, Environment (air, water, waste), Emergency response
• Scope: Own operations
• Time horizon: Regular/ongoing

Customer support and prevention

• Provision of information on safe use and handling of products
• Information on hazards, first aid measures, measures for accidental release and disposal
• Expert network support for customers
• Scope: Downstream (customers)
• Time horizon: Continuous/ongoing

Targets related to pollution

BASF does not have specific pollution reduction targets under ESRS E2-3. The company states:

No specific reduction targets for pollution

"BASF does not have a specific reduction target for emissions to air (excluding GHG) and water in the topic category Pollution Prevention. All relevant indicators are monitored and published on a regular basis."

Reliance on global sustainability targets

The company relies on its global sustainability-related corporate targets as "effective levers in terms of environmental protection in general," including:

• Climate targets to reduce greenhouse gas emissions
• Target of closing loops
• TripleS target
• Sustainable water management target
• Responsible procurement target
• Process safety target

Process safety target as environmental protection

"We also endeavor to minimize potential incidents impacting the environment through our targets for resource-efficient and safe production, particularly our process safety target."

2024 performance

"In 2024, we had no transportation incidents with significant impacts on the environment."

From 2025 onward, environmental impacts from process safety incidents will be systematically recorded in a global database.

Pollution of air, water and soil

Emissions to air and water in 2024 (excluding GHG)

Note: A hyphen (–) indicates that the parameter and medium in question do not trigger a reporting obligation or that the emissions are not above the threshold value.

Summary data from 2024 fundamentals

Methodology notes

Measurement methods for determining the quantities of substances emitted in connection with environmental pollution are described in the General Disclosures section. Emissions are systematically documented and reviewed in a Group-wide database. For additional information on measurement methods and data collection processes, see page 150 onward in the Sustainability Statement.

Substances of concern and substances of very high concern

Substances of concern or of very high concern may represent an integral component of the chemical raw materials used for production or of chemical products. To this extent, a portion of our products, which are key input products in further industrial or professional value creation or application, contain substances of concern or of very high concern. We address the safe handling and usage of chemical raw materials as part of our product safety. BASF understands product safety to be an integral part of all business processes, as an important element of our risk management and as an essential pillar of our commitment to Responsible Care®.

We continuously work on ensuring our products – including those that may contain substances of concern or very high concern – pose no risk to people and the environment when they are used responsibly and in the manner intended. A thorough safety and risk assessment enables us to serve markets with innovative and more sustainable products that meet regulatory requirements while still responding to trends.

We aim to comply with all relevant national and international laws and regulations. The guidelines, requirements, processes and responsibilities described above in this chapter under "Strategy and governance," also pertain to the handling of substances of concern and of very high concern.

We document and evaluate the safety, health and environmental information for our substances and products in a global database. We update this information on an ongoing basis. The database forms the basis for communicating this information via our safety data sheets, which we provide to our customers in around 40 languages. These include information on physicochemical, toxicological and ecotoxicological properties of products, potential hazards, first aid measures, measures taken in the case of accidental release and disposal. Our global emergency hotline network enables us to provide information around the clock. To ensure that people who buy, sell, use, transport or dispose of our products can quickly find information about the products and their associated hazards, we use the Globally Harmonized System (GHS) to classify and label our products around the world, provided this is legally permissible in the country concerned. We take into account national or regional adaptations within the GHS framework if applicable, such as the EU's regulation on the classification, labeling and packaging of substances and mixtures (CLP Regulation).

If necessary, we advise our customers on product safety. We set global requirements on the safe transport of dangerous goods for our logistics providers (see page 213). We also train our employees worldwide on the proper handling and usage of selected products with special hazard potential. In associations and together with other manufacturers, BASF supports the establishment of voluntary global commitments to prevent the misuse of chemicals. We are also involved at national and international level in various initiatives to further develop risk assessments, such as that of the European Centre for Ecotoxicology and Toxicology of Chemicals (ECETOC).

With such efforts, we aim to ensure that these substances or products containing these substances with very high hazard potential are safely handled and to ensure that impacts on human health and the environment can be prevented.

Substances of concern and of very high concern are subject to strict regulatory supervision, and the list of restricted substances with hazardous properties is continuously growing. When a substance is added to a regulatory list, this can change both the future availability of raw materials and the market behavior of customers and consumers. Normally, such changes are planned well in advance and transparently, allowing the industry to prepare by taking suitable measures, such as substitution planning or the implementation of derogations. Our proactive TripleS steering instrument, for example, makes a substantial contribution to planning a sustainable portfolio. A potential material risk for value chains, which would, however, not specifically affect BASF, could only arise in the event of an unforeseen proliferation of regulatory measures.

The substances of concern or of very high concern deployed by BASF in global value chains in the 2024 business year are stated in the following tables. As an integrated chemical company, BASF manufactures a broad portfolio of products, many of which are further processed by customers in the chemical industry. We handle the substances in our production appropriately and supply our customers with products that can be used safely if handled properly. As a B2B company, we market only a very small portion of our products directly to consumers and end users. The values listed in the tables also include multiple counts if several main hazard classes apply to a substance. The values therefore do not correspond to the total tonnages actually introduced into the downstream value chain.

Information about substances of concern (SoC) that are classified in one of the following hazard classes or hazard categories in Part 3 of Annex 4 of Regulation 1272/2008 (CLP Regulation)

Where components in a product/material are assigned to more than one main hazard class, the volume of components will be included in each hazard class, respectively. Emissions (separate reporting via environmental legislation) not included. Not yet implemented part of the EU regulation.

Information on substances of very high concern (SVHC) that correspond to the criteria pursuant to Article 57 and that have been identified pursuant to Article 59 (1) of the REACH regulation (EC) 1907/2006

Where components in a product/material are assigned to more than one main hazard class, as nominated in the candidate list, the volume of components in each hazard class will be included, respectively. Emissions (separate reporting via environmental legislation) not included.

Policies related to water and marine resources

BASF does not disclose a standalone dedicated policy specifically for water and marine resources under ESRS E3-1. Instead, the company addresses water protection through several integrated policies and management systems.

Responsible Care Management System

• Scope: All production sites globally
• Key content: The Responsible Care Management System encompasses environmental protection requirements and standards, including water protection as a core element. It is based on the International Council of Chemical Associations' (ICCA) global Responsible Care® initiative.
• Monitoring: Compliance is monitored through Responsible Care audits covering environment (air, water, waste) areas
• Links to international standards: Based on the Responsible Care® initiative; supports the United Nations' Sustainable Development Goals (SDGs)

Position Paper on Water Protection

• Key content: Reflects BASF's commitment to water protection and the responsible use of water as a resource
• Public availability: Available at basf.com/water
• Links to international standards: Commitment to the United Nations' Sustainable Development Goals (SDGs)

Corporate Requirement Environmental Protection

• Scope: All production sites and Group companies globally
• Key content: Defines global standards and guidelines for water, stipulating that water protection concepts must be implemented at all production sites to prevent emissions and pollution of surface or groundwater. Also covers process and transportation safety to prevent product spills into water bodies.
• Who approves and oversees: Corporate Environmental Protection, Health, Safety & Quality unit in the Corporate Center
• Monitoring: Regular audits conducted by the Corporate Environmental Protection, Health, Safety & Quality unit to create safety and environmental profiles. Corrective measures are determined with specific time frames and monitored through follow-up audits.
• Public availability: Accessible via internal BASF database

Supplier Code of Conduct

• Scope: All suppliers globally
• Key content: Sets out expectations of suppliers covering areas of the Responsible Care® initiative, including the responsible use of water as a resource
• Links to international standards: Covers Responsible Care® initiative requirements

Sustainable Water Management Approach

• Scope: Verbund sites and production sites in water stress areas (covering around 90% of BASF's total water abstraction by 2030)
• Key content: Uses the Alliance for Water Stewardship (AWS) Standard as guidance. Focuses on water availability, water quality, and impact of water use on the environment and other users. Sites conduct regular assessments of the water situation in catchment areas.
• Links to international standards: Alliance for Water Stewardship (AWS) Standard used as guidance
• Monitoring: Sites regularly assess water situation in catchment areas, particularly when changes are made to production infrastructure, but no later than every five years

The company notes in the index table (page 325) that a "dedicated policy" for water and marine resources is disclosed on page 223, though the actual disclosure describes integrated approaches rather than a single standalone policy document. BASF states that "sustainable oceans and seas" is "not material" to their operations.

Actions and resources related to water

BASF states that actions in sustainable water management are often decentralized activities, projects and initiatives at the site and Group company level. The company explicitly notes: "we have not defined an action plan with central resource allocation for sustainable water management."

Overall approach

• Actions aim to ensure continuous optimization and further development
• Fall within the responsibility of sites and Group companies
• Aligned with BASF approach to sustainability steering
• Focus on operational excellence to continuously design plants and processes to be more efficient and resource-saving
• Projects address all levels of the mitigation measure hierarchy: Prevent, reduce, recapture and reuse, restore and regenerate

Actions in own production

Continuous analysis and implementation of improvement actions, including:

• Site-based projects to improve water efficiency or wastewater quality
• Off-site measures in collaboration with third parties to improve water situation in catchment areas

Specific site projects mentioned:

• General Lagos site, Argentina: Process optimizations including use of modified valves and recycling of low-temperature cooling water

  • Outcome: Water savings of 22% since 2018
  • Scope: Own operations

• Verbund site Freeport, Texas: Commissioned membrane bioreactor for treating wastewater in 2023

  • Outcome: Improved capacity and cleaning performance of wastewater treatment plant
  • Time horizon: Medium term goal to reuse treated wastewater to reduce freshwater need
  • Scope: Own operations

• Tarragona site, Spain: Collaboration with water supplier AITASA and other companies

  • Time horizon: Medium term expansion of wastewater reuse
  • Scope: Own operations / partnerships

• Guaratinguetá site, Brazil: "Incentivo ao Produtor de Água" program since 2011

  • Partners: Local authorities, Fundação Eco+, and other partners
  • Activities: Improved soil management and reforestation of primary forests
  • Outcome: Significantly decreased surface runoff and soil erosion in Ribeirão Guaratinguetá catchment area
  • Scope: Catchment area restoration

General measures mentioned (not site-specific):

• Intelligent cooling water systems
• Increased water reuse
• Multimodal transportation concepts with combined transportation methods
• Optimization of energy consumption and water use

Actions along the value chain

Upstream value chain:

• Supplier assessments: Audit supplier compliance with environmental standards worldwide as part of regular supplier assessments

  • Activities: Support suppliers in developing and implementing appropriate measures, such as correct handling of wastewater
  • Scope: Upstream value chain

• Pragati project (since 2016): Efficient water use for more sustainable farming of castor beans in India

  • Scope: Upstream value chain (agricultural sourcing)

• Lithium sourcing: Collaboration with BMW Group, Mercedes- [excerpt cuts off]

  • Scope: Upstream value chain

Resources allocated

No quantified financial or non-financial resources are disclosed. The company states that actions create "direct incentives for investing in efficiency projects" but does not provide specific capex/opex amounts or dedicated personnel allocations for water-related actions.

We want to establish sustainable water management at all production sites in water stress areas and at our Verbund sites by 2030. In 2024, we reached a share of 65% (2023: 57%).

