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1、BASF Report 2022Integrated corporate report on economic,environmental and social performance 87.3 billion(2021:78.6 billion)14.9 billion(2021:13.6 billion)Chemicals10.3 billion(2021:8.2 billion)Agricultural Solutions4.4 billion(2021:3.7 billion)Other8.1 billion(2021:6.4 billion)Nutrition&Care21.3 bi
2、llion(2021:22.7 billion)Surface Technologies18.4 billion(2021:15.2 billion)Materials10.0 billion(2021:8.9 billion)Industrial SolutionsSales by segment and OtherSalesGreenhouse gas emissions(million metric tons of CO2 equivalents)Capital expenditures (capex)Research and development expensesEmployees
3、at year-endPersonnel expenses87.3billion(2021:78.6billion)10.0%(2021:13.7%)111,481(2021:111,047)11.4billion(2021:11.1billion)ROCE6.9billion(2021:7.8billion)4.1billion(2021:3.4billion)2.3billion(2021:2.2billion)EBIT before special itemsSales and employees by region(by location of company)1
4、202240.120.221.918.4We are driving the transformationInnovations based on chemistry can help to overcome many of the challenges of our time from climate change and resource scarcity to feeding the worlds growing population.Products,solutions and technologies from BASF enable and accelerate the trans
5、formation to a sustainable future in all these areas.We as a company are also undergoing major changes:the shift toward climate neutrality and circular business models.Our corporate purpose is our mission and motivation:We create chemistry for a sustainable future.For more information on our strateg
6、y and our strategic action areas,see page28 onwardEUROPE35.8Sales(billion)67,958EmployeesSOUTH AMERICA,AFRICA,MIDDLE EAST5.9 Sales(billion)7,035EmployeesASIA PACIFIC21.3Sales(billion)20,452EmployeesNORTH AMERICA24.3Sales(billion)16,036EmployeesBASFGroup2022 at a GlanceOur integrated corporate report
7、 combines financial and sustainability reporting.It shows how we are developing as a company and how we create value for our stakeholders.Welcome to BASFOn the cover and this page:BASF aims to reduce its greenhouse gas emissions by 25%by 2030 compared with 2018 and achieve climate neutrality by 2050
8、.A key lever on this path is the gradual conversion to energy from renewable sources.As part of our make&buy approach,we are building and expanding our own renewable power assets worldwide,and we are securing renewable energy sources by entering into long-term supply agreements.The photos on the cov
9、er and this page show Rebecca Kuo.Together with Javier Cuellar(left)and Christopher Dorow(right),she helped to expand BASFs green power supply in North America in 2022 for example,with power purchase agreements for solar energy totaling almost 300 megawatts.One of the recipients will be BASFs Verbun
10、d site in Freeport,Texas,where we will be able to meet the sites entire expected demand for purchased power with renewable sources.For more information on energy supply,see page 137 and Report 2022 About This Report 51|To Our Shareholders 7Letter from the Chairman of the Board of Executive Directors
11、 8The Board of Executive Directors of BASF SE 11 BASF on the Capital Market 122|Managements Report 16Overview 17The BASF Group 20Our Strategy 26The BASF Groups Business Year 52Sustainability Along the Value Chain 100Forecast 151ContentsContentsTo Our ShareholdersManagements ReportCorporate Governanc
12、eConsolidated Financial StatementsOverviewsBASF Report 20223|Corporate Governance 168Corporate Governance Report 169Compliance 179Management and Supervisory Boards 182Report of the Supervisory Board 186Declaration of Conformity Pursuant to Section 161 AktG 193Declaration of Corporate Governance 1944
13、|Consolidated Financial Statements 195Statement by the Board of Executive Directors 196Independent Auditors Report 197Statement of Income 203Statement of Income and Expense Recognized in Equity 204Balance Sheet 205Statement of Cash Flows 207Statement of Changes in Equity 208Notes 2095|Overviews 291T
14、en-Year Summary 292Selected Key Figures Excluding Precious Metals 294Glossary and Trademarks 295 4At a glance Integrated BASF Report serves as U.N.Global Compact progress report Financial reporting in accordance with IFRS,HGB,GAS and ESMA Nonfinancial reporting in accordance with HGB and additional
15、sustainability reporting in accordance with GRI External audit by KPMG AG Wirtschaftsprfungsgesellschaft Editorial deadline:February20,2023Integrated reportingThis integrated report documents BASFs economic,environmental and social performance in 2022.We show how we as a company create value for our
16、 stakeholders and how sustainability contributes to BASFs long-term success as an integral part of our corporate purpose and our strategy.Content and structureThe BASF Report,which is published each year in English and German,combines the major financial and sustainability-related information necess
17、ary to comprehensively evaluate the companys performance.We select the reports topics based on the following principles:materiality,completeness,sustainability context,balance and stakeholder inclusion.In addition to this report,we publish further information online.The relevant links can be found a
18、t the endof each chapter.gives us the opportunity to share our experiences of integrated reporting with stakeholders and at the same time,give and receive inspiration for enhancing our reporting.Material topics along the value chain form the focal points of our reporting and define the limits of thi
19、s report.In identifying,prioritizing and validating material topics,we are guided by the principle of double materiality,taking into consideration financial materiality and impact materiality.General information on the materiality analysis can be found under“Our Sustainability Concept”from page 46 o
20、nward.The material topics are explained in this report in the “Material Topics in Focus”sections.For more information on the results of operations,net assets and financial position,see page 56 onward For more information on our sustainability reporting,see from page 45 and 100 onward The 2022 BASF O
21、nline Report can be found at The GRI and Global Compact Index can be found at The SASB index can be found at information on the financial position and performance of the BASF Group comply with the requirements of the International Financial Reporting Standards(IFRS)and,where applicable,the German Co
22、mmercial Code(HGB),German Accounting Standards(GAS)and the guidelines on alternative performance measures from the European Securities and Markets Authority(ESMA).Inter-nal control mechanisms ensure the reliability of the information pre-sented in this report.BASFs Board of Executive Directors confi
23、rmed the effectiveness of the internal control measures and compliance with the regulations for financial reporting.We have reported on our sustainability performance in accordance with Global Reporting Initiative(GRI)guidelines and standards since 2003.The information contained in this report also
24、serves as a progress report on BASFs implementation of the 10 principles of the U.N.Global Compact.The GRI and Global Compact Index can be found in the online report.It provides an overview of all relevant information to fulfill the GRI indicators and shows how we contribute to the United Nations Su
25、stainable Development Goals(SDGs)and the principles of the U.N.Global Compact.KPMG AG Wirtschafts-prfungsgesellschaft has performed an independent limited assur-ance of the disclosures in the GRI Index.The results of this assur-ance are also available in the online report in the form of an assurance
26、 statement.We also publish online additional information on sustain-ability in accordance with the industry-specific requirements of the Sustainability Accounting Standards Board(SASB).BASFs Report addresses elements of the framework of the former International Integrated Reporting Council(IIRC).Thi
27、s framework and the SASBs industry-specific requirements are now being incor-porated into the work of the International Sustainability Standards Board(ISSB)to develop internationally recognized standards for sustainability reporting.The frameworks help us illustrate the impacts of our actions and ex
28、plain how we create value for the environment,society and business(see page 24).Our involvement in networks and in national and international standard-setting bodies About This Report GRI2,305 BASF Report 2022 About This Report 5DataAll information and bases for calculation in this report are founde
29、d on national and international standards for financial and sustain-ability reporting.The data and information for the reporting period were sourced from the expert units responsible using representative methods.Due to rounding,individual figures may not add up exactly to the totals shown and percen
30、tages may not correspond exactly to the figures shown.The reporting period is the 2022business year.We include relevant information made available up to the preparation of this report by the Board of Executive Directors at the accounts meeting on Febru-ary20,2023(editorial deadline).BASFGroups scope
31、 of consolidation for its financial reporting com-prises BASFSE,with its headquarters in Ludwigshafen,Germany,and all of its fully consolidated subsidiaries and proportionally con-solidated joint operations.Shares in joint ventures and associated companies are accounted for,if material,using the equ
32、ity method in the BASFGroup Consolidated Financial Statements and are thus not included in the scope of consolidation.The section“Employees”refers to employees active in a company within the BASFGroup scope of consolidation as of December31,2022.Our data collection methods for environmental protecti
33、on and safety are based on the recommendations of the International Council of Chemical Associations(ICCA)and the European Chemical Industry Council(CEFIC).In the section“We Produce Safely and Efficiently,”we report all data of the worldwide production sites of BASFSE,its fully consolidated subsidia
34、ries and proportionally consolidated joint operations.BASFSE subsidiaries that are fully consolidated in the Group financial statements in which BASF holds an interest of less than 100%are included in full in environmental reporting.The emis-sions of proportionally consolidated joint operations are
35、disclosed pro rata according to our shareholding.Work-related accidents at all sites of BASFSE and its subsidiaries as well as joint operations and joint ventures in which we have authority in terms of safety management are compiled worldwide regardless of our interest and reported in full.Unless ot
36、herwise indicated,data on social responsibility and transportation safety refers to the BASFGroups scope of consolidation.For more information on companies accounted for in the Consolidated Financial Statements,see the Notes from page 214 onward The list of shares held can be found at auditOur repor
37、ting is externally and independently audited by third parties.KPMGAG Wirtschaftsprfungsgesellschaft has audited the BASFGroup Consolidated Financial Statements and the Manage-ments Report and has approved them free of qualification.The limited assurance of the sustainability information contained in
38、 the Managements Report was conducted in accordance with ISAE3000(Assurance Engagements other than Audits or Reviews of Historical Financial Information)and ISAE 3410(Assurance Engage ments on Greenhouse Gas Statements),the relevant assur-ance standards for sustainability reporting.KPMG conducted a
39、reasonable assurance of all disclosures on the most important nonfinancial key performance indicator“CO2 emissions.”KPMG also conducted a limited assurance of the nonfinancial group statement(NFS).The captions,links,QR codes and additional content provided on linked internet sites are not part of th
