Greenhouse gas (GHG) emissions

 

For the first time ever, Novartis achieved a reduction in greenhouse gas (GHG) emission for both Scope 1 (on-site) and Scope 2 (purchased energy) emission.

The total amount of Scope 1 GHGs (mainly CO₂) emitted from on-site combustion and from processes in 2007 was 388kt, a 3% reduction compared to 2006 (401kt). Emission of other GHGs (mainly hydrofluorocarbons from refrigeration systems), included in the above amount, totaled less than 3kt. GHG emission of non-Kyoto GHGs such as HCFCs and certain chlorinated solvents totaled approximately 10kt.

Scope 1 GHG emission from the use of company owned or leased vehicles is reported separately. In 2007 this totaled 186kt, compared to 180kt in 2006 (a 3% increase). This increase is due to the expansion of the sales force in 2007; in the same period the number of cars grew by 8%.

Scope 2 GHG emission (mainly from electricity generation) totaled 866kt, down by approximately 0.8 % from 873kt in 2006.

Sandoz reduced on-site Scope 1 GHG emission by 13.3kt, while this indicator remained more or less constant for other Divisions.

Scope 3 GHG emission from the company’s global business flights totaled an estimated 170kt. The GHG emissions from the owned/leased company aircrafts has been included in the Scope 1 company vehicle fleet reporting, and totaled 10kt.

Scope 1 and Scope 2 emission intensity (per sale) has been reduced over the last five years from 16 to 10 t CO₂e/million USD (Scope 1, on-site) and from 28 to 23 t CO₂e/million USD (Scope 2, purchased), respectively.

 

GHG emission targets and outlook

In 2005, Novartis made a voluntary commitment to reduce global direct on-site GHG emission (from combustion and processes) to the level prescribed in the Kyoto Protocol, i.e. 5% below the 1990 level for the period 2008-2012. This commitment forms a major part of the Novartis Group environmental target set during 2005. It strongly correlates with the targets already set on energy efficiency improvement and energy projects.

In relation to the above GHG target, emissions for the 1990 base year have been assessed, based on the level of Novartis business activities in 1990. Global direct on-site GHG emission in 1990 have been calculated at 308kt. Taking the continued growth of business, and energy efficiency and emission reduction initiatives into account, emissions were expected to rise on average by some 3% per annum. While this was the case between 2003 and 2006, total emissions have now been reduced by 3% during 2007, as a result of an increasing number of improvement actions for energy efficiency, the use of renewable energy, and other GHG emission reduction measures. However, increased efforts and investments in more efficient energy technology and renewable sources will be needed to continue on this path in the coming years.

In 2006, Novartis also set a target on CO₂ emission from the company’s owned or leased vehicle fleet, an additional relevant area of GHG emission. CO₂ emission from vehicles will be reduced by 10% by 2010, compared to 2005 levels. Further reduction of the environmental impact of the vehicle fleet is intended through the introduction of hybrid gasoline-electric cars, and increased use of diesel engines fitted with particulate filters, as well as other emission reduction options such as liquid natural gas or biofuels. At the end of 2007 the Novartis vehicle fleet in the US includes 687 hybrid cars (8%).

To reach the Corporate GHG targets, behavior that fosters energy efficiency will become an important complement to further progress toward technical solutions. Moreover, along with in-house energy efficiency and GHG emission reduction programs, Novartis has so far embarked on two external carbon-offset projects designed to fulfill requirements of the UN Clean Development Mechanism. Land has been purchased in Latin America for afforestation/reforestation of pasture land to sequester carbon. Plantations were started during 2007 and so far 785 hectares have been planted with approximately 600 000 saplings. Ultimately, the goal is to establish a sustainable forest with 75% local species. Certification by the Forest Stewarship Council is expected, and Novartis plans to register the project under the Clean Development Mechanism.

The second carbon-offset project is a jatropha plantation in Africa. Jatropha is a plant that can be used as a raw material for production of biofuel as well aas electrical power. In a pilot phase, 350 hectares of jatropha have been planted at three locations. The jatropha plantation will also be submitted for registration under the UN Clean Development Mechansim.

Novartis supports emission reduction targets set in industrialized countries and the use of market-based instruments directed at reducing GHG emission, such as emission trading schemes and sectoral target schemes to refund carbon taxes. Novartis looks forward to a Post-Kyoto scheme (to be developed by governments), as the definition of these important framework conditions would allow mid-term target setting (i.e. beyond 2012).