Distribution of value to society
Annually we look at Novozymes’ broader economic impact on society at a large. We monitor and disclose data on who benefits from the value that we create as a company on a yearly basis
Novozymes’ economic impact on society goes beyond traditional financial results. Our economic stakeholders include a wide range of stakeholder groups such as suppliers, authorities, employees, and local communities.
It is important for Novozymes to make a positive contribution in the countries where we operate. Our economic contributions consist of taxes, duties, VAT, employee taxes, employee pension and benefit programs, procurement from local vendors and development of workforce, among others.
Annually we look at Novozymes’ broader economic impact on society at a large. We monitor and disclose data on who benefits from the value that we create as a company on a yearly basis: In 2015, Novozymes’ generated value amounted to DKK 14,104 million. 86% of this amount was returned to society through the purchase of goods and services from suppliers, wages and pensions to our 6,485 employees, various types of taxes and duties to the community, and dividend and financial costs to our capital providers. The remaining 14% was reinvested in Novozymes to develop the company, and ensure competitiveness and future value generation for distribution among key stakeholders. In addition to the 8% returned to capital providers, Novozymes bought back shares worth DKK 2 billion in 2015.
Novozymes’ overall tax strategy and transfer-pricing policy support a positive tax contribution to society and governments in the countries in which Novozymes operates. Novozymes continuously works to fulfill our tax obligations in the countries where we operate. We seek to obtain a competitive tax level in a fair and responsible way, and with full regard to national and international laws and regulations. Besides taxes, our economic contributions consist of duties, VAT, employee taxes, employee pension and benefit programs, procurement from local vendors and job creation, among others.
In 2015, Novozymes incurred taxes as corporate income taxes, and other taxes and duties came to approximately DKK 1,425 million. In addition, Novozymes collected and withheld tax contributions on dividends and wages totaling approximately DKK 1,275 million. Novozymes’ total tax contribution therefore amounted to approximately DKK 2,700 million, compared with approximately DKK 2,425 million in 2014. Please see our position on Tax.
Proactive and transparent corporate governance is a cornerstone for the efficient management of Novozymes. The Board of Directors and Executive Leadership Team believe that good corporate governance promotes sustainable business conduct and long-term value creation. By following new corporate governance trends, guidelines and regulations very closely, Novozymes regularly updates its own management systems to ensure openness and transparency at all times, and to provide stakeholders with relevant insight into the business and the way it is managed.
Novozymes’ purpose, strategy and long term targets, which were introduced in early 2015, integrate sustainability at the very core of Novozymes. Sustainability has hereby become a key component of business strategies and management processes. This has led to the dissolving of Novozymes’ Sustainability Board, which previously was the governing body of Novozymes’ sustainability strategy, targets and sustainability-related activities. Today, sustainability is governed at the very top level of Novozymes – Board of Directors and Executive Leadership Team – and sustainability activities and targets are anchored and executed across Novozymes’ functions and operations.
Board of Directors
Our Board of Directors is responsible for ensuring the most effective management and organizational structure in Novozymes and has the mandate to decide on the strategic direction of the company. Together with the Executive Leadership Team, the Board has worked to develop our purpose and our strategy through 2020, and to set the new long-term targets. The Board is also responsible for overseeing that the Executive Leadership Team delivers on financial, social and environmental performance. As sustainability is such an integral part of Novozymes’ strategic direction, the Board is involved in sustainability oversight and is responsible for ensuring adherence to the UNGC Principles. We see this as a best-practice approach to sustainability governance.
Executive Leadership Team
The Executive Leadership Team (ExLT) is responsible for overseeing strategy execution and defining Novozymes’ ambitions. Sustainability performance is a high priority for Novozymes and is therefore included in the ExLT’s stock-based incentive programs alongside financial performance indicators.
Our sustainability targets are owned and managed by vice presidents of the relevant functions and executed across Novozymes. Senior management develops and executes initiatives and activities to support Novozymes’ purpose, strategy and long-term targets. Furthermore, senior management ensures that sustainability activities contribute to business priorities and respond to trends and issues. Incentive programs incorporating sustainability performance are also part of senior management’s remuneration. In 2014, we launched Group-wide employee stock option programs for all employees, incentivizing sustainability performance throughout Novozymes.
Corporate Sustainability department
Corporate Sustainability is responsible for guiding Novozymes’ definition and execution of sustainability priorities across the business. For example, the Sustainability department works with Novozymes’ industries to enable sustainability-driven marketing, sales and business development. Life cycle assessments are performed to document the sustainability aspects of our solutions. Sustainability trendspotting, and stakeholder and materiality analyses are used to identify improvement areas. Furthermore, progress, achievements and challenges are reported in a transparent manner. Regional sustainability agendas are driven by the regional heads of Sustainability located in China, India, North America and Latin America.