Novo Nordisk CSR Content Analysis

Topics: Renewable energy, InnoMed PredTox, Corporate social responsibility Pages: 5 (918 words) Published: October 16, 2014
CSR Content Analysis on Novo Nordisk
Novo Nordisk is a global company based in Denmark operates in the pharmaceutical and healthcare industry. In pursuit of corporate sustainability, Novo Nordisk operates in accordance with the Triple Bottom Line principle which balances financial, social and environmental considerations. In 2013, 78.32% of Novo Nordisk’s total revenue was generated from diabetes care products, thus sustainability initiatives relevant to this core activity are important to the company. Three major initiatives are discussed below. 1. cLEAN

1.1 Importance
cLEAN is the LEAN manufacturing principles developed by Novo Nordisk. Due to the energy-intensive production of insulin products, potential lack of energy in the future resulted from climate change is a crucial risk to Novo Nordisk. It is important for the company to mitigate this risk so that the threat of inability to produce can be avoided. cLEAN enables the company to produce in a more energy-efficient way. By implementing this initiative, Novo Nordisk can reduce the energy consumed and carbon emissions as well as cut manufacturing cost, which benefits both the society and the company. 1.2 Assessment

The performance of this initiative can be assessed quantitatively via percentage of production cost to sales, energy consumption and carbon emissions. The figures in the following table indicate energy efficiency is improved in 2013 since the manufacturing cost contributed to finished goods was 0.34% less compared to that of 2012. However, energy consumption and relevant CO₂ emissions have increased as a result of increased production and new production facilities came into use in 2013.

COGS/Sales (%)
Energy consumption (1,000 GJ)
CO₂ emissions from energy consumption
(in 1,000 tons)
1.3 Recommendation
The company can report energy intensity according to G4 Specific Standard Disclosures to better reflect the effectiveness of cLEAN. Specific ratio dominator will make the figure less static and more meaningful. For instance, when new production facilities are used, energy intensity may be lower though energy consumption has increased. 2. PARTNERSHIP ON WIND POWER

2.1 Importance
In order to achieve the targeted 10% reduction in carbon emissions by 2014 in a cost-neutral way, Novo Nordisk signed a partnership agreement with Danish energy supplier DONG Energy in 2007. The agreement enables Novo Nordisk to convert energy savings from its Danish production facilities into the purchase of renewable energy certificates from DONG Energy’s wind farm. 2.2 Assessment

The performance of this initiative can be assessed by calculating the financial savings for the purchase of renewable energy certificates and comparing the reduction in CO₂ emissions from Danish production sites before and after the partnership. 2.3 Recommendation

However, due to the lack of regional data of those two indicators in 2012 and 2013 annual reports, it is difficult to determine the effectiveness of this initiative accurately based on aggregate data. Furthermore, as is addressed previously, the total carbon emissions are on the rise due to increased production and implementation of new equipment. 3. OH&S MANAGEMENT SYSTEM

3.1 Importance
The growth and expansion of Novo Nordisk entail a stable and competent base of employees. In order to attract employees and reduce staff turnover, Novo Nordisk implemented the Occupational Health & Safety (OH&S) Management System including global standards on relevant OH&S aspects, which is fully implemented throughout the company by 2013. Measures are taken not only to improve the physical working conditions but also to reduce the occupational injuries. 3.2 Assessment

The implementation OH&S Management System can be assessed quantitatively based on employee turnover, annual training costs per employee, frequency of occupational accidents. According to the...
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