40、e audited information.The Independent Auditors Report can be found from page 197 onward An assurance statement on the sustainability information in the BASFReport 2022 can be found at assurance statement of the NFS can be found at statements and forecastsThis report contains forward-looking statemen
41、ts.These statements are based on current estimates and projections of the Board of Executive Directors and currently available information.Forward-looking statements are not guarantees of the future developments and results outlined therein.These are dependent on a number of factors;they involve var
42、ious risks and uncertainties;and they are based on assumptions that may not prove to be accurate.Such riskfactors include those discussed in Opportunities and Risks on pages 157 to 167.We do not assume any obligation to update the forward-looking statements contained in this report above and beyond
43、the legal requirements.Symbols You can find more information in this report.You can find more information online.The content of these links are voluntary disclosures that were not audited by the auditor.The content of this section is not part of the statutory audit but has undergone separate limited
44、 assurance by our auditor.The content of this section is voluntary,unaudited information,which was critically read by the auditor.BASF Report 2022 About This Report 61To Our ShareholdersContentsTo Our ShareholdersManagements ReportCorporate GovernanceConsolidated Financial StatementsOverviewsBASF Re
45、port 2022Letter from the Chairman of the Board of ExecutiveDirectors 8The Board of Executive Directors of BASF SE 11BASF on the Capital Market 12 7BASF Report 2022 To Our Shareholders Letter from the Chairman of the Board of Executive Directors The past year has been a brutal wakeup call that peace
46、and economic stability cannot be taken for granted.Since February 24,2022,a war has been raging in Ukraine in the middle of Europe.This is a catastrophe for the people of Ukraine,and it marks a new era for all of us.We absolutely condemn Russias invasion.There are considerable consequences for the g
47、lobal economy,and future developments are very uncertain.The past year was characterized by rising energy prices,inflation and fears of far-reaching economic turmoil.Natural gas is one of our most important energy sources and a key raw material.The gradual reduction of Russian gas deliveries and the
48、 associated increase in energy prices in Europe presented us with immense challenges.Thanks to the incredible efforts of the BASF team,we were able to significantly reduce our gas consumption in Europe.Now,we would still be able to operate our largest site in Ludwigshafen even if we only had around
49、30%of the average gas volume that we consumed in 2021.Our economic performance in 2022Not only in Europe did 2022 turn out to be funda men-tally different than had been expected at the beginning of the year.In addition to the volatile global economy and high inflation,Chinas strict zero-COVID policy
50、 also had an adverse impact on markets.Neverthe-less,BASFs business proved robust.In 2022,sales rose by 11%to 87.3 billion(2021:78.6 billion).Our employees demonstrated exceptional dedica-tion.We were able to implement price hikes in nearly all segments.Income from operations(EBIT)before special ite
51、ms amounted to 6.9 billion,down by 890million compared with the 7.8 billion recorded in 2021,but within our forecast range.Russias war against Ukraine destroyed the political,economic and social ties between Russia and the West that had been built up over decades.We therefore decided to wind down ou
52、r business in Russia and Belarus in 2022.The sole exception is our business that supports food production,as the war also increases the risk of a global food crisis.Wintershall Dea,in which BASF owns the majority of ordinary shares,will also cease its activities in Russia.Due to the developments the
53、re,BASF had to write down its stake in Wintershall Dea by several billion euros.For the BASF Group,this resulted in negative net income for the year.The considerable slowing of the global economy also impacted the stock markets.After reaching its 2022 high of 68.69 on February 11,BASFs share price f
54、ell over the course of the year.At the Annual Shareholders Meeting,we want to propose a dividend of 3.40 per share,equal to the prior-year level.This would represent a payment of 3.0 billion to shareholders.Based on the 2022 BASFs business proved robust in 2022.8BASF Report 2022 To Our Shareholders
55、Letter from the Chairman of the Board of Executive Directorsyear-end share price of 46.39 and the proposed dividend,the BASF share would thus offer a high dividend yield of around 7.3%.Our transformation Important steps toward climate neutralityDespite the tense global economic situation,our priorit
56、ies with regard to climate protection have not changed.The energy transformation is still at the top of our agenda.As the industry leader,we continue to make great strides here.We are working hard to significantly reduce our carbon footprint.Our goal is to achieve net zero emissions by 2050.This tra
57、nsformation requires endurance,resources and most importantly our combined knowledge.It is an enormous undertaking,but we are making good progress.I am very proud that teams at all our sites are pursuing this goal with great passion.This includes the colleague shown on the cover of this report.She a
58、nd many others are working to further expand our supply of green electricity in North America.As one example,our Verbund site in Freeport,Texas,is already benefiting from new purchase agreements for solar energy.We want our future energy purchases to come from renewable sources and are pursuing this
59、 strategy worldwide.We are also investing in our own capacity to produce green electricity.At the Schwarzheide site in Germany,for example,our new solar park that we operate with a partner went online at the end of August 2022.In the North Sea,work is progressing as planned on the offshore wind farm
60、 Hollandse Kust Zuid,a joint project with Vattenfall and Allianz.Last July,the first volumes of green electricity arrived at the Ludwigshafen site.This wind farm is slated to become fully operational in 2023.Our production New technologies for the Verbund of the futureWe are also breaking new ground
61、 in terms of how we produce,for example,in Zhanjiang in southern China,where we are building a new Verbund site.Once completed,Zhanjiang will be our third-largest Verbund site after Ludwigshafen and Antwerp.It is an ambitious project in the chemical industrys most dynamic growth market.In Zhanjiang
62、we will deploy the newest and most innovative technologies,making the site a role model for sustainable production in China and worldwide.We are also transforming our existing sites.Our Verbund site in Antwerp aspires to be the first petro-chemical site to approach net zero emissions by 2030,in part
63、 thanks to new,energy-efficient tech-nologies.The Ludwigshafen site is also forging ahead,and we are testing many trailblazing approaches in pilot projects there.One of these is the steam cracker of the future that we are developing with our partners SABIC and Linde.It will be heated with electricit
64、y from renewable sources instead of natural gas.This project is being supported by Germanys Federal Ministry for Economic Affairs and Climate Action.Over its more than 150-year history,BASFs raw material base has changed again and again from coal tar,to oil,to natural gas and now to renewables.I am
65、therefore confident our transfor mation will be successful this time,too.Our strength We are close to our customersThe transformation toward value chains and products with low or zero carbon footprints will give us a competitive edge.In 2022,we further expanded our portfolio of products with a certi
66、fied reduced carbon footprint.In this way,we help our customers to achieve their own sustainability goals.We are stepping up our investments in growth regions because a more balanced regional portfolio makes us more resilient in a multipolar world.We are focusing The energy transformation is still a
67、t the top of our agenda.We are also charting new territory when it comes toour production methods.9BASF Report 2022 To Our Shareholders Letter from the Chairman of the Board of Executive Directorson organic growth and are planning capital expenditures of 28.8 billion world-wide by 2027.Not having a
68、presence in large growth markets,such as China,would be a major risk for BASF.Of course,we also assess our investments from various perspectives.We are therefore watching developments in China very closely and continuing our open dialog.We are expanding MDI production at our site in Geismar,Louisian
69、a.Our aim is to grow together with our MDI customers in North America and around the world,whether in the construction sector,the automotive industry or in shoe and furniture manufacturing.The total investment volume of around$1 billion makes it BASFs largest single investment in North America to da
70、te.We also further expanded our global business with battery materials in 2022.This includes investments to increase our production capacities for cathode materials and to establish innovative recycling concepts in the three key regions Europe,North America and Asia.Our operating environment 2023 to
71、 remain challengingThe year 2023 will also bring significant chal lenges.The high level of uncertainty will continue.Unlike the beginning of 2022,there will no longer be momentum from pent-up demand following the coronavirus pandemic.The difficult global economic situa-tion will dampen demand worldw
72、ide.We are prepared for what lies ahead and we have put ourselves on the right track.We will continue to reduce our dependency on natural gas.This is particularly a matter of urgency in Europe,as we expect prices to remain significantly above pre-crisis levels in the long term.We are making our site
73、s leaders in climate-neutral production.And we are strengthening our competitiveness.One contribution here will be from a cost-savings program with a focus on Europe and especially Germany.We want to shape the transformation.But industry can only provide a stable foundation for prosperity when it op
74、erates in a competitive framework.Most recently,the war in Ukraine has made it clear that many urgently needed modernization efforts in Germany and Europe have been delayed for too long digitalization,the sluggish expansion of renewable energy and the necessary investments in infrastructure.We can n
75、o longer afford for approval processes to take a decade or for projects to be endlessly debated.In Germany in particular,we are still slamming on the brakes even though now is the time to accelerate.Moreover,the European Commissions Green Deal will unleash a flood of regu lations on the chemical ind
76、ustry,putting an additional burden on us.We therefore urgently need to reset priorities.This will require that policymakers,society and industry work together toward a common goal:a competitive industry that is strong enough to be the motor of change.We also continue to rely on the support of our ma
77、ny shareholders.I appreciate your trust and I am glad that you are joining us on this journey.Thank you!Yours,Martin BrudermllerThe year 2023 will also bring significant challenges.Competitive industry is a stable foundation for prosperity.10BASF Report 2022 To Our Shareholders The Board of Executiv
78、e Directors of BASF SEThe Board of Executive Directors of BASF SEMichael HeinzDr.Melanie Maas-BrunnerSaori DubourgDr.Markus KamiethDr.Martin Brudermller,Chairman of the Board of Executive DirectorsDr.Hans-Ulrich Engel,Vice Chairman of the Board of Executive Directors 11BASF Report 2022 To Our Shareh
79、olders BASF on the Capital MarketAt a glance BASF share price declined by 24.9%in 2022 Proposed dividend of 3.40 per share at prior-year level Dividend yield of around 7.3%based on the 2022 year-end share priceBASF share performanceBASFsshare price reached an annual high of 68.69 on Feb-ruary11,2022
