Jim Greffet - Vice President of Sustainability at Eli Lilly and Company

Speaker A: Today's guest is Jim Griffith. Jim is the Vice President of Sustainability and led ESG and sustainability efforts at eli Lilly since September 2020. In this capacity, he oversees implementation of Lilly ESG strategy, has responsibility for coordinating ESG related communications and organizing and leading ESG stakeholder interactions. Jim also chairs the ESG Governance Committee at Lilly, which is a central body for development and execution of ESG priorities and communication to Executive Committee and Board of Directors.

Speaker B: Uh, welcome to the Sustainable Nation Podcast.

Speaker A: Our podcast brings you interviews with global leaders in sustainable and regenerative development. Our goal is to provide sustainability professionals, business leaders, academics, and anyone who's interested in joining the sustainability revolution with information and insights from the world's most inspiring change makers. I'm your host, founder and CEO of Sustridge Sustainability Consulting.

Speaker B: Josh Prigge.

Speaker A: Jim Griffey.

Speaker B: Welcome to Sustainable Nation. Thank you for joining us.

Speaker C: Thanks for having me, Josh. It's great to be here.

Speaker B: Great to have you on. Looking forward to the discussion. I already gave our listeners a little background on your professional life, but tell us a little bit about your personal life and what led you to be doing the work you're doing today.

Speaker C: Interesting question. Uh, so I'm an accountant by training. I've been at Lilly. This is my 25th year. Uh, I've been in this job about four and a half years, and it was a newly created role when I was brought into it. Um, and I honestly, I went in it into it somewhat reluctantly. I've worked in finance my whole career. So our CFO at the time said, we're getting more questions from stakeholders about these sustainability topics, and we think it's important to have a central point of contact for them, just as we have investor relations when they want to know about our earnings or other, other things in our pipeline. And, uh, we think you'd be a good person for it. And, you know, usually when the CFO says, we think you'd be a good person, it translates into, congratulations, here's your new job. Um, so at the time I thought, man, I don't know what this stuff is. What I did know about it was from kind of the mainstream media. And I honestly, if I'm really transparent about it, I thought it was a little hokey. So I took the job somewhat reluctantly. I can now say, four and a half years later, I'm a total convert. Uh, this has been the most interesting, most impactful role I've had in my 25 years. And it's great being in settings like this, talking about why these things matter. Why it's an important way of running your company for the long run. And I'm grateful that despite my own inhibitions that I landed here and it's been a great, great four year run for me.

Speaker B: Very interesting. That's one of the first, I think that on this, on this podcast. Love to jump into that first. We'd love to hear about that transition and you mentioned you thought it was a little hokey and then you were converted. What was it about it that really grabbed you and made this a very interesting job for you and understanding why it was so important for the business? Take me a little bit through that transition and those things that you learned.

Speaker C: Yeah. Um, so as you know and your listeners know, this, uh, space has gone through a lot of different names over time. Corporate, social responsibility, esg, sustainability. I'm of a mind that we could call this the Sensible Business practices department. If we take a kind uh, of a common sense view to these sustainability topics, they reflect running your business for the long run, putting your business on the most solid foundation it can be, to be resilient and deliver on your purpose of whatever your organization, whatever the purpose might be, to deliver on that purpose over the long run in the face of all the challenges and strife or whatever you'll endure over time. Um, and I don't think you can really argue too much about this. Sustainability practices in a pragmatic lens, from my view, is running your business in a sensible way for the long run. If I can elaborate maybe a little bit. So this isn't a commercial for Eli Lilly and Company, but I think it's a good illustration of the point I just made. So at Lilly, our purpose is making medicines for people. I think that's a really noble cause and I'm proud to work here. An existential reality is that it takes a really long time and costs a whole lot of money to make medicine. So from the time, uh, a scientist in Lilly Research Labs may have an idea, until that idea becomes a medicine in the hands of a patient who needs it, that might be 10 years and it's going to cost us billions of dollars and a whole lot of failure to get there. In that environment, we have to think and operate with the long run in mind. We can't cut corners, burn the furniture to make this quarter's results or whatever the case may be. So that's a great example how running your business with a sustainability mindset, run it for the long run can help you deliver on your purpose that ultimately, in our case, should help a lot of people.

