Novo Nordisk seizes ‘unique opportunity’
Reducing travel is a key element for its emissions strategy, but so is collaborating with suppliers
Company: Novo Nordisk
Business type: Chronic disease pharmaceuticals
Headquarters: Bagsværd, Denmark
Key green travel goals:
• By 2030: reduce business flight emissions by 50 per cent
• Shift internal meetings to virtual
• Increase rail usage over air
• Introduce emissions messaging in OBT
• Potentially supporting SAF initiatives, including partnering with other pharma companies on SAF consortia purchasing
In a year when so many other urgent needs could have taken precedence, Novo Nordisk is quite clear about its number one priority for travel management in 2021. “As we reintroduce travel, CO2 is going to be front and centre,” said associate director and category leader for travel, meetings and expense management Marc Newman. It is an ambition he and colleagues intend to make reality through a formidable reshaping of both demand and supply management of the travel category at the company.
Novo Nordisk quite literally ranked sustainability as its top business travel priority in the survey of 318 travel buyers BTN conducted for this issue. The reason, according to Newman, is that the present hiatus on corporate travel offers an unprecedented shot at permanently shifting many interactions previously done face-to-face to virtual technologies.
“We had already started a campaign on greener travel,” said Newman. “We had targets we set ourselves in 2019 and 2020 in terms of travel and the use of [meetings] technology. Now we’ve proven business can be conducted digitally. All that technology has come so far so quickly in the last 12 months that it would be a shame not to capitalise on it. I believe we have a unique opportunity to keep this momentum going in terms of our overall CO2 reduction ambitions.”
Novo Nordisk committed itself to deep environmental engagement in 2018 when it adopted a strategy it labels Circular For Zero. The intention is to shift the business from a linear to a circular economy, in which zero environmental impact is achieved by reusing and recycling existing resources where possible, and minimising where not possible. Novo Nordisk operates a triple bottom line that measures and reports on environmental and social as well as financial performance.
Subsequently, the company has also committed itself to the Science Based Targets initiative to reduce greenhouse gas emissions in line with the 2015 Paris Accord and 2018 Intergovernmental Panel on Climate Change.
The company is aiming for zero emissions by 2030 for what it terms Operations and Transportation, covering all Scope 1 (direct) and Scope 2 (indirect from electricity and other forms of power) sources plus some Scope 3 (all other indirect emissions), including business travel. In 2019, business flights accounted for 20 per cent of Operations and Transportation emissions, a figure that fell to 10 per cent in 2020 after Covid shut down most of the company’s travel.
Novo Nordisk aims to achieve by 2025 a 50 per cent reduction compared to emissions caused by business flights in 2019. “And this year we’d like to get it down by 30 per cent”, said Dorethe Nielsen, the company’s vice president for corporate environmental strategy.
The permanent reduction in business trip volumes that would go much of the way to hitting this target looks feasible thanks to lessons learned over the past year.
“That’s been a little bit of a journey,” said Nielsen. “We had a culture where we needed to come into the office every day so the boss could look in your eyes. And our travel habits were extensive. But in 2020 we really proved we can continue our business as usual, and maybe our executive team have also felt their work/life balance has improved.”
THE CHALLENGES AS TRAVEL RETURNS
Recent experiences mean the travel and environmental teams believe they are now pushing at an open door, rather than a closed one, but that doesn’t mean the pushing will stop. Business units have been set emissions budgets they are not supposed to exceed.
It is up to each unit and local leadership to determine how they spend their carbon budgets, which cover much more than travel, but the finishing touches are being put to guidelines they will be sent on how to reduce emissions caused by meetings and events.
One obvious example for European-based employees is use of rail in preference to air where reasonable. Some of the guidance may become hard and fast policy rules, such as a ban on one-day international trips.
However, Newman is encountering obstacles familiar to any travel manager trying to go greener, perhaps the most formidable of which is a paucity of granular data. “Until we have good data, it’s hard to set limits and budgets,” he said.
Examples of where the data is wanting include booking tools that show the same amount of CO2 for different airlines and departures on the same route, regardless of type of aircraft.
Newman also feels frustrated in his attempts to integrate the management and presentation of travel and virtual alternatives. In addition to standard desktop conferencing like Microsoft Teams, Novo Nordisk has invested heavily in more sophisticated telepresence equipment. Newman has started working with facilities management at Novo Nordisk to work toward this concept, but at this point he is unable to take that cooperation as far as the point of sale for the potential business traveller.
“What I’d like to see is the ability when I go to book a trip on our online booking tool for something to come up asking ‘can you do this digitally and by the way it’s going to save you this amount of CO2 and this amount of money?’” he said. “Our online booking tool has a module, but it doesn’t really go far enough.”
“We are willing for a short period to pay a premium but that should be in order for us to support innovation and growth”
COLLABORATION, NOT COMPETITION
The current pause has shown Newman and Nielsen where virtual alternatives work fine, but it has made equally clear that for some crucial interactions, such as professional networking, travel will always be needed.
Consequently, since Novo Nordisk, like all companies, will be unable to achieve zero travel emissions by the simple expedient of ceasing all trips, ways need to be found to green the supply chain.
One early victory has been ground transportation. In 2019, Novo Nordisk contracted a Danish taxi company with a 100 per cent electric fleet as its preferred supplier. “It spurred other taxi companies to increase the amount of electric vehicles they have,” said Newman.
The theme of influence and cooperation runs throughout Novo Nordisk’s supplier strategy, including collaborating with airlines because, Nielsen observed, “we need to fly, so we can’t get to zero by ourselves. We have a huge role to push and work together in partnerships. This is also about the circular model, which is not something we can do alone. We are dependant on each other.”
Putting this principle into practice, Novo Nordisk has started to talking to airlines about assisting their transition to sustainable aviation fuels. That support could be financial. “We are willing for a short period to pay a premium but that should be in order for us to support innovation and growth,” said Nielsen. “We did the same when we signed our first partnership for renewable electricity in Denmark more than a decade ago. We paid a high premium but that led to excess capacity and then prices came down.”
To help lower those costs, Nielsen also sees a potential opportunity for consortium buying of fuel with other pharmaceutical companies.
“I would like us to convene more sector-wise,” she said. “The environmental agenda is something on which we could join forces. We are not competing here. Why not go together and support airlines to do something good?”
Only once demand and supply management options have been exhausted will Nielsen contemplate “compensating”, also known as offsetting.
“We don’t want to use it as an excuse for ‘cheating,’” she said. Nielsen believes there is validity in investing in tree planting and other carbon capture initiatives, but added that finding an appropriate scheme is “a jungle” that requires careful and time-consuming vetting.
No fewer than 400 employees at Novo Nordisk are actively engaged in some capacity in the company’s carbon reduction efforts, but taking emissions from flights to net-zero by 2030 will surely be one of the most formidable achievements of all if the company can pull it off.
“It is a challenge,” said Nielsen, “but, as Marc says, we now have a great opportunity.”