It is now generally accepted that the use of fossil energy sources, together with related greenhouse gas (GHG) emissions, contributes to the man-made increase of CO₂ in the atmosphere and to related adverse effects on the global climate.

While the pharmaceutical industry is not an energy intensive sector, management of energy use and related GHG emissions are important for the long-term success of Novartis. With energy likely to once again become a growing cost factor, efficiency improvements and alternative sources have become important drivers for cost reduction.

In 2005, Novartis made a voluntary commitment to reduce on-site emissions of greenhouse gases (GHG) to the level prescribed in the Kyoto protocol: i.e. 5% below the 1990 level for the period 2008-2012. By the time Novartis announced this intention, strong net sales growth had pushed energy consumption well above the 1990 benchmark level. And projections for sustained net sales growth through 2012 indicate that GHG emissions must shrink by about 100 000 tons of CO₂ each year to achieve the target. During 2008, Group-wide GHG emissions totaled 404 000 tons.

To hold GHG emissions in check, Novartis applies a proactive policy for capital investments associated with energy conservation. Pay-back periods up to the lifetime of the asset are allowed for projects that save energy. And for all investments or asset acquisitions exceeding CHF 20 000, a review of energy-usage implications by an energy expert is mandatory. New projects are a major focus because it is more effective to build in energy efficiency from the beginning than to revamp an existing system.

Reporting
With regard to energy, Novartis monitors the purchase and use of all types of energy and fuels. Energy use comprises: purchased energy (including electricity, steam and hot water), on-site energy (generated mainly from the combustion of gas, but also other fuels such as oil), and energy from waste and bio-fuels at Novartis sites. On-site energy that is sold to third parties is subtracted. In addition, energy costs are systematically monitored and reported.

Since 2005, Novartis has been reporting its GHG emissions in accordance with the WRI/WBCSD Greenhouse Gas Protocol. In previous years, only Scope 1 CO₂ emissions from stationary combustion installations and from processes were reported.

Performance data and target achievements on energy and climate can be found here:

Energy Use

GHG Emission