Anda di halaman 1dari 23

Procter & Gamble:

A CSR Perspective
-by Sarang Tilak,
PGDBM, SIMSREE
Roll No: 857

Page
1
INDEX
Topic Topic Page
no. no.
1. Introduction and Mission 3
Values of P&G
2. Triple Bottom Line Concept in 5
case of P&G:
ECONOMICAL aspect
3. ENVIRONMENTAL aspect 8

4. SOCIAL aspect 11

5. In A Nutshell 21

Page
2
Procter & Gamble
Procter & Gamble Co. (P&G, NYSE: PG) is a Fortune 500, American
global corporation based in Cincinnati, Ohio, that manufactures a wide
range of consumer goods. As of 2008, P&G is the 23rd largest US
Company by revenue and 14th largest by profit. It is 10th in Fortune's
Most Admired Companies list (as of 2007). P&G is credited with many
business innovations including brand management, the soap opera, and
"Connect & Develop" innovation.

According to the Nielsen Company, in 2007 P&G spent more on U.S.


advertising than any other company; the $2.62 billion it spent is almost
twice as much as General Motors, the next company on the Nielsen list.
P&G was named 2008 Advertiser of the Year by Cannes International
Advertising Festival. Procter & Gamble has expanded dramatically
throughout its history, but its headquarters still remains in Cincinnati.
P&G's dominance in many categories of consumer products makes its
brand management decisions worthy of study. For example, P&G's
corporate strategists must account for the likelihood of one of their
products cannibalizing the sales of another.

MISSION:

To provide branded products and services of superior quality and value


that improve the lives of the world's consumers, now and for generations to
come.

VALUES:

P&G is its people and the values by which we live.


We attract and recruit the finest people in the world. We build our
organization from within, promoting and rewarding people without regard
to any difference unrelated to performance. We act on the conviction that
the men and women of Procter & Gamble will always be our most
important asset.

LEADERSHIP:
• We are all leaders in our area of responsibility, with a deep
commitment to deliver leadership results.

Page
3
• We have a clear vision of where we are going.
• We focus our resources to achieve leadership objectives and
strategies.
• We develop the capability to deliver our strategies and eliminate
organizational barriers.

OWNERSHIP:
• We accept personal accountability to meet our business needs,
improve our systems, and help others improve their effectiveness.
• We all act like owners, treating the Company's assets as our own
and behaving with the Company's long-term success in mind.

INTEGRITY
• We always try to do the right thing.
• We are honest and straightforward with each other.
• We operate within the letter and spirit of the law.
• We uphold the values and principles of P&G in every action and
decision.
• We are data-based and intellectually honest in advocating
proposals, including recognizing risks.

PASSION FOR WINNING


• We are determined to be the best at doing what matters most.
• We have a healthy dissatisfaction with the status quo.
• We have a compelling desire to improve and to win in the
marketplace.

TRUST
• We respect our P&G colleagues, customers, and consumers, and
treat them as we want to be treated.
• We have confidence in each other's capabilities and intentions.
• We believe that people work best when there is a foundation of
trust.

Page
4
The TRIPLE BOTTOM LINE CONCEPT’s application
in case of P&G
ECONOMICAL

Effective from July 1, 2007, the company's operations are


categorized into 3 "Global Business Units" with each Global Business Unit
divided into "Business Segments," according to the company's June 2007
earnings release.

1. Beauty Care
•Beauty segment
•Grooming segment
2. Household Care
•Baby Care and Family Care segment
•Fabric Care and Home Care segment
3. Health & Well-Being
•Health Care
•Snacks, Coffee and Pet Care

Management and staff

Current members of the board of directors of Procter & Gamble are:


Norman Augustine, Bruce Byrnes, Scott D. Cook, Joseph Gorman, A.G.
Lafley, Charles R. Lee, Lynn M. Martin, W. James McNerney, Jr., Johnathan
Rodgers, John F. Smith, Jr., Ralph Snyderman, Richard Dearlove, Margaret
Whitman, and Brian Bowns. Norman Augustine will be retiring from the
Board following the Company's October 2007 meeting[9].

In 2007, the P&G's Canadian division was named one of Canada's Top 100
Employers, as published in Maclean's magazine, the only consumer
products company to receive this honor.[10]

Procter & Gamble brands

Page
5
23 of P&G's brands have more than a billion dollars in net annual sales
and another 18 have sales between $500 million and $1 billion.

