Term Paper final.pdf

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Maximilian Garczorz gama1040@h-ka.de
Durlacher Allee 44 maximilian.garczorz@gmail.com
76131 Karlsruhe
Term Paper
Transparency and Compliance in the Chemical
Industry: A Compara8ve Analysis of BASF and
Saudi Aramco

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1 Inhaltsverzeichnis
1 Inhaltsverzeichnis ..................................................................................................................................2
2 Introduc5on...........................................................................................................................................3
3 History of the Companies.......................................................................................................................4
3.1 History of BASF .....................................................................................................................................4
3.2 History of Saudi Aramco.......................................................................................................................5
4 Organiza5onal Structure ........................................................................................................................6
4.1 Structure of BASF..................................................................................................................................6
4.2 Structure of Saudi Aramco....................................................................................................................6
5 Goals and Strategy.................................................................................................................................7
5.1 Goals and Strategy of BASF ..................................................................................................................7
5.2 Goals and Strategy of Saudi Aramco:..................................................................................................7
6 Financial Report.....................................................................................................................................8
6.1 Transparency of the Financial Reports of BASF ....................................................................................8
6.2 Transparency of the Financial Reports of Saudi Aramco ...................................................................10
6.3 Summary ............................................................................................................................................11
7 Transparency in CO2 Emissions Repor5ng ............................................................................................11
7.1 Transparency in CO2 Carbon footprint of BASF ..................................................................................12
7.2 Transparency in CO2 Carbon footprint of Saudi Aramco...................................................................13
8 Accident Inves5ga5on in the Chemical Industry ...................................................................................14
8.1 Transparency of Accident InvesLgaLon of BASF.................................................................................14
8.2 Transparency of Accident InvesLgaLon of Saudi Aramco..................................................................15
8.3 Conclusion ..........................................................................................................................................16
9 Solu5ons for the Iden5ﬁed Issues ........................................................................................................17
9.1 Transparency soluLon for BASF..........................................................................................................17
9.2 Transparency soluLon for Saudi Aramco............................................................................................18

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2 Introduc4on
Transparency and compliance play pivotal roles in shaping the reputa8on, accountability, and
trustworthiness of companies within the chemical industry. Transparency refers to the clear
and accessible disclosure of per8nent informa8on regarding a company's opera8ons,
performance, and decision-making processes. It encompasses ﬁnancial repor8ng, corporate
governance prac8ces, environmental and social impact repor8ng, and open communica8on
with stakeholders. Transparent prac8ces enable stakeholders to make informed decisions,
foster trust, and facilitate meaningful engagement.
In the context of the chemical industry, transparency holds signiﬁcant importance due to the
poten8al environmental, social, and economic impacts associated with chemical produc8on
and usage. Stakeholders, including investors, customers, employees, regulatory bodies, and
the wider society, rely on transparent prac8ces to evaluate the sustainability and responsible
conduct of chemical companies. Comprehensive reports, encompassing informa8on on
opera8ons, supply chains, and environmental impact, enable stakeholders to understand the
company's ac8vi8es and hold them accountable.
By sharing data publicly, companies enable greater scru8ny and analysis by stakeholders.
Compliance, encompassing adherence to laws, regula8ons, industry standards, and ethical
guidelines, is a crucial aspect of corporate governance. Compliance ensures that companies
operate within legal and ethical frameworks, minimizing risks, protec8ng stakeholders'
interests, and promo8ng responsible business prac8ces. Embracing global standards and best
prac8ces, such as those outlined by the Global Repor8ng Ini8a8ve or the United Na8ons
Global Compact, fosters consistency and comparability across industries and geographies.
In conclusion, improving transparency and compliance within the chemical industry requires
a comprehensive approach. It necessitates changes in repor8ng prac8ces and, importantly, a
cultural shiN within companies towards greater accountability and openness. By examining the
transparency and compliance ini8a8ves of industry leaders like BASF and Saudi Aramco,
valuable insights can be gained, enabling other organiza8ons within the chemical sector to
learn from best prac8ces and drive con8nued improvement.