80、,before declining over the remainder of the year.This was mainly attributable to the Russian war of aggression against Ukraine and the associated risks to natural gas supplies in Europe.The resulting higher energy prices negatively impacted the com-petitiveness of energy-intensive companies in Europ
81、e in particular.In addition,high inflation and increased interest rates weakened demand in key customer industries,especially in the second half of the year.Assuming that dividends were reinvested,BASFs share performance declined by 19.7%in 2022.The benchmark indexes of the German and European stock
82、 markets the DAX40 and the EURO STOXX 50 fell by 12.3%and 9.5%over the same period,Change in value of an investment in BASF shares in 2022With dividends reinvested;indexedDecNovOctSepAugJulJunMayAprMarFebJanBASF share 19.7%DAX 40 12.3%EURO STOXX 50 9.5%MSCI World Chemicals 15.5%6090806010
83、00Long-term performance of BASF shares compared with indexesAverage annual increase with dividends reinvested201720228.0%1.5%4.0%4.1%0.1%6.2%6.4%8.1%20122022 BASF share DAX 40 EURO STOXX 50 MSCI World ChemicalsWeighting of BASF shares in important indexes as of December31,2022DAX 403.6%EU
84、RO STOXX 501.5%MSCI World Chemicals4.1%BASF on the Capital MarketGRI2In 2022,the stock markets were characterized by a significant weakening of the global economy.This was primarily attributable to the Russian war of aggression against Ukraine,the drastic increase in energy prices,high inflation,inc
85、reased interest rates and pandemic-related lockdowns in China.These developments dampened demand in many sectors and had a negative impact on economic growth,especially in Europe.BASF will nevertheless propose a dividend of 3.40 per share to the Annual Shareholders Meeting.Based on the year-end shar
86、e price for 2022,BASFshares offer a high dividend yield of around 7.3%.12BASF Report 2022 To Our Shareholders BASF on the Capital Marketrespectively.The global industry index MSCI World Chemicals lost 15.5%.Proposed dividendIt is to be proposed to the Annual Shareholders Meeting that a dividend of 3
87、.40 per share,at the same level as previous year,and thus 3.0billion1 be paid out to the shareholders of BASFSE.With this proposed dividend,BASFshares offer a high dividend yield of around 7.3%based on the year-end share price for 2022.BASF is part of the DivDAX share index,which contains the 15comp
88、anies with the highest dividend yield in the DAX40.Share buyback programOn January4,2022,the Board of Executive Directors of BASFSE resolved on a share buyback program.The program has a volume of up to 3 billion,started on January 11,2022,and shall be concluded by December31,2023,at the latest.As of
89、 December 31,2022,BASF SE had acquired 24,623,765 company shares for a purchase price of 1.3billion.This corresponded to 2.68%of outstanding shares.The repurchased shares were canceled and the share capital was reduced by the corresponding pro rata amount(31,518,419.20).By way of a resolution of the
90、 Annual Shareholders Meeting on April29,2022,the Board of Executive Directors is authorized to buy back company shares in an amount of up to 10%of the share capital.In addition to dividend payments,share buybacks are another tool that BASF uses to create value for its shareholders.Broad base of inte
91、rnational shareholdersWith over 900,000 shareholders,BASF is one of the largest publicly owned companies with a high free float.An analysis of the shareholder structure carried out at the end of 2022 showed that,at around 19%of share capital,the United States and Canada made up the largest regional
92、group of institutional investors.Institutional investors from Germany accounted for around 6%.Institutional investors from the United Kingdom and Ireland hold 7%of BASF shares,while investors from the rest of Europe hold a further 11%of capital.Approximately 45%of the companys share capital is held
93、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.Shareholder structureBy region,rounded 11%Rest of Europe7%United Kingdom/Ireland51%9%Not identified3%Rest of worldUnited States/Canada19%GermanyEmp
94、loyees becoming shareholdersIn many countries,we offer share purchase programs that turn our employees into BASF shareholders.In 2022,for example,around 27,100employees(2021:around 23,600)purchased BASF shares worth 92.8million(2021:38.2million).For more information on employee share purchase progra
95、ms,see page101 onwardDividend per share per share2022020222001420133.303.403.303.402.802.903.003.103.202.701 Based on the number of outstanding shares as of December31,2022(893,854,929)13BASF Report 2022 To Our Shareholders BASF on the Capital MarketBASF a sustainable investmen
96、tAt a glance CDP again awards BASF Leadership status BASF again achieves“Prime”status in ISS ESG ratingBASF has participated in the program established by the interna-tional organization CDP(formerly the Carbon Disclosure Project)for reporting on data relevant to climate protection since 2004.CDP re
97、presents over 680 investors with over$130trillion in assets and more than 280 major organizations with$6.4trillion in purchasing power.In 2022,BASF again scored A on CDPs Climate List,giving it Leadership status.Among other things,the assessment considers the transparency of emissions reporting,the
98、handling of risks and opportunities arising from climate change,the climate protection strategy and CO2 reduction measures.BASF achieved the top rating of A in the CDP assessment for sustainable water management(previous year:A).The assessment takes into account how transparently companies report on
99、 their water management activities and how they reduce risks such as water scarcity.CDP also evaluates the extent to which product developments can contribute to sustainable water management for customers of the companies assessed.BASF continues to implement its sustainable water management target a
100、t all relevant production sites.BASF participated in the CDPs“Forests”assessment for the third time in 2022 and was ranked A,as in previous years.BASF is committed to ending deforestation in the relevant businesses in which it is active.As such,BASF is one of the companies with Leader ship status in
101、 this area as well.BASF again achieved Prime status in the ISS ESG rating developed by Institutional Shareholder Services and is among the top 7%of the companies assessed.BASF received special recognition for addressing key sustainability issues such as environmental Further information on the BASF
102、shareSecurities code numbersGermanyBASF11United States(CUSIP number)055262505ISIN International Securities Identification NumberDE000BASF111International ticker symbolsDeutsche BrseBASPink Sheets/OTCQXBASFY(ADR)Bloomberg(Xetra trading)BAS GYReuters(Xetra trading)BASFn.DEKey BASF share data2018201920
103、2020212022Year-end price60.4067.3564.7261.7846.39Year high97.6774.4968.2972.6168.69Year low58.4056.2039.0457.8838.85Year average80.3864.7753.3166.2049.90Daily trade in sharesamillion 229.6187.6219.2170.8183.0million shares2.92.94.12.63.7Number of shares December 31million shares918.5918.5918.5918.58
104、93.9Market capitalization December 31billion 55.561.959.456.741.5Earnings per share5.129.171.156.010.70Adjusted earnings per share5.874.003.216.766.96Dividend per share3.203.303.303.403.40Dividend yieldb%5.304.905.105.507.33Payout ratio%6336.57.Price-earnings ratio(P/E ratio)b11.87.3.10.3.a Average,
105、Xetra trading b Based on year-end share price 14BASF Report 2022 To Our Shareholders BASF on the Capital Market management,energy efficiency and business ethics with a compre-hensive set of measures and processes.In Sustainalytics1 ESG Risk Ratings,BASF belongs to the best category for“diversified c
106、hemicals”with a medium ESG risk and was recognized for its risk management,for example,in the areas of CO2 emissions,wastewater and waste,as well as occupational health and safety.BASF is participating in a pilot project on the U.N.Global Compacts new reporting format.We consistently support the U.N
107、.Global Compact and its 10 principles of responsible business conduct and the Sustainable Development Goals.For more information on the key sustainability indexes,see For more information on energy and climate protection,see page135 onward For more information on emissions to air,waste and remediati
108、on,see page142 onward For more information on water,see page144 onward For more information on the procurement of certified palm oil and palm kernel oil,see page117 onwardAnalysts recommendationsAround 30 financial analysts regularly publish studies on BASF.The latest analyst recommendations for our
109、 shares as well as the average target share price ascribed to BASF by analysts can be found online at dialog with the capital marketAt a glance Continued use of virtual formats complemented by physical investor events Investor Update in March2022 and R&D Webcast in November2022Regular and transparen
110、t communication with the capital market is key to increasing long-term value.We continued to use mainly virtual formats such as video or conference calls for dialog in 2022.We engaged with institutional investors and rating agencies in numerous one-on-one meetings,as well as at roadshows and confere
111、nces worldwide.In the second half of 2022 in particular,we again recorded increased interest in investor visits to the Ludwigshafen site in Germany.We gave private investors an insight into BASF at virtual and physical informational events.In a virtual Investor Update in March 2022,Dr.Martin Bruderm
112、ller outlined BASFs progress on its journey toward the medium-term reduction target by 2030 and toward net zero CO2 emissions2 by 2050.For more information on our climate protection targets,see page 27In November 2022,Dr.Melanie Maas-Brunner offered analysts and investors insight into the BASFGroups
113、 research and development.Various BASF research projects and products from the fields of white biotechnology,alternative carbon sources and the develop-ment of biodegradable products were presented in a webcast titled“Driving sustainability with microorganisms.”Analysts and investors have again conf
114、irmed the quality of our financial market communications.In the annual survey conducted by Britains IRMagazine,we placed first in the category“Best IR Website(Large Caps).”At the Investors Darling awards ceremony,Manager Magazin presented BASF with the special prize for sustainability communications
115、.In addition,NetFed,a consultancy specializing in digital communications,awarded the BASF Investor Relations website second place in the IR Benchmark 2022.For more information about the BASF share,see For more information on the 20222023 share buyback program,see For more information on the Investor
116、 Update 2022,see For more information on the R&D Webcast 2022,see Register for the newsletter with current topics and dates at Contact the Investor Relations team by phone at+49 621 60-48230 or email 1 Sustainalytics provides institutional investors and companies with ESG research,ratings and analyt
117、ics.2 Based on the BASFGroups Scope1 and Scope2 emissions;other greenhouse gases are converted into CO2 equivalents in accordance with the Greenhouse Gas Protocol 152ManagementsReportContentsTo Our ShareholdersManagements ReportCorporate GovernanceConsolidated Financial StatementsOverviewsBASF Repor
118、t 2022Overview 17Nonfinancial Statement Disclosures 18TCFD Recommendations Index 19The BASF Group 20How We Create Value 24Our Strategy 26Our Strategic Action Areas 28Our Values and Global Standards 31Business Models of the Segments 32Targets and Target Achievement 2022 35Material Investments and Por