Billion dollar brands

• Always is a brand of feminine hygiene products, including maxi


pads, pantiliners (sometimes called Alldays), and feminine wipes,
produced by Procter & Gamble.--See also Brand homepage;
related trademarks: Ultra Thins; Flexi-Wing; Maxis; Alldays;
CleanWeave.
• Ariel is a brand of washing powder/liquid, available in numerous
forms and scents.
• Actonel is brand of Osteoporosis drug Risedronate co marketed by
Sanofi-Aventis.
• Bounty is a brand of paper towel sold in the United States, Canada
and the United Kingdom.
• Braun is a small-appliances manufacturer specializing in electric
razors, coffeemakers, toasters, and blenders.
• Crest is a brand of toothpaste.
• Dawn is a brand of dishwashing detergent.
• Downy/Lenor is a brand of fabric softener.
• Duracell is a brand of batteries and flashlights.
• Gain is a brand of laundry detergent and fabric softeners.
• Gillette is a safety razor manufacturer.
• Head & Shoulders is a brand of shampoo.
• High Endurance is a deodorant by Old Spice.
• Ivory is a soap.
• Nice 'n Easy is a hair color product.
• Olay is a brand of women's skin care products.
• Oral-B is a brand of toothbrush.
• Pampers is a brand of disposable diapers.
• Pantene is a brand of haircare.
• Prilosec OTC is a brand of heartburn medicine co marketed by
AstraZeneca.
• Puffs is a type of facial tissue.
• Secret is a deodorant.

Page
6
• Tide is a brand of laundry detergent.
• Vicks is a brand of over-the-counter medications.
• Wella is a brand of hair care (shampoo, conditioner, styling, hair
color).
• Whisper is a brand of pantyliners.

Manufacturing

Procter & Gamble manufactures its products across the globe.


Manufacturing operations are based in the following geographies

* US
* Canada
* Latin America
* Europe
* China (31 wholly-owned factories) and other parts of Asia
* Africa

Productions

Procter & Gamble produced and sponsored the first radio opera
soap operas in the 1930s (Procter and Gamble's being known for
detergents (soaps) was probably the genesis of the term "soap opera").
When the medium switched to television in the 1950s and 1960s, most of
the new serials were sponsored and produced by the company. Two of
their serials, As the World Turns and Guiding Light, are still on the air
today and are produced by TeleNext Media, Inc for Procter & Gamble. The
serial The Young and the Restless also is regularly sponsored by products
from Procter & Gamble, as well as other daytime serials.

Page
7
ENVIRONMENTAL
Environmental Quality Policy

Procter & Gamble is committed to providing products and services


of superior quality and value that improve the lives of the world's
consumers. As part of this, Procter & Gamble continually strives to
improve the environmental quality of our products, packaging and
operations around the world. To carry out this commitment, it is Procter &
Gamble's policy to:
• Ensure our products, packaging and operations are safe for our
employees, consumers and the environment.
• Reduce, or prevent, the environmental impact of our products and
packaging in their design, manufacture, distribution, use and
disposal whenever possible. We take a leading role in developing
innovative, practical solutions to environmental issues related to our
products, packaging and processes. We support the sustainable use of
resources and actively encourage reuse, recycling and composting.
We share experiences and expertise and offer assistance to others who
may contribute to progress in achieving environmental goals.
• Meet or exceed the requirements of all environmental laws and
regulations. We use environmentally sound practices, even in the
absence of government standards. We cooperate with governments in
analyzing environmental issues and developing cost- effective,
scientifically based solutions and standards.
• Continually assess our environmental technology and programs, and
monitor progress toward environmental goals. We develop and use
state-of-the-art science and product life cycle assessment, from raw
materials through disposal, to assess environmental quality.

Page
8
• Provide our consumers, customers, employees, communities, public
interest groups and others with relevant and appropriate factual
information about the environmental quality of P&G products, packaging
and operations. We seek to establish and nurture open, honest and
timely communications and strive to be responsive to concerns.
• Ensure every employee understands and is responsible and
accountable for incorporating environmental considerations in daily
business activities. We encourage, recognize and reward individual and
team leadership efforts to improve environmental quality. We also
encourage employees to reflect their commitment to environmental
quality outside of work.
• Have operating policies, programs and resources in place to
implement our environmental quality policy.

P&G's philosophy is grounded in a belief that we should be a leader


in our industry in implementing our global environmental program. To do
this, we concentrate on environmental innovation and accountability for
results. We believe our accomplishments illustrate this commitment. For
example, P&G was first to bring innovations such as concentrated
products, refill packages and recycled plastic bottles to our industry. We
have made great strides in reducing overall packaging per case by an
average of 27 percent since 1990. During the same period, our focus on
pollution prevention has resulted in a 37 percent reduction in waste, air
and water emissions from our manufacturing plants.
We recognize that environmental progress is a never-ending journey of
continuous effort and improvement. However, by focusing on improving
the lives of consumers through innovative technologies that work better
and more efficiently, we believe we can continue to sustain both the
growth of our business and the health of the environment.