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The subsequent sec8ons of this paper will delve into the historical backgrounds of BASF and
Saudi Aramco, analyze their organiza8onal structures, evaluate their goals and strategies
concerning transparency and compliance, scru8nize their financial reports, examine their
emergency refurbishment prac8ces, propose solu8ons to challenges, and draw conclusions
regarding the significance of transparency and compliance in the chemical industry.
3 History of the Companies
3.1 History of BASF
BASF, the world's largest chemical company, has a rich and storied history that dates back to
the 19th century. Founded as the Badische Anilin- und Sodafabrik in 1865, the company played
a significant role in shaping the chemical industry and has since evolved into a global leader in
the field.
The roots of BASF can be traced to the region of Baden, Germany, where a group of visionary
entrepreneurs recognized the poten8al of the burgeoning chemical industry. They established
the Badische Anilin- und Sodafabrik in Ludwigshafen, a town situated on the Rhine River, with
the goal of producing synthe8c dyes and soda products.
Under the leadership of its early pioneers, including Friedrich Engelhorn and Carl von Linde,
BASF quickly gained prominence. Engelhorn, a successful entrepreneur, transformed the
company into a leading manufacturer of synthe8c dyes. With technological advancements and
innova8ve research, BASF expanded its product porXolio, producing not only dyes but also
pharmaceu8cals, plas8cs, and agricultural chemicals.
During the late 19th and early 20th centuries, BASF experienced significant growth and
became a global player in the chemical industry. The company's success can be a[ributed to
its commitment to research and development, collabora8on with scien8sts, and strategic
acquisi8ons. BASF's scien8fic breakthroughs, such as the development of synthe8c indigo dye
and the produc8on of ammonia for fer8lizers, propelled its expansion and cemented its
posi8on as an industry leader.
In the post-war era, BASF played a vital role in the reconstruc8on of Germany, contribu8ng to
the country's economic recovery.
The company diversified its product offerings, entering new sectors such as petrochemicals,
fine chemicals, and performance materials.

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Today, BASF operates as a mul8na8onal corpora8on, with a focus on sustainable development
and innova8on. The company is commi[ed to addressing global challenges such as climate
change, resource scarcity, and popula8on growth through its research and product offerings.
BASF con8nues to drive advancements in fields such as chemistry, materials science, and
digitaliza8on, contribu8ng to a sustainable future.
3.2 History of Saudi Aramco
Saudi Aramco, officially known as the Saudi Arabian Oil Company, has a remarkable history
that closely intertwines with the development of the oil industry in Saudi Arabia. The
company's roots can be traced back to the early 20th century when explora8on for oil
resources began in the Arabian Peninsula.
The story of Aramco begins in the 1930s when the Arabian American Oil Company (ARAMCO)
was formed as a consor8um of interna8onal oil companies, including Standard Oil of California
(now Chevron), Exxon, Texaco (now Chevron), and Mobil (now ExxonMobil). These companies
obtained explora8on and produc8on rights in Saudi Arabia under a concession agreement with
the Saudi government.
In 1938, a significant milestone was achieved when oil was discovered in commercial
quan88es. This marked the beginning of a prosperous era for both Saudi Aramco and Saudi
Arabia as a major global oil producer.
Over the years, Aramco played a pivotal role in the development of Saudi Arabia's oil industry
and the transforma8on of the country's economy. The company focused on the explora8on,
produc8on, refining, and distribu8on of petroleum and petrochemical products. As the
industry expanded, Aramco undertook ambi8ous projects, including the construc8on of
pipelines, refineries, and infrastructure to support the growing oil opera8ons.
In the 1970s, the Saudi government acquired a majority stake in Aramco, gradually increasing
its ownership un8l it gained full control by the end of the 1980s. Subsequently, Aramco became
a state-owned enterprise, and its name was changed to Saudi Arabian Oil Company, commonly
known as Aramco.
Under the stewardship of the Saudi government, Aramco con8nued to flourish and solidify its
posi8on as the world's largest oil exporter.
In 2019, Aramco made history by going public and lis8ng its shares on the Saudi Arabian stock
exchange, becoming the largest ini8al public offering (IPO) in history.

