UNGC Communication on Progress 2016

Novozymes’ purpose, strategy and long-term targets, which were introduced in early 2015, integrate sustainability into the very core of its business, making it a key component of business strategies and management processes. For a description of how we manage sustainability, please visit Sustainability governance at Novozymes.com

Our materiality assessment is a systematic and rigorous process that integrates inputs from external stakeholders, trend analyses and internal engagement with relevant departments including Risk Management and Corporate Sustainability. See Materiality in Note 1 Basis of reporting in The Novozymes Report 2016 to learn more.

Increasing integration of trends and ESG topics made the discussion of material issues too abstract. In response to this challenge, Novozymes sought to increase the understanding of these and how they are relevant for various stakeholders. This resulted in two customized outputs: disclosure on key trends and disclosure on material ESG issues. This new approach received strong positive feedback from expert reviewers from the World Business Council for Sustainable Development (WBCSD). Going forward, Novozymes will continue to prioritize and deepen its understanding of externalities and leverage these data to inform decision-making.

Novozymes takes responsibility for its sustainability impacts across the value chain. Engaging with customers, suppliers and employees enables us to learn and improve performance – together. Novozymes engages with a broad range of stakeholders to develop its strategies, goals and policies. More information on this type of engagement can be found in Note 1 Basis of reporting in The Novozymes Report 2016.

Engaging with customers

Novozymes continues to be transparent to customers by disclosing information related to its labor practices, human rights, environment, sustainable procurement and business integrity. This disclosure takes place either in the form of responses to specific questionnaires or via multiple sustainability performance platforms to which many customers have access. One of these platforms is EcoVadis, on which we achieved gold recognition level and were ranked among the top 5% performers in 2016.

Other platforms include EcoDesk, CDP Supply Chain and the Supplier Ethical Data Exchange (SEDEX) platform, which makes site-specific sustainability data and audit reports accessible to customers. Customer disclosure requests help us to identify new sustainability requirements and trends early on, so that we can take a proactive approach. Novozymes was very proud to receive P&G’s 2016 External Business Partner of the Year Award for the seventh time. The award was given to Novozymes because of its innovation capabilities, sustainability leadership and operational excellence. Novozymes saw off competition from more than 50,000 business partners, suppliers and agencies that work with P&G every day. In fact, Novozymes won both the External Business Partner of the Year Award and the Excellence Award for 2016 for its consistent high-level operational performance.

Engaging with suppliers

In 2016, we continued to work with our suppliers to develop new partnerships and promote a sustainable working environment. We conducted a human rights impact assessment of our own operations and of our suppliers within direct sourcing. Read more in Progress on human rights below. Read more about responsible sourcing and supplier management in Note 8.6 Responsible sourcing in The Novozymes Report 2016.

Novozymes values its employees’ perspectives and engages with them frequently on sustainability matters. Training in sustainability is offered to new employees at major sites globally. Novozymes' annual employee survey "Peoples's Opinion" measures, among orther things, employee satisfaction and motivation as well as development of skills and competencies. Furthermore, Novozymes’ Touch values are embedded in individuals’ performance appraisals and bonus schemes. If any employee has a concern about any colleague's or manager’s adherence to the Touch values, grievance mechanisms are available in the form of a global and regional ombudsperson. Read more about grievance mechanisms at Novozymes.com

We are committed to integrating sustainability into our core business and believe in sharing our sustainability performance in the most transparent, accountable and responsible way. We communicate through a wide array of platforms, and this has been acknowledged by various sustainability indices, awards and recognitions.

COP peer review

In August 2016, Novozymes arranged a COP peer review session for the fourth time with peers from the UNGC Nordic Network: A.P. Møller - Mærsk and Novo Nordisk as well as Dutch Royal DSM. The group shared perspectives on better practices and challenges related to the Ten Principles of the UN Global Compact. Furthermore, the group had fruitful discussions concerning materiality and the SDGs. Moving forward, Novozymes will continue to engage in peer reviews of the COP to gain further insights into better reporting practices. Please visit Transparency and Accountability at Novozymes.com for more details about our sustainability disclosure and recognitions.

