2 0 0 1

S U S T A I N A B I L I T Y

R E P O R T•

E X E C U T I V E

S U M M A R Y

Statement of Purpose
Executive Summary

We will provide products and services of

VisionF

rom the beginning, P&G’s embrace of Sustainable
Development has been based on our vision that
we can grow the business, shareholder and stakeholder
value of P&G by bringing to the marketplaceinnovations and technologies that address thefrustrations and aspirations of consumers at all levelsof the economic pyramid. Since then, we have been ona steep learning curve in our attempt to bringsustainability to life for our business managers as wellas our external stakeholders. I want to share some of
our learnings with you.
Our first, and most important, learning came in ourefforts to define the concept of sustainability as a way
to ensure better quality of life for everyone, now andfor generations to come. This is an effort on which wehave been focused for two years, and we areencouraged by how many people – in business,government and non-governmental organizations – arenot only embracing this concept, but also seizing upon
it to pursue common solutions, and not just common
problems. People relate to the idea of a “better qualityof life” at an emotional level. They have their own
ideas about what a better quality of life means forthem and their children and for those less fortunate
than themselves. At P&G, we now use thisdefinition exclusively.
Our second learning was the importance of talking
about sustainability as an opportunity, not an issue tobe managed. We recognized this difference anddeveloped our approach to sustainability accordingly.
When meeting with our business leaders to discuss
how sustainable development relates to theirbusinesses, we stress the opportunity that flows from“ensuring a better quality of life.” When talking withexternal stakeholders, we share ideas on how to
improve lives. We find people begin talking about
creative solutions, new partnerships and new
business opportunities that come from addressing
the aspirations and problems of consumers all over
the world.

superior quality and value that improve
the lives of the world’s consumers.
As a result, consumers will reward us

However, as we focus on building new top-line value
for P&G, we have maintained our historical attention
to how we run our business – our health, safety andenvironmental management, product safety programs
and community relations efforts. In this year’s report,
you will see:
• P&G’s environmental compliance and employee
safety performance are at historical best levels• P&G was rated the No. 1 company in the noncyclical consumer products sector by the Dow
Jones Sustainability Group Index• Business Ethics magazine rated P&G first in its
annual list of 100 Best Corporate Citizens
Our approach to sustainability is a simple but
enormously motivating way to think about our
responsibility as a company. It is fully consistent with
our Purpose, Values and Principles; thus, a perfectly
natural way for us to behave. Living up to such achallenge can be difficult, but it is a challenge weembrace. And we are pleased to share our progresswith you.

creation, allowing our people, ourhis report was prepared in accordance with the
Global Reporting Initiative’s (GRI’s) Sustainability
Reporting Guidelines on Economic, Environmental andSocial Performance, June 2000. The mission of the
GRI is to promote international harmonization in thereporting of relevant and credible corporate
environmental, social and economic performance
information to enhance responsible decision making.
GRI pursues this mission through a multi-stakeholder
process of open dialogue and collaboration in thedesign and implementation of widely applicablesustainability reporting guidelines. GRI has notverified the contents of this report, nor does it take aposition on the reliability of information reported
herein. For further information about the GRI, please
visit: http://www.globalreporting.org

The full report is available on
P&G’s web site:
http://www.pg.com/sr

Please visit P&G’s corporate web site forthe latest P&G news and shareholder andcareer information: http://www.pg.com•

E X E C U T I V E

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

Ownership

Passionfor
Winning

Integrity

Sustainability is an important way for us to leverage thepower of innovation and global markets for the benefit ofeveryone – not just those in the developed world. We cannot
condemn developing countries to a life of poverty so thosein the developed world can maintain their lifestyles. But
neither do we have to presume that the only alternative is forthe developed world to reduce its quality of life. When weconcede to such a notion, we erect barriers to progress. We
pit the developed and developing worlds against one
another and create an adversarial environment in which
there are opposing sides, not common purpose. As aresult, progress stalls or moves only incrementally, andtwo-thirds of the world’s population continues to live on
the fringes of existence.