We define water stress areas as regions in which more than 40% of available water is used by industry, households and agriculture. Our definition is based on the Water Risk Atlas (Aqueduct 4.0) published by the World Resources Institute.

Water consumption

Water balance of the BASF Group in 2024

Total water abstraction: 1,507 million cubic meters

Total water use: 7,102 million cubic meters

Total water recycled and reused: 5,734 million cubic meters

Total water consumption: 76 million cubic meters

Water discharge: Not specifically disclosed in total for 2024

Water abstraction by source

• Freshwater (rivers and lakes): Most of water abstraction
• Alternative sources (treated municipal wastewater, brackish water, seawater): Small part
• Other (part of raw materials and steam, or released in production): Small part

Water use by purpose

• Cooling purposes: 88% of total water abstraction (1,326 million cubic meters)
• Production plants (extraction, dissolution, cleaning): 12% of total water abstraction (181 million cubic meters)

Water consumption breakdown

• Evaporation in recirculating cooling systems: Majority of consumption
• Water content in sales products: Smaller amount
• Other consumption at sites: Remaining amount

Water in water stress areas

Sites in water stress areas: 30% of production sites

Water abstraction in water stress areas: 19 million cubic meters (1% of total)

Water consumption in water stress areas: 9 million cubic meters

Water in areas of high/extremely high overall water risk

Sites in high/extremely high overall water risk areas: 23% of production sites

Water abstraction in high/extremely high risk areas: 13 million cubic meters (1% of total)

Water consumption in high/extremely high risk areas: 6 million cubic meters

Water intensity

Water intensity (2024): 1,171 cubic meters per million € net revenue

Comparative data from other excerpts

Note: The excerpt on page 110 shows different values (1,063 million cubic meters abstraction, 2,021 million cubic meters use, 962 million cubic meters discharge), which appear to be for a different reporting scope or time period than the main 2024 water balance.

Methodology notes

• Water stress areas defined as regions where more than 40% of available water is used by industry, households and agriculture, based on WRI Water Risk Atlas (Aqueduct 4.0)
• Water consumption calculated as sum of evaporation in cooling processes, water content in sales products, and water consumed otherwise at sites
• Aqueduct 4.0 used to identify sites with high or extremely high water stress and/or overall water risk

Transition plan and consideration of biodiversity and ecosystems in strategy and business model

Integration into strategy and business model

We are currently undergoing a transformation toward climate neutrality and observance of the planetary boundaries. To this end, we have set ourselves ambitious targets (see page 31) that impact our business models and our strategy as well as how they interface with nature, biodiversity and ecosystems.

– We strive to use more and more renewable alternatives to fossil raw materials and energy. – We aim to continuously reduce emissions in the natural world and improve our resource use on an ongoing basis. – We manage our product portfolio with regard to the product-related contributions to greater sustainability (TripleS: Sustainable Solution Steering, see page 161).

These three areas of transformation are also relevant to many of our stakeholders, such as investors, customers, legislators, suppliers, insurers and nongovernmental organizations.

Use of frameworks

We actively seek out partnerships with relevant interest groups and organizations worldwide, for example in the Taskforce on Nature-related Financial Disclosures (TNFD), to expand our knowledge, to raise awareness about biodiversity and to drive necessary actions forward.

Nature-related risk assessment and resilience

We generally consider the resilience of our business models at the level of our business units or operating divisions along the value chain (see page 169). The current resilience of our business models in relation to biodiversity and ecosystems was examined in 2024 in preparation for our double materiality assessment. In our Nature Advisory Council, we discussed aspects that were part of this assessment, such as our approach to renewable raw materials. Through the use of big data analysis, stakeholder viewpoints were also incorporated into our considerations.

The assessment was conducted under the basic assumption of continuity concerning our current raw materials base. The examination focused on those business models connected with the impacts identified in this topic category: The use of industrial chemicals and the use of crop protection products.

Overall, we assess our resilience level as high. As a chemical company, we still mainly use fossil raw materials. Our sourcing of renewable raw materials is diversified, leading to low dependence on biodiversity and ecosystem services. We regard the availability of water in sufficient quality and quantity as an important, but not material, dependency on ecosystem services. This dependency is documented as part of our opportunities and risk management and is addressed by means of our sustainable water management (see page 225). We therefore regard our physical risks as low.

We actively pursue actions (see page 248) to reduce our dependency on fossil-based technologies and raw materials. This increases our dependency and impacts on biodiversity and ecosystems. The associated transitory and systemic risks have been considered and assessed as not material.

In respect of our business model in the field of agriculture, the long-term market demand for crop protection products and support in food production results in a high level of resilience. The transitory and systemic risks associated with this line of business have been considered and assessed as important but not material.

Mitigation hierarchy and approach

With a view to avoiding impacts on nature, we are guided by the risk mitigation hierarchy. If impacts cannot be minimized, we aim to reduce them, support the restoration of nature or contribute to the transformation of value chains toward better environmental outcomes.

Material impacts

Impact of land use on the sourcing of raw materials

Human use of land has impacts on biodiversity and the conservation of ecosystems. We pursue our ambitious climate targets (see page 194) and seek to increasingly offer customers products that make a positive contribution to sustainability in the value chain (see page 161). This includes partially replacing fossil raw materials with renewable alternatives. This has a positive impact on the carbon footprint of the product concerned. At the same time, however, the cultivation of renewable raw materials must be considered from a sustainability point of view. If plants are grown in monocultures or if forests are cleared to enable cultivation, this has a negative impact on biodiversity and ecosystems. This may lead to land degradation.

Therefore, our risk assessments when sourcing renewable raw materials take into account the protection of biodiversity and ecosystems, as well as social factors such as working conditions (see page 298) and food security. We carefully weigh advantages and disadvantages, for example with life cycle analyses. Moreover, we seek dialog with our stakeholders to identify conflicting goals. We also take into consideration recognized certification standards in our decisions, such as the Roundtable on Sustainable Palm Oil (RSPO).

For our biomass balance portfolio (see page 250), we only source renewable raw materials that are certified in accordance with recognized standards, such as the International Sustainability and Carbon Certification (ISCC) or the REDcert scheme for sustainable biomass.

Since 2023, our Care Chemicals division has been publishing a comprehensive Responsible Sourcing Report, which has replaced the previously published Palm Progress Report. This report provides an annual summary of our activities and progress in the pursuit of greater sustainability and transparency in the palm value chain and in the value chains of other renewable raw materials.

Through the sourcing of raw materials that have been mined or otherwise extracted, we exert a significant influence on the degradation of land and on the condition of ecosystems. Mining can result in soil erosion, a loss of biodiversity and the pollution of water sources. The BASF procurement requirement ensures that environmental and social criteria are taken into account during procurement. We expect our raw material suppliers to meet environmental and social requirements (see page 239). By fostering the circular economy, we are able to reduce demand for newly mined raw materials. BASF is involved in various projects to improve sustainability in the supply chain, such as in connection with the recycling of lithium-ion batteries. The company's Verbund concept enables the efficient use of raw materials by using a plant's by-products as feedstocks in other processes, thereby saving raw materials and energy.

Land use by BASF sites

The operation of our sites represents land use. Our sites comprise production plants, research and office buildings and agricultural testing grounds, among other things. We utilize a total surface area of approximately 43,000 hectares, of which around 23%¹ is sealed.

Stakeholder engagement

In the event that our business activities negatively impact or could negatively impact affected communities, we involve them or their representatives in one of our stakeholder engagement formats (see page 308).

Policies related to biodiversity and ecosystems

BASF's governance in relation to biodiversity and ecosystems is based on three internationally recognized reference points:

• The five drivers of biodiversity loss as defined by IPBES
• The Kunming Montreal Global Biodiversity Framework (GBF) and its target of reducing biodiversity loss and reversing the trend by 2030
• The United Nations' Sustainable Development Goals (SDGs), including Zero hunger (SDG 2) and Life on land (SDG 15)

BASF has implemented a variety of governance approaches to minimize impacts on biodiversity in the area of land use. The company references several policies, with detailed explanations provided in the General Disclosures chapter (page 151), including application, accountability, impacts in the value chain, global applicability, accessibility to stakeholders and engagement thereof.

Supplier Code of Conduct

Key content:

• Sets expectations of suppliers with regard to environmental, labor and social standards in the supply chain
• Includes commitment to preserving biodiversity

Scope:

• Suppliers in the value chain

Monitoring:

• Multistage control process to ensure compliance

Principles for the responsible sourcing of renewable raw materials

Key content:

• Commitment to stopping or reversing biodiversity loss within BASF's sphere of influence
• Embedded in strategic and procurement processes
• Aims to put the BASF raw materials portfolio on a sustainable footing

Introduction:

• Expanded procurement requirement introduced in 2024

Scope:

• Renewable raw materials sourcing

Monitoring:

• Multistage control process to ensure compliance

BASF Palm Sourcing Policy

Key content:

• Defines expectations of suppliers in the palm-based value chain
• Addresses certification standards, traceability, environmental aspects
• Includes observance of workers' rights and the rights of Indigenous peoples
• Includes the inclusion of smallholder structures

Scope:

• Palm oil, palm kernel oil and their derivatives suppliers
• Covers ingredients for cosmetics, detergent, cleaner and food industries

Based on:

• Supplementary to the Supplier Code of Conduct

Link to standards:

• Third-party certification in accordance with Roundtable on Sustainable Palm Oil (RSPO) standards
• Enables biodiversity-related criteria to be taken into account when sourcing raw materials

Monitoring:

• Regular monitoring of deforestation activities using palmoil.io platform (provided by MapHubs)
• Monitoring of possible breaches of regulations at suppliers' sites
• Achievement of targets when sourcing certified raw materials

BASF position on forest protection

Key content:

• Referenced as part of governance approaches to minimize impacts on biodiversity

Note:

• Detailed explanations provided in the General Disclosures chapter (page 151)

Global environmental protection standards

Key content:

• Internal environmental protection requirements

Oversight:

• Corporate Environmental Protection, Health, Safety & Quality unit in the Corporate Center

Monitoring:

• Regular audits conducted to monitor compliance with internal environmental protection requirements

Note:

• Detailed explanations provided in the General Disclosures chapter (page 151)

Additional governance notes:

Governance in respect of the drivers Climate Change, Pollution and Water is described in the respective ESRS standards and therefore not elaborated upon in E4-2 (Climate Change page 182 onward; Pollution Prevention page 207 onward; Water page 222 onward).

The company states it will continuously further develop its governance, including with regard to protecting biodiversity in the areas around its sites. As the double materiality assessment did not identify any material dependencies, opportunities or physical/transitory risks in this topic category, the policies do not refer to these aspects.

Actions and resources related to biodiversity and ecosystems

Overview of key measures

BASF identifies the following as key measures to ease pressure on biodiversity and ecosystems:

• The steering of the product portfolio toward more sustainability through TripleS
• Measures concerning the sourcing of certified palm-based raw materials

Additional measures represent locally organized activities, projects and initiatives not assigned to any centrally managed action plan. Actions concerning Climate Change and Pollution are described in chapters E1 and E2. Water protection actions are discussed separately.