Educate

We have a long-term target of educating 1 million people about the potential of biology by 2020. This ambition builds on the legacy and best practices of our corporate citizenship program, Citizymes, which leveraged our core competencies within science and environmental responsibility. Our educational programs are tailored to the needs of the different communities we operate in and focus on improving scientific literacy and environmental awareness among future scientists and innovators. We engage learners from primary school up to university level and reached 106,000 learners in 2016, compared with 25,000 learners in 2015. In The Novozymes Report 2015, the number of learners reported correlated to the Citizymes program. In order to transition smoothly from Citizymes to EDUCATE, we have set up a working group and a steering committee.

The working group consists of representatives from R&D, Corporate Sustainability and all the regional sustainability managers. The working group interacts at regular intervals to share best practices, monitor progress and solve challenges. The steering committee is made up of senior management from R&D, the Global Head of Sustainability and Public Affairs, and regional presidents representing Brazil, China, India and North America. The steering committee meets quarterly to monitor progress and ensure the 2020 target will be met.

An overview of our EDUCATE projects across different regions is provided below.

Brazil

In 2016, we launched two mobile educational apps which are accessible on both tablets and smartphones and available in English, Spanish and Portuguese.

The basic aim of the project is to disseminate knowledge in a digital and interactive format, and educate young readers about biology, biotechnology and sustainability through specific SDGs. These educational apps were launched with SESI High Schools, a startup known as StoryMax and institutional support from the Regional Council of Biology of Paraná State.

China

There are four core programs running in this region: 

• “Biology catalyzes the beauty of life” is a program run in partnership with PMAC (Panorama PR & Resources Co. Ltd.). A “teach the teacher” approach is used to improve biology education in migrant schools

• “The Little Biologists” is a program run in partnership with DoltTogether. The organization reaches out to communities and schools to educate them about the application of biosolutions in daily life

• “The biology education innovation” project is run in partnership with ENACTUS. 40 university project teams teach biology in an innovative way to primary and secondary school students. We provide them with an educational package and financial support, and our employees act as tutors for some of the sessions

• “The biological environment classes” are run in partnership with Nature University, an environmental education NGO. The project aims to improve public awareness about environmental challenges and potential biological solutions

Denmark

Our outreach activities consist of a portfolio of activities where the overall purpose is to “create interest in natural science” and “foster natural science talents.” The activities take place in Denmark, where we sponsor and engage in learning activities such as the Young Scientist Competition, Geek Days, Guys’ Science Day and Girls’ Science Day. We also open our doors to around 600 high school students and teach them about enzymesImprovement in water and energy efficiency (and reduction of CO2 intensity) is measured by the reduction in an index that comprises resource use divided by gross profit, compared with the same index for 2014 efficiency levels. Consequently, these indexes measure Novozymes’ ability to create value while reducing its environmental footprint. as well as show them around our laboratories.

India

We are working with the Agastya International Foundation, an Indian education trust and nonprofit organization based in Bangalore. We are supporting the “Let’s investigate lab” at the Bio Discovery Center, around 120 km from Bangalore. The center is a space where children from nearby villages can experiment and build their understanding and knowledge of biology. Approximately 9,000 students visit the center every year. We are also supporting a sustainability education initiative in schools, known as Hand Print for Change, in partnership with the Centre for Environment Education (CEE). The project aims to enhance students’ understanding of sustainable development and integrate science and social science concepts through hands-on experience.

We have a portfolio of site-based educational activities that deliver impact in North America. Our sites in California, Nebraska, North Carolina and Virginia have devoted significant volunteer resources to community science festivals. In addition, many sites have made their facilities available to host teacher training workshops and invite students to engage directly with scientists and staff. Our site in Franklinton, North Carolina, is supporting two science-enrichment programs for elementary school students with the Morehead Science Center. Saskatoon, Canada, continues to support “Ag in the Classroom Saskatchewan” to reach students across the province. The project provides educational materials for schools on the study of agriculture.

