BASF Group 2021

At a Glance
 Shaping the future of e-mobility Dear reader,
BASF is one of the leading manufacturers of battery materials for electric vehicles and continues 2021 was a very successful business year for BASF. Despite the
to invest in this important growth market. For example, we are building a new production plant ongoing coronavirus pandemic, widespread supply bottlenecks,
for cathode active materials in Schwarzheide, Germany, which will start operation in 2022. and increasingly higher energy and raw materials prices, we
The photos on the cover and on this page show Ina Homann. As an assistant process manager, achieved record levels of sales and earnings. Our economic devel-
her responsibilities include monitoring the progress of construction at her future workplace. opment confirms that we are on the right path with our strategic
For more information on battery materials and electromobility, see report.basf.com and weloveevs.basf.com direction, our adapted organizational structure and our ongoing
cost discipline.

As the largest chemical company in the world, we are leaders in

Contents our industry. This applies especially to the transformation to climate
neutrality. We want to reduce our CO2 emissions worldwide by 25%
1 | Foreword from the CEO  3
by 2030 compared with 2018. Our 2050 target is net zero emissions.
2 | Key Figures at a Glance  4 These are very ambitious goals. It is the biggest transformation in Our global responsibility for sustainable development is anchored in
the history of the chemical industry and for BASF. It will make great our corporate purpose: We create chemistry for a sustainable future.
3 | The BASF Group  5
demands on us. But we are confident that we will succeed! We act swiftly and systematically in the implementation of our long-
4 | Our Strategy  8 term strategy for profitable growth. I am convinced that climate
5 | Our Targets  10 CO2-free chemical production is the future. And BASF wants to be neutrality and sustainable resource use are not possible without a
among the first there. That is why we already provide our customers competitive chemical industry. Our company is very well positioned.
6 | Sustainability  12 with Product Carbon Footprints for our around 45,000 sales prod- With our innovation power, creativity, and entrepreneurial courage,
7 | Innovation  20 ucts. Furthermore, we help our customers develop strategies to we look to the future with optimism!
reduce their carbon footprint, to use resources more efficiently and
8 | Responsible Procurement  22 to manufacture products in a more environmentally friendly way. We
9 | Societal Engagement  24 want to be among the first to provide as many products as possible
from our portfolio with a reduced carbon footprint in large volumes
10 | BASF – An Attractive Investment  26
by the end of the decade. This differentiates us, increases our com- Martin Brudermüller
11 | The BASF Group in Figures  28 petitiveness and enables growth above market. Chairman of the Board of Executive Directors of BASF SE

2 3
Key Figures at a Glance The BASF Group
At BASF, we create chemistry for a sustainable future. We combine We steer our six segments along our value chains to address the
economic success with environmental protection and social needs of our customers with differentiated solutions and business
responsibility. Over 111,000 employees contribute worldwide to the strategies.
Sales EBIT before special items ROCE success of our around 90,000 customers in nearly all sectors. Our
customer portfolio ranges from major global customers and small – Chemicals: The segment supplies BASF’s other segments and
€78.6 billion €7.8 billion 13.5% and medium-sized enterprises to end consumers. third-party customers with basic chemicals and intermediates.
(2020: €59.1 billion) (2020: €3.6 billion) (2020: 1.7%) – Materials: The segment offers advanced materials and their
As the world’s largest chemical company and industry leader, BASF pre­cursors for the plastics and plastics processing industries.
has companies in 90 countries. We operate around 240 production
– Industrial Solutions: The segment develops and markets
sites worldwide – including Ludwigshafen, the world’s largest inte-
ingredients and additives for industrial applications.
grated chemical complex owned by a single company. It was there,
Greenhouse gas Employees Personnel in 1865, that the foundation stone was laid for the Verbund concept, – Surface Technologies: The segment offers chemical solutions
emissions Accelerator sales at year-end expenses which remains a key strength of BASF today: Intelligently linking and for surfaces such as battery materials and automotive coatings.
steering our plants in a Verbund structure creates efficient value – Nutrition & Care: The segment produces ingredients and
20.2 million metric tons €24.1 billion 111,047 €11.1 billion chains – from basic chemicals to highly refined products such as solutions for consumer applications, for example, nutrition and
(2020: 20.8 million metric tons) (2020: €16.7 billion) (2020: 110,302) (2020: €10.6 billion) coatings or crop protection. In the Verbund, we can manage our personal care.
production in a resource-efficient, CO2-optimized and reliable way. – Agricultural Solutions: The segment is an integrated provider
For example, by using by-products from one factory as feedstocks of seeds, crop protection and digital technologies and solutions.
elsewhere. This enables us to save raw materials and energy, avoid
emissions, reduce logistics costs and exploit synergies.
New patents Research and development Employees in
filed expenses research and development In addition to Ludwigshafen, BASF operates Verbund sites in Ant- Good to know
werp, Belgium; Freeport, Texas and Geismar, Louisiana; Kuantan,
~820 €2.2 billion ~10,000 Malaysia; and Nanjing, China. Another is currently being built in In the BASF Report 2021, we present how we create value for our stakeholders.
(2020: ~ 950) (2020: €2.1 billion) (2020: ~10,000) Zhanjiang in the southern Chinese province of Guangdong. The overview is based on the framework of the International Integrated
Reporting Council (IIRC).
Discover the interactive value creation graphic at basf.com/how-we-create-value