TripleS (Sustainable Solution Steering)

Scope: Product portfolio (own operations and downstream value chain)

Time horizon: Continuous review of relevant global product portfolio, at least every four years; updated in 2022

Description:

• Steering tool for product portfolio based on sustainability performance
• Updated in 2022 to further steer portfolio toward climate protection, climate neutrality and circular economy
• Evaluation includes criteria for water protection: more efficient water use in production, new approaches to water treatment, lower water consumption
• Products with sustainability concerns classified as "Monitored" or "Challenged"
• Action plans mandatory for both categories
• Challenged products phased out within five years of initial classification

Expected outcomes: More sustainable product portfolio, reduced environmental footprint

Sourcing of renewable raw materials - Palm-based raw materials

Scope: Upstream value chain (Malaysia and Indonesia primarily)

Time horizon: Long-term (member of RSPO for 20 years; ongoing initiatives)

Actions and initiatives:

1. Central Kalimantan smallholder support (Indonesia)

• Start date: 2023
• Partners: Leading natural cosmetics manufacturer, Indonesian nonprofit organization Kaleka
• Activities: Promote regenerative agricultural methods, help establish favorable political framework conditions and regulations
• Target beneficiaries: Smallholders in Central Kalimantan

2. Sumatra local project

• Partners: Forum for Sustainable Palm Oil
• Location: Sumatra

3. Solidaridad partnership (Indonesia and Malaysia)

• Start date: 2023
• Partners: Nongovernmental organization Solidaridad
• Time horizon: Program focused on 2024 activities
• Activities:
  • Promote sustainable palm oil
  • Improve living conditions of smallholders
  • Develop viable and resilient production systems
  • Support integrative market access systems
  • Assist farmers in preparing for compliance with international standards
  • Support certification of agricultural methods
  • Train farmers to foster continued involvement in the sector

4. Colombia palm oil sustainability partnership

• Start date: 2024
• Partners: Nonprofit organization Solidaridad, Fedepalma (organization representing palm oil farmers and mills)
• Time horizon: Long-term
• Objective: Promote more sustainable palm oil production in Colombia by implementing improved and more sustainable growing practices among local producers

Governance and compliance:

• Grievance mechanism for palm value chain reflecting commitment to No Deforestation, No Peat and No Exploitation (NDPE) policy
• Encompasses both direct partners and third-party suppliers
• Actions in case of violations up to and including contract termination
• Results from RSPO grievance mechanism considered in decisions

Reporting and memberships:

• Care Chemicals division published comprehensive Responsible Sourcing Report (first published 2023, replaces Palm Progress Report)
• Third edition to be published at beginning of 2025
• Annual reporting on measures and progress toward sustainability and transparency in palm value chain and further renewable raw materials value chains
• Member of Roundtable on Sustainable Palm Oil (RSPO) for 20 years
• Member of German Forum for Sustainable Palm Oil (FONAP)
• Member of High Carbon Stock Approach (HCSA)

Context: Study conducted for European Commission shows smallholders account for around one-third of total volumes produced in Malaysia and Indonesia

Agriculture sector solutions (downstream value chain)

Scope: Downstream value chain (customers)

Description:

• Targeted solutions to help use water more efficiently
• Yield-enhancing products
• Water-saving cultivation methods
• Crops requiring less water
• Example: Green Queen artichoke variety delivering higher yields with same water use compared to conventional varieties

Link to standards: International Code of Conduct on Pesticide Management and Principles of Integrated Pest Management

Product evaluation: Products and solutions in crop protection and seeds evaluated throughout entire research, development and registration process for potential risks and impacts to ecosystems

Water-related biodiversity initiatives (upstream value chain)

Responsible Lithium Partnership

• Start date: 2021
• Time horizon: Scheduled to run until 2025
• Partners: BMW Group, Mercedes-Benz AG, Fairphone B.V., Daimler Truck AG, Volkswagen Group, German Agency for International Cooperation (GIZ)
• Location: Salar de Atacama salt flat, Chile (world's largest lithium brine reserves)
• Activities:
  • Campaign for responsible use of natural resources
  • Local multistakeholder platform including Indigenous communities
  • Address water-related opportunities and risks of lithium and copper extraction
  • Drive forward action plans
  • BASF participated in BMW-organized study with University of Alaska and University of Massachusetts examining hydrological conditions

Incentivo ao Produtor de Água program (Brazil)

• Start date: 2011
• Location: Guaratinguetá site, Brazil; Ribeirão Guaratinguetá catchment area
• Partners: Local authorities, Fundação Eco+, other partners
• Activities: Improved soil management, reforestation of primary forests
• Outcomes: Surface runoff and soil erosion significantly decreased

Pragati project (India)

• Start date: 2016
• Scope: Upstream value chain
• Activities: Efficient water use for more sustainable farming of castor beans in India

Resources allocated

No specific financial resources (capex/opex amounts) quantified for biodiversity actions. Non-financial resources include:

• Partnerships: Multiple strategic partnerships with NGOs (Solidaridad, Kaleka), industry organizations (RSPO, FONAP, HCSA, Fedepalma), governmental organizations (GIZ), automotive companies, and academic institutions
• Human resources: Not quantified but implied through program implementation and supplier assessments

Link to policies and targets

Actions support:

• No Deforestation, No Peat and No Exploitation (NDPE) policy
• International Code of Conduct on Pesticide Management
• Principles of Integrated Pest Management
• RSPO standards and certification requirements

Targets related to biodiversity and ecosystems

BASF has not set an explicit target for the topic category of Biodiversity and Ecosystems. The company is reviewing whether it can derive a separate target for this topic category.

However, BASF has set related targets that contribute to the protection of nature:

Palm oil and palm kernel oil sourcing

Target adjustment: Due to volatile market dynamics and insufficient availability of RSPO-certified palm kernel oil, the company has adjusted its derivative certification target from 2025 to 2030. The company states that achieving targets remains dependent on the availability of raw materials and economic feasibility.

Circular economy target (Loop Solutions)

Scope: Loop Solutions are defined as products based wholly or partially on renewable or recycled feedstocks, that support the recycling process, or that increase durability of materials or prolong their functional life.

Biodiversity relevance: The company notes this target can ease pressure on ecosystems, as use of recycled raw materials reduces demand for newly extracted raw materials.

Sustainable-Future Solutions

Progress: The company states it is making good progress toward this target.

Training and engagement

Note: The company also references other sustainability targets that contribute to biodiversity protection, including climate protection targets, resource use and circular economy targets, and sustainable water management targets (cross-referenced to other ESRS sections).

Impact metrics related to biodiversity and ecosystems change

Land use by BASF sites

BASF utilizes a total surface area of approximately 43,000 hectares, of which around 23% is sealed.

The company operates around 1,000 sites worldwide, of which approximately one quarter are production sites.

Sites in proximity to protected areas and Key Biodiversity Areas (KBAs)

BASF analyzed production sites for proximity to biodiversity-sensitive areas including:

• Nature reserves pursuant to the International Union for Conservation of Nature (IUCN) classification I, II and III
• Ramsar sites
• UNESCO Natural World Heritage Sites
• Natura 2000 areas
• Key Biodiversity Areas (KBAs)

2024 results:

• Nearly 15% of production sites bordered a nature reserve or biodiversity-sensitive area (within a 3 km radius)
• Zero sites reported negative impacts on nature reserves in 2024

Material sites for biodiversity and ecosystems

Six sites were identified as material based on relative contribution to drivers of biodiversity loss:

Note: One additional material site is referenced but details are cut off in the excerpt

Species impact metrics (STAR analysis)

BASF calculated STAR (Species, Threat, Abatement and Restoration) values for production sites based on the IUCN Red List of Threatened Species. The analysis covered sites and a 10 km radius.

Findings:

• Some production sites are located in areas with high or very high STAR values, indicating the presence of a large number of threatened species
• Identified drivers of biodiversity loss at these sites included tourism, fishing, invasive species, and disease occurrence (unrelated to chemical production)

No quantitative STAR values or number of Red List species potentially affected were disclosed.

Deforestation monitoring

BASF uses the internet platform palmoil.io to regularly monitor deforestation activities at suppliers' sites for palm oil and palm kernel oil sourcing.

No quantitative deforestation footprint metrics (hectares converted) were disclosed.

Restoration metrics

No habitat restoration metrics (hectares restored) were disclosed.

Methodology notes

• Material sites were identified using indicators aligned with drivers of biodiversity loss, including site size, emissions contributing to eutrophication and acidification, greenhouse gas emissions, and water supply
• Sites exhibiting at least 4 markers (>50% of indicators considered) were identified as material
• The WWF Biodiversity Risk Filter (BRF) was used to analyze production sites based on 33 indicators
• The IBAT (Integrated Biodiversity Assessment Tool) was used since 2013 to analyze site proximity to nature reserves
• For the proximity analysis, production sites at which more than one BASF company operates were counted only once to avoid duplication

Policies related to resource use and circular economy

BASF pursues a holistic strategy to establish a circular economy and reduce environmental footprint. The company does not disclose a single named policy for resource use and circular economy, but rather describes several related policies and requirements that together address this topic.

Global procurement requirement

• Scope: The BASF Group uses this requirement to ensure that procurement processes are in line with BASF standards and legal guidelines across the upstream value chain
• Key content/principles:
  • Includes a supplier risk assessment examining sustainability performance
  • Aims to combat negative impacts on the environment from procurement of both fossil and renewable raw materials
  • Addresses sourcing of raw materials considering economic, environmental and social criteria, product safety and supply security
• Governance and monitoring:
  • Unit-specific risk management systems of business units are supported and monitored during implementation according to minimum standards set by Corporate Center units
  • Corporate Audit unit, as the third instance, monitors the effectiveness and compliance with risk management
  • Compliance ensured using a multistage control process
• Supplementary guidelines: The global procurement requirement is supplemented by specific internal guidelines, for example on sourcing palm-based raw materials or certain mineral raw materials

Supplier Code of Conduct

• Scope: Applies to suppliers; integrated into purchasing conditions
• Key content/principles:
  • Requires suppliers to comply with internationally recognized environmental standards
  • Aims to address negative impacts caused by sourcing of fossil and renewable raw materials
  • Covers protecting human rights, compliance with valid environmental regulations and efficient use of resources
• Public availability: See page 295 (referenced in the document)

BASF Verbund concept

• Key content/principles:
  • Intelligently links and steers plants and processes to create efficient value chains
  • By-products from one plant are used as feedstocks elsewhere, saving raw materials and energy
  • Offers opportunities to use renewable and recycled raw materials

Responsible Care

The document references Responsible Care as a core element for responsible management of resources and waste in BASF's own production, though the excerpt is cut off.

For overarching policy information regarding scope of application, accountability, impacts in the value chain, global applicability, accessibility to stakeholders and engagement, the company refers to General Disclosures on page 151.

Actions and resources related to circular economy

BASF is aiming to transition to a circular economy by focusing on using increased amounts of circular raw materials (both recycled and renewable), designing new material cycles and establishing new business models.

Primary actions

BASF relies primarily on the following actions:

• Responsible sourcing of renewable raw materials
• Use of the mass balance approach
• Partnerships to drive forward chemical recycling
• Use of TripleS to steer product portfolio toward more sustainability

Group-wide circular economy program

Scope: Own operations and value chain

Time horizon: Since 2019; implementation by business units from 2025 onward (long term)

Description: BASF teams have developed new approaches in over 50 initiatives since 2019. These relate to the main action areas of:

• Making greater use of circular feedstocks
• Designing innovative material cycles
• Establishing new business models

From 2025 onward, the respective business units will drive forward implementation of these initiatives in the long term.