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Today, Aramco stands as a global energy giant, recognized for its vast oil reserves, cufng-edge
technologies, and commitment to sustainable prac8ces.
4 Organiza4onal Structure
BASF and Aramco, two leading companies in the chemical and energy industries respec8vely,
operate with dis8nct organiza8onal structures that align with their diverse opera8ons and
global presence. These structures play a crucial role in enabling effec8ve management,
coordina8on, and strategic decision-making within the organiza8ons.
4.1 Structure of BASF
BASF follows a divisional organiza8onal structure that supports its diverse porXolio of products
and services. The company is divided into several divisions, each focused on specific business
areas or product lines. These divisions include Chemicals, Materials, Industrial Solu8ons,
Surface Technologies, and Nutri8on & Care. This structure allows for focused exper8se,
efficient resource alloca8on, and tailored approaches to different market segments.
Within each division, there are global business units and regional divisions that facilitate
localized opera8ons and customer-centric strategies. The global business units are responsible
for specific product lines or technologies, ensuring specializa8on and a deep understanding of
market demands. The regional divisions cater to the unique needs of specific geographic areas,
adap8ng strategies and opera8ons to local markets.
The divisional structure of BASF enables effec8ve coordina8on, collabora8on, and decision-
making across different business segments and geographical regions. It allows for agility in
responding to market demands, promotes innova8on, and facilitates efficient alloca8on of
resources.
4.2 Structure of Saudi Aramco
Saudi Aramco follows a func8onal organiza8onal structure that supports its extensive
opera8ons across the en8re value chain. The company is organized into various func8onal
units, each responsible for specific areas of exper8se and opera8ons. These units include
Upstream, Downstream, Projects and Business Development, Finance and Strategy, and
Support Func8ons.

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Aramco's func8onal structure enables efficient coordina8on, exper8se sharing, and focused
execu8on within each func8onal area. It facilitates specializa8on, in-depth knowledge, and
exper8se development in specific domains. This structure also allows for the effec8ve
alloca8on of resources, division of labor, and the implementa8on of standardized prac8ces
across the organiza8on.
5 Goals and Strategy
BASF and Saudi Aramco have dis8nct goals and strategies that align with their respec8ve
missions and industry landscapes. While both companies emphasize sustainability, innova8on,
and long-term value crea8on, their approaches and focus areas differ.
5.1 Goals and Strategy of BASF
BASF is commi[ed to crea8ng chemistry for a sustainable future. The company has set
ambi8ous goals and developed a comprehensive strategy to drive sustainable development
and address global challenges. BASF's goals and strategies revolve around four key pillars:
porXolio management, opera8onal excellence, customer focus, and people and society.
BASF aims to op8mize its porXolio by priori8zing sustainable solu8ons with strong market
poten8al.
Customer focus is a core aspect of BASF's strategy. The company aims to understand and meet
the evolving needs of its customers by collabora8ng closely with them, co-crea8ng innova8ve
solu8ons, and providing value-added products and services. By fostering long-term
partnerships, BASF stays at the forefront of the chemical industry and delivers sustainable
solu8ons tailored to customer requirements.
BASF recognizes the significance of its employees and society in achieving its goals. The
company promotes an inclusive and diverse work environment, empowering its employees to
drive innova8on and contribute to sustainable development.
5.2 Goals and Strategy of Saudi Aramco:
Saudi Aramco aims to maintain its posi8on as the world's leading oil producer and support the
Saudi Arabian economy. The company acknowledges the importance of addressing
environmental concerns and transi8oning to a low-carbon economy. It also seeks to strengthen

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its presence in the global energy market by expanding downstream opera8ons, such as
refining and petrochemical produc8on. While specific details may not be readily available,
Saudi Aramco's goals revolve around leadership, sustainability, and diversifica8on.
6 Financial Report
The financial report is a vital component of corporate transparency, providing stakeholders
with valuable insights into the financial performance, posi8on, and prospects of a company. It
serves as a comprehensive documenta8on of the financial ac8vi8es and results, enabling
stakeholders to assess the company's financial health, make informed decisions, and hold the
company accountable.
BASF offers comprehensive financial reports that provide a comprehensive overview of its
financial performance, including revenues, opera8ng income, net income, and cash flows.
These reports offer a breakdown of financial results by business segments, geographical
regions, and key performance indicators. BASF's financial reports adhere to interna8onal
accoun8ng standards, providing stakeholders with reliable and transparent financial
informa8on.
Saudi Aramco also provides extensive financial reports that reflect its significant presence in
the oil and gas industry. Aramco's financial reports include detailed informa8on on revenues,
costs, profits, capital expenditures, and cash flows. Stakeholders can gain insights into the
company's produc8on levels, reserves, refining capaci8es, and financial performance through
its financial disclosures.
6.1 Transparency of the financial Reports of BASF
BASF has established a strong tradi8on of transparency in its financial repor8ng. The company
provides stakeholders with extensive access to its financial informa8on, enabling them to
review and analyze its performance on a regular basis. Since 1999, BASF has made its quarterly
reports publicly available, allowing stakeholders to stay informed about the company's
financial results and developments.
Through BASF's publica8on finder, stakeholders can access a wide range of financial
documents, including annual reports, quarterly statements, and sustainability reports. This

