Sustaining values

Driving the sustainability

agenda on C-level
2020
Sustainability is a highly relevant topic with a substantial impact on
businesses and their stakeholders …

Increasing awareness, expectations and requirements of stakeholders with different priorities

Employees Investors/owners

Consumers/clients Banks

Suppliers Community/public

Companies are urged to integrate sustainability into strategy, operations and evaluation

Sustaining values 2020

Strategy& 2
… and can become an issue if not addressed adequately

Siemens’ involvement with Adani coalmine “While I do have a lot of empathy for
environmental matters, I do need to
12 January 2020: Due to a supply contract for the new Adani coalmine in Australia Siemens balance different interests of different
CEO Joe Kaeser issued a statement justifying its commitments stakeholders, as long as they have
Climate activists had urged Siemens to review its role in the controversial project given its lawful legitimation for what they do!”
(Financial Times)
commitment to sustainability – in 2015, Siemens has committed carbon neutrality by 2030

Hot topics discussed Climate lawsuit against large carbon emitting countries
in Davos this year
23 September 2019: Five of the countries with the highest carbon emissions in the world –
Argentina, Brazil, France, Germany and Turkey – get sued by the Greta Thunberg
World Association for allegedly violating their children rights by failing to adequately reduce
Economic emissions. Angela Merkel and Emanuel Macron distance themselves from Thunberg
Forum

BlackRock includes climate change as integral part of investment thesis “The evidence on climate risk is
compelling investors to reassess core
14 January 2020: BlackRock, the world's largest asset manager, says that it will now make assumptions about modern finance.
climate change central to its investment considerations. And not just for environmental In the near future – and sooner than
reasons but because it believes that climate change is reshaping the world's financial most anticipate – there will be a
system significant reallocation of capital.”
(Annual Letter to CEOs)

Sustaining values 2020

Strategy& Source: press research 3
Increasing consideration of sustainability in society, economy and
environment has led to a major rise in ‘responsible investments’

Sustainable development Sustainable investment and decision making

17 UN Sustainable Development Goals (SDGs) Principles of Responsible Investing (PRI)
US$tr.
#
2,500 100
2,000 80
1,500 60
1,000 82 86 40
59 62 68
500 32 34 45 20
13 18 21 24
0 7 10 0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Total assests under management # signatories

• Sustainable development addresses the needs of the present to ensure the • Environmental, social and governance (ESG) principles have been agreed
ability of future generations to meet their own needs to provide a framework for companies and investors to analyze, address and
communicate sustainability
• The 17 Sustainable Development Goals (SDGs) of the UN provide a shared
blueprint to achieve peace, prosperity and a better future for people and the • ESG aspects are the baseline of the UN Principles for Responsible
planet Investment (PRI) – Member organizations follow these principles to align
• Corporate Social Responsibility (CSR) encompasses all the practices put in investment activities with the broader interests of society
place by companies in order to uphold the principles and goals of sustainable
development

Sustaining values 2020

Strategy& Source: PRI Association, United Nations, IATF 4
UN wants “net zero by 2050” – momentum accelerated in 2019 as
governments respond, especially in EU and US

UN leads way to “net zero by 2050” EU/US governments respond Support accelerated from other parties

EU – net zero by 2050 laws • European Commission and 24/28 EU

• Norway – by 2030 (2016) members (all but CZ, HU, PL, EE)
• Sweden – by 2045 (2017) (2019)
“Secretary General António Guterres has convened
leaders to New York on Sep 23 bringing concrete, • United Kingdom (2019) • State governments of CT, NJ, MD, CO,
realistic plans to enhance their nationally determined • France (2019) MN, WI push 100% clean energy;
contributions by 2020, in line with reducing greenhouse discussions in NC, MA, IL, AZ… (2019)
gas emissions by 45 per cent over the next decade, and USA – 100% clean power by 2050 laws • All US Democrat presidential
to achieve net zero emissions by 2050.” • Hawaii – by 2045 (2015) candidates have plans for net zero by
• California – by 2045 (Dec 2018) 2050 (2019)
• Washington D.C. – by 2032 (2019) • Switzerland (2019)
• New York – by 2040 (2019) • Australia – all states support (2019)
• New Mexico – by 2045 (2019) • Japan commits to net zero as soon as
possible after 2050 (2019)
• Washington – by 2045 (2019)
• Laws proposed in Chile, Uruguay,
• Nevada (2019) New Zealand, Fiji, … (2019)
• Maine (2019) • Pope Francis/Catholic Church (2019)
• Puerto Rico (2019) • International Chamber of Commerce
(2019)