P&G Sets Sales Target For Greener Products


Procter & Gamble has announced five-year sustainability goals as
part of its 2007 Global Sustainability Report (PDF).
P&G says that it plans to generate at least $20 billion in cumulative sales
of products with reduced environmental impact over the next five years.
Financial Times reports that the environmental impact of those products
will be at least 10 percent less than those of previously available products.
This is believed to be the first time a consumer products company has set
itself a financial target for developing and selling greener items, rather
than for waste or energy reduction.

Page
9
P&G’s sales target for environmentally enhanced products will be
significantly supported by its move to shift its liquid detergent market in
the U.S. to double concentrate formula.
P&G is also changing its core statement of corporate purpose - that it
seeks to “improve the lives of the world’s consumers with its branded
products and services” -? to add the phrase “now and for generations to
come,” according to the FT article.
The company also said it will reduce CO2 emissions, energy and water
consumption, and disposed waste per unit of production by an additional
10 percent each, contributing to a 40 percent reduction over the decade
(2002-2012).
Other goals include:
• Improve the lives of 250 million children through its corporate cause,
Live Learn and Thrive. It will also deliver another two billion liters of clean
water through its Children’s Safe Drinking Water program over the next
five years. The company estimates that this will prevent 80 million days of
disease and save 10,000 lives.
• Help P&G employees build ‘?sustainability thinking and practices’ into
their daily work.
• Continue to work with external stakeholders, such as the Centers for
Disease Control, UNICEF, the World Health Organization and Populations
Services International, to create new opportunities and solutions for the
world’s sustainability challenges.
P&G is a founding member of the recently announced Supply Chain
Leadership Coalition, an organization that will press suppliers to release
data about carbon emissions and climate-change strategies.

Environmental
Credentials

• All P&G products are held to P&G's high


standards for environmental and human
safety; we do not differentiate between
which products meet these standards
and which do not - they all do.
• P&G has been the Dow Jones
Sustainability Index Super Sector Leader
for seven consecutive years in the "Non-
Durable Household Products" market
sector.

Page
10
• P&G has been leading the industry with innovations like
concentrated products, recycled plastic bottles and refill packages
to the industry.
• P&G's Central Product Safety Environment Group was established to
develop new methods for evaluating the environmental safety of
consumer products. P&G was one of the first companies to establish
such an organization.
• P&G has hundreds of scientists and engineers responsible for
assessing the environmental safety of our products and operations.
• P&G's environmental organization has published more than 700
articles over the past 45 years; almost 500 of those since 1990.
• In 1992, P&G received the World Environment Center Gold Medal for
International Corporate Environmental Achievement.
• P&G has been listed by FTSE4Good ethical investment index since
its inception.
• 95.93% of all materials entering P&G factories worldwide leave as
finished product (waste is 4.07% of which more than 50% is
recycled).

SOCIAL
CSR
There are various CSR activities carried out by P&G with genuine intention
of giving back to the society. A few highlighted have been discussed
within this project.
They are:
• PROJECT SHIKSHA – SECURE YOUR CHILD’S FUTURE (2003)
• REBUILDING LIVES IN EARTHQUAKE HIT BHUJ (2001/2002)
• PROJECT POSHAN – FIGHTING MALNUTRITION IN INDIA
(2000)

Page
11
• PROJECT OPEN MINDS – EDUCATING INDIAS WORKING YOUTH
(1999)
• PROJECT DRISHTI – THE FIRST EVER SIGHT RESTORATION
PROGRM IN INDIA(1999)
• PROJECT FUTURE FOCUS - THE FIRST EVER ROUND WRITE IN
CAREER GUIDANCE SERVICE (1998)
• PROJECT PEACE - ENVIRONMENTAL EDUCATION PROGRAMME
(1996)

Let us now study each of these projects.


• PROJECT SHIKSHA – SECURE YOUR CHILD’S FUTURE (2003)
With a mission to make a difference to current alarming situation of
children’s’ literacy, Procter & Gamble (P&G) has joined hands with India’s
premier child rights organization Child Relief and You (CRY) and Sony
Entertainment Television to launch ‘Shiksha’, a program to help educate
underprivileged children across India. Under Shiksha, P&G and Sony
appealed to their consumers and viewers to support the cause and make
it easy for them to do so - all an individual has to do is purchase a large
pack of either Tide, Ariel, Pantene, Head & Shoulders, Rejoice, Vicks
VapoRub or Pampers during April, May and June 2005, and he/she will help
support one day’s education of one child per pack purchased.
Irrespective of the sale of its brands from Shiksha, P&G has committed a
minimum of Rs. 1 crore to CRY.
Education has managed to reach the underprivileged and even the
poorest of the poor, children numbering around 87,000 in India. Thanks to
the corporate social responsibility (CSR) initiatives of FMCG major Proctor
& Gamble (P&G).