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centralized plaXorm serves as a valuable resource for stakeholders seeking to delve into BASF's
financial performance and gain insights into its opera8ons.
A notable aspect of BASF's commitment to transparency is the availability of local reports.
Stakeholders can access 146 local reports, such as "BASF Japan 2022," which provide a more
detailed analysis of the company's performance within specific regions or subsidiaries. These
local reports offer stakeholders a deeper understanding of BASF's opera8ons on a localized
level, facilita8ng a comprehensive assessment of the company's global footprint and its
financial performance in different markets.
By making these local reports publicly available, BASF demonstrates its dedica8on to providing
stakeholders with granular informa8on that goes beyond the consolidated financial
statements. This level of transparency allows stakeholders to gain insights into the company's
regional strategies, market dynamics, and performance in specific geographies.
Figure 1: BASF website with all reports
Furthermore, BASF's financial reports incorporate contextual informa8on that helps
stakeholders interpret the financial results. The reports provide explana8ons of business
developments, strategic ini8a8ves, risks, and opportuni8es, allowing stakeholders to assess
the factors influencing BASF's financial performance and make informed decisions.
BASF's commitment to transparency in financial repor8ng is aligned with its broader
sustainability efforts. The reports integrate relevant informa8on on the company's

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sustainability ini8a8ves, environmental impact, and progress towards achieving its
sustainability goals. This integra8on emphasizes the interconnectedness of financial
performance and sustainability, reinforcing BASF's holis8c approach to transparency.
In conclusion, BASF's commitment to transparency in financial repor8ng is exemplified by its
quarterly reports, extensive availability of local reports, and comprehensive breakdowns of
financial results. By providing stakeholders with 8mely, detailed, and contextual informa8on,
BASF enables them to evaluate the company's financial performance and make informed
decisions. The availability of local reports further enhances transparency by offering
stakeholders insights into BASF's regional opera8ons and performance.
6.2 Transparency of the financial Reports of Saudi Aramco
Aramco has made significant strides in enhancing its transparency in financial repor8ng. Since
its ini8al public offering (IPO) in 2020, Aramco has introduced quarterly financial repor8ng,
allowing stakeholders to access regular updates on its financial performance and opera8ons.
Through the Aramco website, stakeholders can access a range of financial reports and
presenta8ons, including annual reports, interim financial statements, and investor
presenta8ons. These reports provide valuable insights into Aramco's financial performance,
capital expenditures, and strategic ini8a8ves.
The introduc8on of quarterly financial reports by Aramco marks a significant step towards
greater transparency. Prior to the IPO, Aramco was not obligated to disclose quarterly financial
informa8on publicly.
Aramco's commitment to transparency in financial repor8ng aligns with its broader goals of
corporate governance and stakeholder engagement. By providing regular and comprehensive
financial informa8on, Aramco aims to enhance trust, facilitate informed decision-making, and
ensure transparency in its opera8ons.
may not capture recent developments or updates in the company's financial repor8ng.

