Report: Sustainability – The New Normal
Media: Lufthansa Inflight Magazine 2018
Publication Date: November, 2018
Running a profitable business goes hand in hand with being environmentally and socially responsible, says Dirk Voeste, Vice President Sustainability Strategy at BASF.
BASF is truly in a class of its own. There is hardly any other corporation in the chemical industry that can match its revenues (€64.5billion in 2017), but there is more. BASF also proves that sustainability and profitability aren’t opposites. The global giant has built sustainability into its core business and set itself ambitious targets, including to clear out products with sustainability concerns within five years.
Measuring the Impact
“Future business success means not only generating profit but also creating value for society and the environment,” says Dirk Voeste, Vice President Sustainability Strategy at BASF. As a first mover in the industry, the company has developed a method to measure the monetary value of the economic, ecological and social impact of its business activities along the value chain – its ‘Value to Society’. “We are aware that our business has positive as well as negative impacts on the environment and society,” he adds. “We strive to increase our positive contribution and at the same time minimise negative effects. Therefore, understanding the impact of our business is key to improve it.”
Core to the company’s operational networks are integrated production sites, whereby resources like steam and by-products from one plant are fed into connected plants. BASF calls this ‘Verbund’. The Verbund saved BASF around 19.2 million MWh in 2017, which translates to 3.9 million metric tons less of CO2 released to the environment. “We have been able to lower our overall specific greenhouse gas emissions by almost 50% since 1990 while doubling production.”
Sustainability-driven Portfolio Steering
BASF constantly screens and evaluates its portfolio of more than 60,000 products according to sustainability criteria. For all products that do not meet BASF’s requirements, the company develops prompt action plans to improve. Research projects can result in new solutions, but it could also mean replacing one product with an alternative. The company has committed itself to taking products with sustainability concerns off the shelf within five years of classifying them as “challenged”. “This gives us a concrete timeline, but it also allows our partners and customers, who rely on our products and have their own production processes engineered around them, time to adjust.
The efficient use of resources has been at the heart of BASF for its more than 150-year history. In the last decade, it has significantly risen on the public agenda. Customers are increasingly interested in products based on renewable raw materials.
“We respond to the customer demand, and renewable feedstocks also make it possible to develop new products and introduce new business models into the market to help our customers to differentiate with sustainability,” he explains.
Using renewable sources does not automatically lead to more sustainable products. “Green doesn’t always mean more sustainable,” he points out. Two important renewable raw materials for BASF are palm oil and palm kernel oil, which are used to produce ingredients for detergents, cosmetics and food products. Palm oil plantations can contribute significantly to deforestation, loss of biodiversity and climate change. BASF’s primary concern is to ensure it uses sustainably sourced palm products. “We see it as our responsibility to work closely with the companies we buy our raw materials from,” says Voeste. “We share the widespread concern about these challenges and are committed to reducing the impact on the environment.”
From the Research Lab
BASF’s goal is to continually develop innovative products and processes to counter climate change. In 2017, the company invested about half of its annual expenditures in research and development on product and process innovations that help prevent greenhouse gas emissions and improve energy and resource efficiency.
The increasing challenge of plastic waste is also high on the company’s agenda, and BASF is exploring opportunities of chemical plastics recycling together with partners in the value chain. BASF shares its experiences with its customers and partners and is a member of various networks and organisations. “For us successful business means sourcing and producing responsibly, acting as a fair and reliable partner and connecting creative minds to find the best solutions for market needs to provide the right answers to societal challenges.”
“We have been able to lower our overall specific greenhouse gas emissions by almost 50% since 1990 while doubling production.”
Dirk Voeste, Vice President Sustainability Strategy at BASF.