Elanco Releases 2023 Environmental, Social and Governance Report, Delivering Healthier Outcomes for Animals, People, Planet and Enterprise

Rhea-AI Summary

Elanco Animal Health (NYSE: ELAN) has released its 2023 Environmental, Social and Governance (ESG) Report, highlighting progress in its four Healthy Purpose™ Pillars: Healthier Animals, Healthier People, Healthier Planet, and Healthier Enterprise. Key achievements include:

• Launched initiatives to combat canine parvovirus and expand pet care accessibility
• Introduced farm-level analytics for dairy producers
• Acquired NutriQuest® portfolio to offer antibiotic alternatives
• Achieved 12% renewable electricity use, progressing towards 100% by 2030
• Helped customers avoid 2.3 million metric tons of GHG emissions in 2023
• Contributed over 23,600 employee volunteer hours valued at $790,000
• Committed $3.7 million in charitable and community giving

The report also includes updated SASB and TCFD disclosures, reflecting Elanco's commitment to sustainability and its role as a competitive advantage in the animal health industry.

Positive

• Launched 'Defend Puppies. Defeat Parvo.' initiative with $1 million in rebate incentives for veterinarians
• Introduced AdTab®, a non-prescription flea and tick product for pets in Europe, expanding market reach
• Acquired NutriQuest® portfolio, expanding antibiotic alternatives offerings
• Helped customers avoid 2.3 million metric tons of greenhouse gas emissions in 2023
• Increased employee volunteer hours to 23,600, valued at $790,000
• Committed $3.7 million in corporate, Foundation and employee charitable giving

Negative

• Only 12% of electricity use is from renewable sources, still far from 2030 goal of 100%

Insights

ESG Analyst

Elanco's 2023 ESG report demonstrates a comprehensive approach to sustainability, but its impact on investor sentiment may be While the company has made progress in several areas, the report lacks specific financial metrics that directly tie these initiatives to bottom-line growth.

Key points to consider:

• The company's focus on the four pillars of Healthier Animals, People, Planet and Enterprise aligns with growing investor interest in ESG factors. However, the tangible financial benefits of these initiatives are not clearly quantified.
• Elanco's efforts in developing innovative products, such as the canine parvovirus treatment and AdTab for flea and tick control, could potentially drive revenue growth. Yet, the report doesn't provide sales projections or market size estimates for these products.
• The company's progress in renewable energy use (12% of electricity from renewable sources) and waste management (91% of waste reused or recycled) is commendable but falls short of industry leaders. This may not significantly differentiate Elanco from competitors in the eyes of ESG-focused investors.
• The reported $3.7 million in charitable giving and 23,600 employee volunteer hours demonstrate community engagement, but the scale of impact relative to Elanco's size is modest.

While Elanco's ESG initiatives are positive, they don't appear to be game-changers for the company's financial performance or market position. Investors may view this report as a sign of responsible corporate citizenship rather than a catalyst for significant value creation.

Financial Analyst

From a financial perspective, Elanco's 2023 ESG report provides concrete data to assess its impact on the company's financial performance. However, there are a few points worth noting:

• The launch of new products like AdTab and the expansion of Elanco Knowledge Solutions could potentially contribute to revenue growth. However, without specific sales figures or projections, it's difficult to quantify the financial impact.
• The acquisition of NutriQuest's marketed product portfolio expands Elanco's offerings in antibiotic alternatives. This could be a strategic move to capture market share in a growing segment, but again, financial details are lacking.
• The company's efforts to help customers reduce greenhouse gas emissions, particularly through Rumensin, could be a differentiator in the market. The estimated 2.3 million metric tons of avoided emissions in 2023 is substantial, but its translation to financial benefits for Elanco is not clear.
• Elanco's investment in sustainability initiatives, such as increasing renewable energy use and implementing sustainable packaging guidelines, may lead to long-term cost savings. However, the near-term financial implications of these efforts are not provided.

Overall, while the ESG report showcases Elanco's commitment to sustainability, it doesn't provide enough financial context to significantly alter investor perceptions of the company's financial outlook. Investors would likely need to see more direct links between these initiatives and financial performance metrics in future reports to drive any material change in valuation or investment thesis.

GREENFIELD, Ind., July 30, 2024 /PRNewswire/ -- Elanco Animal Health Incorporated (NYSE: ELAN) today released its 2023 Environmental, Social and Governance (ESG) Report, showcasing its dedication to advancing its four intertwined Healthy Purpose™ Pillars: Healthier Animals, Healthier People, Healthier Planet and Healthier Enterprise. The report highlights internal initiatives and strategic external partnerships that are foundational to Elanco's Healthy Purpose and demonstrate that healthier animals can positively impact major global issues like food security, mental health, social isolation and environmental sustainability.

Additionally, the company has refreshed its Sustainability Accounting Standards Board (SASB) and Taskforce on Climate-related Financial Disclosure (TCFD) reports, as well as its extensive suite of issue briefs covering leading ESG topics and KPIs, to reflect 2023 data.

"As we celebrate our 70th anniversary, we're encouraged by the progress our global team has made to continue to raise the bar on our sustainability efforts. Our efforts are embedded across the business to reduce our footprint, increase the expectations of our supply chain, and deeply engage our people in our purpose, allowing us to mitigate some of the most material risks for our business," said Jeff Simmons, Elanco President and CEO. "We also view sustainability as more than a risk mitigator, for Elanco, it's a competitive advantage, as we launch innovations that transform animal care for our customers and bring tools to help the environment. From the first treatment for parvovirus – one of the deadliest diseases in puppies – to pioneering new products and helping build marketplaces that support emissions reduction goals, our team members around the world are contributing to support healthier animals and a healthier, more sustainable world."

