Since 2015, the business strategy of Novozymes has been aligned with developing innovations that will impact the Sustainable Development Goals, with a focus on six of the goals: Zero Hunger, Quality Education, Clean Water and Sanitation, Affordable and Clean Energy, Climate Action, and Partnerships for the Goals.
In fact, the company’s engagement with the goals stretches back right to the 2012 Earth Summit in Rio. Communication Director spoke to Claus Stig Pedersen, Novozymes’s head of corporate sustain- ability, and Jeppe Glahn, its vice president of global communications and brand, about aligning strategy with the SDGs, innovation pipelines and the brand value of sustainability.
Interview by David Phillips
Can you describe the process in aligning strategy with SDGs?
Claus: Our process of integrating the SDGs started with breaking down the global goals into operational metrics – taking the global goals and the targets and including them into our evaluation of our products, where we use life cycle assessments to understand the benefits of our products for the environment and people. We integrate many other SDG parameters so that we can understand the link between our solutions and how they can contribute to reducing some of the parameters described in the global goals. We use that tool to screen and evaluate our innovation pipeline, to see which of our innovation opportunities have the most interesting potential contribution to the global goals. We have used the potential for SDG contribution as a way to attract the right partners to generate impact in the world.
"We have used the potential for SDG contribution as a way to attract the right partners to generate impact in the world." Claus Stig Pedersen
Last year, we also established an open innovation platform, using the SDGs to define innovation challenges. We called on innovators from all over the world to help us with new solutions to those challenges and then selected the best ideas and reward them with financial support, access to our scientists and access to enzymes so that they can experiment with their innovation ideas.
All of this is governed at the highest level of the company. We have established a SDG governance board that includes all our executive management. Their role is to set targets and priorities and drive strategies for maximising our positive contribution to the world and minimising our negative impact.
The company has built a lot of its strategy around achieving the global goals – one could say you Novozymes is ahead of the pack. Are other companies coming to you to learn how to do it?
Claus: Absolutely. We became very visible because we were such an early mover on this, and many big companies, including many of our customers, reach out to us to learn from and work with us on these issues. That is one of the outcomes that we hope for – that we could not only be leaders but that we also work with our customers on these things. It has been impressive to see business take up the SDGs.
Until now, most companies have looked at what they already do to find out how to connect it to the SDGs. That is not enough. We need to see companies use the SDGs to change priorities and invest in new and better ways of delivering positive contributions to the world. The recognition of that is certainly growing, and I think we will see a lot of action in that direction in the coming years. But some companies are still hesitant to invest a lot in new areas where the market may not be ready and where the market will maybe rely on changed priorities at political levels, prices on carbon emissions and so on. So there is a game of wait and see who moves first: is it the politicians that have to move first, is it business or consumers? But in general there is a recognition that we have to move fast very soon.
Have capital markets moved on from viewing sustainability as essentially risk mitigation, that you needed a sustainability officer or manager to avoid potential penalties, to now more as a business opportunity?
Claus: Absolutely and I am extremely happy about that development, because we need to see that there is good business to be made from making the world a better place and not the opposite. Today, most money in the world is made by destroying our planet or by destroying people. That has to change and that starts with business seeing the opportunity of making good money doing the right things. The SDGs are extremely helpful for that transformation process, because it gives us a critically agreed-upon framework to work with, it gives us a common language to talk to policymakers about future regulations that can drive the right behaviour in the market and in business, it gives us a lot of things to discuss and work with NGOs and opinion leaders around. So I think the SDGs will help us align – align policy, align regulation, align investments, align opinions and desires in the marketplace so that we can get to a situation where it will be more profitable to do the right things for the world instead of the opposite.
What has the SDGs brought to your work in communicating the brand of Novozymes?
Jeppe: As a communication department, we sit centrally in the creation of the business strategy, and reach out and work together with Sustainability to ensure that there's an interlink between the overall goals of the company and how we are measuring it and what we are saying to our stakeholders. Communication is a totally integrated part of how we develop strategies in Novozymes and that puts us in a special position: we are there in the boardroom ensuring that, when the strategy is developed and finalised, we have a headline that resonates. Our new strategy just launched is called Better Business with Biology, which is essential for our brand value, for how we communicate to our stakeholders, investors, customers, employees, that we are here to do better business using the tools of nature to enhance and grow both the world and the business at the same time.
