Novo Nordisk A/S (NOVOB) Earnings Call Transcript & Summary

Hello, and welcome to the Novo Nordisk A/S conference call. [Operator Instructions] Today, I'm pleased to present Lars Fruergaard Jørgensen, CEO. Please go ahead with your meeting.

Thank you very much, and welcome to this conference call regarding our approach to sustainability. With me today, I have Camilla Sylvest, Executive Vice President and Head of Commercial Strategy and Corporate Affairs. I also have Henrik Wulff, Executive Vice President of Product Supply, Quality and IT. I also have Monique Carter, Executive Vice President of People and Organization. And finally, I have Karsten Munk Knudsen, Executive Vice President and Chief Financial Officer. Please turn to Slide 2. We will to today be making forward-looking statements, and I have to remind you that such forward-looking statements would include risks and uncertainties. So please look at Slide 2 and also make reference to our quarterly and annual reports for further disclosure on forward-looking statements. Please turn to Slide 3. In November 2019, Novo Nordisk launched our new approach to guidance based on our strategic aspirations 2025. They include 4 quadrants. And today, we will be focusing on the first quadrant, which is purpose and sustainability, where we have 3 elements. One linked to our social responsibility, one linked to our environmental responsibility and then one linked to what it means to be a sustainable workplace. If you look at Slide 4, you will see that for many years, Novo Nordisk has been focused on these sustainability factors, and we have an extensive experience in running a sustainable company. This goes back to our founders mentality of having focus on science and humanitarian purposes as well as creating good conditions for our employees. In the late 1990s, we formulated what we call the Triple Bottom Line principle, and you can see on the timeline here on Page 4 that we have achieved a number of milestones in this regard. I'll just highlight a few, and then we will join today, dive deeper into many of these. In 2001, we launched the World Diabetes Foundation. In 2002, all Novo Nordisk manufacturing sites were ISO 14001 certified. This is the environmental certification. In 2004, we made our first integrated report incorporating finance and sustainability reporting. And this was also the year where we included the Triple Bottom Line business approach into our articles of association. In the following years, there were a number of programs linked to changing diabetes working with programs to really improve diabetes care. and this led up to a new social responsibility strategy to defeat diabetes announced this year. In the recent years, we have also made strong progress in terms of our environmental responsibility, and this year, we achieved one of our targets of supplying -- of running all our global manufacturing sites based on 100% renewable power. We will throughout this meeting, go into more details on many of these initiatives. Please turn to Slide 5. In Novo Nordisk, we believe that long-term value to society is driven by a strong sense of purpose and being a responsible business. This is really well supported by our ownership structure where we have, as you know, a combination of shares owned by our Novo Nordisk Foundation and obviously, also institutional and private investors. This brings a good combination of both a long-term focus, while also making sure that we have agile response to changing circumstances. Since 2004, as I mentioned, we have had our financial, environmental and social responsibility anchored in the articles of association based on this Triple Line business principle, where we are responsible for our social responsibility, our environmental responsibility and also our financial responsibility, all aimed at achieving our purpose. And these business contracts are guided by what we call the Novo Nordisk Way, which we'll also introduce a bit later. Please turn to Slide 6. We keep raising our ambition levels within these 3 dimensions. And examples are our recent defeat diabetes, social responsibility and the launch last year of our Circular for Zero in environmental strategy. We also seek inspiration from the various sustainability indexes and standards, while there's not one uniform standard, we believe we can learn from many of them. When you look at our ratings, we believe our approach is acknowledged by a number of these ranking agencies, and we are pleased with our standing in this regard. Please turn to Slide 7. Here we have the agenda for the remainder of today. We'll start out by looking at our environmental responsibility and I've mentioned Circular for Zero strategy. And that will be done by Camilla Sylvest and Henrik Wulff. And after their presentation, there will be 10 minutes for Q&As on our environmental responsibility activities. Following that, we will dive into our social responsibility to defeat diabetes and what we mean is important in terms of being a sustainable workplace. And that will be covered by Camilla Sylvest and Monique Carter and, again, followed by 10 minutes for Q&A on social responsibility. We will end up by a section on corporate governance and what it means to have a responsible business conduct, and that will be covered by Karsten Munk Knudsen and again, followed by a Q&A session on that specific topic and any other topic you might have. So with that, I'll hand over to Camilla.

