Novo Nordisk A/S – Annual report – 31 December 2021
Novo Nordisk A/S – Annual report – 31 December 2021
Strategic Aspirations (extract)
Consolidated statements (extract)
Statement of Environmental, Social and Governance (ESG) performance
for the year ended 31 December
Notes to the consolidated ESG statement (extract)
Basis of preparation
General reporting standards and principles
Novo Nordisk’s annual reporting complies with the Danish Financial Statements Act. Sections 99a, 99b, 99d and 107d specify the requirements to report on the management of risks related to the environment, climate, human rights, labour and social conditions, anti-corruption, gender distribution and data ethics. These requirements are addressed in the Management Review. Novo Nordisk is also inspired by the International Integrated Reporting Framework and adheres to the AA1000AP (2018), which states that reporting must provide a complete, accurate, relevant and balanced picture of the organisation’s approach to and impact on stakeholders and society.
As recommended by the Task Force on Climate-related Financial Disclosures (TCFD), Novo Nordisk is working to integrate two climate change scenarios into the risk management process to identify short-, medium- and long-term risks within the production and supply chain:
– 2ºC scenario, consistent with meeting the Paris Agreement Goal (Representative Concentration Pathway RCP 2.6)
– 4ºC scenario as an alternative high-emission scenario (RCP 8.5)
Novo Nordisk discloses in accordance with the recommendations put forward by the Carbon Disclosure Project (CDP). For a full breakdown of climate and water impacts, please refer to the publicly available report on Novo Nordisk CDP disclosures.
Novo Nordisk applies AA1000AP (2018) as a component in creating a generally applicable approach to assessing and strengthening the credibility of the Group’s public reporting of ESG information. Novo Nordisk has designed processes to ensure that the qualitative and quantitative information that documents the ESG dimensions of performance is assured, as well as the systems that underpin the data and performance. The principles outlined in AA1000AP (2018) have been applied as described below.
As a pharmaceutical business with global reach, Novo Nordisk is committed to being accountable to those stakeholders who are impacted by the organisation. From the perspective of social responsibility, the key stakeholder groups are patients who rely on Novo Nordisk products, employees at Novo Nordisk and throughout the Group’s value chain, business partners and local communities. Novo Nordisk maps its stakeholders and has processes in place to ensure inclusion of stakeholder concerns and expectations.
When assessing whether a disclosure is material to include in the consolidated ESG statement, Management considers whether the matter is of such relevance and importance that it could substantively influence the assessment by providers of financial capital of Novo Nordisk’s ability to create value over the short-, medium- and long-term. This assessment builds on ongoing stakeholder engagement and trendspotting supplemented by data-driven analysis. The identified key issues are addressed by programmes or action plans with clear and measurable targets. The issues presented in the Annual Report are thus deemed to have a significant impact on the Group’s Environmental, Social and Governance performance and hereby the future business performance and may support stakeholders in their decision-making.
The Annual Report reflects how the company is managing operations in ways that consider and respond to stakeholder concerns and interests. The report reaches out to a wide range of stakeholders but is primarily prepared with investors in mind. To all Novo Nordisk stakeholders, the Annual Report is just one element of interaction and communication with the company.
Understanding, measuring and communicating the positive and negative impacts on society and the environment of Novo Nordisk’s activities is important and remains a priority for Novo Nordisk.
Principles of consolidation
The disclosures of energy consumption and CO2 emissions cover production sites, laboratories and offices. The disclosures of water consumption, environmental breaches and waste cover production sites.
The social and governance-related disclosures cover the Novo Nordisk Group, comprising Novo Nordisk A/S and entities controlled by Novo Nordisk A/S as applicable.
Accounting policies and changes hereto
The accounting policies set out in the notes have been applied consistently in the preparation of the consolidated ESG statement for all the years presented unless stated otherwise below.
The existing categorisation of CO2 emissions from operations and transportation has been supplemented with the categorisation into scope 1, 2, and 3 emissions to align with the Greenhouse Gas Protocol.
Gender in senior leadership positions (ratio men:women) has been added to the statement to reflect the aspirational target of 45:45 representation in senior leadership positions launched during 2021. The target of 45:45 representation leaves 10% flexibility while also allowing for non-binary gender definitions and those that may not wish to be categorised.
Sustainable employer score is replacing the previous disclosure of employee engagement in accordance with Novo Nordisk’s aspirations of becoming a sustainable employer. The sustainable employer score is based on the new employee survey and captures a multitude of dimensions related to employee well-being.
Company reputation is replacing the previous disclosure of company trust. A new and more comprehensive approach to reputational intelligence has been launched in 2021 to cover more markets and stakeholders. These insights are summarised in the company reputation score.
Finally, the categorisation of disclosures into Environment, Social and Governance as well as the sub-categorisation within each dimension has been changed for some metrics.
[Note: the detailed notes to the ESG statement have not been reproduced in this extract]