Principles
We Show Respect for All Individuals
The Interests of the Company and theIndividual 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

There is an alternative. It is based on the premise that we canmake markets work for everyone and ultimately make lives
better in every part of the world. In this report, you will findmany examples of P&G’s contributions to a better quality oflife through the creation of new products, new markets andaddressing new consumer needs. For example:• pregnancy education to reduce maternal mortality• Actonel for the treatment and prevention of
postmenopausal osteoporosis• dental hygiene education to improve oral health• a partnership with UNICEF to combat tuberculosis

Mutual Interdependency is a Way of Life

2001 SUSTAINABILITYREPORT
Editor: Corey Snyder, Cincinnati, Ohio, USACore Report Team: Chris Smith, Newcastle
upon Tyne, U.K.; Debbie White,
Cincinnati, Ohio, USA; Courtney Dressler,
Cincinnati, Ohio, USA; Mary Kay Morris,
Cincinnati, Ohio, USA; Bea Buyle,
Brussels, Belgium; Paul van der
Mensbrugghe, Brussels, Belgium; Taki
Arakaki, Kobe, Japan; Joaquin Zepeda,
Caracas, Venezuela.
Design: Andy Ruttle, Ruttle Design Group, Inc.,
Cincinnati, Ohio, USA.

Another important issue we would like to address is how the
global economic environment has impacted our business.
Fiscal 1999/00 was a difficult year for P&G and for its many
employees around the world. A strong plan was put in place
to re-establish the balance between top-line revenue growthand bottom-line earnings growth. However, over the pastfiscal year, we continued to face a challenging economic
environment, with a slowing U.S. economy and thepossibility of a recession. Key economies around the globe
were also slowing – Japan, some countries in Europe, someof the developing markets. In order to restore P&G’s ability
to compete more effectively and to grow more consistently,
the previous restructuring program was expanded to further
reduce overhead costs, resulting in staffing reductions acrossthe Company.

The report team wishes to thank all the individuals
throughout the Company who contributed information, stories and data to this report.

FRONT COVER: Children gather
outside a school supported by the
Dash Goodwill Mission – School for
Angola program.

Corporate Sustainable Development
Two Procter & Gamble Plaza
TN-02, MS-28
Cincinnati, Ohio 45202 USA
E-mail: sustainrep-im@pg.com

S U M M A R Y
0013-6465

CEO and Chairman’s Statement
he men and women of P&G share a deeply felt purpose:to improve the lives of consumers in every part of theworld. One important way in which we fulfill this purpose isthrough our commitment to the concept of sustainable
development, or sustainability, which we believe is integral
to both P&G’s future business success and to a truly better
quality of life for all the world’s consumers – now and forgenerations to come.

Trust

T

REPORTTPEOPLE

which we live and work to prosper.

WWW

R E P O R TCore Values
Leadership

Fax: (513) 983-5226
S U S T A I N A B I L I T Y

SUSTAINABILITY

shareholders, and the communities inReferences to trademarked products in this report are
to trademarks owned by and registered to
The Procter & Gamble Company.

2 0 0 1

2001

with leadership sales, profit and value

This is the Executive Summary of thethird Sustainability Report for P&G’s
worldwide operations. Data in the reportcovers the period from July 1, 2000,
through June 30, 2001.

George D. Carpenter
Director, Corporate
Sustainable Development

Sustainable development is a very
simple idea. It is about ensuring abetter quality of life for everyone, now
and for generations to come.

This report was printed on 50% recycled paper, 10% post-consumer.
© 2001 The Procter & Gamble Company. All rights reserved.

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

2 0 0 1S U S T A I N A B I L I T YWhen downsizing becomes necessary, as it did this pastfiscal year, we manage employee separations in ways thatare consistent with our values and principles. We maintainfocus and priority on our strong commitment to the diversityof our organization. P&G uses a voluntary separation
program to maximize voluntary attrition. The program,which includes severance pay based on years of service,continuation of health care benefits for the severance period,
outplacement support services and a retraining allowance,
provides a bridge for separating employees to retirement or
employment elsewhere.
These efforts have translated into improved competitivenessby controlling costs and managing cash more effectively,
and resulted in getting P&G’s business back on track andgrowing again. We’ve refocused on our biggest brands, inour biggest markets, with our biggest customers. We’ve
strengthened the value of our brands for consumers. We’ve
made strategic choices about which businesses P&G should
be in and which it should not.
We have only just started down our road to sustainable
development, but already we can see how P&G benefits
when we improve the lives of the world’s consumers, now
and for generations to come.

