blueprint for change concept climate bangladesh (bysted june 21)
TRANSCRIPT
The Triple Bottom Line
– our way of doing business
Gå hjem møde - Bysted June 21, 2012
Ole Kjerkegaard Nielsen, MSc, PhD
Programme Director Corporate Relations
Novo Nordisk A/S
Caring for people and society is at the heart of our heritage and values
August and Marie Krogh
Patient J.L.
15 December, 1922 (with his mother –
prior to insulin treatment)
Patient J.L
15 February, 1923 (after insulin treatment)
Defining moments have shaped our approach
Globalisation Social justice and economic
growth
Environmental protection
Occupational health and
safety
1960-70’s Enzymes
and allergy 1980-90’s
Genetic engineering and the impact on
environment
2001 AIDS drug court case in
South Africa and access to care
2005-2009 Oil for Food and business ethics
An ever changing environment affects our business
Source: IDF Diabetes Atlas, 5th edition, 2011
0
100
200
300
400
500
600
Millions of people w diabetes
+51%
552
2030 2011
366
Global diabetes epidemic Financial instability
We have an ambition to be a sustainable business
Our ambition is to strengthen our leadership in diabetes.
We aspire to change possibilities in haemophilia and other serious chronic conditions.
Our key contribution is to discover and develop innovative biological medicines and make them accessible to patients throughout the world.
The company seeks to conduct its business
in a financially, environmentally
and socially responsible way.
Patients
The TBL is a core principle in the Novo Nordisk Way
“Our business philosophy is one of balancing financial, social and environmental considerations – we call it ‘The Triple Bottom Line’”
- The Novo Nordisk Way
Our culture is also defined by TBL
Managing our
business sustainably
Responding to changing stakeholder expectations
Driving systemic change in areas
of strategic business interest
Learning with stakeholders
Value creation
Business integration
Innovating through
partnerships
A true leader in the transition towards global sustainable development
Risk mitigation Resilience Innovation
Sustainability strategy
Novo Nordisk has a patient centred business approach
From customer driven relationships to cluster development
Better treatment and care for all people with diabetes
Public awareness on the need to take action on diabetes
More resources to prevention and early detection of diabetes
changing diabetes® ambitions Addressing the ”rule of halves”
NADINE ABRAHAMS AND TAMSYN LA VITA
In good company, South Africa
Nadine has type 1 diabetes
A series of carefully selected programs strengthening the link between our TBL principle and our value creation…
…with the purpose to
• assess and communicate the impact of our initiatives for society and for us
• foster healthy:
- profitable business
- communities
- sustainable production
- planet
• emphasize the importance of the TBL principle integration in both internal and external stakeholders’ priorities
Integration
Scale
Expanding the pie • Capture opportunities that create value for both society and Novo Nordisk
Zero sum game • Re-allocate resources to contribute to society
Business basics • Embedded part of how Novo Nordisk does business
The right thing to do
• Adhere to requirements
• Getting engaged
Philanthropy • Passive approach to contribute to issues important to society
Value creation potential
Shared value to Novo Nordisk and Society
• Shaping society
• Scale
Full TBL integration will enhance value to Novo Nordisk and society
the Blueprint for Change Programme is based on a holistic shared value creation model
Developed by Novo Nordisk and Accenture
short term long term
min
imis
ing
d
ow
nsid
e
maxim
isin
g
up
sid
e
Tangible Value
Intangible Value
Risk Cost
Making a business case for corporate sustainability
Facing up to the climate change challenge
Changing Diabetes in China
Creating shared value through socially
responsible initiatives in the United States
Changing diabetes in Bangladesh through
sustainable partnerships
1st Blueprint for Change - Climate Strategy
Facing up to the climate change challenge
2003
2006
2010
Climate becomes a focus area
Novo Nordisk became the 10th member of the WWF Climate Savers Programme
Impact assessment of the climate strategy
Commitment to reduce 10% from 2004-2014
the climate change challenge
10% reduction in carbon emissions achieved five years ahead of time
• 28,000 tons of CO2 reduction equivalent to 4,500 fewer cars on the road every year
• 50,000 tons CO2 reduction through sourcing of wind power equivalent to taking a further 8,000 cars off the road every year
• The DONG Energy partnership – building of the world’s largest off-shore wind farm which will supply power equivalent to the annual electricity consumption of 200,000 households
• 30 new partnerships have been inspired by the Novo Nordisk model
• The energy savings have realised a total of 24 million USD in cost savings corresponding to a 10% reduction in global energy consumption
• The energy savings conducted from 2004 will continue to yield annual cost savings of app. 8 million USD in the future
• Half of all energy saving projects are paid back in less than one year
• Average pay back time is 1.9 year
• Intangible value of future risk mitigation, employee engagement, trust and reputation
VALUE TO NOVO NORDISK VALUE TO SOCIETY
SHARED VALUE
the climate change challenge
Decoupling environmental impact from sales
the climate change challenge
Index: year 2001 = 100
50
100
150
200
250
300
2001 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 2010
In
dex
CO2 Water Energy Waste Sales
Our partnership with DONG Energy leads to an innovative solution
Novo Nordisk saves energy at production
facilities
The financial savings are earmarked to sourcing of renewable electricity
The premium paid helps fund establishment of new wind farm in the
North Sea
100% of our electricity consumption in Denmark
is covered by the new wind farm
the climate change challenge
19
Bangladesh has a strong growing market-based economy with continuously improving quality of life
Gross domestic product, constant prices1
index
Human development index2
Slide no 20
index
1International Monetary Fund, World Economic Outlook Database. http://www.imf.org/external/pubs/ft/weo/2011/01/weodata/index.aspx. Accessed on January 2012. 2International Human Development Indicators. Regional and National Trends in the Human Development Index 1980-2011. http://hdr.undp.org/en/data/trends/. Accessed on February 2012.