Speaker B: Great. And kind of skipped over this. Back up just a little bit. If you can give the folks an overview of your company, what your company does, and a little insight maybe into size and scale and then also just kind of that transition to sustainability. Would love to hear about. Uh, you'd mentioned folks were asking about it. Who are the stakeholders that were really starting to ask, uh, about sustainability that really kind of pushed your company forward to establishing a formal program and a formal approach?

Speaker C: Yeah. So let's back up and set the stage. Who are you? What do you do? Um, so we are Eli Lilly and Company. We're an Indianapolis based company that's make, that makes medicines. Uh, and we're about, we're about ready to celebrate our 150th anniversary. Something that's unique about Lilly. We are the only major pharmaceutical company that has not undergone a mega merger. We were founded in Indianapolis by Colonel Eli Lilly, who was a Civil War veteran with a mind of making medicine that wasn't snake oil at the time. Put yourself back into the 1800s and kind of what the environment would be, selling something out of the back of a horse drawn carriage. Um, and the Lilly family, uh, created a very strong culture. If you walk the halls of any Lilly office and you ask an employee what our values are, they'll be able to answer off the top of their head. Integrity, excellence and respect for people. That culture, uh, which also I think has a real sustainability bent to it, has remained undisturbed for almost 150 years, which also makes my job easier. This is part of the DNA of how we run the place. You may have seen, uh, some of our medicines in the news recently, medicines like Zeppbound or Manjaro that have been absolute breakthroughs for patients with diabetes or obesity. We also have medicines for cancer, for autoimmune disorders, and we've recently launched, uh, only the second or third medicine ever approved for Alzheimer's disease. Kazunla. We have some very creative people that come up with these names. So we're across a different set, a variety of different therapeutic areas, uh, to treat disease. So that's who we are. Coming back to this creation of my role in the idea of sustainability. If you think about our executives, especially our CEO, they spend a good amount of time talking with various stakeholders and the state of the company, especially investors. So let's use investors as the example in those meetings. Uh, and by the way, I used to work in investor relations, which was also kind of the thinking on how I wound up in this role. In the conversation with an investor about the company, the topics are usually things like, how is the state of your innovation pipeline? Do you have new ideas? Will there be new medicines coming? Let's talk about financial results in the past, maybe what your expectations are for the future. So typically scientific and operational concerns then inform the investor's thesis on whether they want to own our stock or not, going back four and a half, five years. In those conversations, investors especially started asking new questions on new topics. What are you doing to help combat climate change? How are you working to get your medicines in the hands of patients that need it? Are you operating ethically and with integrity? And tell me about your governance practices. A lot of these sustainability topics. Hearing those questions, our CEO came back and said, we need to make sure that we're contemporary with what our stakeholders expect here. And in typical Lilly fashion, we commissioned a group that looked at what we're doing and how we're doing it and how we're communicating it. Uh, one of the out, well, two outcomes of that one was the creation of sustainability.lilly.com we're now almost 11 minutes into our conversation. I can't believe I haven't given the plug yet. Sustainability Lily.com that is our sustainability report, the Go to resource that is all encompassing for all of our sustainability topics, goals, progress and programs over time. The other outcome of that project was the creation of my role. What we realized is these topics cover almost every function in the company. They transcend our entire operations. So we realized we need a single point of contact. That one, uh, works internally across all of these various functions to synthesize, consolidate, integrate, communicate all the things we're doing to our stakeholders and then also be a single point of contact to the outside world. The analogy I'll draw is if an investor has questions about our pipeline or financial results, they call investor relations. If they have questions about our sustainability progress, they call me. There's also a signaling aspect to this. We don't create new jobs if we don't take the topic seriously. And we certainly do take this topic seriously. Um, and I spend probably half my time externally focused with stakeholders on these topics. And it also shows the world that we take these things seriously and we consider them in the way we run the company overall.

Speaker B: Wonderful. And so after developing the sustainability program, what were the kind of key sustainability issues that your company identified as material that you would be reporting on and setting goals around? What are some of those issues? Uh, maybe talk about some of those goals that you've established and progress towards Those.