Sustaining values 2020

Strategy& Source: UN 5
With regards to decarbonization, carbon pricing and regulation play a
major role and relevant initiatives increase
Deep-dive: Regulation on decarbonization and sustainability
Carbon pricing ($/tCO2e, 2019)

• 45 national and 25 subnational

jurisdictions are putting a price on
carbon, covering approx. 20% of
global GHG emissions
• 57 carbon pricing initiatives are
implemented or scheduled for
implementation, thereof 29 are
emission trading systems and 28
carbon tax initiatives
• The EU ETS introduced in 2005
covers 45% of the union’s
emissions, with a specific focus on the
energy, industry and aviation sector

Carbon price > 50

Carbon price < 30 - 50 2019
Carbon price < 10 - 30
Carbon price < 10
No carbon pricing

Sustaining values 2020

Strategy& $/tCO2e = Dollar per ton of CO2 equivalent 6
All market scenarios see a strong growth in renewables – fossil
continues to play a relevant role at least until 2040

Installed capacity 2018 and 2040, in GW Main findings

• Doubling of installed
1 2 3 4 5 6 capacity

14,987 15,486
14,345
x2
564 1,052
392 214 13,502 492 0
12,927
264 262 1,256 • Paradigm shift from fossil
4,142 5,044 350
4,507
2,733 10,335 81 2,608
to renewables – from fossil
1,365 215 to renewables dominance
1,960 2,813 1,707
7,207 0 1,147 2,965 2,819
472 122 1,749 1,671 1,839
596 488 1,908 RES
1,293 470 1,437 518 2,096 • Despite decreasing
421 572 421
2,986 2,551 678 Conventional capacity share, gas
1,765 2,740
2,595 2,576
398 296 310 246 2,406 capacity continues to
276 169
2,140 2,189 1,725 2,525
1,608 2,238 228 increase by +35% to 70%
1,119
Actuals IHS Rivalry IHS Auton. IHS Discord BNEF NEO IEA WEO NP IEA WEO SDS
2018 2019 2019 2019 2019 2018 2018 • No increase of oil and coal
fired capacity (decrease in
2018 2040 scenarios with strong
renewables focus)
Coal Oil Natural gas Nuclear Hydro Wind Solar Other renewables Battery storage/flexible capacity

Sustaining values 2020

Strategy& Source; BNEF, IHS data, public data sources, Strategy& analysis 7
 Deep-Dive Energy Market

Power generation customers set own aggressive targets to

show leadership and minimize risk

Customers set their own aggressive targets in US/EU Proof points

Customers with set targets by 2050 (not exhaustive): • 6 of 9 highest emitting US power producers
have set aggressive carbon reduction targets
• Xcel repositions coal-heavy portfolio directly into
Southern renewables to reach 100% carbon reduction
nrg FirstEnergy IVA AEP Energy → no significant “coal to gas”
Company
90% 90% by 2045 70% by 2030 80% 80-100%
• Southern Company's CEO, Tom Fanning, didn’t
(2014) (2016) (2017) (2018) (2018) think CO2 was the primary culprit for climate
change in 2017; in 2019, his bonus is linked to
progress on reaching “low to no carbon” by
2050
• Vistra does not (yet) have a carbon target but is
Xcel ENERGY ENGIE VATTENFAL Orsted EDF
pushing a “coal to solar” bill in Illinois where
100% 85% 100% by 2045 99% by 2025 100% regulations are leading to coal plant closures
(2018) (2017) (2017) (2018) (2018) • 13+ smaller US producers also have 80%+
targets
• Iberdrola and Enel have signed on to UN targets
for “net zero” which will be acknowledged at the
IBERDROLA enel Shell equinor UN Climate Summit
… • Shell’s CEO gave a speech supporting “net
100% 100% 50% 20% by 2030 zero” by 2050 in the EU, Engie and others also
(2019) (2019) (2017) (2018) support these targets
Sustaining values 2020
Strategy& 8
Interviews with thought leaders confirmed the observed trends by
highlighting the importance of decarbonization technologies
Summary thought leader interviews
28 renowned experts from all around the globe … … and placed their bets on future key technologies1)