4 5
 BASF sites 1
We have organized our six segments into
eleven divisions. They manage the 50
global and regional business units and
develop strategies for 75 strategic
business units. Florham Park
Chemicals Materials
Nanjing
For more information on the Verbund concept, see Petrochemicals | Intermediates Performance Materials | Monomers Geismar
basf.com/en/verbund Zhanjiang
Freeport
Share of total sales in 2021 17% Share of total sales in 2021 19% Hong Kong

Kuantan
Verbund sites
Planned Verbund site
Research and development sites
Production sites
Regional centers São Paulo

Industrial Solutions Surface Technologies

Dispersions & Resins | Performance Chemicals Catalysts | Coatings

Share of total sales in 2021 11% Share of total sales in 2021 29%
BASF sales by industry 2021 Antwerp
Direct customers

Ludwigshafen
Chemicals and plastics
 > 20% NORTH AMERICA SOUTH AMERICA, EUROPE ASIA PACIFIC
Transportation AFRICA, MIDDLE EAST

Agriculture
10%– 20%
Consumer goods 21.9 4.4 31.6 20.6
Sales (billion €) Sales (billion €) Sales (billion €) Sales (billion €)
Nutrition & Care Agricultural Solutions
Construction
< 10%
Electronics
Energy and resources
Care Chemicals | Nutrition & Health
16,753 6,786 67,532 19,976
Health and nutrition Share of total sales in 2021 8% Share of total sales in 2021 11% Employees Employees Employees Employees 1 The map shows sites of the BASF Group according to the scope of consolidation
for the BASF Report 2021.

6 7
Our Strategy
Chemistry is our passion. As an industry leader, we want to be the most attractive Innovation is the bedrock of our success. BASF is a leader in the Investments, acquisitions and divestitures play a key role in strength-
partner for challenges that can be solved with chemistry. That is why our customers chemical industry with around 10,000 employees in research and ening our portfolio. We are focusing on innovation-driven growth
are at the center of everything we do. We help to change the world for the better development and R&D spending of around €2.2 billion. We are areas and sustainable technologies. To further strengthen our
with our expertise, our innovative and entrepreneurial spirit, and the power of our expanding this position by strengthening our research activities, position in the dynamic growth market of Asia, we are building a
Verbund integration. This is our goal, embedded in our corporate purpose: bringing research and development even closer together, and new Verbund site in the southern Chinese province of Guangdong.
We create chemistry for a sustainable future. fostering cooperation.
Our employees are key to BASF’s success. That is why we believe
The world is changing at a rapid pace – more and more urgently We also see these disruptive changes as an opportunity. As the We pledged our commitment to sustainability in 1994 and since that it is important to have an inspiring working environment that
than ever, solutions are needed for a more sustainable future. world’s largest chemical company, we want to lead the way and then, have systematically aligned our activities with the principles of fosters and develops employees’ individual talents and enables
Chemistry plays a key role here. In almost all areas of life, it can help actively and responsibly shape the change. That is why we are sustainability. We see sustainability as an integral part of our them and their teams to perform at their best. We are pursuing three
overcome pressing global challenges with innovative products and gradually switching our energy and raw material supplies to renew- strategy as well as our targets, steering processes and business action areas to make our high-performance organization even more
technologies – from climate change and using resources more able sources. We are strengthening our Verbund structure as the models. Our approach covers the entire value chain – from respon- so: empowerment, differentiation and simplification.
sparingly to feeding the world’s population. This belief is expressed basis for resource-efficient, safe and reliable production. We are sible procurement and safety and resource efficiency in production
in our corporate purpose and is what motivates us day in and day developing pioneering low-carbon production processes for our to sustainable solutions for our customers.
out: We create chemistry for a sustainable future. products. We are accelerating our innovation processes and deep-
ening cooperation with partners to develop high-performance Our core business is the production and processing of chemicals.
Our mission and motivation is to grow profitably and make a positive products that also require fewer resources and have a lower carbon Our strength here lies – both now and in the future – in the Verbund
contribution to society and the environment. For example, BASF’s footprint. We are harnessing the many opportunities of digitaliza- and its integrated value chains. The Verbund offers us many tech-
solutions contribute to climate protection and help to prevent or tion. We are systematically aligning our portfolio with growth areas nological, market, production-related and digital advantages. That
is why we will continue to invest in the creation and optimization of
Good to know
recycle waste, produce healthy and affordable food, and enable and future technologies, and are integrating sustainability into our
climate-smart mobility. value chains even more strongly. We create a working environment Verbund structures and drive forward the consolidation of produc- How we act is critical to the successful implementation of our strategy and
in which our employees can thrive and contribute to BASF’s long- tion at highly efficient sites. how our stakeholders perceive us. This is what our four corporate values
At the same time, as an energy and resource-intensive company, we term success. This is how we live our corporate purpose. represent. They provide the framework for responsible conduct and define
are facing the biggest transformation in our over 150-year history: We want to leverage the diverse growth potential of digitalization how we want to work together as a team and with our stakeholders:
The shift toward a carbon-neutral and circular economy and the The following six strategic focus areas enable us to focus on our and seize the associated opportunities to the benefit of our custom-
associated landmarks such as the European Green Deal demand customers while strengthening our leading position in an increas­ ers. To achieve this, we promote digital skills among our employees, Creative Responsible
from us new concepts and approaches – for the way we produce, ingly volatile and competitive environment. cooperate with partners and make digital technologies and ways of Open Entrepreneurial
for our raw material base and for our energy supply. working an integral part of our business.