In 2023, Elanco refreshed its ESG materiality assessment, in alignment with the GRI Standards, IFRS Sustainability Disclosure Standards and European Sustainability Reporting Standards (ESRS), as a foundation for alignment with emerging ESG reporting requirements around the world. The output of the assessment is summarized in the 2023 report, including the impacts, risks, opportunities and managerial approaches by strategic focus area.

In 2023, Elanco advanced key programs and initiatives focused on delivering on the four pillars of Elanco's Healthy Purpose:

Healthier animals: Elanco made strides in developing industry leading innovations that enhance the quality of life and health of pets, strengthening the bond between humans and animals, while also broadly delivering the programs and processes that support humans and the animals within their care. 2023 key initiatives included:

• Launched our "Defend Puppies. Defeat Parvo." initiative to enhance awareness of and education about canine parvovirus, while increasing veterinarian access to our canine parvovirus monoclonal antibody (CPMA) through the establishment of the Elanco's Defenders Fund, offering up to $1 million in rebate incentives to veterinarians who purchase CPMA to help treat the disease.
• Launched AdTab® (lotilaner), a non-prescription oral monthly flea and tick product for both dogs and cats approved by the European Medicines Agency (EMA), increasing accessibility and convenience for pet owners by offering AdTab in European pharmacies, pet shops and online.
• Expanded our Elanco Knowledge Solutions (EKS) offering for dairy producers by introducing Dairy Data Access System (DDAS) Plus, a farm-level analytics platform that provides weekly reports across key areas of health and milk production, supporting decision making for producers.

Healthier People: Elanco remained committed to delivering positive impact on global communities, supporting small-scale producers in Nigeria and Uganda, while driving progress in food security and human health. 2023 key initiatives included:

• Acquired the marketed product portfolio for NutriQuest® and in 2023 began bringing these nutritional products to new markets, expanding our portfolio of antibiotic alternatives and delivering expanded portfolio options to our customers.
• Launched Elanco's Dairy Antibiogram (DAB) initiative — a collaboration between Elanco and New Zealand dairy farms – to enhance farmers' ability to select the most appropriate antimicrobial to treat mastitis in dairy cows, a painful udder infection that can be caused by a number of different pathogens.
• Piloted Tick Academy, an educational mobile app for farmers that presents content on integrated tick management, as well as contact information for nearby service providers and licensed veterinary retailers in support of Elanco's Managing Animal Health and Acaricides for Better Africa (MAHABA) initiative in Uganda.

Healthier Planet: Elanco constantly pushes boundaries, developing innovative products that tackle some of the world's most pressing challenges. From pioneering solutions that measure, reduce, and monetize our customer's carbon emissions on the farm, to minimizing the Company's operational environmental footprint. 2023 key initiatives included:

• 12% of electricity use is from renewable sources, progressing toward our 2030 goal of 100%.
• Reused or recycled 91% of waste generated by the company, including production wastewater.
• Published a Sustainable Packaging Guideline, to outline the key elements of Elanco's sustainable packaging program and describe where and how sustainability considerations influence engineering, design and sourcing decisions related to product packaging.
• Helped U.S. dairy and beef customers avoid an estimated 2.3 million metric tons of greenhouse gas (GHG) emissions (CO₂e) through the use of Rumensin® in 2023. Cumulatively (2020-2023), Elanco has helped customers avoid an estimated 9.5 million metric tons of emissions with Rumensin, approximately equivalent to taking more than 2.2 million passenger cars off the road for a year.

Healthier Enterprise: Elanco supports hundreds of global grassroots causes through an industry-leading employee volunteer and giving program, while also creating inclusive and safe environments where every colleague can grow personally and professionally. 2023 key initiatives include:

• Became a participant in the U.N. Global Compact, furthering Elanco's commitment to fundamental business principles involving human rights, labor, anti-corruption and the environment.
• Contributed more than 23,600 employee volunteer hours to the global community, with an estimated value of $790,000 – up from approximately 12,800 hours in 2022.
• Achieved 28% employee participation in giving and volunteerism.
• Committed $3.7 million in corporate, Foundation and employee charitable and community giving.
• Increased year-over-year participation in an optional employee development program, Everyone LEADS, by 49%.

For details on the company's ESG disclosures, issue briefs, policies, and programs, 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 – all to advance the health of animals, people, the planet and our enterprise. Learn more at www.elanco.com

Investor Contact: Katy Grissom (317) 273-9248 kathryn.grissom@elancoah.com
Media Contact: Colleen Parr Dekker (317) 989-7011 colleen.dekker@elancoah.com

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SOURCE Elanco Animal Health

FAQ

What are the key highlights of Elanco's (ELAN) 2023 ESG Report?

Elanco's 2023 ESG Report highlights progress in four areas: Healthier Animals (launching parvovirus initiatives), Healthier People (acquiring NutriQuest® portfolio), Healthier Planet (helping customers avoid 2.3 million metric tons of GHG emissions), and Healthier Enterprise (contributing 23,600 employee volunteer hours).

How much did Elanco (ELAN) contribute to charitable giving in 2023?

Elanco committed $3.7 million in corporate, Foundation, and employee charitable and community giving in 2023.

What progress has Elanco (ELAN) made towards renewable energy use?

Elanco reported that 12% of its electricity use is from renewable sources in 2023, progressing toward its 2030 goal of 100% renewable energy use.

What new product did Elanco (ELAN) launch in Europe for pet care in 2023?

Elanco launched AdTab® (lotilaner), a non-prescription oral monthly flea and tick product for both dogs and cats, approved by the European Medicines Agency (EMA).