Environment & Energy
Could you describe the corporate environmental strategy at Novartis and the challenges the strategy aims to confront?
Environmental strategy is embedded in Corporate Citizenship policy at Novartis. Specifically, Novartis seeks to reduce energy consumption by improving efficiency of energy use in existing operations, adopting renewable energy sources where economically attractive and undertaking carbon offset projects to complement internal initiatives. In 2009, solar energy systems achieved major gains with the tripling of our solar electricity capacity.
Our strategy aims to address all areas of the environment, certainly in terms of the way we use the limited resources in the world but also in limiting pollution. That leads, in turn, to specific targets and actions. We have targets in a number of areas including carbon dioxide, waste, volatile organic compounds, water and energy efficiency. Our target of completely eliminating organic hazardous waste sent to landfill is rare amongst businesses.
What served as the catalyst to the development of this strategy?
It is evolutionary – emanating from the broader principles of doing no harm through our business. Our commitment to the Global Compact has been an important factor. The three environmental elements in the Global Compact are integrated in the Novartis Corporate Citizenship policy.
“I am a scientist by background and measurement to me is fundamental. Top management is very numerate, and we need to make the environmental numbers as real and as lively as the financial numbers.”
What roles do the Chief Executive Officer and the Board of Directors have in shaping or managing environmental policies and strategies?
The answer is every part of it. All policies, strategies, and targets are approved by the Executive Committee of Novartis (ECN). Corporate Health, Safety and Environment reports to the members of the ECN at least quarterly for some of the indicators – and annually for all of the indicators that I mentioned earlier. Additionally, progress against targets and other information is published in the Novartis annual report.
Just over five years ago, the ECN decided Novartis would voluntarily abide by the Kyoto protocol. In addition to energy efficiency improvements, we also looked for carbon offsets in terms of forestry. We purchased a 34-square-kilometer parcel of former grazing land in Argentina and have planted 3 million trees. Through this project, and another in Mali, Novartis will collect 3 million tons of carbon dioxide by 2040.
What differentiates companies “leading” on environmental management from ones “following” environmental management initiatives?
Three elements: a leadership vision, measurement combined with ambition, and disclosure. The first thing is management commitment to a triple-bottom-line culture that encompasses social and environmental dimensions as well as economic criteria in measuring organizational success. Management’s desire to take a long-term business approach and avoid short-term decisions is crucial.
Also, I would say leading firms are highly engaged in measurement of their activities. If you don’t measure an activity you don’t know what is happening and you certainly can’t manage it.
I am a scientist by background and measurement to me is fundamental. Top management is very numerate, and we need to make the environmental numbers as real and as lively as the financial numbers. Once measurement is in place, it is possible to set ambitious improvement goals in the areas that matter.
And the last part of demonstrating leadership is disclosure: making what you are doing publicly available, because that shows accountability and respect to all stakeholders, external and internal.