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Case
Abstract
Procter and Gamble (P&G) is a publicly owned company which touches the lives of about four billion
people around the world with its product portfolio. P&G is committed to improving peoples everyday
life by making products more environmentally sustainable. To understand how P&G can make products more environmentally sustainable, the present case focuses on the scientific approach called Life
Cycle Assessment (LCA) adopted by P&G to deliver sustainable innovations without trade-offs in
performance or value of the products.
Keywords
Environment, life cycle assessment, social responsibility, conservation, Procter and Gamble
Introduction
P&GBrief Profile
P&G was founded in 1837 in Cincinnati, Ohio, US, by two entrepreneurs named William Procter, a
candle-maker emigrating from England, and James Gamble, a soap-maker originally from Ireland. They
met each other by chance. William Procter married Olivia Norris who was the daughter of Mr Alexander
Norris, a prominent candle-maker in Cincinnati. James Gamble married Elizabeth Ann Norris who was
the sister of Olivia, and second daughter of Mr Alexander Norris. Mr Norris suggested that both sons-inlaw create a joint venture. Finally, on 31 October 1837, William Procter and James Gamble signed the
partnership agreement that founded the Procter & Gamble Company, which began as a small family-run
candle and soap business, and has now become a multi-national giant and the largest consumer goods
The case has been developed solely as the basis for class discussion, for educational and management development
programmes and is not intended to illustrate either effective or ineffective handling of an administrative situation or
to present successful or unsuccessful managerial decision-making or endorse the views of management in decisionmaking. This study uses secondary data (news reports and information available on the company websites) and the
sources have been cited in this case.
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company in the world. Grounded by core responsible business values with a long history of excellence
in business decisions, P&G is now at the forefront and turning its attention toward sustainability, conservation and social responsibility on a global level.
P&Gs world headquarters is located in the founding companys city of Cincinnati, Ohio, US. P&G
sells its products in more than 80 countries to serve more than four and a half billion consumers around
the world. P&G has over 130 manufacturing facilities in over 40 countries. Roughly 1015 per cent of
the companys manufacturing volume is completed by contract manufacturing. However, the percentage
of P&G production supplied by contract manufacturers varies according to the needs of the business.
P&G has a number of products in its portfolio of quality brands. Some of the most popular selling brands
around the globe include Pampers, Tide, Ariel, Always, Whisper, Pantene, Mach3, Bounty, Dawn, Fairy,
Gain, Pringles, Charmin, Downy, Lenor, Lams, Crest, Oral-B, Duracell, Olay, Head & Shoulders, Wella,
Gillette, Braun, Fusion, Ace, Febreze and Ambi Pur, etc.
The growth strategy of P&G is inspired by its purpose to touch and improve peoples everyday lives.
Innovation is the driving force behind its growth strategy. P&G is executing this strategy by innovating
in every part of the world. Innovation is the fundamental driver to develop these brands as leading brands
in the global market. P&G has a global network of external innovation partners, which leads to an effective investment in innovation and research. The company is committed to making socially responsible
products that are better for the environment, thereby improving the environment and safety of the worlds
consumers (P&G Connect, 2012).
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of the products that were not environmentally friendly and further opened ways to create more new technologies to provide assurance that products developed by P&G will be safe for the environment and safe
for people to use the products. Today, the environmental science department continues to develop and
improve methods for evaluating environmental safety and environmental toxicology for product
sustainability.
P&G strives to ensure that consumers need not make a choice between sustainability, performance,
and value. Hence, it is very important to find out what kinds of technology and innovation P&G is
exploring in order to meet these criteria. At the same time, sustainability could be more than just responsibility; it could also be an opportunity to build the business. Therefore, P&G developed its programmes
to include not only responsibility but also opportunity. For P&G, that opportunity came to improve the
environmental footprint of its products, its operations, and to deliver the products that enabled them to
be more environmentally sustainable in a meaningful way for consumers and to the bottom line. P&G
conducted research to better understand how consumers thought about green products. This research
demonstrated that the vast majority of consumers, which they refer to as the sustainable mainstream,
are not willing to accept any trade-offs in performance or price in order to purchase green products.