P&G's CSR programme in partnership with CRY empowers consumers


across the country to participate and support the education of
marginalised children in India via a simple purchase of any of P&G's
products.

P&G India closed Shiksha '08 with the largest-ever contribution of Rs 3.2
crore to CRY and other initiatives reaching out to over 87,000 children in
the coming year.

With a motto of 'Padhega India, Badhega India', Shiksha believes that the
secret to a brighter India lies in children attaining their right to free,
quality education.

Page
12
Irrespective of sales, every year P&G commits to a minimum of Rs 1 crore
to its partner CRY, which will be allocated to projects focused on enabling
the child's right to education.

These funds will be deployed to the established Shiksha projects that work
with the state education departments to re-look at existing education
policies; create awareness to build more schools with better
infrastructure, and more basic amenities like water, electricity, and
health; and enrol more children into formal schools and promote retention
in schools.

Project Shiksha is part of P&G's global philanthropy programme P&G Live,


Learn and Thrive' that focuses on the development of children in need
across the globe, with Education of Children via Shiksha being the priority
in India.

About CRY:
CRY is a leading Indian non profit organization working for child
rights. CRY believes that every child has a right to survival, protection,
development and participation in an environment of equal opportunity.
CRY’s approach to sustainable development is based on the firm belief of
community empowerment and citizen action whilst holding the state
responsible for ensuring children’s rights. CRY’s objective is to
demonstrate that real, sustainable change is possible through the building
of grassroots models and through concerted advocacy for child rights.
Started in 1979, today CRY partners 157 child development projects
across India. To celebrate its 25th year CRY has initiated an awareness
campaign on the rights of the child. It is represented by a symbol, the
pinwheel called the ‘Free a Child Chakri’.

In keeping with the global philosophy of continuous development of


the community, P&G in association with Sony Entertainment Television
launched an education initiative ‘Shiksha – Secure Your Child’s Future’
across the country. In order to ensure P&G reached the non-Hindi
speaking audience, a tie-up with three other channels in the south was
undertaken. In the north, west, east, Karnataka regions – Sony TV telecast
the promotion and announced winners on its No. 1 soap opera Kkusum, in
Andhra Pradesh – Maa TV promoted Shiksha with Todi Kodallu, in Tamil
Nadu – Jaya TV promoted Shiksha with Sahana and in Kerala – Asianet
promoted Shiksha with Snehadooram.

Page
13
By purchasing packs of Vicks, Whisper, Ariel, Tide, Head & Shoulders and
Pantene between 21st April – 12th June 2003, this unique education
promotion allowed a mother to win Rs. 2 lakhs towards Graduate
Education Fee of one child (24 such Prizes), or Rs. 5,000 towards Next
Year’s Tuition fee for one child (96 such Prizes), and a number of
Consolation Prizes, all courtesy P&G. All Shiksha prizes could be gifted and
were transferable, in case the winner is not a parent or, if his/her child
was above 21 years of age.

Shiksha received a positive response from all parts of the country. This
promotion was greatly appreciated as purchase of any P&G product
allowed one to win education for his/her child.

• REBUILDING LIVES IN EARTHQUAKE HIT BHUJ(2001/2002)


P&G in partnership with Swayam Shikshan Prayog (SSP) opened four
Community Resource Centers for the earthquake victims in the Chakasari,
Paggivand, Hanjiya and Jodhpar vands (hamlets) of Rapar Taluka, Kutch
District, Gujarat. The Community Centers provide basic education for
children; training on building earthquake-resistant shelters and has
supported the formation of 22 Women's Savings Groups which contribute
towards an income-generating fund, for future entrepreneurial activity.
The P&G-SSP project positively impacts 25 villages, 3750 families and
22,500 people and helped mobilize women’s groups and communities in
Gujarat for their long-term sustainable development. Credit fund will be
provided as a revolving fund to self-help groups.
The operational cost for each Centre is Rs, 25,000 met by P&G. The
centers have been built from a Gujarat Earthquake Relief Fund created
after the earthquake of 26th January 2001 by employees of P&G India,
Brussels, Japan, Canada, among others and the Company contribution.
P&G employees also made contributions directly to the Red Cross Society
for other rehabilitation work in Gujarat.
In addition, P&G is currently working on forming women’s micro-
credit groups to ensure the sustainability of these community centers and
to further empower these women and increasing the number of
community centers from four to seven.

