How We Manage Environmental Issues

Policies and Standards

Several policies and standards define our commitments and guide our efforts in this area.

• Our Health, Safety, and Environment policy sets environmental expectations in terms of compliance and environmental protection for our people and operations.
• Our Environmental Standard provides more detailed requirements and establishes the core governance requirements to manage significant environmental and energy-related aspects of our operations. This standard requires Lilly’s operations to identify relevant environmental issues, evaluate impacts, and reduce risks through continuous improvement.
• Our Management System Standard and Verification and Corrective Action Standard define requirements to ensure compliance with Lilly HSE standards, applicable regulatory requirements, and other external HSE standards to which the corporation subscribes. This includes identifying, reporting, assessing, and investigating HSE-related compliance and performance gaps; implementing and evaluating the effectiveness of corrective and preventive actions; providing an effective system for verifying compliance; and notifying management of events, issues, and trends that could negatively affect Lilly, our employees, our contractors, or the communities surrounding our facilities.
• Our Global Engineering Standards govern many environmental aspects of our operations. Our Energy Minimization Engineering Standard, for example, ensures that Lilly’s new and retrofit construction projects minimize energy use and associated greenhouse gas (GHG) emissions.
• Our Product Stewardship Standard covers the entire value chain—from product discovery and development, through manufacturing, sales and marketing, distribution, and use, to recycling of manufacturing by-products and final disposal. This standard provides a systematic way to manage product and process risks in our supply chain and our operations, and during the use of our products. See Product Stewardship for more detail.

See detailed information about Lilly HSE governance structure, management systems, and approach to audits in our 2011/2012 Lilly Corporate Responsibility Update.

Lilly's Environmental Goals

Setting, driving toward, and communicating our progress toward HSE performance goals is central to our HSE management approach.

In 2008, Lilly established six HSE goals to minimize our impact on the environment and reduce employee and contractor injuries. These goals follow from an earlier set we achieved ahead of the target date, demonstrating our drive for continuous improvement. See Safety Progress & Performance for progress against our health and safety goals.

Energy, Waste, and Natural Resource Reduction Fund

Making capital investments in technology and physical plant operations can have a substantial, positive impact on achieving overall environmental goals. However, these projects compete for funding with other essential projects at each facility, for example, those directly related to product manufacturing. To address this challenge, we established an Energy, Waste, and Natural Resource Reduction Fund. The Fund helps pay for capital projects at our facilities globally, and promotes the development of environmentally superior and efficient technologies, as well as the sharing of best practices across our facilities.

The amount spent decreased substantially in 2011, due to more readily available capital at the site level and shortage of the needed human resources to implement projects. However, the Fund is on-target to invest more than $2 million in 2012. During 2011, Lilly realized a return of about $18 million for all projects implemented so far.

Sustainable Culture at Lilly

Supporting our employees’ commitment to sustainability is essential to our ongoing success. Lilly has dozens of "green teams" globally, launched during the last decade by our employees who are passionate about the environment and reducing their impact on local communities. These teams meet periodically to discuss environmental developments at their site and how they can make a difference, and HSE management and employees actively support them in their efforts.

Lilly’s green teams engage internal and external experts to provide insight on environmental issues. The teams also take educational field trips (for example, to a recycling facility or an organic food market), and implement projects such as employee carpooling programs, energy efficiency projects, beverage container and cardboard recycling, and others. During 2010, several hundred Lilly employees participated in green teams globally.

Our employees also serve as a great source of ideas, and often make suggestions directly to the management team of their local facilities, to their HSE team, or via online services such as our internal social networking platform. Management evaluates all recommendations based on the potential benefit to the environment and cost savings, and we implement several each year. For example, during the past year, these teams have initiated, sponsored, or volunteered to implement employee-run gardens, on-site farmers’ markets, bike-to-work initiatives, and river cleanup programs.

To extend the benefits of strong environmental performance beyond our operations, we also encourage and provide employees the knowledge to act as better stewards of the environment outside of work. Examples include expanding composting and recycling in their homes, upgrading to more efficient lighting, and using public transport when feasible to decrease impacts from commuting.