As a leading bioinnovator, Novozymes seeks to engage in dialogue with a wide range of stakeholders about the role of biology and biotechnology in addressing some of the most pressing issues of our time. Novozymes is dedicated to ensuring transparency in this outreach.

Based on national and international laws and policy guidelines as well as on codes of conduct established by industry associations and national and international institutions, we present information and our positions to policymakers and other interested parties. We have Public Affairs offices in Copenhagen, Brussels, Washington, D.C., Brasilia, New Delhi and Beijing.Our employees are registered in dedicated registers as legally required in the US and in the Transparency Register in Brussels. No registers exist in the other locations. We reach out to government officials in the areas of renewable energy, bioinnovation, biotechnology and agriculture. Furthermore, we engage in efforts to retain production jobs and drive a thriving biotech knowledge and innovation community in Denmark.

Novozymes is committed to communicating in a respectful way. We engage in dialogue with a diverse range of stakeholders, including our peers, industry partners, academics, civil society and policymakers. In addition, we participate in industry associations and stakeholder organizations as well as in broader international and global business associations. We publish a comprehensive list of our global memberships at Novozymes.com and adhere to the codes of conduct of these organizations.

Lobbying expenditures

In 2016, Novozymes was a member of several global and local industry and other stakeholder associations. We also engaged with the media, governments, NGOs and international organizations. The total amount spent on these activities was approximately DKK 9.3 million. This figure excludes employee costs, travel, rental, media monitoring expenses and other related expenditure.

Novozymes does not make direct contributions to political parties.

Engaging with policymakers

In 2016, Novozymes engaged with stakeholders and policymakers on several platforms. Our focus was on topics concerning climate change and sustainable development. As a leading bioinnovator, we believe that it is our responsibility to share knowledge about the contribution biosolutions can make to these important global challenges.

G20 

Novozymes is a member of the International Chamber of Commerce (ICC), the G20 CEO Advisory Group and the Business 20 (B20). These groups work together to provide input for the work of the G20. President and CEO of Novozymes Peder Holk Nielsen has served as Vice Chair of the newly established B20 Energy, Climate and Resource Efficiency Taskforce since fall 2016.

BioRefining Alliance and promotion of advanced biofuels

In partnership with the Danish Agriculture & Food Council, DONG Energy and Haldor Topsøe, Novozymes is a founding member of the Danish BioRefining Alliance , which aims to foster political support to make Denmark a leader in tomorrow’s bioeconomy.

The BioRefining Alliance works to promote the use of advanced biofuels as a sustainable part of the energy mix going forward. In December 2016, following dedicated efforts by the BioRefining Alliance among others, the Danish Parliament adopted into law a binding blending mandate for advanced biofuels to constitute 0.9% of Danish energy consumption in transport.

The blending mandate enables Denmark to meet its EU obligation to ensure that 10% of energy consumption in the transport sector is derived from renewable energy sources by 2020. This underscores Denmark’s commitment to become a green growth economy – a commitment that makes the Danish government a key ally for Novozymes in garnering political support for green and sustainable technologies globally.

Working strategically with the Danish government globally 

As Denmark is a nation striving to lead by example in the effort to create a more sustainable future, the Danish government is an important partner for Novozymes in encouraging other governments and the global community to move toward policies and agreements that enable a market for green technologies.

Novozymes has a key account agreement with the Danish Trade Council, a governmental export and investment promotion organization under the Ministry of Foreign Affairs of Denmark, and collaborates with the Trade Council in key markets. Furthermore, Novozymes works with the Ministry of Foreign Affairs on its participation in international events, such as the United Nations General Assembly in New York City, US held in September 2016 and the COP22 climate meeting in Marrakech, Morocco, held in November 2016.

Novozymes strives to catalyze partnerships and collective action with diverse stakeholders from the private sector, governments, civil society and academia for a sustainable future.

World Business Council for Sustainable Development (WBCSD)

In 2016, Novozymes stepped up its involvement in the WBCSD’s Low Carbon Technology Partnerships initiative (LCTPi). We are one of the founding members of Below50, an initiative launched by WBCSD in partnership with RSB (Roundtable for Sustainable Biomaterials) and the United Nations SE4All (Bioenergy Accelerator) initiative under the Low Carbon Fuels workstream to promote low-carbon transport fuels. Read more in Issue-based and sector initiatives below. 