Resources: Not quantified

Responsible sourcing of renewable raw materials

Scope: Upstream value chain

Time horizon: Long term (continuous)

Description: Sourcing takes the protection of biodiversity and ecosystems into account. Risk analyses consider social factors such as working conditions and food security. Exclusively sourcing renewable raw materials certified according to recognized standards such as International Sustainability and Carbon Certification (ISCC) or REDcert.

Partnerships:

• Roundtable on Sustainable Palm Oil (RSPO)
• ISCC certification
• REDcert certification
• Joint local initiatives with suppliers and other partners

Resources: Not quantified

Example project: Started operating a prototype metal refinery at the Schwarzheide, Germany site in April 2024. The plant will be used to recycle lithium-ion batteries and waste from the production of electric vehicle batteries.

Mass balance approach

Scope: Own operations (production sites in Europe, North America and Asia Pacific)

Time horizon: Long term (continuous deployment)

Description: Feeding alternative feedstocks from bio-based and chemically recycled sources (bionaphtha, biomethane and pyrolysis oil) into the Verbund in place of fossil feedstocks. Mass balance products are identical in quality to conventionally produced products but contribute to more sustainability through fewer CO2 emissions and lower demand for fossil raw materials.

Third-party verification: Independent monitoring by TÜV Nord on the basis of recognized certification systems such as REDcert2 or ISCC PLUS

Resources: Not quantified

Outcomes:

• Helps customers achieve their sustainability targets
• Helps BASF purchase fewer fossil raw materials and reach its sustainability targets
• Portfolio expanded in 2024 to include Ccycled® automotive refinish coatings, biomass balanced products for detergent and cleaner industry, and products for selected chemical intermediates

loopamid® technology

Scope: Downstream value chain (fashion industry)

Time horizon: Not specified

Description: Innovative solution to recycle polyamide 6 (PA6) textile waste. Technology tolerates all fabric blends, including PA6 and elastane, enabling textile-to-textile-recycling of industrial textile waste and used clothing. Fibers and materials can be recycled over multiple cycles while maintaining identical characteristics to conventional polyamide.

Resources: Not quantified

TripleS method (Sustainable Solution Steering)

Scope: Own operations and value chain

Time horizon: Long term (continuous)

Description: Global steering of the product portfolio based on sustainability performance. Assesses relevant product portfolio and categorizes products by applications and regional aspects, including resource use and circular economy. Products classified as Challenged are generally phased out within five years of initial classification.

Link to target: Contributes to Sustainable-Future Solutions (Pioneer and Contributor products)

Outcomes:

• Reduce sourcing of fossil raw materials by supporting use of recycled feedstocks
• Support closed-loop product cycles
• Reduce waste along entire value chain

Resources: Not quantified

Waste management

Scope: Own operations and upstream value chain

Time horizon: Continuous process

Description: Set out in the Environmental Protection corporate requirement. Systematically tracks material flows following a clear hierarchy: avoid waste through process optimization and new production methods; use by-products of one plant as feedstock elsewhere in the BASF Verbund; assess recycling or thermal recovery options; safe disposal of materials that cannot be recovered.

Link to policy: Environmental Protection corporate requirement

Resources: Not quantified

Monitoring: Regular audits of external waste disposal companies to verify proper disposal

We intend to align our portfolio and the work of our research and development units even more closely with climate protection and the circular economy. For this purpose, we rely on the assessment of our product portfolio using the TripleS methodology (Sustainable Solution Steering). By 2030, we want to achieve more than 50% of BASF sales relevant for TripleS from Sustainable-Future Solutions – products that make a positive contribution to sustainability. In 2024, these products accounted for 46.3% of BASF sales (2023: 41.4%).

We also introduced a new target for circular economy solutions, known as Loop Solutions, in 2024. By 2030, we want to achieve €10 billion in sales with these solutions. Sales with Loop Solutions stood at €5.7 billion in 2024.

E5-4 Resource Inflows

BASF's most important raw materials (based on volume) include gas and crude oil-based petrochemical feedstocks such as naphtha and benzene. We use liquid gas and natural gas as fuels to generate energy and steam, and as raw materials to produce key basic chemicals such as ammonia or acetylene. Naphtha is mainly fed into our steam crackers, where it is split into products such as olefins and aromatics. Olefins such as ethylene, propylene and butene are important feedstocks for numerous value chains at BASF. We use aromatics such as benzene or toluene to manufacture engineering plastics, among other products.

Our renewable raw materials are mainly based on vegetable oils, fats, grains, sugar and ethanol. We use these to produce ingredients for the detergent and cleaner industry and natural active ingredients for the cosmetics industry, for example. We also use renewable feedstocks such as biomethane and bionaphtha as an alternative to fossil feedstocks in our Verbund.

We document the volumes of raw materials that we source by determining and adding together their weights. Solids are weighted directly, while for liquids and gases, the volumes are measured and the weights then calculated using their density.

Total Raw Materials Purchased in 2024

Renewable raw materials were mainly based on vegetable oils, fats, grains and sugar.

Certified Renewable Raw Materials

A total of 24% of the renewable raw materials purchased by us in 2024 were certified, for example by RSPO, REDcert-EU, ISCC EU or ISCC PLUS. Certification standards are not available for all renewable raw materials.

Recycled Raw Materials

We sourced 11.3 kilotons of recycled raw materials in 2024. This corresponds to 0.04% of our raw materials. The figure includes pyrolysis oil, which is extracted from plastic waste or used tires via chemical recycling.

We have many years of experience and a high degree of specialization in recycling precious metals such as platinum, palladium and rhodium. These are used in mobile emissions catalysts as well as in chemical catalysts. We primarily use the precious metals recovered in this way as feedstocks to manufacture new products for the automotive, specialty chemical, semiconductor and green hydrogen industries.

Another focus is on recycling mineral raw materials. For example, we are driving forward innovative technologies and solutions for recovering metals such as lithium, nickel, cobalt and manganese from end-of-life lithium-ion batteries.

Waste

Waste generation and management

BASF generated 636,663 metric tons of waste in 2024 at BASF SE (page 110):

• 46.8% recycled waste
• 53.2% waste disposed of
  • Of which 98.1% was hazardous waste

Waste management approach

BASF's waste management is governed by global environmental protection standards that are part of the Responsible Care Management System. The Corporate Environmental Protection, Health, Safety & Quality unit defines Group-wide requirements for waste management and monitors compliance with internal requirements and legal regulations, while sites and Group companies implement these requirements locally.

As part of the circular economy strategy, BASF is working on:

• Innovative depolymerization processes for recycling foam mattresses and rigid foam from refrigerators
• Circular solutions for textiles
• Development of biodegradable polymers for household and personal care applications

BASF has set a target to achieve €10 billion in sales revenue from Loop Solutions (products contributing to circular economy) by 2030. In 2024, sales with Loop Solutions stood at €5.7 billion.

The company identifies waste management across the value chain as a material negative impact in its double materiality assessment:

• Upstream value chain: Waste from sourcing, refining and processing negatively impacts planetary boundaries (long-term impact)
• Own operations: Waste from production negatively impacts planetary boundaries (long-term impact)
• Downstream value chain: Waste at customers negatively impacts planetary boundaries (long-term impact)

Policies related to own workforce

BASF discloses several policies and management systems that relate to its own workforce, covering human rights, labor standards, health and safety, diversity and inclusion, and working conditions.

BASF Code of Conduct

Policy name: BASF Code of Conduct

Scope: All employees worldwide

Who approves and oversees: Board of Executive Directors of BASF SE

Key content/principles:

• Lays out the framework to which all employees worldwide must adhere in order to comply with applicable laws and internal requirements as well as ethical business practices
• Covers topics ranging from corruption and antitrust laws to human rights, labor and social standards, conflicts of interest, whistleblower protection, trade control and data protection
• Embedded in CORE values: creative, open, responsible, entrepreneurial
• Responsible value: "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."

Public availability: basf.com/code-of-conduct

Links to international standards:

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

Monitoring implementation:

• Mandatory training for all employees (more than 120,000 employees received over 105,000 hours of training in 2024)
• Basic, refresher or specialized training required within prescribed time frames
• Refresher training must be repeated every two years
• Corporate Audit unit continuously monitors compliance (68 internal audits on adherence to compliance standards in 2024)
• Compliance Hotline available for reporting violations
• Regular reviews of security concepts, emergency systems and crisis management structures

BASF Policy Statement on Human Rights

Policy name: BASF Policy Statement on Human Rights

Scope: Entire value chain (BASF's own operations and business relationships)

Who approves and oversees: Chief Human Rights Officer (head of Corporate Legal, Compliance & Insurance) oversees the overarching risk management system with regard to human rights issues and reports regularly to the Board of Executive Directors and the Audit Committee

Key content/principles:

• Defines how BASF fulfills its responsibility to respect and protect human rights in cooperation with relevant stakeholder groups
• Commitment to a fair, diverse and inclusive working environment characterized by mutual trust and respect
• Commitment to equal opportunities whereby no one is at a disadvantage due to race, gender, age, skin color, nationality, disability, religion or worldview, sexual orientation, ethnicity, social status, marital status, gender identity or expression, political opinion, pregnancy, maternity, parental status or any other characteristics protected by law
• No tolerance for discrimination, harassment or any other form of abuse

Public availability: basf.com/policy-statement-human-rights

Links to international standards:

• Universal Declaration of Human Rights of the United Nations (U.N.) and the two U.N. Human Rights Covenants
• Ten Principles of the U.N. Global Compact
• Core labor standards of the International Labour Organization (ILO) and the Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy
• U.N. Guiding Principles on Business and Human Rights
• OECD Guidelines for Multinational Enterprises

Monitoring implementation:

• Systematic, integrated and risk-based due diligence approach
• Clear processes for monitoring and managing human rights risks
• Human Rights Expert Working Group (cross-functional team) regularly discusses latest topics and developments
• Compliance Hotline for raising concerns
• Regular audits by Corporate Audit unit

BASF International Labor and Social Standards

Policy name: BASF International Labor and Social Standards (referenced as requirements)

Scope: All employees globally

Who approves and oversees: Corporate Center's Corporate Human Resources unit is responsible for the requirements

Key content/principles:

• Freedom of association and collective bargaining
• Prohibition of child labor
• Prohibition of forced labor and human trafficking
• No discrimination
• Fair working conditions
• Maternity protection

Links to international standards:

• Core labor standards of the International Labour Organization (ILO)
• ILO Declaration on Fundamental Principles and Rights at Work

Monitoring implementation:

• Global risk-based management process for international labor and social standards at BASF
• Regular monitoring through established governance structures

Responsible Care Management System

Policy name: Responsible Care Management System (includes multiple policies)

Scope: Own production, all production sites globally

Who approves and oversees: Board of Executive Directors of BASF SE is accountable for the Environmental Protection, Health, Safety & Quality (EHSQ) Policy. Corporate Environmental Protection, Health, Safety & Quality unit in the Corporate Center is responsible for specific monitoring activities and corporate governance tasks

Key content/principles:

• Encompasses occupational health and safety requirements and standards
• Environmental protection standards
• Global standards on CO2 emissions and energy data, energy efficiency and energy concepts
• Global standards on environmental protection (emissions to air and water, waste, sustainable water management)
• Global standards on process safety, emergency management and crisis management
• Commitment to continuously improve processes in the areas of safety, environmental protection and resource use

Links to international standards:

• Responsible Care® Global Charter of the International Council of Chemical Associations (ICCA)

Monitoring implementation:

• Corporate Environmental Protection, Health, Safety & Quality unit conducts regular Responsible Care audits (121 audits carried out in 2024)
• Risk-based approach to audits
• Responsible local authorities regularly inspect analyses and safety precautions at sites
• Continuous monitoring, documentation and control of emissions and implementation of improvement measures
• Sites and Group companies responsible for implementing and ensuring compliance with both Group-wide requirements and local guidelines

Global requirement on diversity and inclusion

Policy name: Global requirement on diversity and inclusion (not named but referenced)

Scope: All employees within the BASF Group

Who approves and oversees: Not specified, but part of Corporate Human Resources responsibility

Key content/principles:

• Promotion of diversity and inclusion with focus on the corporate value of "open"
• Standards for a fair working environment
• Emphasis on equal opportunities and compliance with antidiscrimination laws
• Objective to establish a diverse and inclusive working environment
• Commitment to increasing the proportion of women in leadership positions to 30% by 2030

Monitoring implementation:

• Target to increase proportion of women in leadership positions to 30% by 2030 (29.3% as of December 31, 2024)
• BASF management reviews status via global dashboard regularly
• Supported through national or local actions

Global talent acquisition requirement

Policy name: Global talent acquisition requirement (referenced but not formally named)

Scope: All current and potential future employees

Who approves and oversees: Corporate Human Resources

Key content/principles:

• Stipulates that all current and potential future employees must be informed of their working conditions
• Covers compensation, benefits, working environment and learning and development opportunities

Monitoring implementation:

• Compliance monitored via the Employee Voices survey, which measures employee engagement

Human Rights Due Diligence for Third-Party Workers

Policy name: Human Rights Due Diligence for Third-Party Workers (referenced as a requirement)

Scope: Entire value chain (employees of third-party companies)

Who approves and oversees: Corporate Legal, Compliance and Insurance

Key content/principles:

• Sets forth a multilevel approach to ensuring human rights due diligence with regard to employees of third-party companies

Public availability: Global (applicability), but specific URL not provided

Links to international standards:

• Aligned with U.N. Guiding Principles on Business and Human Rights
• OECD Guidelines for Multinational Enterprises

Compliance Management System (CMS)

Policy name: Compliance management system (CMS) policy

Scope: Entire value chain

Who approves and oversees: Corporate Legal, Compliance and Insurance; Chief Compliance Officer (CCO) reports directly to the Chairman of the Board of Executive Directors

Key content/principles:

• Supplements the Code of Conduct
• Describes the actions BASF takes to prevent noncompliant behavior
• Aims to ensure adherence to legal regulations and the company's internal guidelines

Public availability: Global applicability

Monitoring implementation:

• More than 100 compliance officers and representatives worldwide in regions and countries, operating divisions, service units and Corporate Center
• Compliance committees at global and regional level
• Compliance organization reports to Supervisory Board's Audit Committee at least twice a year
• Continuous systematic risk analyses to identify and assess material compliance risks
• Regular compliance audits by Corporate Audit unit

Human Rights Management Policy

Policy name: BASF Human Rights Management Policy

Scope: Entire value chain

Who approves and oversees: Corporate Legal, Compliance and Insurance

Key content/principles:

• Regulates the overarching human rights management at BASF and its overall structure, including roles, responsibilities and obligations

Public availability: Global applicability

Links to international standards:

• Universal Declaration of Human Rights
• U.N. Human Rights Covenants
• U.N. Guiding Principles on Business and Human Rights
• ILO core labor standards
• OECD Guidelines for Multinational Enterprises

Taking action on material impacts on own workforce

Overview

BASF addresses material impacts, risks and opportunities through various actions. The Corporate Center's Corporate Human Resources and Corporate Environmental Protection, Health, Safety & Quality units set the framework for regulating key topics through requirements and providing resources for central actions. Additional resources to implement the actions are made available by the Global Business Services unit as well as teams working in the operating divisions and at sites.

Scope: Own operations (global)

Central measures employed

BASF employs the following central measures:

• Annual compensation level review
• Employee dialogs and continuous meaningful conversations
• Wide range of training options
• The Skill Transformation Project
• Mandatory health and safety training for employees
• Additional training on safe handling of chemicals and the correct use of personal protective equipment
• Analysis of accidents and potential incidents
• Global health management activities such as BASF health checks

Action: Annual compensation level review

What it does: Annual review of compensation levels worldwide using external market data to aim for market-oriented and appropriate compensation in respective countries or markets and analyze the effectiveness of adjustments to compensation levels.

Scope: Global (own workforce)

Key features:

• Compensation comprises fixed and variable components as well as benefits
• Benefits exceed legal requirements in many countries and include company pension benefits, supplementary health insurance and share programs
• Positions are assigned BASF job grades according to globally consistent criteria, independent of individuals
• Job grades form the basis for compensation and are assigned according to the demands of the respective function
• Variable compensation linked to BASF Group's return on capital employed (ROCE) to measure economic success
• Individual performance assessed as part of globally consistent performance management process
• "plus" share program in numerous Group companies ensures employees' long-term participation in company's success through incentive shares

Expected outcomes: Market-oriented and appropriate compensation; effectiveness of compensation adjustments can be analyzed

Governance: Corporate Human Resources reviews compliance with regulations and works closely with local units; changes made in accordance with relevant local laws

Future development: Enhanced performance management system to be introduced that provides closer link between incentives and unit-specific achievements

Link to commitments: Committed to U.N. Global Compact's goal of paying employees a living wage

Action: Annual employee dialog

What it does: Employees and leaders discuss performance over the past year and expectations for the current year

Scope: Global (own workforce)

Key features: Employees and leaders determine what level of detail is necessary when results are recorded

Action: Local recruiting activities and education programs

What it does: Recruiting and education programs carried out based on target groups

Scope: Implemented at respective sites

Resources: Resources made available by local teams at sites

Action: Local health initiatives

What it does: Health initiatives carried out based on target groups

Scope: Implemented at respective sites

Resources: Resources made available by local teams at sites

Note on resources

The disclosure states that resources are provided by:

• Corporate Center's Corporate Human Resources unit
• Corporate Environmental Protection, Health, Safety & Quality unit
• Global Business Services unit
• Teams in operating divisions
• Teams at sites

However, no specific financial amounts (capex/opex) or headcount figures are disclosed for these actions.

Furthermore, we have set ourselves the target of increasing the proportion of women in leadership positions to 30% by 2030. The global proportion of women in positions with disciplinary responsibility was 29.3% in 2024 (2023: 28.4%).

Furthermore, we would like to create a work environment in which more than 80% of our employees feel that they can thrive and perform at their best at BASF. In 2024, we reached a rate of 79% (2023: 79%).

Characteristics of the undertaking's employees

Total headcount and FTE

Year-end headcount:

• 2024: 111,822 employees
• 2023: 111,991 employees

Personnel expenses:

• 2024: €11.2 billion
• 2023: €11.0 billion

Headcount by region

By location of company; employees as of December 31, 2024:

Headcount by gender

Not disclosed in the provided excerpts.

Headcount by employment contract type

Not disclosed in the provided excerpts.

Headcount by employment type (full-time/part-time)

Not disclosed in the provided excerpts.

Employee turnover

Not disclosed in the provided excerpts.

New hires

Not disclosed in the provided excerpts.

Scope and methodology

Scope of consolidation: The figures reported on employees in S1 Own Workforce include all individuals working at an entity included in the scope of consolidation of the BASF Group as of December 31, 2024. Data on work-related injuries at all sites of BASF SE and its subsidiaries as well as joint operations and joint ventures in which BASF has authority in terms of safety management is compiled worldwide, regardless of equity interest, and reported in full.

Reporting approach: Subsidiaries that are fully consolidated in the Group Financial Statements in which BASF SE holds an interest of less than 100% are included in full. In the case of proportionally consolidated joint operations and equity-accounted joint ventures over which BASF has operating control, data points are taken into account in full, regardless of BASF's equity interest.

Data collection: A two-step process is applied in which sustainability data is first recorded and then validated in accordance with the principle of dual control. Additional plausibility checks are carried out by the responsible Corporate Center units, after which the data is evaluated based on the respective consolidation criteria and aggregated in the database.

Characteristics of non-employees in the undertaking's own workforce

Number of non-employee workers

BASF references non-employee workers in various contexts throughout the report, specifically distinguishing between:

• Nonemployees (agency workers/temporary workers)
• Contractors

However, BASF does not provide a total headcount or FTE count for non-employee workers in the own workforce.

Breakdown by type and safety metrics

The only quantitative data provided for non-employee workers relates to occupational safety metrics:

Work-related injury and fatality data (2024)

Note on fatalities: The report mentions two fatal work-related injuries of contractors in 2024 (one on construction site in Zhanjiang, China; one traffic accident in Vietnam), but these appear to be reported differently in the summary table showing zero fatalities.

Methodology

• Safety rates are calculated per 1,000,000 working hours
• The report references "working hours by BASF employees, temporary workers and contractors" in the context of safety metrics
• The Health Performance Index (HPI) and Health & Safety Index (HSI) include hours worked by BASF employees, agency workers and contractors
• One footnote states: "This includes hours worked by BASF employees, agency workers and contractors. We are reviewing the extent to which we can take account of the definition of the company's workforce according to ESRSs in the future."

Multi-year comparison

No multi-year comparison data is provided for non-employee worker numbers or characteristics. The safety metrics shown are for 2024 only.

Scope note

The report indicates that BASF distinguishes between "nonemployees" (appearing to refer to agency/temporary workers) and "contractors" as separate categories within the non-employee workforce, but does not provide headcount, FTE, or other demographic breakdowns for these groups.

Collective bargaining coverage and social dialogue

Collective bargaining and employee representation structures

BASF maintains structured social dialogue arrangements across its operations. The BASF Europa Betriebsrat (BASF Works Council Europe) serves as the European employee representation body of the BASF Group. Six of the twelve Supervisory Board members are elected by this European Works Council, ensuring employee participation in corporate governance.

Social dialogue arrangements by region

Europe: The BASF Europa Betriebsrat (BASF Works Council Europe) addresses cross-border matters in Europe. Local works councils operate at site level, including the Works Council of BASF SE at the Ludwigshafen site and the BASF Group Works Council.

South America: BASF fosters dialogue with employee representatives through the Diálogo Social. The most recent exchange took place in 2023, with the next scheduled for early 2025.

Freedom of association and collective bargaining rights

In accordance with locally applicable legal conditions, BASF employees have the right to form, join and support legally recognized unions or employee representation. These are entitled to represent employees and their interests, for example in collective bargaining. BASF upholds these rights through Group-wide requirements on adherence with international labor and social standards.

Where freedom of association is not guaranteed under national law to the same extent as in European legal systems, individual Group companies use alternative dialog formats, such as informal meetings where employees can exchange ideas.

