Water

Management Approach

Water is essential to our operations and the facilities where we discover and manufacture our medicines, and we’re committed to using this critical resource efficiently. We aim to manage water more sustainably by reducing our water footprint and avoiding potential risks related to pharmaceuticals in the environment (PiE).

We continuously assess our water risks, and while we generally operate in locations where the risk of water scarcity and poor quality are low, we continue to focus on conserving and reducing water use and improving the quality of the water we discharge from our facilities. We work with our sites around the world to identify water-saving opportunities and wastewater treatment technologies to support our environmental goals. We continue to report on our water programs through CDP, including through our latest CDP Water Security response.

2030 Water Goals and Our Progress to Date

In 2021, we set new water-related goals for 2030 that include establishing and implementing water management plans for all Lilly sites in water-stressed areas, as well as ensuring our internal and external manufacturing operations do not adversely impact the waterways as a result of discharges of pharmaceuticals.

Establishing and implementing water management plans for Lilly sites in water-stressed areas

In 2022, 100% of our manufacturing sites in water-stressed areas developed water stress management plans. Each water stress management plan includes localized targets and initiatives with specific delivery dates related to reducing water stress where these sites operate.

In 2023, Lilly sites in water-stressed areas implemented next steps in these plans, which included efforts to improve water efficiency and reduce total phosphorus discharged in wastewater.

Ensuring 100% of Lilly sites meet predicted no-effect concentrations (PNEC) for Pharmaceuticals in the Environment

In 2023, 100% of Lilly manufacturing sites met pharmaceutical PNEC values established by the Lilly Aquatic Exposure Guideline (LAEG) program. Furthermore, all our manufacturing sites achieved wastewater discharges less than 10% of PNEC-based limits established for pharmaceuticals.

Water Use

Manufacturing operations account for most of our water use. The production of injectable medicines requires exceptionally high-quality water, and our sites rely on utility operations to produce purified water and water for cooling systems and steam boilers. To reduce our water consumption, we use reclaimed water when possible, and have optimized our cooling systems to reduce water usage. In 2023, our facilities recycled or reused 283 billion liters of water, representing 97.5% of our total water demand.

In 2023, 7.4% of our total water intake occurred at sites in geographies that are defined as “water stressed." Potential future regional water risk, unpredictable costs and climate change concerns have further strengthened our commitment to using water more efficiently and improving water quality based on local needs. Hence, we have established water management plans for Lilly sites located in water-stressed geographies.

Each of our manufacturing sites that operate in water-stressed areas started conducting water stress assessments in 2021. In 2022, each of these sites developed water stress management plans and have begun implementation. For example, in 2023 our site in Suzhou, China improved water efficiency by 33% versus 2022, meaning less water is now used per unit of production. In addition, the site reduced phosphorus discharge in wastewater (grams of phosphorus per cartridge produced) by 52% versus 2022 through implementation of water treatment plant improvements.

Seven other projects identified in the water stress management plans have been started and are in various stages of being implemented.

Plans Developed using Alliance for Water Stewardship Standards

The water stress management plans were developed based on guidance in the Alliance for Water Stewardship International Water Stewardship Standard V2.0 (AWS Standard). The AWS Standard has five outcomes that represent fundamental aspects of water. The intent of these outcomes is to act as fundamental “pillars” of water stewardship – or themes that are reflected in all water stewardship efforts.

1. How humans are responsible and accountable for water (governance)

2. Quantities and timing of water (water balance)

3. Properties of the water (water quality)

4. Spatial aspects of areas that may or may not contain water at a given time, but that are critical to maintaining the human-derived benefits of water including the ecosystem services from Important Water-Related Areas (IWRAs)

5. Provision of safe water, sanitation and hygiene for all.

Pharmaceuticals in the Environment (PiE)

Pharmaceuticals, the active ingredients of medicines, have been found in surface waters, groundwater, sediment, and soil. Reported concentrations of pharmaceuticals detected in the environment are usually extremely low. Pharmaceuticals may enter the environment through effluents from pharmaceutical manufacturing or through excretion by patients after therapeutic use of a medicine. They may also enter the environment through improper disposal of unused medicines.

There are various public and stakeholder concerns regarding pharmaceuticals in the environment (PiE). The detection and biological potency of pharmaceuticals raise questions about potential risks to the environment. Additionally, there are concerns about the impact of the pharmaceutical supply chain on human health, especially in countries that may lack rigorous environmental protection standards. The World Health Organization, the U.S. Environmental Protection Agency and the U.S. Geological Survey have all concluded that the presence of pharmaceuticals in drinking water is unlikely to have a direct impact on human health. Recent publications by Gunnarsson et al. (2019) and Wilkinson et al. (2022) conclude that for most pharmaceuticals, presence in surface water presents a low risk to environmental species, whether based on predicted or measured environmental concentrations.

We believe the discharge of pharmaceuticals into the environment should be minimized. We strive to ensure our internal and external manufacturing operations do not adversely impact waterways due to discharges of pharmaceuticals.

