Report 2018

The Novozymes Report 2018

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Rethink Tomorrow
Report 2018

Materiality

Materiality and value chain assessment

Novozymes’ annual report is based on the concept of materiality, to ensure that the content is significant and relevant to readers.

Our 2018 materiality matrix

Our materiality matrix highlights the 16 most material financial and nonfinancial themes and acts as a guide for determining the topics we include in our annual disclosure. The illustration below is a snapshot of the upper-right quadrant of Novozymes’s materiality matrix and represents issues in the high material category only. A full list of all material topics can be found under "Disclosure on material issues".

 

In 2018, we studied relevant macrotrends and changes in the internal and external environment to understand the impact they have on our current materiality matrix. As a result of this process, we identified one new issue in the economic category: Trade policies. Changing global trade policies are impacting businesses all over the world. Therefore, it is important that we manage this issue to minimize the impact it may have on Novozymes’ business. All other issues remain unchanged. 

 

We also strengthened our assessment approach to determine which SDG goals and targets we could contribute to by addressing the material issues through our business. We now highlight material issues where we believe our actions and initiatives to address the issue can significantly contribute to specific SDG targets. For more details, see "Value chain assessment", which includes all our material issues.


Materiality matrix 2018

Importance to stakeholders
High
Impact on Novozymes
High
Corporate transparency & accountability Solid capital structure
Solid capital structure

Managing Novozymes’ ability to finance its operations and growth using different sources of funds

Corporate transparency & accountability Trade policies
Trade policies

Managing impacts of changing global trade policies on business

Agricultural productivity Profitable growth
Profitable growth

Managing organic sales growth that impacts company’s operating profits

Global partnerships for sustainable development Climate change & energy
Climate change & energy

Addressing risks and opportunities due to climate change, reducing GHG footprint in value chain, increasing energy efficiency and share of renewable energy

SDG 7 (Targets 7.A, 7.2, 7.3), SDG 13 (Target 13.2)

Energy security & efficiency Water
Water

Addressing risks and opportunities associated with water availability and waste water discharge across the value chain

SDG 6 (Targets 6.3, 6.4), SDG 8 (Target 8.4), SDG 14 (Target 14.1)

Product safety & stewardship Bioethics & biodiversity
Bioethics & biodiversity

Adoption of ethical, science-based regulation for processes and products involving gene technology. Includes aspects like responsible use of Gene technology, bio-diversity rights and conservation and access and benefit sharing

SDG 15 (Target 15.6)

Water management Product stewardship
Product stewardship

Taking responsible ownership of products to minimize adverse impacts. Includes product design, safety and handling and social and environmental impacts over life cycle

Stronger environmental protection regulations Occupational health & safety
Occupational health & safety

All policies, procedures and initiatives to ensure safe, healthy and incident-free working environment for all

SDG 8 (Target 8.8)

Consumer perception of bioinnovation Labor practices & human rights
Labor practices & human rights

Promoting fair labor practices, decent working conditions and respect for human rights including talent management and employee retention

SDG 4 (Target 4.7), SDG 5 (Target 5.5), SDG 8 (Target 8.5, 8.7, 8.8)

Consumer perception of bioinnovation Community engagement & social investment
Community engagement & social investment

Creating value for society through engagement and investment programs

SDG 4 (Target 4.7)

Consumer perception of bioinnovation Corporate governance
Corporate governance

Implementing mechanisms, policies and procedures that control and direct Novozymes’ way of running business and operations

Consumer perception of bioinnovation Business ethics
Business ethics

Implementing mechanisms and processes that govern issues like corruption and bribery, anti-competitive practices, fraud and general code of conduct for day-to-day operations

Consumer perception of bioinnovation Compliance
Compliance

Complying with relevant legal, financial, governance, environmental and social regulations in all operating regions

Consumer perception of bioinnovation Responsible sourcing
Responsible sourcing

Ensuring sustainable supply chains by taking into account social and environmental considerations in addition to quality and economical aspects

Consumer perception of bioinnovation Innovation
Innovation

Developing novel products and optimizing processes to meet global challenges

SDG 9 (Target 9.4)

Consumer perception of bioinnovation Partnerships & customer engagement
Partnerships & customer engagement

Developing partnerships with stakeholders (customers, government and academia) for continued business growth and maximizing sustainable impact

SDG 17 (Targets 17.14, 17.17)

Issue category

  • Economic
  • Environmental
  • Governance
  • Social
  • All

Corporate focus areas

  • Target/flagship initiatives
  • Contributes to SDG target(s)

Our approach to materiality

Novozymes’ materiality assessment is a systematic and rigorous process that integrates inputs from trend analysis and external stakeholders. It also involves internal engagement with relevant functions, including leaders from our business divisions, Investor Relations, Risk Management & Controls, Public Affairs and Corporate Sustainability. This process results in the identification of 1) key relevant macrotrends and 2) material economic and environmental, social and governance (ESG) issues, which are illustrated through a materiality matrix.

 

Materiality assessment

Novozymes conducts a comprehensive materiality assessment every two to three years to identify current issues material to our stakeholders and our business. This comprises a review of the assessment methodology, detailed desktop research to identify the latest trends and ESG issues, and active and extensive stakeholder engagement. Between assessments, we conduct annual materiality refreshes, where we review our existing material issues for their relevance and importance to Novozymes and our stakeholders by means of evidence-based research and analysis of stakeholder opinion through proxy sources.

 

 
Our materiality assessment process:

  • Identification: We compile a comprehensive list of relevant trends and ESG issues by studying expert reports on global trends (Global Risk Report by the World Economic Forum, State of Green Business by Greenbiz, etc.), investor and customer questionnaires and peer analyses

 

  • Prioritization: We engage in dialogue with relevant internal stakeholders from different functions, including Investor Relations, Corporate Sustainability, Corporate Strategy, Public Affairs, Risk Management and business divisions, to prioritize trends and ESG issues and understand how they evolve every year

 

  • Validation: We compare the trends and ESG issues that come up in Prioritization with priority themes highlighted by key ESG rating agencies and recalibrate those with relevant stakeholders, including leaders from different functions. This results in a final list of material issues that go into our materiality matrix

 

  • Disclosure: We disclose our performance in relation to key material issues in our annual report. The primary audience for these assessments and disclosures is Novozymes’ investors, customers and employees

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