Climate

Management Approach

Lilly acknowledges that climate change is negatively impacting human and environmental health. Action against climate change is required to achieve the goals of the Paris Climate Agreement and to avoid the most detrimental effects of climate change by limiting the global temperature rise to 1.5 °C. Lilly is taking action to reduce greenhouse gas emissions within our operations and along our value chain. We have assessed our Scope 3 emissions and progressed in our journey to identify climate-related risks and opportunities in our business.

As a global medicine company, we recognize our responsibility to reduce our carbon footprint and manage climate-related risks and opportunities to do our part. Lilly supports the Paris Climate Agreement, discloses information according to recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and strives to implement these recommendations across the TCFD categories of Governance, Strategy, Risk Management and Metrics & Targets. For more information, see our TCFD metrics.

As Lilly continues to expand its global presence and innovate in the pharmaceutical sector, we recognize the importance of aligning growth with our sustainability goals. Our projected growth trajectory entails careful consideration of its impact on our carbon footprint, resource consumption and waste generation. At Lilly, we are committed to implementing a range of initiatives to advance environmental sustainability across our operations and value chain. This includes initiatives to enhance energy efficiency across our operations and investments in renewable energy sources to reduce reliance on fossil fuels and decrease greenhouse gas emissions. These efforts are aimed at reducing environmental impacts while fostering sustainable business growth.

2030 Climate Goals and Our Progress to Date

Lilly is committed to reducing our greenhouse gas emissions, and prioritizing energy efficiency to become a more climate-resilient organization. We have set climate goals for 2030 as we work toward contributing to a low-carbon economy:

Secure 100% of our electricity from renewable sources

Through the end of 2024, 58% of our electricity demand – 399,000 MWh – came from renewable sources.

We are focusing our efforts on securing renewable electricity using a three-pronged approach:

• On-Site Generation: The first, and most effective effort, is implementing direct renewable electricity through on-site solar installation. We have established on-site solar arrays at our sites in the United States, France, Ireland, India, Italy, Spain, China and Puerto Rico. We aim to expand our use of on-site solar generation where possible at existing sites and implement on-site solar arrays at our new manufacturing sites as we expand our footprint to support business growth.

• Purchased Renewable Electricity: We are actively purchasing renewable energy from our utility providers across numerous sites globally.

• Renewable Energy Certificates (RECs): We also purchase renewable energy certificates (RECs) that support clean energy generation in certain regions where we operate. Our REC purchases align with globally recognized standards, such as the Greenhouse Gas (GHG) Protocol guidelines, ensuring credibility and regional environmental benefits.

Recent Achievements

Reducing Energy and Emissions

In 2024, our energy consumption increased compared to 2023 due to the start-up of new Lilly manufacturing facilities and increased manufacturing production at existing sites. Although our energy consumption increased, we were able to reduce our carbon emissions by transitioning to cleaner and more efficient technologies that help reduce greenhouse gas emissions associated with this energy. We continue to emphasize energy efficiency at our facilities, including:

• Utilizing Leadership in Energy and Environmental Design (LEED) principles as a framework for healthy, efficient and more sustainable buildings in new and updated facilities, facilitating the use of advanced energy monitoring and control solutions, conducting energy assessments, and evaluating and incorporating alternative energy sources.

• Participating in local, regional and national forums to understand and integrate energy management best practices, and to support responsible and cost-effective decision-making and policy development. Examples of participation include the U.S. Environmental Protection Agency’s ENERGY STAR Pharmaceutical Focus Group, the Association of Energy Engineers, and the American Society of Heating, Refrigerating, and Air-Conditioning Engineers.

• Providing an Energy, Waste and Water Reduction Fund which provides capital funding to encourage projects that demonstrate the greatest potential for reduction in energy consumption, greenhouse gas emissions, waste generation or water consumption. Projects supported by this fund have led to meaningful energy efficiency improvements and reductions in greenhouse gas emissions each year.

• Actively recognizing innovation and excellence in Health, Safety and the Environment (HSE) management by granting annual HSE awards. Nominations represent a significant accomplishment, and the awards recognize our employees for helping Lilly achieve energy and greenhouse gas emissions reduction goals and other HSE improvements. Projects are also assessed on their potential to scale in other areas across the company.

Reducing Emissions through Cleaner Energy

We continue to evaluate how to improve our energy resiliency and expand our use of renewable electricity consistent with our goal to diversify our energy sources and decrease our greenhouse gas emissions over time.

Off-Setting through Carbon Removal Projects

While our primary strategy is to directly reduce emissions and replace carbon-intensive sources with clean energy sources where possible, to achieve carbon neutrality we recognize the remaining emissions will need to be offset by purchasing carbon offsets from climate protection projects with recognized quality standards. To date, we have not purchased any carbon offsets. The decision to purchase offsets will be made based on the remaining emissions that cannot be eliminated. Information related to our California Voluntary Carbon Markets Disclosure (AB 1305) can be found here.

Climate Performance Data

See important information about our Sustainability report.