According to a Financial Times article, P&G sets ‘greener’ products targets, “Procter & Gamble has set itself a target for environmentally targeted products, marking what senior executives describe as a major evolution in the corporate philosophy of the world’s largest consumer products company.”
Wow! This is an interesting proposition, and if anybody out there thinks the green movement is a flash in a pan, well, the world’s largest consumer products company, doesn’t, and it’s doing something about it. Every company doing business today should heed this call to action, too, because P&G is pointing to the future with its new positioning.
That’s what I said: new positioning. Get this: P&G is also changing its purpose statement, which currently reads that the company wishes to “improve the lives of the world’s consumers with its branded products and services”–by adding this important language–”now and for generations to come.”
This kind of reminds me of the positioning of a much smaller, but vibrant company, S.C. Johnson, and its environmental statements. Proving once again that companies large and small can make a positive impact on the environment, even as they ring up sales and profits.
Lest anyone out there thinks this is all hot air, P&G CEO AG Lafley is a very purposeful chief executive; one with definite goals and a way of achieving them. According to the article, “It is believed to be the first time a consumer products company has set itself a financial target for developing and selling new “greener” items, rather than for waste or energy reduction.”
Susan Arnold, head of P&G global brands described this as “a huge change” and went on to state: “We have to develop environmentally sustainable products that delight the consumer–they want us to deliver the same great products at the same great prices.”
P&G plans to add a new statement into its operations. The company intends to “incorporate sustainability into our products, packaging and operations.” The company is also working to reduce its waste, energy and water consumption by 10% by 2012, resulting in a projected 30% reduction over 10 years.
Kudos to P&G. What do you think of this development? Will you be more likely to purchase products from a company that incorporates more environmentally friendly policies?
Ted,
Thank you for sharing this important story. Kudos to P&G and to all other businesses savvy enough to see the possibilities and to respond to both a tremendous business driver and a way to make the work a better place to live and work.
Lewis,
Agreed. What’s great about this is that P&G and S.C. Johnson are offering a viable business blueprint to other companies, large and small. By responding to consumers’ needs AND concerns, and by doing business in a smarter, more environmentally responsible manner, companies can enjoy even greater sales and profits in future. And they can do it with greater consumer buy-in. I call that a win-win proposition.
Ted, this is a big deal, especially the “financial target for developing and selling new “greener” items.” Do you think after a prescribed timeframe, I think they said five years, they will “report” out to the community regarding whether they have met this target?
I would think so, Paul. Being a publicly traded company, I think P&G is used to full disclosure. Over and above that, I think top management there is pretty open and accessible to discussing these matters. You’re right. This is a “big deal”, and should have a large impact in the consumer products industry. Thanks for weighing in.
Ted – I think that P&G “gets” green. I agree that they can be successful since they appear to be integrating it into their financial targets from the top-down.
On the other hand, I’d be surprised if Barneys New York current “green holiday” promotion is anything more than a promotion. Judging my their ads, store windows, and in-store experience, BNY seems to be just jumping on the green bandwagon vs. P&G’s goal to bleed green.
Anna Maria,
Savvy consumers like you will always detect any phoniness in marketing campaigns. If companies think they’re going to jump on the “green” bandwagon to beef up sales, and be successful at it, they ought to think again. As you say, companies like P&G have put thought into their environmental initiatives, and they’ve included it into their new mission and positioning, their newest product offerings and their financial goals. There’s a world of difference between what they’re doing and what other companies claim to be, without any real substance. Thanks for adding something important to this discussion, Anna Maria.
You said, “The company is also working to reduce its waste, energy and water consumption by 10% by 2012, resulting in a projected 30% reduction over 10 years.”
They are going to benefit the environment AND their bottom line. Those are outstanding cost savings.
This is great news, Ted. Seems like the green “trend” may be with us for a while. Let’s hope it moves from a trend to a full-time practice.
Exactly, Neil. There’s no reason why being environmentally responsible can’t benefit the bottom line. Reduced consumption, viable consumer products that work and reeducation for employees and consumers are key here.