2 Hydrogen and synfuels 16

Batteries 6
10 Carbon capture 6
Photovoltaic 6
16 Wind 5

… provided their insights on the energy sector …

H2 and synfuels • “Investment hype will come”
• Peakers vs. storage
Generation • “Storage will compete […] with other forms
• Carbon capture and coal-phase out? Storage
of flexibility.”
• Renewables integration and grid stability
Distribution • “DAC – no project made it past the drawing
• Aging grid infrastructure Carb. capt. CO2
board.”
• Hydrocarbons significant until 2040-50 • “PV incredibly powerful source, significant
Oil and gas Photovolt.
• Renewables investments grow increase.”

Sustaining values 2020

Strategy& 1) Some interviewees provided more than 3 bets 9
H2 is suited for a deep decarbonization of the whole energy sector with
already current use case examples
allows a deep carbonization of the total energy sector

Power storage
(Dispatchable
<95%
RES) Power
FCEV taxi fleet
Zeroavia H2 aircraft
(600 taxis by 2020)
H2 storage
70-80% Hydrogen

H2
electro- Feed into gas grid NatGas w/ H2
RES Project Portal: 12 H2
Alstom H2 trains
pwr lysis trucks, Toyota NA
gen Methane/ Methane/
methanol 35-45% methanol and
synthesis derivates
Industrial parks: heat,
Rotterdam H2 heating
power, feedstock

Carbon (Negative
Carbon seques-
capture CO2 CO2
tration emissions)
H2O Power gen: H2-capable gas turbines and fuel cells
Xx% end-to-end efficiency

Sustaining values 2020

Strategy& Biological generation of green H2 not considered, ammonia pathway not shown here but still relevant for fertilizer 10
 Deep-dive energy market

Meanwhile a strong increase in hydrogen related investments indicates

growing importance of fuel cell and Power-to-X
investment trends – Hydrogen

Investment by segment (US$ bn) Companies and deal volume by region (#, US$)
US$ m # Companies funded 0 1-5 >5
65 2101) ~200 270m ~3.1bn
Companies Deals Investors Largest deal Capital invested EU
NA 27
33 95
Regional split: 71% North America | 23% Europe | 5% Asia 104 704
2,195 Asia
Monolith
2
1.2 114m
6
Trend 162
0.2
Oceania
ME
Nikola 2
0.9 210m
Number of companies 1
3
0.4 Number of deals 3
17
Total deal value ($M) 1

PE 0.4 Ballard;
nel
VC 0.5 183m Main deals and investors (US$)
0.3 0.5
IPO ($1.6bn valuation); solid Fuel cell products funded by Weichai
Corporate/Strat. M&A HQHP 0.2 Bloom- Bloomenergy oxide fuel cell manufacturer Ballard Power (Diesel engines) and Zhongshan
Hydro- 0.1
157m energy
IPO 0.4 270m
genics; 270m (2018) 183m (2018) Comp. (manuf. electric AC and DC motors)
nel
Individual
0.3 0.3 236m 0.3 Fuel cell producer and IPO Shenzhen SE ($550M valuation),
Hydrog(e)nics electrolyzers acquired by HQHP hydrogen mobility, e. g. refueling stations
Other 0.1 236m (2019) Cummins 157m (2015)
2010-12 2013-15 2016-18 YTD 08/2019 Fuel cell trucks Manufacturer of carbon black
NIKOLA manufacturer funded by NEL MONOLITH and hydrogen gas in the US funded by
210m (2018) + other undisclosed investors 114m (2018) Warburg Pincus (PE)
# deals 45 81 70 15