What kind of conversations go on between Sustainability and Communications at Novozymes about crafting messages about the SDGs?
Jeppe: We do not want to go out and make claims in the market that are not substantiated by evidence and that has for a very long time been the backbone of how we have talked about our solutions and innovations. And so, the whole machinery that Claus is handling gives us the data and the privilege to claim things without being accused of green washing or SDG washing. These are facts that we can prove. The products that we bring to market can also claim to make our customers win in their markets. Therefore, many of the claims we build are not only for ourselves; we also want our customers to use them in their marketing.
Claus: Sustainability communications is not a battle zone, but somewhere where we need to find the balance all the time between visibility and credibility. Because communications’ role is to make sure that we are visible internally and externally, and our role as the sustainability department is to make sure that we are credible, that the claims we come out with are true. Sometimes we put a little pressure on each other if we think that communications people are a little too fresh and want to say a little bit too much, and then sometimes the communications team may find the sustainability department a little too careful and a too boring.
How do you frame the SDG narrative at Novozymes to your external and internal stakeholders?
Jeppe: Let me explain how we deal with the internal side. Our former CEO used to say that “working with sustainability is rocket fuel for employees”, and all our measurements show that being a company that can document that we are doing good for the world and at the same time do good for business and for our stakeholders is what opens the doors to having some of the best scientists in the world coming to work for us. It's a huge element in our dialogue with our employees and with potential employees. It is what attracts them and gives them purpose.
On the external side, we work closely with our investor relations department and we see a shift where more and more big funds actually look into where they put their money. That kind of sentiment is starting to be very visible. Therefore, we have used our commitment to drive the SDGs as an added sales and brand value to Novozymes. But it's also our ticket for the future. How we communicate it to the investors is that we are here for the long run, we're here to make a difference, and we can see that that resonates with investors as well.
"We have used our commitment to drive the SDGs as an added sales and brand value to Novozymes." Jeppe Glahn
Then we have dialogues with NGOs and politicians, and the work with SDGs and the UN opens doors. We've been invited to the to the White House, we are standing in the UN on some of the biggest podiums and talk to government leaders around the world, we are featured on CNN, in the New York Times, in Forbes... so this company with only 6000 people in Denmark is actually punching way above our weight.
In August, Novozymes announced the loss of up to 330 jobs worldwide to deliver on the corporate strategy. Can investing in SDGs as a brand value also help organisations like Novozymes withstand tough times like these?
Jeppe: Yes and no. Even though we as a company are resilient in that we see ourselves as a part of the future, on the other hand we are influenced by the same mechanisms as other companies. But in August, we actually had people that left us saying “I’m so sad to leave a company that's here to make a positive mark on the world”. So you could say that we send out ambassadors that still talk positively about Novozymes, even though they've just lost their job. And that that has to do with how we're dealing with the SDGs and how we are supporting the world to become a better place.
It seems that with Peder Holk Nielsen you have a visionary CEO when it comes to sustainability. How do you coach executive management on these issues?
Jeppe: Our top management drives a clear strategy on where they want to take the company, then they invite Sustainability and Communications in at an early stage in order to ensure that we are also doing right from a sustainability point of view and we need to be sure that we can communicate it. So in many ways it's a joint venture where we influence each other in the process.
The best example is what we are doing in order to ensure that we keep the temperature rise below 1.5 degrees. That's a mixture between sustainability doing a fantastic job and top management clicking into it and ensuring that all the measures and all the energy and all the leadership that it takes to do things like this is put in place. It's not all romantic, there are long nights and a lot of coffee and a lot of discussions and a lot of frustration, but when it all comes together it's a testimony to having a visionary management group that wants to listen to experts and who acknowledge that we bring things to the table that will lift the company, and that's a total bliss.