Corporate sustainability
At Novo Nordisk, we refer to corporate sustainability as companies’ ability to sustain and develop their business in the long-term perspective, in harmony with society. This implies a more inclusive view of business and its role; one in which engagements with stakeholders are not just used to legitimise corporate decisions, but rather the foundation for how it conducts and grows its business. It is about innovation, opportunity and planning for the long term.
The Triple Bottom is the principle behind our way of doing business. The company’s Articles of Association state that it ‘strives to conduct its activities in a financially, environmentally and socially responsible way’. This is a commitment to sustainable development and balanced growth, and it has been built into corporate governance structures, management tools and methods of assessing and rewarding individuals’ performance.
Linked to our values
Corporate sustainability has evolved naturally from the values and principles that have guided the company since it was founded. The Novo Nordisk Way of Management is the framework for how we do business. It consists of three elements: the Vision, the Charter and a set of 13 global company policies in specific areas. Our vision states that we will make a successful business led by a strong set of values and respect for the communities of which we are a part.
The stakeholder dimension
Novo Nordisk needs to stay attuned to emerging trends and ‘hot issues’ on the global agenda in order to respond and to contribute to the debate. Stakeholder engagement is an integrated part of our business philosophy. We have long-standing engagements with stakeholders that are vital for building trust and understanding of a variety of issues. By involving stakeholders in the decision-making processes, decisions are better founded and solutions more likely to succeed. Stakeholders are defined as any individual or group that may affect or be affected by a company's activities.
Translating commitment to action
Corporate sustainability has made a meaningful difference to our business, and we believe it is a driver of our business success. This is best illustrated in three examples:
- Business ethics: Surveys indicate that ethical behaviour in business is today the number one driver of reputation for pharmaceutical companies. Any company that is not perceived by the public as behaving in an ethical manner is likely to lose business, and it takes a long time to regain trust. While the Novo Nordisk Way of Management is a strong guide to our behaviour, we decided we needed more detailed guidance in the area of business ethics. In 2005 we therefore framed a new business ethics policy, in line with universally accepted high standards, backed by a set of procedures. Since then we have trained managers and employees, held workshops and offered e-learning on the new policy. Read more here.
- Climate change: We need to act to put a brake to human-induced climate change. While the implications of climate change pose major business risks, there are also opportunities. We have partnered with the WWF in the Climate Savers programme and set an ambitious target to achieve a 10% reduction in our company’s CO2 emissions by 2014, compared with 2004 emission levels. This will occur through optimised production, energy savings, and greater use of renewable energy supplies. Read more here.
- The diabetes pandemic: Today, diabetes is recognised as a pandemic. Novo Nordisk responds to this major societal challenge by working in partnerships with many others to rally the attention of policy-makers and influencers to change diabetes. We have made a promise of Changing Diabetes® and have framed a strategy for inclusive access to diabetes care. We established the World Diabetes Foundation, and have made several initiatives to advocate for change and build evidence of diabetes developments. The National Changing Diabetes® programme and DAWN are examples of education and awareness programmes implemented by Novo Nordisk affiliates in their respective countries. Our Changing Diabetes® Bus that promotes Novo Nordisk’s global Changing Diabetes® activities, had reached 86,000 people by the end of 2007 during its world tour. Its primary goal is to support the UN Resolution on diabetes, which was passed in December 2006.
The business case
For Novo Nordisk, our commitment to corporate sustainability has always been based on values rather than making a direct return on financial bottom line. We do business this way because we think it is the right way to do business.
There is ample evidence that responsible business is good business. It can be measured in other ways than monetary terms, which eventually will translate to the financial profit and loss account. For instance, analysts have methods that aim to measure sustainability and shareholder value in financial terms. Assets such as brand management, human capital and carbon risk management can generate higher sales, lower costs and lower risk premiums and can therefore be measured as free cash flow and cost of capital. Read more here.
Corporate sustainability is an opportunities-driven approach, where being proactive, and engaging in partnerships and broader solutions, makes for a more successful business and a more responsible—and responsive—member of society in the long term.
In 2007 we began to explore more systematically the business case of the Triple Bottom Line. Taking the point of departure in Novo Nordisk’s successful business development in China, the intent is to identify what value-add is gained by taking a broader approach in the market.
This analysis will be conducted by Arthur D. Little and will be based on their recent report, Integrity + Innovation = Sustainable Performance. Key findings of the study will be made available here during the second quarter of 2008.
Below is a perspective from Arthur D. Little on Novo Nordisk:
“There remains considerable confusion in the business community as to what responsible business practice is and scepticism as to its value.
Through Arthur D. Little's work in assisting companies to interpret the changing social and environmental agendas, we have been able to identify the key elements of corporations who derive and deliver value through responsible business practice. These are:
- Integrity: consistently fulfilling their stated business principles as an integral part of their decision-making, rather than managing ‘responsibility' as an additional, somehow separate business activity.
- Innovation: finding successful new ways of value creation in response to the changing needs of markets, societies and the environment.
Based on our experiences and close involvement with Novo Nordisk over the past three years, it is our view that Novo Nordisk exemplifies and has pioneered responsible business practice through their core business activities. A recent workshop with Novo Nordisk identified over thirty specific innovative practices that the company has employed in China to translate corporate integrity into social, environmental and economic value for the firm and society. For example, Novo Nordisk's assistance to the Chinese Ministry of Health's National Diabetes programme including training of doctors and nurses.
Novo Nordisk continues in the pursuit of integrity and innovation to deliver sustainable performance and we have been privileged to support Novo Nordisk in this journey.”
