ESG Material Issues Assessment

Strategic Focus

Descriptions of Impacts, Ricks and/or Opportunities

Elanco's Approach

Additional Resources

Climate change adaption

• Increased sales of Elanco products could result from climate change, increasing incidence of disease for pets and livestock and the need for livestock feed efficiency
• Financial effects associated with physical risks of climate change to Elanco operations.

In 2023, Elanco completed a comprehensive climate risk and opportunities assessment, and scenario analysis aligned with Task Force for Climate-related Financial Disclosures guidelines — reviewing physical impacts to owned and operated facilities, as well as strategic third-party manufacturing sites. On an ongoing basis, Elanco is working to identify and prioritize risk management strategies that align with our leading climate-related physical and transitional risks — including risk avoidance, transfer and mitigation, as well as the pursuit of climate-related opportunities for our products and services.

TCFD Report

ESG and Sustainability Governance 

Climate change mitigation and energy 

• Elanco can attract emissions-conscious customers with its combination of emissions monitoring platforms and emissions-reducing products
• Elanco customer GHG emissions contribute to climate change
• Elanco operations generate GHG emissions which contribute to climate change
• Elanco generates GHG emissions through its own operations which may incur costs as various jurisdictions implement carbon pricing, taxes or tariffs (including carbon border adjustment mechanisms)
• GHG emissions from Elanco's supply chain contribute to climate change
• Increasing cost of energy, particularly in scenarios of disorderly transition and underinvestment in energy infrastructure (among others), increases Elanco's operating expenses

Elanco's UpLook™ platform helps U.S. cattle customers understand their operation's carbon footprint and identify actionable steps for improved sustainability. Through the Athian carbon credit marketplace, producers using Elanco products like Rumensin and Bovaer can quantify greenhouse gas emission reductions and monetize their sustainability efforts. Elanco Knowledge Solutions (EKS) provides additional platforms for tracking livestock health indicators, benchmarking, and custom analytics, furthering the value proposition beyond individual products.Elanco has expanded our GHG emissions reporting boundary to reflect our full fianacial control and enhanced disclosure transparency. We continue to pursue conservation and efficiency measures to reduce energy consumption and GHG emissions.

Greenhouse Gas Emissions and Energy Use Issue Brief

Customer Support Section | 2024 Impact Report, pp. 13-15

Pollution of air

• Elanco air pollution impacts on employees and affected communities
• Elanco air pollution impacts on air, land, water, non-human biodiversity

Elanco manages air pollution through a comprehensive, risk-based approach. This includes identifying, characterizing, and minimizing air emissions and related environmental aspects such as greenhouse gases, odors, and dust. Elanco sites assess these aspects and prioritize high-risk areas where they develop and implement targeted reduction plans. Environmental controls are implemented and regularly assessed to ensure compliance with regulatory limits, and rigorous environmental calculations and reporting procedures are maintained.

Greenhouse Gas Emissions and Energy Use Issue Brief 

Substances of (very high) concern

• Use of substances of (very high) concern in Elanco products may expose consumers and their animals to these chemicals, either directly and/or through accumulation in the environment
• Financial effects associated with Elanco's manufacturing, procurement and use of substances of (very high) concern

A comprehensive chemical management program safeguards employee health and minimizes environmental impact by systematically addressing all aspects of hazardous chemical handling. This begins with meticulous inventorying and tracking of chemicals, encompassing their properties, quantities, locations, usage, and disposal. Safe storage and handling practices are paramount, utilizing designated areas with compatibility considerations to prevent hazardous reactions. The program emphasizes exposure control through engineering and administrative measures, alongside robust emergency preparedness for spills and incidents. Waste management adheres to stringent regulatory guidelines, ensuring proper disposal through partnerships with licensed companies. Crucially, the program prioritizes ongoing training and clear communication of hazard information to all personnel, supported by readily available safety data sheets – critical for both Elanco employees and the communities they serve.

Employee Safety Section | 2024 Impact Report, pp. 26

Water

• Elanco manufacturing produces wastewater which can negatively impact water quality, with subsequent impacts people or local communities
• Pollution from supply chain entities impacts local communities and/or environment
• Elanco's operations may contribute to reduced water availability in the local community

Elanco seeks to reduce adverse impact on the health of ecosystems where we operate. We’re continually working to enhance our operational water efficiency and ensure the appropriate treatment and release of wastewater — abiding by all local, regional and national water quality standards. We also ensure alignment with our internal Elanco Aquatic Exposure Guidelines.