Agreed, Elaine. With some of the largest companies in the world not only extolling the virtures of going green, but leading by example, I’m hoping there will be a substantial trickle-down effect. Let’s not forget that Wal-Mart hired an environmental activist to implement an employee based buy-in to the company’s new policies, for example. Now with P&G getting on board, and more companies engaging in more than talk, let’s hope more businesses become good corporate citizens. Thanks for adding your insights, Neil and Elaine.
Interesting information. This is perhaps the bell weather that lets us know that going green is rapidly becoming a cost of doing business. on the other hand, the new mission statement certainly gives P&G some “wiggle room”…rather than targeting a specific green initiative – that enables the company to institute those green initiatives that benefit the bottom line…smart business decision – go green without upsetting the stockholders.
Yes, you’re right, MC. There are costs associated with “going green”. But, you might look at the potential rewards, as well. The old business adage “You have to spend money to make money” applies here, I think. In the long run, the company feels it can be a good corporate citizen and continue to be profitable in the process. That much is clear.
In the case of P&G, I wouldn’t be a bit surprised to see the company take on more green initiatives as they go along, too. They seem to have very proactive leadership as a company. Thanks for adding an important element to the conversation, MC. I appreciate it.
Ted,
My dad, an engineer, always says that a lot of environmental problems are caused by bad engineering.
He has said this for as long as I can remember. Now, this seems to be a mainstream idea that you can design and develop better things. You don’t waste energy, etc., and you save a lot of money.
It also seems, Neil, that we used to make things without giving any thought to how much energy or raw materials it took to do so, or how much pollution it caused. Now, we finally get it. . .there is a finite amount of energy resources and raw materials to make things with. There are also consequences to manufacturing products in terms of pollution and waste streams. Let’s hope we can continue to work to make things smarter and better than we used to. Thanks for your input, Neil.
Yes, I am going to bring this post to the attention of my dad who is semi-retired. He now works at a university.
One of P&G’s biggest revenue earners is from its detergents business. Detergents as such carry many chemicals harmful to the environment. All the washwater from millions of homes using detergents gets dumped right into rivers or the sea. I hope P&G comes up with a detergent less to the environment.
You are right, Sureet. The laundry care division is one of P&G’s mainstay businesses. There is a way to manufacture both laundry detergents and household cleaners that are effective and do minimal, if any damage, to the environment. I’m betting that P&G will find a way to do that, also. Quite a few years ago, phosphates were a heavy presence in laundry detergents, Sureet. Tide, P&G’s most successful laundry detergent brand, was loaded with phosphates. These were exceptional pollutants. Due to public outcry, the phosphates came out and Tide remained the most dominant detergent in the marketplace, so we know this can be done.
Public pressure will push all manufacturers to reorient their thinking and their products to become cleaner and safer. Thanks for a great observation, Sureet. You’ve added an important dimension to the conversation.
Right, Sureet, think of all the billions of people’s washing water going into rivers, etc. People may not realize how dependent we are on having clean water.
I think it’s great for any company to have hard targets for something like this – it suggests seriousness about it – but consider that they are pledging that they’ll make about a quarter of their revenue with products that are 10% less damaging that what they have now. When you consider the enormous impact of laundry detergent alone, plus the approximately 350,000 pounds of toxic chemicals they release into the air each year, this isn’t so much P&G “going green” as “trying to be a bit less bad.”
I don’t want to sound overly cynical; they have to start somewhere. If the next thing we see is ads about the initiative, it will stink of greenwashing. If they just go do it as quickly as they can and move on to a more aggressive goal, however, it will really say something about them.
I’m skeptical, obviously, but we’ll see what happens next.
Your comments are right on the money, John. Others have posted similar comments on this and other posts concerning companies’ proclaimed green stances. As the old adage goes: “the proof is in the pudding”. I’ll also say this: when a company that is as high profile as P&G goes about setting up goals they intend to meet, there is an air of commitment about the endeavor. The companies that are launching marketing campaigns without any underlying change in position and stated goals, are far more suspect. Those are the businesses that appear to be greenwashing the public. And the truth will out.
As you say, we’ll have to see how this develops with P&G. Thanks for weighing in, John.
Yes, if it turns out they are greenwashing, I would bet that a high profile company like P&G would get a lot of bad press.
But John’s point is well taken: they are taking baby steps. Baby steps are better than nothing, though, as momentum has to start somewhere.