Speaker C: It's a really important question. I think it's as important what you don't include in your sustainability strategy as what you do. In my opinion, there's a propensity in this sustainability space for it to become the collection point of every good idea, every do gooder philanthropic thing that might come across the transom. And many of those things are certainly worth attention. But if you let this get out of control, it becomes unsustainable. Pun intended. So in our case we have 15 topics that we focus on and we can draw a line from all 15 of those topics to our overarching purpose of making medicines. And I alluded to these before. Um, environmental, climate topics, overall, ethics and governance, um, the way we engage our employees. Access and affordability. Certainly for us as a pharmaceutical company, human, ah, rights, patient safety, something that's interesting. And I asked myself this question a lot when I first started. Of those 15 topics, there are only two of them that are really specific to us as a company that makes medicines kind of access, affordability, global health sorts of things and patient safety. Those are central to what we do in making medicines. The other, what, 13, 12, 13 or so could be any company in any industry. Climate, waste, water, ethics and compliance and so on. And at first I asked myself, are we, are we not being rigorous enough here? That feels pretty general for us as a pharmaceutical company. Maybe we should be more specific, different, differentiated. After four and a half years in the job, I finally realized that the similarity across these topics reflects what I mentioned before. These are just good business practices and something that you should do to run your company for run maybe one other example. I alluded to this before on what isn't included. So there isn't um, things about global poverty or global hunger in our sustainability strategy to be clear. Certainly important topics for humankind, but we make medicine. So our ability to combat global hunger or global poverty is not central to what we are best at doing. And I think that's the risk that I mentioned before, that if you start expanding the aperture to topics that go beyond what you actually do as an organization, you run the risk that these become uh, an extracurricular, a distraction, something that you do beyond the day job and that creates the risk that it doesn't maintain the momentum and sort of priority in your central vision that it should.

Speaker A: Managing carbon and ESG data has always been a challenge, complex, time consuming and often frustrating. That's exactly why we built Northstar Carbon and Impact to change the game for sustainability professionals. We're excited to announce that Our platform now goes beyond carbon, offering a full ESG suite to allow you to track, manage and report all your sustainability data in one place. Whether it's gri, sasb, csrd, tcfd, B Corp, or even investor or customer ESG surveys, Northstar simplifies it all. And here's what sets us apart. Built by sustainability professionals for sustainability professionals. We know your pain points. We've solved them. We've been in the weeds in this work. The easiest to use, most intuitive ESG software on the market. So simple even an intern can lead your reporting. One click. Audit reports, AI powered decarbonization planning and supplier engagement tools. No more wasted time, just real impact. If you're tired of struggling with spreadsheets or clunky ESG software, let's make things easier. Visit northstarcarbon.com and schedule a demo today. Now let's get back to the interview.

Speaker B: Absolutely. And uh, yeah, like, like to dive into some of the environmental efforts here, here in a minute. I think the, the big thing of course like in the media that people talk about with pharmaceutical companies are the price of drugs, the access and companies who, you know, are increasing the prices to maximize profits. Uh, that's of course been a topic in the industry and one of your commitments and goals is increasing access to medicine. So how does a company like yours do that? Um, you know, kind of balance increasing access affordability with um, maintaining profits and you know, what's kind of the strategy, um, in that area.

Speaker C: It's a really important topic and it's a complex one. I think the US healthcare system especially, uh, you couldn't design something more complicated if you tried. It's very hard to understand with a lot of different players with different business models and profit motives. I think your question on access is really two different planes. One is the us which is more of a pricing insurance, what I pay at the pharmacy counter question, and then international, and we'll come back to that in a second. In the US especially, let's start with insulin. Insulin is a life saving medicine and for patients with diabetes that have progressed to insulin, or if they have type 1 diabetes and just their body doesn't make insulin anymore, it is a life or death proposition. So of our own accord, a number of years ago we established a program where anybody can get a month's supply of insulin for $35. Since then you've seen uh, government mandate for such things. But we were ahead of that. We did it on our own because it was an action we could take ourselves. And by the way, Patients that have uh, insurance coverage. Many of our patients pay even less than $35 a month for insulin. So we've done that on our own. We also have a whole host of various patient support programs. The Lilly Cares foundation, um, it's a means tested way of getting our medicines for free. They gave away over $4 billion of Lilly medicine last year. Um, and so the focus that we take is given that the U.S. health care system is so complicated, we'll one do the things that are in our control to lower the price for the patient at the pharmacy counter. Lilly Direct is another example of that for Zepbound and Manjaro. While also advocating for changes in the broader healthcare system. Pharmacy benefit managers, the way different players work in the system. So that's an example of us, uh, and the things we're doing. The final thought with us access is the overall value we bring to the healthcare system. If we're bringing medicines that truly and positively impact patients with disease, that are positive value for those patients, their loved ones, their caregivers and the broader healthcare system, then we should participate in the value that we've created there and that's the way we make a difference. Back to your profitability question. Innovating with new medicines is the best way that we create value for many players, including ourselves. Uh, the second part of the answer that I alluded to before is internationally. Um, and that could be a variety of things, um, social mores or understanding of disease infrastructure in a given country, like cold chain capabilities, insulin needs to be refrigerated. We could work to get insulin into a country but if they don't have refrigerators that's a problem. So we work through things like that, uh, community healthcare workers understanding logistics of getting to a doctor or all the other factors that might be at play. So internationally we have a program called 30 by 30. It's an effort to improve health care for 30 million patients in resource limited settings by 2030. And that last measurement we're at 18 million and making progress every year. And um, we deliberately use that word, improved health care. Some of it might be getting Lilly medicines into patients hands, but it might go beyond that like the refrigerators I mentioned or community health care workers thinking about social impacts of disease and how we can think about this holistically. Um, we have a team whose job it is to execute on 30 by 30. They have a budget that they work with, they're accountable to our executive committee and we measure the progress. I think that's a way of determining for any topic how Seriously is a company taking this, and we're certainly investing there to make a difference.