8 9
 Achieve a return on capital Grow sales volumes Increase EBITDA Increase the dividend
employed (ROCE) considerably above the faster than global chemical Limitedbefore
Limited assurancespecial
assurance items per
Limited
Limited share
every year based
assurance
assurance
cost of capital percentage every year production every year by 3%–5% per year on a strong free cash flow
Reduce worldwide process safety Reduce the worldwide lost-time

Our Targets
incidents per 200,000 working injury rate per 200,000 working
hours to ≤0.1 by 2025 hours to ≤0.1 by 2025

Profitable
Profitablegrowth
growth Profitable growth Effective climate protection Sustainable product
Responsible portfolio 2
procurement Employee engagement and diversity
2021
2021 2021
2021
2021 2021
2021 2021
2021
2021
2021 202120212021 2025 2021 2021 2030 2021 2021
status
status status
status
status status
status status
status
status 2025
statusstatus 2025
status 2021target target status
2030 targettarget
target
target target
13.5%
13.5% 10.6%
10.6%
13.5% 53%
53%
20.2 53%
€24.1
€3.40 Responsible
1 1
€3.40 85%>€3.30 procurement 1 2021
€3.40 status target 11
2021
2021 2021 10.6% target >€3.3090%
€22.0 SDG >€3.30 30%
status 82% >80%
target
target 2021
2021
target million 2021 billion 2021 2025 80%
16.4 billion target 74%
25.6% 2025
>9%
>9% target
target
>9% metric target
million status 2021 target
SDG
SDG >6.1%
>6.1% SDG
SDG tons >6.1% SDG SDG
SDG
SDG 85% 90% SDG
SDG SDG
SDG status SDG SDG SDG SDG
metric
2021
2021 2021 80%
tons
target
target target 74%
3%
3%– –5%5% 3% – 5%
SDG SDG
Most
Mostimportant
importantkey
keyperformance
performanceindicator
indicator Most important key performance indicator Most important key performance indicator Most important keyassurance
Limited performance indicator Limited
Limited assurance
assurance Limited
Limited assurance
assurance

Achieve
Achieveaareturn
returnon
oncapital
capital Grow
AchieveGrowa sales
salesvolumes
return volumes
on capital Increase
GrowIncrease
Reduce ourEBITDA
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absolute Increase
Increase
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Cover
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€22thedividend
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90% of in
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Have proportion
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3
employed
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chemical
by 25% by 2030 per
per share
beforeshare
Accelerator
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every
withyear
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spend
assurance sales year
items
by based
based
sustainability
2025 leadership
per
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improve
assurance positions
every year
their with disciplinary
based
sustainability feel that at BASF, they can thrive
²
cost
costofofcapital
capitalpercentage
percentageevery
everyyear
year production
production
cost of capital every
everyyear
percentage year
every year byby3%–5%
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every year
year on
on
byaa3%–5%
strong
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cashflow
year
evaluations flow
by 2025 a responsibility
on performance to 30%
strong free cash
uponflow by 2030
re-evaluation and perform at their best
Cover 90% of our relevant Have 80% of our suppliers
spend with sustainability improve their sustainability
evaluations by 2025 performance upon re-evaluation
Resource efficiency and safe production
2021 2021 2030
status status target
Effective
Effectiveclimate
climateprotection
protection Sustainable
Sustainable
Effective product
product
climate portfolio
portfolio
protection Sustainable product portfolio Resource efficiency and safe production
0.3 0.3 100%
2021
2021 2021
2021
2021 2021 2021 2021 2021 2030
status
status status
status 2025
2025 status 2025 2021
2030
2030 status target
2030 status status status target
target
target target 2025
20.2
20.2
53% target
target €24.1
€24.1
20.2
€3.40
1
target €24.1 0.3 2025 0.3 100%
>€3.30
€22.0
€22.0 SDG
SDG €22.0 SDG target SDG target SDG 53.5% SDG
million
million 16.4
16.4 billion
billion
million 16.4 billion 2021
billion
billion billion <0.1 <0.1
metric
metric million
million metric million status
2025 2025
tons
tons metric
metric SDG SDG
SDG tons metric SDG SDG target SDG target SDG 53.5% SDG
2021
tons
tons
target tons Limited assurance <0.1 Limited assurance <0.1
3% – 5%
Reduce worldwide process safety Reduce the worldwide lost-time Introduce sustainable water management
Most
Mostimportant
importantkey
keyperformance
performanceindicator
indicator Most
Most
Most important
important key
important
key performance
key performance
performance indicator
indicator
indicator Most important key performance indicator incidents
Limited assurance per 200,000 working injuryrate per 200,000 working
Limited assurance at our production sites in water stress areas
hours to ≤0.1 by 2025 hours to ≤0.1 by 2025 and at our Verbund sites by 2030
Reduce
Reduce our
Increaseourabsolute
absolute
EBITDA Achieve
Achieveour
Increase
Reduce €22
€22 billion
billioninin
theabsolute
dividend Achieve €22 billion in Reduce worldwide process safety Reduce the worldwide lost-time Introduce sustainable water management
3 3 3
CO emissions²
CO emissions²
before byby25%
special 25%by
itemsby2030
2030 COAccelerator
Accelerator
per sales
sales
share every
emissions² by by
year
25% byby
2025
2025
based
2030 Accelerator sales by 2025 incidents per 200,000 working injury rate per 200,000 working at our production sites in water stress areas
²² ²
by 3%–5% per year on a strong free cash flow hours to ≤0.1 by 2025 hours to ≤0.1 by 2025 and at our Verbund sites by 2030
Employee engagement and diversity
2030 2021 2021
target status target
1 Dividend proposed by the Board of Executive Directors Employee
2021 engagement
30%
and diversity 82%
1

