Sustainability governance in Novozymes
Sustainability forms an integral part of Novozymes’ purpose and strategic direction and is governed by the Board of Directors and the Executive Leadership Team. The Board is responsible for overseeing financial and environmental, social and governance (ESG) performance as part of the Executive Leadership Team’s day-to-day running of the company.
In 2020, Novozymes established a Corporate Sustainability Committee in the new organizational set-up reporting directly to the Executive Leadership Team (ExLT). This committee is responsible for the integration of sustainability into Novozymes’ business strategies and innovation pipeline to deliver solutions that meet the needs of society and drive sales growth. It is also responsible for setting Novozymes’ strategic direction, ambitious sustainability targets, and securing a strong internal foundation of responsible business practices. The committee consists of members from senior leadership representing various functions and is chaired by the Executive Vice President of People, Sustainability & Brand function.
Performance & Remuneration
Sustainability KPIs are included in Executive Leadership Team and Senior Leadership Team scorecards which are reviewed regularly. Sustainability metrics are also included in Executive and senior management’s remuneration programs. A new long term incentive program (LTIP) for the Executive Leadership Team was announced in 2019 for the performance period 2020-2022 and includes an explicit weight on sustainability (weight of 20% of LTIP). The sustainability component will only be unlocked if Novozymes performs above the floor levels across all four sustainability parameters (Climate, Water & Circular, Workplace, and Zymers). Once the floor is reached on all four parameters, the sustainability component will be released as per the performance against each parameter on a pro-rata basis. See the current remuneration policy for the Executive Management and the Board of Directors of Novozymes A/S at https://investors.novozymes.com/investors/corporate-governance/board-of-directors/default.aspx
Additionally, a new incentive program for all employees covering the period 2020- 2022 has been established. The grant of stock options under this program depends on the degree that Novozymes reaches performance targets related to economic profit, annual organic sales growth target and its four sustainability performance targets for the calendar years 2020-2022. The sustainability targets for the period 2020-2022 carry a total weight of 20% in the program and include targets related to is measured in relation to our targets on Climate, Water & Circular, Workplace and Zymers.
Global Sustainability & Public Affairs
The Global Sustainability organization at Novozymes works to ensure that the company is able to understand, influence and leverage the global sustainability agenda to support our commercial objectives - integrating sustainability into management and people processes, with the purpose of securing an internal foundation of responsible business practices and contribute to Zymer engagement and pride.
Global Sustainability engages with investors, customers, and key non-commercial stakeholders to shape markets and enable growth. We also support the annual reporting and other communications, conduct trend analyses and stakeholder mappings, and integrate key learnings into business strategies. We develop lifecycle assessments, and other documentations, to ensure a solid foundation for our sustainability value propositions. Novozymes also has regional sustainability managers at various sites to drive local sustainability agendas where we operate.