Sustainability 

Sustainability

CEO statement Progress on the UNGC Ten Principles Materiality Sustainability governance Measuring our performance Driving action with our stakeholders

Novozymes A/S Sustainability Contents page 2 

CEO statement Committed to making a better world Novozymes continues to deliver impactful innovation to the world in our quest for sustainable solutions to combat climate change and deliver on the UN Sustainable Development Goals.

In 2015, we made the UN Sustainable Stepping up our ambition challenges embodied in the SDGs and by year. We will invest to bring more impactful Development Goals (SDGs) our own. The In our pursuit of generating more growth and growing consumer desire to live lives that are innovation to the market and to progress on SDGs inspired our purpose and strategy having a greater impact on the world, in June better for themselves and the environment. our 2030 commitments and 2022 mid-term and we began our journey to contribute to 2019 we launched our updated strategy – targets on climate, water and sustainable the goals. In the years since, Novozymes Better business with biology. Through it, we will Combatting climate change production and consumption. has made significant progress in delivering focus on addressing three global challenges The world needs to limit the increase in global on the goals. Since 2015, the use of our – climate, water and sustainable production warming to 1.5o C. In September 2019, UN We will continue to harness the power of products has enabled the reduction of an and consumption. These are the areas where Secretary-General António Guterres asked biology to make the world a better place. As

estimated 380 million tons of CO2 equivalent we believe our biological solutions can make leaders to come to the annual UN Climate our commitment to our purpose and the SDGs emissions. In addition, we have delivered the greatest difference and where we can Summit to present plans, not make speeches. remains strong, our commitment to the UN transformative innovations, catalyzed reliably measure our progress. For each of In my address at the summit, I announced our Global Compact and its Ten Principles has partnerships for change, expanded the reach the three challenge areas, we commit to grow science-based commitment to keeping the never been stronger. of our sustainable solutions and helped an the positive impact from our solutions and to temperature rise caused by climate change estimated 941,000 people learn about the manage the environmental footprint of our below 1.5o C. Novozymes is among the first few benefits of biology. own operations. We have set ambitious long- companies globally to set up science-based term 2030 commitments and 2022 mid-term targets validated and accepted by the Science We continue to focus on reducing the impact of targets. Based Targets initiative (SBTi). our own operations while driving sustainable

business growth. In 2019, 30% of the energy But what brings our updated strategy alive By 2030, we will halve absolute CO2 emissions Peder Holk Nielsen we consumed was from renewable sources. is our focus on our employees. We want to from our own operations compared to a 2018 President & CEO We substantially improved our performance inspire people to take action on the SDGs and baseline on our way to becoming carbon in managing safety at our workplace and we begin by pledging 1% of our time to local neutral by 2050. Importantly, we will enable recorded our lowest number of occupational outreach activities by 2022. emission reduction across our value chain and accidents per million working hours. engage with our suppliers to reduce emissions This is our action plan to maximize our from our raw materials. In addition, we will

In summary, we progressed towards our goals, contributions to the SDGs. also help the transport sector reduce their CO2 but we still need to do better – by making our emissions by enabling the production of bio- own operations more sustainable but also by Innovating for the SDGs based, low-carbon fuels. growing our business to enhance the reach and We will invest in exploring biological solutions impact of our solutions. in new strategic opportunity areas like Human Looking ahead Oral & Gut Health and Alternative Proteins. In 2020, we will focus on implementing our These opportunities are inspired by the strategy and the commitments we made this

Novozymes A/S Sustainability CEO statement 3 

Progress on the UNGC Ten Principles Novozymes continues its commitment to the Ten Principles and made significant progress in 2019.

