Investor Presentaiton
Novo Nordisk Annual Report 2023
Introducing Novo Nordisk Strategic Aspirations
Risks
Management
Consolidated statements
Additional information
22
22
GOVERNANCE
EU Taxonomy
The EU Taxonomy is a European sustainability classification framework. It
enables corporates to communicate to stakeholders which of their business
activities have the potential to be considered sustainable (i.e. are Taxonomy-
eligible) and report to which extent eligible activities fulfil EU requirements
to be considered sustainable (i.e. are Taxonomy-aligned). For each relevant
business activity, the company has to disclose how much of its Turnover,
Operating Expenditures (OpEx) and Capital Expenditures (CapEx) can be
considered eligible and aligned, respectively.
In 2023 we identified eligible economic activities based on the six published
environmental objectives. Each of the economic activities was assessed on its
percentage of Taxonomy-eligibility and, for those related to the environmental
objectives of 'Climate change mitigation' and 'Climate change adaptation', also
on their percentage of Taxonomy-alignment. As a result, we report 100%, 60%
and 5% Taxonomy-eligible Turnover, CapEx and OpEx in 2023, respectively.
EU TAXONOMY ELIGIBILITY AND ALIGNMENT¹
Environmental objective
Total Turnover, CapEx, OpEx
Taxonomy-non-eligible activities (B.)
Climate change mitigation
Pollution prevention and control
Eligible not aligned (A.2.A.1.+ A.2.)³
Eligible and aligned (A.1.)
Economic activity²
Eligibility and alignment
We followed a two-step process to arrive at our Taxonomy disclosures. Firstly,
we screened the economic activities defined in the EU Taxonomy to identify
those relevant under the Novo Nordisk business model. Based on our review
and materiality considerations, we identified one new economic activity
to report on in 2023: '1.2 Manufacture of medicinal products' under the
environmental objective of 'Pollution prevention and control'. Furthermore,
like in 2022, we report Taxonomy-eligible CapEx for the economic activities
'7.1 Construction of new buildings' and '7.2 Renovation of existing buildings'
under the environmental objective 'Climate change mitigation'.
Secondly, we evaluated whether we could classify any of our Taxonomy-eligible
CapEx for economic activity 7.1 and 7.2 as Taxonomy-aligned. Although we
have made progress in fulfilling the technical screening criteria, certain
requirements in the design phase of the projects have not been fully met.
Consequently, the existing projects do not meet the criteria for alignment in
2023. We strive for alignment of certain projects in 2024. Furthermore, we have
started investigating the requirements, including CapEx plans, for reporting
alignment of the activity 'Manufacture of medicinal products' with the aspiration
of reporting alignment for part of the activities in 2024.
Turnover
CapEx
OpEx
2022
2023
2022
2023
2022
2023
(DKK
million) (%)
176,954 100%
(DKK
million) (%)
(DKK
(DKK
million) (%) million)
232,261 100%
23,961 100%
(%)
44,498 100%
N/A N/A
0
0%
20,788 87%
7.1. Construction of new buildings
7.2. Renovation of existing buildings
1.2. Manufacture of medicinal products
0 0%
0
0%
0 0%
0
N/A N/A
232,261
0 0%
0%
100%
232,261 100%
1,166 5%
2,007 8%
N/A N/A
3,173 13%
17,996 40%
6,010 14%
2,406 5%
18,086 41%
26,502 60%
(DKK
million) (%)
23,348 100%
23,348 100%
(DKK
million) (%)
31,115 100%
29,646 95%
0 0%
0
0%
0 0%
N/A
N/A
0
0%
1,469 5%
0 0%
1,469
5%
0
0%
0
0%
0 0%
0
0%
0
0%
0
0%
1. A.1, A.2., A.1.+A.2. and B. refer to Annex V to the Commission Delegated Regulation (EU) 2023/2486 of 27 June 2023. Not disclosed data are all either 0 (zero) or not applicable. 2. None of the reported economic activities are Enabling or
Transitional and we do not have any economic activities substantially contributing to 'Climate Change Adaption', 'Water', 'Circular Economy' or 'Biodiversity'. 3. When allocating CapEx and OpEx to economic activities, we prioritise those that
directly contribute to an environmental objective and for which specific technical screening criteria are set. Secondly, we link CapEx and OpEx associated with our primary economic activity, '1.2. Manufacture of medicinal products'.
Accounting policies
Total Turnover consists of total revenue from sale of goods, as defined
under IFRS. The Turnover KPI is defined as Taxonomy-eligible Turnover
divided by total Turnover.
Total CapEx consists of additions to fixed assets (including financial
lease) and intangible assets. Additions resulting from business
combinations are also included. Goodwill is not included in CapEx as
it is not defined as an intangible asset in accordance with IAS 38. The
CapEx KPI is defined as Taxonomy-eligible CapEx divided by total CapEx.
Total OpEx consists of direct non-capitalised costs that relate to research
and development, building renovation, short-term lease, maintenance
and repair and any other direct expenditures relating to the day-to-day
servicing of property, plant and equipment assets. OpEx excludes
amortisations and impairments. The OpEx KPI is defined as Taxonomy-
eligible OpEx divided by total OpEx.
None of our activities contribute to multiple objectives and hence do not
require disaggregation of KPI's. For the CapEx and OpEx allocations, we
have identified the relevant purchases and measures as well as the
primary related economic activity. Thereby, we ensure that no CapEx or
OpEx is double counted. We are adjusting the R&D cost for
amortisations to not double count these costs, as the amortisation
would also have been part of CapEx in prior years.
Contextual information about the KPIs
We consider all Novo Nordisk's revenue related to Manufacture of medicinal
products. As Taxonomy-eligible, we only include CapEx directly associated
with the manufacturing process or related to construction or renovation of
buildings, hence intangible assets are excluded. This is the main reason for
reported eligibility being less than 100%. Eligible CapEx mainly relates to
the expansion of production capacity and consist of additions to property,
plant and equipment, cf. note 3.2 to the Consolidated financial statements.
Eligible OpEx mainly relates to research and development directly linked to
manufacturing processes. The narrow EU Taxonomy OpEx definition is the
main reason for a reported low eligibility.View entire presentation