Climate change
Climate change will affect conditions for life anywhere on the globe, rich or poor. The good news, substantiated in the UN IPCC’s latest report from May 2007, is that it is possible to bring a halt to human-induced climate change, and there are solutions to be found.
There is no doubt that climate change presents significant business risks in the long term. As a global company that relies on energy-intensive production, Novo Nordisk recognises that preparing for a low-carbon future is critical risk-mitigation as well as an act of corporate responsibility for a sustainable future.
Novo Nordisk’s production is energy intensive. It is critical to reduce the company’s dependency on the availability and cost of fossil fuels. Being prepared for a carbon-constrained world is an act of due diligence. An early response to the climate change challenge is an act of leadership. Combining the two is sound business.
Performance in 2007
Novo Nordisk’s total energy consumption increased by 3% in 2007, which translates into an increase in the energy-related emissions of CO2 from 229,000 tons in 2006 to 236,000 tons in 2007, corresponding to a 3% increase. The increase in CO2 was primarily due to increased emissions from the production sites in Clayton, Kalundborg and Måløv. This was mainly due to increased energy consumption in combination with increases in CO2 emission factors for some external energy suppliers. Even though Novo Nordisk’s total CO2 emission increased, by 12% compared to the baseline year 2004, Novo Nordisk’s has implemented energy saving projects that have resulted in an estimated 12,000-ton reduction in the total CO2 emissions.
Assessments of performance against the company’s ambitious long-term target to reduce its CO2 emission by 10% over a 10-year period as part of the WWF Climate Savers Programme, indicate that performance is on track.
Novo Nordisk’s approach
In 2006 Novo Nordisk became a member of the World Wide Fund for Nature (WWF) Climate Savers programme, which invites leading global businesses to demonstrate that investing in reduction options can benefit the long-term health of the business.
Novo Nordisk’s climate strategy links to this agreement, according to which the company has set an ambitious target for the company’s CO2 emissions: To achieve a reduction of 10% by 2014 compared with 2004 emission levels. In this period the business is projected to grow significantly, and it will therefore be necessary to decouple production needs from energy consumption. In reality, the target therefore represents a reduction far greater than the 10% absolute reduction.
The three levers in Novo Nordisk’s climate strategy are optimisation through cLEAN®, energy savings in production and conversion to renewable energy. Novo Nordisk is looking into opportunities for renewable energy such as windmills, solar power and geothermal energy and is also negotiating with energy suppliers to persuade them to reduce the use of carbon-based fuels.
In May 2007 Novo Nordisk signed a partnership agreement with the Danish energy company DONG, which will help Novo Nordisk realise the CO2 reduction target. Under the partnership, which is the first of its kind, Novo Nordisk pledges until 2020 to convert all energy savings realised at its Danish production sites into the purchase of green electricity for these sites. The energy will be supplied from a new wind farm that DONG Energy is establishing at Horns Rev in Danish coastal waters.
With this agreement Novo Nordisk has devised a cost-neutral way to significantly achieve reductions in CO2 emissions and at the same time help build the market for renewable energy in Denmark. This is what makes the agreement unique: it is commercially viable, and that makes it a solution that both parties would like to see other companies adopt.
Novo Nordisk is expected to purchase about a third of the total energy produced by the wind farm once it is in operation in 2010. The aim is that by 2014 Novo Nordisk’s facilities in Denmark, which currently account for 85% of the company’s total CO2 emissions, will be powered entirely by wind energy. The partnership will run till 2020.
The ongoing cLEAN® programme – an adapted LEAN manufacturing programme to increase productivity – in Product Supply underpins the climate strategy and will positively affect the level of CO2 emissions. As a result of this programme Novo Nordisk will achieve lower energy consumption per produced unit. Significant progress has been made in identifying opportunities for energy savings at individual production sites.
Getting employees on board
Achieving the CO2 reduction target relies on communicating its importance to employees. In 2006, this effort kicked off when more than 1,800 employees and their families attended two showings of Al Gore’s film on climate change, “An Inconvenient Truth,” arranged by Novo Nordisk. This was accompanied by an exhibit on Climate Savers and a variety of educational activities for children. Local showings have been arranged in 2007. In March 2007, Al Gore made a motivational speech about climate change to 300 employees at Novo Nordisk headquarters in Bagsvard, Denmark.
Carbon Disclosure Project
The 5th Carbon Disclosure Project (CDP) report, a global survey of how the world's largest companies are responding to climate change, was launched in New York on 24 September 2007 with a key note speech by former President Bill Clinton. The findings in the CDP5 are reported on behalf of 315 investors with assets of $41 trillion. Novo Nordisk has participated in the CDP all five years with good results. For the first time in 2007, a Nordic CDP Report has been prepared and was launched in Copenhagen on 22 October.
Advocacy
In November 2009, world leaders will gather in Copenhagen to negotiate a global climate treaty for the coming decades. Recognising the responsibility of business in tackling climate change, Novo Nordisk has joined two international climate dialogue initiatives leading up to the UN Summit in 2009: The Copenhagen Climate Council and ’the Road to Copenhagen’. Both seek to promote a broad global dialogue and build momentum for reaching an ambitious and binding treaty in Copenhagen.
The Copenhagen Climate Council is an independent global initiative gathering business leaders from Europe, the Americas, Asia and Oceania and leading politicians, authorities and scientists to help achieve an effective global climate treaty.
Over the next two years, the Council will work on presenting positive, achievable and innovative solutions to climate change, as well as assess what will be required to make a new global treaty effective. The Council will seek to promote constructive dialogue between government and business in Europe, the United States and Asia up to the Copenhagen summit.
The Road to Copenhagen initiative is hosted by EU Vice President Margot Wallström, Gro Harlem Brundtland, UN Special Envoy on Climate Change and Mary Robinson, Vice President of Club of Madrid and member of Global Leadership for Climate Action.
The aim of the Road to Copenhagen is to give civil society and business a voice in the UN negotiation process via an interactive website and a communiqué on climate change. The communiqué will be presented next week to lead negotiators of the UN Climate Summit in Bali.
Debate and dialogue continues up till 2009 on the website.
Novo Nordisk also signed up to the United Nations-supported statement, ‘Caring for Climate: The Business Leadership Platform’, launched at the Global Compact Leaders Summit in Geneva in July. See more here and read the statement.
Finally, Novo Nordisk joined the group of global business leaders, alongside leading NGOs, in issuing a communiqué calling for the delegates at the meeting in Bali in December 2007, leading up to the Copenhagen Summit in November-December 2009, for new and longer-term policies and solutions to tackle climate change.
This initiative was led by the WWF and the Cambridge University Programme for Industry, and endorsed by the Prince of Wales.
The communiqué was announced in international media and presented directly to political leaders in Europe, the United States of America, Japan and other major economies, as well as directly to the United Nations Climate Change Conference in Bali.
Awards and recognitions
In 2007, Novo Nordisk’s climate strategy was recognised on several occasions, including:
- A rating as number 14 on CNBC European Business magazine’s list ranking the world’s top low-carbon pioneers. The list, published in the January/February 2007 issue of the magazine is the first of its kind, ranking businesses that have connected climate change to their bottom line and profited. Find out more here.
- A short-listing by the FT (Financial Times)/Citi Private Bank Environmental Award for the Greatest Improvement in Carbon Efficiency Achieved by a Large Enterprise, Europe for Novo Nordisk's Partnership with DONG Energy.
- Two prizes by the World Business in association with INSEAD for ‘Best Management and Sourcing of Energy and Best Sustainable Green Business’.
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.