Theme Summary of key engagements in 2019 Human rights Novozymes and the UN Global Compact Principle 1: Businesses should support and • UN Guiding Principles on Business and respect the protection of internationally Human Rights proclaimed human rights; and Novozymes has been a LEAD member of Novozymes participates in the UNGC’s • Supplier Ethical Data Exchange (SEDEX) Principle 2: make sure that they are not the UN Global Compact (UNGC) since 2011 local networks and engages in activities to complicit in human rights abuses. • Roundtable on Sustainable Palm Oil (RSPO) and actively supports the UNGC’s global promote sustainability across all our regions. For disclosure on progress refer to Note 8.1 and Note 8.6* and regional work on the SDGs and climate Labor rights change. In the Danish local UNGC network, Principle 3: Businesses should uphold the • UN Guiding Principles on Business and Novozymes participated in the working freedom of association and the effective Human Rights In 2019, we continued our engagement group on human rights and shared our recognition of the right to collective bargaining; • Supplier Ethical Data Exchange (SEDEX) with the UNGC’s work on ‘Ambition approach and insights on Novozymes’ Principle 4: the elimination of all forms of forced Loops’, and interacted with them during Human Rights Impact Assessments. and compulsory labour; the development of our non-financial Principle 5: the effective abolition of child labour; and targets, including support for the campaign In Brazil, Novozymes participated in the ‘Business Ambition for 1.5˚C — Our Only UNGC’s Young SDG Innovators program. Principle 6: the elimination of discrimination in respect of employment and occupation. Future’ as one of its first signatories. Our project on mobile wastewater treatment For disclosure on progress refer to Note 8.1 and Note 8.6* systems that can help companies reuse Environment Novozymes continues to participate in the water and help underserved communities Principle 7: Businesses should support a • UN Global Compact Climate Action Platform Action Platform ‘Pathways to Low Carbon treat domestic wastewater was selected precautionary approach to environmental and Resilient Development’, in the lead amongst various other entries. challenges; • UN Convention on Biological Diversity up to the UN Climate Action Summit in Principle 8: undertake initiatives to promote • UN Caring for Climate greater environmental responsibility; and September 2019 and beyond. In China, Novozymes received the ‘Global • Business Council for the UN (BCUN) Principle 9: encourage the development Partnership Award 2019: The Best Practice and diffusion of environmentally friendly • Supplier Ethical Data Exchange (SEDEX) technologies. We are also a continuing member of Caring of Implementation of UN SDGs’ for our • below50 for Climate, a long-standing initiative efforts mainly in the areas of climate action • Roundtable on Sustainable Palm Oil (RSPO) between UNGC, UN Environment and and ecology protection. For disclosure on progress refer to Note 7.1 to 7.7 and Note 8.6* UNFCCC. Anti-corruption Principle 10: Businesses should work against • UN Convention against Corruption corruption in all its forms, including extortion and bribery • Supplier Ethical Data Exchange (SEDEX) For disclosure on progress refer to Note 8.3 and Note 8.6* *Refer to Notes in ‘Accounts and performance’

Novozymes A/S Sustainability Progress on the UNGC Ten Principles 4 

Materiality Novozymes’ materiality matrix serves as critical input in identifying our focus areas and priorities, informs our strategic decisions and guides our disclosure and reporting.

Defining materiality Our matrix in 2019 Refer to ‘Materiality’ at Novozymes.com for Novozymes’ materiality assessment is a Our materiality matrix informed the recent further details on our materiality assessment systematic and rigorous process that integrates strategy update process to identify our and how we address our material issues across inputs from external stakeholders, trend operational focus areas. There were no new our value chain. analyses and internal engagement with issues added to or deleted from the matrix. relevant departments including Investor Relations, Risk Management & Controls, Issue category Quality & Sustainability and leadership from Medium High All our commercial divisions. This process results Innovation in a materiality matrix of financial and ESG Economic Profitable growth issues which reflects the importance of those Environmental issues to stakeholders versus the impact they Partnerships Corporate & customer Governance have on Novozymes. governance Water engagement Trade policies Social We use our materiality matrix to define our Solid capital Business Compliance structure ethics priorities and focus areas for the coming Climate change period, and it acts as a guide in determining Product & energy stewardship the topics we include in our annual disclosure. Bioethics & Corporate focus areas AKEHOLDERS biodiversity

O S T Targets/Flagship initiatives Understanding the matrix Labor practices Occupational & human rights Novozymes’ materiality matrix has three Waste health & safety Contributes to SDG target(s) categories - low, medium and high material ANCE T Responsible sourcing issues. The illustration here reflects our OR T

medium and high material issues and IM P Community engagement highlights those issues where we have external Tax & social investment High targets/flagship initiatives and make a direct contribution to one or more SDG target(s). Deforestation & Data security land use change Animal High materiality, welfare detailed disclosure Medium Medium materiality, limited disclosure IMPACT ON NOVOZYMES Low materiality, no disclosure