2 Includes Scope 1 and Scope 2 emissions 1 status

We regularly determine
>80%
2030 the employee engagement level. The most recent survey was conducted in 2020. The next survey is planned for spring 2022.
2021 2021
3 Following early target achievement in 2021, we will update our product portfolio steering target in the course of 2022. 2 25.6%
Our responsible procurement targets also include a supplier development metric (see
target page 23 and report.basf.com).
status target
2021 1
status 30% SDG 82% >80% SDG
10 25.6% 11
SDG SDG
Sustainability Shaping the future of e-mobility
We want to contribute to a better world with enhanced quality of life We are committed to doing business in a responsible, safe, BASF is conducting research globally on innovative battery materials.
for everyone. That is why we firmly anchored sustainability in our resource-efficient and respectful way. Our actions are guided by our Kathrin Michel’s team, for example, is looking at how charging times
corporate purpose, our strategy, our targets and our operating corporate values and our global Code of Conduct. We want to can be shortened, ranges increased and battery life improved.
business. It is at the core of what we do, a driver for growth and an ensure that we act in line with the applicable laws and uphold our Find out more about how BASF is contributing to climate-smart mobility at
report.basf.com and weloveevs.basf.com
element of our risk management. responsibility to the environment and society with our comprehen-
sive management and monitoring systems.
We contribute to a sustainable development and to the United
Nations’ Sustainable Development Goals (SDGs) in many ways. For Our business partners are also expected to comply with prevailing
instance, our innovations, products and technologies help to use laws and regulations and to align their actions with internationally
natural resources more efficiently, meet the demand for food, recognized principles.
enable climate-smart mobility, reduce emissions and waste, and
increase the capabilities of renewable energy. Alongside these We seek dialog with our stakeholders to discuss critical issues and,
positive contributions, our business activities also have negative if necessary, develop solutions together. We are involved in numer-
impacts. For example, we create CO2 emissions, use water and ous sustainability initiatives to drive forward sustainability in general
procure raw materials from suppliers, which may involve a potential and, specifically, as this relates to our value chains. These include
risk of human rights violations. This is why we are constantly work- the World Business Council for Sustainable Development (WBCSD)
ing to broaden our positive contributions to key sustainability topics as well as networks with thematic focus like the Alliance to End
along our value chains and reduce the negative impacts. Plastic Waste (AEPW) or the Global Battery Alliance (GBA).

We value people and treat them with respect

S UP P L I E R S BASF CUS T O M ER S

We source responsibly We produce safely and efficiently We drive sustainable solutions

12 13
 Sustainability in Focus: Our Journey to Climate Neutrality
Climate change is the greatest challenge of the 21st century. Swift We want to play an active and responsible role in shaping the tran-
and resolute action is needed to ensure that the targets agreed in sition toward a climate-neutral society. This calls for new ways of
the Paris Climate Agreement can be achieved. We stand by this thinking and working together. And it needs a political and regulatory
responsibility. environment that promotes innovation in climate protection, makes it
possible to develop new, climate-smart processes that are competi­
Our target: net zero emissions by 2050. We have set ourselves an tive internationally and, above all, resolutely drives forward the
ambitious milestone on this path. By 2030, we want to reduce expansion of renewable energies.
the greenhouse gas emissions from our production sites and our
energy purchases by 25% compared with 2018 – while growing One thing is clear: The transformation will require significantly more
production volumes. This corresponds to a decrease of around energy from renewable sources. Initial estimates suggest that at the
60% compared with 1990. Ludwigshafen site in Germany alone, we would need to roughly
triple or quadruple our current electricity use (2021: 6.0 TWh) to
We are intensely pursuing our climate protection targets with invest- fully implement new, low-carbon electricity-based production
ments of up to €4 billion by 2030. The focus of our carbon manage- processes. Consequently, there is an urgent need to expand supply,
ment is on five strategic levers: to reduce the levies and fees on electricity prices, and introduce
globally comparable carbon pricing.
Rethinking our energy supply – Gray-to-green: We are increasingly meeting our energy needs
from renewable sources. For more information on carbon management, see basf.com/carbon-management
Renewable energy is a central building block on BASF’s journey to
climate neutrality. To enable us to meet our growing demand in – Power-to-steam: We are increasingly relying on energy recovery
the future, we are gradually switching our supply agreements to to produce steam.
green power and investing in our own plants. One example is our – Continuous opex: We are working to further improve the energy Our global climate protection targets
share in Vattenfall’s Hollandse Kust Zuid (HKZ) offshore wind farm. and process efficiency of our plants.
Once fully operational, expected in 2023, HKZ will be the largest – Bio-based feedstocks: We are increasingly replacing fossil
offshore wind farm in the world with 140 wind turbines and a total resources with bio-based raw materials.
­–25% Net zero
installed capacity of 1.5 gigawatts. Reduction in our greenhouse Greenhouse gas emissions
– New technologies: And together with partners, we are pioneer-
gas emissions by 2030 compared by 2050 (Scope 1 and 2)
Find out more about how we are driving forward the transformation of our energy supply at ing nearly carbon-free production processes, especially for
report.basf.com. with 2018 (Scope 1 and 2)
emission-intensive basic chemicals.

