2003 Sustainability Report
Executive Summary
Linking Opportunity with Responsibility

Visit http://www.pg.com/sr for the full report.

P&G 2003 Sustainability Report
Executive Summary

CEO Statement

Responsibility
P&G operates with integrity everywhere we do business. P&G
invests in every community where we live and work. P&G
embraces its responsibilities as a corporate citizen. More specifically,
P&G people embrace our responsibilities. We take them personallybecause they are a reflection of our individual values as well as
those of our Company.
P&G’s commitment to responsibility and integrity is part ofeverything we do.
• We have a responsibility to consumers to ensure P&G products
are safe and will perform as promised.
• We have a responsibility to P&G employees and their families
to provide a safe work place, to treat them with respect andintegrity, and to deal with them in a fair and ethical manner
every day.

months, until our appeal reached the country’s president, whoarranged for the shipment to be released. The cost to P&G’s
business of closing the plant far exceeded the cost of justpaying the bribe, but the cost to P&G’s reputation and values
would have been far greater had we compromised theCompany’s integrity. We took a stand against bribery andcorruption, which we saw as our responsibility to the nation, toconsumers in that country, to shareholders, and to ourselves.
I don’t want to leave the impression that P&G is perfect. No
organization of 98,000 people – across varying languages,
cultures, and backgrounds – should ever think that it cannot
and does not make mistakes. When we become aware ofthose mistakes, we correct them and acknowledge them. But I
can say with confidence that fair dealing and doing what’s
right for the long term are the norm at P&G. It’s how we dobusiness. Every day.

• We have a responsibility to business partners, suppliers, andtrade customers to deal with them openly and honestly.
• We have a responsibility to communities and nations where
we do business to operate within the law, to bring global
knowledge, practices, and experience, and to help makeeveryday life a little better.
We fulfill these responsibilities even when doing so is difficult
or costly. For example, a customs official in a developing
country once blocked the entry of our $250,000 raw material
shipment until a payment of $5,000 was made. P&G’s regionalpresident did not hesitate to refuse the blatant extortion
demand. We shut down the plant awaiting the shipment until
the issue could be resolved. The plant remained closed for four

A. G. Lafley
Chairman of the Board,
President and Chief Executive

P&G 2003 Sustainability Report
Executive Summary

VisionRewards and Challenges
For the past 15 years, corporate environmental and sustainability
reporting has measured companies’ social responsibility in terms ofwhat they eliminated: waste, emissions, discrimination, workplacesafety risks, and so on. This focus has produced results, andremains relevant but not sufficient. The challenges we face,particularly in the developing world, demand more. Issues such as
safe drinking water, child nutrition and development, sanitation,
and waterborne disease require sustained, breakthroughinnovation. Philanthropy and government aid alone can’t fund thelevel of innovation that’s needed. We need a next-generation
solution – which, I’m pleased to report, P&G is helping to create.
We believe we and other companies can link business opportunity
with corporate responsibility by making consumer products
affordable to more people around the world. We aim to serve
more consumers in developing countries – many of whom havenever had access to products widely available in the developed
world – with products that truly improve their quality of life. At
the same time, we create market-based incentives for the level ofinnovation investment our world’s toughest challenges require.
Real Rewards
For us, 2003 was a year of real progress toward this vision. We
announced a new product that purifies and disinfects polluted
drinking water at a retail cost of about US$.01 per liter. We
designed and developed this product to reduce waterborne
disease in the developing world. Clinical studies in Guatemala by
the U.S. Centers for Disease Control, using P&G’s product, showedthat diarrhea in children was reduced 43 percent through clean
drinking water. This is important because diarrhea is a leading
cause of death among children in the developing world.

of people who now have access to safe drinking water, and casesof diarrhea avoided. In effect, we have direct measures of P&G’s
contribution to the United Nations Millennium Development Goal
to halve the number of people without access to safe drinking
water. Last fiscal year, even with only a few small test and learningmarkets underway, P&G delivered more than 20 million liters ofsafe drinking water to rural and low-income consumers in thedeveloping world.
Big Challenges
The key now is to make this new approach sustainable over time.
We must:• Create new businesses with sufficient scale to fund R&D andmarket development costs.
• Develop new business models appropriate to lower-income,developing-country markets.
• Lower costs to make products affordable in undeveloped
markets that lack large-scale supply chain and distribution
efficiencies that are normal in richer, developed markets.
These are significant challenges, but we’re not alone in our efforts
to overcome them. We are partnering creatively with small, local
entrepreneurs, NGOs, intergovernmental organizations, andnational governments that see the same rewards for society that
we see. We are committed to linking business opportunity andcorporate responsibility in ways that fulfill P&G’s core purpose – totouch lives and improve life for people around the world.