Thank you, Lars, and please turn to Slide 8. As part of our commitment to science-based targets, we have developed our environmental strategy, Circular for Zero and Circular for Zero aspire to have zero environmental impact. And as part of our impact analysis, we have found that our current environmental impact is really threefold. Our carbon emissions, that is 1.3 million tonnes in 2019 here, approximately 80% is from our suppliers. Then we also have waste, whereof the most significant part is 500 million prefilled plastic pens that are produced every year and increasing over time. And then finally, also resources summing up everything Novo Nordisk purchases that is, of course, also have a big environmental footprint. So Circular for Zero is addressing all of these dimensions. And our environmental aspirations are really to have circular products, circular company and circular supply. The circular products relates to both new products and how we deal with circular principles in developing those, but it also deals with end-of-life product waste and how we make sure that we do that in a sustainable way. The circular company really looks at how we can have a strong environmental footprint from operations and drive a circular transition across the company, aspiring for circular environmental impact. And of course, we cannot do that without also making sure that our suppliers are supportive of this. And then finally, we will also talk to circular supply that looks to how we can reduce our environmental impact across the value chain. But let's first zoom in on circular products. So please turn to Slide 9. Circularity in designing products is really related to how we make sure that it is integrated in our product development framework. So in our processes, when we develop new products, we have to make sure that new product offerings will be designed for reuse but also for recycling. And we, of course, have a special attention and focus on plastic in this regard to solve the end-of-life challenge as well. The parameters that are guiding us in this is really the carbon footprint, so how many kilograms of carbon per patient per year. We also look at what are the sustainable materials that we can use and also how we can make sure that they are recycled. So these are the focus areas that we have in our product offerings and how we design products for the future. But of course, we also need to look at the products we already have on the market because there's a very long life cycle within pharmaceutical products. And today, we have every year, around 500 million prefilled plastic pens produced and this volume is expected to, of course, increase over time. So what we are looking at here in the end-of-life challenge for products is to see how can we return products allowing for plastic and other components to be reused or recycled. And this year, we are initiating a pilot in Denmark to look at how can we make sure that we, in a good way, take back the pens so that they can be reused and improved use for other purposes. And of course, the purpose of this pilot in Denmark is to make sure that it can be scaled and also make of use in other countries in the future. And to do that, of course, we are not working alone. We have a broad range of stakeholders engaged with us that consist of municipalities, other public bodies, distributors, patient organizations, pharmacies, and also the environmental protection agency. So this is just to say this is nothing we do on our own, but in a strong collaboration with a number of stakeholders. And now I will hand over to Henrik Wulff to give you more details on sustainable production.