Due to the importance of the topic of pharmaceuticals in the environment (PiE) to Lilly and our stakeholders, Lilly has a PiE Governance Committee that sets strategic direction related to PiE and provides long-term oversight of Lilly’s Aquatic Exposure Guideline (LAEG) program that controls the discharges of pharmaceutical from manufacturing sites. The PiE Governance Committee reports directly to our Global HSE Committee. Read more about our HSE governance.

We assess the pharmaceuticals in our medicines for potential environmental impacts before introducing a medicine to market. To do this we use environmental risk assessment procedures that are aligned with several global regulatory agencies.

We assess the environmental risk posed by patient use of our medicines as part of the approval process for new medicines in the U.S. and Europe.

We also assess the environmental risk posed by manufacturing of our medicines as part of our internal Lilly Aquatic Exposure Guideline (LAEG) program. The results drive appropriate treatment and containment strategies at our manufacturing sites to protect aquatic species in downstream surface waters and the communities and wildlife using these waters. The LAEG program has been in place for more than three decades at Lilly facilities, and we are now fully implementing LAEG assessments at contract manufacturers across our supply chain. Lilly has committed to compliance with LAEG requirements at our manufacturing facilities and to ensure controls are in place at our contract manufacturers to prevent harmful discharge of our active pharmaceutical ingredients.

We continue to partner with industry, academia and governments to improve both our understanding of and response to PiE. Lilly scientists and technical experts have been engaged in the following efforts:

Collaborating on Novel PiE Assessment – We are currently engaged in a second Innovative Medicines Initiative consortium project, the Prioritization and Risk Evaluation of Medicines in the EnviRonment (PREMIER). This six-year project aims to deliver a novel assessment system for characterizing the environmental risks of pharmaceuticals while addressing several of the actions stated in the EU’s published Strategic Approach to PiE. As part of this project, we are collecting environmental data on prioritized legacy pharmaceuticals and contributing to the evaluation of the relationship of external and internal concentrations of pharmaceuticals in fish.

Assessing the potential for designing environmentally biodegradable pharmaceuticals – We participate in the American Chemistry Society’s Green Chemistry Institute Pharmaceutical Roundtable, a consortium of companies that is considering the environmental biodegradation potential of pharmaceuticals.

Advancing the Science of PiE – We continue to support efforts to advance PiE-related research by authoring papers, serving as reviewers for journals, presenting at conferences and workshops, and participating in meetings concerning the safety of pharmaceutical residues in water.

Partnering on Take-Back Programs – In collaboration with regulators and other pharmaceutical companies, we are key partners in take-back programs for unused medicines such as MedsDisposal in Europe and Med-Project in the U.S.

Engaging in Industry Initiatives – We participate in several industry PiE initiatives, such as Eco-Pharmaco-Stewardship, a multi-faceted program developed with several pharmaceutical trade organizations (EFPIA, AEGSP, MFE).

Developing PiE Tools and Resources – We are also actively engaged in creating tools and resources to share with industry peers, including in-person and on-line training on risk-based approaches to managing effluents, a user-friendly tool to calculate discharge limits for pharmaceuticals, an industry guidance document on controlling pharmaceutical discharge and audit protocols to evaluate PiE supply chain risks.

Water Performance Data

Water Use	2020	2021	2022*	2023
Water Intake (billion liters)¹	2020: 6.10	2021: 5.92	2022*: 6.52	2023: 7.35
Water Recycle Rate (%)²	2020: 98.4%	2021: 98.0%	2022*: 97.7%	2023: 97.5%
Percent of Water use in Water-Stressed Areas	2020: 8.1%	2021: 8.9%	2022*: 7.7%	2023: 7.4%

*2022 data revised to reflect most current information.

Water Goals	Target	2023 Performance
Establish and implement water management plans for sites in water-stress geographies	Target: Develop and implement water management plans for sites in water-stressed geographies	2023 Performance: 100% of plans were developed on time, and the implementation phase has started
Ensure 100% of Lilly sites meet predicted no-effect concentrations (PNEC) for pharmaceuticals in the environment	Target: 100%	2023 Performance: 100%
Ensure appropriate controls are in place with Lilly contract manufacturers to prevent discharge of pharmaceuticals in wastewater above applicable predicted no-effect concentrations (PNEC)	Target: 100%	2023 Performance: 100%
Percent of assessed external partners meeting PNEC limits	Target: 100%	2023 Performance: 100%

Footnotes

Note: Bureau Veritas was engaged by Lilly to provide limited assurance in relation to specified 2023 environmental performance data presented.

“Water intake” is the total amount of water coming into a site, including water pumped from bodies of surface water and groundwater, as well as water provided by a utility. It includes water used in processes, utilities and other ancillary operations, such as irrigation. The term does not include groundwater pumped solely for treatment to satisfy regulatory actions or requirements (e.g., remediation activities where the water is not used for another purpose). Values do not include the water extracted from wells solely for the purpose of lowering the groundwater table(s) to maintain the physical and structural integrity of building foundations. Totals include a small amount of rainwater intake not included in other water intake subcategories. Lilly does not generally collect water data from small locations that house primarily administrative activities such as sales and marketing offices unless they are co-located at a Lilly manufacturing or research facility.
“Water recycle rate” is calculated as the total annual volume of water recycled/reused divided by the sum of total annual water intake plus the total annual volume of water recycled/reused.