A. G. Lafley
President and Chief Executive

John E. Pepper
Chairman of the Board

R E P O R T•

E X E C U T I V E

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

S U M M A R Y

2 0 0 1

S U S T A I N A B I L I T Y

R E P O R T•

E X E C U T I V E

S U M M A R Y

Statement of Purpose
Executive Summary

We will provide products and services of

VisionF

rom the beginning, P&G’s embrace of Sustainable
Development has been based on our vision that
we can grow the business, shareholder and stakeholder
value of P&G by bringing to the marketplaceinnovations and technologies that address thefrustrations and aspirations of consumers at all levelsof the economic pyramid. Since then, we have been ona steep learning curve in our attempt to bringsustainability to life for our business managers as wellas our external stakeholders. I want to share some of
our learnings with you.
Our first, and most important, learning came in ourefforts to define the concept of sustainability as a way
to ensure better quality of life for everyone, now andfor generations to come. This is an effort on which wehave been focused for two years, and we areencouraged by how many people – in business,government and non-governmental organizations – arenot only embracing this concept, but also seizing upon
it to pursue common solutions, and not just common
problems. People relate to the idea of a “better qualityof life” at an emotional level. They have their own
ideas about what a better quality of life means forthem and their children and for those less fortunate
than themselves. At P&G, we now use thisdefinition exclusively.
Our second learning was the importance of talking
about sustainability as an opportunity, not an issue tobe managed. We recognized this difference anddeveloped our approach to sustainability accordingly.
When meeting with our business leaders to discuss
how sustainable development relates to theirbusinesses, we stress the opportunity that flows from“ensuring a better quality of life.” When talking withexternal stakeholders, we share ideas on how to
improve lives. We find people begin talking about
creative solutions, new partnerships and new
business opportunities that come from addressing
the aspirations and problems of consumers all over
the world.

superior quality and value that improve
the lives of the world’s consumers.
As a result, consumers will reward us

However, as we focus on building new top-line value
for P&G, we have maintained our historical attention
to how we run our business – our health, safety andenvironmental management, product safety programs
and community relations efforts. In this year’s report,
you will see:
• P&G’s environmental compliance and employee
safety performance are at historical best levels.
• P&G was rated the No. 1 company in the noncyclical consumer products sector by the Dow
Jones Sustainability Group Index.
• Business Ethics magazine rated P&G first in its
annual list of 100 Best Corporate Citizens.
Our approach to sustainability is a simple but
enormously motivating way to think about our
responsibility as a company. It is fully consistent with
our Purpose, Values and Principles; thus, a perfectly
natural way for us to behave. Living up to such achallenge can be difficult, but it is a challenge weembrace. And we are pleased to share our progresswith you.

creation, allowing our people, ourhis report was prepared in accordance with the
Global Reporting Initiative’s (GRI’s) Sustainability
Reporting Guidelines on Economic, Environmental andSocial Performance, June 2000. The mission of the
GRI is to promote international harmonization in thereporting of relevant and credible corporate
environmental, social and economic performance
information to enhance responsible decision making.
GRI pursues this mission through a multi-stakeholder
process of open dialogue and collaboration in thedesign and implementation of widely applicablesustainability reporting guidelines. GRI has notverified the contents of this report, nor does it take aposition on the reliability of information reported
herein. For further information about the GRI, please
visit: http://www.globalreporting.org

The full report is available on
P&G’s web site:
http://www.pg.com/sr

Please visit P&G’s corporate web site forthe latest P&G news and shareholder andcareer information: http://www.pg.com•

E X E C U T I V E

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

Ownership

Passionfor
Winning

Integrity

Sustainability is an important way for us to leverage thepower of innovation and global markets for the benefit ofeveryone – not just those in the developed world. We cannot
condemn developing countries to a life of poverty so thosein the developed world can maintain their lifestyles. But
neither do we have to presume that the only alternative is forthe developed world to reduce its quality of life. When weconcede to such a notion, we erect barriers to progress. We
pit the developed and developing worlds against one
another and create an adversarial environment in which
there are opposing sides, not common purpose. As aresult, progress stalls or moves only incrementally, andtwo-thirds of the world’s population continues to live on
the fringes of existence.

