Procter & Gamble Partners with EPA to Help It Achieve Ambitious Long-Term Green Goals
In this election year, the U.S. Environmental Protection Agency (EPA) is taking a lot of heat as being the enemy of American manufacturing, but some companies are actually approaching the EPA for assistance. The latest organization to form a cooperation with the agency is consumer products giant Procter & Gamble, which is in the early stages of setting and meeting goals for an ambitious corporate sustainability plan.
P&G has partnered with the EPA’s National Risk Management Research Laboratory (NRMRL) with a goal of developing a better modeling and assessment tool for sustainable product design, material sourcing and manufacturing. P&G, whose litany of brands include Tide, Pampers, Bounty, Charmin, Duracell, Crest, Gillette and numerous others, has signed a five-year cooperative research and development agreement with the EPA that it hopes will help it shrink its environmental footprint and meet its promised long-term sustainability vision.
P&G’s green goals, set in 2007 and then renewed and revised in 2010, are numerous. Chief among them are promises to begin using 100-percent sustainable energy to power its plants, using 100-percent renewable or recycled materials for products and packaging, attaining zero consumer and manufacturing waste sent to landfills and boosting the number of products that conserve resources while meeting consumer needs.
Of course, P&G is a long way away from some of these goals, which were set in stages. The first set of five-year goals that the company hopes to meet by the end of this year include at least $50 billion in cumulative sales of what it calls “sustainable innovation products” (SIP, and the sales target for which was originally set at $20 billion but bumped up in 2010).
Sustainable innovation products are defined as those with a significantly reduced (more than 10 percent) environmental footprint compared to previously offered products or current competing products. In mid-2011, the company reported $40 million in sales of SIP in its annual progress report.
Another set of five-year goals, to deliver an additional 20-percent reductions (per unit of production) in energy consumption, carbon dioxide emissions, disposed waste and water consumption, are either within reach or have already been attained. In mid-2011, P&G reported a 16-percent reduction in energy consumption and a 12-percent reduction in carbon dioxide emissions. The company has achieved its goals for waste and water disposal early, reducing waste disposal by 57 percent by 2011 and water usage by 22 percent.
The next set of goals, a 10-year set to be completed by 2020, include replacing 25 percent of petroleum-based materials with renewable materials, reducing packaging by 20 percent (per consumer use), powering plants with 30-percent renewable energy and reducing truck transportation by 20 percent, all using 2010 as the baseline year.
P&G has already lowered packaging and plastics use by switching to renewable, recyclable and biodegradable plastics made from sugar cane in some packaging for the company’s Pantene hair care products and Cover Girl and Max Factor cosmetics. The company has also increased the concentrations in the formulations of its laundry detergents, allowing it to use smaller, lighter packaging and create less consumer waste.
P&G is also paying attention to the sustainability of its offices and manufacturing facilities, announcing in 2011 that all of its new corporate
facilities will be designed to meet LEED-certified standards. The company’s Taicang, China, manufacturing plant — the first P&G site to register for LEED certification — hits a number of key LEED credits, including maximizing water reuse, minimizing water consumption via waste-stream recovery and harvesting rainwater for on-site landscaping efforts. The new facility’s exterior lighting will be provided by a combination of solar energy and high-efficiency mechanical equipment. Finally, the facility has put in place a system that maximizes waste recycling and, ultimately, achieves zero waste to landfill.
While the company has made a lot of progress, mostly without tooting its own horn excessively in the way other companies do, it still ranks 213th in Newsweek’s Green Rankings of companies worldwide. (Germany’s Munich Re maintains the number one spot, followed by IBM.)
It’s possible that Procter & Gamble has progressed as far as it can without outside help and some of the company’s sustainability goals will require new methods and tools to attain and hence the company has established a partnership with the EPA and its NRMRL.
The EPA has developed what’s considered to be a fairly complete list of sustainability metrics and performance indicators that companies can use to quantify their sustainability in both manufacturing and supply chain contexts. P&G says it will bring to the partnership a diverse set of manufacturing operations and supply chains that can serve to optimize those EPA-developed metrics, reported Environmental Leader.
“This is a tremendous opportunity for us to be at the leading edge of developing tools to support the entire company’s effort to improve the sustainability of our products and our operations,” said Stefano Zenezini, vice president of product supply for P&G, in a press release. “We’ve made great progress in areas like energy- and water-use reduction but really need these new tools to help guide the increasingly complex choices we will be making as we continue to strive to meet the vision the company has committed to.”
The EPA has the facilities — such as the NRMRL — and technical tools to help P&G achieve its goals. Established under the 1986 Federal Technology Transfer Act Cooperative, the EPA’s research and development agreements allow private- and public-sector partners to conduct research at EPA facilities and collaborate with the agency on research.
The EPA currently has about 30 active partnerships with companies and academic institutions, including General Electric, New York Energy Research and Finland’s Helsinki University of Technology. The companies and institutions are permitted to use the EPA’s research facilities and resources, and the EPA, in turn, takes a cut of any patents that result from the collaboration, earning a portion of royalties on products and services developed during the time the agreement is in effect.
Many companies need guidance when it comes to meeting sustainability goals. While a lot of companies announce sustainability programs that never quite progress to action (a classic greenwashing tactic), those that take real steps find that their shareholders, stakeholders and customers are keeping close attention. At some companies, sustainability performance is now tied to executive compensation to ensure that goals are met.
As the world’s largest consumer products company, P&G has to overcome some hurdles that many companies don’t. Consider that the world’s greenest company, according to Newsweek, is Germany’s Munich Re, a risk management, primary insurance and reinsurance company that produces no physical products and has no manufacturing facilities and therefore no significant concerns about waste, materials sourcing, large-scale water use, product packaging and carbon dioxide emissions.
But P&G still has a long way to go to catch up with top green leaders such as IBM and Philips. That’s where the EPA — not always the Big Bad Wolf of U.S. manufacturing as often portrayed — can step in to help.