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Novo Group

The Novo Group, based in Denmark, is an international manufacturer of industrial enzymes and pharmaceuticals which sells its products in more than 100 countries. It has been producing environmental reports since 1993.

The group has production facilities not only in Denmark but also in the US, Brazil, China, Switzerland, France, South Africa and Japan.

Since a demerger in 2000, the group has had two operating subsidiaries. Novo Nordisk provides pharmaceutical products, including treatments for diabetes. A smaller sister company, Novozymes, supplies industrial enzymes for use in manufacturing, food production and livestock rearing.

Novo Nordisk employs around 14,000 people and had a turnover in 2000 of DKK 21M. Novozymes has a staff of around 3,000, and a turnover of DKK 5M.

Most of the group's products are manufactured by the fermentation in large tanks of micro-organisms. Most of them are genetically modified in order to increase yields.

The useful products are separated out, leaving behind large quantities of spent micro-organisms, nutrient residues and water. The most nutrient-rich part of the waste is turned into fertilizer, and the remaining liquid is treated in wastewater plants before being released into the aquatic environment.

Besides being energy and resource-intensive, Novo's manufacturing processes include several controversial and emotive practices, including the release of genetically modified micro-organisms (GMMs) into the environment and product testing on live animals. (More than 60,000 animals were purchased in 2000 for the purposes of product testing.) However, the group's philosophy is to promote openness about such issues.

'We must earn the trust of our stakeholders by engaging in an open and honest way,' says Novo's Environmental and Social Report 2000, published in March 2001. 'The innovative use of biotechnology has the potential to help solve human health, environmental and industrial problems, but we are also aware of the controversy surrounding it.'

In 2000, the group - which until that year had traded under the single corporate banner of Novo Nordisk - was one of four winners of the European Environmental Reporting Awards, in the category 'best sustainability report'. The Environmental and Social Report 1999 was singled out by the judges because of, among other things, its broad scope, its coverage of social responsibility issues, and the use of external verification to authenticate the data contained in the report.

Novo's corporate report for 2000 was published in March 2001, in the form of a 52-page document accompanied by supplementary information posted on the company's website. This two-pronged approach makes the task of gleaning information a little confusing, but Novo's intention is that the on-line format can be used to provide regular updates and more detailed sets of information.

In addition, the on-line version contains individual environmental and social reports from each of Novo's 12 largest production sites around the world.

The Environmental and Social Report 2000 has been compiled in accordance with the Global Reporting Initiative guidelines. A cross-reference table at the beginning of the report shows how each GRI reporting requirement is met by a particular section of the document.

Both energy and water consumption at Novo increased in 2000 compared with 1999. However, the corporate report stresses that the group's 'eco-performance index' (EPI) - the amount of resource needed to deliver a particular amount of product - has improved for both commodities: 17% for energy and 22% for water.

'Generally, EPIs for Novozymes and Novo Nordisk improved significantly in 2000 compared to 1999, basically due to the fine-tuning of environmental management systems,' says the report.

In 2000, Novo Nordisk decided to develop an ISO 14001 environmental management system for all its production sites.

Among the environmental targets that Novo has set itself for 2001/2002, as set out in the 2000 corporate report, are:

- A 5% increase in water eco-productivity;
- Progress towards phasing out antibiotic-resistant micro-organisms, which Novo admits 'could potentially be transferred to micro-organisms in the soil'.
- The development of new methods for reporting transport-related emissions; and
- The replacement of an intra-tracheal test on guinea pigs with a less intrusive intra-nasal test on mice.

On the social side of the balance sheet, the group has set itself a range of goals which include:

- Curbing occupational injuries;
- Carrying out pilot projects to begin taking into account social considerations when choosing suppliers and contractors;
- Promoting equal opportunities among the workforce; and
- Completing a study into the behavioural and psychological aspects of diabetes.

Novo Group readily admits that it has come a long way since its first environmental performance report, published in 1993. Significant milestones were reached in 1996, when the scope of the report was extended to include 'bioethics', and in 1998 when the company published its first social report. The 2000 report addresses social responsibility and environmental performance side by side, along with economic performance - the so-called triple bottom line (TBL).

To this end, one of the six key principles contained in Novo's Company Charter is: 'Company activities, practices and deliverables are perceived to be economically viable, environmentally sound and socially fair.'

Both Novo Nordisk and Novozymes are included in the Dow Jones Sustainability Group Index, which is designed to provide investors with an objective measure of TBL performance.

To illustrate the principle of TBL in practice, the Novo report presents a case study of the Novo Nordisk insulin plant in North Carolina, USA, which emphasizes the numerous interconnections between the factory, its workers, the local community and the environment. Efforts by the management to be a 'good neighbour' have included charitable donations, participation in community projects, and measures aimed at improving job satisfaction among the workforce.

In addition, a human rights study was undertaken at the Clayton plant, to investigate the scope for improvement in such areas as union representation, equal opportunities, and the right to privacy.

A significant development for Novo in 2000 was the commissioning of a new 'data warehouse', designed to make the compilation of environmental and social responsibility data more efficient.

Read more about: Corporate reporting, The triple bottom line
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