Principles
We Show Respect for All Individuals
The Interests of the Company and theIndividual 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

There is an alternative. It is based on the premise that we canmake markets work for everyone and ultimately make lives
better in every part of the world. In this report, you will findmany examples of P&G’s contributions to a better quality oflife through the creation of new products, new markets andaddressing new consumer needs. For example:• pregnancy education to reduce maternal mortality• Actonel for the treatment and prevention of
postmenopausal osteoporosis• dental hygiene education to improve oral health• a partnership with UNICEF to combat tuberculosis

Mutual Interdependency is a Way of Life

2001 SUSTAINABILITYREPORT
Editor: Corey Snyder, Cincinnati, Ohio, USACore Report Team: Chris Smith, Newcastle
upon Tyne, U.K.; Debbie White,
Cincinnati, Ohio, USA; Courtney Dressler,
Cincinnati, Ohio, USA; Mary Kay Morris,
Cincinnati, Ohio, USA; Bea Buyle,
Brussels, Belgium; Paul van der
Mensbrugghe, Brussels, Belgium; Taki
Arakaki, Kobe, Japan; Joaquin Zepeda,
Caracas, Venezuela.
Design: Andy Ruttle, Ruttle Design Group, Inc.,
Cincinnati, Ohio, USA.

Another important issue we would like to address is how the
global economic environment has impacted our business.
Fiscal 1999/00 was a difficult year for P&G and for its many
employees around the world. A strong plan was put in place
to re-establish the balance between top-line revenue growthand bottom-line earnings growth. However, over the pastfiscal year, we continued to face a challenging economic
environment, with a slowing U.S. economy and thepossibility of a recession. Key economies around the globe
were also slowing – Japan, some countries in Europe, someof the developing markets. In order to restore P&G’s ability
to compete more effectively and to grow more consistently,
the previous restructuring program was expanded to further
reduce overhead costs, resulting in staffing reductions acrossthe Company.

The report team wishes to thank all the individuals
throughout the Company who contributed information, stories and data to this report.

FRONT COVER: Children gather
outside a school supported by the
Dash Goodwill Mission – School for
Angola program.

Corporate Sustainable Development
Two Procter & Gamble Plaza
TN-02, MS-28
Cincinnati, Ohio 45202 USA
E-mail: sustainrep-im@pg.com

S U M M A R Y
0013-6465

CEO and Chairman’s Statement
he men and women of P&G share a deeply felt purpose:to improve the lives of consumers in every part of theworld. One important way in which we fulfill this purpose isthrough our commitment to the concept of sustainable
development, or sustainability, which we believe is integral
to both P&G’s future business success and to a truly better
quality of life for all the world’s consumers – now and forgenerations to come.

Trust

T

REPORTTPEOPLE

which we live and work to prosper.

WWW

R E P O R TCore Values
Leadership

Fax: (513) 983-5226
S U S T A I N A B I L I T Y

SUSTAINABILITY

shareholders, and the communities inReferences to trademarked products in this report are
to trademarks owned by and registered to
The Procter & Gamble Company.

2 0 0 1

2001

with leadership sales, profit and value

This is the Executive Summary of thethird Sustainability Report for P&G’s
worldwide operations. Data in the reportcovers the period from July 1, 2000,
through June 30, 2001.

George D. Carpenter
Director, Corporate
Sustainable Development

Sustainable development is a very
simple idea. It is about ensuring abetter quality of life for everyone, now
and for generations to come.

This report was printed on 50% recycled paper, 10% post-consumer.
© 2001 The Procter & Gamble Company. All rights reserved.