• PROJECT POSHAN – FIGHTING MALNUTRITION IN INDIA


(2000)
P&G and UNICEF launched Project Poshan to combat malnutrition in
India. India has 40% of the world’s malnourished children. POSHAN
targeted three key projects: an Adolescent Girls’ Initiative to educate girls
in Mumbai slums on health problems and improve their lives with Anemia

Page
14
prevention through IFA tablets; a Women’s Parenting Network in Chennai
to provide information on care during pregnancy; and Day care projects in
Jaipur, which focused on increased food intake and micro-nutrients. Once
again, P&G raised Rs. 50 lakhs by contributing Re. 1/- from sales of large
size packs of Ariel, Whisper, Head & Shoulders and Pantene sold in the
months of May, June and July 2000.

• PROJECT OPEN MINDS – EDUCATING INDIAS WORKING YOUTH


(1999)
P&G in partnership with UNICEF launched Project Open Minds to
support and educate children across the Australia, ASEAN and the India
(AAI) region. According to UNICEF, only 55% of the children of India
complete primary education. The support that P&G provided was in terms
of money and publicity. For every large size pack of Vicks VapoRub,
Whisper, Ariel Power Compact, Head & Shoulders and Pantene purchased
by consumers during November 1999 to January 2000, P&G on behalf of
consumers contributed the cost of one day’s education of a working child
to the ‘OPEN MINDS’ fund. In India P&G raised Rs. 1.25 crore for ‘OPEN
MINDS’ which was donated to UNICEF in February 2000

• PROJECT DRISHTI – THE FIRST EVER SIGHT RESTORATION


PROGRM IN INDIA(1999)
P&G tied up with the National Association for the Blind (NAB) to
launch Project Drishti and restore eyesight to 250 blind girls through
corneal transplant operations. FOGSI (Federation of Obstetricians and
Gynaecologist Societies of India) and UNICEF had declared 1999 as the
Year of the Adolescent Girl. On studying the problems of the blind girl,
P&G realized that, what better way to celebrate the FOGSI-UNICEF, Year of
the Adolescent Girl (YOGA) than to attempt to give sight to as many blind
girls that the company could. Till date 138 sight restoration operations
have been successfully conducted across the country.

• PROJECT FUTURE FOCUS - THE FIRST EVER ROUND WRITE IN


CAREER GUIDANCE SERVICE (1998)
P&G in association with Resource Management Group (RMG)
launched a 365 days Free Write-In Service ‘P&G Future Focus’ for the first
time to the youth of India, where a panel of professional Career
Counsellors would send personalized answers to letters within 15 days of
the receipt of the queries.

• PROJECT PEACE - ENVIRONMENTAL EDUCATION PROGRAMME


(1996)

Page
15
P&G launched PEACE – a unique Environmental Education Program
for children in schools across Bombay and Thane representing a cross-
section of economic backgrounds. Children were exposed to a fascinating
account of the Indian environmental scenario. The Multiplicity of Eco-
Systems in India, Air around Us, Water, Solid Waste and Adopting
Conservation in our Lifestyles were the topics dealt with using interesting
media like music, games, project-work, slides, video films, group
discussions, etc.

CSR ACTIVITIES AT GLOBAL LEVEL


Pursuing a Sustainability Business So how are companies trying to
meet this challenge? P&G has worked with UNICEF to combat
micronutrient malnutrition. Over half a billion people worldwide are
deficient in iodine, iron and vitamin A, resulting in stunte growth, impaired
learning, increased child and maternal mortality. 250,000 children go
blind every year. To address this problem, P&G developed a powdered
drink product, NutriStar, which effectively delivers the missing
micronutrients. The product was clinically Business Council for Sustainable
Development Report,April 2001. WBCSD, Geneva9 WBCSD, 2002.
Sustainable Livelihoods – the business connection. World Business Council
for Sustainable Development, Conches, Switzerland. tested in Tanzania,
test marketed in the Philippines,then marketed in Venezuela.Every year,
over three million people, many of them children, die from diarrhea. One
billion two hundred million people are without access to safe drinking
water, yet safe water would reduce diarrhea incidence by about one-third.
The UN Millennium goal equates to delivering safe drinking water to
125,000 new people every day. The consumer marketplace is one of the
few places where one can envision creating that kind of scale. Yet it has
been largely ignored until now in the pursuit of safe drinking water.
Several years ago, P&Gpurchased the PuR brand, a U.S. based inhome
water purification business. We are developing low cost technologies, and
businessmodels to bring those technologies to consumers,that will be
effective on the more serious water problems in the developing world.
Similarly, over 2 billion people are without adequate sanitation, and better
hygiene canreduce deaths caused by diarrhoea by up to 33%. P&G has
been in the bar soap business for decades, and our Safeguard brand,
working in developing countries with local health ministries to create
awareness about the importance of hygiene, is showing how public-
private partnerships can reach far more people with health messages than
either the ministry or we could do individually. Individuals will change
their consumption practices when they realize they can improve their
quality of life. In many parts of the world, dental hygiene is virtually