2024 Impact Report 

Biodiversity 

• Elanco manufacturing produces wastewater which can negatively impact water quality, with subsequent impacts on biodiversity and ecosystems
• Impacts to local biodiversity/ecosystems through Elanco's water use
• Impact to local biodiversity and ecosystems through local effects of site-specific water pollution
• Impact to local biodiversity and ecosystems through local effects of site-specific soil pollution
• Elanco supply chain activities negatively biodiversity and ecosystems, most notably through land use change

A significant percentage of active pharmaceutical ingredients are derived from molecules found in natural products. Elanco assesses how our manufacturing processes could impact biomes and we’re working externally with organizations focused on restoring natural landscapes and helping mitigate and/or prevent biodiversity loss.

2024 Impact Report 

Waste

• Operational waste (including hazardous waste) can negatively impact people or the environment near where waste is disposed

Elanco’s HSE organization maintains standard operating procedures detailing appropriate processes for disposal of both non-hazardous and hazardous waste. Elanco is advancing multiple initiatives to reduce our waste footprint by increasing recycling and reuse, where practicable and appropriate.

2024 Impact Report 

Strategic Focus

Descriptions of Impacts, Ricks and/or Opportunities

Elanco's Approach

Additional Resources

Talent Attraction and Retention 

• Instances of discrimination can have negative mental, physical, and/or career impacts on employees
• Financial effects associated with turnover and/or inability to attract talent

Elanco relies on our employees to effectively execute our business model. We operate across a diverse range of communities and countries around the globe. Our comprehensive strategy includes recruitment efforts focused on attracting high quality talent from diverse sources, as well as learning, mentoring and development opportunities for all employees. We also acknowledge the continued needs of our diverse workforce through the evolution of our benefits, including paid time off and parental leave. 

2024 Impact Report 

Training and development 

• A lack of skilled candidates, especially around essential or compliance skills or a mismatch between existing skills and company needs can result in negative financial consequences
• Negative impact to people from insecure employment - e.g. excessive use of temporary or zero-hours contracts

2024 Impact Report 

Health and Safety 

• Elanco’s manufacturing operations present health and safety risks for employees.
• Elanco workplace can affect the mental health, stress, well-being of employees
• Exposure to hazardous materials/waste could result in harm to employee health

Elanco believes promoting a healthy environment, maintaining a safe workplace and operating in a responsible and environmentally sound manner are linked to the success of our business. Elanco’s global HSE organization oversees all facets of employee health and safety, including maintaining our HSE Management System — which aligns with internationally recognized standards such as ISO45001, ISO 14001, the Chemistry Council Responsible Care Management System and the U.S. Occupational Safety and Health Administration Voluntary Protection Program.

Elanco is dedicated to enhancing global employee health, safety and well-being by integrating benefits and talent management. We promote well-being awareness through robust communication campaigns across internal platforms and have expanded our Mental Health First Aid program to all employees. Our Employee Assistance Program offers support in over 30 languages, aligning well-being efforts with business objectives and promoting a culture of self-care.

Employee Safety Section | 2024 Impact Report, pp. 26 

Human Rights 

• Elanco operations could result in violations of employees' human rights

Elanco's commitment to human rights is outlined in its global Human Rights Policy, underpinned by international human rights agreements. This policy promotes equal opportunity, diversity, and inclusion within the workforce. Elanco strives to create a respectful and inclusive workplace, providing relevant training and development programs while ensuring a safe and accessible work environment. Fair remuneration, quality benefits, and effective grievance mechanisms are integral components of their approach. Beyond its internal operations, Elanco extends its human rights expectations to its Business Partners, requiring ethical conduct throughout their operations, including health and safety, the prohibition of child and forced labor, and promoting equal opportunity, as detailed in the Business Partner Code of Conduct.

Elanco Human Rights Policy 

Elanco Employee Code of Conduct 

Supply Chain Workers

• Global supply chain operations could result in supplier violations of their workers' human rights
• Negative impacts to people in Elanco's contract manufacturing supply chain (generalized employee impacts such as health and safety, secure employment, etc)

Elanco is a participant in the UN Global Compact and maintains a Business Partner Code of Conduct (Code) that provides suppliers and third parties working on Elanco’s behalf with expectations for conducting Elanco-related business. Compliance with the Code and applicable laws is the minimum standard of conduct. Elanco has also established a formal human rights program, including a global human rights policy, an executive oversight committee and a core program team comprised of representatives from organizations such as ESG and sustainability, legal, ethics and compliance, HSE, human resources, procurement and supply chain.

Human Rights and Responsible Supply Chain Issue Brief 

Elanco Human Rights Policy 

Elanco Business Partner Code of Conduct 

Farmers, producers, and food systems

• Economic benefit to farmers who use Elanco products can experience benefits to quality of life through increased yield
• Elanco products help reduce rates of disease in livestock, which can help prevent disease spread to humans
• Elanco products help alleviate threats to human food security and safety posed by animal diseases that can affect livestock

Elanco supports farmers, producers and resilient food systems with products, services and initiatives that promote animal health, welfare and productivity. Our products and services can help customers reduce feed inputs per animal, increase yield from the same number of animals and operate more sustainably with reduced overall emissions. We offer tools that help our customers track their greenhouse gas emissions, establish baselines and demonstrate improvement — opening the door for potential new revenue streams related to their sustainability efforts.

