Performance in Operations

We are committed to continually improving environmental performance across Lilly’s operations. This includes our most significant areas of environmental impact—energy use, greenhouse gas (GHG) emissions, water use, and waste. We are also dedicated to maintaining compliance with applicable legal standards, advancing our green procurement, reducing non-GHG air emissions, and supporting biodiversity efforts in communities where we operate. As a fundamental part of our approach, we establish, work toward, and share progress against HSE performance goals.

See a summary table of health, safety, and environment (HSE) data in our 2012/2013 Corporate Responsibility Report.

Energy Use and Greenhouse Gas Emissions

The topic of climate change is compelling governments, companies, and citizens worldwide to act. We’ve responded to climate change by setting and making progress toward aggressive targets for improved energy efficiency and reduced GHG emissions. These efforts improve our environmental performance and decrease energy use, which represents one of the most substantial operational costs for our research, manufacturing, and distribution activities. Recognizing the connection between GHG emissions and water use, we have also conducted evaluations of water-stressed areas where we operate.

Solar panels at our site in Sesto, Italy.

Energy assessments are central to our approach. Since 2006, we have conducted 30 energy assessments at our most energy-intensive sites. These findings have contributed to approximately $137 million in cumulative cost avoidance36 from 2007 to 2012, while helping us to avoid more than 800,000 metric tonnes CO2e of GHG emissions during that same time period. Additionally, Lilly has implemented several global strategic initiatives to support these efforts, such as energy submetering to enable monitoring and benchmarking of facilities and utility equipment, use of the Laboratory Energy Efficiency Profiler assessment tool, and retrocommisioning37 of laboratory and administrative facilities.

At three facilities, we generate electric power using photovoltaic arrays. At a fourth Lilly site, we have entered into an agreement to purchase solar power from a third-party provider that is constructing a nearly 10-MW array adjacent to our facility. We continue to use renewable energy to diversify our energy sources and decrease GHG emissions globally, using direct generation as well as direct and indirect purchases of renewable energy from local utilities. Cogeneration, which involves using an on-site engine to generate electricity while also recovering usable heat from the process to improve overall energy efficiency, is another important part of our approach. We currently feature three sites with 10-MW, 4.3-MW, and 2.4-MW cogeneration units in operation.

Progress Toward Goal

In 2012, Lilly’s energy use totaled 10,900,000 million BTUs, almost 1 percent more than 2011 (see graph). Since 2007, our energy intensity per square foot of facility space has improved by nearly 18 percent, exceeding the company’s goal of a 15 percent reduction by 2013.38 These changes were due primarily to increased awareness of our energy goal and implementation of energy conservation measures identified through energy assessments, including improvements in boiler efficiency, chiller optimization, HVAC system enhancement, addition of laboratory fume hoods, and many others.

 

During 2012, the company’s Scope 1 and Scope 2 GHG emissions equaled 1,580,000 metric tonnes CO2e, less than 1 percent reater than in 2011. Lilly’s GHG emissions intensity improved by almost 17 percent compared with 2007, surpassing the company’s goal of a 15 percent improvement by 2013.39 The decrease in Scope and Scope 2 GHG emissions between 2007 and 2012 is equivalent to the annual emissions of about 54,000 passenger vehicles.40

This year, we again reported several categories of Scope 3 GHG emissions. We are committed to continually expanding the scope and quality of our disclosure in this area. To support these efforts, we have initiated a project to gather energy and GHG data from our key suppliers to more effectively assess our Scope 3 emissions and overall carbon footprint.

Lilly’s 2013 CDP climate change disclosure score increased to 86, compared to the average score of 82 in the healthcare sector and our company’s score of 65 in 2012. Our performance band also improved, from C to B. See Lilly’s recent CDP climate change submission for additional detail about the company’s approach and performance in this area.

Water Use

Water remains an important issue for Lilly. Predicted future regional water scarcity, increased costs, and climatic changes have only strengthened our commitment to use water wisely.

Manufacturing operations represent a majority of the water consumed by Lilly. In our operations that produce injectable products, we require exceptionally high-quality water. In our utility operations, we use substantial amounts of water for cooling and to support steam boilers. Some sites have updated to waterless cooling systems, and others have installed technology that reclaims water for this purpose. To a lesser extent, we consume water for domestic uses in our offices (such as cafeterias, bathrooms, and landscaping). Our Engineering Technical Center helps our sites to identify water-saving technologies. Additionally, capital is available to sites through Lilly’s Energy, Waste, Water, and Natural Resource Use Reduction Fund.

