sustainable manufacturing @ p&g - oecd
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Sustainable Manufacturing@ P&G
Prof. Dr. Marina FrankeManager Global Sustainability
Procter & Gamble Service GmbHFranke.m@pg.com
OECD Conference“Sustainable Manufacturing and Competitiveness”
DK Copenhagen June 21-22, 2007
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Sustainable Development at P&G
• Sustainability Definition: Ensuring improved quality of life“now and for generations to come”
Consistent with P&G Statement of Purpose„to improve the lives of the world‘s consumers“.
• The synergy between economicdevelopment, social equity, andthe environment.
• Sustainability is important toP&G to leverage the power of innovation. SocialSocial
Econ
omic
Econ
omic
Environmental
Environmental
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Leadership Support“The men and women of P&G share a deeply felt purpose : to improve the lives of consumers in every part of the world. One important way in which we fulfil this purpose is through sustainable development, or sustainability, which we believe is integral to both P&G’s future business success and to a truly better quality of life for all the worlds consumers – now and for generations to come.”
Chairman of the Board,President, and Chief Executive
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Sustainability Focus
• Environmental pollution and resource management
• Labor Practices (e.g. Child Labor & Wages)
• Supply Chain Expectations
• Stakeholder Interface (e.g. NGO’s)
• Transparency in Reporting
• Human Rights & Bribery
Only About Reducing Negatives ?
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+
−
Val
ue A
dded
Non
-Val
ue
0Time
Responsibility
Opportunity
0
Reputation
+
−
Define Sustainability Broadly
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P&G Sustainability MatrixO
ppor
tuni
tyR
espo
nsib
ility
Social/Economic Environmental
Sustainable Innovation
Doing the right th
ing
P&G Sustainability MatrixO
ppor
tuni
tyR
espo
nsib
ility
Social/Economic Environmental
Sustainable Forestry
Environmental Quality policy & management system
Product Safety assessment tools(Risk Assessment, LCA, PSAT, etc)
Science-in-the-Box, P&G Perspectives, Science of Beauty
Product Safety Policy
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Ongoing Environmental Responsibility
P&G pioneered
• Environmental Reporting 1970’s
• Global EnvironmentalReports since 1993
• P&G Global Environmental Management System
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Product Safety @ P&G
1000+ employees globally in Product Safety & Regulatory Affairs and Health, Safety & Environment departments assess safety of P&G ingredients, finished products, manufacturing operations throughout their life-cycle.
• for workers in laboratories and plants• for communities around plants• for consumers• for professional users • for environment around plants and after product use
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“Science in the Box”
Transparency
Sustainable Forestry Certification
• P&G requires certification of supplier forestry operations
• Use multiple schemes due to diverse pulp supply
Sustainable ForestryInitiative (SFI)
Forest StewardshipCouncil (FSC)
CSA International
Programme for the
Endorsement of Forestry
Certification
P&G Sustainability MatrixO
ppor
tuni
tyR
espo
nsib
ility
Social/Economic
Eco-efficiency – cost savings
Environmental
Sustainable Forestry
Environmental Quality policy & management system
Product Safety assessment tools(Risk Assessment, LCA, PSAT, etc)
Science-in-the-Box, P&G Perspectives, Science of Beauty
Product Safety Policy
Eco-efficiency2005 - 06
P&G Sustainability MatrixO
ppor
tuni
tyR
espo
nsib
ility
Eco-efficiency – cost savings
Social/Economic Environmental
Supplier sustainability guidelines & compliance
PVP
Values and Policies
Worldwide Business Conduct Manual
Live Learn and Thrive, Community programsDisaster Relief & Preparedness
Sustainable Forestry
Environmental Quality policy & management system
Product Safety assessment tools(Risk Assessment, LCA, PSAT, etc)
Science-in-the-Box, P&G Perspectives, Science of Beauty
Product Safety Policy
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Corporate Social Responsibility
Introduce our P&G Values and Principles to our Suppliers
Sustainability Guidelines for Supplier Relations
• Human Rights• no Child Labor,
no Forced Labor• Health and Safety Standards• Environmental Quality• Data Privacy
Global Supply Chain Management
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Corporate Social ResponsibilityOur Employees
• Pension program• P&G stock ownership• Employee training programs• Flexible work hours• Mentoring programs• Health programs & standards• Wellbeing – Fitness Center
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P&G’s Global Corporate Cause- philantrophy program
Development of Children in Need (ages 0-13)Live Keep children healthy - prevent disease
Learn Places, tools and/or programs that enhance the ability to learn
Thrive Access to programs that help develop self-esteem and skills for life
10 year anniversary of Project Hope in China
P&G Sustainability MatrixO
ppor
tuni
tyR
espo
nsib
ility
Social/Economic
PVP
Environmental
Values andPolicies
Worldwide Business Conduct Manual
Supplier sustainability guidelines & compliance
Live Learn and Thrive, Community programsDisaster Relief & Preparedness
Worker Health & Safety
Child Development
Products for lower income consumers
Older population products
PUR Program
Eco-efficiency – cost savings
Sustainable Forestry
Environmental Quality policy & management system
Product Safety assessment tools(Risk Assessment, LCA, PSAT, etc)
Science-in-the-Box, P&G Perspectives, Science of Beauty
Product Safety Policy
PUR – in home waterpurification
Reverse engineered water treatment - in a sachet
• Developed by P&G R&D in cooperation with the US CDC
• Removes bacteria, viruses, cysts, heavy metals, etc…
• Low cost ($ 0.1 per sachet = 10 l safe water)
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The need for Clean Water
• More than 1 billion people lack access to safe drinking water.
