Novozyme – Value Chain Sustainability

Novozyme, a Danish company, is one of the world leaders in green chemicals.  They work in reducing the release of toxic materials into the environment by replacing synthetic materials with enzymes in many industrial segments. Novozyme has been named one of the Sustainable Business’s 20 most sustainably innovative companies numerous times. They are seen as a world leader in sustainable driven innovation.

Novozyme use enzyme technology to generate bioproducts for use in industrial processes. Enzymes are biological catalysts, mainly proteins, generated by an organism to speed up chemical reactions. The enzymes replace harsh chemicals and processes in commercial applications. Novozyme technologies are found in products from everyday life such as stickies removal, detergents, textiles, food, beverages, leather, biodegradable plastic and bioethanol.

“Rethink Tomorrow” is Novozyme tagline and has sustainability deeply engrained in their culture. It is a recurring agenda item at every board meeting. They have developed a sustainability development strategy group with representation from all levels of the business.  This group monitors sustainability implementations and sets direction for the company, such as supplier evolution, business integrity principals, and ambitious sustainability targets. They support their business units through a sustainability development center. It consists of specialist in the fields of social responsibility, human rights, the environment and ethics. This center supports the strategy and assists in helping to integrate sustainability development into their operations.  They have also integrated sustainability activities in all annual reports since 2002. In addition, they have adopted the triple bottom line principal to ensure all business activities are conducted in a financially, environmentally and social responsible way.

Novozyme focuses on sustainable solutions and practices throughout their value chain.  Since 2008 they have been evaluating the sustainability practices of their suppliers. If a supplier is not up to their set standards, Novozyme partners with the supplier to help them come up to Novozyme standards.  If a supplier cannot meet their standards they will and have stopped relationships with them.  This is their way of talking the talk and walking the walk.

The value propositions for their customers are they reduce cost and environmental impact. They conduct life cycle studies to see how normal industry practices compare to their biological solutions. They document environmental impact such as CO2 emission reductions.  In 2011, their customers saved 45 Million tons of CO2 admissions by applying their products instead on normal industrial practices.  This is a measure of success for both Novozyme and their customers.  Another measure of success for their customers is the cost savings recognized from using Novozyme technology.

To help consumers, they educate them on how they can impact the environment through sustainable behaviors. An example is the “I do 30” campaign from 2009. In it they educated European consumers on the Environmental impact of washing at 30 degrees Celsius.  The premise was that customers could turn down the temperate on their washer machine, save money, make an environmental impact and get clean clothes at the same time.  They informed consumers that if all of Europe did this they would reduce CO2 emissions by 12 million tons a year. That’s the equivalent of annual emissions from 3 million cars. In behavior like this, Novozyme takes a holistic approach to the problem and look at all actors in the supply chain to identify opportunities for further sustainability, even if their product is not directly involved.

Novozyme’s practices put them in a class by themselves. Image if other companies looked for the possibilities of sustainability in their supply chains. There are infinite opportunities out there to help drive the world to sustainability. There are new emerging markets Novozyme is targeting.  The question for Novozyme is how will they meet the global challenge of entering emerging markets?  As their competitors follow the money into places like China, will they be able to enter and keep their triple bottom-line principal and there value chain aligned in a region where there may be no focus on it? Can they compete, solve sustainability issues and continue to make a profit at the same time?

References:

http://en.wikipedia.org/wiki/Enzymes

http://www.novozymes.com

http://report2011.novozymes.com/Service/Download+report/The-Novozymes-Report-2011.pdf

http://www.biofuelsdigest.com/bdigest/tag/novozymes/

http://www.unglobalcompact.org/participant/7023-Novozymes

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One thought on “Novozyme – Value Chain Sustainability

  1. tlhill2012 November 23, 2012 at 3:31 PM Reply

    Chris – an interesting example of a company with a well-developed strategy. You ask good questions about the durability of this approach as competitors begin to duplicate. What might novozyme do to keep its advantage? ARe its practices embedded so thoroughly that others might see but not really be able to copy? And/or does it have a learning curve advantage? And finally, as Interface tried (w/o success), is there a shift in business model that novozyme might try that would align economic and sustainability drivers?

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