14 15
Sustainability in Focus: Thinking and Acting Circular New products from waste
As the world’s population grows, so does demand for limited natural This is the case, for example, in the chemical recycling of used tires Together with partners, BASF is developing innovative products and technologies
resources. At the same time, many recyclable materials end up in and different types of plastics,where we can feed recovered raw to improve recyclability and enable resources to be fed back into the system in
landfill or in waste incineration. New concepts are needed to decou- materials such as pyrolysis oil or monomers back into our Verbund the future. One example is chemical recycling of used tires (photo) and mixed
ple growth from resource consumption. Reduce, reuse and recycle structure at different points. Another example is the recovery of plastic waste in our ChemCyclingTM project.
are the keywords of this transition to a system of more sustainable valuable metals from spent batteries and catalytic converters. Find out more about how used tires and mixed plastic waste are converted into new raw materials at
report.basf.com.
product cycles with less resource consumption and lower carbon
emissions. In addition, we are developing innovative products and technologies
in many areas that will increase the service life of materials or their
For BASF, the concept of a circular economy is not new. As early as recyclability and compostability. One example is additives for the
1865, it underpinned the foundation of our company: At that time, mechanical recycling of plastics. A Group-wide co-funding program
Friedrich Engelhorn pursued the idea of producing synthetic dyes supports our employees in developing new business models for the
from coal tar – a waste product – and organizing production effi- circular economy – from the initial idea to market launch. Our target:
ciently in an integrated Verbund structure. We are still committed to By 2030, we want to double our sales of solutions for the circular
this tradition today and are aligning our actions more strongly than economy to €17 billion.
ever with circularity.
For more information on circular economy, see basf.com/circular-economy
For example, we already use bio-based and renewable raw mate­
rials in our production. To further reduce the resource and carbon
footprints of our products and solutions, we will align our raw mate-
rial base even more strongly toward recycled and renewable raw
materials. For instance, we aim to process 250,000 metric tons of
Our circular economy targets
recycled and waste-based raw materials in our production plants
annually from 2025. Together with partners, we are analyzing waste
streams and raw material sources to find the best solution and ­250,000 metric tons €17 billion
develop suitable, innovative processes. Recycled and waste-based Sales of solutions for
raw materials processed the circular economy
every year from 2025 by 2030

16 17
 Sustainability in Focus: Steering Our Product Portfolio
We want to further increase our products’ contribution to sustain- Our Accelerator products make a substantial sustainability contribu-
ability. A significant steering tool for the product portfolio, based on tion in the value chain. These include catalysts that reduce emis-
the sustainability performance of our products, is the Sustainable sions, biodegradable mulch films for agricultural applications, and
Solution Steering method. It considers our products’ applications in high-performance insulation materials for higher energy savings and
various markets and customer industries. Transparently classifying reduced material use in building construction.
our products on the basis of their contribution to sustainability
enables us to systematically improve them. For more information on Sustainable Solution Steering, see basf.com/en/sustainable-solution-steering

Classification of assessed portfolio according to the Sustainable Solution Steering method

Accelerator Accelerator sales

Substantial sustainability contribution 2021: €24,103 million
in the value chain 2020: €16,740 million

Performer Performer sales

Sustainable solutions Meets basic sustainability standards
on the market
2021: €39,033 million
2020: €30,519 million
Assessed
One Accelerator product from BASF’s extensive portfolio is Haptex®. portfolio
The water-soluble polyurethane solution is used in the production Transitioner €71,041 million
Transitioner sales
of synthetic leather. Among other things, Haptex’s solvent-free Specific sustainability issues which are 2021: €7,879 million
production process cuts greenhouse gas emissions by around 50%. being actively addressed 2020: €6,799 million
BASF aims to achieve annual growth of more than 50% with the
product by 2025. Challenged Challenged sales
Discover Haptex® at basf.com/haptex Significant sustainability concern identified and 2021: €26 million
action plan in development or implementation 2020: €72 million

18 19
 Low-carbon production processes Innovation
Hydrogen is a key element on the journey to climate neutrality. Innovation has always been the key to BASF’s success. The knowl- The number and quality of our patents also attest to our power of
BASF is developing a process – methane pyrolysis – that signifi- edge and skills of our highly qualified employees is our most innovation and long-term competitiveness. In 2021, we filed around
cantly reduces carbon emissions in the production of hydrogen. valuable resource here and the source of our innovative strength. 820 new patents worldwide. The Patent Asset Index, a method that
Find out more about BASF’s innovative low-carbon production processes We had approximately 10,000 employees involved in research and compares patent portfolios, once again ranked us among the lead-
at report.basf.com
development worldwide in 2021. ing companies in the chemical industry in 2021.

