Procter and Gamble CSR

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a new challenge everyday

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P G In a Glance

•Sales of $ 68.2 billions

•Nearly 300 brands in morethan 160 countries

•22 global brands with salesof over $ 1 billion

•Workforce of 140.000

•3 billions people touchedeveryday by P&G products

•Spends more than $5 milliona day on R&D


Prepared By:

THE CSR

W Y




P & G OVERVIEW

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P&G at a glance

• Founded in 1837 - 176th anniversary

• Sales of $ 83.6 billion

• Nearly 300 brands in more than 160countries

• 22 global brands with sales of over $ 1

billion

• Worldwide workforce of 135,000

• 140 plants and 25 R&D centers globally

• Spend nearly $ 2 billion a year on R&D





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P&G: Sustainability

Sustainability is integrated into the company’s purpose of touching and improving the lives ofconsumers now and for generations to come.

P&G does this through the products and servicesit offers, manufacturing in an environmentallyresponsible manner, and through its socialresponsibility programs that improve lives for

those in need around the world.

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5INDIAN INSTITUTE OF MANAGEMENTRAIPUR




P&G’s Programs:

P&G’s Enablers:

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P&G’S ENVIORNMENT

SUSTAINABILITY PROGRAMS

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INDIAN INSTITUTE OF MANAGEMENTRAIPUR



P&G’s Long-Term Environmental

Sustainability Vision

•Powering our plants with 100% renewableenergy

•Using 100% renewable or recycled materials for

all products and packaging

•Having zero consumer and manufacturing wastego to landfills

•Designing products that delight consumers whilemaximizing our conservation of resources

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PRODUCTS & PACKAGING

• Ariel and Tide: Pioneers in

introducing compact detergentsin India using less raw materialand packaging material•Whisper and Pampers: Re-designed packaging to reducethickness, thus reducing raw

material usage and savingpaper•Olay: Re-designed pumppackage reduces plasticconsumption and is 25%lighter. Saves over 400 tons of

packaging a year (the weight ofa Boeing 747)

OPERATIONS & SUPPLIERS

•P&G’s Head Office in Mumbai

has reduced its annual energyconsumption by over 27% overthe last 9 years, saving over1700 gigajoules of energy, byconscious behavior change ofemployees

•P&G’s plant’s have adoptedvarious innovative ideas totransform scrap material intouseful daily needs.•The melted plastic is beingused for making chairs while

the metal laminate is beingapplied as mixture with cementfor construction. Shampooproduction waste has beenconverted to car washing agent

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PROGRESS SO FAR

PROGRESS(percent reduction per unit of

production)

Since July2007 Since July2002

Energy Usage -16 -52

Carbon Di oxide Emissions -14 -54

Waste Disposal -71 -74

Water Usage -22 -58

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P&G’S SOCIAL

RESPONSIBILTY PROGRAMS

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Social Responsibility Programs

LIVE LEARN AND THRIVESince its inception, P&G hasimproved life for more than 400million children around the worldthrough our Live, Learn and

Thrive cause.Every second of every day, twochildren benefit from P&G Live,Learn and Thrive initiatives

P&G’s CHILDREN’S SAFEDRINKING WATER PROGRAM4.2 billion liter of clean waterdelivered, 22000 lives saved and170 days of diseases prevented

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Social Responsibility Programs

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P&G’s OLYMPICS CAMPAIGN: PROUD SPONSORS OF MOM:

• The “Thank You, Mom” campaign honors moms, celebrate theLondon 2012 Olympic and Paralympics Games, and leverage the

Company‟s broad portfolio of leading brands to drive extensive retaildisplays and volume.

• The campaign ends with the line “The hardest job in the world is thebest job in the world. Thank you Mom!!”

• In addition, P&G will sponsor 28 U.S. Olympic and Paralympicathletes, as well as launch the P&G/Team USA Youth Sports Fund.



Social Responsibility Programs in

India SHIKSHA

Shiksha has till date helped 280,000underprivileged children access theirright to education.

• Every time a consumer buys a large pack of anyof P&G‟s product he/she will have made adefinitive contribution towards „SHIKSHA‟

• Irrespective of the sale of its brands fromShiksha, P&G has committed a minimum of Rs.1 crore to CRY.

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DISASTER RELEIF

P&G has stepped forward in natural calamities and helped communities

get back on their feet.Most recently they helped rebuild the Army School in Ladakh, located inone of the most challenging Himalayan Terrains, which was wrecked bythe Flash Floods in 2010.



Contd…

PARIVARTAN -TheWhisper School ProgramThe program has beenimproving the lives of over2 Million girls annuallyacross 15,000 schools in

India.The objective of theprogram is to helpadolescent girls embracewomanhood positively and

enable them to adopt theright feminine hygienepractices to stay healthyand stay in school

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P&G’S SUPPLIERS AND THEIR

ENVIRONMENTAL POLICY

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P&G Rated its Suppliers

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1. Procter and Gamble has released the second version of itsenvironmental sustainability scorecard, moving from benchmarkingsuppliers to rating and rewarding them.

