There are some big changes afoot at consumer products giant Procter & Gamble (P&G), though with little in the way of comments from the company, it’s anybody’s guess what’s behind it.
Here are the facts. The company announced that it is consolidating facilities, and cutting some 3,000 office jobs over the next two years. A company spokesman said that the move to close one office in Geneva, “was enabled by leveraging more flexible office designs, increased use of digital technology and improving our environmental sustainability.”
Sustainability is a big topic at the company, especially after the Dow Jones Sustainability Index dropped P&G from its Top 100 list of most sustainable companies in North America. This must have come as quite a blow after the company had been on the list for 14 consecutive years and named as the leader of Nondurable Household Products sector for seven years straight. The company now considers environmental impact a top priority, “as important as a new product launch or a business acquisition.”
The company was named as a hero in last year’s Canadian Corporate Knights report. Among the accomplishments cited by the report was the fact that 25 percent of its 192 plants were certified zero waste. The company is committed to finding the value throughout its supply chain that might have once been considered waste. “Only in a landfill does that waste have no value,” said Len Sauers, vice president for global sustainability. “Our goal was to find some value in all that waste, which has been a good investment for the company. Plus, not paying to have the stuff landfilled.” Some examples include paper sludge being converted into roofing tiles and waste from a feminine care pad plant converted into fuel for a local cement plant. All told, the company has saved $1 billion in landfill costs since 2007.
Obviously there is not only subjectivity in the various ranking systems, but each one uses different criteria with different emphasis.
The company, which is renowned for its cleaning products, has just brought back CEO A.G. Lafley to help them clean up their act. Lafley was at the helm during a very dynamic period of growth for the company in the early 2000s, but that was before sustainability was the hot topic that it is today.
P&G was called out for being the second highest producer of greenhouse gases among consumer products companies, and for not reducing emissions as much as its rival, Kimberly-Clark.
This, according to BrandChannel, might create a quandary for a company of this size — which is a perceptual gap between what environmentalists and journalists care about, as opposed to what the typical consumer that buys their products care about. That’s because in today’s hyper-connected world, where generational buying decisions and brand loyalties can be overturned by a single tweet, reputation means everything. At the same time, 75 percent of consumers say that they will not accept any tradeoffs for products that are more sustainable than their traditional counterparts.
A few actions the company has recently taken include a pledge to cut water content in laundry detergent by 25 percent by 2018, saving 45 million gallons of water annually; and joining with Walmart in the $100 million Closed Loop Fund to help encourage recycling programs. The company has also responded to Greenpeace protests by vowing to begin policing its entire palm oil supply by next year. Social media played a big role on this issue in bringing P&G to the table.
So what can we take away from this story?
We can say that sustainability matters a lot to consumers, even those who don’t traditionally have green values. That’s because, all other things being equal, consumers want to feel good about the products they buy and the companies they buy from. But the “all other things being equal” part, might be the most important part of all.
RP Siegel, PE, is an author, inventor and consultant. He has written for numerous publications ranging from Huffington Post to Mechanical Engineering. He and Roger Saillant co-wrote the eco-thriller Vapor Trails. RP sees it as his mission to help articulate and clarify the problems and challenges confronting our planet at this time, as well as the steadily emerging list of proposed solutions. His uniquely combined engineering and humanities background help to bring both global perspective and analytical detail to bear on the questions at hand.
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