Consequently, P&G focused on this sustainable mainstream and developed new products, which
enabled consumers to be environmentally sustainable, but for which there were no trade-offs, and this is
where this idea of Sustainable Innovation Products (SIPs) originated. The invention and development of
SIPs resulted in reduced environmental footprints for which there are no trade-offs to the consumer.
P&G uses the following criteria for defining SIPs (Sauers & White, 2008):
1. A reduction in environmental footprint achieved through technical or commercial product innovation impacting one or more of the following: energy, water, transportation, packaging and substitution of non-renewable energy or materials with renewable sources.
2. A significant reduction of more than 10 per cent in at least one indicator, or a reduction equivalent
to the footprint of at least 10,000 people for one or more of the indicators.
3. The reduction is not offset by a meaningful increase in other indicators and does not negatively
impact the overall sustainability profile of the product.
4. Reductions are supported by sound and transparent assumptions, scientific methodologies
substantiated by data, and pass existing approval systems at P&G.
P&G believes that the environmental benefits of SIPs should be significant, obvious and easy to communicate. P&G has been able to reduce the amount of materials, which they use to manufacture a product along with the energy it takes to produce them and the waste at the end of consumer usage. SIPs have
significantly contributed in terms of environmental protection while minimizing negative product
impacts. In 2011, some of the products which were reinvented by P&G through analyzing the footprint
of the products throughout its entire life cycle are Powder Laundry Detergents (Cheer, Dreft, Era, Gain
Ivory Snow, Tide), Pantene Nature Fusion, Gillette Fusion ProGlide Razors, Pampers Cruisers, Pampers
Baby Dry, Swaddlers, Baby, Active Fit, Active Baby, Juegos Latin and Cruisers with Dry Max, and
Pampers Wipes Sensitive. All of these products are available in different countries of the world and these
products strive to benefit the environment with no consumer trade-offs.
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and less bulky core. The thinner core is enabled by the new Absorbent Gelling Material (AGM), removing the need for air felt. The AGM is more permeable, meaning it locks wetness in faster than previous
AGM. With this DRY MAX technology, Pampers Swaddlers and Cruisers Diapers became leak-proof
diapers, in which wetness is locked in for up to 12 hours. These diapers are able to withstand large quantities of moisture. The new DRY MAX technology pulls the moisture away from the skin keeping
the babys bottom dry, and helping to prevent diaper rash creating a thinner diaper core and providing
flexibility and comfort to babies.
Changes to product formulation and package design delivered reductions in material usage as the new
design also contains 10 per cent less material weight, which helps families to reduce their impact on the
environment. Despite such improvements, P&G surveys and on-line blogs show that some parents feel
confused or guilty about how diapers fit with sustainable living approaches, as they try to balance diaper
cost, convenience, hygienic containment, babys skin health, and uninterrupted sleep, with potential
environmental impacts (Weisbrod & Van Hoof, 2011).
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out a LCA is to provide a complete picture as possible of the interactions of human activity within the
environment. The other objectives are to understand the overall and interdependent nature of the
environmental consequences of human activities and to provide decision-makers with information to
identify opportunities for environmental improvements (Pant, 2007). Business leaders should recognize
that different product systems might require distinct LCA methods because environmental values are not
clearly integrated in market pricing (Christiansen, 1997). Furthermore, critical and comparative LCA
review processes are vital for potential environmental impacts and differential significance. Consumers
can quantify the footprint and impact, across a products entire life cycle, from the creation of raw materials that are used in the product, to manufacturing, to logistics, to use in the home, and to ultimately the
disposal of the product. Environmental impacts could be described as energy use, greenhouse gas
emissions, solid waste generation, water use, etc. (Saouter, Van Hoof, Feijtel & Owens, 2002). Overall,
designing more effective products and influencing behaviours in the supply chain are the most meaningful things that a corporation can do to achieve sustainable product development and enable more
sustainable living (Weisbrod & Van Hoof, 2011).
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are necessary to meet the companys long-term environmental sustainability vision. For example, P&G
recently signed a Cooperative Research and Development Agreement (CRADA) with the Environmental
Protection Agency (EPA) National Risk Management Research Laboratory (NRMRL) to develop tools
and methods for optimization and improvement of sustainability metrics and indicators within products,
manufacturing and supply chain contexts (Business Wire, 2012).
