Key performance indicators

Novo Nordisk has defined four long-term financial targets, which were communicated to the stock market in 2001. During the five-year period 2000-2004 the reported average performance compared to the long-term financial targets is:

See details of performance in the consolidated financial statements and information for investors.

In managing its business with a Triple Bottom Line approach, Novo Nordisk is linking a set of key targets to sustainability goals. Twenty top-level indicators help track performance over time in regard to environmental, social and socio-economic goals. They relate to six areas of strategic importance: living our values, access to health, our employees, our use of animals, eco-efficiency and compliance, and economic contribution. The indicators have been defined through consultation with stakeholders, while methods of measuring and targets are set by Novo Nordisk’s management. For details and comparative data, see the overview of Triple Bottom Line indicators.

Living our values

The employee survey, eVoice, is conducted annually and systematically measures the working climate. This includes a measure of the organisational support for and understanding of responsible business practices. In 2004, the average of respondents’ answers – on a scale from 1-5, with 5 being the highest score – was 4.2. Regular independent facilitations assess compliance with the Novo Nordisk Way of Management. In 2004, 96% of identified corrective actions were accomplished. Performance on these indicators is stable over time and better than targets.

Novo Nordisk’s commitment to social and environmental good practices extends throughout the supply chain. Suppliers are evaluated with respect to basic labour rights and environmental management. Due to the company’s expanding global production, new suppliers have been introduced to the company and its standards. To focus on key impacts, the triviality limit has been raised. During 2004 suppliers accounting for 20% of the total value of Novo Nordisk’s purchases were evaluated. Of these, 72% reported a satisfactory performance. All suppliers with an unsatisfactory rating receive a feedback letter from Novo Nordisk, and when needed an action plan is agreed upon. In 2004, nine key suppliers were audited, following similar processes as Novo Nordisk’s regular quality audits.

Access to health

Novo Nordisk has built its strategy for improved access to diabetes care on the World Health Organization’s (WHO) key priorities: national healthcare strategies, national healthcare capacity, best possible pricing and additional funding. Novo Nordisk serves around 20% of the global diabetes care market, supplying insulin to 11-13 million people. The global health programmes, providing awareness, education or treatment of diabetes, are reaching out to at least 21 million people. 

The best possible pricing scheme, offered by Novo Nordisk to 49 of the least developed countries in the world (LDCs), was monitored closely in 2004 to ensure that sales offers were followed up and realised purchase prices were at or below the level at 20% of average prices in the industrialised countries. As a result, 33 LDCs chose to buy insulin under this pricing scheme, as compared with 16 LDCs in 2003.

Our employees

Since 2003 efforts to improve health and safety have focused on prevention. As a result, the frequency of occupational injuries per million working hours has gone down; from 8.9 in 2002 to 5.6 in 2004. Regrettably, Novo Nordisk had one fatal accident in 2004 in connection with a social team event. Steps have been taken to ensure that employees’ safety is properly considered before embarking on such activities.

Employee turnover at Novo Nordisk was 7.3% in 2004, which is satisfactory compared to the industry.

Our use of animals

Novo Nordisk sets goals to reduce, refine and replace animal experiments and to improve animal welfare. Hence, despite a significantly higher research activity in early phases, when animal experimentation is required, the number of animals purchased in 2004 only rose by 10% to 47,311 animals, of which 96% are mice, transgenic mice and rats.

The goal to totally remove animal test types for biological product control by 2004 had to be postponed till 2005. An FDA approval, obtained in 2004, enables Novo Nordisk to considerably reduce (by approximately 80%) the number of animals used for biological product control in one of the two remaining tests. A 60% reduction in the use of rabbits has already been achieved by end 2004. A novel test for glucagon was fully implemented in the third quarter of 2004. The test uses isolated cells in vitro rather than living animals, and rabbits are therefore no longer used for this purpose.

Eco-efficiency and compliance

The 2003-2008 environmental strategy identified eight focus areas, of which climate change has key priority. Novo Nordisk has agreed to set the goal for absolute reductions of its net CO2 emission by 2014. The year 2004 will serve as the basis for evaluation of the target achievement.

In 2004, CO2 emissions were 253,000 tons. This is a significant increase from previous years. There are two reasons: First, the emission factors from electricity purchased in Denmark have increased by approximately 15%. Secondly, Novo Nordisk no longer purchases green electricity certificates for its site in Kalundborg. The company is currently investigating in detail the renewable energy market, product offerings and the possibilities to purchase credible certified electricity from renewable sources.

Eco-productivity is a means of measuring the ability to ‘produce more with less’. The medium-term targets are a 5% annual improvement in water efficiency and a 4% annual improvement in energy efficiency. In 2004 the achieved improvements were 7% and 8% respectively.

Compliance with regulatory requirements is a key indicator for the standards of environmental management at local production sites. In 2004, there were 76 breaches of regulatory limits, which is a marked improvement compared with 2003, with a record number at 105.

In 2004 there were 30 incidents of accidental releases, as compared with 20 in 2003. Immediate measures are taken to mitigate future events, including retraining of personnel. In August 2004, Novo Nordisk had two accidental releases of materials containing GMOs – genetically modified organisms - at the production site in Bagsværd. The affected areas were disinfected immediately, and no harm was done to humans or the environment.

However, since the goal remains to be zero breaches and zero accidental releases, this performance is not satisfactory. Steps are taken to improve compliance.

Economic contribution

The ‘footprint’ model provides an understanding of Novo Nordisk’s local and global contributions to society. In the reports from the largest production sites, the company’s contribution to socio-economic growth is assessed and quantified. This includes job creation, local taxes paid and local procurement.

Knowledge assets

Being a research driven and knowledge intensive company knowledge is considered a key asset for further exploration. Novo Nordisk takes a strategic and systematic approach, viewing knowledge from a holistic approach that seeks to balance three perspectives: behaviour/culture, technology/communication and performance economics.

To ensure progress and report on the knowledge base, knowledge assets are defined as stakeholder resources (employees, customers, relationships and partnerships) and structural resources (technology and processes).

Novo Nordisk’s exposure to patent expiry is significantly lower than that of industry peers. No major patents expire within a 5-year period. In 2004 Novo Nordisk had a total of 778 active patent families, as compared with 701 in 2003. Two key elements of the patent strategy are to raise patent awareness internally, through training and the appointment of ‘patent champions’ in the R&D organisation, and to improve the intellectual asset management. 
Being a research driven and knowledge intensive company knowledge is considered a key asset for further exploration. Novo Nordisk takes a strategic and systematic approach, viewing knowledge from a holistic approach that seeks to balance three perspectives: behaviour/culture, technology/communication and performance economics.

To ensure progress and report on the knowledge base, knowledge assets are defined as stakeholder resources (employees, customers, relationships and partnerships) and structural resources (technology and processes).

Novo Nordisk’s exposure to patent expiry is significantly lower than that of industry peers. No major patents expire within a 5-year period. In 2004 Novo Nordisk had a total of 778 active patent families, as compared with 701 in 2003. Two key elements of the patent strategy are to raise patent awareness internally, through training and the appointment of ‘patent champions’ in the R&D organisation, and to improve the intellectual asset management.