Novozymes A/S Sustainability Materiality 5 

Sustainability governance At Novozymes, sustainability is a key component of our business strategies and management processes. Novozymes and the SDGs

As sustainability is such an integral part of Board was established in 2018 to ensure In June 2019, Novozymes launched its Novozymes’ purpose and strategic direction, that sustainability forms an integral part of updated strategy, Better business with We advance solutions that have the it is governed by the Board of Directors and the company’s strategy and actions which biology, and new targets, and the Novozymes’ potential to have the greatest impact the Executive Leadership Team. The Board are anchored and executed across various SDG Governance Board played a fundamental on the SDGs. We have identified six is responsible for overseeing financial and commercial divisions and operations. Refer to role in this process. Read more about our SDGs that we believe Novozymes’ ESG performance as part of the Executive 'Sustainability governance' at Novozymes.com updated strategy in 'Strategy'. technologies and actions can Leadership Team’s day-to-day running of for further details. contribute significantly to. the company. Novozymes' SDG Governance

Novozymes’ SDG Governance Board In 2018, Novozymes established the SDG Governance Board to build a shared understanding of the opportunities and risks associated with the UN Sustainable Development Goals (SDGs) and to translate this knowledge into corporate priorities and targets. The SDG Governance Board consists of an Impact Board and a Foundation Board.

Impact Board Foundation Board The Impact Board sets Novozymes’ strategic global direction and The purpose of the Foundation Board is to provide the foundation ambition in respect of the SDGs. The board also develops and for ensuring that Novozymes’ sustainability performance in our executes a strategy for integrating sustainability into business operations, supply chain and other functions allows us to build on and strategies and management processes. maintain our sustainability leadership position.

The Impact Board consists of the Executive Leadership Team as well The Foundation Board consists of SVPs and VPs representing a Read more in “Novozymes as a number of SVPs and VPs from different areas of the business. variety of Novozymes’ functions. and the SDGs”

Novozymes A/S Sustainability Sustainability governance 6 

Measuring our performance Sustainability highlights Sustainability drives the way we do business and we have always taken the triple bottom line approach to generate economic, environmental and social value.

Novozymes’ key growth driver is to deliver 2019 Highlights solutions that improve the performance of our customers and partners, while having a better Environmental impact on the world. To ensure that we add 87 30% 262,000 value across our stakeholder ecosystem, we Set new climate target in million tons of CO emissions saved energy m3 of water saved actively engage with our stakeholders across a line with 1.5°C pathway (estimated) by our customers through consumption variety of themes. Read more in ‘Driving action – verified by SBTi the application of Novozymes’ products from renewables with our stakeholders’.

We manage our performance on material ESG issues through relevant targets and KPIs. We also believe in sharing our performance in Social the most transparent way. Read more about our performance in 2019 in ‘Accounts and 0.9 12.7% 100% 97% 20,000 occupational accidents rate of employee of palm oil sourced of our biomass waste was GJ of energy saved performance’. Our sustainability leadership per million working hours turnover was RSPO certified handled in a circular system has been recognized by many indices and presented with a number of awards.

Through the implementation of our updated strategy, we aim to increase the positive impact of our biological solutions, while also managing the environmental footprint of Regional Human Governance our operations. Novozymes’ ambition is to 329,000 Rights Impact 31% 99% continuously improve business operations learners educated Assessment completed women in senior of employees 0 for EMEA across our value chain, making them more fatalities (estimated) under EDUCATE management completed business efficient, environmentally friendly and socially integrity training responsible. As part of our updated strategy, we have set long-term 2030 commitments and 2022 mid-term targets to measure our progress going forward.

Novozymes A/S Sustainability Measuring our performance 7 Measuring our performance New non-financial targets

