SustainAbility was commissioned by Novo Nordisk to verify the company's fifth annual environmental report. The objectives were to validate the collation of the data, to verify the statements made in the 1997 Environment & Bioethics Report, and to comment on the company's performance during 1997.

The benchmarks for our verification were:

• Novo Nordisk's own policies.
• SustainAbility's revised fifty-point checklist of reporting ingredients (Engaging Stakeholders 1996 and The Benchmark Survey 1997, UNEP/SustainAbility).
• The ICC Business Charter for Sustainable Development (to which Novo Nordisk is a signatory).
• Emerging best practice in corporate environmental performance reporting.
   

The verification process involved:

• A series of interviews with key personnel at Novo Nordisk in Denmark and at Novo Nordisk Biochemicals in Franklinton, USA - Novo Nordisk's largest production site outside Denmark.
• Examination of Novo Nordisk's policies, objectives, monitoring and reporting procedures, background documentation, the data to be included in the report and how they were compiled, the performance indicators used, and the drafts of the report.

SustainAbility is satisfied that:

• The written statements in this report present a fair and honest reflection of Novo Nordisk's policies, management systems and practices.
• The description of progress achieved during 1997 is valid and is substantiated by the company's performance data and the internal interviews undertaken by SustainAbility.

There is much controversy over the development and application of genetic engineering and the potential contribution new bio-technologies could make towards sustainable development. Novo Nordisk continues to be a leader in the biotechnology industry, adopting an open and proactive approach to addressing these issues in relation to its own use of biotechnology. A wide range of information is provided in the report and this is supplemented by cross-referencing to the company's web site. The extension of Novo Nordisk's voluntary reporting to include bioethics is an important initiative, and the company is in the process of broadening the scope of its activities beyond environmental responsibility to encompass social and ethical dimensions.

We were favourably impressed by the standards of operation at Franklinton but, as stated in previous years, a company-wide, internal, environmental auditing system is now needed to track performance against the company's international standards.

In addition, Novo Nordisk needs to develop a set of corporate sustainability principles for the businesses worldwide. Progress in the implementation of the Environmental Management System has been slower than expected, but this should remain a key priority for Novo Nordisk in 1998. The company is committed to establishing an EMS based on ISO 14001 at all production sites worldwide.

Significant progress has been made in implementing Novo Nordisk's policy in the company's supply chain. A new purchasing evaluation system has been established in Denmark, incorporating environmental criteria and an environmental rating system has been established in Enzyme Business. This now needs to be extended to include the company's Health Care business. On the transport and distribution side, a new policy has been defined which is under trial with a major contractor.

One area that we have highlighted in previous verification statements has been environmental education and training. Although this is now a line responsibility and, therefore, more directly integrated into management, a coherent strategy for this key area still needs to be defined and implemented.

The biosafety of genetically modified organisms (GMOs ) remains a focus of interest for key stakeholder groups. Novo Nordisk is continuing its work in this area and we recommend that the company publishes information on the fate of its GMOs and recombinant DNA in the environment at all its production sites worldwide.

For 1998 we recommend that Novo Nordisk:

• Formally addresses environmental and sustainable development issues in its research and development programmes; and,
• Further internationalizes its approach to Health and Safety by defining global standards and responsibilities.

The provision of site information in the corporate report is welcomed, but we would additionally like to see the further development of the site reporting for the company's main production sites, so that they also specifically address local needs, and to see this information used in the local communities. Whilst the globalization of its policies and practices is a key challenge for the company, the needs of local stakeholders also have to be addressed at the same time.

Dr. Vernon Jennings, Director, SustainAbility,
London, April 29, 1998

We have performed certain control procedures on Novo Nordisk Environment & Bio-ethics Report 1997 (the "Report"). The Report is the responsibility of and has been approved by the management of the Company. The Report has been prepared on the basis described here.

The scope of our work and the procedures that we performed, which were agreed with the Company's management, were as stated below. Our work has been performed according to Professional Standards applied to State Authorised Public Accountants in Denmark.

• We ascertained whether the data collection procedures, as mentioned here, were used at Corporate level (Environmental Affairs) to collect data from reporting units. Our procedures consisted of interviews and meetings with the corporate environmental management and employees.
• We studied the Report and compared the figures reported for 1997 with the data that was submitted as a result of the procedures noted above. We have assessed whether the figures reported for 1997 are appropriately reflected in the Report. Our procedures included meetings, interviews and review of relevant documents.
• We reviewed the internal control procedures established on a corporate level to verify data submitted from reporting units for inclusion in the Report. On a test basis, we compared the 1997 data reported from a sample of three reporting units (Kalundborg, Copenhagen and Franklinton) to the source documentation supporting the submitted data. Our procedures included meetings, interviews and review of relevant documents.
• We compared the information in the Report on environmentally related investments and costs to the source documentation presented to us and assessed whether the information is appropriately presented in the Report.
   

The foregoing procedures do not constitute an audit. The scope of work and the procedures performed preclude us from providing an opinion as to whether all figures and other disclosures in the Report are complete and accurate.

In summary, we find that the Company has applied detailed data collection procedures for the purpose of collecting data from the reporting units for inclusion in the Report; and that the figures reported for 1997, according to these data collection procedures, are appropriately reflected in the Report. Further, we find that the company has made reasonable endeavours at corporate level to verify that the data collected from reporting units for the Report; and for the three units identified above, submitted data is consistent with the source documentation presented to us. In addition, the information on environmentally related investments and costs is consistent with the source documentation presented to us and appropriately presented.

Copenhagen, April 29, 1998
DELOITTE & TOUCHE Statsautoriseret Revisionsaktieselskab

Preben J. Sørensen,
State Authorised Public Accountant

Corporate environmental report