• More than 4,000 children die every day from diseases caused by drinking unsafe water.
PUR purifying process
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PUR – Purifier of Water
• 25 countries:Pakistan, Morocco, Kenya,Haiti, Romania etc.
• Cooperation with UNICEF,USAID, Internat`l Red Cross, PSI etc.
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An innovative product in Latin America that is saving water in households that rinse laundry manually.
Reducing Water ConsumptionDowny one Rinse
• Reduces water needed to wash laundry by 2/3
• Women / girls gain time for family, school or business
Safeguard Hand Wash Education Program
Safeguard Hand Wash Education ProgramChina
Pakistan
Philippines
First grade students in 35,000 schoolsIn collaboration with CDC, WHO
China- 24 million grade since 1999 Pakistan - 7.5 million kids since 2003Philippines- Just underway
Tools to drive memorability of hygiene education
Results of joint study with CDC- Episodes of absence reduced 40%- Days of absence reduced 54%
P&G Sustainability MatrixO
ppor
tuni
tyR
espo
nsib
ility
Social/Economic
PVP
Environmental
Values andPolicies
Worldwide Business Conduct Manual
Supplier sustainability guidelines & compliance
Live Learn and Thrive, Community programsDisaster Relief & Preparedness
Worker Health & Safety
Child Development
Products for lower income consumers
Older population products
PUR Program
SustainableSustainableInnovationInnovationOpportunityOpportunity
Eco-efficiency – cost savings
Sustainable Forestry
Environmental Quality policy & management system
Product Safety assessment tools(Risk Assessment, LCA, PSAT, etc)
Science-in-the-Box, P&G Perspectives, Science of Beauty
Product Safety Policy
P&G Sustainability MatrixO
ppor
tuni
tyR
espo
nsib
ility
Social/Economic
PVP
Environmental
Values andPolicies
Worldwide Business Conduct Manual
Supplier sustainability guidelines & compliance
Live Learn and Thrive, Community programsDisaster Relief & Preparedness
Worker Health & Safety
Child Development
Products for lower income consumers
Older population products
PUR Program
New OpportunityNew OpportunityRetailer
Sustainability Ariel Cool cleanTide HE
CommercialProducts
Eco-efficiency – cost savings
Sustainable Forestry
Environmental Quality policy & management system
Product Safety assessment tools(Risk Assessment, LCA, PSAT, etc)
Science-in-the-Box, P&G Perspectives, Science of Beauty
Product Safety Policy
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Ariel Cool Wash
Ariel Cool Wash – Peer Reviewed
http://www.ariel-kalt-aktiv.de
Online presenceUp to 40% less energy
http://www.oeko.de/oekodoc/289/2006-008-de.pdf
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Consumer Behaviour• Correct Dosing• Consumer Education
Less Materials• Compaction• Better Packaging
Less Resources• Low Temp Washing• Water Conservation
LaundrySustainability Drivers
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Millstone Coffee – Fair TradeRainforest Alliance Certified - TransFair USA
• introduces social and environmental standards
• education of farmers, schools for children
• cooperation of small farmers, better investments
• 10 years alliance with TechnoServe (NGO)
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P&G Sustainability MatrixO
ppor
tuni
tyR
espo
nsib
ility
Social/Economic
PVP
Environmental
Values andPolicies
Worldwide Business Conduct Manual
Supplier sustainability guidelines & compliance
Live Learn and Thrive, Community programsDisaster Relief & Preparedness
Worker Health & Safety
Child Development
Products for lower income consumers
Older population products
PUR Program
New OpportunityNew OpportunityRetailer
Sustainability Ariel Cool cleanTide HE
CommercialProducts
Sustainable Innovation
Doing the right th
ingEco-efficiency – cost savings
Sustainable Forestry
Environmental Quality policy & management system
Product Safety assessment tools(Risk Assessment, LCA, PSAT, etc)
Science-in-the-Box, P&G Perspectives, Science of Beauty
Product Safety Policy
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In Touch - Transparency
Annual SustainabilityReports since 1999:
www.pg.com/sr
Reporting Responsibility
2005
2004
2006
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Reporting Responsibility – External Recognition
Winner in Dow Jones Sustainability IndexFor the 7th straight year, P&G named #1 inDJSI for “Consumer Goods Company Group”(2,000 largest Dow Jones Companies)
Have been on the FTSE4Good eversince the index was devisedFortune Magazine ranked P&G as the #1among household and personalproduct companies (02/06)
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DJSI - Recognition for our Sustainable Management Principles and Systems
Engagement in developing countries- esp. PUR, Nutristar
Environmental and human safety of our plants worldwide
Ethical business practices (no child labor, no forced labor)
Social Responsibility for employeesand in local communities (Live, Learn and Thrive)
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SustainableDevelopment
Linking
Opportunity
with
Responsibility
In Conclusion
• Turn attention from eliminating “negatives” to “creating positives”
• Move beyond eliminating “non-value” to creating “new value”
• Not just market-based solutions, but see the market itself as a solution
• Sustainability is not just removing the business risk
• Sustainability is an opportunityfor business
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