Page
16
unknown, or poorly developed. P&G has partnered with national
organizations in many countries, including China, Poland and Russia to
raise awareness. Clinical studies in Poland and Russia showed a 60%
reduction in cavities. In the process, we laid the foundation for a new
market where none existed before. There is also the possibility to link
developed world markets to developing world needs, through cause-
related marketing initiatives. P&G’s Fairy brand organized an initiative
Finding the Sustainable Development Business Case 2-56 George
Carpenter and Peter White Corporate Environmental Strategy:
International Journal for Sustainable Business with UNICEF to help combat
tuberculosis in West Africa. For every bottle of product purchased, P&G
paid for a TB vaccine to be delivered by UNICEF where it was most
needed. This initiative was run in Spain and Portugal, then twice in the UK,
and in total delivered some 11 million TB vaccines, while building P&G’s
business. These product and business model innovations can significantly
improve lives, and help build business. This is not business as usual and it
is not philanthropy; it is building social, environmental and economic
sustainability into business in a strategic way. Developing new products
and new business models for developing markets present significant
challenges, however, and not all initiatives succeed. Our Nutristar product,
for example, was intended for developing world markets, yet was
developed with a developed world mindset. It included all of the available
technology, rather than being aimed for a low purchase price.
Consequently it proved impossible to reach all of the consumers who
needed the product. Combined with political instability in Venezuela which
prevented us from refining our business model, this led to Nutristar being
withdrawn from test markets. Managing Sustainable Development The
importance of the business case for delivering sustainable development
cannot be overstressed. If we rely on philanthropy to deliver improved
quality of life around the world, it will only go as far as the funding will
allow. If we rely on the moral case alone, it will be restricted to those
companies driven by high ethical standards. If there is a real business
case, however, then such initiatives will continue to grow and spread, and
we can start to achieve the considerable scale that is needed to deliver
against the millennium development goals. Once there is a real business
case, the water will start to run downhill; until now we’ve been trying to
push it uphill. The real business case requires that companies link
opportunity with responsibility. If the focus stays limited to just areas of
corporate responsibility, the oft-quoted view that sustainability provides
long term value, but short term costs, will prevail. It can also cause
problems with how sustainability is managed within companies. If it is
seen only as a responsibility, sustainable development will be treated as
an issue to be managed, rather than as a business opportunity to be

Page
17
pursued. Consequently, it will be managed by a corporate function, much
as health, safety and environment has been managed in the past. Only if
responsibility is linked with opportunity is sustainable development likely
to get the attention of senior management and become built into
businesses in a strategic way. In Conclusion to find the real business case
for sustainable development, companies need to find ways to link
opportunity with responsibility. They need to:
• Turn attention from just eliminating negatives to creating positives;
• Move beyond eliminating “non-value” to creating “new value;”
• Not just look for market-based solutions, but see the market itself as a
solution; and
• Evolve from seeing the value of sustainability as removing the risk from
business, to seeing sustainability as their business. In no way do we claim
that we, or our company, have fully figured out the business case for
sustainable development. However, we do know that a robust business
case is necessary to deliver a better quality of life on the scale needed to
achieve the development goals that the world has set.
When Procter & Gamble had to promote Biomat, a laundry detergent in
Israel, they were in a quandary. Their primary audience were the Jews
who were orthodox to the core. They shunned conventional mass media
like TV & radio as they saw it as bad influence. P&G decided to appeal to
their motivation for charity - to help the needy. The initiative included a
road show of a mobile Laundromat - people were urged to give their old
clothes for charity. These clothes would then be cleaned at the
Laundromat (using Biomat, of course) and then given to the needy.

While this may not be the conventional CSR initiative (long term,
cause-related) other such examples abound. In India, Sakthi Masala has
been consistent in its CSR effort to help the disabled. They offer
employment opportunities and rehabilitation centres for the disabled. P&G
India's CSR initiative - Shiksha - has been successfully contributing to CRY.
They motivate consumers to purchase certain brands of P&G - a part of
the sale proceeds are then contributed to the CR fund.

