Contributing to a sustainable future is implicit in Novo Nordisk´s core values. The integration of environmental considerations into business decisions at all levels of our or-ganization illustrates the importance we attach to managing our environmental impact. However, quantifying the effects of our environmental measures in financial terms is a major challenge given the current status of environmental accounting frameworks and existing management information systems.

Status of 1997-99 target: Develop and refine financial accounting systems for our environmental performance and extend them to encompass the entire Novo Nordisk Group.

In 1998 we made progress towards our aim of linking environmental performance with financial performance. In particular, we began the process of developing new corporate indicators (EPI_BP), initially for the areas that we identified as having a significant impact, i.e. water and energy used in the basic production process, which account for 72% and 58% respectively of Novo Nordisk's total consump-tion. As a result, in this year´s report we have outlined the relation-ship between the eco-productivity index for basic production (EPI_BP) and water and energy costs used in basic production. A key feature of the new EPI_BP is that it can also be segregated at a site and divisional level and can thereby be used in the internal management decision-making process.

Financial performance
In 1998, consolidated sales and operating profit increased by 6% and 16% respectively to DKK 17,911 million and DKK 3,536 million. This increase was primarily associated with an increase in sales for Health Care of 8% while sales for Enzyme Business were 2% lower than last year.

Production costs increased by 1% to DKK 5,856 million. This slight increase in costs in relation to the increase in sales is largely attributable to improved production yields, especially in Enzyme Business.

Environmental costs

Environmental costs decreased by 4.4% to DKK 216.8 million. Environmental costs as a percentage of total production costs thus decreased from 3.9% to 3.7%. The primary reason was reduced costs for the treatment, transport and spreading of spent biomass processed at the Kalundborg site.

Biomass cost reduction of DKK 22.5 million
As a result of legislation introduced in Denmark in 1997, a process was developed at Kalundborg to dewater NovoGro^®, our spent biomass used as fertilizer, into a solid product.

The reduction in biomass costs in 1998 is a result of two factors. Firstly, there has been a decrease in the volume of water entering the biomass treatment plant at Kalundborg due to less use of water in the production process itself. Secondly, the improved efficiency of the dewatering of spent biomass means that the NovoGro^® product now contains less water. This has resulted in lowered costs for transportation and spreading on farmers´ fields.

Environmental energy taxes increased by DKK 10.5 million
Despite a decrease in overall energy consumption of 2.3%, energy taxes have increased by 35%. DKK 7.4 million of the increment was primarily a result of a 50% increase in the Danish environmental tax on energy used for room heating purposes.

Remediation costs for polluted sites decreased by DKK 1.5 million
This was due to the completion in 1997 of a project at the Copenhagen site where 40 underground tanks were closed. The remediation costs of DKK 0.2 million in 1998 were primarily associated with our site in Bagsværd.

Environmental investments
The annual charge of environmental investments was DKK 74.1 million, representing 3.5% of total Novo Nordisk investments in 1998. This was a decrease of DKK 72.3 million compared to 1997, which is primarily due to the completion of the expanded Kalundborg biological waste water treatment plant for which expenditure in 1997 totalled DKK 76 million.