119、tfolio Measures 37Our Steering Concept 41Our Sustainability Concept 45Innovation 49The BASF Groups Business Year 52Economic Environment 52Results of Operations 56Net Assets 61Financial Position 63Actual Development Compared With Outlook for 2022 67Business Review by Segment 69Chemicals 72Materials 7
120、6Industrial Solutions 79Surface Technologies 82Nutrition&Care 85Agricultural Solutions 88Other 91Non-Integral Oil and Gas Business 92Regional Results 94E.U.Taxonomy 95Sustainability Along the Value Chain 100We Value People and Treat Them with Respect 101We Source Responsibly 114We Produce Safely and
121、 Efficiently 123Forecast 151Economic Environment in 2023 151Outlook 2023 154Opportunities and Risks 157 16BASF Report 2022 Managements Report OverviewOverviewGRI2The Managements Report comprises the chapter of the same name on pages 16 to 167,as well as the disclosures required by takeover law and t
122、he Declaration of Corporate Governance.These are presented in the Corporate Gover-nance chapter.The Nonfinancial Statement(NFS)is inte-grated into the Managements Report.NFS in accordance with sections 315b and 315c of the German Commercial Code(HGB)The NFS disclosures can be found in the relevant s
123、ections of the Managements Report and have been prepared in accordance with the appropriate frameworks:the Global Reporting Initiative Standards and the reporting requirements of the U.N.Global Compact.The table on the following page shows the sections and subsections in which the individual disclos
124、ures can be found.In addition to a description of the business model,the NFS includes disclosures on the following matters,to the extent that they are required to understand the development and performance of the business,the Groups position and the impact of business development on the following ma
125、tters:environmental matters,employee-related matters,social matters,respect for human rights,anti-corruption and bribery matters.In accordance with the E.U.Taxonomy Regulation and the supple-mentary delegated acts,the NFS includes the proportion of the Groups taxonomy-eligible and,for the first time
126、,our Group-wide taxonomy-aligned turnover,capital expenditures(including acqui si-tions and excluding goodwill in accordance with the E.U.taxonomy)and operating expenditures for the 2022 business year.This applies to the environmental objectives of climate change mitigation and adap tation to climat
127、e change currently addressed in the E.U.taxonomy.Within the scope of the annual audit,KPMG checked pursuant to section 317(2)sentence 4 HGB that the NFS was presented in accordance with the statutory requirements.KPMG also conducted a limited assurance of the NFS.An assurance statement of the limite
128、d assurance can be found online at assurance was conducted in accordance with ISAE 3000(Assurance Engagements other than Audits or Reviews of Historical Financial Information)and ISAE 3410(Assurance Engagements on Greenhouse Gas Statements),the relevant international assurance standards for sustaina
129、bility reporting.Disclosures required by takeover law in accordance with section 315a HGBThe disclosures required by takeover law in accordance with section 315a of the German Commercial Code(HGB)can be found in the Corporate Governance chapter starting on page 168.They form part of the Managements
130、Report,which is audited as part of the annual audit.Compensation ReportThe Compensation Report in accordance with section162 of the German Stock Corporation Act(AktG)is publicly available on the BASF website together with the assurance statement of the sub-stantive and formal audit issued by the aud
131、itor.The Compensation Report is available online at of Corporate Governance in accordance with section 315d HGB in connection with section 289f HGBThe Consolidated Declaration of Corporate Governance in accor-dance with section 315d HGB in connection with section 289f HGB can be found in the Corpora
132、te Governance chapter from page 194 onward and is a component of the Managements Report.It comprises the Corporate Governance Report,including the description of the diversity concept for the composition of the Board of Executive Directors and the Supervisory Board(excluding the disclosures required
133、 by takeover law in accordance with section 315a HGB),compliance reporting and the Declaration of Conformity pursuant to section 161 of the German Stock Corporation Act.Pursuant to section317(2)sentence6HGB,the auditor checked that the disclosures according to section315d HGB were made.Recommendatio
134、ns of the Task Force on Climate-related Financial DisclosuresBASF supports the recommendations of the Task Force on Climate-related Financial Disclosures(TCFD).Disclosures recommended by the TCFD are presented in a number of places through out this report.The table on page 19 shows the sections and
135、subsections in which the relevant information can be found.The table is divided into four key areas in line with the TCFD recommendations:gover-nance,strategy,risk management,and metrics and targets.Symbols,captions and QR codes You can find more information in this report.You can find more informat
136、ion online.The content of these links are voluntary disclosures that were not audited by the auditor.The content of this section is not part of the statutory audit but has undergone a separate limited assurance by our auditor.The content of this section is voluntary,unaudited information,which was c
137、ritically read by the auditor.Captions,links and the information contained on linked websites,and QR codes are not part of the audit.17BASF Report 2022 Managements Report OverviewNonfinancial Statement(NFS)disclosures in the relevant chapters of the integrated reportNFS disclosureTopicsConcepts and
138、resultsBusiness model BASF GroupPages 2023E.U.TaxonomyE.U.TaxonomyPages 9599Environmental mattersProcess safetyPage 36(targets)/pages 123124 and 125127(targets,measures,results)BiodiversityPages 147150(targets,measures,results)Energy and Climate ProtectionPage 36(targets)/pages 27 and 135141(targets
139、,measures,results)Emergency response and corporate securityPages 128129(targets,measures,results)Supplier managementPage 36(targets)/pages 114116(targets,measures,results)Emissions to airPages 123124 and 142143(targets,measures,results)Product stewardshipPages 123124 and 132133(targets,measures,resu
140、lts)Resource efficiencyPages 4344 and 142143(targets,measures,results)Steering of product portfolioPage 45(targets,measures,results)Transportation and storagePages 123124 and 134(targets,measures,results)Management of waste and contaminated sitesPages 123124 and 142143(targets,measures,results)Water
141、Page 36(targets)/pages 123124 and 144146(targets,measures,results)Employee-related mattersOccupational safetyPage 36(targets)/pages 123124 and 125126(targets,measures,results)Dialog with employee representativesPage 106(targets,measures,results)Inclusion of diversityPage 36(targets)/pages 107108(tar
142、gets,measures,results)What we expect from our leadersPages 102103(targets,measures,results)Health protectionPages 123124 and 127(targets,measures,results)International labor and social standardsPage 110(targets,measures,results)Learning and developmentPages 103104(targets,measures,results)Supplier m
143、anagementPage 36(targets)/pages 114116(targets,measures,results)Employee engagementPage 36(targets)/page 102(targets,measures,results)Competition for talentPage 103(targets,measures,results)Compensation and benefitsPage 105(targets,measures,results)Social mattersSocietal engagementPages 48 and 112(t
144、argets,measures,results)Respect for human rightsInternational labor and social standardsPage 110(targets,measures,results)Supplier management Page 36(targets)/pages 114116(targets,measures,results)Responsibility for human rightsPages 109111(targets,measures,results)Anti-corruption and bribery matter
145、sCompliancePages 179181(targets,measures,results)Supplier managementPage 36(targets)/pages 114116(targets,measures,results)18BASF Report 2022 Managements Report OverviewRecommendations of the Task Force on Climate-related Financial Disclosures in the relevant chapters of the integrated reportTopicRe
146、commended disclosuresSection/explanationPageGovernanceDisclose the organizations governance around climate-related risks and opportunities.Describe the boardsa oversight of climate-related risks and opportunities.Corporate Governance Report Direction and management by the Board of Executive Director
147、sReport of the Supervisory BoardOur Sustainability Concept Our organizational and management structuresPages 169170Pages 186192Page 47Describe managementsb and senior executives role in assessing and managing climate-related risks and opportunities.Our Sustainability Concept Our organizational and m
148、anagement structuresPage 47StrategyDisclose the actual and potential impacts of climate-related risks and opportunities on the organizations businesses,strategy and financial planning Describe the climate-related risks and opportunities the organization has identified over the short,medium and long
149、term.Opportunities and Risks Operational opportunities and risksOpportunities and Risks Financial opportunities and risksOpportunities and Risks Strategic opportunities and risksPages 160163Pages 163164Pages 164167Describe the impact of climate-related risks and opportunities on the organizations bu
150、sinesses,strategy and financial planning.Energy and Climate Protection Strategy and governanceMaterial topics in focus:Climate ChangeOur Sustainability Concept Our organizational and management structuresOur Strategic Action Areas SustainabilityOpportunities and Risks Operational opportunities and r
151、isksOpportunities and Risks Financial opportunities and risksOpportunities and Risks Strategic opportunities and risksPages 135136Page 27Page 47Page 29Pages 160163Pages 163164Pages 164167Describe the resilience of the organizations strategy,taking into consideration different climate-related scenari
152、os,including a 2C or lower scenario.Opportunities and Risks ToolsOpportunities and Risks Strategic opportunities and risksPages 159160Pages 164167Risk managementDisclose how the organization identifies,assesses,and manages climate-related risks.Describe the organizations processes for identifying an
153、d assessing climate-related risks.Opportunities and Risks Risk management processOpportunities and Risks ToolsPages 158159Pages 159160Describe the organizations processes for managing climate-related risks.Opportunities and Risks Risk management processOpportunities and Risks Strategic opportunities
154、 and risksPages 158159Pages 164167Describe how processes for identifying,assessing and managing climate-related risks are integrated into the organizations overall risk management.Opportunities and Risks ToolsPages 159160Metrics and targetsDisclose the metrics and targets used to assess and manage r
155、elevant climate-related risks and opportunities where such information is material.Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.Energy and Climate Protection Global targetsEnergy and Climate Prot
156、ection Energy supplyPage 136Pages 137138Disclose Scope 1,Scope 2,and Scope 3 greenhouse gas(GHG)emissions,and the related risks.Energy and Climate Protection Corporate carbon footprintEnergy and Climate Protection Global targetsPages 139140Page 136Describe the targets used by the organization to man
157、age climate-related risks and opportunities and performance against targets.Energy and Climate Protection Strategy and governanceEnergy and Climate Protection Energy supplyPages 135136Pages 137138a Refers to the Supervisory Board b Refers to the Board of Executive Directors 19BASF Report 2022 Manage
158、ments Report BASFGroupSites and VerbundAs one of the worlds largest chemical companies,BASF is present in 91countries.We operate 239production sites worldwide.The foundation for the Verbund concept was laid in 1865 at the Ludwigs-hafen site in Germany and is still one of BASFs great strengths today.
