The energy-efficiency program incorporates a balance of targets and incentives to build pride in achieving challenging objectives, as well as maintain the commitment of associates at a high level. Increasingly, divisions and business units are appointing energy managers and energy advisors for their worldwide operations. Energy management tools and dedicated training programs are applied systematically, together with continuous monitoring of targets and performance.

Combined heat and power plants (CHP) have become a key option as Novartis strives toward more efficient energy production and use. By generating electricity on site – where it is needed – CHP facilities help avoid transmission losses experienced by the distributions of electricity generated at power plants. And by being close to the consumer, CHP facilities can also put heat to work that otherwise would be wasted. Overall efficiency of a CHP installation is about double that of a conventional plant and carbon savings of up to 45% can be achieved by operating a CHP plant rather than by separate heat and electricity supply.

Annual Energy Excellence Awards recognize outstanding examples of energy management and reductions of GHG emissions across the Novartis Group. Even more important, the awards underscore that energy efficiency is good business. The 46 projects submitted for the 2008 Energy Excellence Award program have already achieved USD 17 million cost savings. This figure is equivalent to 5% of worldwide annual energy costs at Novartis.

Almost half of the projects submitted have a payback time of less than one year and 24 will repay their initial investment within two years.

Reductions in GHG emissions also reflect increased use of renewable energy. Along with adoption of bio-fuels and organic-waste fuels, solar energy is being implemented in a number of energy-efficiency projects within Novartis. Bagasse, a sugar cane-based residue, is used for process and steam generation in India. In another example, USD 2 million has been invested at a Pharmaceuticals Division production site in Wehr, Germany, to convert a heating system from natural gas to wood chips. Wood is carbon neutral and the new heating plant, which opened at the end of 2008, will reduce the Scope 1 CO2 emissions by 3,400 tons per year. Dependency on natural gas will be reduced significantly and the project will pay for itself within five years.