Environmental management

Ensuring environmental sustainability is one of the global challenges addressed by the UN Millennium Development Goals. Loss of environmental resources not only upsets the ecological balance of the Earth, but also has a huge impact on human lives. In addition, the unequal access to environmental resources means that in some parts of the world economic growth is hindered by the lack of e.g. clean drinking water, whereas in other parts of the world the abundance of and access to energy is accelerating the depletion of fossil fuels.

Governments and intergovernmental organisations such as the United Nation (UN) recognise the urgency of this issue and seek to promote the integration of the principles of sustainable development into national and regional policy programmes. Legislation and policy instruments such as taxation and regulation aim to curb or even reverse the loss of environmental resources, but not even these initiatives fully factor in the environmental costs and the potentially negative impacts on human lives in the long term. The business community has a key role to play if we are to achieve more sustainable growth.

Environmental issues such as global warming and climate change, ozone layer depletion, use of freshwater and fossil fuels, and waste generation call for collaborative efforts and responsible action. As corporate citizens, businesses, like other actors in society, have a responsibility to contribute to environmental sustainability, and – being in many cases not only highly dependant on access to environmental resources but also heavy users of resources such as energy, water and chemicals – companies must support efforts to decouple environmental impacts from economic growth. As the sphere of influence of companies expands, so does their sphere of responsibility in the eyes of the global community and the societies in which they operate.

Environmental management is much more than good housekeeping; increasingly, it extends beyond the factory gates and comprises the whole supply chain.

Novo Nordisk's approach

Novo Nordisk is committed to ‘strive to conduct its activities in a financially, environmentally and socially responsible way’. Environmental responsibility implies working to continuously improve the company's environmental performance by setting high objectives and integrating environmental considerations into daily business activities. To ensure that environmental priorities are attuned with stakeholders' and society's concerns and requirements, the company maintains an open dialogue with stakeholders, communicates its activities, and reports annually on its performance.

In this area, as in any other business undertaking, Novo Nordisk is an active player on the international agenda, e.g. through its membership of industry groups and through engagements in partnerships between industry, governments, communities and NGOs.

Novo Nordisk subscribes to the International Chamber of Commerce's Business Charter for Sustainable Development and is a supporter of the UN Global Compact and the UN Convention on Biological Diversity. In 2006 Novo Nordisk signed an agreement with WWF to become a member of the Climate Savers Programme and in 2007 we furthermore signed “Caring for Climate: The Business Leadership Platform” under the UN Global Compact and the “Bali Communiqué on Climate Change”.

Environmental policy

Novo Nordisk formulated its first environmental policy in the early 1980s. Since then it has been revisited several times but the core has remained the same over the years. The current environmental policy is stated below:

In Novo Nordisk we will continuously improve our environmental performance.

This means that we will:

promote environmental awareness and integrate environmental considerations into our business processes
develop and apply sustainable processes and products
reduce our use of resources and strive to prevent pollution
monitor and evaluate environmental performance throughout the entire supply chain
engage in stakeholder dialogue and partnerships and report on our performance
comply with environmental legislation and relevant requirements.

Environmental strategy

Novo Nordisk's environmental strategy and management system serve as robust tools that support the policy and the commitment to environmental responsibility. The strategy is reviewed to respond to emerging issues and proactively address societal and business challenges.

An Environment & Bioethics Committee, chaired by the EVP of Corporate Relations, is the company's highest authority with regard to environmental and bioethical issues. The committee works on behalf of Executive Management to ensure that:

Novo Nordisk's interests and needs regarding environmental and bioethical issues are met.
Novo Nordisk remains in compliance with the commitments spelled out in the Charter of the Novo Group.

In 2007, the Committee reviewed the environmental strategy in the light of Novo Nordisk business strategy developments and the commitments on corporate responsibility. The review resulted in the following corporate priorities:

Climate change
Environmental assessments in R&D
Transportation.

