Managing risk is central to the business in Novo Nordisk Pharmatech, as it is critical for us to protect our assets, our employees, and the business of our customers. It is the responsibility of the management board to review the overall risk exposure of the company. For this purpose, a risk assessment process is in place, where relevant risks are identified and assessed on a frequent basis.
On the basis of this assessment, mitigation plans are evaluated twice a year, and subsequently reported to the Board of Directors as a standard agenda item at Board meetings.
Risks are assessed based on the likelihood of events, as well as the potential impact of events on our business to reach short and long-term objectives. This assessment is anchored in the strategic planning process presented to and approved by the Board of Directors on an annual basis.
The top five risks for Novo Nordisk Pharmatech in 2020 were identified as:
As Novo Nordisk Pharmatech operates in a global market, we also adhere to the highest standards of business ethics in our dealings with external parties. All relevant employees receive mandatory e-learning training, as well as training from legal experts in order to counter corruption and/or bribery attempts. Our operating model is to use distributors in global markets, and our distributors are trained and contractually obliged to uphold the same standards.
Our production processes involve chemicals that are potentially hazardous to the health and safety of our employees as well as the local environment. Therefore, we are continuously investing to mitigate the risk of adverse situations in this area.
We are continuously reviewing our environmental mitigation plans to ensure we are equipped to deal with abnormal climate situations – for example, the aftermath of flooding or heavy rain as we are situated close to sea level.
As part of annual budgeting and follow up, we build in expectations to market development short term, mid term and long term. For the Quats market, we see an underlying short-term increase in the market, but long term, a trend away from using preservation chemicals in final products, as end customers are looking for alternatives to this. This can threaten the long-term growth of our Quats business. For the technical insulin market, we do see a long-term trend towards using chemically defined growth media instead of eg e-coli based growth media, where insulin is needed, and this can also threaten the long-term growth of our insulin business.
Novo Nordisk Pharmatech follows the Novo Nordisk policy for human rights. Due to the nature of our business, our suppliers and distribution set-up, it is our assessment that the issue of human rights is not a significant risk and therefore no mitigating actions are put into place.