We have been engaged to obtain moderate assurance (review) as to whether Novozymes adheres to the AA1000 AccountAbility principles and to obtain reasonable assurance (audit) as to the statement of the Board of Directors and Executive Management, Management’s review, accounting policies and the quantitative environmental and social data in Novozymes A/S’ Annual Report for the financial year 2009.
The criteria for the preparation of the environmental and social data are evident from the accounting policies described on pages 49-50. These contain information on 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 principles of inclusivity, materiality and responsiveness is the responsibility of Management. Furthermore, Management is responsible for preparing the environmental and social data, including 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.
As assurance provider, it is our responsibility, on the basis of our work, to make observations and recommendations on 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.
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 is highly experienced in sustainability management as well as in handling social and environmental related issues. Also, we have not been responsible for the preparation of any part of the report, and we are independent as defined in the AA1000 Assurance Standard (2008) (AA1000AS (2008)). We thus consider our team qualified to conduct this independent assurance engagement.
We have planned and performed our work based on AA1000AS (2008), using the criteria in the standard to perform a Type 2 engagement and to obtain a moderate level of assurance (review) as to Novozymes’ adherence to the AA1000 AccountAbility principles of inclusivity, materiality and responsiveness. Moreover, we have planned and performed our work in accordance with the International Standard on Assurance Engagements (ISAE) 3000, “Assurance engagements other than audits or reviews of historical financial information”, to obtain reasonable assurance (audit) of the quantitative environmental and social data in the Annual Report.
Our assurance methodology has included procedures to obtain evidence for the environmental and social data in the Annual Report. The procedures selected depend on our judgment, including the assessment of the risks of material data misstatements. In making 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 members of Executive Management, staff from the sustainability development department, as well as management of different functions at headquarters regarding Novozymes’ adherence to the AA1000 AccountAbility principles of inclusivity, materiality and responsiveness, including Management’s commitment to the 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 obtained evidence supporting the environmental and social data disclosed in the Annual Report. Our assurance on environmental and social data has been undertaken at selected reporting units and combined with analytical assurance procedures on data covering the Novozymes Group.
Nothing has come to our attention causing us to believe that Novozymes does not adhere to the AA1000 AccountAbility principles.
In our opinion, the environmental and social data in the Annual Report 2009 have been stated in accordance with the criteria mentioned.
According to the AA1000AS (2008), we are required to include observations and recommendations for improvements in relation to adherence to AA1000 AccountAbility principles.
With regard to the fundamental AA1000 AccountAbility principle of inclusivity:
Management has a strong commitment to inclusivity and stakeholder engagement. At its headquarters in Bagsvaerd, Novozymes plays an active role in relation to stakeholder engagement. In 2009, Novozymes designed and developed a stakeholder mapping tool and a stakeholder engagement planning tool which - when implemented throughout the Group - will form the basis of a more structured and systematic stakeholder mapping and engagement planning.
With regard to the AA1000 AccountAbility principle of materiality:
Management takes the principle of materiality into consideration when making decisions regarding sustainability at management level. Also, the organization has in place relevant governance bodies to discuss, evaluate, and determine the materiality of sustainability issues.
With regard to the AA1000 AccountAbility principle of responsiveness:
Novozymes is committed to being responsive to stakeholders. This is evident from the wide range of media, forums and forms used by Novozymes to communicate on sustainability issues.
Based on our observations, we recommend that Novozymes continues to work on raising awareness of sustainability across the organisation as well as continues the efforts to ensure that an ongoing systematic approach to sustainability trend spotting, stakeholder mapping and engagement is embedded also at site level.
Bagsvaerd, January 21, 2010
State Authorized Public Accountant
State Authorized Public Accountant