Driving Business with Sustainability and Partnerships Front page Driving Business with Sustainability and Partnerships Stefan Maard Head of Sustainability Innovation

Inspired by the world The draft United Nations Sustainable Development Goals and Post 2015 Development Agenda guided the development of our new Purpose, Strategy and Long Term Targets We understand the SDGs to be the best representation of the global consensus on priority global challenges available Our long-term targets are also an example of how we want to partner for impact: The targets are guided by the United Nations’ Sustainable Development Goals. In reaching our targets, we help create impact for the world. Right now [September 2015], representatives of more than 193 countries are making history. They have set 17 Sustainable Development Goals (SDGs) to direct the fundamental changes the world needs to tackle poverty and climate change, and grow sustainably and equitably both now and in the future. Over the next 15 years, countries are expected to use these goals to frame policies, allocate financing and drive changes that will help build a more fair and sustainable world – for all. The goals aim to unite governments, NGOs, companies and communities to work together to drive the sustainability agenda for the greatest impact. Businesses play a key role and bear a big responsibility in doing so. It’s a given for Novozymes to take on this responsibility and lead development towards a more sustainable tomorrow. So when we defined our non-financial long-term targets we ensured that they reflected the intentions within the SDGs; and at the same time, the SDGs are a yardstick for measuring our progress on those targets. As probably the first company in the world, we have succeeded to transform these very large and complex global sustainability goals into something that is operational on a business level. Once we fulfill our targets we will have helped the world to become more sustainable, while ensuring our company’s continued growth.

15 Novozymes Impact Categories Reading the SDGs taught us: We break down the complexity within the Global Goals (SDGs) to impact categories relevant to our business 17 Goals 169 targets 15 Novozymes Impact Categories Nutrification Land use Food supply Health Chemicals Climate change Energy supply Sanitation Poverty Resources Forest Acidification Water supply Gender Waste Reading the SDGs taught us: Poverty and social oriented Possible to relate our technology to the SDGs: Climate change (SDG 13) Agricultural productivity (SDG 2.3) Chemicals (SDG 3.9) Need to strengthen understanding of social impacts To ProMan: 17 goals: 1. End poverty 2. End hunger 6. Clean water 7. Renewable energy 13. Renewable energy 14. Life under water 15. Life on land Each SDG and target were evaluated and related to the capabilities of NZ technology to create impact Reading the SDGs taught us: SDGs are poverty and social oriented Our current technology more directed towards reduction of environmental impacts Still, it is possible to relate our technology to a good number of SDGs Climate change (SDG 13) Agricultural productivity (SDG 2.3) Chemicals (SDG 3.9) We need to strengthen our understanding of social impacts in the future We defined 15 impact categories that we can handle: - Some are well-known whereas others may seem as bit new and exotic, like “poverty”, “health”, “gender” …………….. General: To make this approach operational, we break down the complexity within the SDGs to impact categories relevant to our capabilities which can be measured on an ongoing basis leveraging our experience in over ten years of LCA excellence We see many benefits from understanding the impact of our company and our technology in a SDG context and will furthermore integrate SDG impact assessments into our existing annual corporate materiality assessment to prioritize sustainability activities on a corporate level

Working Version Our impact categories are mapped back to the SDGs Novozymes Impact Categories… … are measured and mapped back to SDGs and targets Break down SDG complexity to manageable impact categories Take lifecycle assessment approach to measure impact Nutrification Land use Food supply Health Chemicals Climate change Energy supply Sanitation Poverty Resources Forest Acidification Water supply Education Waste Working Version To make this approach operational, we break down the complexity within the SDGs to impact categories relevant to our capabilities which can be measured on an ongoing basis leveraging our experience in over ten years of LCA excellence We see many benefits from understanding the impact of our company and our technology in a SDG context and will furthermore integrate SDG impact assessments into our existing annual corporate materiality assessment to prioritize sustainability activities on a corporate level

ILLUSTRATIVE We are developing SDG assessment and management tools to maximize our contribution Novozymes Innovation Opportunities High impact opportunities Opportunity Screening Funnel SDG Assessment Products, Tech, Applications A Launch Business models B Partnerships C SDG ASSESSMENT STEPS Identification Understand the technology / activity for SDG assessment Qualitative assessment Review contribution to each impact category Qualitatively assess and describe the impact Choose relevant impact categories for further quantification where contribution, positive as well as negative, is expected Quantitative assessment Quantify contribution to relevant impact categories

Our new approach will encourage us to think creatively about business development If the SDG impact potential is much larger than achievable with the standard business case we should ask: How can we close the gap on commercially attractive terms? Which partnerships can help us realize the potential? Impact potential Business Case Our new approach will encourage us to think creatively about business development In order to succeed we will need to think creatively about business development When - NZ solutions have high SDG impact potentials Then - rethink business cases and attract non business partners for more business and impact If the SDG impact potential is much larger than suggested by the business case Then we should ask: Who has enough stakes in that societal impact and development to be willing to partner with us for realizing the potential of the solution? For example, stakeholders in societal development are potential partners for impact : Governments and regulators Academia Opinion leaders , organizations NGO´s Consumers, retailers and customers, And we should think about what additional business development levers can be used, for example: Develop new business or service models Identify and communicate new value propositions Influence legislation to create an enabling environment Solution 1 Solution 2 Solution 3 1 2 3

Walking the walk: Novozymes co-founding a new impact venturing vehicle with WBCSD and other partners… DIVA is a unique venture incubation partner that both co-develops and co-invests in opportunities, helping corporations reach further with their ambitions for business development and impact, and creating deal flow for impact investors 9/17/2018