CSR in Pakistan:
Starting with the company’s health-related activities, it certainly has done
a magnanimous job. Whether it’s infant health, issues faced by adolescent
girls or mothers, the company has initiated awareness programs for each

Page
18
of them. The CSR activity is carried out on a national scale unlike Unilever
Pakistan and is brand-oriented. Like Safe Guard Mother Education
Program, Sehat-o-Safai Program, Always Agahi Program or Pantene Solo
Program, among others. The company has recently launched Khwabon
Sey Aagey initiative in collaboration with the Pakistan Medical Association.
The program is aimed at saving the lives of new born babies.

Similarly, in the education sector, the company is running many


development programs. The initiatives includes building and refurbishing
of schools including those in the earthquake ravaged areas.

Speaking of media campaigns, the company is way ahead and is breaking


many new boundaries. Commander Safeguard was the most popular TV
campaign in the history of Pakistan. The P&G team devised a new
superhero type character and created excellent animations at par with
international standards. The animation films, propagating health and
cleanliness awareness, became a craze in the kiddos and not-so-kiddos
alike.

Having written a lot of praise for the company and that too sans any
monetary benefits, now I’ll shift my gears towards some positive criticism.
All of the P&G health and awareness campaigns involve the participation
of the customers. Involvement of the customers is good but the company
is actually promoting its products and increasing sales by advertising its
CSR efforts.

The trend started more than a decade ago with Anwar Maqsood and some
other showbiz personalities flaunting Ariel as the best detergent as it’s
helping building schools for the underprivileged. The advertisement said
that the more Ariel packs you buy the more money will go into school
building. That was a new advertising gimmick then and people responded
very heavily making Ariel the most selling detergent of the time.

Given the huge success of Ariel education campaign, P&G made it a core
strategy to never start any ’socially responsible’ project unless and until
there are some prospects of increasing the sales of a particular product.
Now I can’t decipher why the world’s biggest FMCG company, which is
earning millions from Pakistan as well, is so tight-budgeted that it can’t
spend a million or two for a social cause? At least Unilever is not
promoting its products for its so-called CSR projects regardless of their
microscopic nature. Can someone please bring some CSR sanity to the
P&G top shots?

Page
19
P&G's Partnerships with NGOs to Deliver Water
Purification Product:
In 2003, a $20 million R&D and marketing project at Procter & Gamble
(P&G) had reached a financial impasse after eight years of work. A decade
earlier, the company had spotted an opportunity to supply a water-
purifying product to the developing world, which, it was hoped, would
increase the company's share of the mass consumer market in the
emerging economies.

At the same time, the company believed it could save lives by providing a
simple way to purify household and drinking water. Unsafe water supplies
and inadequate sanitation kill more than 3 million people every year,
making this problem collectively more lethal than Aids.

The project stalled in late 2003 when it became clear that the financial
returns for selling a powder product called PUR Purifier of Water did not
justify further investment in commercial terms. At this point, P&G changed
tack, transforming the project into a corporate social responsibility (CSR)
programme. Alan Lafley, P&G's president and chief executive, moved it to
the corporate sustainability department (CSD), itself a new division.
Thereafter, the company developed partnerships with not-for-profit
organisations in social, health services and humanitarian relief to market
and distribute the product more effectively.

Procter & Gamble's partnership with non-profit organisations is proof that


local markets can be won over to new products.

In 2003, a $20 million R&D and marketing project at Procter & Gamble
(P&G) had reached a financial impasse after eight years of work. A decade
earlier, the company had spotted an opportunity to supply a water-
purifying product to the developing world, which, it was hoped, would
increase the company's share of the mass consumer market in the
emerging economies.

At the same time, the company believed it could save lives by providing a
simple way to purify household and drinking water. Unsafe water supplies
and inadequate sanitation kill more than 3 million people every year,
making this problem collectively more lethal than Aids.

The project stalled in late 2003 when it became clear that the financial
returns for selling a powder product called PUR Purifier of Water did not

Page
20
justify further investment in commercial terms. At this point, P&G changed
tack, transforming the project into a corporate social responsibility (CSR)
programme. Alan Lafley, P&G's president and chief executive, moved it to
the corporate sustainability department (CSD), itself a new division.
Thereafter, the company developed partnerships with not-for-profit
organisations in social, health services and humanitarian relief to market
and distribute the product more effectively.

P&G Pakistan tried the commercial route once more in 2004, but the
results were not encouraging. In 2005, P&G officially announced its new
non-commercial approach and its decision to sell PUR at $0.04 per sachet,
the cost of production. PUR would be sold at cost to non-profit partners,
but a large number of donations of the product would be paid for by P&G
corporate philanthropy and employee donations.