Thank you, Camilla. When we are working together on this, seen from a manufacturing and supply chain point of view, then we normally take all 4 quadrants in the strategic aspirations for 25 because basically, we need to serve both the environmental ambitions that we have, but also the financial ambitions that we have. On top of that goes that when we look at new products, and we also look at the pipeline and the segments that we are serving. We try to strike a balance where we can actually optimize our way into the future from a manufacturing and supply chain point of view. That, we have tried to illustrate on the left-hand side on Slide 10 where we have actually drawn our development and sales in our index up against our consumption in manufacturing. And there, you can say that we have been able to basically decouple our sales from our consumptions and our emissions. This work has been -- this year has been further enforced by the environmental impact that we have and the environmental focus that we have. So now we have not only have a financial interest in search from solutions here, but actually also environmental interest. That has become sort of multidimensional efforts in our organization basically to improve our yields and manufacturing, especially in our processes, in our process part but also in our pens that Camilla referred to. Actually, we have been able to develop, together with R&D-standardized platforms where we can actually utilize them across our product portfolio. We are much more focused nowadays to invest in multipurpose manufacturing units that can serve a broadened pipeline and lately, our biggest investment around Rybelsus, both in Denmark and in U.S., has already shown 3x to 4x up capacity compared to what we thought in the beginning. So that means, of course, a lot for our unit cost, but that means certainly also a lot for our environmental footprint when we want to develop that part of the supply chain. Further, another important topic for us is, of course, our partnerships within environmental efforts where we have succeeded in making some long-term engagement with both establishing wind power around in the world and, lately, also solar power, that will also impact it. If you turn to Slide 11. Then if you look further into our CO2 emissions, then we have sort of divided that into our own operations and our own transport and then also looking at our suppliers. That's, of course, a simple way of doing it, but it at least showing our efforts, what we try to do. In the middle of the slide, you can see comparison in the different parts of the 20% CO2 emissions where you can actually see surprisingly high figures from things like company cars and business side compared to manufacturing and product distribution. We are working on all parameters to reduce them. And it's interesting to see how a year like this has developed our understanding in the needs for different elements among company cars and business flights. So we'll work further on that. We have both the local action plans on how we can shift to renewable power in offices and laboratories. We are aggressively following the development within less polluting cars worldwide. We have more times communicated that our usage of business flight will be reevaluated during our experiences during COVID-19 period, and then we will further double down on our use of sustainable energy within manufacturing. If you just look a little further into the supplier part of the equation, then we will basically start working with all our suppliers, but we will start to work, that's on Slide 12. We will start to work with our Tier 1 suppliers that the biggest -- our long-term suppliers where we -- where they are also have ambitions already in this respect. And we have a good already initial collaboration with them and shared understanding on where the world are moving. So it's a good collaboration. Then, of course, we have around 60,000 suppliers. So it's a huge effort going through all the suppliers. But we have started, and it's a good start. Our Tier 1 suppliers, they actually account for 60 out of 300,000 tons of CO2. And so there's a lot of suppliers beyond the Tier 1 suppliers that we need to dig into. To sum up, we will strive for designing our new products for circularity. That means that we will take new materials into use. We will -- we are still very curious to find ways to design a meaningful take-back program. So we can solve the end-of-life challenges that Camilla alluded to. We will continue aiming for Zero CO2 from operations and transportation for 2030. And then finally, the latest one that we have communicated about. Our ambition is to have all direct suppliers to using 100% renewable power when they are supplying us in 2030. Thank you very much, and back to you, Lars.

Thank you, Camilla, and thank you, Henrik, and we are now ready for the Q&A session on our environmental responsibility. And I would kindly ask you to limit yourself to 2 questions, please. First, let's set of questions.

[Operator Instructions] Our first question comes from Michael Leuchten from UBS.

It's Michael Leuchten from UBS. Two questions, please. One, I was wondering if you could speak to capital allocation for projects like your recycling program. Obviously, that requires an amount of funding, but I guess this could easily also be a very steep requirement. So how do you balance the funding versus the time horizon that you're striving for? And that would be question number one. And question number 2, on Slide 10, a very interesting chart where you plot the sales versus the CO2, energy, waste, water. I was just wondering if you could do that in terms of unit costs, rather than looking at revenues when we were to look at this from a volume perspective, how much has the average unit costs come down in terms of the environmental costs that you have on the chart?

Thank you, Michael. First, Camilla. Can you touch a bit upon the capital allocation for a recycling program, putting -- I know we cannot share the party but some perspectives on that. And then Henrik, on what you can guide in terms of unit cost impact from the CO2 trends. So first Camilla.

Yes. Thank you, Lars. Thank you, Michael. So on the take-back, it's -- the objective of this is to understand how can we find the best possible way to take the devices back so that they can be recycled. And actually in this process with all of the partners that we have, there is a common interest in making this work out. There is actually, you could say, business opportunities in this for several of the partners in this project. One can imagine, for example, that if people come back to the pharmacy to hand in the pen, then that is also a shop where there might be more business for some of the pharmacies and so on. So the way that the partnership is constructed today is not very capital-intensive at all. Then, of course, this pilot in Denmark is not necessarily exactly the same in all other countries. So now we are learning from Denmark, how this works, then, of course, we will be expanding to bigger scale countries later on, where the setup, in terms of how the system works, might be different. But it's important for us to understand how many of the patients are willing to give back the pens. That's the first and foremost experience that we want to get now and how we do that in the best way.

