Novozymes’ materiality assessment is a systematic and rigorous process that integrates inputs from external stakeholders, trend analyses and internal engagement with relevant departments including Investor Relations, Risk Management & Controls, Quality and Sustainability and leadership from our commercial divisions. This process results in a materiality matrix of financial and ESG issues and reflects importance of those issues to our key stakeholders versus impact on Novozymes. We use our materiality matrix to guide our strategy and reporting.
Various global movements and the COVID-19 pandemic has led to an increased focus on how companies manage ESG issues, specifically on social issues for eg. occupational health & safety and labor practices. As a responsible corporate citizen, Novozymes considers these issues to be highly material and we continuously strive to strengthen our governance and management of these issues.
Understanding the matrix
Novozymes’ materiality matrix has three categories - low, medium and high material issues. The illustration here reflects our medium and high material issues and highlights those issues where we have external targets/flagship initiatives and make a direct contribution to one or more SDG target(s).
Our matrix in 2020Our materiality matrix in 2019 informed our strategy update process (Better business with biology) and helped to identify our operational focus areas.
During our assessment in 2020, no new issues were added to or deleted from our matrix.
Refer to our "Value chain assessment" for more information.
Our materiality assessment process
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.
- 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