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6.3 Summary
In the analysis of the financial reports, both BASF and Saudi Aramco demonstrate a
commendable level of transparency. However, it is noteworthy that BASF has been consistently
providing transparent financial repor8ng for 21 years longer than Saudi Aramco.
BASF's financial reports are well-structured and comprehensive, allowing stakeholders to
access a wealth of informa8on. Addi8onally, BASF goes the extra mile by providing country-
specific reports, such as "BASF Japan 2022," which offer addi8onal insights into the company's
opera8ons.
While Saudi Aramco has made strides in improving its transparency following its IPO in 2020,
BASF's extensive track record and provision of detailed financial informa8on posi8on it as a
leader in this aspect. The availability of country-specific reports further underscores BASF's
commitment to transparency and stakeholder engagement.
7 Transparency in CO2 Emissions Repor4ng
Transparency in CO2 emissions repor8ng within the chemical and oil industries are known to
be significant contributors to global carbon dioxide emissions. Specifically, the CO2 emissions
of BASF and Saudi Aramco will be analyzed, shedding light on the transparency of their
emissions data.
Concerns about climate change and environmental sustainability have elevated the
importance of transparent and accurate repor8ng of carbon footprints for companies. The
chemical and oil sectors, as major players in the global energy landscape, bear a significant
responsibility in addressing their CO2 emissions and promo8ng transparency in repor8ng.
The aim of this chapter is to assess the level of transparency in the CO2 emissions data
disclosed by BASF and Saudi Aramco. Transparency, in this context, refers to the availability,
accuracy, and comprehensiveness of emissions data, enabling stakeholders to understand the
environmental impact of these organiza8ons.
By examining the transparency of CO2 emissions data, valuable insights can be gained into the
companies' commitment to addressing climate change, sefng emission reduc8on targets, and
adop8ng sustainable prac8ces.

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7.1 Transparency in CO2 Carbon footprint of BASF
The company has established a comprehensive sec8on on its website specifically focused on
CO2 emissions, providing stakeholders with valuable insights into its environmental impact
and mi8ga8on efforts.
By visi8ng the website, stakeholders gain access to detailed informa8on regarding BASF's
corporate carbon footprint. The webpage highlights the company's systema8c approach to
measuring, repor8ng, and reducing greenhouse gas emissions.
The company provides a breakdown of emissions by source, including direct emissions from
its own processes, as well as indirect emissions from purchased energy and other sources. This
transparent breakdown enables stakeholders to gain a comprehensive understanding of the
main contributors to BASF's carbon footprint.
Furthermore, BASF sets specific targets for reducing its CO2 emissions, illustra8ng its proac8ve
stance towards mi8ga8ng its environmental impact. The company strives for con8nuous
improvement by op8mizing energy efficiency, implemen8ng innova8ve technologies, and
promo8ng the use of renewable energy sources within its opera8ons.
Figure 2: Development of greenhouse gas emissions of the BASF Group (Scope 1 and 2)
The transparency of BASF's CO2 repor8ng is commendable, as it goes beyond basic repor8ng
requirements. By making this informa8on easily accessible and providing clear insights into its
emissions data and reduc8on strategies, BASF demonstrates its commitment to transparency
and environmental responsibility. The establishment of a dedicated CO2 transparency sec8on

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on its website showcases BASF's commitment to open communica8on, stakeholder
engagement, and accountability. BASF sets a posi8ve example for the chemical industry by
demonstra8ng a strong focus on transparency in CO2 emissions repor8ng.
7.2 Transparency in CO2 Carbon footprint of Saudi Aramco
Saudi Aramco faces challenges in terms of CO2 emissions transparency. However, the company
has taken steps to address its environmental impact and enhance transparency.
Saudi Aramco is responsible for approximately 5% of global greenhouse gas emissions,
signifying its substan8al contribu8on to climate change. To communicate its sustainability
efforts, the company provides an Environmental Report on its website.
While specific details on CO2 emissions are not explicitly men8oned, the Environmental
Report demonstrates Saudi Aramco's commitment to sustainability repor8ng.
While further improvements in CO2 emissions transparency may be needed, Saudi Aramco's
publica8on of the Environmental Report marks a step towards enhanced transparency.
Nevertheless, the existence of the Environmental Report showcases the company's efforts to
promote transparency and accountability regarding its environmental impact.
Moving forward, it is important for Saudi Aramco to con8nue enhancing its CO2 emissions
repor8ng by providing more specific informa8on on its carbon footprint.
Figure 3: Greenhouse Emission Scope 1 Saudi Aramco

