Value-to-SocietyMeasuring our contribution to sustainable growth

Dr. Dirk VoesteVice PresidentCorporate SustainabilityStrategy

Investor Visit Hermes

LudwigshafenSeptember 29, 2017

Investor Visit Hermes, Sept. 29, 2017 2

Cautionary note regarding forward-looking statements

This presentation contains forward-looking statements. These forward-looking statements are basedon current estimates and projections of the Board of Executive Directors and on currently availableinformation. These forward-looking statements are not guarantees of the future developments andresults outlined therein. Rather, they depend on a number of factors, involve various risks anduncertainties, and are based on assumptions that may not prove to be accurate. Such risk factorsparticularly include those discussed on pages 111 to 118 of the BASF Report 2016. The BASFReport is available online at basf.com/report. BASF does not assume any obligation to update theforward-looking statements contained in this presentation.

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Sustainability performance measurement Impact valuation: next level to evaluate the business contribution to a sustainable future

Systematic sustainability performance assessments since 1996

1996

2004

2011

SEEBALANCE®

2012

Advanced IT solutions

for customers

2015

AgBalance™Sustainable

Solution Steering®Eco-Efficiency

AnalysisInvestmentevaluation

Value-to-Society

Corporate Carbon Footprint

2013

2007

Products in the value chain

Portfolio and digital solutions

Corporate

2017

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Sustainable Solution Steering®

Methodology to steer our portfolio

Substantial sustainability contribution in the value chain

Meets basic sustainability standards on the market

Specific sustainability issues which are being actively addressed

Significant sustainability concern,action plan developed

27.2%

68.3%

4.2% 0.3%

>60,000 product applications analyzed (€53.2 billion sales, 95.9% of BASF’s portfolio)

27.2% Accelerators− outgrow their markets − deliver margins above the average− represent majority of BASF’s R&D

pipeline

68.3% Performers

<1% Challenged products

2020 goal: Increase the share of Accelerators from 23% in 2014 to 28%

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SLENTITE®

High-performance insulation panel for construction

1990

Slen

tite®

1950 1990 20201930

Slen

tite®

Slentite®

PU aerogel as solid panel with best in class thermal insulation

Flexible scope of design thanks to very slim panel (25–50% less than industry standard)

Construction solution for reduced energy consumption

Perspective Strong growth potential in a market of

€1.3 billion

Start of production in a few years

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Trilon® MChelating agent for more sustainable detergents and cleaners

Trilon® M – alternative to phosphate for automatic dish washing Fast growing global market demand driven by

regulatory changes and consumer demand

2015: Start-up of a new Trilon® M world-scale plant in Alabama, USA

2016: Expansion and flexibilization of production facilities in Ludwigshafen

Compared with alternative chelating agents Trilon® M is readily biodegradable and shows high

performance

meets eco-label requirements

has better eco-toxicology profile

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Acronal® MBFrom biomass to dispersion for premium paints

First BASF binder for interior paints based on the biomass balance approach launched in 2016

91% of interviewed professional painters in Germany see an increase in sustainability aspects in tenders

Replacing fossil raw materials with renewable feedstock at the beginning of the production process

Less greenhouse gas emissions

Enabling interior paints that combine environmental responsibility with uncompromising premium qualityRenewable

Feedstock ProductsConventionalAllocatedFossil

BASF Verbund production steps

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Value-to-Society: Changing the perspectiveAssessing and valuing how business changes the well-being of people

Traditional reporting

Quantified output (€, CO2e, LTI…)

Impact valuation / Value-to-Society

Valued financial & pre-financial impacts (€)

Output – tCO2eInput – Raw materials Impact – Costs of floods etc.Outcome – Climate change

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Impact valuation gains momentumIt is not a question of if, but rather when impact valuation is implemented

StandardizationDisclosureBusiness examples

Natural Capital Protocol Social Capital Protocol Natural & Social Capital Sector

Guidance ISO 14007 and 14008

CDP (formerly Carbon Disclosure Project)

Dow Jones Sustainability Index Reporting schemes started the

discussion

WBCSD Redefining Value Impact Valuation Roundtable Increasing number of companies

is piloting in all sectors First companies go public

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Value-to-Society: a comprehensive assessmentEconomic, social and environmental impacts in monetary terms based on a PwC model

Net incomeWages

Health & safety

Human capitalAir emissions

Land use

Water consumption

Water emissions

GHGs

Waste

Amortization

DepreciationTaxes

Impact categories Consistent application at corporate, project, and

product level

Value chain Corporate level: “production cycle” – supply chain, own operations, customer industries Project and product level: use phase and end-of life integrated on a case-by-case basis

Economic Social

Contributions to gross domestic product (value added)

Contributions to society beyond gross domestic product

Environmental

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Benefits and limitations of Value-to-SocietyComplementary information to demonstrate relevance and interdependencies

Required data accuracy and granularity

Required maturity level of quantification and valuation methods

Positioning Progress monitoring Decision making

Communication

Reporting

Advocacy

Over time

Industry benchmark

Relevance of impacts

Risk exposures

Business opportunities

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BASF’s Value-to-Society 2016Net positive contribution to sustainable growth in each step of the assessed value chain

Net income

Taxes

Wages & benefits

Human capital

Health & safety

Air pollution

GHGs

Land use

Waste

Water consumption

Water pollution

Amortization

Value contribution from BASF procurement Value contribution from BASF operations-10 0 10 20 30 -10 0 10 20 30 -10 0 10 20 30

Value contribution from BASF sales

Full external supply chain1 Own operations Customer industries2

1 Indirect suppliers, direct suppliers 2 Customers in industries supplied by BASF

billion €

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BASF’s Value-to-Society in a nutshell

We assess our contribution to a sustainable future

We improve our understanding of relevance and interdependency of financialand pre-financial impacts

Our calculation model is pragmatic, scalable, transferable and auditable

Our approach is aligned with existing protocols and standards

We engage in relevant networks to share our learnings

We anticipate that impact valuation, after further refinement of the method, will be embedded into daily business

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