Speaker B: Wonderful. And speaking of 2030, you have a number of environmental, climate related, waste, renewable energy goals and targets in place for 2030. Tell me a little bit about those. Uh, maybe the development of those and how those came about, why those have been prioritized. And, um, would love to hear the approach to establishing the goals, getting them approved and communicating and persuading leadership, um, on why these are important, uh, and then uh, a little bit about progress and what you're doing to work towards those goals.

Speaker C: Really thoughtful question. We're a science driven company, a data driven company, so we don't set goals by slogan or fiat. You were exactly right that these 2030, especially our environmental goals, uh, were developed bottom up with a lot of thought. Uh, we don't typically set a goal if we don't have a path to get there. We understand that the actions we need to take. So we set those environmental goals in 2020, the 10 year goal period to 2030, and we did that deliberately. A lot of companies, as you know, will set 2040 or 2050 environmental goals. We think when the goal is that far into the future, there isn't the current sense of urgency to get there. 2030 is now only five years away. All the people for the most part who were here when we set those goals in 2020 are still going to be here in 2030 to live with a consequence of whether we made it or not. So that 2030 date was done deliberately. The other thing that you and your audience certainly know is, uh, climate goals especially, you can't reduce your greenhouse gas emissions without changing how you run the place, how you run your factories, how you have your infrastructure. Um, so you need to make changes, um, in your operations. And you can't wait in our case until January 1st of 2029 and say, oh, shoot, all right, let's make sure we're thinking about this goal that we need to make next year. You need to be making progress over time. So in our case, our goals are to be carbon neutral in our own operations, effectively scope one emissions, and to purchase all of our electricity from renewable sources, scope 2 emissions, and we're making progress. So as we mentioned before, the company's growing quite a bit. Between 2020 and 2023, which is our last measurement point, we reduced our absolute emissions by 26% even though the company is growing. And we're doing that by putting on site solar running, more efficient equipment, putting in LED lights, changing temperature set points Air handling rates, a lot of uh, detailed engineering considerations, but all that are necessary to achieve the goal. And on the renewable energy, we're at almost 30% of our energy coming from renewable sources and we publish all this in the sustainability report. Um, and we have a line of sight to get there. Maybe an important sidebar here. We have not purchased any carbon offsets to this point. We expect that we'll need to for certain emissions of our own operations, especially where the technology isn't there to eliminate it, it organically. Um, but we're sensitive to the durability. We want to make changes over time to our operations that are durable, that last, that alleviate the need to continue purchasing offsets year after year. We want to use those offsets as the, the, you know, the sweeping of the last little bit we can't get on our own but really change the way we operate to reduce things that will be persistent over time.

Speaker B: Wonderful. I think a lot of companies are realizing 2030 is coming up quick. Um, a lot of companies set those 2030 targets and uh, some of them are probably thinking we haven't made the progress we thought we would by now. Wondering how you're feeling as a company, uh, achieving those 2030 targets as we see that coming up soon. And what happens if you don't, you know, achieve those targets by 2030?