2. About 40 percent of scorecards received offered at least oneinnovation idea for improving the environmental footprint of P&G’s

business.

3. Many of the ideas have become actual projects. In one example, a

chemical supplier has begun to work with P&G on renewable energyprojects, renewable materials development, and ways to reduceemissions.

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How many employees have sustainability objectives?

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• P & G has been a leader in greening its consumer products,

offices and production facilities.• One of the company’s most successful initiatives has been the

engaging of P&G’s 130,000 global employees through its “Take

the R (responsibility) for Tomorrow” engagement program.

• Established site Green Teams led by a SustainabilityAmbassador, and armed them with a Sustainability Toolkitthat outlined an easy-to-use ten-step formula to engage fellowworkers for green success.

• Result : The majority of P&G personnel are enthusiastic aboutthe sustainable workplace, but they also contribute ideas thatsave the corporation about $1 million per year in energy costs



Introduced Future Friendly campaign in Europe, a multi-brand and

multi-platform effort to raise awareness about greener products and

greener practices;

Created a high-profile panel of sustainability experts to advise on its

Future Friendly efforts;

Launched a supplier scorecard to measure their environmental impacts;

Reformulated a bestselling shampoo to reduce toxins;

Announced concentrated versions of powder laundry detergents that

significantly reduce packaging and energy use; and

Introduced sugarcane packaging to three of its shampoo and makeup

brands.

Other Initiatives

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Measuring Social Impact

Resources and Waste Summary

Diversity Metrics

Audit Scores

Environmentally Sustainable Scorecard

Fragmented Scores

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MARKETING SUSTAINABILITY

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Market „Sustainable

Products‟ ?

Market „Sustainability‟

?

How do Consumersreact?




Good News

Consumers are

• Re:THINKING consumption,

• Re:DEFINING success and

• Re:IMAGINING the future of a moresustainable economy.

Source: Market Research by BBMG, GlobeScan and SustainAbility




What P&G achieved

• P & G is a leading in its sector in Environmentaland Social Leadership in consumer perception

• Consumer Product Safety Commission (CPSC)

• Material Safety Data Sheets (MSDS) provide astandardized listing of the chemical and physicalcharacteristic of a product

• Product Ingredients




Challenges

• Only 11% believe company‟s traditional communications.

• 75 % - performance of the product should be at par

• 70 % - Price of the product should be at par

• However the first most trusted sources amongconsumers are certification seals





Customer

Segmentation – Target

Market

PRODUCT

PROMOTION

PRICE

PLACE




Consumer Segmentation on

Sustainability Spectrum

• Highly committed Advocates (14%)

• Style and social status seeking Aspirationals (37%),

• Price & performance-minded Practicals(34%)

• Less engaged Indifferents (15%).





• 86% of Advocates believe they have a “responsibility to

purchase products that are good for the environment andsociety.”

• 73 % of Aspirationals believe “consume a lot less toimprove the environment for future generations” but they

also care for style, status and happiness• 52% of Practicals believe “they‟d buy more sustainable

products if they got rewarded in some way for doing so.”

• 16% believe individuals should be responsible and areindifferent to company





Recomendations

• Reward Aspirationalists and Practicals interms of all P‟s of Marketing

• Design Marketing Strategies accordingly

• Along with Product, market sustainability of it

• However this is possible only if there is no

inherent defect in the product in sustainabilitylines

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BOTTOM OF THE PYRAMID

APPROACH




Bottom of the Pyramid

• C. K. Prahalad proposes that businesses andgovernments should stop thinking of the pooras victims and instead start seeing them asresilient and creative entrepreneurs as well asvalue-demanding consumers.

• There are tremendous benefits to multi-national companies who choose to servethese markets in ways responsive to theirneeds.

• The poor of today are the middle-class oftomorrow.




Examples of Bottom of Pyramid

• Tata Swach range of Water Purifiers from TataChemicals-A Tata Group Company satisfying theessential necessity of purified water for the BoPfor as low as Rs.499

• Godrej & Boyce called ChotuKool provides all thefunctionality of a normal refrigerator but can runon a battery and doesn‟t need continuous powersupply unlike the traditional refrigerator.

• Vortex is a startup incubated at Indian Institute of

Technology, Chennai which has been successfulin making rural banking a reality with the low cost ATM.




HUL – Project Shakti

• HLL created a direct distribution network in hard-to-reachlocales. HLL selected entrepreneurial women from villages andtrained them to become distributors, providing education,advice, and access to products to their villages.

• These village women entrepreneurs, called Shakti Amma(“empowered mother”), have unique knowledge about what thevillage needs and which products are in demand.

• They earn between Rs. 3,000 and 7,000 per month (U.S. $60 –$150) and therefore create a new capacity to consume forthemselves and their families.

• More important, these entrepreneurial women are increasinglybecoming the educators and access points for the rural BOPconsumers in their communities.