George D. Carpenter
Measuring progress and success in this value-creation approach isstraightforward. As a company, we use traditional businessmeasures of sales, profit, and shipments. For society, our productshipments translate into liters of safe drinking water, the number

Director
Corporate Sustainable Development

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P&G 2003 Sustainability Report
Executive Summary

P&G Profile
For 165 years, P&G has been providing trusted, high-quality brands
that make every day better for the world’s consumers. The
Company markets nearly 300 products – including Pampers, Tide,
Ariel, Always, Whisper, Pantene, Bounty, Pringles, Folgers,
Charmin, Downy, Lenor, Iams, Crest, Actonel, Olay, and Clairol –in more than 160 countries around the world.
P&G’s worldwide headquarters is located in Cincinnati, Ohio, USA.
The Company has on-the-ground operations in almost 80
countries worldwide and employs nearly 98,000 people.
P&G is a publicly owned company. Its stock is listed and traded on
the following exchanges: New York, Cincinnati, Amsterdam, Paris,
Basle, Geneva, Lausanne, Zurich, Frankfurt, Brussels, and Tokyo.
As of August 1, 2003, there were approximately 1,234,000
common stock shareholders, including shareholders of record,

participants in the Shareholder Investment Program, participants in
P&G stock ownership plans, and beneficial owners with accounts
at banks and brokerage firms.
This is the fifth Sustainability Report for P&G’s worldwide
operations. Data in this report covers the period from July 1, 2002,
through June 30, 2003. Last year’s report covers the July 1, 2001,
through June 30, 2002, time period. Financial information is given in
U.S. dollars.
As part of P&G’s initiative to optimize resources to fit a growing
global business and to accelerate innovation and growth, theCompany operates its business through Global Business Units (GBUs).
• Health Care
• Snacks & Beverages• Fabric & Home Care
• Beauty Care
• Baby & Family Care

Key Brands
Of P&G’s almost 300 brands around the world, these are the ones we consider our key brands.
Global Business Unit
Fabric & Home Care

Product Lines
Laundry detergent, fabricconditioners, dish care,household cleaners, fabricrefreshers, bleach, and carefor special fabrics

Key Brands
Tide, Ariel, Downy, Lenor, Dawn, Fairy, Joy, Gain, Ace Laundry
and Bleach, Swiffer, Bold, Cascade, Dash, Cheer, Bounce, Febreze,
Mr. Clean/Proper, Era, Bonux, Dreft, Daz, Vizir, Flash, Salvo, Viakal,
Rindex, Alomatik, Dryel, Myth, Maestro Limpio, Ivory Dish,
Hi Wash, Lang

Beauty Care

Hair care/hair color, skin careand cleansing, cosmetics,
fragrances, andantiperspirants/deodorants

Pantene, Olay, Head & Shoulders, Cover Girl, Clairol’s Herbal
Essences, Nice ‘n Easy, Natural Instincts and Hydrience, SK-II,
Max Factor, Hugo Boss, Secret, Zest, Old Spice, Safeguard,
Rejoice, Vidal Sassoon, Pert, Ivory Personal Care, Aussie, Lacoste,
Infusion 23, Noxzema, Camay, Sure, Physique, Infasil,
Laura Biagiotti, Muse, Wash & Go, Giorgio, Mum
Always, Whisper, Tampax, Lines Feminine Care, Naturella, Evax,
Ausonia, Orkid

Feminine protection pads,
tampons, and pantiliners
Baby diapers, baby and toddler
wipes, baby bibs, baby change
and bed mats
Paper towels, toilet tissue, andfacial tissue

Pampers, Luvs, Kandoo, Dodot

Health Care

Oral care, pet health andnutrition, pharmaceuticals, andpersonal health care

Crest, Iams, Eukanuba, Vicks, Actonel, Asacol, Metamucil,
Fixodent, PuR, Scope, Pepto-Bismol, Macrobid, Didronel,
ThermaCare

