CUSTOMER STORY

BASF Case Study:
A Need For Continuous Monitoring 

BASF Case Study: A Need For Continuous Monitoring - Dr. Jutta Kissel

Jutta Kissel - Sustainability Manager

BASF Case Study: A Need For Continuous Monitoring

To continue illustrating the client experience of Datamaran’s approach to materiality analysis and non-financial risk management, we have spoken with Dr. Jutta Kissel, Sustainability Manager at BASF SE (BASF). In this conversation Kissel shares her experiences on how BASF is embedding non-financial topics into its organization, management systems and value chain. She also explains why there is a need for a continuous topics monitoring process in-house.

BASF creates chemistry for a sustainable future. It combines economic success with environmental protection and social responsibility. More than 115,000 employees in the BASF Group work on contributing to the success of their customers in nearly all sectors and almost every country in the world. The portfolio is organized into five segments: chemicals, performance products, functional materials and solutions, agricultural solutions and oil and gas. BASF generated sales of €63 billion in 2018. BASF shares are traded on the stock exchanges in Frankfurt (BAS), London (BFA) and Zurich (BAS).

BASF believes that non-financial topics should be assessed and monitored on an ongoing basis rather than approached only every few years. “It is important to continuously monitor the dynamics and the evolution of the key topics, so we, as a company, can be more proactive and stay on top of these developments,” says Kissel.

BASF Case Study: A Need For Continuous Monitoring

BASF portfolio is organized into five segments: chemicals, performance products, functional materials and solutions, agricultural solutions and oil and gas. 

​What is the business case behind issues monitoring?

Kissel: Whether the changes are regulatory or associated with news and social media, some of these topics could be disruptive.

Things change much faster than ever before due to media digitization and the rise of social media. Individuals and their opinions have become more influential in the development of certain non-financial topics. This can have a much more profound impact on corporate reputation.

It is no longer enough to do a materiality analysis once every four years. The world is moving faster than it has ever done before, and as such we, as a company, need to keep up with this pace.

When considering mega-trends, such as climate change or global warming, we can understand the logic behind topics monitoring. Questionnaires with their “tick box” approach would not give us an understanding of how the perception of these trends has evolved over a period of time. Most of the stakeholders would tick a box, identifying climate change as an important topic BASF should address today and would have done the same five years ago. 

What we are really after is a more granular view of the sub-topic; how it is evolving and what issues it is becoming associated with. The latter is only possible if we have integrated sustainability into our organization and management systems.

Only by performing continuous topics monitoring can we get a much more objective view of BASF key topics evolution.

“Individuals and their opinions have become more influential in the development of certain non-financial topics. This can have a much more profound impact on corporate reputation.”

Dr. Jutta Kissel - Sustainability Manager at BASF

What are the limitations of a traditional approach to materiality analysis and monitoring of non-financial topics?

Kissel: Continuous stakeholder monitoring entails visiting networks, attending events, reading news and having conversations with colleagues from the wider company. This, of course, has also limitations.

The world is changing very fast and the amount of information generated is increasing exponentially. The human brain simply cannot process that amount of information and we need solid business processes supported by technology to scan what is going on through tracking regulatory, corporate as well as online and social media changes. Subsequently this will help us to focus on areas that can have an impact on our business.

BASF plaint in ludwigshafen

BASF plant in Ludwigshafen

In relying only on personal contacts there is a danger of filtering this information by perceptions, which will give a subjective view. The data-driven approach, with its unarguable ability to process larger volumes of information, would give you a much wider, deeper and more objective perspective. 

Human element remains an important aspect of materiality analysis as it provides a wider-company contribution to the analysis and enables a better integration of its findings to the corporate strategy.

Why Datamaran?

Kissel: Datamaran, with its evidence-based approach, helps us to see what is going on in the outside world by providing the regulatory, strategic and reputational perspectives. It has become an important element of a broader BASF “science-based” approach towards a continuous monitoring of key topics.

“What we are really after is a more granular view of the sub-topic; how it is evolving and what issues it is becoming associated with.”

Dr. Jutta Kissel - Sustainability Manager at BASF

In the past we did materiality analysis with the help of consultants, and questionnaires were our primary source of information. These questionnaires were not stakeholder specific – meaning they were less insightful. Datamaran helps us to better understand the interests of our various stakeholders. 

Doing a topic deep-dive on all our material topics helped us to show our colleagues why these  are important according to Datamaran sources. We have done several layers of analysis, from a regulatory perspective using the Observe module, to exploring the Benchmark module. We have also used the NewsFlow and Social modules to do a reputational analysis. 

New media topics arise quickly and might have disruptive effects on certain narratives in the news and social media. Such topics do not necessarily have any scientific evidence – they sometimes get a lot of traction purely due to emotional reasons. This is something that social media and news digitalization has enabled. And we believe tracking these changes is vital to ensure business resilience and a social license to operate.

In particular, we are interested in seeing which topics have moved and what has changed. What is especially important is that we are able to see what has caused these changes by tracking each individual data source.

How will the key topic list be used and what decisions does it influence in the wider company?

Kissel: Sustainability can only truly have an impact if it is integrated into our organizational and management systems. And a key topic list is the first step down this path that allows us to find out which topics are vital for the company. We will integrate the identified key topics into our sustainability tools and long-term steering processes and take advantage of business opportunities and improve risk management.

Once we know what topics are relevant to us and which products contribute to these special issues, we can integrate them into the innovation process, allowing us to have better insights in our product portfolio.

“Furthermore, as we are continuously understanding the potential opportunities and risks along our value chain that are associated with topics and trends, we can adjust and implement our activities accordingly.”

Dr. Jutta Kissel - Sustainability Manager at BASF

 

Building an in-house process through Datamaran will allow continuous topics monitoring, while maintaining internal awareness and facilitating the management of these topics.

We have various policies around our sustainability activities that have been affected by our key topics, such as our Palm-Dialog, Eco-Efficiency Analysis, SEEbalance®, and our Value-to-Society approach. 

Measuring sustainable development on a product level

Measuring sustainable development on a product level

Understanding non-financial topics is vital for BASF, as a company that is serious about value creation and sustainability in general. We see a clear need to have a “science-based” approach to understanding what topics are relevant for us. In addition, in this ever-changing world it is important to always keep a finger on the pulse. That is why continuous monitoring will be just as important as the materiality analysis itself. 

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