There is no doubt that climate change presents significant business risks in the short- and long-term. Novo Nordisk is committed to conducting business in a financially, environmentally and socially responsible way and climate change has global implications on all three dimensions. 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 total energy consumption decreased by 9% in 2008, which translates into an decrease in the energy-related emissions of CO2 from 236,000 tons in 2007 to 215,000 tons in 2008, corresponding to a 9% decrease. The decrease in CO2 was primarily due to decreased emissions from the production site in Kalundborg, as a result of changes in production, process optimisations as well as realisation of energy-saving projects. The annual CO2 emission is now close to the 2004 (210,000 tons) baseline year, only 2% above, and Novo Nordisk is confident that the ambitious 10% absolute reduction target will be met in 2014. This will as planned happen through a continued effort in the cLEAN® programme and secondly the highly prioritised energy-saving programme. This energy saving programme has until now resulted in an estimated 20,000 tons reduction in CO2 emission. Thirdly, green electricity from the offshore wind farm at Horns Rev II in Denmark will give substantial reductions, starting in the end of 2009.
Half of the energy saving projects the company has undertaken globally are expected to have a pay-back time of less than one year, and two thirds of all 2008 projects are expected to have a pay-back of less than three years. Nearly a quarter of the 112 energy saving projects the company undertook during the year required no upfront investment, only changes in facility management.
Outside of Denmark, the company’s Brazilian production facility in Montes Claros is now burning biomass instead of fuel oil for the steam production, thus being close to CO2 neutral, as the main energy supply is based on hydro power. Heavy fuel oil will be kept for back up to secure the steam production. This plant will eventually be the company’s biggest device filling facility, with more employees than any other Novo Nordisk production site.
Novo Nordisk has also succeeded in building significant energy and water efficiencies into the production facility currently under construction in China. This facility is expected to open in 2012.
Credit for much of the company’s progress in resource management is due to the hard work and diligence of energy stewards placed throughout the organisation. The stewards and other utility staff serve as a small army of eyes and ears within production facilities, looking for ways the company can improve.
Getting employees on board
Achieving the CO2 reduction target relies on communicating its importance to employees. Energy stewards are committed through training and annual seminars and broader awareness raising activities are also included in the communication effort.
In 2006, 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 Bagsværd, Denmark.
In 2008, an internal climate action campaign was launched under the voluntary employee programme TakeA ctio2n! recognising that it takes people to fight climate change. The campaign includes activities for employees around the world whether they want to make their team go green, reduce their travelling by car pooling, plant trees or other activities.
Making voices heard
Recognising the responsibility of business in tackling climate change, Novo Nordisk has joined the international climate dialogue initiative ‘Copenhagen Climate Council’ leading up to the UN Summit in 2009: The Copenhagen Climate Council seek to promote a broad global dialogue and build momentum for reaching an ambitious and binding treaty in Copenhagen.
Novo Nordisk has 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, 2007 and participated actively in the discussion at the first meeting in Geneva in October 2008.
Carbon Disclosure Project
The 6th 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 22 September 2008. The findings in the CDP6 are reported on behalf of 385 leading institutional investors representing more than US$57 trillion under management. Novo Nordisk has participated in the CDP all six years with good results. However, Novo Nordisk’s score in the 6th CDP report indicates that we have to secure a complete reporting according to the Green House Gas (GHG) Protocol, extending our reporting on emissions of CO2 to other sources than production.
Novo Nordisk’s approach
In 2003, Novo Nordisk began shaping its strategic response to climate change and in January 2006, Novo Nordisk joined the WWF Climate Savers Programme. The agreement between WWF and Novo Nordisk commits the company to restructure energy consumption from production sites so that the company’s total CO2 emissions by 2014 will be 10% less than in 2004.
The 10% absolute reduction target is voluntary and bold. In light of the projected significant growth in production capacity, the absolute target represents a relative reduction of approximately 65%. It requires that growth in production is decoupled from growth in energy consumption and calls for both incremental advances and radically innovative solutions. The reduction is achieved through three levers. Optimisation through the Novo Nordisk’s LEAN programme, cLEAN®, energy savings in production and conversion to renewable energy.
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.
Producing the diabetes active pharmaceutical ingredient in Novo Nordisk’s insulin products is a highly energy-intensive process which only takes place in Denmark together with the production of biopharmaceuticals and hormone products. In 2008, Danish production facilities accounted for 85% of the company’s total CO2 emissions from production. In May 2007, Novo Nordisk signed a partnership agreement with Danish energy supplier DONG Energy. Under the partnership Novo Nordisk pledges to convert all energy savings realised at its Danish production sites into the purchase of green electricity. The energy will be supplied from a new wind farm that DONG Energy is establishing in the North Sea. 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. Novo Nordisk is expected to purchase about a third of the total energy.
When the partnership was launched in 2007 the company’s objective was to use only green electricity for its Danish operations by 2014. Significant reductions in energy usage, even as sales and production have increased, mean that this goal will be achieved several years ahead of schedule.