September 10, 2014: In order to better help its customers align environmental and societal aspects with business success, BASF has developed a new process for steering its portfolio based on sustainability criteria.
The Sustainable Solution Steering method is used to systematically review and evaluate the sustainability aspects of the approximately 50,000 relevant product applications in the company's portfolio, which represent sales of €56 billion. The benefit: This externally validated process makes it possible to measure the products' contribution to sustainability within their various markets and industries and to increase this contribution through targeted steps.
Over the past three years, BASF has already analyzed more than 80% of its portfolio of around 50,000 specific product applications. The data shows, for example, how a product contributes to cost effectiveness and resource conservation as well as to health and safety.
The concrete sustainability requirements of various customer industries are taken into account as well as regional differences. Finally, the process determines the extent to which BASF solutions can accommodate these needs.
Based on the results to date, the analyzed product applications have been sorted into four categories:
- Accelerators make a substantial contribution in the value chain to sustainability. 22% of the analyzed products by sales are in this category.
- Performers are solutions that meet the standard market requirements for sustainability. Around 73% fall under this category.
- For the Transitioners, specific sustainability issues have been identified and concrete action plans defined. These recommendations are in the process of being implemented. Around 4.5% of the analyzed products are currently in this category.
- Applications with a significant sustainability concern are labeled Challenged. BASF is developing action plans for these products in order to find improved solutions. This currently applies to 0.5%.
Sustainable Solution Steering aims to increase the number of "Accelerator" solutions in the long term in order to further improve the sustainability profile of both BASF and its customers. That is why the product portfolio is under continual review – which means that this four-category segmentation is also subject to change, for example, in response to altered market requirements or new legislation.
The whole product portfolio will have been analyzed by the end of 2014. With this new method, BASF continues to drive its "We create chemistry" strategy. "It is becoming increasingly important to our customers to be able to combine economic, environmental and societal demands. We see this development as a business opportunity for BASF, and intend to seize it in a targeted manner. This approach forms an integral part of our corporate purpose: 'We create chemistry for a sustainable future.' By analyzing our entire portfolio with respect to sustainability and systematically expanding on especially sustainable solutions, we underscore this endeavor," said Dr. Kurt Bock, Chairman of the Board of Executive Directors of BASF.