Novozymes’ materiality assessment is a systematic and rigorous process that has been aligned with the principles of double materiality. It allows us both to evaluate whether Novozymes has an impact on environment and society and to identify how ESG issues affect the creation of long-term value. The process integrates input from external stakeholders, trend analyses and internal engagement with relevant departments including Investor Relations, Risk Management & Controls, Quality, Sustainability and our commercial divisions. This process results in a materiality matrix of economic and ESG issues.
In the past couple of years, various global movements and the COVID-19 pandemic has led to an increased focus on how companies manage social issues, like diversity and inclusion and labor practices. As a responsible corporate citizen, Novozymes continuously strive to strengthen our governance and management of these material issues. We have external targets/flagship initiatives for many of our material issues.
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 analyse
- 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
Our matrix in 2021The matrix reflects the importance of those issues to our key stakeholders versus their impact on Novozymes, and it is used to guide our strategy and reporting. As a result of the materiality assessment performed in 2021, two new issues were added: Supply chain security and Diversity & Inclusion.
Refer to our "Value chain assessment" for more information.