159、Intelligently linking and steering our Verbund plants creates efficient value chains from basic chemicals to high value-added solutions such as coatings or crop protection products.The Verbund enables us to manage our production in a resource-efficient,carbon-optimized and reliable way.By-products f
160、rom one facility are used as feedstocks elsewhere,for example.This saves us raw materials and energy,avoids emissions,lowers logistics costs and leverages synergies.In addition to Ludwigshafen,BASF operates five other Verbund sites in Antwerp,Belgium;Freeport,Texas;Geismar,Louisiana;Kuantan,Malaysia
161、;and Nanjing,China.Another Verbund site is being built in Zhanjiang in the southern Chinese province of Guangdong.We also use the Verbund principle for more than production,apply-ing it to technologies,the market and digitalization as well.Research expertise is bundled globally.For more information
162、on the Verbund concept,see For more information on our segments investments,see page37 onwardChemicalsThe Chemicals segment supplies BASFs other segments and customers with basic chemicals and intermediates.Share of sales:17%R&D expenses:93million Investments including acquisitions:1 1,701millionSur
163、face TechnologiesThe Surface Technologies segment offers chemical solutions for surfaces and automotive coatings,as well as battery materials and catalysts.Share of sales:24%R&D expenses:335million Investments including acquisitions:1 740millionMaterialsThe Materials segment offers advanced material
164、s and their precursors for the plastics and plastics processing industries.Share of sales:21%R&D expenses:201million Investments including acquisitions:1 880millionNutrition&CareThe Nutrition&Care segment produces ingredients and solutions for consumer applications such as human and animal nutrition
165、,and home and personal care.Share of sales:9%R&D expenses:172million Investments including acquisitions:1 642millionIndustrialSolutionsThe IndustrialSolutions segment develops and markets ingredients and additives for industrial applications.Share of sales:12%R&D expenses:172million Investments incl
166、uding acquisitions:1 322millionAgricultural SolutionsThe Agricultural Solutions segment is an integrated provider of seeds,crop protection and digital solutions for the agricultural sector.Share of sales:12%R&D expenses:944million Investments including acquisitions:1 414million BASFGroupGRI2At BASF,
167、we create chemistry for a sustainable future.We combine economic success with environmental protection and social responsibility.Around 111,500employees contribute to the BASFGroups success worldwide.Our business is divided into the Chemicals,Materials,Industrial Solutions,Surface Technologies,Nutri
168、tion&Care and Agricultural Solutions segments.1 Additions to property,plant and equipment and intangible assetsThe BASF Groups segments in 2022 20BASF Report 2022 Managements Report BASFGroupOrganization of the BASFGroupThe BASF Group consists of eleven operating divisions,which are grouped into six
169、 segments as follows:Chemicals:Petrochemicals,Intermediates Materials:Performance Materials,Monomers Industrial Solutions:Dispersions&Resins,Performance Chemi cals Surface Technologies:Catalysts,Coatings Nutrition&Care:Care Chemicals,Nutrition&Health Agricultural Solutions:Agricultural SolutionsThis
170、 segment structure enables us to steer our businesses in a dif-ferentiated way according to market-specific requirements and the competitive environment.We provide a high level of transparency around the results of our segments and show the importance of the Verbund and value chains to our business
171、success.The operating divisions,the service units,the regions and the corporate center are the cornerstones of the BASF organization.This organizational structure lays the foundation for customer proximity,competitive-ness and profitable growth.BASF aims to differentiate its businesses from their co
172、mpetitors and establish a high-performance organiza-tion to enable BASF to be successful in an increasingly competitive market environment.For more information on the products and services offered by the segments,see pages 72,76,79,82,85 and 88 onward For more information on the segment structure,se
173、e Note5 to the Consolidated Financial Statements from page 219 onwardThe divisions bear strategic and operational responsibility and are organized according to sectors or products.They manage the 52global and regional business units and develop strategies for 72strategic business units.BASFs regiona
174、l and national companies represent the Group locally and support the growth of business units with local proximity to customers.For financial reporting purposes,we organize the regional companies into four regions:Europe,North America,Asia Pacific,as well as SouthAmerica,Africa and Middle East.To st
175、rengthen our innovation capabilities,we reorganized our global research activities in 2022 and aligned them even more closely with the needs of our customers.As part of this,we integrated down-stream research into the divisions and bundled activities with broad relevance for our customers in a resea
176、rch division.This division is globally positioned with research centers in Europe,North America and Asia Pacific.For more information on the reorganization of our research activities,see page 49 onwardFive service units provide competitive services for the operating divisions and sites:Global Engine
177、ering Services,Global Digital Services,Global Procurement,European Site&Verbund Manage-ment and Global Business Services(finance,human resources,environmental protection,health,safety and quality,intellectual property,communications,procurement,supply chain and in-house consulting services).We have
178、driven forward the bundling of services and resources in the Global Business Services unit,making greater use of the digi tali-zation of processes.This aims to achieve annual savings of more than 200million from 2023.1The Corporate Center supports the Board of Executive Directors in steering the com
179、pany as a whole.These include central tasks from the following areas:strategy,finance and controlling,compliance and law,tax,environmental protection,health,safety and quality,human resources,communications,investor relations,corporate audit and the Net Zero Accelerator unit.1 Part of these savings
180、is included in the 500million cost savings program announced in October 2022.2 The number of customers refers to all external companies(sold-to parties)that had contracts with the BASFGroup in the business year concerned in which sales were generated.3 BASF considers all direct suppliers of the BASF
181、Group in the business year concerned as Tier1 suppliers.These are suppliers that provide us with raw materials,investment goods,consumables and services.Suppliers can be natural persons,companies or legal persons under public law.Procurement and sales marketsBASF supplies products and services to ar
182、ound 82,000customers2 from various sectors in almost every country in the world.Our cus-tomer portfolio ranges from major global customers and small and medium-sized enterprises to end consumers.We work with over 70,000Tier1 suppliers3 worldwide.They supply us with important raw materials,chemicals,
183、investment goods and consumables,and perform a range of services.For more information on customers,see page 26;for more on suppliers,see page114 onward;for more on raw materials,see page117 onwardBASF sales by industry 2022 Direct customers 20%Chemicals and plastics|Transportation(respectively)10%20
184、%Agriculture|Consumer goods(respectively)70,000Equity ratioR&D employeesCapexEmployees around the worldRenewable raw materialsSuppliers900,0002.3billion16%11.4billion1,590 million m382,000ShareholdersR&D expensesElectricity from renewable sourcesPersonnel expensesTotal water abstractionCustomersFina
185、ncial2Business model1Inputs13Outputs 4Outcomes5ImpactDiscover the interactive How We Create Value graphic in the BASF Online Report at modelWe implement our corporate purposeCorporate purposeHow we operateOur targets Profitable growth Effective climate protection Product portfolio geared to innovati
186、on and sustainability Responsible procurement Resource-efficient and safe production Employee engagement and diversity Our customers are at the core of our strategy.We have a global,customer-focused presence and strive to achieve a leading position in our markets and business areas.We build on a bro
187、ad and diversified investor base.Sustainability and innovation are at the center of everything we do and a driver for growth and value.BASFs Verbund structure is the backbone of our efficient and reliable production.Our segments address customer needs with differentiated solutions and business strat
188、egies.Safety is always our number one priority.Effective corporate governance ensures responsible conduct.We value our employees and stakeholders and treat them with respect.EmployeesEnvironmentInnovationOperationsPartnershipsHow We Create ValueThe following overview shows how we create value for ou
189、r stakeholders.It is modeled on the framework of the former International Integrated Reporting Council(IIRC).The content of the graph has been audited within the scope of the relevant sections of the Managements Report.2 24Outcomes2ImpactWe aim to increase our positive contributions,minimize negativ
190、e impacts and carefully assess conflicting goalsWe make positive contributions by creating products thatWe make positive contributions byWe make positive contributions because we Driving forward growth,progress and value creation Strengthening our customers competitiveness and innovative strength Ac
191、celerating the digital transformation of the industry Offering our investors an attractive dividend yield Offer products that improve peoples quality of life Provide attractive jobs and promote diversity Pay taxes and competitive wages and salaries Promote integration and help overcome social challe
192、nges Contribute to climate protection Conserve resources,avoid waste and strengthen circularity Pave the way for climate-smart mobility Are environmentally friendly and safe to useOur countermeasuresOur countermeasuresOur countermeasures Careful selection,evaluation and development of suppliers Proj
193、ects to improve sustainability in the supply chains Compliance Program and Code of Conduct Employee training programs Disciplined implementation of our corporate strategy Systematic cost management Active portfolio management Optimizing the cost of capital Carbon management Circular Economy Program
194、Sustainable water and energy management Responsible Care management(including product stewardship)Potential negative impactsPotential negative impactsNegative impacts Weaker growth stimulus as a result of the slowing economy,the war in Ukraine,the coronavirus pandemic and global trade conflicts A we
195、aker share performance Risk of violation of labor,environmental and social standards in the production of the raw materials we procure Personnel adjustments The emission of CO2 and other gases that affect the climate Resource consumption and non-recyclable waste Potential misuse or spillage of produ
196、ctsWe achieve long-term business success by creating value for our shareholders,our company,the environment and society(see focus on material sustainability topics and evaluate the opportunities and risks of our actions6.9billion45,00081%1,0001,0001,042EBIT before special itemsSales productsEngageme
197、nt index according to 2022 employee surveyNew patents worldwideMass balance products based on alternative raw materialsSuppliers screened through Together for Sustainability3.0billion6.2MMT27.2%12billion79%60Proposed dividend payment to shareholders1CO2 avoided through Verbund and combined heat and
198、power generationWomen in leadership positionsSales of products that have been on the market for up to five yearsWater demand recirculatedStrategic customer networksFinancialEmployeesEnvironmentInnovationOperationsPartnershipsEnvironmentalSocialEconomic1 Based on the dividend proposed by the Board of
199、 Executive Directors and the number of outstanding shares as of December31,2022(893,854,929)2 The outcomes category shows examples of positive contributions as well as negative impacts and the measures we take to mitigate them.345BASF Report 2022 Managements Report Our Strategy Humankind is facing e
200、normous challenges.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 sustain-able future.Chemistry plays a key role here.In almost all areas
201、of life,it can pave the way to greater sustainability with innovative products and technologies and accelerate the change needed to achieve this.This belief is expressed in our corporate purpose:We create chemistry for a sustainable future.Our mission and motivation is to grow profitably and make a
202、positive contribution to society and the environment.For example,BASFs solutions help to protect the climate,avoid or recycle waste,use resources more efficiently,produce healthy and affordable food,and enable climate-smart mobility.At the same time,we are undergoing profound changes.We need to tran