Novozymes is also a member of WBCSD’s Sustainable Lifestyles project, which seeks to understand the material footprints of consumer lifestyles globally with the aim of promoting sustainable and aspirational living. In 2016, representatives from Novozymes visited the ReNEWW House, a lab in Indiana, US, where innovative lifestyle solutions are tested to understand their potential for improving lifestyles. Through this initiative, Novozymes is seeking to develop partnerships and pursue collaborative opportunities with interested partners to design and develop innovative solutions that promote sustainable living.

International Chamber of Commerce (ICC)

ICC, the world’s leading business organization, has actively promoted sustainable business for more than 40 years and has official UN consultative status. Novozymes has played an ever-increasing and active leadership role across ICC country networks in recent years. In September 2016, CEO Peder Holk Nielsen, who was part of ICC’s CEO advisory group, participated in the G20 and B20 summit held in China. At the summit, world leaders focused on highlighting the role of sustainable development within global economic growth and called for commitments to achieve progress on the UN SDGs. Furthermore, Peder Holk Nielsen will be co-chairing the priority themes of energy, climate and resource efficiency at the 2017 B20 summit. 

Novozymes also increased its involvement with ICC’s US affiliate, the the United States Council for International Business (USCIB), joining its Board of Trustees and the Board of the USCIB Foundation. In September 2016, Novozymes participated in a strategic dialogue on “The Private Sector’s Role in Achieving the SDGs” during the Concordia Summit in New York City, US supported by the USCIB. President and CEO of Novozymes Peder Holk Nielsen participated in this high-level discussion, along with USCIB President and CEO Peter Robinson and ICC Secretary General John Danilovich. At this session, leaders from across sectors and industries examined the role businesses should play in providing technical know-how and fostering the spirit of innovation needed to meet the SDGs outlined by the United Nations.

Partnership with DONG Energy

In 2016, Novozymes signed a new agreement with DONG Energy, Denmark, whereby Novozymes will supply enzymes for DONG’s upcoming REnescience plant, the world’s first full-scale biorefining plant turning household waste into biogas, electricity and fuel. The plant is located in Northwich, UK, and is expected to be operational by early 2017.

The REnescience plant will be capable of sorting 15 tons of waste per hour, or 120,000 tons per year. This corresponds to the annual waste produced by almost 110,000 UK households. REnescience is a safe, reliable technology which has been working since 2009 at a demonstration plant in Copenhagen, Denmark. Using enzymes, the technology is able to convert unsorted household waste into biogas, recyclable plastics and metals. Going forward, Novozymes and DONG Energy will further develop the enzymes for the technology together.

Novozymes’ regional subsidiaries are active members of the UN Global Compact’s local networks in Brazil, China, India, the Nordic region and the US. Furthermore, regional subsidiaries engage in relevant local working groups and arrangements to further UN goals. 

Brazil

Novozymes is a member of the UN Global Compact Network Brazil and has representatives on its board. We also actively participate in two working groups: Food & Agriculture and Climate & Energy. In 2016, the world’s first private sector food and agriculture business principle, a guide to enabling a common ground methodology for meeting the SDGs goals, was launched in Brazil. Novozymes was a sponsor and contributed to the dissemination of best practices. In addition, we volunteered to assist companies in embracing a set of commitments that will be evaluated in terms of progress annually. We continued to actively support the Brazilian Association of Industrial Biotechnology (ABBI), created in 2014, and participated in a number of thematic groups on joint objectives to promote the progress of the bioenergyBioenergy comes in the form of liquid fuels, electricity, heat and steam, and is produced from primary crops or biomass such as sugarcane, grains, agricultural residues, algae and household waste. In liquid forms, it is typically used to replace gasoline and diesel in transportation. platform worldwide. Novozymes also engages in public policy debates on renewable energy, climate change, biodiversity access, intellectual property rights, science, technology and innovation in Brazil. The organizations with which we engaged include the Brazilian Network of Biodiversity and Forests, led by the Brazilian Industry Confederation (CNI), the Brazilian Association of Industry and Trade of Food Ingredients and Additives (ABIAM), the Brazilian Association of Cleaning Industry and Related Products (ABIPLA) and the Biotechnology Innovation Organization´s Latin America Working Group BIO.