The new non-profit strategy proved a success and by the end of 2006,
P&G had sold 57 million sachets, at cost, to humanitarian organisations, in
contrast to the mere 3 million sachets sold during the commercial phase.
The biggest lesson of this study is that P&G knew when to close the
commercial venture and when to leverage partnerships with non-profit
organisations to fulfill a broader social need. It did so with clear
expectations about the cost of making it sustainable, meaning that PUR
would be a non-profit venture - driven by a social mission rather than
profits. It left the social marketing - educating the target customer about
the risks of untreated water and distributing the product at an affordable
price - to the non-profit organisations.

P&G first researched new water-purifying technologies in 1991, following a


major outbreak of cholera in Central America. P&G's diluted chlorine
bleach water-purification technology was not well received by all its target
customers in the region, some of whom said that the water looked dirty
and tasted of chlorine. In 1995, the company signed a collaborative
research agreement with the US Centers for Disease Control and
Prevention (CDC) to test and develop water-purification products.

After joining forces with CDC, P&G tested a low-cost water filter in
Guatemala, but local people complained that the filters clogged up too
quickly. P&G then reverse-engineered the municipal water treatment
process, leading to the discovery of the powder product.

PUR is a sachet of powder, which when swirled into a 10-litre bucket of


dirty water results in clean and safe drinking water. It was launched in

Page
21
2000, priced for a low-income commercial market at $0.08-$0.10 a
sachet. Independent studies show that it is effective in reducing the cases
of water-borne disease, with an upper range of 90% and an average
disease reduction rate of 50%. However, after three years of market tests
in Guatemala, Morocco and Pakistan, the product had not made a profit.
Mixed results came back in 2003, with repeat purchase rates of 5%, 10%
and sometimes 25%.

The decision then facing Lafley was clear: push ahead on the PUR
initiative, given its public health benefits, or terminate the initiative, given
its costs and low returns. Employees who had worked with the product,
however, found it difficult to shut down a product line that held so much
promise. Greg Allgood, who worked in the consumer health products unit,
recalls an internal memo: "The memo had no conclusion about what to do
with the product, but it was very clear that no product engaged our
employees and our stakeholders - customers, governments, UN groups,
NGOs - like this one."

PUR was relaunched as a CSR product in 2004 within the Safe Drinking
Water Alliance, a partnership comprising P&G and the Johns Hopkins
University Bloomberg School of Public Health's Center for Communication
Programs (CCP), Population Services International (PSI) and UK charity
Care. The Safe Drinking Water Alliance was the first in a series of
partnerships between P&G and non-profit organisations featuring PUR and
was designed as a pilot programme to test three marketing strategies:
social marketing, commercial marketing and disaster and humanitarian
relief networks.

Now working in P&G's CSD unit as director of the Children's Safe Drinking
Water (CSDW) programme, Allgood says: "Our purpose as a company is to
improve the lives of the world's consumers. Our brands, such as Pantene,
Oil of Olay, Always, Tide and Ariel, touch consumers every day in ways
that meet their needs. Our focal philanthropy programme, the Children's
Safe Drinking Water programme, makes our purpose as a company
tangible for our employees and critical stakeholders."

Simple in theory, but finding the right formula is often more difficult. Local
barriers to entry are often tricky to overcome in 'bottom of the pyramid'
markets. Certainly, P&G discovered that traditional marketing methods
did not work; consumers were suspicious of new products that required
them to change the way they managed their lives. During 2004, it began
a new testing strategy. Putting the product into the CSD unit and turning

Page
22
it into a non-profit venture gave enthusiasts such as Allgood the room to
explore alternative marketing.

In a Nutshell:
• P&G, a giant in FMCG industry, is one of the most efficient
corporations on the global platform
• P&G’s success is largely attributed to its corporate
strategies and the management decisions
• A fierce competitor in its field, P&G is also environmentally
conscious and tries to do minimise the loss/harm caused
due to their production processes
• It constantly makes sure to have its technologies updated
and processes complying all the laws and regulations thus
making sure that its ethical responsibilities are met with
• On the CSR front, we can see that P&G has constantly
been active in being SOCIALLY CONSCIOUS AND
CONTRIBUTING and a responsible CORPORATE CITIZEN
• The various CSR activities carried out by Procter and
Gamble demonstrate the diverse issues that they have
tried to solve and valuable contributions they have made
• Finally, if we look at their activities and their
Mission and Values they tally to a great extent
which tells us that they always have their goals on
their mind while carrying out its business
operations

Page
23