Snacks & Beverages

Snacks and beverages

Pringles, Folgers, Millstone, Torengos, Sunny Delight, Punica

Baby & Family Care

Charmin, Bounty, Puffs, Tempo, Codi

Building for the Future
William Procter andJames Gamble, Founders,
Candle & Soap Business

1837

1840

$1 Million
Net Sales

1850

1860

Regional
U.S. Markets

1870

P&G 2003 Sustainability Report
Executive Summary

Key Indicators
Key Sustainability Focus Areas
At P&G, we proactively seek to bring together innovative ideas andresources to create new products and services that improve thequality of people’s daily lives. Regarding sustainability, we focus in
the areas of:• Water• Health and Hygiene

Environmental Protection• Water• Resource Use• Waste Reduction

Our actions are not just profit driven but also progress driven, toensure a better quality of life for everyone, now and for generations
to come. Our extensive consumer research related to our brands
also helps us identify ways we can best address sustainability.

Social Responsibility• Health• Hygiene• Education

Major Opportunities and Impacts
Associated with Products and Services

Economic Development• Shareholder Value• Employment• Taxes, Fees, and Contributions

Manufacturing Resource & Waste Summary by Global Business Unit (GBU)
TotalsAll units are in thousands ofmetric tonnes unless otherwise noted.†

Production
Product Shipped
Raw Materials from Recycled Sources
Waste
Generated Waste
Percent Recycled / Reused Waste
Disposed Waste
Solid Waste
Non-Hazardous
Hazardous
Effluents (Excluding Water)
Air Emissions**
Other
Energy Consumption (105 GJ)¶
Greenhouse Gas Emissions** ¶Water Consumption (million cubic meters)
SARA Releases (metric tonnes)***2003 Global Business Unit Detail*

2003

2002

2001

BFC

FHC

BC

HC

SB

17,055
119

16,151
208

15,808
208

3,503
119

9,178
0

1,573
0

1,218
0

1,583
0

794
52%

798
54%

910
51%

428
48%

124
57%

164
60%

43
47%

35
36%

317
9
35
24

304
19
23
20

376
13
36
15

204
1.3
4.4
11.2

40
4.6
6.0
2.9

40
1.9
19.8
3.4

16
1.1
1.1
4.8

17
0
3.7
1.1

758
3,122
85
1,567

706
3,148
85
1,274

717
3,092
88
1,722

487
2,198
55
41

135
444
13
1,008

66
298
13
102

40
113
2
416

30
69
3
0

† 1 metric tonne = 1,000 kg = 2,205 lbs.
* BFC = Baby & Family Care; FHC = Fabric & Home Care; BC = Beauty Care; HC = Health Care; SB = Snacks & Beverages** Air emissions include particulates, SO2, NOx, CO, and VOC whereas greenhouse gas emissions include CO2 from fuel combustion sources.
*** Releases defined in the U.S. Superfund Amendments and Reauthorization Act (SARA) by the U.S. Environmental Protection Agency.
¶ Energy use and greenhouse gas emissions have been restated using conversion units recommended by the U.S. Department of Energy in its 1605 reporting initiative.
The major change was in the conversion of electricity from kilowatt hours to gigajoules (GJ). Actual energy use didn’t change. The greenhouse gas emission factors changed slightly.

Incorporated
Company
P&G Brand
Advertising

1880

ProfitSharing

P&G Code ofRegulations

Beginning of P&G
Research & Development

1890

Shortening &Oils Business

1900

1910

CanadaMarketP&G 2003 Sustainability Report
Executive Summary

P&G’s Billion-Dollar Brands

Diversity Data – Global Enrollment
P&G continues to focus on diversity as a global strategy andexpects its workforce to become increasingly more diverse. Global
data on enrollment by gender is shown in the following table:
2003
35.5
37.1

Global Enrollment % Female

Management
All Other Employees1

2002
34.6
41.6

1 The category of “All Other Employees” continues to be an evolving global database as
more of P&G’s plants are included.