China

In 2016, the regional president of Novozymes APAC was elected as a board member of the Global Compact Network China. The regional president is actively involved in reviewing annual working plans and supporting the implementation of initiatives run by the network. Novozymes was recognized by the UN Global Compact China as a pioneer company for achieving the UN Sustainable Development Goals (SDGs). Only 16 companies were awarded the recognition out of 300 local and multinational companies in China. In March 2016, we attended one of the discussions of Renewable Electricity 100 (RE100), a global initiative by The Climate Group in partnership with CDP. RE 100 is a collaborative initiative of influential businesses committed to using 100% renewable electricity. In September 2016, we participated in the CSR Asia Summit 2016 in Hong Kong. The summit was attended by government officials and business leaders. The objective of the summit was to network and identify sustainable solutions to current pressing challenges. We participated in the panel discussion on “Operationalizing the SDGs."

Denmark

Novozymes actively seeks stakeholder feedback on its annual reporting via a UNGC COP peer review together with other LEAD members. In 2016, we hosted a peer review and shared feedback with peers including Novo Nordisk, A.P. Møller - Mærsk and Royal DSM.

India

Novozymes was a Sustainable Development Goals (SDG) research partner at the 11th National Convention on Sustainable Development Goals in India in March 2016. The event was the first such dedicated program on SDGs in India and was attended by government officials and leading business thought leaders. In 2016, we continued to act as a convener of the Sustainability Alliance Partners platform, which promotes the environmental principles of the UN Global Compact. The group agreed that the Global Compact Network of India will map companies’ activities in relation to SDGs for the benefit of its members. We also participated in one of the leading sustainability events in India, the 11th Sustainability Summit, organized by the Confederation of India Industry (CII) and the ITC Centre of Excellence for Sustainable Development. The summit was attended by distinguished speakers and thought leaders from across the globe, captains of industry, international CEOs and policymakers. The discussions touched on important topics such as biodiversity, climate change, energy, food security, health, infrastructure, water and sanitation. In August 2016, we participated in a National Summit organized by the Ministry of Petroleum on World Biofuels Day. One of the highlights of the event was the government communicating its willingness to provide a conducive policy environment to support the development of biofuels. Furthermore, the government indicated that it is against the idea of importing any first-generation fuels available on the global markets. Furthermore, we interacted with different divisions of the Ministry of Transport during the year. The discussions were constructive and revolved around the major challenge of reducing carbon emissions as well as the government’s efforts to encourage the development and adoption of biofuels for public transport.

North America

Novozymes continued to support the UN’s efforts to promote the SDGs in the private sector. In 2016, Novozymes elevated the SDGs at a number of prominent events, including:

• Global Compact Network USA Symposium on “Sustainable Development Goals and the Private Sector”

• US Chamber and Commerce Foundation’s Sustainability Forum on “Mainstreaming the Circular Economy” and

• Sustainable Brands Conference San Diego on “Aligning the UN Sustainable Development Goals with Brand Strategy.” 

Novozymes supports a number of organizations leading sustainability improvements in industry. In 2016, we joined the Green Chemistry and Commerce Council, a cross-sectoral, business-to-business network of companies and other organizations working to accelerate green chemistry across sectors and supply chains.

Novozymes continued to support the efforts made in the US by The Sustainability Consortium (TSC) and the American Cleaning Institute (ACI) to promote cold water washing on university campuses. As part of these efforts, a pilot campaign encouraging sustainable washing practices was also launched at NC State University, North Carolina.

Caring for Climate

Post-COP21, Novozymes welcomed the Paris Agreement and reiterated its enduring commitment to climate change action. As part of this commitment, Novozymes has endorsed and taken action on the UN Global Compact Business Leadership Criteria for Carbon Pricing.

