Sustainability Series: Procter & Gamble

September 02, 2009

Sustainability Series: Procter & Gamble

What began as a small, family-operated soap and candle company now consists of 138,000 employees providing products and services of superior quality and value to consumers in over 180 countries. Procter & Gamble’s trusted portfolio of brands includes Pampers, Tide, Ariel, Always, Pantene, Bounty, Pringles, Charmin, Downy, Iams, Crest, Actonel and Olay. We talked to Len Sauers, PhD, Vice President for Global Sustainability at P&G, about how greener consumer goods can positively impact the planet.

How does your business define sustainability?

At P&G, we define sustainability broadly. It’s about ensuring a better quality of life for everyone, now and for generations to come. For P&G, this integrates economic development, environmental protection and social responsibility.

How are you incorporating sustainable practices into your business?

P&G has integrated sustainability into the rhythm of our business. It is directly tied to our business strategies and daily operations, and is now embedded into the company’s core principles and values, helping to inspire and guide the actions of all 138,000 employees and lead to sustainability innovations in every facet of the company’s business. Overall, we believe that products should not require a trade-off between sustainability considerations and consumer needs for performance and value, which is why we incorporate sustainability considerations into the design of all of our products, packaging and operations.

From a product standpoint, we look to improve the environmental profile of our products through innovations that impact one or more of the following indicators:

• Energy

• Water

• Transportation

• Amount of material used in packaging or products

What are your short term and long term goals?

P&G is making great strides in reducing the environmental impact of our products and operations. To demonstrate this commitment to sustainable, responsible growth, P&G has established a specific set of sustainability goals which the company will meet by 2012.

• Build P&G’s business through sustainability innovations that delight consumers while improving the environmental profile of P&G products. By 2012, P&G’s stated goal is to generate at least $20 billion in cumulative sales of products with a meaningful improvement in their environmental profile.

• Continue to improve the environmental profile of P&G operations and facilities.  Today, over 95% of materials that enter P&G plants leave as finished product. Through 2012, P&G will reduce CO2 emissions, energy and water consumption, and disposed waste per unit of production by an additional 10 percent, contributing to a 40 percent reduction for the decade.

• Continue to improve lives through numerous social responsibility programs. P&G’s corporate cause – Live, Learn and Thrive™ – aims to help 250 million children in need from birth to age 13 by 2012.

• Inspire and engage P&G’s 138,000 employees to build sustainability thinking and practices into their daily work.

• Continue to work with external stakeholders to identify new needs and to create new opportunities and solutions for the world’s sustainability challenges. These stakeholders include thought-leading retailers and partners such as the Centers for Disease Control, UNICEF, World Health Organization, Population Services International and others.

Where do you think you’ll have the biggest impact?

Because our products touch three billion people each day, we feel that reaching the mainstream consumer is where we can make the most meaningful impact. Today, we find that she wants to be environmentally sustainable, while at the same time receiving products that meet all of her other needs, including performance and value. To meet these needs, we’re developing sustainable innovation products which involve innovations that are seen, such as packaging and product use considerations, and unseen, such as P&G operations. 

For example, a product that can make an enormous impact is Tide Cold Water. By encouraging laundry detergent users to wash at lower temperatures, they can conserve 80 percent of the energy used per washing load. We saw this as a great opportunity to make a meaningful difference so we developed a product that works just as well as your regular laundry detergent but can be used at much lower temperatures. If all U.S. households switched to cold water for laundering, an estimated 32 million pounds of CO2 emissions would be eliminated each year – an absolutely staggering number. 

How do you measure your progress?

We closely monitor a number of indicators to make sure we’re on track to meet our sustainability goals and help drive continuous improvement. For example, we track energy and water usage, waste disposal and carbon emissions at all P&G plants and facilities. During the last year, P&G operations reduced water consumption by seven percent, energy usage by six percent, CO2 emissions by eight percent and waste disposal by 21 percent (per unit of production). Including last year’s results, P&G has reduced water consumption by 51 percent, energy usage by 46 percent, CO2 emissions by 52 percent and waste disposal by 50 percent since 2002 (per unit of production). We report these findings each year in our annual sustainability report.

Another example is with our social responsibility programs, where, in the last year, we have reached more than 60 million children through Live, Learn and Thrive™ – our global cause that focuses on improving the lives of children in need. Our Children’s Safe Drinking Water program has delivered more than 1 billion liters of clean water in more than 30 countries, with the goal of delivering 3.5 billion liters by 2012. ? 

?How do retailers factor into your efforts?

We work closely with our retail partners to develop solutions that advance both of our sustainability programs. Sustainability programs with our suppliers are an opportunity for joint value creation. We work with retailers on joint promotions and initiatives that can help drive sales or create more sustainable products – and so build both our businesses. 

Much of this work involves supply chain considerations and other items, such as packaging changes, that can facilitate a reduced environmental footprint. For example, when we converted our North American liquid laundry detergent portfolio to a “2x” concentrated formula, there were a number of benefits to retailers. By decreasing the size of the product, we enabled more efficient shipping, ultimately resulting in 40,000 fewer trucks on the road each year. That’s a substantial reduction that impacted fuel use and other logistical considerations. 

Why are sustainable business practices important to the consumer goods industry?

For P&G, the consumer is boss, so if sustainability is important to her, it’s important to us. The vast majority of consumers want to do the right thing environmentally, but they’re not willing to accept a trade-off in performance or value. We’ve found this to be consistently true across all global regions, whether it’s the U.S., Western Europe or Asia. This is why we incorporate sustainability considerations into the design of all P&G products so we can ensure the customer receives everything she wants and allow her to do what’s right for the environment. We believe that the company that can bring solutions to the sustainability issues the world now faces will ultimately be the company that thrives. 

Why are sustainable business practices important to the consumer?

I think consumers want to know that the companies they support have a strong moral compass, are doing what’s right for the environment and operating in the most efficient manner possible. As a company that’s been in business for 170 years, P&G has operated with the guiding philosophy of “doing the right thing.” I think our long corporate track record of leadership, success and collaboration is a testament to that philosophy and should assure our customers that we are living up to our responsibility and striving for continuous improvement.

This week on Supermarket B2B, we are running a series featuring interviews with food companies that are making strides in their sustainability efforts. Check in daily for a new feature.

If you are interested in telling us more about what your company is doing to get involved please contact Allison Bloom