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

2 0 0 1S U S T A I N A B I L I T YWhen downsizing becomes necessary, as it did this pastfiscal year, we manage employee separations in ways thatare consistent with our values and principles. We maintainfocus and priority on our strong commitment to the diversityof our organization. P&G uses a voluntary separation
program to maximize voluntary attrition. The program,which includes severance pay based on years of service,continuation of health care benefits for the severance period,
outplacement support services and a retraining allowance,
provides a bridge for separating employees to retirement or
employment elsewhere.
These efforts have translated into improved competitivenessby controlling costs and managing cash more effectively,
and resulted in getting P&G’s business back on track andgrowing again. We’ve refocused on our biggest brands, inour biggest markets, with our biggest customers. We’ve
strengthened the value of our brands for consumers. We’ve
made strategic choices about which businesses P&G should
be in and which it should not.
We have only just started down our road to sustainable
development, but already we can see how P&G benefits
when we improve the lives of the world’s consumers, now
and for generations to come.

A. G. Lafley
President and Chief Executive

John E. Pepper
Chairman of the Board

R E P O R T•

E X E C U T I V E

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

S U M M A R Y

2 0 0 1

S U S T A I N A B I L I T Y

R E P O R T•

E X E C U T I V E

S U M M A R Y

Statement of Purpose
Executive Summary

We will provide products and services of

VisionF

rom the beginning, P&G’s embrace of Sustainable
Development has been based on our vision that
we can grow the business, shareholder and stakeholder
value of P&G by bringing to the marketplaceinnovations and technologies that address thefrustrations and aspirations of consumers at all levelsof the economic pyramid. Since then, we have been ona steep learning curve in our attempt to bringsustainability to life for our business managers as wellas our external stakeholders. I want to share some of
our learnings with you.
Our first, and most important, learning came in ourefforts to define the concept of sustainability as a way
to ensure better quality of life for everyone, now andfor generations to come. This is an effort on which wehave been focused for two years, and we areencouraged by how many people – in business,government and non-governmental organizations – arenot only embracing this concept, but also seizing upon
it to pursue common solutions, and not just common
problems. People relate to the idea of a “better qualityof life” at an emotional level. They have their own
ideas about what a better quality of life means forthem and their children and for those less fortunate
than themselves. At P&G, we now use thisdefinition exclusively.
Our second learning was the importance of talking
about sustainability as an opportunity, not an issue tobe managed. We recognized this difference anddeveloped our approach to sustainability accordingly.
When meeting with our business leaders to discuss
how sustainable development relates to theirbusinesses, we stress the opportunity that flows from“ensuring a better quality of life.” When talking withexternal stakeholders, we share ideas on how to
improve lives. We find people begin talking about
creative solutions, new partnerships and new
business opportunities that come from addressing
the aspirations and problems of consumers all over
the world.

superior quality and value that improve
the lives of the world’s consumers.
As a result, consumers will reward us

However, as we focus on building new top-line value
for P&G, we have maintained our historical attention
to how we run our business – our health, safety andenvironmental management, product safety programs
and community relations efforts. In this year’s report,
you will see:
• P&G’s environmental compliance and employee
safety performance are at historical best levels• P&G was rated the No. 1 company in the noncyclical consumer products sector by the Dow
Jones Sustainability Group Index• Business Ethics magazine rated P&G first in its
annual list of 100 Best Corporate Citizens
Our approach to sustainability is a simple but
enormously motivating way to think about our
responsibility as a company. It is fully consistent with
our Purpose, Values and Principles; thus, a perfectly
natural way for us to behave. Living up to such achallenge can be difficult, but it is a challenge weembrace. And we are pleased to share our progresswith you.

creation, allowing our people, ourhis report was prepared in accordance with the
Global Reporting Initiative’s (GRI’s) Sustainability
Reporting Guidelines on Economic, Environmental andSocial Performance, June 2000. The mission of the
GRI is to promote international harmonization in thereporting of relevant and credible corporate
environmental, social and economic performance
information to enhance responsible decision making.
GRI pursues this mission through a multi-stakeholder
process of open dialogue and collaboration in thedesign and implementation of widely applicablesustainability reporting guidelines. GRI has notverified the contents of this report, nor does it take aposition on the reliability of information reported
herein. For further information about the GRI, please
visit: http://www.globalreporting.org

The full report is available on
P&G’s web site:
http://www.pg.com/sr

Please visit P&G’s corporate web site forthe latest P&G news and shareholder andcareer information: http://www.pg.com•

E X E C U T I V E

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

Ownership

Passionfor
Winning

Integrity

Sustainability is an important way for us to leverage thepower of innovation and global markets for the benefit ofeveryone – not just those in the developed world. We cannot
condemn developing countries to a life of poverty so thosein the developed world can maintain their lifestyles. But
neither do we have to presume that the only alternative is forthe developed world to reduce its quality of life. When weconcede to such a notion, we erect barriers to progress. We
pit the developed and developing worlds against one
another and create an adversarial environment in which
there are opposing sides, not common purpose. As aresult, progress stalls or moves only incrementally, andtwo-thirds of the world’s population continues to live on
the fringes of existence.