In 2012 and 2013, we used the World Business Council for Sustainable Development’s Global Water Tool© and the United Nations Environment Programme’s Vital Water Graphics tool to evaluate water stress-related risks to our internal and externally sourced operations. Using business-interruption criteria, we estimated potential financial impacts for each type of risk and assessed whether it is significant to the company.

We evaluated more than 100 contract manufacturing sites to determine business risk related to potential extended droughts. This analysis covered a range of operations, from bulk active ingredient production sites that require the largest amounts of water to packaging sites that consume the least. Through this assessment, we determined that extended periods of drought should not significantly impact our business. We use inventory management practices to mitigate these types of risks, and each of our facilities creates a local business-continuity plan that considers many possible sources of business interruption, including water availability.

Learn more in Lilly’s 2013 CDP water submission.

Progress Toward Goal

In 2012, Lilly’s water intake42 was 12.4 billion liters, a greater than 9 percent decrease from 2011 and a nearly 37 percent reduction since 2007 (see graph below). Major contributing factors to the 2012 reduction included implementation of a product-recovery process at one of our bulk production sites as well as pumping improvements at another bulk production location. An extended heat period that caused water shortages at some sites in North America during the last two years also motivated more efficient water use.

Improving Storm Water Management in Indianapolis, Indiana

Lilly has begun capturing 90 percent of the rainwater that falls on its headquarters site in Indianapolis, Indiana. By retaining water on site and letting it seep slowly into the ground, we have reduced the facility’s storm water impact by 45 million liters annually, which reduces the potential for pollution and damage to waterways. We accomplished this through techniques such as directing storm water to underground pipes that allow the water to naturally infiltrate into the soil instead of entering the city sewer system. We have also implemented vegetation-assisted bioretention areas and captured water for use on site in systems designed for non-potable water uses. Watch this video to learn more.

Waste

Lilly uses the following hierarchy to manage waste:

  • Eliminate or reduce the amount of waste produced,
  • Reuse materials when possible (often multiple times),
  • Recycle used materials to make new products,
  • Recover energy from waste,
  • Treat waste to reduce toxicity and volume, and
  • Send waste to landfill only when the options above are not feasible.

Progress toward Goal

Due to increases in production, total waste generation rose by nearly 15 percent from 2011 to 2012, to 278,000 metric tonnes (see graph).

 

Specifically, the difference related to increases in fermentation waste and a sizable amount of concrete and soil waste associated with construction at one site, much of which was reused. Between 2007 and 2012, however, total waste generation decreased by nearly 27 percent. The reduction is equivalent to the amount of waste that would fill about 10,000 garbage trucks.43 During 2012, Lilly sent 12,300 metric tonnes of waste to landfill, up from 10,900 metric tonnes in 2011, but approximately 62 percent less than in 2007 (see graph).44 During the year, 11 Lilly sites globally reported “zero-landfill” status (indicating that they send less than 0.5 percent of generated waste to landfill).

See a summary of total waste generation and disposition in the Waste Generation graph and text.

During 2010, total waste at Lilly was managed in the following ways:

  • Reused (65 percent). For example, mycelia, a solid material left after a fermentation process, is being used as a soil conditioner on farmland. Spent urea, a material used in insulin production, is used as an ingredient in fertilizer manufacturing. See our 2012/2013 Corporate Responsibility Report for more detail.
  • Recycled (20 percent). This includes solvent recovery in development and manufacturing processes, recycling of construction and demolition debris, and “waste-to-energy,” where steam and electricity are produced from waste to provide power to several of our facilities.
  • Treated (5 percent). This includes incineration and other waste treatment, but not wastewater treated on-site or at public facilities.
  • Landfilled (10 percent). The proportion of waste sent to landfill increased from 7 percent in 2009 to 10 percent in 2010. Six sites globally reported achieving zero-landfill status, including Lilly’s U.S. distribution centers in Fresno, California; Enfield, Connecticut; and Plainfield, Indiana; our research and development center in Surrey, United Kingdom; and manufacturing sites in Suzhou, China, and Giessen, Germany.

See case studies of waste reduction and recycling in our 2012/2013 Corporate Responsibility Report .


 

Benefitting Schools and Reducing Waste through Teachers Day in Indianapolis, Indiana

Since 2000, Lilly has assisted Indiana’s schools while promoting reuse during our annual “Teachers Day.” In 2013, teachers from 70 schools around the state “shopped” from about 150 pallets containing more than 20
metric tonnes of free lab equipment and office supplies to use in their classrooms. The total estimated value of items donated was $100,000. This event helps reduce our waste sent to landfills, while also providing much-needed assistance to help schools stretch budgets and enable teachers to advance science in their classrooms.