2030 COMMITMENTS 2022 TARGETS In June 2019, Novozymes launched an updated strategy, together with a set of new WORLD Limit global warming increase to 1.5°C • Save 60 million tons of CO2 by enabling low-carbon fuels in the transport sector in 2022 non-financial targets. Our commercial priorities were the starting point for the target setting process. On that basis, we identified areas Ensure clean and efficient water use • Reach >4 billion people by contributing to laundry where our biological solutions can have the We will help solutions that replace chemicals in 2022 greatest impact on the SDGs and for which we the world... can reliably measure progress. We assessed Produce more and better products with • Gain 500,000 tons of food by improving what our customers and employees care about less impact efficiency from farm to table in 2022 and looked to our peers and other leading companies for inspiration. OPERATIONS 50% reduction in absolute CO2 emissions from • Reduce absolute CO2 emissions from operations on our way to carbon neutral in 20501,3 operations by 40%1 Our targets focus on People (inside and 100% renewable electricity3 outside the company) and three global challenges: Climate, Water, Production & 15% reduction in absolute CO2 emissions from We will Consumption. For each of the global challenge 1,3 achieve… purchased goods and services areas, we have defined 2030 commitments and 2022 mid-term targets. Our new targets 100% sites manage water in balance with • Develop context-based water management framework considers both our opportunity local conditions programs at 100% of sites to make a positive impact through our solutions and our responsibility to manage the 100% key materials and waste managed • Develop plans for circular management of 100% environmental footprint of our operations. in circular systems of key packaging materials • Achieve 100% circular management of our biomass • Develop programs to reach zero waste by 2030

For more information on how we have at 100% of sites framed our targets, see 'Strategy'. EMPLOYEES • Achieve a score of 80 on learning in employee survey in 2022 • Achieve a score of 86 on our diversity index by 2022 • Achieve a score of 81 on Zymer spirit index by 2022 • Maintain occupational injuries2 ≤ 1.5 We will… • Pledge 1% of our time to local outreach activities

1 Compared to a 2018 baseline 2 Defined as a three-year rolling average of occupational injuries with absence per million working hours 3 Verified by SBTi

Novozymes A/S Sustainability Measuring our performance 8 

In the spotlight

This means the world needs to drastically to generate energy from waste streams for use The heat is on: accelerate climate action. in our operations and to share with our local communities. In September 2019, at the U.N. Climate Novozymes’ Action Summit, Novozymes announced new Novozymes’ impact goes beyond its production ambitious climate commitments. Novozymes’ alone, and the company must account for President and CEO Peder Holk Nielsen said emissions that occur outside its operational ambitious climate “UN Secretary-General Antonio Guterres asked boundaries. We will monitor emissions across companies to come up with plans – not just the value chain and work with our suppliers to speeches; here is one of the first, validated, reduce emissions from key raw materials. By commitments and science-based commitments – backed up 2030, we aim to reduce absolute CO2 emissions by a robust plan for action.” from purchased goods and services by 15%, compared to a 2018 baseline. To tackle climate change, the world needs Stamp of approval to limit the increase in global warming to By 2030, Novozymes will reduce absolute CO2 emissions from its operations by 50% “This is not about Novozymes 1.5°C. Novozymes is committed to doing compared to a 2018 baseline, on our way to and one company only; we want its part and helping the world reach the becoming carbon neutral in 2050. to inspire others across our goals of the Paris Agreement. value chain to follow suit – and This target has been validated by the Science- transparency is key” – Peder Holk Based Targets initiative (SBTi) as being in line Nielsen. with a 1.5°C pathway. SBTi is a collaboration between CDP, the United Nations Global uilding on a decade of climate action When the world reached a landmark Compact (UNGC), World Resources Institute In many geographies, Novozymes actively Novozymes has been engaged in climate agreement in Paris in 2015, Novozymes hailed (WRI), and the World Wide Fund for Nature supports policies to promote the use of B issues for more than a decade. We work global leaders for taking the first step towards (WWF). SBTi has established a comprehensive sustainable, low carbon fuels. Transportation with our stakeholders to enable the transition a low-carbon future and recognizing the crucial verification process which considers a accounts for about 25% of total energy- to a low carbon economy. We were one of the role the private sector plays in this transition. company’s industry profile, its historical related global CO2 emissions – and to limit its very first companies to document the carbon We are committed to helping the world achieve emissions and the latest climate models. contribution to the increase in global warming, footprints of our products and demonstrate the goals of the Paris Agreement by providing this sector will require a range of solutions, how biological solutions can enable customers low-carbon, biological solutions, while also More action, fewer speeches including low-carbon fuels. We have set a target to reduce emissions. reducing our own greenhouse gas emissions. Our new climate commitments are the to help the transport sector save 60 million culmination of months of effort by our tons of CO2 emissions in 2022 by enabling the On the operational side, we have successfully In 2018, the UN Intergovernmental Panel engineers, production teams and experts to production of bio-based, low-carbon fuels. decoupled growth from emissions. Since on Climate Change (IPCC) released a report define a detailed roadmap for climate action. 2010, we have grown our revenue by 48%, stating that to avoid catastrophic and In addition to investing in energy efficiency while absolute emissions from Novozymes’ irreversible climate impacts, we need to limit projects and sourcing 100% renewable operations have risen only 6%. the increase in global warming to 1.5°C. electricity, we will also explore opportunities

