Interview Kemivärlden Biotech med Kemisk Tidskrift, Sweden with


Contact at BASF:

Sonja Morweiser

Corporate Media Relations

Tel: +49 6 21 60 4 21 17

Interview Kemivärlden Biotech med Kemisk Tidskrift, Sweden with Dirk Voeste,

Vice president sustainability strategy, BASF

Why do you work with sustainability issues?

I understand sustainability as a driver for growth and innovation. We understand ourselves as solution provider to today’s challenges whilst acting responsibly in society and the market. My team and I support BASF's long-term business success by integrating sustainability in our businesses, strategies and decision-making.

What is your background?

I am a biologist by heart and education graduated with a Ph.D. in biotechnology and agricultural botany from University Bonn in Germany and a M.Phil. in Post Harvest Technology from the

Cranfield Institute of Technology in England. After my studies, I was the responsible scientist for the development of a closed equilibrated aquatic ecosystem in cooperation with NASA, USA. Since

1998, I had held various global positions in the field of biotechnology, breeding and crop protection

– research as well as marketing related.

What concerns you the most?

We are pretty aware about the global challenges of enabling a growing population to live adequately with the limited resources the globe holds to all of us. Therefore our objective is to balance economic, environmental and social needs to find the best available solutions for a more sustainable future. As the challenges around the world are quite different it is not possible to define the concern.

But what drives me is to find the most sustainable solutions in the various business environments we are operating in.

Are you a member of the management group?

I am Vice President of Sustainability Strategy at BASF, Ludwigshafen, heading the company’s

Sustainability Core Team. Proposals of the Sustainability Core Team becoming proposals for decision of BASF’s Corporate Sustainability Board headed by a board member.

More precisely what is your job?

I am responsible for BASF’s sustainability strategy and the implementation of sustainability into the business activities and decision making processes. I am also heading the eco-efficiency analysis and sustainability evaluations of BASF.

How is sustainability defined within BASF? (in technical terms)

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The Earth’s resources are limited, so the growing world population and its rising expectations are and will continue to be a global challenge. On the one hand, innovations based on chemistry play an important role in ensuring a sustainable future. On the other hand, the continuous pursuit of greater sustainability enables BASF’s long-term business success by new business opportunities, increased efficiency in our activities and improved risk mitigation. Our understanding of sustainable development is balancing economic, environmental and social needs to find the best available solutions.

Sustainable chemistry? How do you instruct your chemists when they start working for BASF?

Linking sustainability only to chemists is a bit too narrow as we understand ourselves as company creating chemistry. Chemists play indeed an important role when it comes to developing new products and looking for ways to use less hazardous substances. But these products must be manufactured from raw materials, processed and distributed, and so sustainability also plays a role for employees in purchasing, engineering and logistics. If we then look at the economic and social dimensions, it is clear that sustainable development is a topic that involves everyone at our company.

That is why BASF is introducing a number of formats to engage our employees for sustainable development. One example is a web-based sustainability-training tool. This helps BASF employees worldwide to get to know the many facets of sustainability and its importance to the company.

I read that BASF aims to reduce its emissions per tonne of sales product by 40% from 2002 to

2020? How? Case? How far have you come?

By 2020, we aim to reduce our greenhouse gas emissions per metric ton of sales product by 40% compared with baseline 2002. We achieved a reduction of 34% in 2013. Since 1990, we have been able to lower our greenhouse gas emissions from BASF operations (excluding Oil & Gas) by 48.3% and reduce specific emissions by 74.2% overall. To supply our production sites with energy, we rely on combined heat and power plants with gas and steam turbines and the use of heat released by production processes. Comparisons with European emissions trading benchmarks show that our chemical plants operate at above-average efficiency.

If BASF invest in measures to reduce energy use in any process, it is probably profitable on a shorter or a longer term. How long can BASF wait for that profitability? Do you have more patient shareholders compared to other companies?

The assets of an investor who invested €1,000 in BASF shares at the end of 2003 and reinvested the dividends in additional BASF shares would have increased to €5,090 by the end of 2013. This average annual return of 17.7% places BASF shares above the returns for the DAX 30 (9.2%),

EURO STOXX 50 (4.3%) and MSCI World Chemicals (10.3%) indexes.

Is BASF a forerunner or a follower in sustainability?

From our perspective it’s not really decisive being the frontrunner.The more crucial point is to having sustainability integrated in the DNA of our company. This is an ongoing process as we use to say a journey.

In 1866 – just one year after the company was founded – the first company doctor was hired and thus the first company medical officer in Germany. Our pension scheme is older than Bismarck’s pension system. To combine Economic success with social responsibility and environmental protection has a long tradition in our company.

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The first BASF environmental report was released in 1988, the first annual report including economic, environmental and social topics was published 2003. BASF was the first DAX-listed company that publishes an integrated annual report.

The BASF share is included in the DJSI World for the 13th consecutive year.