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of the companys performance in sustainability (Sauers & White, 2008). P&G is producing an annual
global sustainability report. The company prepared its first sustainability report in October 1999 based
on the format developed by the Global Reporting Initiative (GRI). The GRI provides a common format
for sustainability reporting that assists both the organization providing the report and those using the
report as a key source of data. The GRI consists of multinational corporations, NGOs, international associations, universities and other stakeholders from around the world. P&G has embedded sustainability
into its purpose, values and principles as a company. For example, the purpose of P&G is as follows:
We provide branded products and services of superior quality and value that improve the lives of the
worlds consumers, now and for generations to come.
(Source: Company Website, 2012)
P&G also added a new principle that states: We incorporate sustainability into our products, packaging, and operations.
(Source: Company Website, 2012)
Thus, sustainability is built into the rhythm of its business through employees taking responsibility by
taking a next step or action to integrate sustainability into the home and workplace. Employees are
guided by P&Gs purpose, values and principles. This is important. For sustainability to be sustainable,
it needs to be embraced by employees and consumers. P&G follows the definition of sustainability that
is defined by the UK government. This definition describes a better quality of life for every human being
in the developed and developing world. According to this definition, sustainability is about ensuring a
better quality of life for everyone, now and for generations to come. It integrates economic development,
environmental protection and social responsibility.
P&G sustainability includes both environmental sustainability and social responsibility by making
products and services in an environmentally responsible manner, and through its social responsibility
investment and employee volunteer programmes to help needy peoples throughout the world. The longterm environmental sustainable vision of P&G includes powering the plants with 100 per cent renewable
energy, using 100 per cent renewable or recycled materials for all products and packaging, having zero
consumer and manufacturing waste go to landfills, designing products that delight consumers while
maximizing the conservation of resources, etc. P&Gs social responsibility programmes help children in
need around the world to receive a healthy start, access to education and to build skills for life, etc. These
goals were originally set by P&G in 2007 across different areas of products, operations and social
responsibilities (Franke, 2007). Overall, P&G strives to understand consumers financial, social and
environmental needs and concerns to develop environmentally and socially responsible products. P&G
equips all employees and stakeholders to build sustainability thinking and practices into their routine
work with a focus on integrity, leadership, ownership, passion for winning and trust between employees,
P&G brands and consumers. Reducing consumer waste in landfills and maximizing the conservation of
resources are examples of shared social and environmental sustainability where the consumer and P&G
benefit. However, it is not easy to achieve 100 per cent results immediately. Therefore, P&G set two
strategies in products and operations to achieve its vision for 2012 and 2020 within products and operations for making its employees and stakeholders accountable.
South Asian Journal of Business and Management Cases, 2, 1 (2013): 8596
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Conclusion
Finally, it can be said that success is based on the approach of getting the final results by making meaningful efforts. P&Gs innovative sustainability goals are decreasing the environmental footprint of its
products and operations, fulfilling social responsibility commitments and delivering sustainable product
innovations to the market. With a growing emphasis on sustainability, sustainable products appear to be
well positioned to take advantage of the trend. So by creating a consumer product that targets mainstream consumers with meaningful improvements and with no trade-offs, P&G makes positive impacts
in environmental sustainability and social responsibility. Over the years, sustainability continues to be a
top priority at P&G, and as P&G already has implemented several successful sustainable initiatives, the
company continues to strive for further improvement.
Note
1. This case as developed by Raveesh Agarwal and Monica Thiel is a revised and updated version of the case titled
Delivering Sustainable Innovations by P&G through LCA as presented by the authors at the International
Conference on Management Cases (ICMC 2012) held on 2930 November 2012 at the BIMTECH Campus,
Greater Noida, India.
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Raveesh Agarwal is with RIMT, Bareilly, Uttar Pradesh, India. Dr Raveesh has presented and published
original papers in conferences and journals of repute. [E-mail: drraveesh15@gmail.com]
Monica Thiel is with Tilburg University, the Netherlands. She has contributed many papers to international conferences and published in journals of repute. [E-mail: mt2652@gmail.com]