Novozymes A/S Sustainability In the spotlight 9 

Driving action with our stakeholders Creating value for our stakeholders and meeting stakeholder expectations on material sustainability issues is a priority for Novozymes. We strive to catalyze partnerships that drive collective action on the SDGs, enable a sustainable bioeconomy and deliver on our purpose.

Customers their approach to sustainable development. Suppliers Funding for research in plant sciences At Novozymes, we engage with our customers These trends include consumer scrutiny on Continuous engagement with our suppliers The Novo Nordisk Foundation (NNF) through strong partnerships to provide animal welfare and sustainable farming, is key to driving our sustainability agenda awarded a grant of DKK 203 million to the sustainable solutions tailored to their needs. digitalization of livestock management and and further developing our responsible Collaborative Crop Resilience Program To measure our impact and support our chronic diseases in pets. sourcing practices. Our approach to (CCRP), a new research project to be carried customers’ sustainability commitments, • Novozymes was awarded Gold recognition responsible sourcing is defined by our out in Denmark and the United States. The we also participate in customer-driven from Ecovadis for our sustainability Responsible Purchasing Standards (RPS) and project aims to study the interaction of the assessments that provide us with opportunities performance. managed through our Supplier Performance roots and leaves of plants with bacteria for learning and improving our performance on • Novozymes completed the full B Impact Management (SPM) process. We will work to for the purpose of enabling more efficient material ESG issues. Assessment (BIA) as part of our partnership strengthen our supplier sustainability profile and sustainable agricultural practices - by with Seventh Generation. by continuing the enrollment of suppliers reducing the use of fertilizer and pesticides 2019 highlights onto SEDEX. We will also strengthen our by promoting natural bacteria that coexist • Novozymes partnered with Orkla (one of our “As part of our B-Corp commitment to obtaining certification of with the plants. Novozymes played a key key customers in Europe) on a joint project commitment, we consider relevant raw materials with a sharp focus on role in bringing together the universities to provide more environmentally-friendly sustainability. involved and the NNF by ensuring their solutions, specifically in the reformulation the broader social impacts participation in the CCRP. of laundry detergents across three of their of our suppliers’ business 2019 highlights leading brands to reduce the amount of and community engagement. • For our TEDA site in Tianjin, China we began chemicals (surfactants) and reduce the Novozymes has joined us in sourcing high quality renewable energy carbon footprint through the power of our our efforts toward continuous certificates (REC) issued by Goldpower, enzymatic solutions. sustainability improvement by sourced from a nearby advanced biomass • The Institution of Chemical Engineers plant in the city of Nangong. participating in the full BIA. We (IChemE) Malaysia presented Novozymes • Through our partnership with Ørsted, one and Sime Darby Research with the Palm Oil are impressed with the results of our energy suppliers, we successfully Award and the Sustainability Award for our and proud of our continuing delivered the first batch of steam, derived joint project ‘Enzymatic Assisted Extraction partnership with Novozymes” from sustainable biomass as a substitute to of Palm Oil’ which demonstrates the benefits - Joey Bergstein, CEO, Seventh coal for our site in Kalundborg, Denmark. of the enzyme-assisted oil extraction process, Generation • Novozymes is a member of the Roundtable including higher yield, greater profitability, on Sustainable Palm Oil (RSPO). In 2019, and improved sustainability performance. 100% of the palm oil we sourced was RSPO • Our partner Boehringer Ingelheim visited certified and nearly 80% of our soy materials Novozymes to share their insights on trends sourced were certified by recognized in the animal health industry as well as certification bodies.

