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Weighing Vision against Goals: P&G Announces New Sustainability Focus

By Melissa J. Anderson

In a webcast yesterday, P&G announced its vision for sustainability moving forward. Chairman, CEO, and President Bob MacDonald explained that the vision is about building long term sustainability for the company, in order to better fulfill its mission of “touching and improving” its consumers’ lives.

MacDonald explained, “This company has been around for… almost 173 years, and we want to be around in another 173 years. We need to take care of the world in which we operate.”

The vision includes powering plans with 100% renewable energy, using 100% renewable or recycled materials for products and packaging, producing zero consumer or manufacturing waste going to landfills, and making products consumers will love, while maximizing conservation.

An impressive vision – but it is just that. A vision. As MacDonald indicated during the webcast, it may not be achieved in 10 years… or even 30. In fact, there is no timeline for the vision.

When it comes to driving actual change, what companies need are goals – numbers-based, metric driven goals, against which executives and managers are held accountable.

P&G’s Real Goals

This is not to say that P&G hasn’t set an reasonable laundry list of goals, for example, replacing 25% of petroleum-based materials with sustainably sourced renewable materials, manufacturing products enabling 70% of washing machine loads to use cold water, and reducing 20% of packaging per consumer use, by 2020. On the operations side, by 2020, P&G hopes to power its plants with 30% renewable energy, reduce manufacturing waste to less than .5%, and reduce truck transportation by 20%.

These goals are certainly more in line with industry efforts, and the company is already making strides toward meeting these numbers – even if it means taking a hit in terms of quarterly growth. When pressed on the issue of investor focus on quarterly returns, MacDonald replied, “The kind of investors we encourage are ones who believe in the long term goals” of the company.

But, he continued, “[sustainability] doesn’t always have to cost more money,” adding that he hoped the goals would enable the company to work toward greater efficiencies and contribute to its bottom line.

The company pledges to report on its progress toward these goals in its annual sustainability report. The company also announced that it will work with the World Wildlife Fund to set and measure its progress.

Additionally, while it doesn’t seem that executives will be held accountable to achieving these goals on a strictly numbers-focused basis, McDonald said, “Our leaders are measured on their ability to execute the mandates of the company,” and he explained, this initiative is one of those mandates.

So what does it all mean for P&G?

The vision is a bit outlandish and open-ended, seemingly designed to capture hearts (but maybe not minds). The goals are definitely more modest, but – backed up by a pledge toward transparent reporting and executives who seem to believe in the value of sustainability – they’re a good starting place.

The fact that the executives won’t really be held accountable to the goals based on their progress is certainly a weak indicator of the company’s commitment to sustainability. But, that P&G is working with a third party, WWF, to help set and measure progress is does add some weight to the program.

People-Powered Sustainability Innovation

When asked how the sustainability vision contributes to employee engagement, VP of Global Sustainability Len Sauers said, “Our employees are our biggest asset when it comes to sustainability. Our people are going to come up with innovative ways to achieve our goals.”

He said, “I believe all the issues of sustainability will be solved by innovation.”

MacDonald continued, “There are 127,000 P&G employees around the world, and they want to contribute to something bigger and something that inspires them.

Carter Roberts, CEO of WWF US, who said he began his career at P&G, explained that sustainability initiatives help “attract and retain the best and the brightest.” Today’s workers, he said, “do not just want to go to a company that is all about delivering profits.” They want to work someplace that is addressing the issues facing the world.

“Increasingly business schools are packed with people who not only want to be business leaders, but who want to leave a legacy… that is meaningful to their families as well.”

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