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Goals for Improving HSE Performance

The corporate HSE function, working with other functions within the company, has developed a comprehensive corporate strategy to drive performance improvement. The strategy includes five HSE goals:

Realize a one-third reduction in the energy intensity (normalized to sales) and corresponding greenhouse gas emissions of our operations by 2010, compared to the baseline year of 2003. Progress to date: 13 percent reduction for energy; 11 percent for greenhouse gas emissions.
Realize a one-third reduction in the purchase of hazardous materials (normalized to sales) by 2010 through innovative process and facility design, compared to the baseline year of 2003. Progress to date: 38 percent reduction.
Achieve zero serious environmental events by 2007. Progress to date: Reduced from 11 to 3.
Reduce serious ergonomic injuries by 50 percent by 2008, compared to the baseline year of 2003. Progress to date: 11 percent reduction.
Attain a one-third reduction in collisions per million miles by 2010 through implementation of motor vehicle safety programs in our top 10 sales affiliates, compared to the baseline year of 2005.

Corporate HSE Policy

As a health care company, we are committed to the present and future well-being of people and the environment in which we live. This commitment is pursued with a goal of continuous improvement and guided by the following principles:

Encourage and expect each employee to be environmentally responsible and to conduct work practices in a safe manner in accordance with established policies and procedures. These practices are considered an essential measure of performance for all employees. Contract employees working on Lilly premises and external entities engaged in the production of our products will also be held accountable for this expectation.
Build health, safety, and environmental (HSE) considerations into all phases of the business, including product and technology discovery and development, facility design, operation and maintenance, and product delivery.
Strive for an injury-free workforce and minimize environmental impact through implementation of programs in our facilities and the surrounding communities that reduce risks to employees, neighbors, the public at large, and the environment.
Comply with all applicable laws and regulations. Where existing laws and regulations are not adequate, we will adopt our own standards consistent with this policy.
Encourage and promote waste minimization, the sustainable use of natural resources, recycling, energy efficiency, resource conservation, and resource recovery.
Engage in dialogue with our stakeholders about our commitment to the environment and to the health and safety of Lilly employees, contractors, shareholders, vendors, customers, visitors, and the communities in which we operate.
Actively participate with government agencies and other appropriate groups to ensure that the development and implementation of environmental, health, and safety policies, laws, regulations, and practices promote the present and future well-being of people and the environment and are based on sound scientific judgment.
Regularly assess and report to management and the board of directors on the status of compliance with these principles and other external HSE initiatives to which we subscribe.

Protecting Soil and Groundwater

We are committed to ensuring that our present and future operations do not negatively impact soil and groundwater. To this end, we have established a global Soil and Groundwater Protection Policy that requires each of our facilities to conduct periodic risk assessments of activities and processes that could result in impacts to soil and groundwater. The assessments must include evaluations of possible spills from activities and leaks from equipment, containers, and piping; drum storage practices; and the impacts of past waste-management practices. Once risks are identified, programs are implemented to minimize these risks. These programs may include, but are not limited to, preparing spill prevention plans, implementing secondary containment inspection and repair programs, and training employees/contractors in spill response measures.

Emergency Response Programs and Practices

Lilly sites are required by company policy and regulatory requirements to have an emergency management system. This includes a risk assessment to identify the critical risks that should be addressed in the site emergency plan. Each site is required to assess its readiness annually. Testing the plan can range from tabletop exercises to full-scale drills that include community fire and emergency agencies.

In addition to testing the local site plan, Lilly has a corporate-level Incident Support Team that is ready to commit corporate resources in the event of an incident that impacts tangible assets (such as people and facilities), products, or sites. Major exercises have been conducted in the past, including working with manufacturing facilities in Indiana (U.S.), Puerto Rico, France, and Mexico.

These drills test the site emergency plan, emergency response teams, and local agencies. Past drills have also included the local hospitals, law enforcement agencies, and local emergency response agencies.

Corporate HSE Audits

Every three years, the corporate HSE audit group completes an assessment of HSE and business risks associated with Lilly global operations and facilities. This assessment is based primarily upon available site information, including:

role of the site
previous audits and bi-annual site self-assessment results
corporate HSE staff and management input
geographic location
dates of previous audits
regulatory inspection history
process/operational changes
management/staff changes

The results of this assessment are used to create a plan for the following year as well as a tentative three-year HSE audit plan, which may be revised based on major changes in one or more risk factors.

OSHA Voluntary Performance Program

The U.S. Occupational Safety and Health Administration’s (OSHA) Voluntary Performance Program sets performance-based criteria for a managed safety and health system, invites sites to apply, and then assesses applicants against these criteria. OSHA’s verification includes an application review and a rigorous on-site evaluation by a team of OSHA safety and health experts.

On October 16, 2002, the Lilly Technology Center in Indianapolis, Indiana, was awarded “Star” status—the highest level of recognition in this OSHA program. The Lilly Technology Center was able to demonstrate that it has excellent injury reduction and health and safety programs in place. Other U.S.-based Lilly sites are considering participation in this initiative.

Responsible Care®

In 2005, Lilly continued its longstanding involvement in the American Chemistry Council’s Responsible Care® initiative. This voluntary program aims at achieving improvements in health, safety, and environmental (HSE) performance at participating manufacturing facilities beyond levels required by the U.S. government. Highlights of Lilly’s efforts in 2005 include performance of an external audit on the Responsible Care management system that addresses our HSE and security systems. Lilly has shared facility security plans with local law enforcement agencies during on-site visits. We also publish various HSE performance metrics via the Responsible Care metrics website [link to http://www.responsiblecare-us.com/].

Lilly’s manufacturing sites in Kinsale, Ireland, and Speke, U.K., are also members of Responsible Care in their respective countries.

S.E.E. Change Initiative

Lilly is actively participating in the Business Roundtable’s new S.E.E. Change Initiative (Social, the Environment, the Economy), a program designed to encourage the adoption of sustainability principles as business tools. The initiative asks American companies to establish and meet goals that will enhance society and the environment while
creating business value. Together, our efforts are focused on such high priority challenges as water quality and energy efficiency. Another key goal of the initiative is the eradication of disease and poverty, something we work toward every day in our quest to develop new drugs, and through efforts such as our Multiple-Drug Resistant Tuberculosis Partnership.

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