Primary: Energy efficiency investments via dedicated Energy and Waste Reduction Fund Since 2006 Lilly has allocated up to $4 million annually to the Energy and Waste Reduction Fund, which supports projects that reduce emissions and energy use but fall outside local capital budgets. By 2023 more than $50 million has been invested, funding over 190 projects that collectively save more than 1 trillion BTUs annually and avoid more than 132,000 tCO2e per year. In 2023 initiatives included AHU optimisation (9,669 tCO2e saving), chiller recapitalisation at one US facility (3,307 tCO2e), new 2.5 MW solar PV at Kinsale Ireland, combined heat and power optimisation, and lighting and lab air-change reductions — together estimated to save ~20,700 MWh/year at Kinsale alone. An internal shadow carbon price of $5–$100/tCO2e is applied to capital expenditure decisions to incentivise low-carbon investments.
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Three-pronged RE100 strategy: on-site solar, utility green power, and RECs As a RE100 member targeting 100% renewable electricity by 2030, Lilly pursues three pathways. First, on-site solar PV installations already operational in France, Ireland, India, Italy, Spain and Puerto Rico (total self-generated renewable electricity 5,979 MWh in 2023), with plans to expand at existing and new manufacturing sites. Second, purchased green power from utilities in Germany, India, Ireland, Spain, Switzerland and the UK under retail supply contracts or on-site PPAs (e.g. Kinsale, Ireland facility 100% renewable under EKOenergy-labelled contract). Third, unbundled Energy Attribute Certificates (RECs/GOs) purchased in alignment with RE100 technical criteria requiring location- and vintage-matching. By end-2023 28.4% (185,770 MWh) of purchased electricity was renewable; ultimate aim is to supplement on-site solar with PPAs in primary consumption regions — USA, Europe and China — by 2030.
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Third-party limited assurance (ISAE3000) for Scope 1, 2, and 3 emissions Eli Lilly obtained annual limited assurance under ISAE3000 for 100% of reported Scope 1, Scope 2 (both location- and market-based), and all Scope 3 categories, as well as energy consumption and EACs. Assurance statement titled 'Eli Lilly_Assurance Report 2024_Final Issued.pdf'. Third-party assurance covers all 15 Scope 3 categories.
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Primary: Business travel and employee commuting reduction Business travel (Cat 6) recovered strongly post-pandemic to 40,500 tCO2e in 2023, significantly above the 2021 base of 8,581 tCO2e and reflecting full return-to-travel. Employee commuting (Cat 7) is 45,100 tCO2e (up from 25,108 tCO2e base year), calculated using FTE counts, commuting distances and modal emission factors. Both categories are calculated via the average-data method. Lilly's transition plan relies partly on continued hybrid working arrangements and has established HSEDirections, an energy awareness programme for sales and marketing teams. Climate change performance (including energy efficiency and renewable electricity transition) is tied to executive incentive compensation for the CEO and President of Manufacturing.
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New North Carolina manufacturing facility started up, offsetting emission reductions Lilly started up a new manufacturing facility in Research Triangle Park, North Carolina in 2023, which increased energy consumption and partially offset GHG reductions from renewable electricity and efficiency improvements. Scope 1+2 (market-based) decreased 3% year-on-year from 2022 despite business growth. Total 26% absolute reduction from 2020 to 2023.
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Dependent: Scope 3 cold-chain and downstream distribution logistics Downstream transportation and distribution (Cat 9) is reported at 6,600 tCO2e for 2023, substantially lower than the 2021 base year of 173,777 tCO2e. The calculation uses sold product tonnages multiplied by DEFRA emission factors plus 'last mile' estimates from distribution warehouses to customers. While this category is smaller relative to upstream logistics, Lilly acknowledges it covers global distribution across approximately 105 countries. End-of-life treatment (Cat 12) is 83,800 tCO2e, calculated assuming all sold pharmaceutical waste undergoes hazardous incineration.
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Capital goods (Cat 2) reported separately for first time in 2023 In the 2021 base year, Category 2 (capital goods) was combined with Category 1 as line items could not be distinguished. In the 2023 reporting year, Cat 2 is reported separately at 721,200 tCO2e using the spend-based method. This represents improved granularity in Scope 3 accounting.
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Dependent: Supplier engagement on Scope 3 Category 1 purchased goods and services Category 1 purchased goods and services is Lilly's dominant Scope 3 source at 3,098,800 tCO2e in 2023 (up from 2,434,210 tCO2e base year 2021), reflecting a hybrid method: where supplier Scope 1+2+3 data are available they are used to develop emission factors attributed proportionally to Lilly's spend; otherwise spend-based EEIO factors are applied. Only 5% of emissions are calculated from supplier-provided data, indicating significant data-quality improvement potential. Lilly prioritises suppliers by procurement spend and strategic importance, engages via CDP supply chain platform and has communicated climate expectations, but these are not yet contractual requirements. Category 4 upstream transport also large at 957,400 tCO2e, up sharply from 141,255 tCO2e base year, reflecting expanded scope to include spend-based logistics.
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Primary: Manufacturing energy decarbonisation — stationary combustion and process emissions Stationary combustion (123,523 tCO2e) and process emissions (2,581 tCO2e) make up the majority of Lilly's Scope 1 inventory, with mobile combustion (48,847 tCO2e) and fugitive emissions/refrigerants (6,907 tCO2e) as secondary sources. Lilly's strategy targets fuel switching and energy efficiency across its owned manufacturing sites in the US, Puerto Rico, Ireland, Italy, Spain and France. The EU ETS covers the Kinsale, Ireland facility (14.6% of Scope 1); strategy is to improve GHG efficiency to limit ETS obligations, supported by a specialist third-party trading adviser. In 2023 Scope 1 was 182,000 tCO2e, a reduction of approximately 26% from the 2019 base of 192,075 tCO2e.
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