How can we assess the contribution of business to society? In search for an answer to this question, an approach is needed to measure the value propositions of business activities along the entire value chain. It needs to capture the right impact factors, demonstrate interdependencies and help to make better and more informed decisions.
At BASF, we strive to contribute to a world that provides a viable future with enhanced quality of life for everyone. Therefore, acting sustainably is an integral part of our strategy, and we have embedded this principle into our corporate purpose: “We create chemistry for a sustainable future.” With this ambition in mind, we have developed the “Value-to-Society” approach. This new method has been elaborated under the guidance of external experts and is aligned with the Natural and Social Capital Protocols. It represents our first assessment of financial and pre-financial impacts of our business activities along the value chain including all three pillars of sustainability in a common unit: euro. By measuring the impact on the health and well-being of people, the results reflect the ‘real’ value contribution of our business activities: the benefits and costs created for society. In line with our corporate purpose, we strive to increase our positive contributions to society and minimize the negative effects of our business activities.
For BASF, the process of impact-measurement and valuation has been a complex undertaking, given that our value chain includes 75,000 tier one suppliers, 358 sites and more than 60,000 product applications in various markets and industries. Yet, the reward was worth the effort: expressing our impact on society in monetary terms improves the understanding of our economic, social and environmental impacts and their interdependencies along the different levels of our value chain. Furthermore, it increases the comparability of financial and pre-financial impacts while simultaneously translating our impacts into figures – the language business understands. Above all, the results allow us to make better-informed decisions and monitor our progress on a yearly basis.
According to our analysis, our value contribution to society has been net positive in all years assessed so far (2013-2016), and the results show a stable distribution of economic, social, and environmental impacts. This not only demonstrates that we as a chemical company aspire sustainable growth, but it also represents an important step towards more transparency and comparability to show contributions of business to society.
Further information: basf.com/en/value-to-society
Vice President Sustainability
October 27, 2017