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In the spotlight The yield benefits of JumpStart® and Optimize® have been documented by statistical analyses published in peer-reviewed literature. The assessments of environ- mental benefits have been conducted in collaboration Microbial inoculants support with biogeochemical modelers from renowned institu- tions and the two studies have been subject to critical review by international expert panels, as required by the Climate-Smart Agriculture ISO standard for life cycle assessment (LCA). Novo- zymes’ investment in LCAs of existing agricultural inocu- lants has revealed general patterns in the environmental benefits of microbial yield enhancers, which can be used Novozymes’ microbial inoculants enhance agricultural productivity, in support of future product launches. reduce environmental impacts and improve climate resilience.

n a world of increasing crop demand, finite JumpStart® Optimize® In the highly optimized land resources, and a changing climate with JumpStart® contains a Optimize® is applied on and resource-intensive I more frequent weather anomalies, it is vital naturally occurring soil soybeans and other legume soybean production in the to optimize crop yields and nutrient utilization. fungus which improves the plants in North America, US, Optimize® generally To maximize yield potential and enhance stress crop’s uptake of phosphorus South America and Europe. provides a moderate tolerance, crops need an optimal start and a and is used in multiple Optimize® contains a yield improvement continuous uptake of essential nutrients in crops, including corn, soy, wheat, and canola. naturally occurring soil bacterium that is (1-2%) and thereby also their growth cycle. “Microbial inoculants can The improved uptake of phosphorus results involved in the nitrogen fixation process moderate environmental benefits. play a vital role in this regard,” says Thomas in early vigor, greater stress tolerance, of legumes, such as soybeans. Optimize® In a year with suboptimal soil Stenfeldt Batchelor, Vice President, BioAg and ultimately higher yield. The improved ensures the plant has the beneficial bacteria conditions, Optimize® can be a key yield is accompanied by reduced nitrogen necessary to capture nitrogen directly from the factor in obtaining high crop yields. In this article, we discuss two case studies losses to the aquatic environment and atmosphere. that demonstrate these benefits. reduced emissions of nitrous oxide, a potent “The findings of the LCA studies highlight greenhouse gas, to the atmosphere. The In Argentina, yield improvements with the positive role that Novozymes’ microbial Novozymes’ microbial solutions improve the improved plant growth also results in a larger Optimize® generally amount to 5-6%. The inoculants can play in Climate-Smart uptake of nutrients in crops and also make root system whereby more carbon is stored accompanying increase in root growth binds Agriculture (CSA),” says Jesper Hedal them more resilient to stress factors such as in the soil. Finally, increased demand from a carbon in the soil and thereby reduces Kløverpris, Senior Sustainability Specialist, dry spells. Microbial solutions increase crop growing world population can be satisfied with atmospheric CO2 concentration. In addition, Global Sustainability and EMEA Public Affairs. yields and provide a number of environmental less pressure on natural habitats from higher the yield benefit results in reduced pressure benefits. These results have recently been crop yields. If used on all US corn, Jumpstart® on natural habitats and thereby in reduced CSA is a framework developed by the United documented by two studies for our JumpStart® could potentially reduce greenhouse gas GHG emissions from land clearing. Optimize® Nations’ Food and Agriculture Organization and Optimize® products based on the ISO- (GHG) emissions by 3.9 million tons of CO2 reduces GHG emissions of soybean production (FAO) to ensure sustainable agricultural standardized life cycle assessment (LCA) corresponding to annual tail pipe emissions in the Buenos Aires region by no less than strategies. methodology. from 820,000 US passenger cars. 17% per ton of soybeans produced.

Novozymes A/S Sustainability In the spotlight 11 In the spotlight Driving action with our stakeholders