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8 Accident Inves4ga4on in the Chemical Industry
Chemical companies are no strangers to accidents due to the inherent risks involved in their
opera8ons. However, the chemical industry recognizes that chemical accidents can severely
damage the company's reputa8on and significantly impact its stock price. Consequently, the
industry places great emphasis on safety as a top priority.
Chemical accidents have the poten8al to cause significant harm, including human safety
hazards, environmental damage, legal consequences, regulatory scru8ny, increased insurance
costs, and a loss of public trust. Investors closely monitor the safety records of chemical
companies, as accidents can have a detrimental impact on their market performance and stock
prices. Therefore, the chemical industry places paramount importance on safety to protect its
reputa8on and maintain stakeholder confidence.
Accident inves8ga8on plays a crucial role in understanding the causes of incidents, iden8fying
areas for improvement, and implemen8ng preven8ve measures. It involves a systema8c
examina8on of factors such as human errors, equipment failures, process devia8ons, and
organiza8onal shortcomings. By conduc8ng thorough accident inves8ga8ons, chemical
companies aim to uncover root causes, learn from past mistakes, and enhance safety protocols
and prac8ces.
The industry's commitment to safety and robust accident inves8ga8on is aimed at ensuring
the safety of opera8ons, protec8ng reputa8on, and maintaining stakeholder trust.
8.1 Transparency of Accident InvesLgaLon of BASF
BASF places a strong emphasis on safety and has implemented various measures to ensure a
safe working environment. However, despite its efforts, accidents can s8ll occur within the
company. While BASF is renowned for its safety prac8ces, it is essen8al to acknowledge that
accidents can happen even in the safest workplaces. In 2017, for example, an explosion at a
BASF facility resulted in the unfortunate loss of five lives.
BASF maintains a rigorous safety culture by requiring employees to undergo mul8ple safety
tests and following to personal protec8ve equipment (PPE) guidelines, including helmet
requirements. The company also conducts comprehensive annual assessments of damage
preven8on in all its opera8ons.

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However, it is notable that BASF does not provide a comprehensive accident report on its
official website, documen8ng and inves8ga8ng each incident that occurs within the company.
Informa8on about accidents is primarily obtained through local media sources. While BASF
may release statements related to such incidents in the press sec8on of its website, detailed
accident reports are not publicly available.
The lack of publicly accessible accident reports on BASF's official website makes it challenging
to obtain comprehensive informa8on on each incident and its inves8ga8on.
8.2 Transparency of Accident InvesLgaLon of Saudi Aramco
Aramco, headquartered in Saudi Arabia, operates in a region where oil fields are prone to
security threats, including drone a[acks. While the company has made efforts to ensure safety
and security within its opera8ons, incidents have occurred that warrant comprehensive
accident inves8ga8on and transparency. However, it is notable that detailed informa8on and
reports regarding these incidents are not readily available on Aramco's official websites.
One significant incident that occurred in 2007 was the explosion of a gas pipeline, resul8ng in
the tragic loss of 28 lives. This incident highlights the importance of thorough accident
inves8ga8on and preven8ve measures. However, the lack of accessible informa8on on official
Aramco sources raises concerns about the transparency of the company's approach to
addressing and communica8ng incidents to the public.
Transparency is a crucial element in building trust and accountability.
While it is understandable that Aramco operates within a complex geopoli8cal landscape and
faces security concerns, it is essen8al for the company to strike a balance between security
considera8ons and transparency. Open communica8on about incidents, including providing
informa8on on causes, consequences, and measures taken to prevent future occurrences,
would foster a greater sense of accountability and trust among stakeholders.
By proac8vely sharing informa8on on incidents, Aramco would demonstrate its commitment
to transparency, responsible prac8ces, and addressing poten8al risks. Transparency would not
only enhance stakeholder confidence but also contribute to industry-wide learning and the
development of best prac8ces in safety and incident management.