Collective agreements

BASF representatives participated in the successful renegotiation of the 2024 collective agreement for the chemical industry in Germany.

Employee representation in organizational changes

In cases of organizational changes, restructuring, or other codetermination-relevant topics, BASF involves employee representatives in accordance with existing participation rights to consult on socially responsible solutions. Regular meetings take place to inform employee representatives of general topics such as the current economic situation.

Specific quantitative metrics

The company has not disclosed the percentage of employees covered by collective bargaining agreements (overall, EEA, or non-EEA) or the percentage covered by workers' representatives.

Employee engagement mechanisms

BASF employs feedback instruments stipulated in a global requirement:

• FEEDback&forward format: Provides leaders with regular feedback from employees on leadership behavior
• Employee Voices survey: Invites all employees to give feedback on their working environment and corporate culture on a regular basis

Results are communicated to employees, leaders, the Board of Executive Directors, the Supervisory Board and others. In 2024, employee engagement reached 79%, nearly achieving the target of exceeding 80%.

Scope of disclosure

The following topics related to working conditions were deemed nonmaterial in the double materiality assessment and are therefore not discussed in detail: social dialog; freedom of association; the existence of works councils and the information, consultation and participation rights of workers; collective bargaining, including rate of workers covered by collective agreements.

29.3% Women in leadership positions

The global proportion of women in positions with disciplinary responsibility was 29.3% in 2024 (2023: 28.4%). Furthermore, we have set ourselves the target of increasing the proportion of women in leadership positions to 30% by 2030.

Adequate wages

Benchmark used

BASF is committed to the U.N. Global Compact's goal of paying employees a living wage to support them and their families by 2030. The company reviews on a regular basis whether employees around the world receive a wage sufficient to cover their and their families' basic cost of living under the respective general conditions.

Coverage and assessment

For 2024, BASF reviewed adequate wages at BASF Group companies in accordance with the ESRS definition. The review included the respective base salary and fixed guaranteed additional payments in the business year.

Result: For 2024, the review concluded that all employees receive adequate wages. Furthermore, BASF regularly reviews whether employees around the world receive a wage that affords them and their families an adequate standard of living under the respective conditions (living wage).

Methodology

Compensation is based on global compensation principles according to position and function, market environment and performance. These principles are stipulated in three BASF Group-wide requirements:

• Compensation by position and function
• Market-oriented compensation
• Performance-based compensation

The company conducts an annual review of compensation levels worldwide using external market data, among other things, to aim for market-oriented and appropriate compensation in the respective countries or markets.

As a rule, compensation comprises fixed and variable components as well as benefits. In many countries, these benefits exceed legal requirements and include company pension benefits, supplementary health insurance and share programs.

Target and commitment

BASF is committed to the U.N. Global Compact's goal of paying employees a living wage to support them and their families by 2030. If any potential gaps are identified through regular reviews, the company works to remedy them.

Specific methodology note

The calculation of adequate wages in accordance with ESRS is not based on an annual target value. The review focuses on whether employees receive a wage sufficient to cover their and their families' basic cost of living under the respective general conditions.

Training and skills development metrics

Training hours

BASF provided over 105,000 hours of training on the Code of Conduct in 2024 to more than 120,000 employees worldwide.

Note: The excerpts disclose total training hours for Code of Conduct training specifically, but do not provide:

• Average training hours per employee (overall or by gender/employee category)
• Total training hours across all training types
• Breakdowns by gender (male/female/other)
• Breakdowns by employee category (executive/management/non-management)

Performance and career development reviews

The majority of BASF leaders with disciplinary responsibility received feedback on their leadership behavior and development recommendations as part of the FEEDback&forward global leadership survey in 2024.

All employees participate in annual employee dialogs with their leader to reflect on performance and behavior, discuss expectations, and agree on development objectives.

Note: The excerpts confirm that performance review processes exist but do not provide:

• Percentage of employees who received a performance and career development review (overall)
• Percentage by gender
• Percentage by employee category

Training investment

Total investment in training (€): Not disclosed in the excerpts.

Methodology notes

BASF's employee development approach is based on a globally consistent framework provided by Corporate Human Resources. Employee development is planned together with leaders through:

• Regular feedback in annual employee dialogs
• Continuous meaningful conversations throughout the year
• Annual talent discussions in divisions
• Global access to training on various learning platforms

Training data is collected through documentation in BASF's learning management system as well as individual decentralized reports from Group companies.

Health and safety metrics

Coverage of health and safety management system

BASF's Responsible Care Management System encompasses occupational health and safety requirements and standards. The safety and health management includes all employees worldwide. 100% of BASF's own workforce is covered by the company's health and safety management system based on the Responsible Care® initiative.

Health and safety metrics (2024)

Additional health and safety metrics

Scope and methodology notes

• All rates are calculated per 1,000,000 working hours unless otherwise stated (HSI uses 200,000 hours)
• Data includes BASF employees, agency workers (non-employees), and contractors at all sites where BASF has safety management authority
• Recordable work-related injuries include all injuries recorded in the system in accordance with ESRS
• Two fatal work-related injuries occurred in 2024, both involving contractors (one at construction site in Zhanjiang, China; one traffic accident during business trip in Vietnam). However, the fatality rate for employees shows 0.0
• The HPI comprises five equally weighted components: recognized occupational diseases, medical emergency preparedness, first aid, preventive medicine, and health promotion
• The scope includes worldwide production sites of BASF SE, fully consolidated subsidiaries, and proportionately consolidated joint operations

Work-life balance metrics

Not disclosed.

BASF explicitly states that work-life balance was deemed non-material in their double materiality assessment and is therefore not discussed in detail with respect to corresponding policies, actions, targets and metrics.

Compensation metrics

Pay gap

Not disclosed.

Remuneration ratio

Not disclosed.

Phase-in statement

BASF has indicated that ESRS S1-16 metrics (unadjusted gender pay gap and excessive CEO pay ratio) are "Not material" according to the disclosure index table on pages 326-327. The company references qualitative information about compensation concepts and principles (ensuring equivalent positions are compensated comparably regardless of gender, ethnic background or other characteristics) but does not provide the quantitative metrics required by S1-16.

Incidents, complaints and severe human rights impacts

Fatal work-related injuries (S1-14)

Safety is our top priority. Despite our considerable efforts, there were two fatal work-related injuries in 2024: A contractor was fatally injured on the major construction site in Zhanjiang, China. Another contractor was involved in a fatal traffic accident during a business trip in Vietnam.

Discrimination incidents (S1-17)

In 2024, 79 cases of discrimination were reported to us. These were related to gender, age, nationality, disability, religion or worldview, sexual orientation or ethnicity; were racist in origin or related to other relevant forms of discrimination based on characteristics protected by law, including harassment as a specific form of discrimination.

Complaints related to social factors and human rights

In addition, 225 complaints related to the social factors or aspects mentioned in ESRS S1, paragraph 2, including human rights, were submitted via the BASF compliance grievance mechanism in the reporting period.

These social factors or aspects include working conditions, equal treatment and opportunities as well as other work-related rights.

Fines, sanctions and compensation

In 2024, there were no fines, sanctions or compensation payments in connection with these incidents.

Severe human rights impacts

In 2024, we did not identify any severe human rights-related incidents in relation to workers in our company.

Status and tracking

Reported cases are systematically documented and processed worldwide using a single, uniform system. The grievance procedure is analyzed and evaluated annually for its appropriateness and effectiveness. This includes analyzing the number of complaints received, their distribution, processing status and derived measures.

Policies related to value chain workers

BASF addresses value chain workers through several global policies that form part of its risk-based sustainability management approach. The company focuses primarily on the upstream value chain, particularly suppliers, in line with its materiality assessment.

BASF Code of Conduct

Scope: All BASF employees and leaders globally. The Code extends expectations to business partners and the value chain.

Governance: The BASF Board of Executive Directors oversees the Code of Conduct. All employees and leaders must adhere to it.

Key content and principles:

• Covers topics ranging from corruption and antitrust laws to human rights, labor and social standards
• Addresses conflicts of interest, whistleblower protection, trade control and data protection
• Embeds responsibility for human rights
• All employees are expected to act in line with these principles

Public availability: Available at basf.com/code-of-conduct

Links to international standards:

• Universal Declaration of Human Rights and the two U.N. Human Rights Covenants
• The Ten Principles of the U.N. Global Compact
• Core labor standards of the International Labour Organization (ILO) and the Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy
• U.N. Guiding Principles on Business and Human Rights
• OECD Guidelines for Multinational Enterprises
• Responsible Care® Global Charter
• German Corporate Governance Code

Policy Statement on Human Rights

Scope: Applies globally across BASF's operations and value chain.

Governance: The head of BASF's Legal and Compliance organization acts as Chief Human Rights Officer, overseeing the risk management system regarding human rights issues, particularly in relation to due diligence under the German Supply Chain Due Diligence Act (LkSG). Reports regularly to the Board of Executive Directors and the Audit Committee.

Key content and principles:

• Sets out detailed commitments on human rights
• Embedded responsibility for human rights in business activities
• All employees and leaders are responsible for ensuring compliance

Public availability: Available at basf.com/policy-statement-human-rights

Links to international standards:

• Based on internationally recognized human rights principles
• Aligned with U.N. Guiding Principles on Business and Human Rights

Monitoring: A Human Rights Expert Working Group, managed by the Compliance Department, works on holistic assessment and development of the human rights due diligence approach. A Human Rights Advisory Council comprising independent international experts provides external perspectives.

Supplier Code of Conduct

Scope: All suppliers globally. The Code is part of BASF's purchasing conditions and integrated into electronic ordering systems across the Group.

Governance: Global Procurement unit (reporting to the Chief Financial Officer) is responsible together with Corporate Strategy & Sustainability. The procurement requirement is binding for all employees with procurement responsibility worldwide.

Key content and principles:

• Compliance with human rights
• Exclusion of child labor, forced labor and human trafficking
• Safeguarding labor and social standards
• Antidiscrimination and anticorruption guidelines
• Health and occupational safety standards
• Environmental protection standards
• Compliance with valid environmental regulations and efficient use of resources
• Deployment of energy-efficient, environmentally friendly technologies
• Responsible use of water as a resource

Public availability: Available at basf.com/suppliers. Available in the most relevant languages for suppliers.

Links to international standards:

• Ten Principles of the U.N. Global Compact
• Responsible Care® initiative of the International Council of Chemical Associations (ICCA)
• ILO principles and Declaration on Fundamental Principles and Rights at Work

Monitoring:

• Multistage control process to ensure compliance
• Risk-based evaluation through online assessments (EcoVadis) or on-site audits as part of the Together for Sustainability (TfS) initiative
• 118 raw materials supplier sites audited in 2024
• 328 suppliers received EcoVadis sustainability assessments in 2024
• Responsible Care audits at selected contract manufacturers
• Corporate Audit unit monitors effectiveness and compliance
• Follow-up audits conducted according to defined time frames based on sustainability risk identified

Procurement Requirement (Risk-based sustainability management)

Scope: Global, applies to all procurement activities across BASF Group.

Governance: Global Procurement unit. Corporate Development is accountable. Procurement requirements and targets are set centrally and binding for all employees with procurement responsibility worldwide.