Our research and development expenses amounted to €2,216 mil- In addition to effectiveness, the global presence of our research and
lion in 2021 (2020: €2,086 million). Research and development development and a close global network with top universities,
activities in our operating divisions, which is mainly application and research institutes and companies are vital to our long-term
customer-related, accounted for 83% of this figure. Corporate success. Both enable us to respond to the needs and requirements
research, in which we bundle cross-divisional and long-term topics, of the regional markets in a differentiated way and leverage growth
was responsible for 17% of these expenses. potential.

Our innovation focus is on developing sustainable solutions for our For more information on innovation, see basf.com/innovations

customers. We ensure our long-term competitiveness by helping

our customers reduce their carbon footprint, use resources more
efficiently, or manufacture products in a more environmentally
friendly way and to recycle them, to name a few examples. In 2021, Good to know
we generated sales of over €11 billion with products launched on
the market in the past five years that stemmed from research and
development activities. In the long term, we aim to continue
~10,000 ~€2.2 billion
significantly increasing sales and earnings with new and improved Employees in research Research and development
products – especially with products that make a substantial sustain- and development expenses
ability contribution in the value chain.
Eight academic research alliances
Cooperation with around 280 research partners
Around 820 new patents filed in 2021

20 21
 Natural active ingredients Responsible Procurement
Our bioactives for cosmetics are based on plants. Our partnerships with suppliers are based on mutual value creation, In addition, we develop and test approaches to make the supply of
Through sustainable sourcing practices, we aim as well as a reliable supply of raw materials, precursors, technical raw materials more sustainable in joint initiatives with suppliers and
to preserve ecosystems and enable sustainable goods and services at competitive prices. In doing so, we want to other partners. Examples include our joint activities on certified
management for those who depend on them. generate long-term benefits for both sides. sustainable supply chains for renewable raw materials such as
To this end, we have set up various programs palm, palm kernel and castor oil. To promote the responsible
that unite economic, ecological and social aspects Together with our suppliers, we want to improve sustainability in the sourcing of min­ eral raw materials, for example, we have been
in holistic approaches. One example is the supply chain. Consequently, we expect our suppliers to comply involved in the cross-­ industry Cobalt for Development initiative
rambutan program we are implementing in with the applicable laws in full and to adhere to internationally since 2018. It aims to improve working and living conditions for
Dong Nai province in southeastern Vietnam with recognized environmental, social and corporate governance (ESG) artisanal miners in the Democratic Republic of Congo.
a network of local smallholders. standards. We also expect our suppliers to make an effort to
For more information on our rambutan program, see enforce these standards at their suppliers. For more information on responsible procurement, see basf.com/suppliers
carecreations.basf.com/sustainability

Our global Supplier Code of Conduct is founded on internationally

recognized guidelines, such as the principles of the United Nations’
Global Compact. Topics covered by the Code of Conduct include
compliance with human rights, the exclusion of child and forced
labor, safeguarding labor and social standards, antidiscrimination
and anticorruption policies, and protecting the environment. We
revised our Supplier Code of Conduct in 2021 and added our
expectations around the procurement of conflict minerals (tin, tanta-
lum, tungsten, their ores and gold).
Our responsible procurement targets

We take a closer look at suppliers in critical supply chains, for ­90% 80%
example mineral raw materials, renewable resources, a number of Share of relevant spend Percentage of suppliers
pigments and highly toxic substances. Upstream stages of the covered by with improved
value chain are assessed for serious sustainability risks and, if nec- sustainability evaluations sustainability performance
essary, suitable remedial measures are identified and implemented. upon re-evaluation