Sustaining values Note: total raised: >0.5m; Deal date after 01/2010; Deal types: all Buyout; Private Equity; VC; M&A/Control Transactions; IPO; excl. bankrupt, out of business and failed deals 2020
Strategy& 1) Including 40 undisclosed deals; Source: Pitchbook 11
 Deep-dive energy market

Storage technologies have received large investments in recent years –

volumes strongly driven by North America and Europe
Investment trends – Energy storage

Investment by segment (US$ bn) Companies and deal volume by region (#, US$)
US$ m # Companies funded 0 1-5 >5
162 5731) 630 602m ~7.5bn
Companies Deals Investors Largest deal Capital invested EU
NA 43
97 159
Regional split: 48% North America | 29% Europe | 22% Asia 374 2.180
3,579 Asia
14
3.4
25
Trend 1,679
Oceania
ME
2
1.4 Number of companies 5
4
Number of deals 11
24
Total deal value ($M) 17
BYD
450m
1.5 0.8 1.4 Main deals and investors (US$)
1.2 Power optimization for real Lithium-ion battery system for vehicles,
Lithium 0.4 0.4 ferroamp Microvast
0.2 Maxwell estate, went public on investment by i.a. CITIC Securities, CDH
Other chemical
235m 0.1 602bn (2019) Stockholm Stock Exchange 400m (2017) Investments and National Venture Capital
0.9 0.6
Power electronics 1.0 Ferro- Manufacturer of lithium-ion Micro batteries and other energy
and non chemical amp 0.8 Liotech batteries; Rusnano and other VARTA storage solutions, went public on
0.1 0.3
Not specified 0.1 0.1 0.1 602m 0.0 451m (2010) undisclosed investors 240m (2017) Frankfurt stock exchange

2010-12 2013-15 2016-18 YTD 08/2019 Rechargeable batteries; Engaged in developing, manufacturing and
BYD investors include Samsung, Maxwell Tech. marketing energy storage and power
450m (2016) AMP Capital and SDIC 235m (2019) delivery solutions, acquired by Tesla
# Deals 112 192 227 42 Innovation Investment Mgmt.

Sustaining values Note: Total raised: >0.5m; Deal date after 01/2010; Deal types: all Buyout; Private Equity; VC; M&A/Control Transactions; IPO; excl. bankrupt, out of business and failed deals 2020
Strategy& 1) Including 86 undisclosed deals; Source: Pitchbook 12
 Deep-dive energy market

Investments into carbon capture picked up in 2019 –

deal volumes mainly driven by North America
CO2 Investment trends – Carbon capture

Investment by segment (US$ bn) Companies and deal volume by region (#, US$)
US$ m # Companies funded 0 1-5 >5
34 891) ~150 190m ~1.5bn
Companies Deals Investors Largest deal Capital invested EU
NA 10
23 21
29
Regional split: 97% North America | 2% Europe | 1% Asia 67
1.434 Asia
1
0.5 Net 1
Trend Power 0.5 11
0.1 90m

0.1 Number of companies

Number of deals
0.2 Sapphire
Sapphire 0.3 Total deal value ($M)
Energy
Pre-combustion Energy
92m 0.2
144m
Carbon
Carbon Storage Engineer
Main deals and investors (US$)
ing Operating post-combustion Grows algae that capture CO2 in open
Direct Air Capture
68m
0.2 Petra Nova CC facility, received $190 Sapphire Energy ponds, deal led by ARCH Venture Partners
Lanza Petra
Allam Cycle 0.3 Tech Nova 0.3 190m (2017) from the U.S. Dep. of Energy 92m (2015)
0.1
188m 0.2 190m Lanza
Biotechnologies Tech CC from biomass and waste Operates Allam Cycle power plant in
LanzaTech plants, deal lead by Mitsui NETPOWER Texas, USA. Received the whole deal sum
72m 0.1
Post-combustion 188m (2014) Global Investment 90m (2014) from Exelon (power generation company)