Key content and principles:

• Defines standards for risk-based sustainability management in the supply chain
• Governs BASF's procurement process
• Establishes how BASF deals with risks in the procurement process
• Continuously enhanced to adapt to changing conditions
• Suppliers required to comply with internationally recognized environmental standards

Monitoring:

• Unit-specific risk management systems supported and monitored during implementation according to minimum standards set by Corporate Center units
• Corporate Audit unit monitors effectiveness and compliance
• Management processes activated in case of specific incidents

Principles for the Responsible Procurement of Renewable Raw Materials

Scope: Global, applies to upstream value chain for renewable raw materials.

Governance: Corporate Development is accountable. BASF Renewable Carbon unit within Global Procurement drives sourcing of renewable raw materials and biomass.

Key content and principles:

• Describes how BASF sources renewable raw materials responsibly
• Covers environmental and social criteria
• Addresses working conditions and food security
• Incorporates ILO principles and Declaration on Fundamental Principles and Rights at Work
• Includes child labor and health and safety at work

Public availability: Available at basf.com/en/responsible-renewables-sourcing

Links to international standards:

• ILO principles and Declaration on Fundamental Principles and Rights at Work

BASF Palm Sourcing Policy

Scope: Global, applies to Care Chemicals division and suppliers in the palm-based value chain.

Governance: Care Chemicals division is accountable.

Key content and principles:

• Defines process of purchasing palm-based raw materials
• Certification standards and traceability requirements
• Environmental aspects including forest and peat conservation
• Respect of workers' rights and rights of Indigenous peoples
• Smallholder inclusion
• Right of Indigenous and local communities to grant or refuse free, prior and informed consent for land-use changes
• Builds on the Group-wide Supplier Code of Conduct

Public availability: Referenced at basf.com/en/palm-dialog. Annual Responsible Sourcing Report published by Care Chemicals division.

Links to international standards:

• Roundtable on Sustainable Palm Oil (RSPO)
• United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP)
• High Carbon Stock Approach (HCSA) social guidelines

Monitoring:

• Use of Palmoil.io internet platform from MapHubs to monitor potential deforestation activities
• Monitoring of compliance with policy through achievement of certification targets

Third-Party Compliance Due Diligence

Scope: Global, applies to downstream value chain business partners.

Governance: Corporate Compliance is accountable.

Key content and principles:

• Governs compliance requirements for business partners
• Risk-based reviews of business relationships for signs of corrupt behavior, human rights violations, or noncompliance with ESG standards
• Continuous checking against sanction lists

Monitoring:

• Ongoing risk-based reviews conducted globally
• IT application introduced in 2024 to support business partner screening
• Compliance experts evaluate system alerts and initiate control measures
• Results documented

Responsible Care Management System (Environmental Protection, Health, Safety & Quality Policy)

Scope: Global, applies to own operations and extends expectations to value chain.

Governance: BASF's Board of Executive Directors is accountable. Corporate Environmental Protection, Health, Safety & Quality unit in the Corporate Center is responsible for specific monitoring activities and corporate governance tasks.

Key content and principles:

• Encompasses occupational health and safety requirements and standards
• Environmental protection standards
• Global standards for emissions to air and water
• Process and transportation safety
• Product safety
• Emergency and crisis management

Links to international standards:

• Based on the Responsible Care® initiative of the International Council of Chemical Associations (ICCA)

Monitoring:

• Regular Responsible Care audits conducted
• 121 audits carried out in 2024 using risk-based approach
• Corporate Environmental Protection, Health, Safety & Quality unit monitors regularly
• Local authorities regularly inspect compliance

Labor and Social Standards

Scope: Global, applies across BASF operations and value chain.

Governance: Part of BASF's global standards overseen by the Board of Executive Directors.

Key content and principles:

• Based on internationally recognized principles
• In some cases exceed existing laws and regulations

Links to international standards:

• Universal Declaration of Human Rights and U.N. Human Rights Covenants
• Ten Principles of the U.N. Global Compact
• Core labor standards of the ILO and Tripartite Declaration
• OECD Guidelines for Multinational Enterprises
• Responsible Care® Global Charter

Monitoring: Appropriate management and monitoring systems ensure compliance with applicable laws and responsibility to environment and society.

Implementation and Monitoring

BASF has established comprehensive governance and monitoring structures:

Human Rights Expert Working Group: Managed by the Compliance Department, includes employees from Corporate Compliance, Corporate Legal, Corporate Human Resources, Corporate Environmental Protection, Health, Safety & Quality, Corporate Strategy & Sustainability, Corporate Communications & Government Relations, Global Procurement, Security and operating divisions. Provides support on processes, training and challenging situations.

Human Rights Advisory Council: Independent international human rights experts meet regularly (attended in 2024 by representatives from Corporate Compliance, Corporate Strategy & Sustainability, Global Procurement and operating divisions). Provides external perspectives on stakeholder engagement, challenges in critical supply chains and dilemma situations.

Supplier Sustainability Management:

• Dedicated procurement-specific sustainability team
• Core team plus sustainability network with employees from regions and procurement clusters
• Global audit team for EHS topics at contract manufacturers
• Results analyzed and documented in central database
• Suppliers with insufficient performance contacted and requested to implement improvements
• Progress reviewed according to defined time frame or after three years at latest
• TfS webinars in various languages (990 supplier employees participated in 2024)
• TfS Academy online learning platform with over 300 courses in 11 languages
• Partnership with East China University of Science and Technology (92 employees from 68 Chinese suppliers trained on ESG topics in 2024)

Compliance Hotline: Available globally to BASF employees and all external stakeholders, including workers in supply chains. Allows confidential and anonymous reporting of potential human rights violations, health and occupational safety concerns, and child labor issues. Available at ethicspoint.basf.com/en.

Corrective Actions: If irregularities or violations identified, BASF requires immediate corrective measures. In case of serious violations (e.g., intolerable working conditions, child labor), commercial sanctions up to termination of business relationship may be imposed. No direct business relationships were terminated in 2024.

Corporate Audit: As third instance, monitors effectiveness and compliance with risk management. 68 internal audits on adherence to compliance standards conducted in 2024.

Taking action on material impacts on value chain workers

Upstream Value Chain Actions

Supplier Assessment and Audit Program

Scope: Upstream value chain (suppliers)

Description:

• Review compliance with required criteria when selecting suppliers and assessing new and existing supplier relationships
• Third-party evaluations of suppliers with high sustainability risk using on-site audits or sustainability assessments by rating agency EcoVadis
• Supplier assessment mainly performed as part of the chemical industry's Together for Sustainability (TfS) initiative
• Responsible Care audits at selected contract manufacturers if material risks identified with respect to occupational safety, health and environmental protection
• Targeted checks on suppliers in higher-risk countries to prevent potential child labor (e.g. seed business supply chain in India)

Activity in 2024:

• 118 raw materials supplier sites audited in relation to sustainability standards
• 328 suppliers with potential sustainability risks received EcoVadis sustainability assessments
• Follow-up audits in 2024 identified improvements in health and occupational safety measures and labor law requirements

Resources (non-financial):

• Dedicated procurement-specific sustainability team (core team plus supplementary sustainability network comprising employees from regions and procurement clusters)
• Global audit team that audits EHS topics at contract manufacturers

Process:

• Results analyzed and documented in central database
• Where performance insufficient, suppliers contacted and improvement requested
• Suppliers reviewed according to defined time frame based on sustainability risk identified, or after three years at latest

Supplier Development and Capacity Building

Scope: Upstream value chain (suppliers)

Description:

• Support suppliers in developing measures for improvement
• TfS webinars in various languages on sustainability and implementation of corrective measures
• TfS Academy online learning platform covering entire spectrum of ESG topics including child labor and health and occupational safety (over 300 courses available in 11 different languages)
• Partnership with East China University of Science and Technology in Shanghai, China

Activity in 2024:

• TfS webinars attended by 990 employees of suppliers
• 92 employees from 68 Chinese suppliers received training on ESG topics including child labor and health and occupational safety

Supplier Code of Conduct Implementation

Scope: Upstream value chain (suppliers)

Description:

• Grievance mechanism set out in Supplier Code of Conduct
• Made available to partners and service providers via electronic ordering system as part of purchasing conditions

Links to policy: Supplier Code of Conduct

Cross-Value Chain Actions

Compliance Hotline

Scope: Own operations and entire value chain (upstream and downstream)

Description:

• Uniform grievance mechanism available globally
• Offers way of reporting concerns, risks and violations occurring in BASF's activities or in the value chain in confidence and anonymously
• Includes potential concerns in relation to health and occupational safety as well as child labor
• Available to BASF employees and all external stakeholders, particularly workers in supply chains

Access: ethicspoint.basf.com/en

Links to policy: Supplier Code of Conduct

Local Initiatives and Preventive Actions

Scope: Upstream supply chains (indirect relationships)

Approach:

• Locally organized activities, projects and initiatives without centrally managed action plan
• Aimed at continuous optimization and further development
• Work with upstream supply chains where BASF has no direct contractual relationships, less transparency and less influence
• Partnerships with civil society and participation in cross-sector initiatives
• Projects start on the ground to build specific local expertise regarding sustainable and responsible supply chains

Objectives:

• Environmental improvements
• Promote social aspects: safe working conditions, adequate wages, access to healthcare systems, opportunities for upskilling/reskilling

Stakeholder engagement:

• Discussions with NGOs and government representatives
• External dialog forums
• Human Rights Advisory Council
• Nature Advisory Council

Note: Specific examples of local initiatives are mentioned but details are not provided in the excerpts (reference made to page 299 for "Pragati project for efficient water use concerning more sustainable farming of castor beans in India" but full details not included).

Effectiveness Assessment

• Effectiveness of collaboration with workers in value chain assessed through supplier assessments and follow-up evaluations
• Progress of actions, initiatives and projects assessed
• Issues raised and addressed through compliance hotline tracked and monitored (details on page 321)

We are working to further increase sustainability in our supply chains. Our previous target was to have 80% of suppliers improve their sustainability performance upon reevaluation. Moving forward, we are concentrating on suppliers that generated inadequate results in evaluations. For the time frame up to 2030, we are working toward ensuring that, annually, 80% of suppliers who underwent a sustainability evaluation during the reporting period, and who had inadequate results in a prior comparable evaluation, improve their sustainability performance. In 2024, the figure was 76%.

446 BASF suppliers screened as part of Together for Sustainability

Policies related to affected communities

BASF addresses affected communities through several interconnected policies and frameworks rather than a single dedicated policy.