The percentages of minority and female employees in the UnitedStates are shown in the following table:

Financial Highlights
Amounts in millions
except per-share amounts

Net Sales
Marketing, Research, &Administrative Expenses
Income Taxes
Net Earnings
Basic Net Earnings
Per Common ShareTotal Assets
Long-Term Debt
Shareholders’ Equity

2003$43,377

2002$40,238

2001$39,244

13,383
2,344
5,186

12,571
2,031
4,352

12,406
1,694
2,922

3.90
43,706
11,475
16,186

3.26
40,776
11,201
13,706

2.15
34,387
9,792
12,010Philanthropic Contributions
P&G and its employees have a long-standing commitment tobeing good citizens and neighbors in all places where we dobusiness around the world. We believe we have a responsibility touse our resources – money, people, and energy – wisely. We show
our commitment through financial support and volunteerism in awide range of educational, health, social service, cultural, civic, andenvironmental organizations to benefit society.
Global philanthropic contributions made by The P&G Fund andCorporate Contributions for the past three years are provided in
the following table:

Total

2003
$84,572,906

2002$77,746,930

2001
Not Available% Minorities
Management
All Other Employees2% FemaleManagement
All Other Employees2

2003

2002

2001

18.0
19.8

16.1
20.3

15.8
18.1

34.8
38.7

34.4
38.0

34.1
38.8

2 Administrative, Technical, and Plant Technicians

Occupational Health & Safety Data
Past three years’ global data on two key metrics for worker healthand safety:
Total Incident Rate
Injury and illness per 100 employees

2003
0.54

Total

2002
0.67

2001
0.69

2002
0.27

2001
0.24

Total Lost Workday Case Rate
Lost and restricted workday cases per 100 employees

2003
0.22

Total

Summary of Violations and Interventions
The following table lists global data on environmental,transportation, and worker health and safety violations andinterventions.

Number
Fines

2003
67
$154,756

2002
45$39,026

2001
63$77,070

Both fines and Notices of Violations (NOVs) have increased this year. Two incidents
account for almost 80 percent of the fines. Both were related to recordkeeping.
Procedures have been reinforced to provide more effective monitoring.

Beginning of
P&G Market
Research

1920

SafetyPhilippines
Oral Care
Program and UK
Synthetic
Started Markets
Detergents Business

1930

1940

Tide
Introduced
Overseas
Division

1950$1 Billion
Net Sales

Disposable
First Fluoride Diapers
Toothpaste
Business

1960

P&G 2003 Sustainability Report
Executive Summary

Sustainability in Action
Millstone Rainforest Alliance Coffee
for a More Sustainable Future
As part of the Millstone brand’s efforts to help build a sustainable
future for coffee farmers, the brand is launching a new coffee thathas been Rainforest Alliance certified.

Photo Credit:
Adilson Moralez

In recent years, farmers have cleared forests to increase coffee
production. Chemicals and soil erosion from their farming aredestroying wildlife habitats. Now, the Sustainable Agriculture
Network, a program of the Rainforest Alliance, provides incentives
for farmers to conserve the rainforests. If they meet a strict set of
agricultural standards, their farms receive a seal of approval bywhich consumers can distinguish their product.

PuR Purifier of Water
P&G’s Health Sciences Institute has developed a product to help
more than a billion people in developing nations who don’t havesafe drinking water at home. P&G is collaborating with the U.S.
Centers for Disease Control and Prevention (CDC) and theInternational Council of Nurses (ICN) to test the product and bringit into use.
PuR Purifier of Water is a small packet of specially combined
ingredients similar to those used in large-scale water treatment
facilities. Mixing the contents of one packet into ten liters of water
separates dirt and other contaminants from the water withinminutes. The water is then filtered through a cloth. PuR works
better and more economically than tablets and filters that havebeen on the market for home use.
In CDC trials conducted in Guatemala, PuR reduced diarrheal
illnesses by 40 percent by removing pathogenic bacteria, viruses,and parasites from water. When widely available, supplies will be
provided at cost for emergency relief operations. The International
Rescue Committee already has purchased enough to make 3.5
million liters of drinking water in Iraq.
“We estimate that 5,000 children die every day because ofdiarrheal illness,” says Steve Luby, M.D., a CDC medical
epidemiologist. “If we can get people to use products like PuR todecontaminate water in their homes, we can reduce the incidenceof diarrhea and illness and save thousands of lives.”

Living It! in Brazil
In Brazil, low-income households account for 76 percent of the
population. At least half their income goes into consumer goods.
P&G understands these households need to get the best value
they can for their expenditures. But P&G also recognized that itneeded to gain a better understanding of these consumers
before truly being able to meet consumer needs in this large
population segment.
P&G Brazil staff decided that to understand these households, theyneeded to live in them. They partnered with Brazilian food industry
leader Sadia to implement the Living It! program. Under Living It!,P&G staff lived in low-income Brazilian homes for two weeks,trying to better understand family and community life.
As a result of Living It!, we are working on new products anddistribution systems as well as better ways of communicating withour consumers.

