Novozymes defines risks as “events or tendencies that can prevent the company from achieving its overall targets – including financial, environmental, and social targets – or negatively affect our future results and activities.”
Novozymes has established a formal process to map risks, assessing individual risks on the basis of probability and consequence. The process ensures involvement and ownership throughout the organization, as all business units report new risks and any changes to previously established risks. The aim of strategic risk management is to ensure proactive management of the key risks, including efforts to reduce both probability and consequence where possible, as well as giving the appropriate management levels the necessary attention. A systematic and analytical approach to risk management enables Novozymes to achieve greater transparency, resulting in a stronger decision-making basis for investing resources in opportunities. In addition, it provides management with the opportunity to discuss risks and undertake the necessary actions in relation to the Group’s risk profile.
Novozymes conducts an annual evaluation of the long-term opportunities for growth. Part of this work involves identifying risk factors and measures to limit risks, and these are then managed by the respective units. The most significant business risks are discussed by Executive Management and the Board of Directors each quarter.
The following section describes a number of critical risks and measures that Novozymes has implemented to reduce them. The list is not in any order of priority and is not exhaustive.