How a Corporation Should Think About Social Responsibility
S.K. Lacy Class
John C. Lechleiter, Ph.D.
Chairman, President and Chief Executive Officer — Eli Lilly and Company
March 4, 2014
I’m very pleased to welcome you to Eli Lilly and Company. And I want to congratulate each of you for the accomplishments that led to your selection to participate in this leadership series.
I’ve had the pleasure of talking with several S.K. Lacy classes … and I always find it enlightening and fun.
I understand that your focus this year is on poverty in Central Indiana – how it impacts quality of life in our community and what we can do about it. I also know you’ve looked at this critical issue from a variety of angles.
So I thought – both as a citizen concerned about the impact of poverty on our community … and as someone who represents a company with a long history of tackling seemingly intractable societal issues – that I’d use my time to share some thoughts on how a corporation should think about social responsibility – and, specifically, how we think about it at Lilly.
When most people think of Lilly, they think of innovative medicines.
Indeed, Lilly was founded with the goal of creating trusted medicines at a time when untested elixirs peddled by questionable characters were the norm.
And if you consider Lilly’s greatest contributions over our 137-year history … many of them have made a profound difference to people in need.
For example, we commercialized the world’s first insulin … we produced more than half of all the Salk polio vaccine used in the United States … we introduced important classes of antibiotics … we helped revolutionize the treatment of mental illness … and we’ve made important contributions in the treatment of cancer.
So we strongly believe that the greatest contribution Lilly can make to society is to continue to discover and develop innovative medicines that help people live longer, healthier, more active lives.
That said, there’s been an equally-strong strand woven into Lilly’s DNA from the time of our founders: our work to strengthen our communities and help those in need.
Here’s one example from the 19th century – taken from a history of the company that covered Lilly’s first 70 years:
“In the gaunt years of 1893–1894, there were many unemployed in Indianapolis. Colonel Eli Lilly, then president of the Commercial Club, headed a movement to alleviate the distress of the poor and unemployed. A food market was opened … every able-bodied man was given labor. The practical and successful manner in which this plan was carried out gained national recognition for Indianapolis.”
The Lilly family also wrote about and advocated for an enlightened view of corporate responsibility.
Nearly 75 years ago, J.K. Lilly, Senior – the Colonel’s son – wrote that:
“Every man should – in addition to his endeavors for personal and family gain and comfort – unselfishly perform some duties as a citizen, for the community in which he and others ‘live, move, and have their beings.’ ”
J.K., Senior – and his two sons – J.K., Junior and Eli – established the Lilly Endowment in 1937 … which has grown to become one of the largest and most important foundations in the country. The impact that the Endowment has had on our community in the last 75 years can hardly be calculated.
The Lillys were also major donors to the Community Fund – known today as the United Way. This is another tradition that continues at Lilly. Our employees set all-time records in donations to the United Way of Central Indiana these past three years – including a year we didn’t provide raises due to a series of patent expirations affecting our sales and profits.
While we continue to invest in traditional philanthropy, our company vision – to improve global health in the 21st century – calls us to continue along our company’s distinguished path of giving back and lifting up in new and ever-better ways.
So, over the last decade, we’ve transformed our corporate responsibility efforts to sharpen our focus on improving health for people in low- and middle-income countries and strengthening the communities where we work and live.
We’re also pursuing novel approaches that engage our scientific and business expertise, resources, and the passion of our employees … and that do a better job of linking our corporate responsibility efforts together – and to our business – for greater impact and continuous learning.
You can see this approach most clearly in our two signature global health programs, which focus on tuberculosis and diabetes. Through these programs, we’re partnering with leading health organizations and governments to explore new approaches to complex global health challenges. Our goal is to find new solutions that can be scaled up and replicated around the world, creating ripple effects and touching even more lives.
We launched our Lilly MDR-TB Partnership in 2003 to fight multidrug-resistant TB. This hard-to-treat form of TB particularly afflicts people living in cramped, unventilated homes often found in impoverished communities.
It’s usually preventable or curable if patients get the right medicine at the right time. But too often that’s not the case: MDR-TB needlessly kills more than 150,000 people each year.
The Lilly MDR-TB Partnership is our largest philanthropic effort ever. We’ve committed $170 million to it from 2003 through 2016. Through the partnership, we gave away our manufacturing technology and know-how for two antibiotics to other manufacturers; these two medicines are still part of the last line of defense to cure MDR-TB.
In addition, we’ve partnered with global health organizations to strengthen awareness, prevention, and care, and funded early TB discovery efforts aimed at finding desperately needed new treatment options.
Our current focus is primarily in countries with the highest burden of MDR-TB – China, India, Russia, and South Africa – where we’re training frontline healthcare providers and improving access to safe, effective, high-quality MDR-TB medicines.
Taking the insights gained from this effort, in 2011 we launched the Lilly NCD Partnership to help fight the rising tide of non-communicable diseases – which include heart disease, cancer, chronic respiratory diseases, and diabetes.
Here’s something that might surprise you: though we think of NCDs as diseases of more affluent societies, in fact, the vast majority of NCDs today – some 80 percent – occur in low- and middle-income countries, due largely to changing lifestyles.
