Environmental Sustainability at Novartis
Novartis North American HSE & BC
2013 ISPE- NJ Supplier Showcase, September 12
We work responsibly and ethically
Our patients and customers expect us to do business responsibly
and ethically. We want to work with others to help address some
of the world’s biggest health challenges.
We focus our corporate responsibility work in three areas:
1
Reaching more
patients
2
Collaborating
for results
3
Doing business
responsibly
Expanding access to
healthcare
Listening to and working
with our stakeholders
Striving for operational
excellence
 R&D for rare and
neglected diseases
 Malaria Initiative
 Leprosy elimination
 Social business models:
Arogya Parivar
 Stakeholder engagement
 NGO relationships
 Novartis perspectives
and positions
 Caring for our associates
 Protecting the
environment
 Promoting ethics and
strengthening
governance
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Access-to-medicine programs –
in 2011 we supported 89 million patients
Coartem® delivered without profit
More than 80 million malaria patients treated
Leprosy medicine donated through WHO
Extended donation agreement to 2020
Tuberculosis medicine donations
More than 100,000 treatments delivered
Glivec®/Tasigna® patient assistance
Provided to 47,000 patients in about 80 countries
NITD1 in Singapore
2011
Programs and
research valued
at USD 1.7 bn3
Contributed 3%
of net sales
Focus on tuberculosis, dengue fever and malaria
NVGH2 in Siena, Italy
Vaccines research institute for neglected diseases
1Novartis
Institute for Tropical Diseases; 2Novartis Vaccines Institute for Global Health; 3Based on approximate market value
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Novartis Code of Conduct and HSE mission
Novartis Health, Safety and
Environment Mission
To be a leader in health, safety and
environmental protection, as an integral
part of the business, for the benefit of our
associates and other stakeholders
Environment in the Code of Conduct
We make efficient use of natural
resources and minimize the
environmental impact of our activities and
products over their life cycle.
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The value added by HSE & BCM
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Commitment to the environment
“Protecting the environment is an integral part of
business strategy in all divisions and business
units. By balancing our economic, social and
environmental objectives we aim to have a long
term sustainable business.”
Keith Saveal
Head Corporate HSE, Novartis
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Product value chain
Business process functions manage the value chain:
Research
Up-streams
Development
Down-streams
Procurement
Raw
Materials
Intermediates
Manufacturing
Supply
TechOps
Infrastructure
Distribution
Marketing
& Sales
CommOps
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Delivery
Product
Use
End of
Life
Mapping relevant environmental aspects
Raw
Materials
Intermediates
Supply
NVS Operations
Delivery
Product
Use
End of
Life
Sustainable
Packaging
Materials
Water
Energy
GHG
Energy &
Climate
Energy
Efficiency
Energy
Climate
Pr. Subs.
Air Emis.
PiE
Effluents
Waste
Contamin.
Legacy
sites
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PiE
Why Environmental Footprint over the Live Cycle?
Growing interest in environmental impacts outside the company boundary
 Requests for information on supply chain from stakeholders and sustainability
rating agencies
 Stakeholder concerns related to potential environmental impacts (micropollutants) from pharmaceutical product use and disposal
 Trends with respect to increasing outsourcing and change of production
patterns
 Globalization of business and of the value chain
In 2009 we did a Scope 3 GHG emission estimation for Novartis overall
with following results:
• Raw material generation may represent the largest carbon impact
• Other relevant impacts are waste disposal, infrastructure, business travel
and packaging material disposal
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Objectives for our
Life Cycle Assessment (LCA) work
 Gain better understanding of impacts (carbon, waste, water, ecotoxicity, etc.) and assessment methodologies
 Learn how to use tools effectively
 Develop an understanding of relevant influencing factors and
product specific parameters that determine the impact
 Raise awareness for these factors and how they can be influenced
in the business
 Find ways to reduce relevant life cycle impacts for the benefit of
clients, the company and the environment
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Life Cycle Analysis Learning
What did we learn from Cradle-to-grave LCA / Supply Chain Carbon
Footprint:
• Pharma product impact overall is small:
10kg CO2e for annual patient dose = driving 35km
• Impact from materials (solvents, intermediates) purchased from the
supply chain is dominant (60%)
• Potential end-of-live impact (Pharmaceuticals in the Environment) is not
well reflected in a Carbon Footprint analysis
• Internal transportation and distribution (for high volume products) are
marginal
What did we learn from Cradle-to-gate Carbon Footprinting for APIs:
• Synthetic APIs have a clearly higher impact than Bio-tech APIs (170
versus 17tCO2e/t)
• Energy is the dominant factor in Bio-tech (80%)
• Supply chain and internal transportation are marginal (2%)
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Influencing factors
 What type of API generation do we have (synthetic versus
fermentation/bio-tech)?
 What is the molecule (how complex is its chemical
synthesis)?
 What is the physiological activity of the molecule (what is
the dose required)?
 What (supply and distribution) logistics have we chosen?
 What is the environmental effect potential after use (PiE);
what measures are necessary to keep the environmental
impact marginal?
 Which improvements count the most?
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Green Chemistry
Designing more sustainable medications
 ACS GCI
Roundtable
 Green chemistry in
practice
• Telescoping
• Solvent elimination
 Supply Chain
• Green Solvents
• Critical mass
"No endorsement or approval by the ACS GCI Pharmaceutical Roundtable has been received or is in any way implied."
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Environment and Energy
Strategic Objectives
 Minimize risk related to
Pharmaceuticals in the Environment
Pharmaceuticals in the
Environment (PiE)
Sustainable packaging
 Leader in environmental
sustainability
 Leading position on energy
and climate
GHG emission reductions and Carbon offsetting
 Stringent management of
environmental liabilities and
legal compliance
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Contaminated sites
Pharmaceuticals in the Environment
Novartis Position
 Minimize environmental impact of activities and
products over life cycle; work with suppliers
 No risk for human health; implications for
aquatic wildlife limited or inconclusive
 Four-fold strategy, applies to all operations
involved in R&D, production and disposal
• Environmental risk assessment: evaluate impact
of new products before reaching the marketplace
• Manufacturing: minimize discharge of APIs from
operations; take appropriate corrective measures
• Save disposal: do not dispose waste containing
APIs into landfills; recommend avoiding disposal into
sewers or landfills; welcome state-of-art waste water
treatment and processes/system to ensure
incineration
• Increase knowledge: support academia and
regulators to close data gaps
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Three pathways into the environment
Patient use
• Excretion, washing off the skin
• Hospitals / retirement homes
Upgrade of public waste water treatment
• Extent of metabolization
Incorrect disposal
• Toilet flushing
• Landfill of household waste
Collection / take-back schemes,
consumer education
• Take-back schemes (e.g. Spain)
Factory effluents
• ChemOps, PharmOps sites
• API suppliers and formulation
contractors
Site special waste water treatment,
operational measures
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Novartis Vision on Sustainable Packaging
“Consistent with our goal to be the most respected
health care company, Novartis will design and utilize
packaging solutions that minimize the impact on the
environment while meeting all design, functional,
regulatory and quality requirements that our patients
and customers expect.”
Developed by the Sustainable Packaging Committee, approved by HSE
SteCom and endorsed by ECN in Nov 2010
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Savings achieved with packaging improvements
Savings from 20 projects between 2008 and 2012
Cost
USD
2.7mio
Materials
572t
of carton /
plastic /
metals
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GHG emissions
Other
30% weight
more than
133tCO e
2
reduction
Storage space
Lead time
Work load
Waste
Elimination of plastics in Lamisil Gel packaging
AFTER
BEFORE
 High-end package with a strong
visual statement
 Very complex and labor intensive
 Several re-designs of package
leading to
 USD 189,000 of cost saved