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8.3 Conclusion
In conclusion, while BASF is widely recognized for its safety prac8ces and commitment to
employee well-being, there is room for improvement in the transparency of its accident
repor8ng. The company's stringent safety measures and protocols aim to prevent incidents
and create a safe working environment. However, accidents can s8ll occur, as evidenced by
unfortunate incidents such as the 2017 explosion that resulted in the loss of lives.
To further enhance transparency and accountability, it would be beneficial for BASF to
establish a publicly accessible and transparent document that lists all accidents, including
details on the substances involved and the resul8ng harm to individuals. Such a document
would provide stakeholders with a comprehensive understanding of incidents, facilitate
greater transparency in accident repor8ng, and demonstrate BASF's commitment to learning
from past incidents.
By implemen8ng a transparent repor8ng system, BASF would not only fulfill its responsibility
to stakeholders but also contribute to industry-wide knowledge sharing and best prac8ces.
The availability of detailed accident reports would promote a collec8ve learning environment,
allowing other companies and stakeholders to understand the causes, consequences, and
preven8ve measures associated with accidents in the chemical industry.
Furthermore, transparent repor8ng can strengthen public trust, foster accountability, and
demonstrate BASF's commitment to open communica8on. It would provide an opportunity for
the company to showcase its dedica8on to con8nuous improvement and proac8ve safety
measures.
While Aramco faces unique security challenges and operates within a complex geopoli8cal
landscape, there is a need for greater transparency and communica8on regarding incidents
that occur within the company's opera8ons. Providing accessible informa8on on incidents,
including causes and preven8ve measures, would enhance stakeholder trust, accountability,
and the company's commitment to safety. Striking a balance between security considera8ons
and transparency is crucial for maintaining stakeholder confidence and promo8ng industry-
wide learning.

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9 Solu4ons for the Iden4fied Issues
For BASF and Saudi Aramco, transparent repor8ng mechanisms, including comprehensive
financial reports, detailed accident inves8ga8ons, and regular updates on safety prac8ces, are
essen8al.
To bolster transparency, both companies can consider publishing comprehensive reports that
include informa8on about their opera8ons, supply chains, environmental impact, and incident
reports.
By placing transparency at the forefront, BASF and Saudi Aramco can foster a culture of
openness, accountability, and con8nuous improvement.
9.1 Transparency soluLon for BASF
BASF is regarded as a highly transparent company, as evidenced by its well-structured website
that allows for quick access to a wealth of informa8on. This strong online presence contributes
to the percep8on of BASF as trustworthy and transparent. Stakeholders can easily obtain all
financial reports and, addi8onally, access annual reports specific to each country where BASF
operates. In these areas, there is no apparent need for improvement regarding transparency.
However, one area that requires a[en8on is the adequacy of accident inves8ga8on and
repor8ng. Currently, the responsibility for providing informa8on on incidents is mostly leN to
local media sources. To enhance transparency in this regard, it is recommended that BASF
establish a dedicated department responsible for conduc8ng and dissemina8ng accident
inves8ga8ons in a transparent manner, making the informa8on readily available to the public.
By implemen8ng this improvement, BASF can demonstrate a commitment to transparency and
proac8ve communica8on. The establishment of such a department would ensure that
accident inves8ga8on reports are accessible to the public, fostering transparency,
accountability, and trust. This step would align BASF with industry best prac8ces and
contribute to the company's overall goal of enhancing transparency and stakeholder
engagement.

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9.2 Transparency soluLon for Saudi Aramco
Saudi Aramco indeed faces significant transparency challenges. The company's transparency
has improved to some extent following its ini8al public offering in 2020, as it must comply with
stock exchange regula8ons. However, the transparency issue at Saudi Aramco is not easily
resolved due to several factors.
One of the major obstacles is the company's ownership structure, with the Saudi Arabian royal
family being the largest shareholder. The royal family's stance on equality and transparency
may not align with interna8onal standards. Addi8onally, Saudi Aramco holds the 8tle of the
world's largest CO2 emi[er, despite expressing inten8ons to become more climate neutral.
However, concrete measures to address this issue are not readily evident.
The geopoli8cal situa8on in the Middle East further complicates ma[ers, as the region
experiences ongoing conflicts and daily bombings. Resolving this issue is beyond the control
of Saudi Aramco.
To improve transparency at Saudi Aramco, there is a need for more open communica8on on
all relevant topics. However, this requires greater press freedom within the country. Achieving
transparency at Saudi Aramco necessitates significant steps, including press freedom, peace in
the region, and the willingness of the Saudi government to priori8ze transparency.
One poten8al driver for an image shiN could be the involvement of Western investors. Saudi
Aramco is compelled to become more transparent to a[ract such investors. However,
achieving this transparency requires a comprehensive transforma8on that encompasses not
only internal policies and prac8ces but also broader societal and governmental changes.
It is crucial to recognize that addressing the transparency challenges at Saudi Aramco is a
complex and mul8faceted endeavor that requires significant efforts from various stakeholders.

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