We are as an integral part of our strategic approach implementing certified environmental management systems according to the ISO 14001 standard at our production sites worldwide. The responsibility for this lies with the corporate environmental department, External Environment.

Environmental aspects and impacts of operational importance such as resource consumption, waste, other emissions and legal compliance are managed as part of the ongoing ISO 14001 activities in Product Supply.

Performance 2007

Novo Nordisk accounts for its environmental performance as part of its non-financial statements.

The consolidated environmental data in the Annual Report build on information from Novo Nordisk's production sites worldwide. In the interactive charts, all data can be extracted for comparison or further analysis from each of the production sites or at corporate level.

Key indicators of environmental performance can be found in the environmental footprint article. Below is an overview of the top-level key indicators for monitoring of Novo Nordisk's environmental performance as well as other strategic initiatives.

Top-level performance indicators

Eco Intensity Ratio (EIR) on water and energy

As of 2006 the Eco-Productivity Indicator (EPI) has been replaced by a new key performance indicator to measure water and energy efficiency relative to production. The new indicator Eco Intensity Ratio (EIR) is defined as: ‘EIR = Resource consumption per produced or released unit’.

By using the performance indicator 'EIR', the total performance measured for water and energy of a production facility or a business area, can be calculated by adding the EIR ratios in standard units from each process step or intermediary product in the process flow from e.g. fermentation to packaging of the finished product.

To ensure ongoing improved performance, EIR targets for water and energy are defined on an annual and long-term basis. The annual targets are used as milestones towards achievement of the long-term target. The annual EIR targets are implemented in the Balanced Scorecard for Novo Nordisk as well as in the bonus schemes for management.
EIR is reported in the Annual Report for the two business areas: Diabetes care and Biopharmaceuticals. The long-term EIR target for 2006–2010 is a 2% reduction in water and energy consumption relative to production on average per year.

In 2007, we have achieved the following EIR results:

Diabetes Care:

Note: MU = Mega unit.
The EIR targets for 2007 have been achieved for both water and energy with good margin. Furthermore, the EIR performance has improved from 2006 to 2007 by 6% for water and by 7% for energy independent of the development in product mix. This is despite the fact that the product mix is shifting towards insulin analogues which are more water- and energy-consuming than human insulin.

Biopharmaceuticals:

Note: API = Active Pharmaceutical Ingredients.

The EIR targets for 2007 have been achieved for both water and energy with good margin. Furthermore, the EIR performance has improved from 2006 to 2007 by 16% for water and by 14% for energy.

The EIR concept and the long-term targets were reviewed in 2007. The 2007 review will continue into 2008 and Novo Nordisk expects to either have a revised EIR methodology or a new indicator for reporting in 2009.

Compliance

Compliance with legal requirements is constantly a high priority for Novo Nordisk and preventive measures are beginning to show results. To reduce the number of breaches of regulatory limit values and accidental releases targeted prevention programmes were initiated in 2006 at our pilot and production facilities worldwide.

The long term objective is to have no breaches of regulatory limit values and no accidental releases. However, this is not realistic short term and the target for 2007 was thus to reduce the number of breaches and accidental releases to below the 2006 level. This target was achieved.

The number of breaches of regulatory limit values has decreased by 82% from 123 in 2006 to 22 in 2007. Out of the 22 breaches, 16 are related to pH in waste water, which are monitored through continuous measurements. The reason for this dramatic improvement is primarily due to amended reporting procedure, which has been accepted by the Danish environmental authorities, improved monitoring equipment for pH in waste water and the closure of an insulin purification plant in Bagsværd.

In the same period, the number of accidental releases has decreased by 22% from 135 in 2006 to 105 in 2007, of which 82 are releases to the atmosphere of cooling agents. This positive development is primarily due to increased focus on preventive measures to reduce the number of accidental releases. This includes risk assessment of our pilot and production facilities worldwide carried out during 2006 and 2007. A range of preventive measures were implemented during 2007 and this work will continue in 2008.