203、sform our company,as we have done repeatedly in the more than 150-year history of BASF.This time,we are moving toward climate neutrality and the circular economy.This involves managing long-term policy decisions like the European Green Deal,overcoming the consequences of current geopolitical conflic
204、ts such as the war in Ukraine,and driving forward digitalization.All of this requires a clear vision as well as a high degree of creativity and flexibility.Both long-term trends and short-term developments in an environ-ment characterized by volatility and uncertainty are challenging for the chemica
205、l industry.At the same time,they also open up numerous opportunities for new business areas and innovative products.We want to lead the way in the chemical industry and responsibly shape the change with ambitious targets and a concrete road-map:We are gradually switching our energy and raw materials
206、 supplies from fossil to renewable sources.We are adapting our Verbund structure to the new circumstances as the basis for resource-efficient,safe and reliable production.We are developing new,pioneering carbon-free and low-carbon production processes for our products.We are accelerating our innovat
207、ion processes and deepening cooperation with customers,suppliers and other partners to develop high-performance products with a lower carbon footprint.We are developing recycling technologies for various waste streams to strengthen the circular economy.We are harnessing the many opportunities of dig
208、italization across all areas of the company.We are systematically aligning our portfolio with growth areas and future technologies,and are integrating sustainability into our value chains even more strongly.We create a working environment in which our employees can thrive and contribute to BASFs lon
209、g-term success.For more information on our strategic action areas,see page 28 onwardGood to know Our customers in focus BASF supplies products and services to around 82,000 custom-ers from almost all sectors and countries around the world.Our customers are mainly global and small and medium-sized co
210、mpanies,but also include end consumers.We are continually refining our organizational structure so that our operating divisions can flexibly address specific market and customer requirements and differentiate themselves from the competition.The operating divisions pursue different business strategie
211、s from cost leadership in basic chemicals to tailored system solutions for specific customer applications.Above and beyond this,we are intensifying cooperation with our customers to jointly leverage innovation and growth potential.For instance,we have established around 60 strategic customer network
212、s to address the needs of our most important customers even better and more quickly.Our StrategyGRI203Chemistry is our passion.We want to be the most attractive partner for our customers to overcome challenges that can besolved with chemistry.Our customers are at the center of everything we do.With
213、our products and technologies,our innovative and entrepreneurial spirit and the power of our Verbund integration,we want to grow profitably and at the same time,create value for society and the environment.This is our goal,which is embedded in our corporate purpose:We create chemistry for a sustaina
214、ble future.In this section:Strategic Action AreasValues and Global StandardsBusiness Models of the SegmentsTargets and Target Achievement 2022Investments and Portfolio MeasuresSteering ConceptSustainability ConceptInnovation 26BASF Report 2022 Managements Report In Focus:Climate Change At the same t
215、ime,we are working intensively to significantly reduce the carbon footprint of our production and thus of our products.Our target:Net zero emissions by 2050.1 We have set ourselves an ambitious milestone on this path.By 2030,we want to reduce greenhouse gas emissions by 25%compared with 2018 while g
216、rowing production volumes in parallel.Compared with 1990,this would translate into a reduction of around 60%.We are intensely pursuing our climate protection targets with investments of up to 4billion by 2030.Our focus here is on five strategic levers:Grey-to-green:We are increasingly meeting our el
217、ectricity needs from renewable sources.In 2022,the share of green power was 16%.Power-to-steam:In the future,we will increasingly rely on electri-fication and energy recovery in steam generation,for example,through the use of heat pumps or e-boilers.New technologies:We are developing pioneering carb
218、on-free and low-carbon production processes,especially for emis sion-intensive basic chemicals such as hydrogen,olefins and aromatics.Bio-based feedstocks:We are increasingly replacing fossil resources with alternative raw materials.In 2022,for example,we procured around 1.2million metric tons of re
219、newable raw materials.Continuous opex:We are working to further improve the energy and process efficiency of our plants.In 2022 alone,BASF implemented more than 500 operational excellence measures.We want to play an active and responsible role in shaping the transformation toward a climate-neutral s
220、ociety.This also requires a political and regulatory environment that promotes innovation in climate protection,makes it possible to develop new processes that are competitive internationally and,above all,resolutely drives forward the expansion of renewable energies.Initial estimates suggest that a
221、t the Lud wigs hafen site in Germany alone,we would need three to four times more green electricity than in 2021 to fully implement new,low-carbon electricity-based production processes.To meet this demand,we are investing in our own power assets and are increasingly buying green electricity on the
222、market(make&buy approach).We are also addressing the question of how climate change affects our sites.In Ludwigshafen,for example,we have been implementing a range of climate resilience measures for dealing with low water levels on the Rhine River since 2018,including an early warning system,multimo
223、dal transportation concepts,smarter management of cooling water and the development of an innovative type of barge for very low water levels.These measures already proved successful during the dry period in summer 2022.For more information on energy and climate protection,see page 135 onwardOur glob
224、al climate protection targets25%Reduction in our greenhouse gas emissions by 2030 compared with 20181Net zeroGreenhouse gas emissions by 205011 Scope 1 and Scope 2(excluding the sale of energy to third parties,including offsetting)Material topics in focus:Climate ChangeGRI3,302Climate change is the
225、greatest challenge of the 21st century.Swift and resolute action is needed to ensure that the targets agreed in the Paris Climate Agreement can be achieved.We stand by this responsibility.In many areas,products and innovations based on chemistry are the key to a climate-neutral future from insulatio
226、n foams for energy-efficient buildings,lightweight construction components and battery materials for e-mobility to sustainable agriculture.Renewable energy is a central building block on BASFs journey to climate neutrality.To enable us to meet our growing demand in the future,we are gradually switch
227、ing our supply agreements to green power and investing in our own plants.One example is the Hollandse Kust Zuid offshore wind farm currently under construction,which has a total capacity of 1.5 gigawatts.27BASF Report 2022 Managements Report Our Strategic Action AreasBASFs strategic orientation is f
228、ounded on a comprehensive analysis of our markets,competitors and the economic environment.We continuously monitor global trends and short-term developments and anticipate the resulting oppor tunities and risks.The following six strategic action areas enable us to focus on our customers while streng
229、th en-ing our leading posi tion in a competitive environment.InnovationInnovation is the bedrock of our success.BASF is a leader in the chemical industry with around 10,000 employees in research and development and R&D spending of around 2.3 billion.We want to expand this position by strengthening o
230、ur research activities,especially in battery materials,polymer technologies and catalytic and biotechnological methods(see box on the right).In addition,we are expanding our cooperation with customers,universities,research institutions and other partners.We reorganized our global research activities
231、 in 2022.Business and application-driven units that were previously part of three research divisions were integrated into the operating divisions,aligning them more closely with the needs of our customers.For greater efficiency and effectiveness,we have bundled research activities that are relevant
232、to several operating divisions in the new cross-functional and cross-regional Group Research unit.This global research division supports our operating divisions customer-specific R&D activities.It also drives forward cross-divisional projects on topics relevant to the entire Group,such as avoiding C
233、O2 in chemical pro-cesses and products,energy efficiency and recycling technologies.Our innovation pipeline is geared to sustainability especially climate protection and the circular economy.This lays the foundation for future growth:We are working intensively on fundamental innovations for products
234、,processes and business models,for example,for the chemical recycling of plastics,battery and catalyst Our Strategic Action AreasGRI203Good to know Driving sustainability with microorganisms With its broad technological expertise,BASF is well positioned todevelop innovative solutions for a sustainab
235、le future.One of ourkey technologies is white biotechnology.White biotechnology enables us to produce a wide range of products using a variety of feedstocks in an efficient,resource-conserving and flexible manner:biopolymers,essential ingredients for human and animal nutrition,crop protection produc
236、ts,flavors and fragrances,or ingredients for cosmetics.We also produce enzymes from fungi and bacteria for use in detergents.One example is BASFs protein-cleaving enzyme Lavergy Pro,which removes tough stains even at low temperatures and in short wash cycles,thus saving energy and water.Microorganis
237、ms are not just used to manufacture products,but atthe end of the product life cycle as well.We are working to understand how microorganisms metabolize complex organic compounds into energy,water,carbon dioxide and biomass.A fundamental understanding of such biological processes is needed to use thi
238、s natural method and develop biodegradable products.In addition,digital tools are an important component of the research work to predict the properties and biodegradability of molecules and materials at a very early stage of product develop-ment,enabling their structures to be adapted accordingly.Th
239、is is important for products that end up in wastewater treatment plants at the end of their life cycles,such as cosmetics,laundry detergents and dishwashing products.Another example is our certified biodegradable biopolymer ecovio.This can be used to produce mulch films that can be plowed under afte
240、r use in the field and completely metabolized by microorganisms.28BASF Report 2022 Managements Report Our Strategic Action Areastechnologies,low-carbon production of basic chemicals,and digital,climate-smart farming.At the same time,we are developing product improvements in all business units that o
241、ffer our customers sustainability and competitive advantages.These include surface solutions for the aviation and wind power industries,bio-based and bio degrad able active ingredients for the cosmetics,detergent and cleaner industries,and engineering plastics based on renewable raw materials.For mo
242、re information on innovation,see page 49 onwardSustainabilityWe believe that the economy,environment and society are inextri-cably linked and interrelated.We want to create value in all three areas with our products,solutions and technologies.We pledged our commitment to sustainability in 1994 and s
243、ince then,have system atically aligned our activities with the principles of sustain-ability.We want to further strengthen our position as a pioneer for sustainable solutions.We see sustainability as an integral part of our strategy aswell as our targets,steering processes and business models.In doi
244、ng so,our aim is to be a responsible and attractive partner for our customers,develop new growth areas and lay the foundation for the long-term success of our company.Our approach covers the entire value chain from the responsible procurement of our raw materials and safety and resource efficiency i
245、n production to sustainable solutions for our customers.Protecting the climate is of central importance for us here.Since 1990,we have more than halved our carbon emissions while simul-taneously doubling sales product volumes.By 2030,we want to reduce our absolute CO2 emissions by 25%compared with 2