Thank you, Camilla. Henrik, what can you share in terms of unit cost and the environmental trends we showed on the slide?

Yes. So there's many perspectives of this regarding which products that we are talking about. But in general, we can say that a 5% to 6% volume growth per year is what we calculate with. And that's a rough number. But even though, based on 5% to 6% in general growth in so-called volumes, then we are able to stabilize our consumptions and our waste. So that's the answer for that.

Thank you, Henrik. Thank you, Michael. Next set of questions, please.

Our next question come from Richard Vosser from JPMorgan.

First question, just following up on that reusing of the pen. Is there a thought to sort of redesign the pen so that they could be essentially the out of housing and plastic could be reused, much like the old cartridge pens of the past? Any thoughts again going back there? And just on the program, is there a rebate idea for money for the patient on bringing it back? And then secondly, just on the COVID-impact on CO2, just wondering if you could sort of give us an idea of the quantification of that? And how much of that reduction you see carrying forward?

So first, Camilla, again, on say sign of the pen for reusability and whether there's incentive for patients to bring back the pen?

Yes. Thank you. So thanks, Richard. So on the reuse of the pens, it's important for us to, of course, make sure that the pens can actually be reused to something that makes sense when they come back. So at the moment, we have actually tried already with some of our smaller scale pilots, we have tried to reuse the pens for chairs or for other types of materials that make sense as they can use recycled plastics. We are working with another company that can sort of dismantle the pens into different types of plastics that can be used for different types of purposes. And of course, the pen also consists of other things than only plastic. So it's important to be able to split all of this apart in an easy way. And you can imagine that this is some of the things that also, in the future, could go into our design principles so that it becomes easier and easier to do this. We have also actually done some research with patients when we were designing the program as to monetary incentives for bringing back the pens, and maybe it's a little bit of a Danish phenomenon, but this was actually not sort of the biggest purpose for the patients. They, for environmental reasons, would like to make sure that they would support such a program. But this is not to rule out that in other countries, there could be elements of this. But for now, that is actually -- was not part of -- is not part of our program as such.

Thank you, Camilla. And on CO2 benefit from COVID, you have seen in our reporting so far this year that we have significantly reduced our CO2 emissions, partly because we have now turned into CO2 powering and manufacturing, but also because many of us have been grounded in the locations we are. So we are some 40% down on CO2 emissions. Looking into '21, we believe some of that will continue as we will be, at least as we start the year, restricted from traveling. And overall, we believe we can reduce business travel quite significantly going forward. Thank you, Richard. Next set of questions, please.

Our next question comes from Mark Purcell from Morgan Stanley.

I'll take 2, please. The first one is on the towards-zero CO2. I just wondered if you could help us understand for a relatively new product like semaglutide, how this has allowed you to redesign your supply chain with respect to suppliers, if you compare that versus older, more legacy products such as [ Sørensen. ] And then secondly, in terms of Rybelsus and oral medicines, I wonder if you could help us understand, if you take your COGs at the moment, what proportion comes from device costs and what comes from API costs? And given the recent deal you did with Emisphere, where your aspirations are now across our portfolio in terms of moving to an oral presentation versus an injectable alternative?

Thank you, Mark. Henrik, can you say anything about what does it mean when you look ahead at sema supply chain versus some older products compared to the CO2 emissions?

So sema supply chain is, in a simple way, utilizing some of the same facilities and some of the same processes that we use from other APIs. And you can also see our pinch systems around the sema product is similar to what you have seen on insulins and Victoza. So in that respect, of course, the impact of once-weekly compared to once-daily is significant reduction in the consumption, both in our facilities compared -- also compared to what the patients on the supply chain, how they see it. So that's a significant advantage moving from daily to weekly. Yes.

Thank you, Henrik. And on the notion of now selling all proteins, I cannot go into, say, core split or anything the like on split of devices, API, et cetera. But from a, say, an environmental footprint, it's clear that short-term lower bioavailability and large API volumes will be, say, a negative on CO2. However, obviously, we will save on the plastic component. But we see this as a technology platform that we will be investing in and maturing for the long term. So we think both from a cost and CO2 perspective, there are significant opportunities for us to improve this. So that we can largely take these downward pressure on cost and CO2 down over time. Thank you. Next set of questions please.