Because of the global need for and proven health benefits of clean
drinking water, the P&G Health Sciences Institute, the CDC, andthe ICN have joined with 20 other organizations to establish theInternational Network to Promote Safe Household Water
Treatment and Storage. In addition, the ICN and the P&G Health
Sciences Institute are educating nurses and populations in thedeveloping world about the health benefits of treating water andstoring it safely.

World Environment
Center Award
Affirmative
ActionEnvironmental
Audit Program1970

Toll-Free
Consumer
Hotline$10 Billion
Net Sales

1980

Feminine
Protection
BusinessStatementof Purpose

1990

1st Annual Global
Environment
ReportOpportunity
2000 Award

FutureShares Clairol
1998– Acquisition
2001 2001

2000

P&G 2003 Sustainability Report
Executive Summary

Sustainable development is a very simple idea.
It is about ensuring a better quality of life foreveryone, now and for generations to come.1
P&G’s Statement of Purpose
We will provide branded products and services ofsuperior quality and value that improve the lives of theworld’s consumers.
As a result, consumers will reward us with leadershipsales, profit and value creation, allowing our people,
our shareholders, and the communities inwhich we live and work to prosper.

Consumers

P&G Values
Leadership
Ownership
Integrity
Passion for Winning
Trust
P&G
BrandsP&G
PeopleP&G Brands and P&G People are the foundation of P&G’s
success. P&G People bring the values to life as we focus on
improving the lives of the world’s consumers.
This report was prepared using the Global Reporting Initiative’s(GRI) July 2002 Sustainability Reporting Guidelines. The missionof the GRI is to promote international harmonization in thereporting of relevant and credible corporate economic,
environmental, and social performance information to enhance
responsible decision-making. The GRI pursues this mission througha multistakeholder process of open dialogue and collaboration in
the design and implementation of widely applicable sustainability
reporting guidelines. The GRI has not verified the contents of thisreport, nor does it take a position on the reliability of information
reported herein.

on theWeb

For further information about the GRI, please visit:
http://www.globalreporting.org

The GRI’s Sustainability Reporting Guidelines were released in
exposure draft form in London in March 1999. The GRI Guidelines
represent the first global framework for comprehensive
sustainability reporting, encompassing the “triple bottom line” of
economic, environmental, and social issues. Twenty-one pilot testcompanies (including P&G), numerous other companies, and adiverse array of non-corporate stakeholders commented on thedraft Guidelines during a 1999-2000 pilot test period. Revised
Guidelines were released in June 2000, and again in July 2002.

on theWeb

Please visit P&G’s corporate Web site for the latest P&G
news and shareholder and career information:
http://www.pg.com

1 Definition from U.K. government report from DETR (Department for the Environment,

Transport and the Regions) – 1998.
Note: Years listed in this report‘s data charts signify the fiscal year ending June 30.
© 2003 The Procter & Gamble Company. All Rights Reserved.
References to trademarked products in this report are to trademarks owned by andregistered to The Procter & Gamble Company.

0013-6468

Principles
We Show Respect for All Individuals
The Interests of the Company and the Individual Are Inseparable
We Are Strategically Focused in Our Work
Innovation Is the Cornerstone of Our Success
We Are Externally Focused
We Value Personal Mastery
We Seek to Be the Best
Mutual Interdependency Is a Way of Life

Global Editor
Janice Tarter, U.S.A.
Core Report Team Ina Andreasen, Denmark
Javier Arevalo, Venezuela
Lucy Bogaerts, Belgium
Bea Buyle, Belgium
Dionisis Kolokotsas, Belgium
Anne McConnell, Canada
Win Sakdinan, Canada
Chris Smith, U.K.
Robin Tollett, U.S.A.
Pam Wright, U.S.A.
Shinobu Yasutake, Japan
Copy Editor
Jan Sherbin, Cincinnati, Ohio, U.S.A.
DesignAndy Ruttle, Ruttle Design Group, Inc.,
Cincinnati, Ohio, U.S.A.
The report team thanks all the individuals throughout the world
who contributed information, stories, and data to this report.
Contact
Janice F. Tarter
Corporate Sustainable Development
1 Procter & Gamble Plaza
Cincinnati, Ohio 45202 U.S.A.
E-mail sustainrep.im@pg.com

This report was printed
on recycled paper.