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In order to better help its customers align environmental and societal aspects with business success, global chemical company BASF SE has developed a new process for steering its portfolio based on sustainability criteria. The Sustainable Solution Steering method is used to systematically review and evaluate the sustainability aspects of the approximately 50,000 relevant product applications in the company’s portfolio, which represent sales of €56 billion.
The benefit is that this externally validated process makes it possible to measure the product’s contribution to sustainability within their various markets and industries and to increase this contribution through targeted steps.
Over the past three years, BASF has already analyzed more than 80 percent of its portfolio of around 50,000 specific product applications. The data shows, for example, how a product contributes to cost effectiveness and resource conservation as well as to health and safety. The concrete sustainability requirements of various customer industries are taken into account as well as regional differences. Finally, the process determines the extent to which BASF solutions can accommodate these needs.
Based on the results to date, the analyzed product applications have been sorted into four categories:
- Accelerators (22 percent) make a substantial contribution in the value chain to sustainability
- Performers (73 percent) are solutions that meet the standard market requirements for sustainability
- Transitioners (4.5 percent) indicate products where specific sustainability issues have been identified and concrete action plans defined. These recommendations are in the process of being implemented.
- Challenged applications (0.5 percent) have a significant sustainability concern. BASF is developing action plans for these products in order to find improved solutions.
To increase the number of “Accelerator” solutions in the long term, the product portfolio is under continual review, which means that this four-category segmentation is also subject to change (for example, in response to altered market requirements or new legislation). The whole product portfolio will have been analyzed by the end of 2014.