Our next question comes from Carsten Lønborg from SEB.

It's Carsten from SEB. I was wondering the feedback you have gotten from suppliers since you announced this ambition by being on their behalf that they should also be 100% renewable by 2030. And will you also ultimately then be actually kicking out suppliers if they are not sort of adhering to the targets you are setting for them?

Thank you, Carsten. Camilla, will you comment on that?

Yes. So generally, the feedback from suppliers have been very positive. And so we are not in a place where it's needed to make -- to throw anyone out. Actually, we already have a big part of them signing up to do this. And we, of course, also able to share some of our experience. So that's very important for them. And so generally, just very, very positive feedback. And of course, there's also still time to solve this. The earlier, the better, but 2030 is the date.

If I can just -- can I quickly just pull out one more question?

Yes, please.

Yes. Obviously, this is also for Camilla, I guess, or Lars. Do you expect this strict focus on ESG to deliver a comparative advantage for you in the market versus other pharma companies or do you more see that as something that everyone basically will be able to do or will have to do going forward?

It's a good question. I think in our industry, it is, end of the day, the level of innovation that we bring to the market that determines our success, but it's clear when we deal with governments around the world, the fact that you take a shared responsibility with them in terms of driving health benefits for the population when we recruit employees, when we talk to stakeholders, the fact that we have a strong focus on the environment, makes us a more attractive company to either work for or collaborate with. So I think if you do it well, you can have a stronger standing with your stakeholders who have a significant say in your fortune going forward. So you don't want to fall behind on this, but whether it can really be a sustainable competitive advantage, I would doubt.

Thank you, Carsten. With that, we will progress the presentation, and I remind you that we have a Q&A session coming up at the end, where you can get back to this particular topic, if you want. So with that, we continue with our social responsibility. And that's back to you, Camilla.