22 23
 Societal Engagement
Through our societal engagement, we want to help disadvantaged example, BASF doubled the donations made by employees of par-
groups tackle their specific challenges – whether through initiatives ticipating German Group companies to a total of around €600,000
in our immediate communities or around the world in cooperation for the benefit of the United Nations Children’s Fund UNICEF.
with global organizations. We support projects that aim to have a
lasting impact on specific target groups and offer learning opportu- Another focus in 2021 was on aid for those affected by natural
nities for participating cooperation partners and for BASF. The focus disasters. In July, for example, BASF donated €1 million in Germany
is on health, skills and resources. In this way, societal engagement to help cope with the flood disaster, which hit the states of North
is an important part of our corporate social responsibility. Rhine-Westphalia and Rhineland-Palatinate particularly hard. In the
United States, BASF donated $500,000 in September for emer­
We work with partners worldwide to promote public health, for gency relief after Hurricane Ida and for long-term recovery efforts in
example, to combat malaria. Through our New Nets project in Louisiana.
cooperation with The Global Fund, Unitaid and other financial part-
ners, approximately 25 million of our Interceptor® G2 mosquito For more information on our engagement in the Rhine-Neckar region, see ludwigshafen.basf.de
For more information on our social engagement around the world, see basf.com/en/engagement
nets had been distributed in African countries as of December
2021. These were specially developed to counter insecticide resis-
tance in the fight against malaria. The project goal is to distribute a
Aid in the coronavirus pandemic total of around 35 million nets by the end of 2022.
In April 2021, BASF opened the first accredited corporate coronavirus
vaccination center in Germany at its Ludwigshafen site. More than At the U.N. Food Systems Summit 2021, BASF signed the Zero
22,000 primary vaccinations and more than 21,000 secondary Hunger Private Sector Pledge and announced that it would invest
vaccinations were administered there from April to August and $11 million in initiatives in Africa, Asia, Central and South America,
more than 10,000 booster vaccinations were administered there such as for seed production, malaria prevention and food fortifi­ Good to know
in December to BASF employees, contractors and site partners. cation as well as smallholder projects.
As part of BASF’s interdisciplinary team at the coronavirus vaccination ~€30 million
center, Dr. Sung Min Pyo, a pharmacist in the Nutrition & Health In the area of international development cooperation, we also sup-
BASF Group expenses for societal engagement activities
division, ensured that the vaccines were used as required. port the independent charitable BASF Stiftung with donations for its
For more information on the Helping Hands aid campaign, see basf.com/en/helping-hands project work in cooperation with various organizations. In 2021, for

24 25
BASF – An Attractive Investment Ready for the future
With more than 800,000 shareholders, BASF is one of the largest products. For example, in the latest assessments by the nonprofit Covering an area of around 10 square kilometers, our Verbund site in Ludwigshafen, Germany,
publicly owned companies with a high free float. An analysis of the organization CDP, BASF was ranked A– in all three categories is the world’s largest integrated chemical complex owned by a single company. It was here
shareholder structure carried out at the end of 2021 showed that, at “Climate Change,” “Forests” and “Water” and thus once again that back in 1865, Friedrich Engelhorn laid the foundation for a unique success story.
around 19% of share capital, the United States and Canada made achieved Leadership status. Today, BASF is the world’s largest chemical company. And our corporate purpose guides
up the largest regional group of institutional investors. Institutional the way into the coming decades: We create chemistry for a sustainable future.
investors from Germany accounted for around 9%. Institutional For more information about BASF stock, see basf.com/share
For more information on key sustainability indexes, see basf.com/sustainabilityindexes
investors from the United Kingdom and Ireland hold 6% of BASF
For more information on the latest analyst recommendations, see basf.com/analystestimates
shares, while investors from the rest of Europe hold a further 13% of
capital. Approximately 39% of the company’s share capital is held
by private investors, nearly all of whom reside in Germany. BASF is
therefore one of the DAX companies with the largest percentage of
private shareholders.

BASF is committed to a reliable and ambitious dividend policy:

Based on a strong free cash flow, we want to increase the dividend Good to know
per share annually. The Board of Executive Directors and the Super-
visory Board will propose a dividend payment of €3.40 per share to €3.40 5.5%
the Annual Shareholders’ Meeting in April 2022. Based on the year- Dividend Dividend yield based on the
end share price for 2021, BASF shares offer a high dividend yield of per share (proposal) year-end share price for 2021
around 5.5%. BASF is part of the DivDAX share index, which con-
tains the 15 companies with the highest dividend yield in the DAX 40. Unique Verbund concept
Industry-leading innovation platform
BASF shares are also attractive for investors looking for chemical
companies with a convincing ESG performance (environment, Strategy focused on participating in fast-growing Asian markets
society and governance). In the analyses of leading ESG rating Creating value for society and contributing to a sustainable
agencies, BASF is often recognized as a benchmark within the development
chemi­cal industry. They specifically highlight our inte­grated sustain- Long-term value creation and attractive dividend policy
ability reporting, business ethics and the development of sustainable

26 27
The BASF Group in Figures
Million € 2021 2020 2019 2018 2017 Million € 2021 2020 2019 2018 2017

Statement of income Balance sheet (IFRS)