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CREATING SHARED VALUE




The Process

1. Countries fail if they don’t create corporate citizenship.

2. P&G should work with government and NGOs to increase value.

3. It should understand the need of society from NGOs who work at

ground level.

4. Attack a societal problem with a business model but it requires anenormous change in mindset.

5. It should follow separate form of measurement and policy at

business unit level.

6. It should analyze social impact that the company is having and what

that meant for the success of their business.7. It should focus on inclusive growth, focus on that segment of society

that is left out.

8. Food security to very low income population.

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CSR 2.0




CSR 2.0

Based on transformative approach

• C=Creativity

• S=Scalability

• R=Responsiveness

• 2=Glocality

• 0=Circularity




C~Creativity

• P&G water purifying solution, a sachet thatcan clean 10 litres in just 20 minutes. Over2000 children die a day from drinking unsafe

water; they have provided close to 6 billionlitres of clean water.

• P&G give these packets away or provides itover the world at cost working with different

agencies.




S~Scalability

• Procter and Gamble has formed a globalpledge to invest resources into thedevelopment of plant-based PET for use in

the packaging of its personal care productsand other consumer goods.

• use of 100 percent plant based PET materialsand fibres for a variety of consumer products.




R~ Responsiveness

• Improved manufacturing process by askingsuppliers to reduce energy use.

• P&G fragrance packaging contains varying

properties of recycled glass depending on theproducts.

• Using recycled paperboard in secondarypackaging.




2~ Glocality

I. The Vicks Breathe for Life Project of P&Gprovided accessible healthcare services forup to 75,000 children in Bangladesh, where

pneumonia is among the top three causesof death in children under five.

II. P&G‟s Live, Learn and Thrive has improvedlife for more than 400 million children across

the Globe.




0~Circularity

• On December 6, 2010 P&G announced that it‟sMaine facility became 9th P&G manufacturingsite globally to reach zero waste to landfill,putting company on path to delivering long-term

environmental vision.• The feminine care facility worked with both

employees and suppliers to implement a processthat beneficially uses 100 percent of its waste. A

majority - more than 60 percent - is recycled orreused, while the remainder is converted toenergy.

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MEASURING SOCIAL IMPACT

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Measuring Social ImpactBalanced Score Card

Financial Results:

a) Operating Profit

b) Investment

c) Return on Investment

Customer & Society:

a) Cost Reduction

b) Reduction in wastage ofelectricity, water and CO2emission

c) Increase in Literacy rate

Processes/Capabilities:

a) Timely Deliveryb) Social Responsibility

c) Supply Chain efficiency

People & Organization:

a) Increase in Retention Ratiob) Decrease in absentees.

c) Gender Diversity

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Karmayog Rating

Negative Criteria Reason Rating Level

Companies that make liquor,tobacco, genetically engineered /modified crops

These products are not needed by society,and cause harm to people and theenvironment. The best CSR to do is tostop making these products.

Level 0

Companies that violatelaws/rules/regulations

CSR is not limited just to how a companyspends its money, but also to how itmakes that money in the first place

Level 1

Companies engaged in high impactprocesses

Processes that severely damage theenvironment require extraordinaryefforts by the company to reduce andrepair the damage, and require greatercontributions to benefit society

Level 1

Companies that report the sameCSR activities (even, verbatim) asfor previous years

This indicates that the company does nottake CSR seriously enough to be engagedin CSR initiatives every year, building onthese, and reporting progress.

One Level less

than the

previous year’s

rating

A. Negative Criteria that usually determine the maximum possible Rating

P&G doesn’t fall

under any of this

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Karmayog RatingSufficient Criteria

Sufficient Criteria What this means RatingLevel

Company fulfilling basic needs ofsociety through its products orservicese.g. providing financial services

The products and services of the company areuseful and benefit society

Level 1

Unique CSR activity which would not

otherwise happene.g. Developing a mapping andtracking software for adoption inIndia

The CSR activity being undertaken by the

company is helpful to government, NGOs,others, in tackling issues of society

Level 1

Company helps to reduce the negativeimpact of other companiese.g. A company that makes waterpurification & waste recycling

systems

The company’s products or services provide

solutions to mitigate harm caused by actionsof companies, their products, etc.

Level 1

Company adopting the GRIFramework for CSR reporting

The company is committed to measuring andreporting its CSR initiatives as per a voluntaryglobally accepted framework.

Level 1

Company’s annual expenditure on

CSR = 0.2% of sales, minimum

The company is committed to a minimumexpenditure on CSR annually, and thusconsiders CSR as an integral part of its

business

Level 2

P&G qualifies for

Rating Level

of Level 2



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Implementing Social Welfare

Inputs

Leadership

Communication

Communication

across

Organization

Decide area of focus

Fix

Responsibilities& targets

Action plan based

on health care

Revise/ Intensify

PlansMonitor the Plan

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Procter and Gamble CSR

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