Yes. Thank you, Lars. And please turn to Slide 15. So earlier this year, at the end of May, we launched our new social responsibility called strategy called the Defeat Diabetes and after thorough stakeholder input and the discussions about expectations for the future and the role of big companies and how they can work to solve societal challenges, we have defined Defeat Diabetes with 3 important elements. And the first one is innovation because the biggest contribution that Novo Nordisk can make is really on innovation given our capabilities. But of course, we also realize that not everyone has access to innovation. So therefore, access to affordable care for vulnerable patients in every country was also important to be -- have as a strong element of the strategy. And then finally, with the progress in terms of new innovations, we can, of course, and access, we can reach a lot of patients but the problem with diabetes and obesity constantly keep getting bigger and bigger because of lifestyle and urbanization. And of course, prevention for that reason also had to be part of our social responsibility strategy. So with those elements, we expect that we can help society rise to one of its biggest challenges. And now I would just zoom in on the 3 elements of the social responsibility strategy. So please turn to Slide 16. And on Slide 16, you see how innovation, as a core element, can help us improve millions of lives. And on the left-hand side, you see today's marketed treatment options and how they can reduce weight loss or how they can achieve weight loss over time. We, of course, expect with some of our new innovations, we will be able to get to an even bigger weight loss opportunity, not only from semaglutide 2.4, but also with our pipeline in question. And with that, we would be able to, within the foreseeable future, get to the level of surgery and what surgery can achieve. So of course, with that innovation, we are able to help improve millions of lives and potentially also save costs for society. We're also working on other transformational treatments for people living with diabetes. We already, at this call, discussed Rybelsus, the first oral GLP-1. But of course, we are also working on a once-weekly insulin, which we are about to initiate Phase III on and a glucose sensitive insulin. And also on digitalization for our connected pens. So with all of this, of course, we are able to bring innovations that can help reduce the long-term complications of people living with obesity and with diabetes and with that, of course, hopefully, also save societal costs. We are also working on, as you know, a stem cell-based program that is likely also to be able to contribute with curative therapies, potentially within Type-1 diabetes as well. So those are some of the core elements of innovation that we are bringing to the market in the future. And if you turn to Slide 17, please, then you will see an overview of the access to affordable care for vulnerable patients in every country that we are also embarking on. Because finding solutions to improve care for vulnerable patients that, for one reason or another in different health care systems do not have access to life-saving medications is, of course, very important for us. So we have committed ourselves to -- in every country where we operate to map who are the vulnerable patients that for different reasons might not have access to care. Sometimes, those groups are minority groups, migrants or displaced populations. They can also be groups of people with low socioeconomic status or limited resources or other underserved populations. We've now completed the analysis in 20-plus affiliates this year, and next year, we expect to complete it for 2/3 of the affiliates or the countries where we work. For each of those affiliates, there will be an action plan in place within a year after the completion. So those vulnerable groups are, in summary, groups that are struggling to get access to essential affordable insulin. There, of course, are also a number of countries where there is already access to insulin where such groups do not exist to a large extent. Then at the same time, we are also looking at -- and we have already this year, reduced our ceiling price for our access to insulin commitment in low and middle income countries. So we have now reduced the ceiling price to USD 3 per vial in 76 countries. And we are, of course, also looking at expanding our Changing Diabetes in Children program with the objective that no Child should die from Type-1 diabetes. Currently, we are operating this program in 14 countries, 10 in Africa and 4 in Asia. And we are expecting to add on more countries next year so that we can reach an ambition by 2030 of reaching 100,000 children compared to the 25,000 children we are reaching today that otherwise would not have access to life-saving medication. And then we are also engaging in partnerships with donations to the World Diabetes Foundation and, of course, also the World Hemophilia Foundation. And we are also supporting humanitarian organizations in times of crisis. And I'd like to emphasize that especially during the COVID-19 crisis, the support needed was, of course, our products, but also our supply chain to bring the products to the right places, where, of course, we have a special capability. So for all of these projects, we are trying to use our core capabilities to a large extent to make sure that we can help and support societies on this. And if you turn to Slide 18, please, you will see an example from the U.S., where 8% of the U.S. populations are uninsured. And of course, these people have -- for them to have developed a number of different access programs that can address some of the issues that they might face if they don't have any commercial coverage or are not covered by Medicare or Medicaid. And we have, as you can see on the right-hand side, a number of programs in place that can make sure that, for whatever reason that a person is not able to get access to insulin, there hopefully will be a solution in place so that they, for an affordable amount, can get access to this life-saving medication. And then if you turn to Slide 19, you will see examples of how we are working with prevention. So the global burden of diabetes keeps increasing. And we also know that to bend that curve on the prevalence we would need to reduce also obesity because that obesity is the leading indicator to get diabetes. The global obesity burden is 650 million people living with obesity and 120 children living with obesity. So a part of our preventional efforts in diabetes is to avoid that more kids will grow up with obesity. And we have recently engaged in a partnership with UNICEF to prevent childhood obesity. And we have started these partnerships in Latin America with the prevalence of childhood obesity in some countries is above 30%. So our midterm goal is to reach more than 500,000 children in Latin America by 2023 and hopefully, some of the learnings from this program can be expanded to other parts of the world. Then at the same time, we're also strengthening our preventional efforts in connection with our Cities Changing Diabetes network, where we, today, have 36 cities enrolled and wherein more than 200 million people are living. And the ways that we do this are very depending on the challenges. For example, in Houston, we have worked with various organizations to target people at risk of diabetes. And in other of these cities in China, we have done educational efforts to make sure that we could support the move of the care to lower-tier segments. So -- and most recently here, in November, we have launched the urban diabetes action framework, which is really an interactive guide to support facilitating cities and countries moving from understanding the diabetes challenge to getting into how do we then implement solutions. So the urban diabetes action framework, which you can also find on our internet at novonordisk.com, really looks at cases, tools and steps to take to get to actionable solutions. And I would recommend that you take a look at that also at novonordisk.com. And now I will hand over to Monique to talk more to how we work with social responsibility also within the company.

