Sustainability as business driver

Audited by PwC

Sustainability has increasingly become a business driver for Novozymes over the past decade. We have been able to turn it into a competitive advantage in our relations with customers in recent years as more customers look to use sustainability as a differentiator. Thus, the original focus on sustainability as a matter of risk and cost management has broadened to also include and even create business opportunities for Novozymes.

Interest in Novozymes’ biological solutions has soared in recent years. Our technology can help save raw materials, reduce the use of chemicals, and bring about energy and quality improvements. Our solutions have always had these benefits – the difference today is that demand for sustainable solutions is being stimulated by national regulatory initiatives and retailers’ tougher sustainability criteria for suppliers in response to consumer preferences.

Customers recognize that sustainable solutions can be better and more profitable in the long run. They are keen to differentiate themselves through the reduced environmental impact made possible by our technology.

It is a major step forward for Novozymes that we can now promote sustainability together with more of our customers, and this was reflected in our new ambition launched in 2009. We aim to drive the world toward sustainability together with our customers, which means making better use of the world’s resources to meet people’s needs for food and other consumables. Many different factors have helped us come this far, but two key priorities have been particularly important in making us an attractive partner in sustainability today: our decision in 2005 to build up in-house life cycle assessment (LCA) expertise and our continuing commitment to integrating sustainability into our organization and strategy.

In-house life cycle assessment expertise

The decision to build up in-house expertise in life cycle assessment has been crucial for our ability to use sustainability as a true business driver. Our LCA specialists work with colleagues in Sales & Marketing and with our customers to compare the environmental impact of conventional technologies and our biological solutions, covering products’ entire life cycles ”from cradle to grave.” This enables customers to back up their claims with solid data, and Novozymes to document our carbon footprint.

Since 2008, Novozymes has also used rough LCA estimates in R&D to assess and compare the environmental impact of new products as an important element in prioritizing our pipeline.

Integration of sustainability

At Novozymes, we integrate sustainability into our everyday business activities. It is how we do business and part of who we are, because we truly believe that this is the right way to do business. Sustainability is also key in our relations with stakeholders. In 2002, we were one of the very first companies to publish an integrated report combining traditional financial information and sustainability data, as is now considered best practice.

We have been committed to building an organization based on our priorities and geared to respond to our stakeholders’ concerns. In 2003, this led to the establishment of a Sustainability Development Board (SDB) with high-level representation of all main areas of the business. SDB develops our sustainability strategy, which is integrated with the business strategy and takes stakeholders’ concerns into consideration. SDB also sets the annual sustainability targets that form part of our corporate bonus scheme.

Our efforts have made us a top performer in the Dow Jones Sustainability Indexes for the past nine years, and we have been awarded both Gold Class and Sector Leader for our performance. More importantly to us, however, our internal sustainability setup enhances our credibility with business partners, who appreciate that having our own house in order is part of our offering – and something that we are ready to share with them.

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“We have this combination of a sustainability approach and an ability to innovate and to understand the challenges and concerns our customers are facing.”
Thomas Nagy, Stakeholder Relations