Independent assurance statement on Novozymes’ 2011 sustainability reporting and adherence to the AA1000 AccountAbility Principles
To the Stakeholders of Novozymes
We have been engaged by Novozymes A/S’ Management to obtain moderate assurance (review) as to whether Novozymes adheres to the AA1000 AccountAbility Principles and to obtain reasonable assurance (audit) as to the quantitative environmental and social data including accounting policies for environmental and social data in Novozymes' 2011 Annual Report, pages 54–55, 61–63, and 86–88.
Criteria for the preparation of reporting on data
The criteria for the preparation of the environmental and social data are evident from the accounting policies for environmental and social data described in Novozymes' 2011 Annual Report, pages 61–63. The accounting policies for environmental and social data include information concerning which of Novozymes’ activities and functions are included in the reporting, types of data, Management’s reasons for choosing the data included and the accounting policies and methods applied.
Adherence to the AA1000 AccountAbility Principles of Inclusivity, Materiality and Responsiveness is the responsibility of Management. Furthermore, Management is responsible for preparing the environmental and social data as well as for establishing data collection and registration and internal control systems with a view to ensuring reliable reporting, specifying acceptable reporting criteria and choosing data to be collected for intended users of the Annual Report.
Assurance provider’s responsibility
As assurance provider, it is our responsibility, on the basis of our work, to make observations and recommendations with respect to the nature and extent of Novozymes’ adherence to the AA1000 AccountAbility Principles as well as to express an opinion on the reliability of the environmental and social data in the Annual Report, pages 54–55 and 86–88.
Our team of experts has competencies within performing assurance of environmental and social data and within assessing such data and information. In addition, our team has competencies with regard to assessing sustainability management systems. We have in 2011 not performed any tasks or services for Novozymes or other clients which would have conflicted with our independence, nor have we been responsible for the preparation of any part of the Annual Report. Thus, we are independent as defined in the AA1000 Assurance Standard (AA1000AS (2008)) and we consider our team qualified to carry out this independent assurance engagement.
Scope, standards and criteria used
We have planned and performed our work based on AA1000AS, using the criteria in the standard to perform a Type 2 engagement, and in accordance with the International Standard on Assurance Engagements (ISAE) 3000, “Assurance engagements other than audits or reviews of historical financial information.”
We have worked to obtain:
- A moderate assurance (review) as to Novozymes’ adherence to the AA1000 AccountAbility Principles
- A reasonable assurance (audit) of the quantitative environmental and social data in the Annual Report, pages 54–55 and 86–88
Methodology, approach, limitation and scope of work
Our methodology has included procedures to obtain evidence of Management’s commitment to the AA1000 AccountAbility Principles and of the implementation of systems and procedures in support of the principles.
Our methodology has also included procedures to obtain evidence of the environmental and social data in the Annual Report. The procedures chosen depend on our judgment, including the assessment of the risks of material data misstatements. In conducting those risk assessments, we have considered internal controls relevant to the preparation and fair presentation of environmental and social data in order to design assurance procedures which are appropriate under the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Novozymes’ internal controls.
Based on an assessment of materiality and risk, our work has included:
(i) Enquiries and interviews with the chairman of the Board of Directors, members of Executive Management, staff from the Sustainability Development department as well as management of various corporate functions regarding Novozymes’ adherence and commitment to the AA1000 AccountAbility Principles, the existence of systems and procedures to support adherence to the principles and the embedding of the principles at corporate level.
(ii) Sample testing of key processes and controls which form part of management reporting systems, processes and procedures, and the obtaining of evidence supporting the environmental and social data disclosed in the Annual Report, pages 54–55 and 86–88. Our assurance on environmental and social data has been undertaken at chosen reporting units and combined with analytical assurance procedures on data covering the Novozymes Group.
In our opinion, the environmental and social data for the financial year 1 January to 31 December 2011 (pages 54–55, 61–63, and 86–88) are prepared in accordance with accounting policies stated in accounting policies for environmental and social data, and, based on our review, nothing has come to our attention causing us to believe that Novozymes does not adhere to the AA1000 AccountAbility Principles.
Observations and recommendations
According to AA1000AS (2008), we are required to include observations and recommendations for improvements in relation to Novozymes’ adherence to the AA1000 AccountAbility Principles.
Management’s strong commitment to inclusivity and stakeholder engagement continues. In 2011 Novozymes has strengthened its approach to stakeholder engagement through the Citizymes program and through the development of more systematic tools for stakeholder mapping and engagement. This development continues to form the basis of a structured and systematic stakeholder engagement process being integrated and applied across the organization.
Novozymes has integrated identification and assessment of materiality of sustainability issues into the ongoing management and governance processes, ensuring a systematic and documented approach to assessing materiality of sustainability issues.
Novozymes is committed to being responsive to stakeholders – through the Annual Report, through the ongoing dialogue with stakeholders and through the systematic approach applied in developing suitable responses to sustainability issues.
We recommend that Novozymes considers how to provide an easy-to-understand overview of sustainability issues that are material to Novozymes in a reporting context, e.g. the Annual Report or on www.novozymes.com, including information on dilemmas concerning enzymes and biotechnology and related social impacts to ensure a balanced communication on sustainability issues.
Bagsvaerd, January 19, 2012
Mogens Nørgaard Mogensen
State Authorized Public Accountant
State Authorized Public Accountant