246、018 and will invest up to 4 billion to this end.By 2050,we aim to achieve net zero greenhouse gas emissions from our production sites and our energy purchases.We are pursuing ambitious climate protection targets with our carbon management.This comprises five strategic levers that we are systematical
247、ly driving forward to reduce our greenhouse gas emissions(see page 27).In the future,we want to align our product portfolio even more strongly with climate protection,carbon neutrality and circularity in order to meet the growing sustainability demands in our markets with innovative solutions.That i
248、s why we are updating our Sustain-able Solution Steering methodology for steering the product port folio based on sustainability criteria(see page 45).We will apply the new methodology for the first time in the 2023 business year.In addition,a digital solution enables us to calculate the carbon foot
249、-print of our approximately 45,000 sales products from raw materials extraction to the factory gate(“cradle-to-gate”).This creates transparency around the carbon intensity of our products and at the same time provides important starting points for reduc-ing greenhouse gas emissions along our value c
250、hains.For more information on energy and climate protection and our carbon footprint,see page 135 onward For more information on the circular economy,see page 43 onward ProductionOur core business is the production and processing of chemicals.Our strength here lies in the Verbund and its integrated
251、value chains.This enables us to achieve efficient,reliable and CO2-optimized production and leverages synergies in the development and applica-tion of new technologies and the use of digital solutions.At the same time,the Verbund is the foundation for meeting the increas-ingly diverse needs of our c
252、ustomers and markets with a differenti-ated offering.Our comprehensive product portfolio ranges from basic chemicals to custom system solutions.Our strategy is to produce locally for local markets,close to our customers.We plan to invest 28.8 billion worldwide between now and 2027 to expand our capa
253、cities based on market demand and to further increase the availability,efficiency and flexibility of our plants.In particular,we want to benefit from the strong growth of the chemical market in Asia(see“Portfolio”).Our global production footprint contributes to the regional diversification of our sa
254、les and earnings distribution,making it part of our risk management.It helps us to compensate for economic weaknesses and a lack of growth prospects in individual markets within the BASF Group.This currently applies to Europe and especially Germany,where high natural gas prices and a challenging reg
255、ulatory environment are negatively impacting our competitiveness and our growth.For more information on our production sites and the Verbund structure,see page 20 onwardDigitalizationWe want to leverage the diverse growth potential of digitalization,seize the associated opportunities to the benefit
256、of our customers and strengthen our competitiveness.To achieve this,we promote digital skills among our employees,cooperate with partners and make digital technologies and ways of working an integral part of our business.Digitalizing our plants and systematically analyzing data enables us to further
257、 automate processes and in this way,manage the capacity,availability and efficiency of our plants in line with market conditions,for example,by simulating value streams within our Verbund structure or through predictive maintenance.Linking data from different sources and using artificial intelligenc
258、e for smart data analysis opens up numerous opportunities for us to manage our business more efficiently and improve our processes,for example,inlogistics.The combination of products,services and digital offerings also creates new business models and advantages for our customers,such as in agricultu
259、re or the personal care industry.In addition,digitalization enables us to further strengthen our innovative power.BASF has one of the most powerful supercomputers in the chemical industry Quriosity.We use it to accelerate complex computing processes such as the simulation of molecules,for example.At
260、 the same time,we are working on groundbreaking technologies such as quantum computing,including as a founding member of the Quantum Technology and Application Consortium(QUTAC).We are also involved in other digitalization initiatives such as the Catena-X 29BASF Report 2022 Managements Report Our St
261、rategic Action Areasnetwork,where we are working with partners to develop a system for standardized data exchange in the automotive value chain.PortfolioWe are orienting our portfolio even more strongly toward innovation-driven growth areas with high Verbund synergies.Following major acquisitions(ba
262、ttery materials,engineering plastics,farming solutions)and divestitures(pigments,construction chemicals,paper and water chemicals)in recent years,we continued on this course in 2022 with divestitures and division-specific partnerships.As planned,we divested the kaolin minerals business to KaMin and
263、the attapulgite business to Clariant.At the same time,we are strengthening the basis for our organic growth with investments.In North America,for example,we launched the third and final phase of the MDI expansion at the Geismar site in Louisiana in 2022.Examples in Europe include the construction of
264、 a new hexamethylenediamine(HMD)plant at our site in Chalamp,France,and the expansion of our polyamide 6.6 production in Freiburg,Germany.A new world-scale production plant for alkylethanolamines will be built at the Verbund site in Antwerp,Belgium,by 2024.The Asian market will play a key role in ou
265、r future growth.With a share of more than 45%,China is already by far the worlds largest chemical market and is a key driver of growth in global chemical production.We have a strong production,sales and innovation base in Asia,and in particular in China,which we will continue to expand.Our largest p
266、roject is the new Verbund site in Zhanjiang in the southern Chinese province of Guangdong.We granted final approval for its construction in 2022.Once completed,it will be BASFs third-largest Verbund site after Ludwigshafen,Germany,and Antwerp,Belgium.Following the successful startup of the first pla
267、nt for the production of engineering plastics in August 2022,the focus in Zhanjiang is now on the step-by-step establishment of the Verbund structure,starting with the construction of asteam cracker along with downstream plants for the production ofpetrochemicals and intermediates.Work is also under
268、way to complete a plant for thermoplastic polyurethanes and to build a plant for neopentyl glycol.In addition,the expansion of our Verbund site in Nanjing,China,operated together with Sinopec,started operation in 2022.New plants for products from the Petrochemicals and Intermediates divisions will b
269、e built there by the end of 2023.We also further expanded our global battery materials business in 2022.This includes investments to increase our production capacities and to establish innovative recycling concepts in the three key regions of Europe,North America and Asia.At the Schwarzheide site in
270、 Germany,we started the multi-step com mis-sion ing process for a new production plant for cathode active materials1 at the end of 2022,as planned.We are also building a prototype plant for battery recycling in Schwarzheide,1 which is scheduled for startup in 2023,as well as a plant for the producti
271、on of black mass from batteries on a commercial scale(planned start-up:2024).We are working on the integration of our production site in Harjavalta,Finland,2 which supplies precursors for cathode active materials.Alongside our existing sites in North America,we are looking into investing in a new pr
272、oduction site for cathode active materials and battery recycling in Bcancour,Canada.The new site allows for ample space to expand up to 100 kilotons of cathode active materials per year with potential for fully integrated precursor cathode active materials supply.We are also currently expanding the
273、capacity of BASF Shanshan Battery Materials Co.,Ltd.in China to 100 kilotons per year.The multi-step commissioning process for the new production lines at the Changsha and Shizuishan sites started in late 2022 as planned.In Onoda,Japan,work to expand production capacities for cathode active material
274、s at BASF TODA Battery Materials LLC has also been underway since the end of 2022.This is scheduled for startup in the second half of 2024.Our production facilities in all key regions and growing capacities enable us to serve battery cell and automotive manufacturers in all relevant markets even mor
275、e extensively with tailored and sustainable solutions.For more information on material investments and portfolio measures,see page 37 onward EmployeesOur employees are key to BASFs success.That is why we believe that it is important to have an attractive total offer package and an inspiring working
276、environment that fosters and develops employees individual talents and enables them and their teams to perform at their best.We are pursuing three action areas to make our high-performance organization even more so:empowerment,differentia-tion and simplification of structures and processes.At the sa
277、me time,we encourage and promote a leadership culture that empowers our employees to respond to customer needs quickly and efficiently with a solution orientation.We value diversity in people,opinions and experience as being crucial to creativity and innovation.We embrace bold ideas,help our employe
278、es to implement them and learn from setbacks.This is founded on an open feedback and leadership culture based on mutual trust,respect and dedication to top performance.For more information on employees,see page 101 onward1 Our investment and research activities in Schwarzheide and Ludwigshafen,Germa
279、ny,receive funding from the German Federal Ministry for Economic Affairs and Climate Action and the Ministry for Economic Affairs,Labor and Energy of the German state of Brandenburg under the IPCEI on Batteries(funding code 16BZF101A/B).2 The investment in Finland is co-financed by Business Finland,
280、the Finnish government organization for innovation funding and trade,travel and investment promotion.30BASF Report 2022 Managements Report In Focus:Our Values and Global StandardsTogether with our Code of Conduct and our global standards,our CORE values lay the foundation for responsible conduct and
281、 trust-based relationships with our stakeholders.They define how we want to work together as a team,with our customers and our 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
282、 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
283、 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.Our standards are based on,and in some cases,exceed existing laws and regulations an
284、d take internationally recognized principles into account.We respect and promote:The Universal Declaration of Human Rights and the two U.N.Human Rights Covenants The 10 principles of the U.N.Global Compact The core labor standards of the ILO and the Tripartite Declaration of Principles Concerning Mu
285、ltinational Enterprises and Social Policy The OECD Guidelines for Multinational Enterprises Material topics in focus:Our Values and Global StandardsGRI 2 We want to help change the world for the better.This is what drives us and is at the core of our corporate purpose:We create chemistry for a susta
286、inable future.How we act is critical.BASFs four corporate values serve as a compass for us worldwide and are simultaneously an expression of our ambitions and our shared identity.BASF welcomes all talents regardless of gender,cultural,religious or social background,sexual orientation or identity,ori
287、gin or physical integrity.BASF also shows its colors during Pride Month and raises the rainbow flag at many sites around the world as a sign of openness,diversity,tolerance and respect.The Responsible Care Global Charter The German Corporate Governance CodeWe stipulate binding rules for our employee
288、s with our standards and guidelines that apply throughout the Group.Our aim is to prevent compliance violations from the outset through compulsory training for all employees and special training for leaders.The Corporate Audit department continuously monitors compliance with require-ments.We regular
289、ly assess our performance in environmental protection,health and safety as part of our Responsible Care Management System.We realize our responsibility to behave in accordance with international and social standards largely in three ways:through our Compliance Program,including our Code of Conduct a
290、nd compliance hotlines,through close dialog with stake-holders and through the global management process to respect international labor norms.We pursue sustainability-oriented supply chain management and expect our business partners to comply with prevailing laws,regulations and internationally reco
