BUS604: Innovation and Sustainability

Novozymes is a biotechnology company and the world's largest manufacturer of biological solutions for industry. Novozymes produces a wide range of industrial enzymes and microorganisms applied in more than 30 different industries ranging from textile, leather, pulp & paper, laundry to food, feed, and agriculture. 

Novozymes' biological solutions improve industrial products and manufacturing processes by saving energy, water, and raw materials, while reducing chemical use, waste generation, and emissions. 

Being a responsible company, operating with respect for the environment, people and society has been part of Novozymes' DNA throughout the company's history and the company has benefitted from its sustainability leadership in many ways. These include employee motivation, attraction, and retention, customer and investor recognitions, goodwill from policy makers and NGOs, storytelling, and branding. 

Novozymes was formed as an independent company by a demerger from the pharmaceutical company Novo Nordisk in 2000 and has since then had three business strategy periods, where sustainability has been used in three different ways as illustrated in Figure 2. 

In Novozymes' first business strategy period (2000-2008), sustainability activities were primarily focused on controlling operational and supply chain risks, reducing costs, increasing transparency and reporting. Sustainability leadership recognitions in those years primarily came from making award-winning integrated reports on financial, environmental, and social performance. 

In the second business strategy period (2009-2014), Novozymes' sustainability focus shifted from supply chain and operations to products and customers. Product life cycle assessments (LCAs) were conducted in collaboration with customers to document the sustainability benefits generated by Novozymes solutions - which customers could use in their marketing activities. LCAs also formed the basis for corporate storytelling and communication about the potential of Novozymes' technologies and for dialogues with investors, policy makers and NGOs. Sustainability leadership recognitions came from the ability to integrate the sustainability-related value proposition within different business functions, and support them in their efforts to add value to customers and other key stakeholders. 

In the third business strategy period (2015-2020), where Novozymes' current Purpose was launched, business and sustainability ambitions effectively merged and became one at the highest level. The opportunity and challenge within this strategy period is to bring sustainability insights into the process of setting priorities for innovation and business development, and thereby use sustainability insights to set direction for the business, as opposed to just following and supporting the business. 

Succeeding with this strategy will require a much stronger inclusion of sustainability perspectives in business strategy development & execution, as well as in innovation portfolio & pipeline management, and finally a much stronger integration of the Sustainability and Public Affairs work, as the SDG agenda increasingly drives business, sustainability and policy interest of Novozymes closer together. 

The role of sustainability is continually intensifying and Novozymes will continue to work with all the sustainability aspects and value drivers mentioned in the three steps above. Going forward, Novozymes believe that sustainability leadership credits will come from the scale of the positive impact on the world you can generate with your business. In that context the SDGs are extremely helpful. 

Novozymes has been engaged in the SDG process since its very beginning at the UN Earth Summit (Rio+20) in 2012. Novozymes' engagement has primarily been via memberships of the UN Global Compact (UNGC), The International Chamber of Commerce (ICC), and the World Business Council for Sustainable Development (WBCSD). Through these organizations, Novozymes has actively taken part in advocating for an SDG framework that was relevant to, and present a prominent role for, business. Already in 2014 Novozymes used the draft SDGs as inspiration when developing its new Purpose, Strategy, and Long Term targets for the third strategy period. 

To make the SDGs a relevant tool to support business decision making, Novozymes needed to be able to qualify and quantify potential contributions to the SDG's stemming from its core business activities and technologies. Novozymes has therefore developed an SDG assessment and management tool to guide those processes. The tool has already been used to scan the pipeline of innovation opportunities and to identify the most potent future contributors to the SDGs. 

Novozymes believes, given the many stakeholders supporting the SDG agenda and the general desire to see SDG solutions in the market at speed and at scale, that it will be possible to form partnerships with non-business stakeholders with capacity to help accelerate the deployment of its business solutions for the SDG's. 

Currently, Novozymes is in the process of using the potential positive SDG contributions from four commercial projects, in animal feed, bioenergy, palm oil, and water, as an argument to attract business and non-business partners for business development acceleration.