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BASF
About the company
Grade Summary
BASF has a very large production of hazardous chemicals and data tells us that it is producing 127 highly hazardous chemicals this year, compared to 112 last year. The production of persistent chemicals has also increased from 14 substances to 15. This large production of very problematic chemicals is a big reason behind BASF’s poor score in this category (0 points) and also in the ranking as a whole. Another poor area for BASF is the Lack of Controversies category where the German company scores yet another zero points due to several violations and accidents. On a positive note, BASF is one of the companies that scores the most points in the Development of Safer Chemicals category, as it puts energy towards R&D of sustainable and circular chemistry.
Opportunities for improvement
- BASF currently has 15 substances in its product portfolio belonging to the group of chemicals dubbed “forever chemicals”, due to their extreme persistence. For investors, these chemicals pose a nightmare when the persistence and level of exposure is revealed, as demonstrated by the companies involved in the PFAS disaster, suffering massive financial implications. Investors risk stranded assets, as the environmental and human health impacts of exposure to “forever chemicals” can’t be stopped or easily reversed. For this reason – not to mention for the sake of human health and the environment – we strongly recommend that BASF prioritises phasing out persistent chemicals from its product portfolio.
- The company should also reduce its hazardous portfolio overall, which currently consists of a whopping 127 banned, severely restricted or SIN-listed substances. Chemical pollution has a harmful impact on human health and the environment, and poses a growing threat. Two million people died due to exposure to hazardous chemicals in 2019, compared to 1.56 million in 2016, according to the World Health Organization (WHO). Hazardous chemicals are also key drivers of biodiversity loss, putting entire ecosystems in jeopardy. A good place to start the reduction would be the 16 PIC substances that BASF still offers. PIC, short for Prior Informed Consent, is one of the key provisions of the Rotterdam Convention, allowing the export of – often domestically restricted – hazardous chemicals to poorer countries with weaker chemical legislation, as long as the receiving country signs a consent that it understands what it is accepting and has a plan for how to handle it.
- BASF states that it has started its circular journey through more than 20 innovative material cycle initiatives, and received five out of eight circularity points in this year’s ChemScore assessment. We awarded the company one point for its additives, enabling and enhancing mechanical recycling. However, we recommend that the company improves and expands its circular activities. As ChemScore only evaluates technologies that are used in practice and at scale, making an overall contribution to sustainability, we haven’t rewarded BASF’s chemical recycling. We are critical that BASF uses a mass balance approach, which allows for misleading accounting, since it doesn’t require a physical connection between the input waste material and the end product, claiming to contain renewable or recycled content.
Category breakdown
BASF produces/uses 127 highly hazardous substances – 118 SIN List chemicals, 16 PICs, and 13 HHPs) – 43 of which are included on the EU’s REACH Candidate List. 11 of these highly hazardous substances are either banned or severely restricted, with set dates when production needs to cease (10 Authorisation List substances, and 1 POPs). The company produces 15 persistent chemicals. Persistent chemicals are particularly problematic, since they do not break down, but instead accumulate in humans and the environment. Because of this, persistent chemicals should be of extra concern for investors; substances that are not considered a problem today could become huge liabilities in the future.
Please note that there is no available data for the 31 percent of the company’s production that takes place outside of the EU and US. Lower EU/US production means higher uncertainty with regard to the total production of hazardous chemicals, which will have a negative impact on the company’s score in this category.
BASF has a method in place to screen and assess the sustainability of its products and includes the intrinsic hazards of ingredients in the screening process. It does not, however, exclude substances with toxic properties from its new products. BASF actively markets safer alternatives both on its own website as well as on ChemSec Marketplace. The company has at least one product, process or innovation that enables production of circular products. BASF uses biobased resources without occupying extra land or competing with food production. It does not source and treat recycled materials in a sustainable way, which is one of the key elements of a circular economy. BASF is actively reducing the hazardous waste it generates.
The German company does not produce only sustainable products, but it does have a timed phase-out strategy for hazardous substances that go beyond regulatory compliance. It shares chemical safety information on its website and is following a credible code of conduct standard.
BASF responded to ChemSec’s attempts to communicate around its ChemScore ranking, but it does not share any information about what kind of chemicals it produces in regions with low regulatory demands for transparency (e.g. Asia).
BASF does have a circular economy program in place, but it is lacking objective and measurable circular economy targets.
BASF is on the list of the top 10 polluting companies in the world according to an index on air, water and greenhouse gas pollution released in 2019 by the Political Economy Research Institute at the University of Massachusetts. A couple of years ago, BASF was responsible for contaminating eggs in the Netherlands with a toxic pesticide, worker exposure to hazardous pesticides in Brazil, and was also among the major brands found out to have broken the EU chemical safety law, REACH, in 2019. The company was also fined 4.7 million USD for 69 environmental violations between 2011 and 2020.
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