situation
One-third of sales are expected to come from China and International Operations (IO) regions by 2020
Novo Nordisk, sales shares
Source: Internal data: SPP11 ex-factory sales, Insights & Forecasting, January 2012.
rest of the world China IO
Slide no 21
Note: IO is International Operations (Bangladesh is an IO country)
situation
Slide no 21
IO will account for 51% of the patient growth by 2021 driven by intensified treatment and lifestyle changes
Share of global growth (patients)
Source: Internal data: Insights & Forecasting, January 2012.
CAGR (2011-2021) - 5.87%
IO growth potential (drivers)
CAGR (2011-2021) - 7.03%
Slide no 22 situation
Slide no 22
Currently, many developing countries rely primarily on locally produced drugs
These are often counterfeits or generics of branded drugs
The rise in socioeconomic and educational levels is driving a market for more innovative and branded drugs
Rising standards of living and increasing life spans will shift focus away from infectious diseases
Infectious diseases Non-communicable diseases
As incomes and longevity rise, demand will shift from infectious to non-communicable diseases
Source: IMS Health. Pharmerging Markets. Opportunities for Growth and Change. IMS ,2008
cardio vascular cancer diabetes HIV malaria tuberculosis
Slide no 23 situation
Slide no 23
complication
However, healthcare systems will not be transformed as quickly as demand, creating a need for models to ensure both economic and public health sustainability
Demand for healthcare
Supply of healthcare
Early market entry and extensive partnering with government, non-governmental institutions and private enterprises with an aligned vision for removing barriers to care and improving defined outcomes
partnerships
private sector Significant private sector or social entrepreneurship investments, in addition to government interventions
sustainable business models
A compelling business case that encourages private institutions to invest in healthcare infrastructure and services
Slide no 24 situation
Slide no 24
Patients in the developing world face barriers to improve their health
Note: The model has been developed together with BADAS and Accenture, and is based on “Access to Health: Our Approach”, Novo Nordisk, 2011.
Slide no 25 complication situation
Availability
Affordability Quality for
patients
Accessibility Awareness
Lack of education and awareness about diabetes, its complications, and its cost
It is difficult for many to remember medication and follow scheduling, many fear of injections, many people living with diabetes are stigmatized and have psychological issues
Many cannot afford medicine and treatment services, the majority do not have health insurance and do not have access to other finance solutions, healthcare system is lacking necessary resources to treat diabetes
Issues and barriers
examples
Lack of high quality HCPs and clinics, long distance to facilities, and long waiting time for treatment
Some medicines/package solutions are not available in the country or in the region
More than one-third of all people with diabetes in least developed countries live in Bangladesh
IDF Diabetes Atlas, 5th edition, International Diabetes Federation, 2011.