2010-12 2013-15 2016-18 YTD 08/2019 Grows algae that capture CC from biomass and waste plants,
Sapphire Energy CO2 in ponds, investor i.a. LanzaTech funding received from Novo Holdings on
144m (2012) Monsanto Growth Ventures 72m (2019) August 6, 2019
# Deals 28 18 38 5

Sustaining values Note: Total raised: >0.5m; Deal date after 01/2010; Deal types: all Buyout; Private Equity; VC; M&A/Control Transactions; IPO; excl. bankrupt, out of business and failed deals 2020
Strategy& 1) Including 20 undisclosed deals; Source: Pitchbook 13
 Deep-dive energy market

Despite strong performance in previous years, investment in

PV technology plummeted in 2019
Investment trends – PV

Investment by segment (US$ bn) Companies and deal volume by region (#, US$)
US$ m # Companies funded 0 1-5 >5
~210 ~5801) ~800 1.1bn ~10bn ~2.9m2)
Companies Deals Investors Largest deal Capital invested Med deal value EU
NA ~80
~90 ~200
US$ bn ~290 1.9bn
~3.5bn Asia
~25
~ 4.1
~50
Trend ~4.3bn
Oceania
ME ME
~5
~ 3.1 Number of companies ~5 ~5
Trina JA ~10
solar SOLAR Number of deals ~5 ~25
~10m
~ 2.5 Total deal value ($M) ~30m ~300m

PE Trina
solar
VC Jiangsu Main deals and investors (US$)
Zongyi
Mainly producing and selling Manufacturer of solar power products,
Corporate/Strat. M&A Trinasolar solar modules in China, JA SOLAR acquired by Mr. Beefing Jinn and Jingling
Jinko SPI
IPO Solar Group 190m (2017) acquired by Red Viburnum 92m (2015) Group Company

Individual Supplier of solar Manufacturer of solar panel plates,

~ 0.3 Jiangsu Zongyi photovoltaic system Silevo acquired by SolarCity (backed by Capital
188m (2014) integration, undisclosed 90m (2014) One, DFJ Growth and Draper Fidher)
Other
investors
2010-12 2013-15 2016-18 YTD 08/2019 Photovoltaic solutions for Manufacturer of ingot, wafer, solar cell
SPI Group all customer classes, JinKO Solar and solar module products. Investment
144m (2012) investment by GSR Ventures 72m (2019) by China Develop. Bank Int., Macquarie
# Deals ~190 ~210 ~160 ~20 via private placement Fund Group and New Horizon Capital

Sustaining values Note: Total raised: >0.5m; Deal date after 01/2010; Deal types: all Buyout; Private Equity; VC; M&A/Control Transactions; IPO; excl. bankrupt, out of business and failed deals; 2020
Strategy& 1) Including ~120 undisclosed deals; 2) Excluding undisclosed deals; Source: Pitchbook 14
 Deep-dive circular economy

An exploding production of plastics and regulatory pressure requires

industry leaders to develop recycling solutions
Deep dive: Circular economy and plastic waste
8.3 bn t Circular chemical recycling and industry examples
Virgin plastic
Global Plastic Production

produced to date Mismanaged waste2

1. Plastic waste supply to recyclers
79%
Accumulated
6. Waste collection 2. Conversion
(landfills)
and sorting Alliance To End Plastic Waste into Feedstock
40+ global chemicals and CPG companies
12% partnering with finance community,
government, and NGOs, tackling entire plastic
Incinerated
value chain

Iyondellbasell/
9% QCP/SUEZ
Recycled Nestle/PureCycle Increasing alliances
Covestro/
Technologies: across the value chain,
e.g. chemical companies BASF
Polypyrene restorage in ChemCycling: plastic
collaboration with Nestlé and recyclers
waste broken down to oil
and Milliken for products- and gaseous products
Increasing pressure concerning recyclability and eco-friendliness
Regulatory Pressure

to-market
translating into new initiatives:
Uniliver/Fraunhofer
• European strategy for plastics in a circular economy CreaSolv®:
• Ecoloop certification program 5. Product Recovering plastics from sachets in