What “green” products does BASF have?

We have defined climate protection products as those product groups which, compared with the alternatives, prevent greenhouse gas emissions from production and use to disposal, and whose ecoefficiency is at least as good as that of the alternatives. For example, BASF’s Keropur®-brand fuel additives result in better combustion in engines. This enables an approximately 1% decrease in fuel consumption and reduces pollutants and greenhouse gases in the exhaust. Our Neopor® insulation materials help reduce carbon emissions and energy requirements in buildings.

The use of climate protection products we sold in 2013 prevents the emission of 300 million metric tons of CO2 for our customers.

We generated sales of around €6.7 billion (around 9% of BASF Group sales) with our climate protection products in 2013, such as building insulation materials, plastic components for the automotive industry, and materials for wind turbines. Our goal is to continually increase the contribution of our current climate protection products, as well as of new products and solutions, to climate protection.

What green feedstocks does BASF use and what concrete plans are there for the future on this issue?

Renewable raw materials can contribute to sustainable development by reducing CO


emissions and replacing non-renewable raw materials, but they are not intrinsically sustainable. Issues such as competition with food, land use and biodiversity play an important part in the debate about renewable raw materials.

BASF has products related to renewable raw materials at all stages of the value chain: We manufacture products derived directly from renewable feedstocks. Additionally, we offer fossilbased products that are used to grow and process crops and that act as enablers for the use of renewable raw materials, e.g. resin binders for natural fibers.

BASF has also developed a mass balance approach that allows a proportion of fossil feedstock to be replaced by renewable feedstock in BASF’s Verbund and for it to be allocated to selected products.

In addition, BASF is using its vast chemical process and synthesis know-how to make the use of renewable raw materials more competitive. BASF experts are working on process innovations in the areas of reaction technology (e.g., fermentation) and work-up.

Currently, renewable raw materials account on average for around 4% of our global raw material purchasing volume, although the figure is significantly higher in specific businesses.

Together with our partner, Purac Biochem B.V., we established Succinity GmbH for the production of bio-based succinic acid. The bacterium used in this process can syntheize succinic acid naturally from various renewable raw materials. This makes bio-based succinic acid an economically and ecologically viable alternative to petrochemical raw materials. Succinic acid is used in a number of applications, such as in the production of bioplastics, chemical intermediates, solvents, polyurethanes and plasticizers.

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Furthermore, we produced the first amounts of 1,4butanediol on a commercial scale using sugars as a renewablefeedstock in 2013, based on a licensing agreement with the company

Genomatica Inc. Butanediol and its derivatives are also used for producing plastics and solvents as well as electronic chemicals and elastic fibers.

What would you say is BASFs biggest challenges in sustainability?

Due to various reasons balancing economic, environmental and the social impact of our activities is not easy. There is no silver bullet ensuring a win-win-win in all situations. It is rather always a caseby-case decision there trade-offs in one of the sustainability dimensions are often the case. Finding the right balance for the company and our stakeholder in our day-to-day operations is definitely quite a challenge.

Are there any products that will be phased out because they cannot be produced sustainably?

The Verbund system creates efficient value chains that extend from basic chemicals right through to high-value-added products such as coatings and crop protection agents. In addition, the by-products of one plant can be used as the starting materials of another. In this system, chemical processes consume less energy, which leads to higher efficiency and resource conservation. In that manner, we save on raw materials and energy, minimize emissions, cut logistics costs and exploit synergies.

These solutions enable BASF to sustain competitiveness in every world region while making our customers more successful. This means that based on our Verbund system, we own already an advantage compare to our competitors.

One of BASFs areas of interest is crop science, crop protection. How much does the company spend on non chemical/biological plant protection?

In 2013, our Crop Protection division spent €469 million on R&D. This is part of our commitment to investing for long-term growth and developing new active ingredients and solutions for agriculture.

An important part of this is our recently established global unit Functional Crop Care, which includes products for biological crop protection. With both chemistry and biology, we are able to provide farmers with a complete offer, from the seed to the harvest. Biologicals have features and uses that complement our classical chemistry-based solutions. We do not report spending for single projects, products or fields of activities.

Do you in Germany experience what we in Sweden call chemophobia in the general public and in the media? If so, how do you act on it?

Our economic success also depends on the social acceptance of our activities. Over the past 20, 30 years the chemical industry, including BASF, has learned that transparency is the foundation for building public trust. We therefore share information about us and what we do, how and why we do it. We also report our progress annually.

How do you transport yourself?

In former position at BASF, I walked or sometimes biked to the office. No living about 10 kilometers from my office and in a corporate role I have to be at different places in our large

Verbund site in Ludwigshafen for meetings. That’s why I am currently using most of the time my car to go to work. Whenever I can I share the ride with colleagues or neighbors. In the last years, we more and more introduced phone and web-conferences to to reduce my business trips, especially oversee flights or flights.

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