Procter and Gamble Signals a Slow Start out of the Sustainability Gates

pg.jpgWilliam Procter made candles, James Gamble made soaps and in The Panic of 1837 they competed intensely for the same resources. The two men happened to be married to sisters and their shared father-in-law sat them down and in pursuit of peace in the family, convinced them that collaboration was better than competition, and thus Procter & Gamble was born.
Today P&G is the world’s biggest consumer products corporation, with close to 300 brands that “three billion times a day touch the lives of people around the world, making life a little better every day.” Somehow I seem to avoid these odds, understandable considering that I don’t eat non-hydrogenated oils, so the Pringles are out, I opt for laundry detergent that is biodegradable and non-toxic, sorry Tide, I leave the Duracels on the shelf as I cycle rechargeable batteries through my solar powered charger, and I’m not fully clean until I am Dr. Brommers Magic Soap fully clean. However, P&G did make my life a little better one day at the end of October when it announced that it has a new goal and perhaps the seeding of a new culture of sustainable business.

When a corporation with annual sales that are higher than the annual GDP of most countries starts talking about sustainability goals, my grin grows. The new target is to sell $20bn of products, over the next five years, whose environmental impact is at least 10 percent less than those of previously available products. Sounds great, but what does this really mean?
If you let the numbers do the talking, the news is underwhelming. A student on the Presidio School of Management’s online discussion of the topic was quick to point out that based on P&G’s 2007 revenues of $76 billion, we can estimate $400 billion in revenue over the next five years. The eco-targeted $20 billion thus represents 5% of total sales for the period and achieving a 10% reduction in environmental impact of that 5% amounts to a 0.5% eco-improvement over the whole product line.
Now consider that Wal-Mart has set in place a concentrated liquid detergent objective which states that its U.S. stores, which represent 25% of the U.S. liquid laundry detergent market, will only be selling concentrated detergent in 2008. Concentrated laundry detergent requires half of the water and 20-40% less plastic than the standard sizes. Considering P&G sold $3.1 billion of liquid detergent in 2006, one could reason that the will to do business with Wal-Mart, through complying with this and other elements of Wal-Mart’s commendable ‚ÄòSustainability 360‘ supplier program, will necessitate enough eco-improvement to meet their target.
So, another load of corporate greenwash? Well, yes. But as sustainability guru Hunter Lovins likes to say on the topic, ‚Äòhypocrisy is the first step towards real change’. Talking the talk opens the conversation and enables shareholders and stakeholders the platform from which to ground an intensified level of questions, requests, and recommendations.
Outside of a weak initiative, P&G’s announcement hints at a deeper shift in corporate culture, which holds the seed of hope for a serious sustainability engagement. The senior executives hailed the move as a major evolution in the corporation’s philosophy, which included adding, ‚Äònow and for generations to come’ to the core purpose statement, and adding a new clause to its operating principles, saying the company will “incorporate sustainability into our products, packaging and operations”.
It’s important to keep in mind that researchers at University of Massachusetts Amherst have identified Procter & Gamble as the 52nd-largest corporate producer of air pollution in the United States, with roughly 350,000 pounds of toxic chemicals released annually into the air. There obviously is a big opportunity for a clean up here, and in order to keep the sustainability ball rolling, Lovins suggests, ‚Äòlet’s all write P & G and congratulate them for a great first step, and say that we will all increase our purchases of their products because of this -but that it is only a tiny step and we look forward to their joining the companies that are serious about sustainability’.
I took her up on the suggestion and after clicking through a few questions here, was able to post the following comment;

Congratulations on your recent announcement around sustainability and the apparent shift in corporate culture and product orientation. I am pleased that P&G is taking the first steps in joining the many companies that are reaping a rich array of benefits from their sustainability measures. I look forward to supporting your new sustainable product options and I hope that this small, but important, initial step is a sign of more measures to come; measures that will create a corporation which truly operates in alignment with the wellbeing of future generations.

Feel free to do the same, the more the merrier. Although if you use the same note, you’ll probably get the same response, which at least is heartening;

Thanks for taking the time to share such kind words! Your reaction is just what we hoped for — I can’t wait to share your comments with the rest of our team.
Thanks again for writing!
P&G Team

Thanks Team P&G. All of a sudden I feel as if I am back at the table with William Proctor and James Gamble, calling forth a new spirit of collaboration; but this time the collaboration entails working with nature and all of her constituents so that P&G may continue to enjoy a planet, customers, and profits, for now and generations to come.
Bret Walburg lives in San Francisco and is a graduate student of sustainable business at the Presidio School of Management. Before starting school he spent a year backpacking around the world, marveling at the vast beauty of Earth’s places and people. Prior, he spent 5 years in Salt Lake City as a commercial real estate project manager and property manager.