Criterion 1: Set an internal price for carbon high enough to materially affect investment decisions to drive down greenhouse gas emissions

In 2015, Novozymes set an internal carbon price to drive decarbonization in its operations and prepare for a future where external carbon pricing is the norm. In 2016, Novozymes adopted a shadow price on its direct and indirect carbon emissions, used when evaluating its global portfolio of operational eco-efficiency projects. The internal price provides a standard way of quantifying and visualizing the climate benefits of one efficiency project over another and helps to prioritize investments in regions where the carbon footprint is larger (i.e., Asia-Pacific and the Americas). For Novozymes, the adoption of an internal carbon price has provided the company with an additional tool to maintain its strong commitment to climate leadership and help achieve its ambitious carbon intensity target.

Criterion 2: Publicly advocate the importance of carbon pricing through policy mechanisms that take into account country-specific economies and policy contexts

Novozymes attended the COP22 in Morocco. The objective of the meeting was to engage in an interactive dialogue to accelerate climate action at country level and identify pathways for transformation to realize the below 2°C trajectory in local markets everywhere.In addition to participating in the UN Global Compact Caring for Climate event, Novozymes’ Head of Corporate Sustainability was one of the panelists at the International Chamber of Commerce press conference as part of COP22. The key objective of the conference was to present views from business on policies that can create incentives to scale up solutions quicker and on the role of the private sector in implementing the Paris Agreement. Novozymes’ Head of Corporate Sustainability was also a speaker at the event “The Past and the Future of Climate and Sustainability” as part of COP22. The event focused on how the SDG agenda fits with Novozymes’ strategy.

Criterion 3: Communicate on progress over time on the above two criteria in public corporate reports

We have been reporting on our progress in meeting the business leadership criteria through different channels, such as our integrated annual report and our disclosure to the CDP platform. In 2016, we achieved leadership level A in the CDP Climate Change Program for our efforts toward climate change mitigation.

Sustainable Energy For All

The UN Sustainable Energy For All (SE4All) initiative aims to double the use of renewable energy by 2030 in support of the UN Sustainable Development Goals (SDGs). In 2015, Novozymes started the Sustainable Energy For All Sustainable Bioenergy Accelerator, which is a global partnership with the UN Food and Agriculture Organization (FAO), Roundtable on Sustainable Biomaterials (RSB) and other international organizations working to accelerate the use of bioenergy for power and fuel. Novozymes continues to support the work of the Sustainable Bioenergy Accelerator. Some of the Accelerator’s achievements are detailed below:

Halve emissions: Through the below50 initiative, Novozymes and other organizations are developing the renewable fuel market and working to get more companies to choose sustainable fuel. Any company that produces, uses or invests in sustainable fuels which emit at least 50% less CO₂ emissions than traditional fossil fuels can join below50. The initiative seeks to grow markets for low-carbon fuels through B2B connections that link demand from consumer-facing businesses with fleets of vehicles and planes to fuel suppliers. In 2017, below50 will host technology roadshows and investment dialogues in Australia, Brazil, China and India to highlight the potential for low-carbon fuels to benefit these countries.

Markets for farmers: Small-scale farmers typically live in developing countries and are vulnerable to land, water and biodiversity loss, climate change and food insecurity. They often lack financing and the technology to boost crop yields, besides which they have poor access to markets for selling their produce. Many of them want to produce more biomassOrganic material, predominantly plants or plant residues. as a way of earning more and being part of the wider economy. The Smallholder Certification Project, led by the Roundtable on Sustainable Biomaterials (RSB), has established projects in South Africa and Brazil to promote sustainable practices and determine what prevents small farmers from accessing markets.

Powering Africa: Bringing sustainable energy to African countries is vital in order to achieve SE4All’s objectives. The Sustainable Bioenergy Accelerator has created SusInc., which is a Nairobi-based (Kenya) project that seeks to boost the realization of potential biomass-to-power projects by creating “bankable” propositions and investor engagement. SusInc. is already working with five sustainable bioenergy projects in East Africa. These projects promote the use of agricultural residues to produce electricity in rural off-grid areas in Kenya and Ethiopia.