Our response to the Task Force on Climate-related Financial Disclosures (TCFD)

The industry-led Task Force on Climate-related Financial Disclosures (TCFD) establishes recommendations for disclosing clear, comparable and consistent information about the risks and opportunities presented by climate change. It is expected to help companies better demonstrate responsibility and foresight in how they consider climate change issues, with the intent to lead to smarter, more efficient allocation of capital and facilitate the transition towards a more sustainable, low-carbon economy.

Novo Nordisk believes that decision-useful climate-related information in mainstream reports is needed more than ever. The TCFD recommendations fit well into our commitment to conduct business in a financially, environmentally and socially responsible way. We believe the TCFD recommendations will assure investors that Novo Nordisk takes climate change seriously and works proactively to understand the risks and opportunities to our business related to climate change.

We will take a step-wise approach to incorporate climate-related disclosures as per the TCFD recommendations into our Annual Report; Below is a summary of how Novo Nordisk addresses the risks related to climate change.

Governance

• The Novo Nordisk Environmental Strategy is approved by Executive Management and covers the entire organisation. The Environmental Strategy deals directly with climate issues, including GHG emissions from production and the supply chain and water use.
• The Environmental Steering Group, chaired by the CEO, meets three times a year to monitor and oversee progress towards 2030. This steering group includes members from Executive Management and provides support on an ad-hoc basis.
  
• An annual sustainability review is presented to Executive Management to communicate progress towards sustainability objectives, including environment and climate.
  
• Novo Nordisk has a publicly available Position on Climate Change and has committed to following the Paris Agreement by setting targets consistent with the 2 degrees pathway.
  
• The Corporate Environmental Strategy department is responsible for the implementation of the strategy and the environmental policy. In addition, a dedicated department is responsible for managing environmental issues related to global production.

Strategy

• All decisions at Novo Nordisk are driven by the Triple Bottom Line (TBL) business principle: a commitment to do business in a way that is financially, environmentally and socially responsibility. The TBL principle is anchored in the Novo Nordisk Articles of Association and the Novo Nordisk Way.
• Risk assessments are conducted for Novo Nordisk’s own production and suppliers to understand potential risks related to climate change.
• Further risk assessments and scenario analyses will be conducted to analyse the impact of climate change on our supply chain and manufacturing.

Risk Management

• Novo Nordisk’s risk management process is governed by Executive Management and is designed to ensure that key business risks are effectively identified, assessed and mitigated so that they do not affect the company’s ability to achieve its business objectives.
• Climate-related risks are identified and assessed through the risk management system. So far, neither the short-term nor the medium-term risk of climate change at company level has been material/critical in terms of potential direct impacts. The risks have therefore been identified, assessed and mitigated through individual departments or business units.
• For the upstream production and sourcing of components Novo Nordisk performs an annual risk assessment of all active direct spend items and vendor combinations on the approved supplier list. The assessment includes likelihood of disruption paired with financial implications. The risk assessment serves to provide input for risk mitigation in sourcing categories, and consequently prioritise actions to prevent or minimise the impact of supply disruptions on manufacturing. The assessment includes a natural hazards risk rating of supplier locations, provided by external insurance companies. The risk rating is related to various parameters, including flooding, earthquake, wind speed, tornado, hail storm, and lightning.