Thank you, Camilla. Novo Nordisk is a company with a purpose-driven culture. The direction is set by the Novo Nordisk way, providing a framework for our culture. It possessed the guiding principles, which underpins every decision we make. And it describes who we are, when we're at our best, how we work and what we want to achieve and sets a clear direction for our company and our employees. Today, we are more than 40,000 employees across the world, with the passion, the skills and the commitment to drive change to defeat diabetes and other serious chronic diseases. Our employees are our strongest assets. And so it's important to maintain our high levels of engagement as you can see here, 92% this year. So we can continue to drive the business forward. Next slide, please. To maintain high engagement, we need to stay competitive. One of the elements is that employees need to have a sustainable workplace. Novo Nordisk aspires to continue to involve the workplace by focusing on 3 areas. The first, we want to organize to win by accelerating diversity inclusion and aspiring for a gender-balanced representation. I'll get back to this on the next slide. The second is to continue to grow our people and be a talent incubator. So we are an organization that consistently grows our talent to fuel the pipeline and ensure that the company has the competencies in place to stay innovative and competitive for the future. And third is to drive cultural change to be an employer fit for the future. To ensure we continue to support the strong culture and foster an environment where our people can thrive, innovate and perform. And I'll get back to how we use facilitation to support the adherence the Novo Nordisk weight and cultural development in a moment. To give you an example of us continuing to evolve our culture, I can tell you about the launch of flexible ways of working, we call this Flex Able. And this consists of 6 ways of working to allow for more flexibility for our employees. So for example, they could conduct their jobs from home, they could work different hours and so on. We have seen that these initiatives that were launched before the global pandemic have actually been accelerated because of the pandemic and are now allowing for more agile ways of working while still fulfilling the business needs. Next slide, please. So diversity and inclusion, our key focuses were Novo Nordisk. And currently, there's a broadly balanced gender representation amongst all managers, which obviously varies between the different areas and the seniority levels where, at senior management levels, it's more skewed towards men. Novo Nordisk aspires towards a balanced gender representation across all managerial levels. And to hold ourselves accountable for ensuring diversity and inclusion is -- has been added to our incentive programs. In addition, local action plans are being made across all areas. Our focus is on ensuring inclusive leadership to enable everyone to be able to deliver their best, everyone is heard, everyone is valued for their unique contributions, and so we unlock the value of diversity and inclusion. Next slide, please. At Novo Nordisk, our purpose-driven culture is defined by the Novo Nordisk Way. And our facilitation process is our way of ensuring this. Facilitations are a proactive assurance done by interviews and assessment of different units in Novo Nordisk by our facilitators. Facilitators are experienced and senior leaders with a strong understanding of our culture and our business role models, you could say. Every year, Novo Nordisk conducts around 30 facilitations with interviews of more than 1,000 employees, 85% of facilitated units are champions of Novo Nordisk Way. When areas are identified for improvement, action plans are outlined to ensure issues are resolved to minimize unpleasant surprises as a way to drive compliance. Facilitation is also used to drive the evolution of the Novo Nordisk culture where coaching elements are used to embed inclusive leadership. We believe this will support our aspiration to ensure we are employee-fit for the future. Next slide, please. So now we've covered social responsibility, both related to Defeat Diabetes, which you heard Camilla talk about and our aspiration of becoming a sustainable workplace. And we would now like to invite for 10 minutes Q&A, which will be moderated by Lars. Over to you, Lars.

Thank you, Camilla, and thank you, Monique. We're now ready for the first set of questions within social responsibility.

Our first question comes from Charles Pitman from Redburn.

Charles Pitman from Redburn. I was wondering if you could please just talk to how you aim to keep management employees and suppliers accountable to the society targets? And then on -- for a second question, I was wondering on transparency. Does Novo Nordisk believe the balance between public disclosure and commercial confidentiality in their drug development is currently correct? So for example, does Novo Nordisk think all trial protocol should be published at or before the start of clinical trial in order to enhance their transparency?

Thank you very much, Charles. Firstly, on best targets. Is that something you will talk to the Camilla? No. Karsten?

So the accountability on -- Charles, could you repeat the question? Your first part of the question around accountability and anchoring repeat that please?

Sure. So you've talked about the systems you've got in place to monitor and survey how employees are following your targets and keep in line with the kind of pure societal workplace. But I was wondering how you keep management and also then suppliers accountable to achieving improved societal targets?