BASF Group's Policy Statement on Human Rights

• Scope: Entire value chain, including local communities and vulnerable groups (including Indigenous peoples)
• Key content/principles:
  • Commitment to respecting human rights of local communities and vulnerable groups
  • Commitment to strengthening human rights along the entire value chain
  • Implementation of the principle of free, prior and informed consent (FPIC) for Indigenous peoples
  • Respect for human rights systematically integrated into corporate governance and decision-making processes
• Links to international standards:
  • Universal Declaration of Human Rights of the United Nations (U.N.)
  • Both U.N. Human Rights Covenants
  • Core labor standards of the International Labour Organization (ILO)
  • Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy
  • Ten Principles of the U.N. Global Compact
  • U.N. Guiding Principles on Business and Human Rights
  • OECD Guidelines for Multinational Enterprises
  • Responsible Care® Global Charter of the International Council of Chemical Associations

BASF Code of Conduct

• Scope: All employees (global)
• Key content/principles:
  • Anchors human rights responsibility
  • Binding for all employees
  • Forms basis for societal engagement policy
• Monitoring: Compliance tracked through control and monitoring systems
• Public availability: Global accessibility (referenced on page 295)

Supplier Code of Conduct

• Scope: All partners and suppliers
• Key content/principles:
  • Anchors human rights responsibility
  • Expectation that all partners comply with international human rights standards
  • BASF supports partners in meeting due diligence obligations where necessary
• Public availability: Referenced on page 295

Societal Engagement Policy

• Governance: Falls within the responsibility of the Corporate Center unit Corporate Strategy & Sustainability
• Key content/principles:
  • Contributes to positive development of communities
  • Based on the BASF Code of Conduct
• Scope: Contribution to improved quality of life for everyone

Environmental Protection, Health, Safety and Quality Management System

• Governance: Corporate Center unit Corporate Environmental Protection, Health, Safety & Quality (reports directly to Board of Executive Directors)
  • Determines Group-wide management and control systems
  • Monitors compliance with internal requirements and legal guidelines
  • Sites and Group companies responsible for implementing stipulated guidelines at local level
• Key content/principles:
  • Builds on guiding principles of the Responsible Care® initiative, quality management and other relevant management standards
  • Serves to protect environment and health and safety of employees, third-party workers and neighbors
  • Principle of coexisting well with affected communities by reducing negative impacts and maximizing positive impacts
  • Global standards and guidelines clearly defined in Group-wide requirements
• Monitoring: Regular audits by Corporate Center unit Corporate Environmental Protection, Health, Safety & Quality to monitor compliance with guidelines
• Links to international standards: Responsible Care® initiative

Product Stewardship Commitment

• Key content/principles:
  • Commitment under Responsible Care® and International Council of Chemical Associations initiatives
  • Minimizing negative effects of products on health, safety and environment
  • Continuously improving safety of products
  • Products undergo tests and assessments before market launch
  • Global management systems in downstream value chains
  • Global guidelines on safe transportation of hazardous goods for logistics service providers
  • Customer advice on product safety
• Links to international standards: Responsible Care®, International Council of Chemical Associations

Risk Assessment Process

• Scope: Operating divisions and Group companies worldwide
• Key content/principles: Regular risk assessments to record compliance risks, including those related to communities potentially affected by business activities

Key Management Approaches

• Dialog with stakeholders: Where activities could impact Indigenous peoples, BASF seeks dialog with nongovernmental organizations before investing, potentially establishing an ESG advisory council on case-by-case basis (see page 310)
• Material impacts addressed:
  • Potential adverse effects on health due to business activities
  • Right of Indigenous peoples to free, prior and informed consent

Taking action on material impacts on affected communities

Overview of approach

BASF takes concrete actions to mitigate negative impacts and risks while simultaneously seizing opportunities in connection with affected communities along value chains. These actions often entail decentralized measures, projects and initiatives that are not assigned to any centrally managed action plan. Instead, they – like management and monitoring systems – aim to ensure continuous improvement and further development and fall within the responsibility of the sites and Group companies concerned.

Stakeholder engagement and dialog

Dialog formats and engagement bodies

• BASF uses various dialog formats and bodies and incorporates the insights gained into business operations and strategic planning
• Distinguishes between:
  • Direct engagement with affected stakeholders (e.g., through community advisory panels)
  • Indirect engagement via representatives on advisory councils (see page 308)

Due diligence engagement with South African platinum suppliers

• Regular contact with South African platinum suppliers, including Sibanye-Stillwater
• Continuous dialog with relevant stakeholder groups to gain comprehensive picture of the situation on the ground and address relevant issues
• In-person stakeholder meeting in Germany (September 2024): Representatives of suppliers, NGOs from South Africa and Germany, and other experts held constructive discussion on environmental and human rights-related situation
• Scope: Upstream value chain (suppliers)
• Link to policy: Part of due diligence processes related to the Marikana platinum mine situation

Actions to avoid potential adverse effects on health

Product design for minimal impacts

• Actions to design products so that impacts on environment and society are as small as possible along entire value chain (see page 161)
• Scope: Full value chain

Supplier assessment and development

• Open dialog with suppliers
• Supplier assessment and development
• Support for preventive and local initiatives to improve working conditions of suppliers' employees
• Management processes activated in event of specific work-related incidents (see page 295)
• Scope: Upstream value chain

Safe working practices and training

• Support and demand safe and risk-aware working practices
• Learning from events and regular sharing of experiences among employees
• Regular training for employees at production sites on:
  • How to handle chemicals safely
  • How to use personal protective equipment correctly
• Scope: Own operations
• Resources (non-financial): Teams of experts at all sites dealing with health, occupational safety and environmental protection matters

Monitoring and compliance

• Corporate Environmental Protection, Health, Safety & Quality unit in Corporate Center conducts regular audits to monitor compliance with internal requirements and legal guidelines at regular intervals (see pages 278 and 209)
• Scope: Own operations

Targets related to affected communities

BASF has not set itself a specific target for the topics identified as material in the area of Affected Communities.

The company states that many of its sustainability-related corporate targets contribute to the protection of affected communities, including:

• Climate protection targets to reduce greenhouse gas emissions (see page 194)
• Responsible procurement target (see page 301)
• Sustainable water management target (see page 227)
• Targets for safe and resource-efficient production (see pages 287 and 212)

However, these targets are not specifically designated as S3 (Affected Communities) targets and their details are disclosed in other sections of the report.

The company notes: "Beyond these targets, BASF has not set itself a specific target for the topics identified as material in the area of Affected Communities."

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 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.

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

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.

We are working to further increase sustainability in our supply chains. For the time frame up to 2030, we are working toward ensuring that, annually, 80% of suppliers who underwent a sustainability evaluation during the reporting period, and who had inadequate results in a prior comparable evaluation, improve their sustainability performance.

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.

Global compliance systems and codes of conduct are implemented to address risks of violation of social and environmental standards.

Incidents of corruption or bribery

Confirmed incidents

In the reporting year 2024, there were no convictions for violations of anticorruption and antibribery regulations.

Convictions and fines

BASF reports zero convictions for violations of anticorruption and antibribery regulations in 2024. The excerpts state: "In the reporting year, there were no convictions for violations of anticorruption and antibribery regulations."

Regarding fines: In 2024, there were no fines, sanctions or compensation payments in connection with incidents reported via the compliance grievance mechanism (which included 79 discrimination cases and 225 complaints related to social factors including human rights).

Disciplinary actions

While the report does not provide a specific number of employees dismissed or disciplined specifically for corruption or bribery, it discloses that in 2024, violations of the Code of Conduct (which includes anticorruption provisions) led to termination of employment in 67 cases total (2023: 48). These related to various violations including respect in the workplace, protection of company property, and conflicts of interest.

Investigation procedures and speak-up mechanisms

BASF operates a global compliance hotline as its grievance mechanism, available to all employees and external stakeholders including supply chain workers. The hotline is operated by an independent external provider to ensure confidentiality. In 2024, the hotline received 751 reports (2023: 643), covering all categories of the Code of Conduct including corruption. Reports can be made anonymously via phone or online in over 50 languages.

All reported cases are systematically documented and investigated according to principles of objectivity, independence, accuracy, confidentiality and fairness. BASF's Compliance Officers are responsible for receiving reports and initiating investigations. The company prohibits retaliation against whistleblowers.

The Corporate Audit unit monitors adherence to compliance principles. In 2024, Corporate Audit conducted and documented 68 audits Group-wide (2023: 64) covering areas where compliance violations could occur.

Business partner due diligence

In 2024, BASF revised its global requirements on business partner due diligence and introduced an IT application to support business partner screening. The company conducts ongoing risk-based reviews of business relationships worldwide for signs of corrupt behavior, human rights violations, or noncompliance with ESG standards.

Training

In 2024, more than 120,000 employees worldwide received over 105,000 hours of training on the Code of Conduct, which includes anticorruption and antibribery content. All employees are required to complete basic, refresher or specialized training, with refresher training repeated every two years. Employees in procurement are considered most at risk and are subject to a "Zero Gift Policy" prohibiting acceptance of gifts of any kind.

Political influence and lobbying activities

Political engagement approach

BASF's political advocacy is conducted in accordance with transparent requirements and publicly stated positions. The same applies to BASF's activities in associations.

Ethical standards and guidelines

BASF has publicly available requirements for responsible lobbying.

Policy: BASF's Political Relations and Advocacy policy sets out the framework for political engagement.

» For more information on requirements for responsible lobbying, see basf.com/responsible-lobbying

Political contributions

BASF does not financially support political parties, for example, through donations in cash or in kind. This is codified in global requirements.

In the United States, employees at BASF Corporation have exercised their right to establish a Political Action Committee (PAC). The BASF Corporation Employee PAC is an independent, federally registered employee association founded in 1998. It collects donations from employees for political purposes and independently decides how these are used, in accordance with U.S. law.

Trade association memberships

BASF is a member of various industry associations. The company has published an Industry Associations Review that compares the energy and climate protection positions of BASF and the most important associations of which it is a member, with explanations on BASF's approach.

» For more information on the Industry Associations Review, see basf.com/corporategovernance

Memberships and engagement in sustainability initiatives

BASF is involved in numerous sustainability initiatives and networks to drive forward sustainability both in general and specifically in relation to its value chain. These include:

• International Council of Chemical Associations' (ICCA) global Responsible Care® initiative
• Together for Sustainability initiative (chemical industry)
• Ellen MacArthur Foundation (EMF)
• World Business Council for Sustainable Development (WBCSD)
• Global Battery Alliance (GBA)
• Alliance to End Plastic Waste (AEPW)
• Alliance for Water Stewardship (AWS)
• Sustainable Castor Initiative – Pragati (founding member, active since 2016)
• Cobalt for Development initiative (since 2018, together with BMW Group, Samsung SDI Co. Ltd., Samsung Electronics Co. Ltd., Volkswagen AG, Stihl AG & Co. KG and GIZ)
• Wage Improvements in Seed Hybrids (WISH) multistakeholder initiative in India (since 2022, with Syngenta and Arisa)

BASF engages in these networks, lobbying groups and associations in order to jointly promote sustainability topics, better understand requirements, trends and growth opportunities, and contribute to the development of standards.

Payment practices

Contractual payment terms

Payment terms are generally agreed upon individually with customers and, as a rule, are within 90 days.

Supplier finance arrangements

BASF has concluded supplier finance arrangements under which suppliers are entitled to receive invoice amounts prior to the original due date. Payment to the supplier is made by one of several participating banks with a discount. BASF pays the full invoice amount to the banks on the original due date. As the original payment obligations remain in place and there is no change in the main payment terms, the obligations continue to be reported under trade accounts payable.

The carrying amount of financial liabilities that are the subject of supplier financing agreements and are reported as trade accounts payable:

The payment terms for these liabilities ranged between 0 and 120 days and for comparable trade accounts payable that were not the subject of the agreements, between 0 and 60 days.

Factoring agreements

Factoring agreements in the amount of €359 million had a negative impact on cash flows from operating activities in 2024 (previous year: positive impact, €560 million).