Is BASF Stock Halal?

Is BASF Stock Halal?

Key Points

  • After examining BASF’s source of revenue, the ratio of interest expense to total operating expense, and ESG impact we feel questionable investing in BASF from a Halal perspective.

Company Overview

BASF SE is a German multinational chemical company and the largest chemical producer in the world. Its headquarters is located in Ludwigshafen, Germany.

How much of BASF’s revenue comes from haram?

The revenue source of BASF is categorized into seven segments. Chemicals, Materials, Industrial Solutions, Surface Technology, Nutrition & Care, Agricultural Solutions, and Other. 

Practical Islamic finance concludes

None of BASF SE’s Revenue comes from anything inherently haram.

Does BASF rely on interest to operate?

Recent Quarter ended 3/31/2022Fiscal Year ended 12/31/2021Fiscal Year ended 12/31/2020
Interest Expense121482537
Total Operating Expense366014,68816,919
Interest Expense / Total Operating Expense3.31%3.28%3.17%

*Numbers in millions, of Euros 

Practical Islamic finance concludes:

Riba is used but not relied upon in BASF SE’s operations.

What is BASF’s Environmental, Social, and Governance (ESG) impact?


According to the 2020 “Top 100 Polluters Indexes” published by the University of Massachusetts, Amherst’s “Political Economy Research Institute” (PERI), among US corporations, BASF was ranked the #2 largest polluter of water and #4 largest polluter of air in 2018. 

BASF is working towards becoming a climate-neutral company with a net-zero emission target by 2050.


BASF has a Glassdoor rating of 3.9 out of 5.0. Glassdoor is a trusted website where current and former employees can review and rate their companies.


No notable governance highlights. 

Practical Islamic finance concludes:

BASF is one of the top polluters on earth but they are also the number one chemical manufacturer on earth. Given they are actively taking steps to reduce emissions we are unclear as to whether their net ESG impact is positive or negative.

Comfort Rating

From BASF SE’s business, financial, and ESG reviews, Practical Islamic Finance rates BASF SE stock as

Questionable to invest in from a Halal perspective.


It’s unclear to PIF whether the net impact of BASF is positive or negative. We are not naive enough to suggest a company operating in chemical manufacturing should have the same environmental cost as another operating a services business for example. That said, we certainly feel a level of discomfort investing in a company named one of the top polluters on Earth. 


Q1 2022

Annual Report 2021

BASF Sustainability

BASF Glassdoor Reviews

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