• EU plastics regulation
Malaysia
3. Reutilization
disposal
• Ban on single-use plastics for polymer
• … creation
4. (Plastic) product creation
1Geyer et al. “Production, use, and fate of all plastics ever made”, Science Advances 2017; Strategy& Analysis
Sustaining values 2) mismanaged waste (= either littered or inadequately disposed) by population within 50km of coast line/high risk of entering the ocean; https://ourworldindata.org/plastic- 2020
Strategy& pollution 15
As a result, sustainability quite obviously impacts the agendas of CEOs
across industries

Key drivers Impact Examples

EU Action Plan on • Urgency to grow number of Zero Emission Vehicles • Mercedes: CO2-neutral car
Sustainable Finance • Adaption to CO2 neutral production (e.g. 37,5% less CO2 emissions in production in Europe by 2022
2030 for newly produced cars) • VW announced target share of e-cars
(2018) • Investment in intelligent transport systems to enhance shared mobility of 40% by 2030
Automotive
The Paris Climate • Investment in sustainable supply chain with focus on green • ArcelorMittal: Carbon neutral by
Agreement (2015) procurement and CO2 neutral production 2050 in Europe
• Emphasis on holistic (downstream) value chains as enabler for • BASF: CO2-neutral growth between
sustainable solutions and circular economy 2019-2030
Process industry
17 UN Sustainable • Germany: Nuclear phase-out as of 2022; coal phase-out as of 2035 • Iberdrola: Pioneer in focusing on
Development Goals (2015) (2038) renewable projects
• Development/implementation of new business models in energy • E.ON: Focus on grid and new
efficiency, renewable production, storage, smart infrastructure and cities business models (innogy deal)
Utilities
EU Emissions Trading • Investment in new technologies (e.g. e-mobility, smart infrastructure) • Siemens: Carbon neutral by 2030
System • Investment in sustainable supply chain with focus on green • Bosch: Work climate-neutral within
procurement and CO2 neutral production one year and is investing on billion
• Investment in e-mobility start-ups
OEM/suppliers
EU Action Plan on Human • Development of sustainable packaging models, e.g. plastic-free • H&M: Old cloths can be turned in at
Rights and Democracy household, reduced packaging, design for recycling and reuse H&M stores; vouchers in return
Investment in sustainable inventory management models • IKEA: Wood from sustainable forests,
(2012) • Investment on social responsibility at workplaces net energy exporter by 2020; solar
Retail panels powering stores

Sustaining values 2020

Strategy& Source: press research, company websites 16
 Deep-dive steel

Thyssenkrupp aims to decarbonize its entire steel production by

following two distinct CO2 reduction approaches
Case study: Thyssenkrupp’s journey to carbon neutral steel production
CO2 usage (Carbon2Chem)

From 2018 From 2020 2025

With the “Carbon2Chem” project, waste From 2020 the industrial pilot phase will By 2025 Thyssenkrupp will have
gases that accrue during steel production
are further processed. In 2018, ammonia
begin, in which methanol will be produced
from the actual steel mill gases.
established a large-scale plant on an
industrial level. The German government is
Thyssenkrupp
and methanol were produced in this way for supporting the project with more than 60
the first time. Mio EUR.

Breakthrough 2050
2030
carbon-
Test Introduction Milestone Transformation
-30% CO2 Transformation neutral

From 2019 From 2022 From 2024 2025 - 2050

Injection coal at the first blast furnace is All three other blast furnaces are gradually Change in the production process: Sponge iron is processed into crude steel
successively replaced by hydrogen. With being converted to hydrogen. The supply is hydrogen-powered direct reduction plants in a climate-neutral way using new electric
this measure in the production process ensured by a network of pipelines operated produce so-called sponge iron instead of arc furnaces, supplied with electricity from
about 20% of the CO2 emissions that would by Air Liquide. liquid pig iron, which further reduces CO2 renewable energy sources.
otherwise occur can be saved. emissions.

