P&G outlines major sustainability drive

29 September 2010

CINCINNATI: Procter & Gamble, the FMCG giant, is planning a major sustainability drive covering various aspects of its operations from innovation to marketing.

The company has outlined several goals from now to 2020, such as replacing 25% of petroleum-based materials with renewable substances, ensuring 70% of washing machine loads use cold water and cutting product packaging by 20%.

Elsewhere, P&G will conduct research to understand the ways in which shoppers can be persuaded against disposing of items in landfill, alongside forming a three-year alliance with WWF, the charity.

"What's important is that we don't treat environmental sustainability as something separate from our base business," said Bob McDonald, Procter & Gamble's ceo.

"When we operate sustainability we earn gratitude, admiration and trust that lead to opportunity, partnerships and growth."

P&G spent a year establishing these targets, having consulted hundreds of employees and external experts, a process yielding extremely broad results.

"It will influence the products we develop, how they are produced and distributed, and the programmes in which we make social investments," argued McDonald.

"It does us no good to grow our business today at the expense of tomorrow."

Moreover, the organisation's aim of attracting 1bn new customers in the next five years should be assisted by its enhanced green credentials.

"Consumers are more sceptical today and more cynical than ever before, and want to know what they're buying into," said McDonald.

"When we do the right thing, consumers give us the benefit of the doubt and help us win at the first moment of truth when they're in front of a shelf, or in front of the internet, buying a product.

"I think when you do the right thing, with social networks the way they are today, the business just takes off."

P&G's recent activity in this area has included introducing brand extensions like Ariel Excel Gel and Tide Cold Water detergents, which wash clothes at lower temperatures.

Under its Future Friendly initiative in the US, P&G pledged to reach 50m US households, providing information about potentially eco-friendly habits.

"We realise that we have an enormous responsibility not just to build the products that are better for the environment but to communicate those benefits, both environmental benefits as well as cost benefits, to consumers," said McDonald.

"We're busy investing and trying to do that."

However, the imperative is equally pronounced in emerging nations, as discretionary expenditure levels rise.

"In these markets that are enjoying tremendous growth rates, like in South-East Asia, we need to get way ahead of the sustainability curve and make sure we're doing the education."

Downey Single Rinse, rolled out in several such countries, also showed innovation at low price-points can yield wider benefits.

"Our innovation strategy is to … innovate discreetly for every person in the economic pyramid, don't just innovate for the people on top of the economic pyramid and then dilute or trickle down," said McDonald.

"As we do that, we often surprise ourselves with what we learn."

Similarly, P&G's Connect+Develop platform has seen it tap other firms and knowledgeable individuals in creating pioneering technology.

"We will need to continue collaborating with our suppliers, with consumers, with retailers and in our industry," said McDonald.

"No one company can have all the answers, but we need to be part of the solution."

Data sourced from Procter & Gamble; additional content by Warc staff