Elanco Releases Environmental, Social and Governance (ESG) Summary

Summary Aligned with Leading Sustainability Frameworks and Elanco’s Healthy Purpose™ Sustainability Strategy

Elanco Animal Health Incorporated (NYSE: ELAN) today released its 2020 Environmental, Social and Governance (ESG) Summary, including disclosure on climate-related and workforce metrics. The summary, its first since becoming a standalone animal health company less than three years ago, provides an initial view of the company’s ESG programs, policies, and metrics aligned with its sustainability approach.

“Sustainability is at the heart of our vision of Food and Companionship Enriching Life and we are embedding our Healthy Purpose efforts throughout the company,” said Jeff Simmons, president and chief executive officer at Elanco. “Our 2020 ESG Summary is an important step in the accountability and transparency of our overall sustainability program and provides the baseline for future reporting.”

The summary is aligned with leading sustainability frameworks, namely the Sustainability Accounting Standards Board (SASB) guideline for the Biotechnology & Pharmaceuticals industry as well as the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations and covers additional disclosure topics deemed relevant and material by Elanco and its key stakeholders as a part of a robust materiality assessment conducted in 2020.

The materiality assessment identified topics relevant to Elanco and its diverse stakeholders and highlighted the interdependency of many factors. The assessment also identified key trends Elanco believes will propel the animal health industry and the company forward over the coming decade.

• Creating Convenient Access to Animal Care: With approximately half of the world’s pets still unmedicalized, Elanco’s role as omnichannel leader creates a responsibility to be the conduit – the bridge – between pet owners and veterinarians, improving pet care over the long-term.
• The Path to Net Zero: Elanco is committed to help advance the health and well-being of three billion farm animals and to be livestock producers’ leading partner on their path to Net Zero greenhouse gas emissions.
• Innovation Matters: Innovation is rewarded and will be the enabler of both the changing pet care landscape and environmental trends. This next five years Elanco expects to see transformational innovation and remains focused on being an innovation partner of choice in the industry.
• Creating Community on the Inside Changes Communities on the Outside: Elanco aspires to be a safe harbor, to foster a culture and community where employees from across the globe can be their authentic selves every day. Creating an environment where employees can thrive allows for a greater focus on driving scientific, product and personal advancement.

Addressing these macro trends, in October 2020, Elanco launched its 2030 sustainability commitments aligned to the 2030 United Nations Sustainable Development Goals (SDGs). The company’s approach to sustainability, called Elanco’s Healthy Purpose™, is a framework of commitments and actions focused on advancing the well-being of animals, people, and the planet. Elanco’s Protein Pledge, Planet Pledge and Pet Pledge, are expected to drive sustainable change by 2030 – for the company, the industry, and the world.

The publication of Elanco’s 2020 ESG Summary complements these decade-long commitments, outlining the company’s approach to environmental management and emissions, talent management and diversity, equity, and inclusion practices, responsible business practices and risk management across its value chain, and establishes a baseline for future reporting.

Key Highlights from Elanco’s 2020 ESG Summary:

Environment

Elanco understands that its business operations have an impact on the environment and is committed to conducting business in an environmentally responsible manner, advocating for sustainable change. The company utilized the Task Force on Climate-Related Financial Disclosures (TCFD) framework to evaluate and describe its efforts related to environmental sustainability. The summary includes metrics for the combined company footprint including Scope 1 and Scope 2 greenhouse gas (GHG) emissions, energy use, waste, and water.

The company has a track record for improving its environmental footprint through operational improvements and targeted programs. Legacy Elanco has achieved targets set as a division of its former parent company, Eli Lilly and Company (Lilly), including improving waste efficiency by 35% by 2018, reducing phosphorus emissions in wastewater by 88% by 2019, and reducing energy intensity by 14% by 2019, all compared to a 2013 baseline.

Legacy Bayer Animal Health facilities were integrated into the Elanco’s environmental management approach and a consolidated view of global operations will be considered in further target setting. Elanco is committed to continuing to reduce its environmental footprint, while also supporting customers as they work to achieve their sustainability goals.

Social

Elanco recognizes its broad impact on social topics and covered those deemed material by the company and its stakeholders as part of the ESG Summary.

In the summary, the company shares policies and governance established to ensure the integrity of responsible research practices, to advocate for and uphold the highest standards of animal welfare, and to ensure the quality and safety of our products. Additionally, the summary contains workforce demographic data, including gender and U.S. ethnicity data by level in the company, inclusive of the combined company at the end of 2020. The company will utilize this baseline for future target setting.

Elanco believes its people are a key asset to the culture and ability to deliver for customers. The company is focused on cultivating a sustainable work culture through enhanced talent attraction and retention programs, targeted training and leadership development programs, and detailed tracking and analysis of employee engagement.

Additionally, the company has further enhanced its Diversity, Equity, and Inclusion (DEI) efforts since the separation from Lilly. The company’s comprehensive DEI strategy starts with targeted recruitment efforts, equity and inclusion learning opportunities for all employees, and dedicated mentorship and development opportunities for individuals from underrepresented groups.

Governance

A strong system of corporate governance is critical to delivering long-term value for shareholders and society. The Governance section of the ESG Summary provides a baseline for the ethics and compliance, supply chain management and information security programs in place at Elanco. The company established a robust sustainability governance process and created the Healthy Purpose Sustainability Committee, with representation from functional areas across the company, including those leading the working groups established for each of the three 2030 Pledges. The Committee will drive integration of sustainability efforts throughout the organization and maintain the integrity of the program.

Elanco is committed to the evolution of its sustainability efforts and providing the transparency necessary for all stakeholders to understand and evaluate its efforts, including updates toward its 2030 Pledges and additional targets to support advancement of its ESG efforts.

For additional information about how Elanco’s Healthy purpose contributes to creating a more sustainable future for all stakeholders, visit elanco.com/en-us/sustainability.

ABOUT ELANCO

Elanco Animal Health Incorporated (NYSE: ELAN) is a global leader in animal health dedicated to innovating and delivering products and services to prevent and treat disease in farm animals and pets, creating value for farmers, pet owners, veterinarians, stakeholders, and society as a whole. With nearly 70 years of animal health heritage, we are committed to helping our customers improve the health of animals in their care, while also making a meaningful impact on our local and global communities. At Elanco, we are driven by our vision of Food and Companionship Enriching Life and our Elanco Healthy Purpose™ Sustainability/ESG Pledges – all to advance the health of animals, people and the planet. Learn more at www.elanco.com.

This press release contains forward-looking statements, which reflect the current views of Elanco with respect to ESG commitments, goals and aspirations, and other future events. The statements are not guarantees of future performance or actions. Such forward-looking statements are subject to a variety of known and unknown risks, uncertainties, assumptions, and other factors that are difficult to predict and many of which are beyond management’s control. If one or more of these risks or uncertainties materialize, or if management's underlying assumptions prove to be incorrect, actual results may differ materially from those contemplated by a forward –looking statement. These risks, assumptions, uncertainties and other matters are described in Elanco’s annual reports on Form 10-K for fiscal year ended December 31, 2020 and other reports that are available from the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements, which reflect management’s view only as of the date made. We undertake no obligation to update any forward-looking statement, except as otherwise required by law.

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