2Sustain

Late last month, the Procter & Gamble Company released its 2008 Sustainability Report, titled “Designed to Innovate … Sustainably.” It’s comprehensive, easy to read, and loaded with examples of how corporate sustainability initiatives can drive innovation –and improve the bottom line.

A year ago, P&G established five strategies designed to integrate sustainability into its day-to-day business. The new 105-page report, prepared using the Global Reporting Initiative’s (GRI) G3 guidelines, describes the company’s progress in each of these five key areas:

• Products. P&G is committed to innovations that improve the environmental profile of its products. In F2008, the company launched seven sustainable innovations, such as liquid laundry detergent that’s concentrated “2X.” These new products generated more that $2 billion in sales, and the company’s goal is to reach $20 billion in cumulative sales of these products over five years.

• Operations. By 2012, P&G wants to deliver an additional 10% reduction (per unit of production) in energy and water use, CO2 emissions, and waste disposal, completing a 10-year plan to reduce at least 40% in these areas. Over the past year alone, the company cut energy use by 6%, CO2 emissions by 8%, waste disposal by 21%, and water use by 7%. How? By incorporating sustainability into the construction of new manufacturing sites and by improving existing facilities. (For instance, a P&G plant in Pennsylvania uses a heat recovery system that reclaims enough energy to power about 12,000 households each year.)

• Social Responsibility. P&G’s global social responsibility program, “Live, Learn and Thrive,” reached more than 60 million children this year. The company opened its 140th elementary school in rural China, delivered its one-billionth liter of clean drinking water through its Children’s Safe Drinking Water program, and partnered with UNICEF to fund more than 50 million doses of maternal and neonatal tetanus vaccines in the developing world.

• Employees. P&G is engaging and equipping employees to incorporate sustainability principles into their everyday work. The company has reduced travel by supporting video collaboration, instead.

• Stakeholders. P&G is an active part of the Clinton Global Initiative and other social responsibility programs world-wide.

The P&G 2008 Sustainability Report has page after page of details about each of these five points, and I couldn’t help but be struck by how well the company has tied innovation to their sustainability efforts. For example, one of the company’s biggest success stories has been the development of a liquid laundry detergent portfolio that is concentrated “2X.” Each year, these new formulas now save more than 500 million liters of water. Plus, since they require less packaging, these new products also reduce CO2 emissions by more than 100,000 metric tons annually, save more than 15,000 metric tons a year in packaging materials, and require more than 40,000 fewer truck loads a year in shipping.

P&G went on to couple these smaller products with new forecasting techniques designed to better manage product inventory conversion at retail stores. According to the report, the result was significant waste reduction and “unprecedented low levels” of unsalable product.

I’ve written about this topic in earlier posts, but here P&G proves it again: the drive for sustainability can inspire innovation, which in turn can contribute even more to long-term business success and profitability.

P.S. In other CSR report headlines, Ringier AG, Switzerland’s largest media company, also released their 2008 CSR Report last month. Although the company has been engaged in reporting its sustainable corporate policies for years, this is the first time that Ringier has used GRI standards. Take a look. A discussion about the environment begins on page 26 and includes interesting insights about how a media company tackles environmental issues, such as paper production, pollution at printing plants, and product distribution and delivery.