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How a Breakthrough Product Portfolio Assessment is Changing Business Strategy and Yielding New Value



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How a Breakthrough Product Portfolio Assessment is Changing Business Strategy and Yielding New Value

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How a Breakthrough Product Portfolio Assessment is Changing Business Strategy and Yielding New Value

  1. 1. Dirk Voeste | @BASFCorporation Vice President of Sustainability Strategy BASF How  a  Breakthrough  Product  Por1olio  Assessment  is   Changing  Business  Strategy  and  Yielding  New  Value
  2. 2. 150 Jahre Dirk Voeste, Sustainability Strategy Sustainable Brands London | November 18, 2015 How a Breakthrough Product Portfolio Assessment is Changing Business Strategy and Yielding New Value
  3. 3. 150 Jahre We create chemistry for a sustainable future.
  4. 4. 150 Jahre We create chemistry for a sustainable future Our sustainability levers Strategy & organization Assets & operations Business & innovation Stakeholder & commu- nication Employees & engagement
  5. 5. Our commitments along the value chain Material aspects We drive sustainable solutions CustomerBASFSuppliers We produce safely for people and the environment We produce efficiently We source responsibly We respect people and treat them fairly
  6. 6. We establish goals to address sustainability along the value chain CustomerBASFSuppliers Evaluation of 70% of relevant suppliers with regard to their sustainability performance by 2020 Energy & climate protection §  Greenhouse gas reduction of 40% by 2020 §  Energy efficiency: Introduction of certified energy management system at all major sites Increase the share of Accelerators to 28% by 2020 Water §  Introduction of sustainable water management at all relevant sites by 2025 Safety, health and security §  “Risk assessment” of products by 2020 >99% §  Transportation accidents by 2020 -70% §  Health Performance Index >0.9 §  Lost-time injuries by 2025 -80% §  Red. of process safety incidents by 2025 0.5 Employees §  Women in leadership positions §  Non-German senior executives §  Senior executives with int. experience >80%
  7. 7. We screen all assets and investments for relevant sustainability improvements Sustainability Team Division + Result Improved sustainability in investments, financial assets and real estate Sustainability statement n  Evaluates fit with sustainability strategy & criteria n  Identifies sustainability opportunities or risks n  Suggests improvements
  8. 8. We use a holistic approach to assess investments projects on sustainability BASF´s economic success BASF´s social responsibility BASF´s corporate reputation & brand credibility BASF´s environmental protection BASF´s values & principles „How we act“ Market & value chain? Competitive technology? Attractive & responsible sourcing? Suitable location? Fit to strategy? Beneficial use & product stewardship?
  9. 9. Sustainable Solution SteeringTM “We drive Sustainable Solutions” 1,000+ action plans in place >60 % of R&D budget spent on projects contributing to sustainability 2,000+sustainability experts in extended networks 14,000 products contributing substantial to sustainability with about >15 bn€ sales 60,000+ solutions assessed
  10. 10. 150 Jahre We integrate sustainability in our business strategies Step 1 Analysis of sustainability needs and trends in the value chains Step 2 Evaluation and categorization of product sustainability performance in the market application Step 3 Development of action plans for strategies, R&D, and market approach
  11. 11. 150 Jahre We categorized all our products into four categories Substantial sustainability contribution in the value chain Meets basic sustainability standards in the market Specific sustainability issue which is actively addressed Significant sustainability concern identified and action plan in development 2014 % of analyzed sales to 3rd parties TM
  12. 12. 150 Jahre TM We increase the sustainability contribution of our solutions 〉  60,000 product applications analyzed representing 66.3 bn € in sales (data 2014) 〉  23% ranked as Accelerators: - outgrow their markets - deliver higher margins above average - BASF´s R&D pipeline: >60% Accelerators 〉  74% classified as Performers 〉  <1% ranked as Challenged. Individual action plans (implemented in 2015) 28%
  13. 13. 150 years Sustainability yields new value 〉  Sustainability drives profitable growth 〉  Increased long-term business success Ÿ market differentiation Ÿ risk mitigation Ÿ innovation 〉  Full integration in investment decisions and portfolio management as major lever
  14. 14. 150 Jahre 150 years