There’s a difference between a company having a sustainability program and actually being sustainable. The difference is measurement. When you have data on what your efforts are accomplishing, you can set targets, and if you don’t meet them, change the way you’re going about it.Danish-based pharmaceutical giant Novo Nordisk is particularly committed both to sustainability, and using data to measure it. They were named as the world’s most sustainable company by Corporate Knights this year, and have received a variety of other awards to that effect.
We spoke to Susanne Stormer, Novo Nordisk’s vice president of corporate sustainability and global stakeholder engagement, on why the company values sustainability so highly, the role of data and measurement, and the business impact of both.
Sustainability has been part of the company for a long time. “It’s been about showing respect for people, the patients that we’re serving, and the people who work at the organisation,” Stormer said. In 2004 the company wrote the “triple bottom line” into their bylaws; that they would conduct their business in a way that is “financially, environmentally, and socially responsible.”
Publishing emissions numbers to keep themselves accountable
To do that, the company puts its social and environmental goals on the same real estate as the financial data investors pore over. Stormer says that the company has had integrated reporting since 2004. That means the company reports its financial results alongside data on their environmental and social performance and targets. “And it’s all in the same book, it has the same look and feel, and it’s based on the same approach of collecting information.”
For example, in last years annual report, you can see that the company’s CO2 emissions from energy were down to 93 thousand tons from 95 the year before, and that the company was selling cheaper insulin in 75 developing countries up from 67 the year before. That’s published right next to its 21.9 per cent growth in earnings per share.
It’s how the company keeps itself accountable and makes sure that sustainability is a priority in fact instead of just in name. “The reason why we do that is because we think it’s important that when you talk about sustainability, that you don’t just [tell] the tree hugger stories and the compelling emotional part of why a company should be sustainable, but … to hold ourselves accountable to our stakeholders and to drive internal accountability,” Stormer said, “so that when we set a target, whether its a financial target or an environmental target, we work towards achieving that target and we can track our performance, whether its progressing or stagnating.”
Attracting investors who care about sustainability, with data
The amount of data they collect and the extent of their sustainability efforts lets them make both a business and a moral case for their efforts. Because investors are used to looking at financial data, having in-depth analysis of the business impact of these programs is very important. It lets Novo Nordisk make an appeal to investors and potential customers who have an interest in social and environmental sustainability.
“We have been meeting with investors for many years at road shows where we also speak with investors who have this particular interest in these dimensions of our company’s performance. And what they say is, ‘Well, it’s fine that you can talk about this program and that initiative, but how does it really benefit your business, what difference does it make from a business perspective?'” Stormer said.
To satisfy those needs, they’ve put together a series of cases showing the social and business impacts of specific measures. “[We] are aiming at measuring value in ways that go beyond what we can do in an annual reporting context. What we’ve found is that you actually can find robust ways of measuring the tangible and the intangible value that your work generates to the world and as a business and also — and this is where it ties into this notion of shared value — also how it benefits society,” Stormer said. “We have examples, like investing in training of doctors and patients in how to manage diabetes and how to diagnose it, that can translate directly into better treatment, better control, more years of life, and that is a direct economic benefit or economic cost saved for society.”
Figures help make gains real for a group of people that’s very important to businesses. “We are also exploring ways of making that business case in a strong and convincing way and that is something that investors really take to their hearts,” Stormer said. “So when we have been presenting these cases at roadshows and at investor meetings, they are reaching out and saying that is precisely what [they] are looking for.”
Saving money by going green
Beyond small, incremental changes that, for example, reduce the carbon footprint year over year, Novo Nordisk also takes bigger steps. “On top of that incremental innovation, are also opportunities for real business innovation that is more radical and is really driving change at a systemic level,” Stormer said. “By devising a partnership with our energy supplier we were able to convert from black energy based on coal to green energy based on wind power.”
It was compelling from a business and social perspective because it worked out for everybody, Stormer pointed out. “It’s a business model where there is a commercial interest for a supplier in making a proposition to us, we are saving money in the long term, the capacity for wind power in Denmark increased because we made more capacity available, and the energy supplier could develop a new business model. So it really was one of these win win win examples.”
It’s a selling point for investors, employees, and the various partners who make real sustainable change possible, because there’s only so much the company can do on its own.
A healthy society and environment are the foundation of any business
It’s not just about the environment either. The company obviously focuses on healthcare, such as in programs in Kenya and Malaysia surrounding diabetes care, but it also looks at problems like an ageing population, or unemployment in Europe. “I think in our way of looking at sustainability it’s really to see that if we want as a company to be sustainable, it means we have to [be in] business for the next 100 years,” Stormer said. “And in order to be in business for the next 90 years or a 100 years we have to consider how do we interact with society and what does society look like? So the basis for our sustainability work is to say we believe that a healthy society, healthy environment, and healthy communities are the foundation for success as a business.”
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