Sales 78,598 59,149 59,316 60,220 a 61,223 b Total assets 87,383 80,292 86,950 86,556 78,768
Income from operations (EBIT) 7,677 –191 4,201 5,974 a
7,587 b Noncurrent assets 52,332 50,424 55,960 43,335 47,623
Income before income taxes 7,448 –1,562 3,302 5,233 a 6,882 b of which intangible assets 13,499 13,145 14,525 16,554 13,594
Income after taxes from continuing operations 6,018 –1,471 2,546 4,116 a
5,592 of which property, plant and equipment 21,553 19,647 21,792 20,780 25,258
Income after taxes from discontinued operations –36 396 5,945 863 a 760 Current assets 35,051 29,868 30,990 43,221 31,145
Income after taxes 5,982 –1,075 8,491 4,979 6,352 of which inventories 13,868 10,010 11,223 12,166 10,303
Net income 5,523 –1,060 8,421 4,707 6,078 of which accounts receivable, trade 11,942 9,466 9,093 10,665 10,801
Income from operations before depreciation and amortization (EBITDA) 11,355 6,494 8,185 8,970 a 10,765 b of which cash and cash equivalents 2,624 4,330 2,427 2,300 6,495
Income from operations (EBIT) before special items 7,768 3,560 4,643 6,281 a 7,645 b Equity 42,081 34,398 42,350 36,109 34,756
Total liabilities 45,301 45,894 44,600 50,447 44,012
Key data of which financial indebtedness 17,184 19,214 18,377 20,841 18,032
Earnings per share € 6.01 –1.15 9.17 5.12 6.62 b
Adjusted earnings per share € 6.76 3.21 4.00 5.87 6.44 b Capital expenditures, depreciation and amortization
Dividend per share € 3.40 3.30 3.30 3.20 3.10 Additions to property, plant and equipment and intangible assets 4,881 4,869 4,097 10,735 4,364
Dividend yield c % 5.50 5.10 4.90 5.30 3.38 of which property, plant and equipment 4,410 4,075 3,842 5,040 4,028
Cash flows from operating activities 7,245 5,413 7,474 7,939 8,785 Depreciation and amortization of property, plant and equipment and intangible assets 3,678 6,685 4,146 3,750 a 4,202
Payout ratio % 57 . 36 63 47 of which property, plant and equipment 3,064 5,189 3,408 3,155 a 3,586
Price-earnings ratio (P/E ratio) c 10.3 . 7.3 11.8 13.9
Return on capital employed (ROCE) % 13.5 1.7 7.7 12.0 a 15.4 Research and development expenses 2,216 2,086 2,158 1,994 a 1,843 b

a Figures for 2018 were restated with the presentation of the construction chemicals activities as discontinued operations. a Figures for 2018 were restated with the presentation of the construction chemicals activities as discontinued operations.
b Figures for 2017 were restated with the presentation of the oil and gas activities as discontinued operations. b Figures for 2017 were restated with the presentation of the oil and gas activities as discontinued operations.
c Based on year-end share price

28 29
Continued from page 29

2021 2020 2019 2018 2017 2021 2020 2019 2018 2017
Employees at year-end 111,047 110,302 117,628 122,404 115,490 Water
of which women % 26.1 25.5 25.1 25.1 24.6 Emissions to water: organic substances metric tons 12,500 11,500 12,100 12,600 13,200
of which men % 73.9 74.5 74.9 74.9 75.4 Emissions to water: nitrogen metric tons 3,000 2,900 3,000 3,100 2,800
of which up to and including 25 years 8,207 7,635 8,227 8,584 8,151 Emissions to water: heavy metals metric tons 17 22 25 23 25
of which 26–39 years 38,798 37,715 40,614 41,910 38,412 Emissions to water: phosphorus metric tons 340 270 260 220 420
of which 40–54 years 42,531 43,322 46,509 48,826 47,478 Water supply million cubic meters 1,695 1,728 1,717 1,743 1,816
of which 55 years and up 21,511 21,630 22,278 23,084 21,449 Water used for production % 13 13 14 13 13
Water used for cooling % 87 87 86 87 87
Personnel expenses (million €) 11,097 10,576 10,924 10,659 10,610
Waste (million metric tons)
Occupational and process safety Total waste generation 2.47 2.21 2.34 2.19 2.12
Lost-time injury rate per 200,000 working hours 0.3 0.3 0.3 0.3 0.3 Waste recovered (recycled or thermally recovered) 1.16 0.96 0.99 0.80 0.79
Process safety incidents per 200,000 working hours 0.3 0.3 0.3 0.3 0.4 Waste disposed of 1.31 1.25 1.35 1.39 1.34

Energy supply and emissions to air For more facts and figures on the BASF Group and an interactive key figures comparison, see report.basf.com

Electricity million MWh 15.3 14.7 14.8 15.1 15.1

Steam million MWh 45.0 40.3 40.3 39.4 39.7
Greenhouse gas emissions million metric tons CO2 equivalents
20.2 20.8 20.1 21.9 21.5
(CO2, N2O, CH4, HFC, SF6)
Air pollutants metric tons
26,358 24,496 25,130 26,866 25,853
(CO, NOx, NMVOC, SOx, Dust, NH3 and other inorganic substances)

30 31
At BASF, we create chemistry for a sustainable future. We combine economic success with environmental protection and social respon­
sibility. Around 111,000 employees in the BASF Group contribute to the success of our customers in nearly all sectors and almost every
country in the world. Our portfolio comprises six segments: Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care
and Agricultural Solutions. BASF generated sales of €78.6 billion in 2021.

Contact
General inquiries
Phone: +49 621 60-0, email: [email protected]

Media Relations
Jens Fey, phone: +49 621 60-99123

Sustainability Relations
Thorsten Pinkepank, phone: +49 621 60-41976

COMS 2203 E
Investor Relations Further information at basf.com and in the
Dr. Stefanie Wettberg, phone: +49 621 60-48002 BASF Report 2021 at basf.com/report