And at the same time as these diseases lead to premature death and long-term disability … they also spread poverty and stifle development. A study by researchers from Harvard University estimated that one extra year of life expectancy raises a country’s per capita GDP by about 4 percent. Imagine the negative impact that NCDs have on poverty reduction and economic growth in countries that can least afford it.
The biopharmaceutical industry has played a key role in reducing deaths from NCDs in developed countries. To take one striking example: mortality from heart disease in the U.S. has dropped by about two-thirds since the 1960s.
And we’re working hard to find new and better treatments.
But to win the battle against NCDs in many low- and middle-income countries, we need more than medicines. Many countries lack the health care infrastructure to get the right treatment to those who need it. To tackle these diseases, we need holistic solutions, especially in countries with less-developed health-care systems.
Through the Lilly NCD Partnership, we’re investing $30 million over five years to strengthen diabetes care for people in rural and urban settings in Brazil, Mexico, India, and South Africa. We’re leveraging our more than 90 years of diabetes experience and knowledge along with the creativity of our partners to test new approaches … report on what works and what doesn’t … and then advocate for the best solutions to be replicated.
We’ve been exploring partnerships for decades. In South Africa, for example, one of our NCD partners is Project HOPE, a remarkable humanitarian health organization. Lilly’s partnership with Project HOPE dates back to 1959, and since then, we have contributed about $80 million in cash and in-kind gifts to support its diabetes education and training programs, disaster relief efforts, and product donations.
Through the NCD Partnership, we’re now working with Project HOPE to operate a diabetes clinic and train healthcare workers in a township on the outskirts of Johannesburg. In 2012, we received Project HOPE’s inaugural Global Health Partner Award.
Still another example of how we’re working to improve global health can be found in the efforts of Elanco, our animal health business. Elanco is helping break the cycle of hunger in communities across the world … including through its partnership with Heifer International. Our goal is to lift 100,000 families out of hunger through the donation of livestock, training, and tools.
There are two more global efforts I want to single out:
First, on our annual Global Day of Service, more than 20,000 Lilly employees fan out across their local communities, doing everything from supporting patients and their families at our NCD sites … to beautification projects … to working in food pantries … and more. I’m sure you’ve seen the red-shirted army of Lilly employees in Indianapolis each Fall … and this past year we expanded the program to include other local companies and organizations.
Second, through our Connecting Hearts Abroad program, we’ve been sending 200 employees each year to volunteer for two weeks in impoverished communities around the world. The employees chosen get to see firsthand the challenges that confront people living in poverty … and they bring back insights and inspiration that make us a better, more globally aware company.
We’re excited about the impact we can have around the world as we continue to evolve and sharpen our corporate responsibility efforts. And, while our work is global by necessity … our greatest obligations and opportunities are in our home city of Indianapolis.
We live in a great city, and we are proud to call it home. But, we have some real challenges – as you have learned.
Today, more than 20 percent of the people in Marion Country live below the poverty line … and an alarming one in three children.
As a major corporation headquartered here, we have an obligation to address this.
And just as we’ve transformed our global corporate responsibility … so our philanthropy locally has evolved in recent years from an approach that could be described as “spread the money around” to one that is focused on helping improve K-12 education in our community first and foremost.
So, while we continue to be major contributors – in both dollars and hands-on volunteering – to United Way … we are placing special emphasis on public education – working to dramatically improve outcomes for low-income students … as well as getting more kids excited about science and math. We are also strong advocates in the legislature to invest more resources in early education.
We also understand the importance of growing our tax base. This is among the reasons Lilly – along with BioCrossroads – has spearheaded an effort to energize our strong life-sciences cluster in Central Indiana … and why we work hard to attract new businesses to our state. It’s why a year-and-a-half ago I called for establishing the Indiana Biosciences Research Institute to be a catalyst for world-class research leading to new medical innovation for patients … and I’m pleased to say we’re moving ahead.
It’s why Lilly supports the arts and all those amenities that make Central Indiana an appealing place to live.
Better educated citizens … better quality of life – these things are critical for our region. They’re also essential to Lilly’s success. In Indianapolis, we have 4,500 scientists, physicians, and researchers in R&D – working to find solutions for diseases like Alzheimer’s, cancer, and diabetes.
We need a community and region with a quality of life that enables us to attract and retain the very best talent from around the world.
What I’ve been discussing are just some examples of how Lilly is working to make a dent in poverty and other social needs around the world and here at home.
I’m privileged to lead nearly 38,000 employees whose passion for finding the next treatment for a devastating disease is matched by their generosity and caring. They are worthy successors to our founding family.
I hope I’ve also conveyed the sense that – though problems like poverty can seem to defy solution – through a sense of mission … building a network of like-minded partners … and leveraging their capabilities and expertise – an organization – or an individual – can make a difference – can be the pebble thrown in the pond from which ripples expand ever outward.
So I encourage you to think about the impact you and the organizations you lead can have here in Indianapolis … and also in this ever-shrinking global landscape.
How will you be the change you want to see in the world? Or be a catalyst for change within the organization you are part of?
Now, I invite you to watch this short video on Lilly’s corporate responsibility programs … then I’ll be happy to take any questions you might have.
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