CO2 avoidance (Hydrogen)

Sustaining values 2020

Strategy& Source: Thyssenkrupp company publications, website 17
With its “Value-to-Society” method, the negative and positive effects of
BASF’s business operations can be made measurable
Case Study: BASF’s Value-to-Society accounting
Traditional Accounting Value-to-Society
BASF
We create chemistry
“Business success tomorrow means creating Value of
Input Output Outcome Impact
value for the environment, society and impacts
business”
(Saori Dubourg, BASF Board Member)
What resources have What activities have What has changed as How much of that What is the value of
• Value-to-Society is BASF’s approach in the been used for been done? a result of the outcome would have the impact?
market to provide a comprehensive picture on business activities? business activities? happened otherwise?
value creation
• Human well-being the yardstick provides a
Value-to-Society Full supply chain Own operations Customer Industries
new perspective on company performance
2017 (EUR bn)
• Monetary metrics enable direct comparison and Net Income
improve understanding of interdependencies of Amortization
Taxes
economic, social and environmental aspects Wages & benefits
Human capital
• Represents the most promising concept to Health & safety
Air emissions
integrate sustainability in management GHG
Land use
accounting so far Waste
Water consumption
Water emissions
BASF is founding member of the Value
-10 -5 0 5 10 15 20 25 -10 -5 0 5 10 15 20 25 -10 -5 0 5 10 15 20 25 30
Balancing Initiative2, which is also
supported by PwC
Economic Social Ecological

Sustaining values 2020

Strategy& Source: BASF company publications, website, executive speeches 18
With our complete and differentiated offering from strategy through
execution we are able to provide end-to-end support

Sustainable Responsible Sustainable Corporate digital Sustainable Holistic

value creation investment supply chain responsibility transformation consulting
approach
• Company values • Investment criteria • Sustainable supply • Overarching • Definition of identity
and contribution to decide on the chain integration strategy for digital and transformation
• Sustainability and right investments • Sustainable value creation strategy
Strategy climate strategy portfolio • Purpose-led and
• New biz models impact
and technology organizations

• Governance and • Allocation of • Sustainable supply • Connectivity and • Capability

steering capital/deals chain (source, technology requirements
Operating • Organizational selection make, deliver) set implementation in • Change
model embedment • Integration in up daily business Management
• Strategy execution processes • Partnerships in the
ecosystem

• Integrated P&L and • Monitoring of • Sustainability • Adherence to • Transformation

Steering, reporting based on company value impact transparency and impact
future accounting based on measurement standards measurement
reporting, • Impact valuation sustainable • Sustainability audits • e.g. data protection, • Behavioral change
assurance investments (e.g. with suppliers) privacy measurement
• Risk assessment

Continue with existing internal initiatives Focus area internal investment Potential further internal investment

Sustaining values 2020

Strategy& 19
We can support your sustainability agenda end-to-end, addressing what
matters to you

• How can the value and sustainability • What are key factors to act • How strong will investors be
of a company be measured? sustainable? influenced in the future by
• How can we define worldwide • How can companies integrate sustainability?
comparable standards? sustainability in strategic decisions • What will be the main KPIs for a
(trade-offs/optimization)? sustainable investment portfolio?
• How should the future company
reporting look like? • How can a company increase its • How can investors decide on
competitiveness in a sustainability- sustainable investments?
• How will future auditing look like
oriented landscape?
considering the increasing • Which external factors like regulatory
importance of sustainability? • How can a company steer its will force investors to act
business to creating lasting value? sustainably?

Hendrik Fink Iris Herrmann Carsten Stäcker

Sustaining values 2020
Strategy& 20
Contacts

Hendrik Fink Iris Herrmann Carsten Stäcker

Leiter Sustainability Partner at Strategy& Partner at PwC
Services at PwC
Germany Germany Germany

hendrik.fink iris.herrmann carsten.staecker

@pwc.com @strategyand.de.pwc.com @pwc.com

Sustaining values 2020

Strategy& 21