Climate change and its associated regulation will significantly impact Proctor & Gamble (P&G), a multinational consumer goods company, if it does not work to accelerate its change. P&G is feeling the effects of climate change primarily in the forms of anticipated regulations and social pressure. Despite an impressive plan outlining how to address climate change challenges, P&G has been far too slow to adjust its operating processes.<\/p>\n
P&G, the 39th<\/sup> largest public company in the world,[1]<\/a> has a business model that relies heavily on CO2 emissions. Many of P&G\u2019s supply chain partners provide raw materials that are derived through petroleum-driven processes.[2]<\/a> Once raw materials are received, hundreds of P&G factories throughout the world burn fossil fuels to produce, package, and deliver goods. Finally, many of the products sold by P&G enable excessive energy use by customers, such as laundry detergents that require only hot water.[3]<\/a> An operating model heavily reliant on excessive CO2 emissions coupled with the sheer magnitude of the organization leaves P&G exposed to significant risks associated with climate change.<\/p>\n In September 2015, ClimateCounts.org gave P&G a grade of \u201cD\u201d based on climate change goals, policy stance, and measurable impacts — the worst grade given in the \u201chousehold products\u201d industry. [4]<\/a> InfluenceMap<\/em>, a non-profit organization whose goal is to \u201ccommunicate the extent to which corporations are influencing climate policy\u201d, took it a step further and accused P&G of obstructing climate change legislation (along with 50 of the world\u2019s 100 largest companies). [5]<\/a> [6]<\/a>\u00a0 The P&G website, however, paints a much different picture.<\/p>\n P&G\u2019s position statement on climate change outlines how P&G aims to reduce greenhouse gases (GHG) by: (1) creating supply chain partnerships that develop renewable material replacements for petroleum derived materials; (2) developing energy efficiency measures in facilities, transitioning to cleaner alternative fuel sources, and delivering product with energy efficient vehicles; and (3) creating efficient product packaging and educating consumers on energy efficient use of its products.[7]<\/a> Also, P&G posted \u201csustainability reports\u201d for every country it operated in dating back to 1999. [8]<\/a><\/p>\n Unilever, P&G\u2019s largest competitor, publishes a sustainability strategy that is remarkably similar in concept.[9]<\/a> This is not surprising, as several organizations publish industry reports that highlight best practices in climate change, encouraging industry learning.[10]<\/a> In comparing hard numbers, however, Unilever and P&G are quite more different. According to the 2015 sustainability reports posted by each company, P&G\u2019s total GHG production was 5,256 metric tons to Unilever\u2019s 1,770.[11]<\/a> With P&G\u2019s annual production 41% greater than Unilever\u2019s, this is not necessarily surprising. Looking at the intensity ratio<\/em> – total GHG production over total overall production – \u00a0P&G is still over double Unilever at 187kg CO2\/ton compared to 89 kg CO2\/ton.[12]<\/a> [13]<\/a> Both in absolute and relative terms, P&G is lagging severely behind.<\/p>\n Although P&G clearly laid out changes to address climate change, it grossly underestimates the pace at which change is necessary. In 2010, P&G set a goal to reduce absolute GHG emissions by 30% before 2020. Five years into this goal the company had only reduced emissions by a measly 4%.[14]<\/a> Furthermore, only 40% of the company\u2019s environmental goals have a timeline associated with them.[15]<\/a> For example, one goal states, \u201cContinued progress on [zero manufacturing waste to landfill].\u201d[16]<\/a> This weak goal setting and lack of tangible progress is a recipe for disaster.<\/p>\n P&G needs to revise its goals and then hold itself accountable to them. Each goal should be specific, ambitious, measurable, and timeline-oriented. They all require an implementation plan that spans P&G\u2019s worldwide footprint.\u00a0 Second, accountability has been absent. P&G\u2019s website touts an impressive sustainability vision, while in reality the company is on pace to miss its GHG reduction goal by 30 years.[17]<\/a> [18]<\/a>\u00a0 Make no mistake, these are not easy challenges to address, but the investment in time, effort and money will far outweigh the costs associated with inaction. (797 Words)<\/p>\n [1]<\/a> Forbes, \u201cThe World\u2019s Biggest Companies.\u201d http:\/\/www.forbes.com\/companies\/procter-gamble\/, accessed November 2016.<\/p>\n [2]<\/a> Proctor & Gamble, \u201cClimate Change.\u201d http:\/\/us.pg.com\/sustainability\/environmental-sustainability\/policies-practices\/climate-change, accessed November 2016.<\/p>\n [3]<\/a> Ibid.<\/p>\n [4]<\/a> Climate Counts, \u201cClimate Scores for Household Products Industry.\u201d http:\/\/www.climatecounts.org\/scorecard_sectors.php?id=17, accessed November 2016.<\/p>\n [5]<\/a> InfluenceMap, \u201cAbout.\u201d http:\/\/influencemap.org\/page\/About, accessed November 2016.<\/p>\n [6]<\/a> Bloomberg, \u201cBiggest Companies \u2018Obstructing\u2019 Climate Policy, Report Finds.\u201d http:\/\/www.bloomberg.com\/news\/articles\/2015-09-15\/biggest-companies-obstructing-climate-policy-report-finds, accessed November 2016.<\/p>\n [7]<\/a> Procter & Gamble, \u201cClimate Change Position Statement.\u201d http:\/\/us.pg.com\/sustainability\/environmental-sustainability\/policies-practices\/climate-change, accessed November 2016.<\/p>\n [8]<\/a> Procter & Gamble, \u201cSustainability.\u201d http:\/\/us.pg.com\/sustainability, accessed November 2016.<\/p>\n [9]<\/a> Unilever, \u201cThe Unilever Sustainable Living Plan.\u201d https:\/\/www.unilever.com\/sustainable-living\/the-sustainable-living-plan\/our-strategy\/, accessed November 2016.<\/p>\n [10]<\/a> PricewaterhouseCoopers, \u201cGlobal Sustainability and Climate Change.\u201d http:\/\/www.pwc.com\/gx\/en\/services\/sustainability\/publications.html, accessed November 2016.<\/p>\n [11]<\/a> Procter & Gamble, 2015 Annual Sustainability Report (Cincinnati: Procter & Gamble, 2015), p 11.<\/p>\n [12]<\/a> Procter & Gamble, 2015 Annual Sustainability Report (Cincinnati: Procter & Gamble, 2015), p 11.<\/p>\n [13]<\/a> Unilever, Annual Report and Accounts 2015 Strategic Report (London: Unilever, 2015), p. 55.<\/p>\n [14]<\/a> Procter & Gamble, 2015 Annual Sustainability Report (Cincinnati: Procter & Gamble, 2015), p 10.<\/p>\n [15]<\/a> Ibid.<\/p>\n [16]<\/a> Ibid.<\/p>\n