40% of people living with diabetes in least developed countries (LDCs) are living in Bangladesh
In Bangladesh, diabetes is a
particularly daunting challenge, with more than 12% of the adult population affected by diabetes or prediabetes
Nearly half of the population with diabetes is undiagnosed
Among those with diabetes, only 1 in 3 people is treated, and roughly 1 in 13 achieves treatment targets
Slide no 26 complication situation
People living with diabetes, top 10 LDC countries
Slide no 26
Patients in LDCs face barriers in diabetes, which need to be addressed sustainably and in partnerships
Critical Success Factors Response to Issues
Interactions/Partners Issues and barriers Outcomes
• Too few people know about diabetes / lack of awareness
• Patients have difficulties adhering to guidelines
• Most people cannot afford medication
• Lack of sufficiently educated health care professionals
• Limited availability of HCPs
• Transportation issues
• Psychosocial issues
• Value to people with diabetes
• Value to society
• Value to Novo Nordisk
• Value to NGOs
• Value to public sector
• Value to social enterprises
• Value to private sector
non-exhaustive
The most important initiatives since 2001
2003 2004 2004 2007 2007 2008 2010 2010 2006 2007
Implementation of cool-chain system
Distance Learning Programme (DLP)
Bangladesh: a full fledged affiliate
Primary prevention of diabetes
Changing Diabetes in Children
LDC pricing policy
Distributor change
Improving DM through diabetes educators
Accredited Physician Scheme
Improving diabetes care at Thana level
Slide no 27 answer complication situation
Partnering with the local champion has been a key for the success created in Bangladesh
Slide no 28
Our key contribution is to discover and develop innovative
biological medicines and make them accessible to patients
throughout the world.
- Novo Nordisk Way
In Bangladesh no diabetic shall die untreated, unemployed or unfed. All people shall be provided with affordable healthcare services.
- BADAS vision
focus trust
consistency commitment
answer complication situation
Accessibility and availability of diabetes care have been addressed though DLP and distributor change
involved partners not involved partners
outer circle primary addressed issues secondary addressed issues not addressed issues
pie chart
Slide no 29
Interactions Response
Issues and barriers Outcomes
Distributor change
• Lack of insulin availability in the country
• Lack of proper insulin storage equipment
Increased sales volumes and market potential
Improved access to new growth possibilities
Increased insulin distribution from 16% to
53% of population
Improved availability of and accessibility to HCPs
on a sub district level
Increased sales volumes (9.5%-point) and market potential
Improved access to new growth possibilities
Distance Learning Programme
Increased sales volumes and market potential
Improved access to new growth possibilities
v
Improved quality of more than 4,500 HCPs
Improved quality of care and patient knowledge
about diabetes
Improved patient outcomes (3%-6%
decrease in HbA1c level)
Contribution to device, MI penetration, and market potential
Improved reputation and stakeholder support
Improved access to new skills & patient pools
• Poor accessibility to HCPs
• Quality of diabetes care is poor
• Lack of awareness and knowledge among patients about diabetes
answer complication situation
Affordability and accessibility of diabetes treatment has been improved through LDC pricing policy and CDiC
involved partners not involved partners
outer circle primary addressed issues secondary addressed issues not addressed issues
pie chart
Slide no 30
Interactions Response
Issues and barriers Outcomes
LDC pricing policy
Increased sales volumes and market potential
Improved access to new growth possibilities
m
Overall reduced cost of insulin and complementary
products
Decreased cost of treatment from 41% to 12% of the
disposable income
Improved affordability from 10% to 40% of the
population
Increased sales volumes (2.3%-point) and market potential
Improved market share with 12%-point in the first 2 years
• Affordability is a very significant issue in Bangladesh
Increased sales volumes and market
V
Improved access to new growth
c
Improved quality of life for 1,077 children
Increased focus and awareness about T1D
Accessibility to care has improved
Treatment targets improved due to CDiC camps
Increased market potential and stakeholder support
Improved access to new growth possibilities
Employee engagement
Changing Diabetes® in Children
• Affordability is poor in the country
• Lack of awareness about type 1 diabetes
• Lack of specialized and dedicated resources
• Accessibility to care is challenging
answer complication situation
Novo Nordisk has been effective in addressing societal issues due to a number of sustainability considerations
Partnership development
Success requires extensive partnering with government, NGOs and other institutions and private enterprises with aligned visions and goals
Private sector involvement
In addition to government interventions significant private sector or social entrepreneurship investments are required
Sustainable business models’ creation
A sustainable business case is needed to incentivize private institutions to invest in healthcare infrastructure and services
Slide no 31 answer complication situation
In order to drive more value, a stronger partnering model around the patient centric issues is advised
Slide no 32 next steps answer complication situation
Critical Success Factors Interactions/Partners Issues and barriers Outcomes
• Too few people know about diabetes / lack of awareness
• Patients have difficulties adhering to guidelines
• Most people cannot afford medication
• Lack of sufficiently educated health care professionals
• Limited availability of HCPs
• Transportation issues
• Psychosocial issues
• Value to people with diabetes
• Value to society
• Value to Novo Nordisk
• Value to NGOs
• Value to public sector
• Value to social enterprises
• Value to private sector
non-exhaustive
Making change happen There is only one way
“Be the change you want to see in the world.”
Mahatma Gandhi