Sustainability Governance
Why It Matters | Our Approach | Progress | Resources | Related Topics
Last updated: July 1, 2026
Why It Matters
To Lilly
As we expand our global footprint and invest in the infrastructure to deliver medicines at scale, strong sustainability governance helps us set direction, allocate resources, and manage the risks and opportunities that come with that growth. Clear structures and accountability at every level of the organization keep our sustainability agenda aligned with our business strategy.
To the World
Patients, healthcare systems, and communities depend on pharmaceutical companies to operate responsibly, from how we manage our environmental footprint to how we influence equitable access to medicines. Strong governance of our sustainability agenda gives stakeholders visibility into the standards we set, how we measure progress, and where we fall short. That transparency is essential to maintaining public trust in our results and delivering the outcomes our stakeholders expect.
Approach
Lilly's approach to sustainability governance reflects our commitment to operating as a responsible corporate citizen while creating long-term value for shareholders and stakeholders. We integrate sustainability considerations into our decision-making at the highest levels of the organization, with clear accountability structures that extend from the Board of Directors through executive leadership to functional teams across the enterprise.
Board Oversight
Our Board of Directors oversees sustainability strategy, performance, and risk management as a part of the overall business strategy. The Board is engaged in strategic oversight of sustainability matters and receives regular updates on progress against our long-term environmental goals and sustainability priorities.
Board Committee Responsibilities related to Sustainability topics
Directors and Corporate Governance Committee: Identifies and brings to the attention of the board, as appropriate, current and emerging environmental, social, political, and governance trends and public policy issues that may affect the business operations, performance, or reputation of the company. The committee also oversees matters of corporate governance, including board performance, non-employee director independence and compensation, corporate governance guidelines, and shareholder engagement on governance matters.
Audit Committee: Oversees our process and procedures related to identifying and mitigating enterprise-level risks, while the Board oversees our approach to managing those risks. It also oversees our programs, policies, procedures, and risk management activities related to information security, cybersecurity, and data protection.
Ethics and Compliance Committee: Reviews, identifies and, when appropriate, brings to the Board’s attention legal and regulatory trends and compliance and quality matters that may affect our business operations, financial performance, or reputation, and it oversees corporate policies and practices that relate to compliance. It holds primary oversight responsibility for non-financial compliance and, together with the Audit Committee, oversees our compliance with our code of ethics.
Talent and Compensation Committee: Oversees our global compensation philosophy and human capital management, including inclusion efforts, and establishes executive officer compensation. The committee also reviews succession plans for the CEO and other key senior leadership positions, including a broad review of our succession management.
Science and Technology Committee: Reviews and advises the board regarding the company’s long-term strategic goals and objectives and the quality and direction of the company’s research and development programs. The committee also reviews and advises the board and management on the company’s major technology positions and strategies relative to emerging technologies, emerging concepts of therapy and healthcare, and changing market requirements, monitors and evaluates developments, technologies, and trends in pharmaceutical research and development (including those related to AI). Additionally, the committee assists the board with its oversight responsibility for enterprise risk management in areas affecting the company’s research and development.
Annual Sustainability Program Review
Annually, the full Board receives a comprehensive sustainability program update from the Vice President of Sustainability. This review provides directors with a holistic view of our sustainability performance, progress against goals, emerging risks and opportunities, and strategic priorities for the coming year, so they can provide informed guidance on strategic direction.
Board Education and Engagement
We continually educate our Board on sustainability topics that may affect our business, stakeholders, and the broader operating environment. These sessions help our directors stay current on the issues that shape our sustainability strategy and oversight responsibilities.
Sustainability in Executive Compensation
Accountability for sustainability is reinforced through our executive compensation structure. Many executive officers have annual strategic objectives aligned with our long-term sustainability agenda, tailored to each executive's role and scope of responsibilities including, for example, environmental stewardship and advancing access to healthcare. Performance against these objectives is evaluated alongside individual contributions to broader strategic business imperatives, directly impacting annual stock award payouts and base pay increases.
Enterprise Risk Management Integration
Sustainability risks, including climate-related risks, are integrated into our enterprise risk management processes. The Board actively oversees the development and execution of our business strategy, with sustainability considerations reviewed throughout the year alongside financial performance, business unit results, and pipeline progress. The Audit Committee maintains primary responsibility for overseeing the enterprise risk management program, which provides a framework for risk identification and management of significant risks, including those related to environmental sustainability and the long-term viability of our business.
Disclosure and Transparency
We report transparently on sustainability matters. Our disclosure approach includes:
Annual Sustainability reporting aligned with globally recognized frameworks including SASB and TCFD
Regular stakeholder engagement on sustainability priorities, including with investors
External assurance of key environmental metrics
Progress
Over the past year, we have taken concrete steps to strengthen the governance infrastructure behind our sustainability agenda. We expanded the scope and frequency of Executive Sustainability Committee reviews, deepened cross-functional coordination through the Sustainability Operations Committee, and continued to build out the Corporate Sustainability Team’s capabilities in data management and regulatory readiness.
We are implementing sustainability data management systems and expanding our internal control structure, bringing enhanced discipline to sustainability reporting. These actions position us to meet evolving global disclosure requirements, including the EU’s Corporate Sustainability Reporting Directive and the IFRS Sustainability Disclosure Standards in various jurisdictions, while improving the quality and timeliness of the data that informs our strategy.