Complete elimination of plastics

Reduced packaging complexity
 Overall high-impact appearance of
the product kept
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Design guide on Sustainable Packaging
 Principles of Sustainable Packaging
• Material selection
1. Choose materials with lower environmental impact
2. Reduce number of different materials
• Design and size of the package
3. Reduce total amount of materials
4. Reduce excess volume
5. Reduce number of layers
• Procurement of packaging materials
6. Purchase from environmentally and socially
responsible suppliers
7. Consider certified/preferred materials
8. Consider local sources
 Specific questions on each level of packaging
• Primary packaging
• Secondary packaging
• Tertiary packaging
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Energy and climate: commitment and targets
 Climate commitment
•
In 2001, Novartis joined the UN Global Compact
•
In 2004, Voluntary “Kyoto” target set for global direct CO2 emissions: Emit 5% less
greenhouse gases (GHGs) by 2012 than in 1990; i.e. <293kt of Scope 1 on-site GHG
emissions
•
In 2010, mid-term 15% reduction of total GHGs (Scope1 and Scope 2) by 2015, and
long-term 20% reduction by 2020, based on 2008 levels
 To achieve these targets, Novartis employs a dual strategy
•
Improve energy efficiency and make use of renewable resources in order to keep
energy use and GHG emissions at a minimum
•
Engage and participate in “carbon offset“ projects (sequestration) in order to
compensate for part of the Novartis GHG emissions
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Successful energy savings by project
Novartis Group Energy Use and Energy Savings by Projects
Energy use and savings (in TJ)
target 2015: 14.0%
status 2012: 11.5%
 2150TJ
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Energy costs and cost savings
(in million USD)
 USD 57mio
Energy Excellence Awards
 Proven success with the Energy Excellence
Awards (EEA) over last years
 In eight years, the EEA scheme has:
• Generated over 500 projects totaling more than USD 100 million in cost savings
• Saved 4,000 terajoules
• 350 kiloton reduction of GHG, which equals the total emissions of the Novartis Group’s
30 000 vehicles over 2 years
• Created tangible, replicable best practices
 The awards are perceived as a highly prestigious prize with senior management support
 Associates are motivated to “compete with the best”
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Planting trees to capture CO2 and foster biodiversity
Improve
12 mio
boiler
trees
KPIs

3 mio in Argentina
9 mio in China by 2014

4 Mt of carbon over 30 years

Natural forests primarily based
on native species

Wood product business
managed by principles of the
Forest Stewardship Council

Two UN registered projects
(Argentina, China) one VCS
(Mali)

Social and environmental
benefits
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Contributing to rural development in Mali with
plantation of Jatropha
 5,000ha of Jatropha planted by more
than 5,000 local farmers
 200kt of carbon by 2020
 Jatropha oil used for rural electrification,
soap, bio-fertilizer by-product
 Supplemental income for farmers
 Protects food crops
 Protects fields from soil erosion and
counters desertification
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2012 Kyoto target achieved
 Novartis on-site Scope1 GHG
emissions by 2012 (excl. Alcon)
are 5% below 1990, i.e.: 293kt
kt
 Results:
• Emissions: 2012 emission were
409kt. The needs from offset projects
is therefore at least 116kt.
• Offsets: Argentina reached 118kt by
year end 2012. The Mali project gave
only about 1.1kt offsets.
• Result:
Emissions
= 409kt
Offsets
= 119kt
Balance
= 290kt
Kyoto target achieved!
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Offsets
Kyoto target
Scope1 GHG