291、gnized principles.Here,too,we have established appropriate monitoring systems.For more information on human and labor rights,see page 109 onward For more information on compliance,see page 179 onward For more information on responsible procurement and the German Supply Chain Due Diligence Act,see pa
292、ge114 onward For more information on the Responsible Care Management System,see page 123 onward 31BASF Report 2022 Managements Report Business Models of the SegmentsChemicalsThe Chemicals segment is at the heart of the Verbund.Its produc-tion facilities reliably supply BASFs other segments with chem
293、icals to produce higher value-added products and in this way,contribute to the organic growth of the BASF Group.It also markets high-quality basic chemicals and intermediates to customers in down-stream industries.The segment creates value through process and product innovation and invests in resear
294、ch and development to implement new,sustainable technologies and make existing technologies even more efficient.Thanks to our integrated manufacturing processes,the carbon footprint of some of our products is significantly lower than that of our competitors.Technological leadership,operational excel
295、lence and a clear focus on individual value chains are among our most important competitive advantages.We concentrate on the essential success factors of the traditional chemicals business:leveraging economies of scale and the advantages of our Verbund,high asset availability,continuous optimization
296、 of access to raw materials,lean and energy efficient processes,and reliable,cost-effective logistics.We are continuously developing our value chains and are expanding our market position especially in Asia with investments and collaborations in growth markets.Furthermore,we are constantly improving
297、 our global production structures and aligning these with regional market requirements.For example,we are modernizing our chloroformates and acid Business Models of the SegmentsOur segments business models are aligned with their specific strategic action areas.Innovation and sustainability are the c
298、ornerstones that will enable us to continue to be successful with our products and with our customers in the future and to collectively master the challenges that lie ahead.Strategic alignment of the segmentsChemicalsMaterialsIndustrialSolutionsSurfaceTechnologiesNutrition&CareAgriculturalSolutionsV
299、erbund synergiesCatalysisProcess technology Automotive industryRecycling and renewable raw materialsBiosciencesFormulationDigitalization and artificial intelligenceStrategic focusEconomies of scale in basic chemicals and intermediatesHigh-performance plasticsAdditives platformSurface technology plat
300、formIngredients for consumer productsConnected offer across technologies for farmersInnovation and sustainability focusEmission-reduced processesApplications,recycled and bio-based materialsPolymer dispersions,resinsBattery materials,coatingsBiotechnology,natural active ingredients,formulationsActiv
301、e ingredients,seeds and traits,digital solutionschlorides plant in Ludwigshafen,Germany so that we can continue to reliably support our customers growth with these products.Materials BASFs Materials segment supplies high-quality plastics precursors and develops new plastics applications,high-perform
302、ance materials,systems and digital solutions.Our product portfolio is unique in the industry.We aim to grow mainly organically by differentiating ourselves with our application expertise and industry knowledge and by creating maximum value in our isocyanate and polyamide value chains.Advanced materi
303、al simulation capabilities are a unique selling point in the industry and enable us to meet customer require-ments individually.To provide added value to our customers and society,we are working on new circular economy solutions and more sustainable production processes that use resources as sustain
304、ably as possible.BASF is active along the value chain for important durable plastics,from monomers to polymers and their formulated specialties.With 32BASF Report 2022 Managements Report Business Models of the Segmentsour specific technology knowledge,we are working to shape and close cycles and con
305、vert plastics back into primary products for the chemical industry.This is how we help to reduce plastic waste,save fossil resources and avoid carbon emissions in plastics pro-duction.Examples include Ultramid Ccycled,which is made from raw material based on end-of-life tires,biomass balance prod-uc
306、ts and certified compostable bio plastics.With these solutions,weaim to meet growing demands in all key markets and help our customers to meet their sustainability targets.We are continuously expanding the range of applications in our portfolio with tailor-made services and product offerings.Our glo
307、bal production network enables us to provide our solutions wherever our customers are.Industrial SolutionsThe Industrial Solutions segment markets and develops ingredients and additives for industrial applications.These include fuel and lubricant solutions,ingredients for paints and coatings,electro
308、nic materials and plastic additives.We concentrate on research and development with the aim of enabling more efficient resource use and developing more sustainable products and processes,for example,in polymer dispersions,resins and plastic additives.At the same time,this also enables our customers
309、to contribute to sustainability through their applications and processes.Other focus areas are efficient production setups,backward integration in our Production Verbunds value chains,capacity management,and technology and cost leadership.Our global presence enables us to operate close to our custom
310、ers and their industries.As a reliable partner,we offer high-quality products at attractive prices.We work on new solutions together with our customers and strive for long-term partnerships that create profitable growth opportunities for both sides.To achieve this,we draw on our innovative strength
311、and our many years of experience and in-depth industry expertise.Through our in-depth application knowledge and technological innovations,we strengthen customer relationships in key industries such as the automotive,electronics,plastics and coatings industries.Surface TechnologiesIn the Surface Tech
312、nologies segment,the focus is on the protection,modification and development of surfaces.Together with our customers,we develop novel products and technologies for cata-lysts,coatings and battery materials.We also offer precious and base metal as well as surface treatment services.Our aim is to driv
313、e growth by leveraging our portfolio of technologies to find the best solution for our customers in terms of functionality and cost.This in turn helps our customers to drive forward innovation in their industries and contribute to sustainable development.Key growth drivers for us are the positive me
314、dium-term development of the automotive market,especially in Asia,the trend toward sustainable,low-emission mobility,and the associated rise in demand for battery materials for electromobility.We are developing customized,more sustainable solutions in these growth areas for battery materials,emissio
315、n control,recycling and functional coatings in close cooperation with our customers.Our specialties and system solutions in these areas enable customers to stand out from their competitors.The automotive industry is currently undergoing a fundamental trans-formation.As one of the largest chemicals s
316、uppliers to this industry,we will further strengthen our focus on battery materials and recycling and pursue our ambitious growth plan.We are also establishing a new entity(BASF Environmental Catalyst and Metal Solutions)within the Catalysts division for mobile emissions catalysts,automotive catalys
317、ts recycling and associated precious metal services.The carve-out process started in January 2022.The new organizational structure prepares the business for the upcoming changes in the internal combustion engine market and allows for future strategic options.Nutrition&Care In the Nutrition&Care segm
318、ent,we strive to expand our position as a leading provider for nutrition and care ingredients for consumer applications.We will continue to develop our capabili-ties in areas such as biotechnology and broaden our portfolio withbio-based and biodegradable products.One example is the Verdessence produ
319、ct line launched in 2022,which offers sus-tainably sourced biopolymers for personal care applications.This supports our customers in meeting the ever-growing consumer demand for natural and organic cosmetics.Our enzymes business enables us to pursue a targeted,accelerated marketing strategy and expa
320、nd our portfolio for natural and biotechnological products.Furthermore,we are investing in natural and biological substances.BASF supplies excipients for human therapeutic drug formulation.Our biopharma ingredients serve a variety of markets,from bioprocessing and formulation of proteins to vaccines
321、 and antibodies.In addition,acquisitions expand our business with new business models and sustainability trends in consumer markets.Future growth in our markets will be driven by trends like growing consumer awareness and the resulting demand for sustainable product solutions,natural and organic ing
322、redients and their traceability.Moreover,the shift toward individualization and local production supports new players and business models.Digitalization,a focused technology and product portfolio,and close cooperation with our customers is crucial to meeting these dynamic market requirements both no
323、w and in the future.33BASF Report 2022 Managements Report Business Models of the SegmentsAgricultural Solutions In the Agricultural Solutions segment,we are working to achieve the right balance between economic,environmental and social value creation for a sustainable and efficient agricultural sect
324、or.Efficient farming is fundamental given that the worlds population is expected to increase by about two billion1 people between 2022 and 2050.While the demand for food,feed,fiber and energy is growing,natural resources are limited.Balanced agriculture is a key enabler inpro-ducing enough healthy,a
325、ffordable food and responding to changing consumer behavior while reducing the impact on the environment.As one of the worlds leading agricultural solutions companies,we are making a positive impact on sustainable agriculture and food systems.Our innovation-driven strategy for agriculture focuses on
326、 selected crops and their appropriate cultivation systems in specific regions.We integrate sustainability criteria into all business and portfolio decisions.In doing so,we help farmers achieve better yield,protect the planet and produce economically.We leverage our expertise in research and developm
327、ent and our deep understanding of the way individual growers manage their farms to provide offers across technologies.These include novel solutions for seeds,traits,crop protection and digital products tailored to the farming needs of their region and crop systems.Good to knowWe are committed to sus
328、tainable farming to help farmers not only produce more,but also better.We focus on four areas in particular:Climate-smart farming:We help farmers tackle the pressing challenges of climate change with the right combination of technologies designed to increase yield even under changing climatic condit
329、ions,make farm management easier and more effective,and at the same time,reduce the impact on the environment.Our technologies include products that enable greenhouse gas emissions reductions,for example,nitrogen management products to improve fertilizer efficiency,or herbicides that facilitate cons
330、ervation tillage.Moreover,we develop seeds and traits for more stress-resilient crops and are working on using bacteria to improve nitrogen availability to plants.Sustainable solutions:We systematically steer our innovation pipeline according to sustainability criteria from an early stage.This enabl
331、es us to continually develop innovations that offer added value for farmers,the environment and society.We also assess each product in our portfolio with respect to its contribution to sustainability.This is one of the levers we use to system atically steer our portfolio to increase our substantial
332、contribution to sustainability.Digital farming:Digitalization will transform agriculture and make it more resource-efficient and sustainable.Our digital farming solutions help farmers to produce more with less and grow their business profitably while improving their environmental footprint.Smart ste
333、wardship:Our tools and services are tailored to farmers daily work.Farmers get the support they need to use ourproducts safely:access to tools and services,protective equipment,customized training,digital solutions and new and future-oriented application technologies such as drones.1 Source:U.N.World Population Prospects 2022 34BASF Report 2022 Managements Report Targets and Target Achievement 202