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Why biotech innovator Novozymes uses the SDGs as a catalyst for growth

By Heather Clancy, Editorial Director, GreenBiz
Novozymes\n president and CEO Peder Holk Nielsen is optimistic that the world has \nthe willingness and the technology to tackle climate change.

But \nhe worries that too many well-intentioned companies are wasting time \ntaking action because they’re looking for perfect solutions for the long\n term rather than embracing good ones that have the potential to make a \nsmaller impact more quickly.

\"You can get into the mood where this\n is such an overwhelming task that you can’t make a difference and \ntherefore you go on doing the same thing as you’ve always done,\" Nielsen\n told me during a chat last week. \"Or you can tell yourself, ‘Let’s \nconcentrate on where I can make a difference, and then let’s make a \ndifference.’ I would put to you that if every company did that, then we \ncould actually solve most of these problems. It’s no harder than doing \nthat.\"

Nielsen’s own company, Danish biotech firm Novozymes — \nwhich develops enzymes used for bioenergy, food and agricultural \napplications, household care products and production processes — has \ntaken that sentiment to heart. And then some.

Since 2015, the \ncompany’s business strategy has been explicitly aligned around \ncatalyzing technologies that will play a role that exploit the \n\"inventory of business opportunities\" embedded into the U.N. Sustainable Development Goals\n (SDGs) into reality. Using the SDGs as a talking point helps Novozymes \nput it strategies into context for national governments, cities, \ninvestors and other key stakeholders, such as its roughly 6,200 \nemployees.

Indeed, a \"significant\" portion of the compensation for\n Novozymes’ top 200 executives is tied to the company’s ability to grow \nrevenue related to catalyzing a low-carbon future, while meeting its own\n corporate sustainability targets, Nielsen said.

\"Sustainability \nis not a corporate department in Novozymes; it’s a part of what we do, \nit’s the strategy,\" he said. \"I think that’s an important distinction to\n make.\"

To be clear, the company isn’t trying to tackle all 17 \nSDGs. It has honed its focus to five that explicitly play into its \nbusiness:

No. 2 – Zero HungerNo. 4 – Quality EducationNo. 6 – Clean Water and SanitationNo. 13 – Climate ActionNo. 17 – Partnerships for the Goals

\"I\n would advise executives to concentrate only on those where they think \nthey can make a positive impact and try not to mess up on the others,\" \nNielsen said.

Novozymes is the global leader in industrial \nenzymes, controlling an estimated 48 percent of the market and holding \nmore than 6,500 granted and pending patents, according to the company’s \nannual report. The organic revenue growth for its bioenergy business was\n 11 percent in 2017, while its food and beverage business grew 9 \npercent. Right now, about 65 percent of its business companies from \ndeveloped economies, and Nielsen views the SDGs as a way of starting \nmore serious dialogues in emerging nations.

One example of how the\n SDG lens shapes Novozymes’s strategy is its partnership with the NICE \nGroup, one of China’s largest detergent companies — and one of the \nbiotech company’s biggest customers. In 2017, two companies began \ncollaborating on a research and development project to help NICE create \nfar more concentrated formulas of its products. 

\"If we can \nencourage half the market to switch from conventional to concentrated \ndetergents, we will save huge amounts of energy in terms of \ntransportation and packaging,\" said Hu Zhengyu, chief engineer of NICE, \nin Novozymes’s latest sustainability report. \"That will be a leap \nforward for sustainable development.\"

Another example of how Novozymes uses the SDGs for guidance on investment decisions is its BioAg Alliance\n with Monsanto, an initiative focused on developing new pesticides and \nherbicides that are made from naturally occurring microbes. The products\n are already being used on more than 80 million acres of farm land; the \ngoal is to reach 250 to 500 million acres worldwide by 2025.

\"We \nhave great new products on the market that will help farmers produce \nmore crops in a sustainable way,\" said Colin Bletsky, Novozymes’ vice \npresident for BioAg, in a statement about the initiative last year. \"We \ncontinue to increase our understanding of how plants and microbes \ninteract, and this is reflected in our strong pipeline. It will help \npropel biological solutions from agricultural niche to industry \nmainstream over the coming decade.\"

This article was originally published in GreenBiz