Employees Community Novozymes drives employee engagement Novozymes invests in various educational through various regional initiatives that programs across our regions to help people support the development of our employees, understand the potential of biology. Our Educate increases their motivation, drives safety programs are tailored to the needs of the awareness, strengthens safety culture and communities in which we operate. These encourages healthy lifestyles. New employees programs focus on improving scientific literacy Ambassadors are required to complete an e-learning and environmental awareness. In total, we module on sustainability at Novozymes during educated an estimated 329,000 learners in onboarding. We are also exploring initiatives to 2019 through these initiatives. Moving forward, in China further strengthen employee engagement on we have introduced a new target called our sustainability goals in the updated strategy. INSPIRE, for which we have pledged 1% of our employees’ time to community engagement. 2019 highlights Driving community • This year we launched our new Innovation 2019 highlights engagement initiatives Campus in Lyngby, Denmark, that has been • In Denmark, Novozymes educated designed to encourage collaboration and approximately 5000 school students through with our employees. innovation. We have created flexible and two programs. In collaboration with the inspiring workspace zones that promote new scientific learning center LIFE, we knowledge sharing and socializing, and developed two cases for their mobile lab. As support working in silence. part of the ‘Naturfagsmaraton’ initiative, we he Educate Target Ambassador The program is • In North America, employees engaged in created and distributed 1500 experiment programme is an honorary deeply embedded direct conversations with the site’s preferred sets for schools where students tested how a T recognition for employee in Novozymes' 'Touch Values'. Currently, training and development vendors at an starch stain can be cleaned with the help of volunteers who are deeply involved in the we have 18 ambassadors from various event focused on exploring individual and enzymes. EDUCATE activities. This program aims functions across all of Novozymes’ sites team needs. • In Latin America, Novozymes created an to encourage employee involvement in in China. They support and encourage • Building on Novozymes’ approach to safety alliance with the Argentine government community engagement initiatives and other employees to engage in EDUCATE management, in China, we also organized through the Centro Cultural de La Ciencia strengthen the internal communication activities on their respective sites through a health management session focused on (Science Cultural Center) to set up an of EDUCATE target projects across all of sharing their personal experiences and cervical vertebra health for our employees. interactive program, Fuerza Atómica (Atomic Novozymes’ sites in China. insights. • We introduced a new initiative called ZEDx Force), which thousands of people attended Friday in India, where employees learn to learn about scientists and the challenges The Ambassadors directly support four “Through the EDUCATE something new and spark ideas together, they face in building scientific knowledge. core Educate Initiatives in China, namely, activities we can create a enabling their overall career development. The Parent’s Class, Biology Catalyzes the footprint about biology and Beauty of Life, The Little Biologists and science in children’s minds,” the Biology Education Innovation. They says Wu Gui Fang, Director, AP are experienced lecturers and educators, F&B Application Research and an with expertise in biology, communication Educate Ambassador. and volunteer work.

Novozymes A/S Sustainability Driving action with our stakeholders 12 In the spotlight Driving action with our stakeholders

Investors At Novozymes, maintaining a transparent and • Novozymes continues to be recognized by ongoing dialogue with our investors on both various indices and rating agencies as an financial and ESG performance is crucial to ESG leader in our sector. We are included Novozymes ensuring a strong long-term relationship and in the Corporate Knights’ 2020 Global 100 improving our performance on material issues. Most Sustainable Corporation in the World Index. secures Green 2019 highlights • Novozymes has a strong tradition of • Novozymes announced its updated strategy, transparent reporting on its climate change Better business with biology, and new non- impacts, and we submit climate change Mortgage Loan financial targets and commitments at the data to CDP annually. We received a ‘B’ Capital Markets Day in June 2019. This was score in CDP’s climate change disclosure well received by our investors and we look and management assessment. Refer to forward to our continued engagement during www.cdp.net to access our submission. Our energy-efficient innovation its implementation. campus secures the loan from • We are inspired to work with frameworks such as the Task Force on Climate Related finance partner Nykredit. Financial Disclosures (TCFD) and in the coming years we will work towards improved climate-related disclosures taking guidance from the TCFD framework. ovozymes’ commitment to sustainability • We are seeing increased interest among also extends to our approach to our investors in disclosures on and Nfinancing and we are continuously engagement in ESG topics including risks exploring sustainable financing initiatives. and opportunities, clean revenues, workforce metrics and animal welfare. In 2019, we obtained a Green Mortgage Loan for our new energy-efficient innovation campus in Lyngby, Denmark. The loan is provided by our finance partner, Nykredit, and is funded by the proceeds from Green Mortgage Bonds.

“Sustainable financing is one of our top priorities and to support this we launched the Green Bonds Framework in April 2019. We are pleased to support the journey toward sustainable development. With its highly energy efficient innovation campus in Lyngby, Denmark, Novozymes is one of our first Danish customers in the Green Mortgage Program. We are proud of our continued partnership.” - Nykredit.