Speaker C: Uh, the easier one to start with is the renewable energy. Last year we signed a renewable power purchase agreement that will cover about 90% of our US energy needs. So the, our ability to purchase all of our electricity from renewable sources. We have a clear line of sight there. Just as a quick side note, I was at a conference recently and a speaker I think had an interesting take on this. He said reducing your scope one emissions is the effort of 1,000 projects that I was mentioning before on air handling, exchange rates and temperature set points. Uh, jumping ahead, uh, the effort on scope three emissions that we haven't really talked about is the effort of 1000 contracts with counterparties and the effort of scope 2 emissions is a power purchase agreement. So certainly we're there. So to your question on how we feel about progress, I think renewable energy, we've got a clear line there in our scope one emissions. Uh, we're doing all of the necessary actions as I had mentioned, um, and we know that there are mechanisms like carbon offsets that we can use. We are particularly sensitive to the quality of offsets, establishing the diligence practices that we're buying high quality offsets that ultimately are benefiting the planet. We all know of a lot of sort of disturbing stories in the media where the offset market hasn't behaved as it should. So that's the other lever we have in place to be able to land things safely in 2030 at the goals we've set.

Speaker B: Excellent. Um, we're starting to run out of time, so we're going to jump into our final five questions if you're ready.

Speaker C: Absolutely.

Speaker B: Okay. What is one piece of advice you would give other sustainability professionals that might help them in their careers?

Speaker C: Two words. Be pragmatic. We've talked. This was a theme that's come up in our conversation. There's the lunatic fringe on everything, and certainly in this space, on both ends of the spectrum. Tie your sustainability work to the purpose of your organization, be pragmatic, think in common sense terms, and you'll make a whole lot more progress.

Speaker B: What are you most excited about right now in the world of sustainability?

Speaker C: In the short four and a half years, this world has changed a lot. I think when I first came into it, it was sporadic voluntary reporting by organizations, maybe a little bit of accentuate the positive. It evolved into, I think, more rigorous and disciplined financial reporting. Over the last 18 months or so, I think we've seen the heavy hand of regulation start to come about, especially in Europe, which creates a lot more overhead. I think all of us would rather deploy our energy and resources to doing things than reporting about them. So, to the exciting part, I now think we're starting to see a little bit more, uh, sensibility prevail in some of these regulations, maybe lifting the heavy hand of regulation a little bit so that we can have consistent, rigorous,

Speaker B: well

Speaker C: constructed reporting that's doable and doesn't take us away from the mission that we have in front of us. So I'm optimistic and excited that we're going to land in a spot that's doing the right thing for the right reasons, consuming the right amount of energy.

Speaker B: What is one book you'd recommend sustainability professionals read?

Speaker C: George Seraphim, Purpose plus Profit. He's a Harvard Business professor and he taught you that you can see from the name of that book, Purpose plus Profit. It takes this pragmatic view of why sustainability can help you run your business better, not just be a, um, fringe idea that's detached from what the business is supposed to do.

Speaker B: What are some of your favorite resources or tools that really help you in your work?

Speaker C: I'll give, ah, one shout out. Brian Matt with the New York Stock Exchange puts out an email each Friday called the ESG Top five. It's the top five sort of sustainability topics of the week. He commits that it's a two minute read if you get interested. It's going to be more than a two minute read, but you can certainly get the headlines in two minutes. It's one of those messages and I expect you and your listeners have the same thing. There's certain emails that I can't delete fast enough and that's one that I open every time and I always learn something out of it, so. Brian Matt, New York Stock Exchange and

Speaker B: finally, where can our listeners go to learn more about you and the work being done at Eli Lilly?

Speaker C: Sustainability.lilly.com My performance is tied to website hits, so all your listeners, please open it up first thing when you get in the morning and hit refresh many times during the day. You'll do me a solid on my performance. Um, and then LinkedIn, I have a LinkedIn page as well that captures some of the stuff we're doing here. And I imagine you can, you can put the official link to get to my page in the, in the podcast materials.

Speaker B: Wonderful. We will do that. Jim, thank you so much for joining us and filling us in here. Congrats on the transition to the sustainability role and getting sustainability going at Eli Lilly and getting these great goals and targets in place. Um, and then all the progress you've made. Thank you so much for joining us, Jim, and thank you for making the world a better place.

Speaker C: Thanks for having me, Josh. This has been a fun conversation together.

Speaker A: Well, that's it for this episode of Sustainable Nation.

Speaker B: We'd love to hear from you.

Speaker A: If you have feedback on the show, have ideas for future guests, or have questions you'd love to hear us ask, email them to joshustridge.com and if you

Speaker B: enjoyed the content we're delivering, we would

Speaker A: be so grateful if you would subscribe, rate and review our podcast. Thank you and we'll see you next time.