Novo Nordisk publishes environmental profit and loss account
17 February 2014
Novo Nordisk has become the first pharmaceutical company in the world to publish an environmental profit and loss account so that it can further integrate sustainability into its core business. The EP&L was developed in partnership with natural capital analysts Trucost, NIRAS and 2.-0 LCA consultants.
Novo Nordisk, which is best known for making insulin to treat diabetes, has a well-established sustainability strategy through which it measures, manages and reports its environmental impacts. The EP&L takes this to the next level by putting a financial value on these impacts so that their significance can be easily understood and managed alongside other business issues.
Trucost’s analysis shows that the environmental impacts of Novo Nordisk’s business cost €223m in 2011. However, Novo Nordisk’s own operations were responsible for only 13% of these costs. Three quarters came from supply chain impacts such as greenhouse gases released from agricultural production of maize to make glucose, the main ingredient in insulin.
A significant benefit of the EP&L approach is that it provides a single metric to compare the relative scale of all environmental impacts across company operations, supply chains and product portfolios. The results of the EP&L will be used by Novo Nordisk to ensure its sustainability strategy is focused on the most costly environmental ‘hotspots’ in its business enabling the company to reduce operational and supply chain risks from volatile energy and raw materials prices, natural resource scarcity and regulatory costs.
The EP&L was commissioned by the Danish environment protection agency in response to PUMA’s call for contributions to develop the EP&L methodology. PUMA, the global sportswear brand, published the first-ever EP&L also powered by Trucost’s analysis. Other partners in the project were NIRAS and 2.-0 LCA consultants.
Susanne Stormer, vice president for corporate sustainability at Novo Nordisk, said: “We have learned a lot from calculating the EP&L for Novo Nordisk. It has given the organisation valuable insights into the value of the externalities related to purchases in our supply chain and use at our production sites. We look forward to the continued deliberation on how the EP&L methodology can be used to inform decision-making."
Richard Mattison, chief executive, Trucost, said: “Novo Nordisk has shown that companies increasingly understand that creating long-term financial value depends on conserving and enhancing natural capital. Incorporating an EP&L into financial accounting provides a clear view of environmental risks and opportunities in a way that everyone in a company, from board members and financial managers to supply chain managers and product decision makers, can understand and act on.”
DOWNLOAD Novo Nordisk's Environmental Profit and Loss Account
Trucost: James Richens, research editor, +44 (0)20 7160 9804, firstname.lastname@example.org
Novo Nordisk: Media office, +45 4444 8888, email@example.com