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.

Internal control mechanisms ensure the reliability of the information presented in this report.

The data and information for the reporting period were sourced from the expert units responsible using representative methods. More information on our sustainability parameters and collection of the underlying data can be found under General Disclosures in the (Consolidated) Sustainability Statement from page 150 onward.

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.

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 Double Materiality Assessment from page 167 onward).

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.

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

26% Electricity from renewable sources

We procured significant amounts of renewable energy to operate our plants. This site will already be operated using 100% renewable electricity starting 2025 at our new integrated Verbund site in Zhanjiang.

Greenhouse gas emissions

Scope 1 and Scope 2 (excluding the sale of energy to third parties)

We calculate the BASF Group's absolute CO2 emissions on the basis of greenhouse gas emissions, which are the sum of direct emissions from production processes and the generation of steam and electricity (Scope 1), as well as indirect emissions from the purchase of energy (Scope 2). Direct emissions from the generation of energy for third parties are not considered here. Relevant emissions include other greenhouse gases according to the Greenhouse Gas Protocol, which are converted into CO2 equivalents.

6.1 MMT CO2 avoided by the Verbund and combined heat and power generation

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.

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.

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)

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%).

BASF had 111,822 employees in 92 countries in the 2024 business year and operated 235 production sites worldwide.

~10,000 R&D employees

€11.2 billion Personnel expenses

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.

In production, we want to further improve safety and focus on reducing high-severity work-related accidents and process incidents. By 2030, we aim to achieve a rate of no more than 0.10 High Severity Process Safety Incidents (hsPSI) per 200,000 working hours. The global rate of hsPSI in 2024 was 0.03 (2023: 0.05 hsPSI).

For the period up to 2030, we are also committed to a maximum rate of 0.05 High Severity Work Process Related Injuries (HSI) per 200,000 working hours. In the 2024 business year, this figure stood at 0.02 HSI (2023: 0.03 HSI).

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

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.