Ethical Corporation is now Reuters Events - LEARN MORE
Claire Manuel runs an eye over Procter & Gamble’s weighty 2017 Citizenship Report
Consumer goods giant P&G was founded on three core themes: purpose, values and principles, which have underpinned its operations for 180 years. Founded in 1837 by candle-maker William Procter and soap-maker James Gamble, the American multinational is headquartered in Cincinnati, Ohio. Operating in 70 countries, P&G products are bought by five billion people globally and the company achieved net sales of $65.1bn in 2017. Brands include such household names as Head & Shoulders, Ariel, Charmin, Fairy, Febreze, Gillette and Oral-B.
P&G, which ranks 15th on the Forbes Just 100 list of America’s best corporate citizens, has published an annual sustainability report since 1999. In 2016 it was expanded to include a comprehensive overview of the company’s citizenship priorities. These included assisting with humanitarian disasters, innovation in recycling and instigating conversations about gender and racial bias.
The company’s weighty 2017 Citizenship Report (136 pages) demonstrates how P&G’s social responsibility work comes together. Before compiling it, P&G consulted around 80 stakeholders in an issue prioritisation exercise to better understand the citizenship issues relevant to them. These stakeholders included investors, civil society groups, retailers, suppliers, industry organisations, experts and P&G employees.
Governance and ethical conduct, human and labour rights, corporate transparency, product safety and ingredient transparency were rated as priorities. Climate, water, waste and packaging also came high on the agenda, as did promoting sustainable lifestyles and sustainable product design and innovation.
P&G’s strategy covers five pillars: ethics and corporate responsibility; community impact; diversity and inclusion; gender equality; and environmental sustainability. Each is led by an executive sponsor from inside the business.
P&G has worked with a range of partners globally, including governments, NGOs and other businesses. Notable achievements in 2017 included delivering its 12 billionth litre of clean drinking water through its Children’s Safe Drinking Water programme, which aims to deliver 15 billion by 2020 and is part of a worldwide effort to achieve UN SDG6.
On gender equality, P&G launched the #WeSeeEqual video (in conjunction with International Women’s Day), which has been viewed millions of times. It also joined the Association of National Advertisers’ #SeeHer movement and the UN Women Unstereotype Alliance to focus on eliminating stereotypes and accurately portray women and girls in advertising. Over the last fiscal year, P&G spent more than $1bn with women-owned businesses in the US through its supplier diversity programme, and it has now expanded the programme into all five global regions.
On the environmental side, Procter & Gamble is a signatory to the Science-Based Targets initiative, under which is commits to reduce emissions from operations 30% by 2020 from a 2010 base-year. It also commits to address the main source of emissions across its value chain by measures including: ensuring that 70% of all washing machine loads are washed in cold water, doubling the use of post-consumer resin in plastic packaging and ensuring zero deforestation in the palm oil supply chain.
According to its citizenship report, several of P&G’s 2020 goals have already been achieved ahead of schedule, including reducing energy use at its facilities by 20% per unit of production against a 2010 baseline (it has achieved 22%) and reducing water use by 20% per unit of production (it has reached 27%). P&G also received top marks from the Forest 500, which ranks organisations from 0 to 5 based on their deforestation policies. And it estimated that 67% of its customers' washing machine loads in 2017 used cold water, up from 60% in 2016.
However, other goals, such as reducing absolute GHG emissions by 30%, still have a way to go: the current figure stands at just 16%. Currently, only 10% of energy in P&G’s plants comes from renewable sources, while the target is 30%.
P&G received a mediocre C from CDP for its effort in mitigating climate risk last year, meaning merely that it has "awareness" of the issue.
Dexter Galvin, global director of corporations and supply chains at CDP, explains that CDP’s scoring methodology takes a range of factors into account, allowing multiple ways to achieve points, and no single action can earn a company an A score.
“This ensures that companies take a holistic approach to corporate sustainability and demonstrate multiple actions,” Galvin says. “P&G’s ambitious science-based target, validated by the pioneering Science Based Targets initiative, shows the company is taking significant steps towards tackling climate change. We would hope to see their CDP score improve to reflect this as they implement actions to achieve their science-based target.”
Like other big brands, recycling is a fundamental issue for P&G, particularly when it comes to plastics. In September 2017, the #breakfreefromplastic movement conducted a number of coastal clean ups and brand audits. The audit conducted in Manila showed that P&G was the fifth-worst plastic polluter.
P&G last year partnered with TerraCycle and SUEZ to pioneer the world’s first recyclable shampoo bottle made with beach plastic, which it launched in its French market. Last year it also announced that it would produce a limited edition of Fairy Liquid made with 10% beach plastic for the UK market in 2018, and set a goal of having 99% of all hair care bottles sold in Europe converted to include 25% post-consumer recycled content by the end of 2018.
P&G says its scientists have invented a technology that has the potential to revolutionise the plastics recycling industry. Produced in partnership with Innventure, PureCycle technology purifies recycled polypropylene plastic back to a virgin-like form – this can open up billions of pounds of plastic material to meet an unmet demand for like-new recycled plastic.
Greenpeace campaigner Michael Meyer-Krotz acknowledges that P&G is making efforts to reduce packaging and increase recycling rates. “These seem to be good approaches,” he says, “but to rely on recycling as a way out of the plastic pollution crisis is a fault. There is a need for alternative delivery systems, including reusable packaging and unpacked delivery systems."
He adds: “P&G and other FMCG companies need to disclose the types and amount of plastic they use, reuse and recycle as a first step out of this crisis,” he says. “There is a need to understand that our throwaway culture is leading to a deadlock – and that corporates have a responsibility to develop a way out.”
P&G plastics plastics recycling emissions science-based targets CDP gender