Principles
We Show Respect for All Individuals
The Interests of the Company and theIndividual 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

There is an alternative. It is based on the premise that we canmake markets work for everyone and ultimately make lives
better in every part of the world. In this report, you will findmany examples of P&G’s contributions to a better quality oflife through the creation of new products, new markets andaddressing new consumer needs. For example:• pregnancy education to reduce maternal mortality• Actonel for the treatment and prevention of
postmenopausal osteoporosis• dental hygiene education to improve oral health• a partnership with UNICEF to combat tuberculosis

Mutual Interdependency is a Way of Life

2001 SUSTAINABILITYREPORT
Editor: Corey Snyder, Cincinnati, Ohio, USACore Report Team: Chris Smith, Newcastle
upon Tyne, U.K.; Debbie White,
Cincinnati, Ohio, USA; Courtney Dressler,
Cincinnati, Ohio, USA; Mary Kay Morris,
Cincinnati, Ohio, USA; Bea Buyle,
Brussels, Belgium; Paul van der
Mensbrugghe, Brussels, Belgium; Taki
Arakaki, Kobe, Japan; Joaquin Zepeda,
Caracas, Venezuela.
Design: Andy Ruttle, Ruttle Design Group, Inc.,
Cincinnati, Ohio, USA.

Another important issue we would like to address is how the
global economic environment has impacted our business.
Fiscal 1999/00 was a difficult year for P&G and for its many
employees around the world. A strong plan was put in place
to re-establish the balance between top-line revenue growthand bottom-line earnings growth. However, over the pastfiscal year, we continued to face a challenging economic
environment, with a slowing U.S. economy and thepossibility of a recession. Key economies around the globe
were also slowing – Japan, some countries in Europe, someof the developing markets. In order to restore P&G’s ability
to compete more effectively and to grow more consistently,
the previous restructuring program was expanded to further
reduce overhead costs, resulting in staffing reductions acrossthe Company.

The report team wishes to thank all the individuals
throughout the Company who contributed information, stories and data to this report.

FRONT COVER: Children gather
outside a school supported by the
Dash Goodwill Mission – School for
Angola program.

Corporate Sustainable Development
Two Procter & Gamble Plaza
TN-02, MS-28
Cincinnati, Ohio 45202 USA
E-mail: sustainrep-im@pg.com

S U M M A R Y
0013-6465

CEO and Chairman’s Statement
he men and women of P&G share a deeply felt purpose:to improve the lives of consumers in every part of theworld. One important way in which we fulfill this purpose isthrough our commitment to the concept of sustainable
development, or sustainability, which we believe is integral
to both P&G’s future business success and to a truly better
quality of life for all the world’s consumers – now and forgenerations to come.

Trust

T

REPORTTPEOPLE

which we live and work to prosper.

WWW

R E P O R TCore Values
Leadership

Fax: (513) 983-5226
S U S T A I N A B I L I T Y

SUSTAINABILITY

shareholders, and the communities inReferences to trademarked products in this report are
to trademarks owned by and registered to
The Procter & Gamble Company.

2 0 0 1

2001

with leadership sales, profit and value

This is the Executive Summary of thethird Sustainability Report for P&G’s
worldwide operations. Data in the reportcovers the period from July 1, 2000,
through June 30, 2001.

George D. Carpenter
Director, Corporate
Sustainable Development

Sustainable development is a very
simple idea. It is about ensuring abetter quality of life for everyone, now
and for generations to come.

This report was printed on 50% recycled paper, 10% post-consumer.
© 2001 The Procter & Gamble Company. All rights reserved.

