Subject Matter, Responsibilities, Objective and Scope of Assurance Report
The environmental and social data and information presented in the Annual Report on which this Assurance Report is based are also comprised by our audit of the Annual Report. As further agreed with Management, we have performed work to express a conclusion in relation to each of the key principles of the AA1000 Assurance Standard: materiality, completeness and responsiveness, and to evaluate the environmental and social responsibility data and information in the Annual Report for 2006, as well as underlying systems, processes and competences underpinning performance.
The environmental and social responsibility reporting is the responsibility of Company Management. Our responsibility is to express a conclusion as well as to make recommendations on the environmental and social responsibility reporting in the Annual Report.
Basis of Conclusion
We planned and performed our work based on the AA1000 Assurance Standard and in accordance with the International Standard on Assurance Engagements (ISAE) 3000, "Assurance Engagements other than Audits or Reviews of Historical Financial Information (revised)", to obtain reasonable assurance that the environmental and social responsibility reporting in the Annual Report is free from material misstatements and that the information has been presented in accordance with the accounting policies applied. On the basis of an assessment of materiality and risk, our assurance work included an examination, on a sample basis, of management and reporting systems, processes and competences supporting Novozymes’ performance, as well as systems, procedures and evidence supporting the social and environmental data and information disclosed in the Annual Report. Our assurance work further included interviews with members of management and subject matter experts in key environmental and social performance areas, as well as an assessment of stakeholder engagement and Novozymes’ understanding of non-financial impacts, including its sphere of influence. Further, we performed an assessment of the reporting against peer reporting, media reports and industry knowledge. Our activities were undertaken at selected reporting units in China, USA and Denmark. We believe that the work performed provides a reasonable basis for our conclusion.
Conclusion
Based on the work performed we state our conclusion in relation to each of the key principles of the AA1000 Assurance Standard: materiality, completeness and responsiveness.
Materiality
In our opinion, the Annual Report provides a fair and balanced representation of material aspects of Novozymes’ environmental and social performance
Reported qualitative and quantitative environmental and social indicators form part of strategic and operational decision-making at Novozymes, including as an element in Management’s and Top Management’s balanced scorecards.
The presentation of data and information related to Novozymes’ environmental and social performance assists key stakeholders in interpreting the reporting in relation to their decision-making needs.
Completeness
In our opinion, the environmental and social responsibility data and information in the Annual Report have been included as a result of relevant activities for identifying and understanding environmental and social performance and impacts.
In 2006, Novozymes has continued its efforts to embed structured stakeholder engagement at the local level through development of supporting tools. At group level stakeholders are addressed through selected initiatives.
Novozymes identifies material aspects of its environmental and social performance within and beyond the boundaries of its direct management control, including animal welfare and energy consumption. Initiatives are considered to address carbon emissions of relevant suppliers and customers, as well as to further reduce the need for animal testing.
As a result of business expansion through acquisitions and business partnerships, the boundaries of Novozymes’ environmental and social impacts are expanding, resulting in new management and reporting challenges, in particular in terms of new activities outside the enzyme business. In general, there are processes to assess environmental and social issues arising as a result of business expansion, in particular in terms of acquisitions.
Responsiveness
In our opinion, the environmental and social responsibility data and information in the Annual Report address aspects material to Novozymes’ key stakeholders. In general, reported indicators and targets related to environmental and social performance are linked to relevant policies and are generally underpinned by financial and human resources.
Responsiveness is generally supported by management systems, which include use of internal and external environmental and social audits, as well as values-based audits (facilitations). Environmental and social policies cover all business activities and are underpinned by global business-level governance structures for the enzyme activities and site-level governance structures for non-enzyme activities.
In 2006, Novozymes has made progress in terms of developing systems and processes for managing diversity, as well as designing activities in the area of carbon emissions. Some steps have been taken towards developing a common and consistent approach to responsible purchasing.
In our opinion, the existing management and reporting systems as well as internal control systems support the reliability and accuracy of the environmental and social data and information in the Annual Report.
Commentary
According to the AA1000 Assurance Standard, we are required to include recommendations for improvements in relation to environmental and social responsibility. The recommendations as well as our statement of independence and competence to undertake this assignment in line with the requirements of the AA1000 Assurance Standard are stated under "Other information " in the online report. Our recommendations do not affect the conclusion stated above.
Gladsaxe, 25 January 2007
PricewaterhouseCoopers
Statsautoriseret Revisionsaktieselskab
Kim Füchsel
State Authorised Public Accountant |
Helle Bank Jørgensen
State Authorised Public Accountant
|
|
|
|