Novozymes A/S Sustainability Driving action with our stakeholders 13 Driving action with our stakeholders

Governments, industry associations, others to advocate for passage of the Sustainable We engage with governments in all our Chemistry Research and Development Act regions, primarily through policy advocacy. Our which was finally passed by the House of engagement with industry or trade associations Representatives in October 2019. further helps us in our policy advocacy efforts. Novozymes presents its positions to • China Business and Biodiversity policymakers and other interested parties in Partnership (CBBP): Novozymes became one accordance with national and international of the first companies to join CBBP which laws. was established in May 2019. CBBP aims to bring members and government together Our public affairs employees in Europe, United on one platform to engage in dialogue on States, India and China, primarily engage biodiversity protection and sustainable with governments through advocacy and utilization-related policies, laws and consultation forums. They are registered in standards. It will also support members in dedicated lobbyist registers, as legally required evaluating biodiversity risks and sharing best (e.g: Transparency Register in Brussels). In practices through the global network. 2019, we spent approximately DKK 11.4 million globally on our advocacy efforts. • White paper to help E10 execution in China: As a member of the drafting committee As a member of various institutions that of the white paper ‘Global Experience support our sustainability commitments, we of Biofuel Policy and Implementation’, explore partnerships and drive collective Novozymes actively participated in the action. discussions and provided expertise. This white paper was published by the China 2019 highlights Petroleum and Chemical Industry Federation • The Sustainable Food Platform (SFP): The (CPCIF) in June 2019. SFP partnership under the Danish Initiative P4G (Partnering for Green Growth and • Confederation of Indian Industry (CII): the Global Goals 2030) saw good progress Novozymes is an active member of various in 2019. Novozymes together with other committees of CII. Through the Committee partners in the initiative are developing a on Bioenergy which is co-chaired by biscuit recipe that includes local Ethiopian Novozymes, we provide support in the quinoa and whey protein ingredients, made implementation of India’s National Biofuels possible with enzymes. Next steps are to Policy through various activities including improve biscuit recipes, produce locally and The Bioenergy Summit 2019 – Farm2Fuel. test with Ethiopian consumers. This summit was an excellent platform for various stakeholders working in the biofuels • Green chemistry policies in the US: sector to engage with the government. Novozymes, together with the GC3 Sustainable Chemistry Alliance, continued

Novozymes A/S Sustainability Driving action with our stakeholders 14 Driving action with our stakeholders

• HelloScience: In May 2019, Novozymes’ • Business Council for the United Nations collaborative innovation and project (BCUN): In 2019, Novozymes joined the development platform was awarded the BCUN of the UN Foundation as part inaugural SDG Tech Innovation Award in of its wider efforts to engage with key Copenhagen for its work to drive and build stakeholders on the global sustainable partnerships that make a lasting difference development agenda. Novozymes has to sustainable business development worked closely with BCUN around its climate around the world. HelloScience also change initiatives, including its support for hosted ‘LiveLabs’ in Bangalore, India and ‘Business Ambition for 1.5°C – Our Only Copenhagen, Denmark to drive further Future’ and commitments from the private innovative collaborations across the SDGs. sector.

• Below50: Novozymes is a founding • United States Council for International member of below50, a global campaign to Business (USCIB): During 2019, Novozymes reduce emissions in the transport sector continued its longstanding involvement with by increasing demand for low-carbon USCIB, with CEO Peder Holk Nielsen being fuels. In 2019, below50, along with the re-elected to its Board of Trustees as its California Low Carbon Fuels Coalition Sustainability Champion. Novozymes also (LCFC) and the Biotechnology Innovation helped support the launch of the USCIB Organization (BIO), jointly organized and ‘All-in Campaign’ to enhance multilateral hosted a Multi-State Legislative Strategy engagements between businesses, the UN session RE: Passage of Low Carbon Fuel and international organizations. Standards (LCFS) at the BIO World Congress in Iowa. This event kicked off joint work by Read more in ‘Stakeholder engagement’ at below50, BIO and the LCFC to advocate Novozymes.com. for more state-level policy that emphasizes the reduction of carbon intensity of transportation fuels in the US.

• International Chamber of Commerce (ICC): Novozymes worked through the course of 2019 to help support the development and deployment of ICC’s new strategy and priorities, which include a core focus on Climate Change and Sustainable Development. Novozymes joined various events like the UN High-level Political Forum and the UN General Assembly together with ICC to support the deployment of the SDGs.

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