The accidental releases in 2007 comprise

89 releases to the atmosphere, of which 82 were due to leakage of cooling agents such as HCFC’s, HFC’s and ammonia. The environmental impact from the releases of cooling agents corresponds to an ozone layer-depleting potential of 201 kg CFC11 equivalents. In addition, the released amount of cooling agents have a global warming potential corresponding to 8.645 tons CO2 equivalents constituting 3.6% of Novo Nordisk’ total contribution to global warming.
11 releases to sewage systems, of which 8 incidents were due to accidental releases of acids, bases or waste water that was not sufficiently pH-neutralised. The remaining three incidents were caused by accidental releases of propylene glycol and ethanol which are readily biodegradable. All accidental releases to the sewage systems are treated in public waste water treatment plants before discharge to a water recipient and the environmental impact is thus insignificant. This is a significant improvement from 2006 where 29 accidental releases to sewage systems occurred.
5 releases to soil due to accidental releases of cooling water, acid, base, glycol and waste water. Where possible and necessary, corrective actions have been implemented to minimize the environmental impact. It is evaluated that the incidents have had no significant environmental impact. This is a significant improvement from 2006 where 12 accidental releases to soil occurred.

There were no accidental releases of GMOs in 2007.
Survey of compliance 2007

All of these incidents have been reported to the authorities and in all cases corrective actions have been implemented to limit the impact on the external environment and to prevent reoccurrence of similar incidents in the future.

Complaints

In 2007, we have received 6 complaints over nuisances from our production facilities, an increase from 2006 where only three complaints were received. The complaints concern noise from ventilation and construction work at two Danish sites.

Corrective actions have as far as possible been implemented to reduce the nuisance and minimize the risk of reoccurrence.

Other strategic initiatives

Climate strategy

In January 2006 Novo Nordisk adopted a climate strategy for the company worldwide. Also in 2006, Novo Nordisk signed an agreement with WWF to become a member of the Climate Savers programme. We have hereby committed to reducing the total CO2 emissions from our production sites in 2014 to 10% below the level in 2004. Implementation of the climate strategy was initiated already in 2005.

Waste strategy

In 2006, Novo Nordisk developed a waste strategy for the company’s production sites (Product Supply). The strategy covers the period 2006 – 2010 and focuses on two strategic principles:

a) Waste prevention – to reduce the amount and hazardousness of waste
b) Environmentally sound waste management – to reduce the environmental impacts of waste.

A number of initiatives have been and will be launched in the period 2006 – 2010 to implement the waste strategy.

ISO 14001 certification

All Novo Nordisk's production sites worldwide are to be certified according to the ISO 14001 standard. In 2008, all pilot plants in R&D will be ISO 14001 certified, and all production sites will furthermore be certified according to OHSAS 18001.

Survey of Novo Nordisk’s production sites and ISO 14004 status

* Our site in Algeria is not in included in the environmental reporting for 2007 since the site is not launching products to market yet.

Environmental investments and costs

Compared to 2006, environmental investments have decreased by 28.7 million Danish kroner from 47.8 million to 19.1 million. The main reason for the decrease is that the investments in the production capacity at site Kalundborg, Denmark was finalised in 2006, and that no new major investments were initiated in 2007. Environmental investments constitute 0.8% of the total investment in tangible assets, which is a decrease of 53 percentage points compared to 2006.

Environmental costs have decreased by 7.6 million Danish kroner from 218.8 million in 2006 to 211.2 million in 2007. This is mainly due to a decreased costs for handling solid waste, a decrease which can also been seen in the quantity of solid waste disposed of in 2007.

In 2007 the environmental costs constituted 2.2% of total production costs, 0.5% of sales and 2.4% of the operating income which are almost at the same level as in 2006.
The full data set for environmental costs and investments can be viewed here.

This page has been reviewed by PricewaterhouseCoopers as part of its assurance of Novo Nordisk’s non-financial reporting. Please refer to Audit and assurance for a full description of the conclusions and the nature of assurance offered.