Our Managing Animal Health and Acaricides for a Better Africa (MAHABA) initiative supports small-scale producers, farmers, and customers. Our Elanco Knowledge Solution (EKS) team supports customers through training, data systems and technical advice.

Farmers, Producers, and Food Systems Section | 2024 Impact Report, pp. 13 - 15

Antimicrobial Stewardship

• Shared-class antibiotics in the food chain can harm human health through antimicrobial resistance, especially when used off-label
• Compliance risk and/or loss of market access associated with antibiotic regulations 

For more than two decades, Elanco has worked with global leaders — including farmers, veterinarians, scientists and healthcare industry leaders — to develop long-term, responsible approaches for addressing antimicrobial resistance. Elanco’s business aligns with a tiered approach to antibiotic stewardship, prioritizing animal-only antimicrobials as the first choice, followed by a tiered approach based on WHO ranking of antimicrobials.

Antimicrobial Stewardship Issue Brief

Antimicrobial Stewardship Section | 2024 Impact Report, pp. 19 

Product Quality and Safety

• Customers can be emotionally, physically or financially harmed by pharmaceutical products that do not meet product quality standards or in case of off-label use or misuse
• Financial effects associated with product quality and safety
• Impacts to customers and end-users related to failing to maintain responsible marketing practices (non-misleading marketing, clear labeling, environmental health claims)

Elanco’s customers require reliable and safe products to effectively treat animals. As such, product quality and safety are imperative to Elanco’s business model and reputation as an animal pharmaceutical manufacturer. Our rigorous quality assurance process includes prioritizing quality and safety throughout our manufacturing and quality organization, regular audits from our Global Quality Assurance team, maintaining and governing robust quality standards with Elanco’s Quality Management system and constantly monitoring data for safety signals related to products on the market through our pharmacovigilance organization. Elanco’s quality assurance process mandates root cause analysis and evaluation for all incidents — ensuring appropriate mitigating, corrective and preventative actions are implemented accordingly. In addition, we collaborate with government entities, law enforcement agencies, trade associations and other global cross-industry to fight counterfeiting and help ensure consumers receive only genuine Elanco products.

Product Quality and Safety Issue Brief 

Veterinarians

• Veterinarians who use Elanco products to treat animals can experience positive outcomes by improving animal welfare and increasing their economic success and/or mitigating risk

Elanco actively supports veterinarian well-being by offering innovative products designed to enhance efficiency and reduce workload, like single-dose treatments and digital parasite risk assessment tools. To address mental health challenges, Elanco provides continuing education workshops on topics like compassion fatigue and resilience, along with resources such as mental health first aid and access to counselors. Through these combined efforts, Elanco demonstrates a commitment to both the professional success and mental well-being of veterinarians.

2024 Impact Report 

Pet Owners

• Elanco medications can alleviate pain and suffering for pets, which can also alleviate stress for pet owners

Elanco recognizes that pain in pets, stemming from injuries, surgeries, or chronic conditions like osteoarthritis, can manifest in various ways, including mobility changes, stiffness, appetite loss, behavioral shifts, and restlessness. Veterinarians, with Elanco's support, can offer guidance on lifestyle adjustments, activity modification, and medications to manage pain and improve the pet's comfort. This collaborative approach aims to alleviate both the pet's suffering and the associated stress and concern experienced by pet owners.

Elanco Pet Health Website 

Strategic Focus

Descriptions of Impacts, Ricks and/or Opportunities

Elanco's Approach

Additional Resources

Companion and farm animals

• Increased quality of animal health and/or longevity, for those treated by Elanco products. Elanco products are demonstrated to have positive effects on animal health and/or longevity 
• Animals can be physically harmed by pharmaceutical products that do not meet product quality standards

Elanco has maintained a rich pipeline of innovation for over 70 years, currently comprised of more than 160 active programs across species and development phases. Elanco provides support and resources to farmers and veterinarians to help ensure optimal farm and companion animal welfare — including online and in-person trainings, welfare evaluations and consultations.  

Animal Welfare Issue Brief 

Research animals

• Research on animals can cause adverse reactions, pain, distress, and death to animals

Elanco has a robust management program in place to mitigate this impact. Elanco’s animal welfare standards meet or exceed local, national and international laws and regulations. Elanco’s global animal welfare team is tasked with the implementation and oversight of our animal welfare program, which includes regular animal welfare audits of company-owned and contract research organizations’ facilities. 

Animal Welfare Issue Brief