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

2 0 0 1S U S T A I N A B I L I T YWhen downsizing becomes necessary, as it did this pastfiscal year, we manage employee separations in ways thatare consistent with our values and principles. We maintainfocus and priority on our strong commitment to the diversityof our organization. P&G uses a voluntary separation
program to maximize voluntary attrition. The program,which includes severance pay based on years of service,continuation of health care benefits for the severance period,
outplacement support services and a retraining allowance,
provides a bridge for separating employees to retirement or
employment elsewhere.
These efforts have translated into improved competitivenessby controlling costs and managing cash more effectively,
and resulted in getting P&G’s business back on track andgrowing again. We’ve refocused on our biggest brands, inour biggest markets, with our biggest customers. We’ve
strengthened the value of our brands for consumers. We’ve
made strategic choices about which businesses P&G should
be in and which it should not.
We have only just started down our road to sustainable
development, but already we can see how P&G benefits
when we improve the lives of the world’s consumers, now
and for generations to come.

A. G. Lafley
President and Chief Executive

John E. Pepper
Chairman of the Board

R E P O R T•

E X E C U T I V E

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

S U M M A R YFinancial Highlights(Millions of dollars except per-share amounts)

P&G Profile

Key IndicatorsOur sustainability focus continues to be Waterand Health & Hygiene. We have chosen these
two major areas as they are applicable across all of theCompany’s global business units and the core drivers
for sustainability: environmental protection, social
responsibility and economic development. While P&G
continues to focus on Water and Health & Hygiene,
the Company will not forget its long tradition of:• Doing what is right for consumers, employees,
shareholders and communities where it operates.
• Building sales and profit growth in a socially andenvironmentally responsible manner.
• Increasing diversity within its work force.
• Contributing to a more educated population.
• Maintaining high standards of health, safety andenvironmental protection for its products andoperations throughout the world.

P&G’s worldwide headquarters is located in Cincinnati, Ohio, U.S. The Company has on-the-ground operations
in more than 80 countries and employs nearly 106,000 people worldwide.
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 July 31, 2001, there were 1,090,000 Common Stock shareholders of record, including participants in the
Shareholder Investment Program. Five billion shares of Common Stock have been authorized. About
1,295,738,000 shares were outstanding as of July 31, 2001.
This is the third Sustainability Report for P&G’s worldwide operations. Data in this report covers the period
from July 1, 2000, through June 30, 2001. Financial information is given in U.S. dollars.

As part of P&G’s restructuring initiative to optimize
resources to fit a growing global business and to accelerateinnovation and growth, the Company began operating its businessthrough Global Business Units (GBUs).
• Global Baby, Feminine, & Family Care

Fabric & Home Care
ACE BLEACH AND
PREWASHARIEL
BOUNCECASCADE
CHEER
DASH
DAWN
DOWNY
DRYEL
ERA
FAIRY
FEBREZE
JOY

Feminine Care
ALWAYSALLDAYSTAMPAX
WHISPER

BC

BFFC

FHC

FB

HC

• Global Beauty Care

Product Shipped
Raw Materials from
Recycled Sources

15,808208

13,936476

13,269
380

893
0

3,510
208

8,248
0

2,179
0

978
0

Food & Beverage
CRISCOFOLGERSJIFMILLSTONE
OLEAN
PRINGLES

Beauty Care
COVER GIRLIVORYMAX FACTOR
OLAY
OLD SPICEPANTENE PRO-V
PERT PLUS
REJOICESAFEGUARD

910(830)*
51%

879
55%

863
56%

57
34%

472
65%

140
62%

214(134)*
39%

27
54%

376(296)*
13
36
15

317
12
39
19

271
27
31
20

27
3.3
3.7
0.5

199
0.9
7.4
6.3

29
8.0
11.1
2.4

113(33)*
0.2
11.2
5.5

8.0
0.5
2.1
0.4

1,068
88.1
1.7

1,080
87.0
1.9

967
83.4
1.6

43
4.9
0.02

656
55.8
0.01

216
15.8
1.2

110
9.0
0.08

Secret To Self-Esteem ProgramEnters Third Year
The mission of the Secret to Self-Esteem Program isto help young girls become strong women by building
self-esteem. In 1998, P&G’s Secret anti-perspirant
and The Partnership for Women’s Health at Columbia
University created the program with the objective ofproviding teen girls with the practical skills andsolutions to build healthy self-esteem.