Watch this video to learn more.

Green Procurement

Lilly continues to expand its green procurement efforts to decrease the company’s environmental impacts and support markets for green products. Office supplies remain an area of focus. We offer online purchasing tools globally that inform employees who order office supplies if items with recycled content are available. In 2012, Lilly purchased more than 1,900 different office supply products that contained recycled material. During the year, an estimated 24 percent of the office supplies Lilly purchased by volume in the state of Indiana qualified as “green” compared to 13 percent in 2009.45 We expanded our green procurement program to cover areas such as product transport, manufacturing, and research. In 2012, we transitioned our approach to shipping products related to clinical trials requiring refrigeration from one-way shipping containers to reusable packaging that provides better thermal protection, is easier to pack, and reduces the number of containers. These enhancements reduce environmental impacts while decreasing costs to ship products to clinics.

Other Air Emissions

Lilly tracks emissions of compounds that can affect air quality. Currently, the company’s most significant air emissions, other than greenhouse gases, include volatile organic compounds (VOCs) as well as sulfur dioxide (SO2) and nitrogen oxides (NOx) resulting from the combustion of natural gas, oil, and coal.

Between 2007 and 2012, our total air emissions (not including GHGs) decreased by nearly 54 percent, largely driven by changes in manufacturing processes. Emissions decreased in all categories except VOCs, which rose due to increased production rates. Reductions in SO2 and NOx emissions were driven by the divestiture of Tippecanoe Laboratories in 2009, as well as energy efficiency improvements and changes to the company’s fuel mix during the period.

Biodiversity

Lilly has a long history of working collaboratively to protect habitat and reduce the impact of our operations on ecosystems. We pursue a decentralized approach, recognizing that biodiversity challenges and opportunities vary based on location, and we engage in conservation projects and habitat enhancements at many sites worldwide. We also support conservation efforts in the communities where our facilities are located. Examples include the following:

  • Walking paths in the education area of the site.

    Guayama, Puerto Rico: Our facility maintains about 10 acres within its grounds as an ecological habitat conservation area to help preserve and restore the vibrant plant life found in this location. The space is divided into three areas that focus on education, reforestation, and preservation.
  • Augusta, Georgia: Our manufacturing site manages a 650-acre farm in Burke County that is used for contingency application of some of the facility’s nitrogen-rich by-products (which are typically used by local farmers). The location’s Wildlife Habitat Team focuses on enhancing biodiversity at the site through the implementation of its wildlife management plan. Ongoing projects include improving Northern Bobwhite quail habitat, managing a 1.5-acre pollinator garden, and maintaining a waterfowl feeding area. The team also collaborates with the local community on various outreach Clinton, Indiana: In early 2011, we launched a project that showcases the compatibility of conservation and farming, while protecting more than 300 acres at our manufacturing facility in this location. Lilly’s site is part of a 20-mile long conservation easement established in collaboration with local conservation partners to permanently protect land along the Wabash River (see photo).
  • Great blue heron and egrets flying over the wetland habitat.

    Indianapolis, Indiana: In 2012, we focused our annual Global Day of Service (GDOS) work near our global headquarters along six waterways as part of a larger citywide collaborative known as Reconnecting to Our Waterways. Nearly 8,000 Lilly employees and other volunteers participated. Learn more on page 70. We also work to improve our understanding of the company’s impact on biodiversity. For example, Lilly has operated a bulk manufacturing site in Kinsale, Ireland, since 1982 and discharges treated wastewater to the Kinsale Harbour. In 1978, we commissioned a long-term ecological study of Kinsale Harbour with the University of Galway. This study, which is ongoing, has suggested that the minor changes observed in the aquatic life on the seafloor of the harbour are associated with storm events rather than treated wastewater from our facility.

Environmental Compliance

Lilly’s policy is to comply with applicable health, safety, and environment regulations wherever we do business. Where existing laws and regulations are inadequate, Lilly applies its standards consistent with this policy. We believe compliance is fundamental to maintaining our facilities’ “right-to-operate” in their local communities. If it is determined that we are out-of-compliance, we work to remedy the situation as quickly as possible and to continuously improve our performance. Using environmental capability assessments, we apply statistical process-control techniques to drive our key environmental compliance-related processes to be in control, compliant, and continuously improving. We routinely assess nearly 50 environmental processes and use the results to improve our control strategies. Reportable permit-limit exceedances decreased from 43 in 2007 to eight in 2012, an 81 percent reduction that equals the lowest level ever reported by the company. Of the exceedances in 2012, six were related to water, and two were related to air.