Climate

As a global medicine company, we recognize our responsibility to reduce our carbon footprint and manage climate-related risks and opportunities. We support the Paris Climate Agreement and strive to implement recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) across Governance, Strategy, Risk Management and Metrics and Targets within our program.

Our Climate Goals

We are committed to reducing our greenhouse gas (GHG) emissions while supporting business growth by improving energy efficiency, increasing the use of renewable energy and implementing other decarbonization initiatives. We have set climate goals for 2030 as we work toward contributing to a low-carbon economy:

• Secure 100% of our purchased electricity from renewable sources

• Become carbon neutral in our own operations (Scope 1 and 2 emissions)

• Enhance tracking and reporting of Scope 3 (value-chain) emissions

Measuring Our Impact

We complete an annual corporate greenhouse gas emissions inventory to evaluate the global GHG footprint of our operations (Scopes 1 and 2) and value chain (Scope 3). Our inventory follows industry-leading guidance established by the Greenhouse Gas (GHG) Protocol. We use the inventory results to identify emissions hotspots, to understand our emissions in the context of our growing footprint and to develop and prioritize actions that aim to reduce emissions in our value chain.

Scope 1 and 2 Emissions Approach

We strive to be carbon neutral in our own operations by 2030, and we are working to reduce greenhouse gas emissions throughout our operations. Our strategy is to first reduce emissions as much as possible internally before we consider offsets to cover the residual emissions.

Over the last several years, demand for our medicines has increased significantly. To support this, and future anticipated demand, we are meaningfully expanding our manufacturing facilities and our supply chain overall. As a result, our overall energy consumption and total (Scope 1, 2 and 3) greenhouse gas emissions have increased. Despite this growth, we remain focused on reducing the carbon intensity of our operations by improving energy efficiency and transitioning to cleaner and more efficient technologies that reduce greenhouse gas emissions. 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. We also facilitate 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 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 internally funded sustainability and decarbonization fund 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 while driving business value and return on investment.

• Actively recognizing innovation and excellence in Health, Safety and the Environment (HSE) management through annual HSE awards. Nominations represent a significant accomplishment, and the awards recognize our employees for helping Lilly achieve energy, waste, water 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.

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

Renewable Electricity

We are focusing our efforts to secure renewable electricity through:

• 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 several sites around the world. 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 electricity from our utility providers across many sites globally.

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

Additionally, we focus on energy resiliency – helping our facilities maintain a reliable supply of energy and contingency measures in place in the event of a power failure. Combined heat and power systems provide energy resilience by efficiently supplying electricity and thermal energy to facilities on a continuous basis with the ability to operate independently from the grid. This reduces the risks associated with energy supply disruptions or climate-related events.

Finally, our GREENDirections program, which applies to our sales and marketing organizations around the world, focuses on carbon emissions reduction, office energy conservation and waste reduction. Business areas maintain a local roadmap to deliver on these priorities and look for opportunities to reduce their environmental impact.

Our sales organizations around the world have demonstrated a commitment to reducing carbon emissions and many locations have begun fleet transitions to electric vehicles (EVs). In many geographies where EVs and infrastructure are not readily available, we offer fleet vehicles with more efficient fuel economy (e.g., hybrids and plug-in hybrids) and emphasize sustainable driving and work practices in training programs.

Scope 3 Emissions Approach

Aligned with the GHG Protocol Corporate Standard, we define Scope 3 emissions as indirect GHG emissions (not included in Scope 1 or 2) from sources not owned or directly controlled by the company but related to activities across the entire value chain, both upstream and downstream.

Our calculation methodology covers all relevant Scope 3 categories and is calculated using a combination of spend‑based, average-data and supplier-specific methodologies, and thus, growth in the business is the primary driver in Scope 3 emissions growth in recent years. Additionally, we monitor updates to the U.S. Environmentally-Extended Input-Output (USEEIO) codes and the associated emission factors, and other evolutionary methodology changes that have potential to impact Lilly’s calculated Scope 3 emissions. In an evolving Scope 3 data capture and calculation environment, we consider best practices each year to improve estimates where possible.

We are working to advance transparency across our value chain, including in our Scope 3 emissions by engaging with key suppliers and collaborating with industry peers to better understand value chain activities and emissions impacts. Through these efforts, we aim to improve the tracking and analysis of our supply chain emissions, identify reduction opportunities where possible, and use the insights gained to inform our evolving supply chain strategy related to climate change.

Offsetting through Carbon Avoidance and Removal Projects

While our primary strategy is to reduce emissions and replace carbon-intensive sources with clean energy sources where possible, to achieve carbon neutrality we recognize that residual emissions will need to be offset by purchasing carbon offsets from projects that meet recognized quality standards.

As our operations continue to grow, we expect the use of high-quality carbon offsets to play a complementary role alongside direct emissions reductions in achieving our carbon neutrality goal.

In 2025, our site in Suzhou, China purchased 8,887 metric tonnes of CO₂e of Verified Carbon Units (VCUs) from a third-party verified carbon avoidance project, aligned with the site's residual Scope 1 and Scope 2 emissions. The offsets were applied only to emissions within the site's operational boundary and were not used to adjust Lilly's gross Scope 1 or Scope 2 emissions totals, which continue to be reported in accordance with GHG Protocol requirements.

Information related to our California Voluntary Carbon Markets Disclosure (AB 1305) can be found here.

Our 2030 climate goals anchor our progress: securing 100% renewable electricity, achieving carbon neutrality in our own operations and strengthening how we track and report value-chain emissions. The results below reflect a year of meaningful gains in renewable electricity and absolute emissions reductions, even as our manufacturing footprint expanded to meet growing patient demand. Continued significant growth in our business makes consistent year-over-year reduction more difficult but also reinforces why disciplined execution against each goal matters.

Goal: Secure 100% of our purchased electricity from renewable sources

• In 2025, 79.3% of our electricity demand – 619,000 MWh – came from renewable sources, including on-site generation, purchased energy and renewable energy certificates. We have established on-site solar arrays at a number of Lilly facilities globally, contributing to reduced greenhouse gas emissions at these key facilities.

• We had previously signed a renewable power purchase agreement to procure approximately 450,000 megawatt hours per year of renewable electricity from a newly constructed wind farm. The wind farm came online in 2025 and is expected to provide a significant portion of our renewable electricity needs as we expand our manufacturing footprint to meet growing global demand for our medicines, while continuing progress toward our goal of achieving 100% renewable electricity by 2030.

As we continue to expand our global presence and innovate in the pharmaceutical sector, we recognize the importance of aligning business growth with our environmental sustainability goals. Our projected growth trajectory requires careful consideration of its impact on our carbon footprint, resource consumption and waste generation.

We are committed to advancing environmental sustainability across our operations and value chain through a range of initiatives. These include continued efforts to improve energy efficiency, expand the use of renewable energy and reduce reliance on fossil fuels. Together, these actions support our goal of reducing environmental impacts while enabling sustainable, long‑term business growth.

Resources

• Lilly Position Statement on Environment and Climate Change

Related Topics

• Waste

• Water

• Biodiversity

• HSE Governance

• Supply

• Supply Chain Management

• Product Stewardship