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

Management
All Other Employees (Administrative, Technicaland Plant Technicians)% Minorities
2000/01 1999/00 1998/99
15.8
15.9
15.8
18.4

Occupational Health & Safety Data
Past three years’ global data on two key metrics forworker health and safety:

Other
Energy Consumption (10 GJ)
Water Consumption (MM cubic meters)
SARA Releases (1,000 tons)**

This initial program was extremely successful, and the DoH has asked the program be madeavailable to everyone. Pampers has led a fundraising campaign among industry to raise ZAR 1
million ($122,000) to provide 1,500 clinics and hospitals with the program. The rollout of thenational Hands-On program should be completed within two years.

* The category of “All Other Employees” continues to be an evolving global database as more of P&G’s plants areincluded. The database is expected to be complete by 2001/02. Changes in this category between 1999/00 and 2000/01
are reflective of the addition of more plant sites, which tend to have higher levels of male enrollment.

Disposed Waste

5

Last year Pampers and the South African Department of Health (DoH) jointly developed the HandsOn program to educate and empower couples about these issues. The program was rolled-out ateight test sites in both rural and urban public hospitals and clinics.

Global Enrollment % Female
2000/01
1999/00
Management
34.5
34.1
All Other Employees*
38.0
39.3

Waste

Family Care
BOUNTYCHARMIN
PUFFS
TEMPO

he maternal mortality rate in South Africa is exceptionally high resulting in 150 deaths per
100,000 live births. South Africa’s women are 12 times more likely to die from complications
during pregnancy than their European and U.S. counterparts. The five main causes of maternalmortality are non-pregnancy related sepsis, hypertension, obstetric hemorrhage, pregnancy related
sepsis, and pre-existing maternal disease.

P&G continues to focus on diversity as a global strategy and expects its work force to become increasingly morediverse. Global data on enrollment by gender are shown in the following table:

1998/99

Health CareACTONELASACOLBLEND-A-MED
CREST
DIDRONEL
IAMS
MACROBIDMETAMUCILNYQUIL/DAYQUILPEPTO-BISMOLSCOPEVICKS FORMULA 44
VICKS VAPORUB

T

1998/99$27,585,008

Diversity Data — Global Enrollment

1999/00

Solid Waste — Non-Hazardous
Solid Waste — Hazardous
Effluents (Excluding Water)
Air Emissions

1999/00$28,292,768• Employment• Taxes, Fees and Contributions

Economic Development

2000/01

SKII
SECRETVIDAL SASSOONZESTSouth Africa Hands-On Pregnancy Education Program• Shareholder Value

Production

Baby CareBABYSANDODOTLUVS
PAMPERSPAMPERS & LUVSBABY WIPES

Sustainability in Action

P&G’s contributions and community activities are an important part of achieving the Company’s purpose of
improving the lives of the world’s consumers. During the past year, P&G through The P&G Fund has provided
support to more than 1,500 organizations.

• Global Fabric & Home Care

SUNNY DELIGHTSPIREECLIPSE

2000/01$27,503,686

Total

Total

Generated Waste
Percent Recycled/Reused Waste

Key Brands

Social Responsibility• Health• Hygiene• Education

2000/2001 Global Business Unit Details• Global Food & Beverage

1998/99$38,125$10,845$2,075$3,763$2.75$32,192$6,265$12,058

P&G and its employees have a long-standing commitment to being good citizens and neighbors in all the places
where we do business around the world. We believe we have a responsibility to society to use our resources –money, people and energy – wisely. We show our financial commitment through support for a wide range ofeducational, health, social service, cultural, civic and environmental organizations. Worldwide, P&G has acorporate contributions system in place that coordinates contributions to local communities. Contributions madeby The P&G Fund and Corporate Contributions in North America for the past three years are provided in thefollowing table:

Environmental Protection• Resource Use (Materials and Energy)• Water• Waste and Emissions

All units are in thousands of metric tonnes unless otherwise noted. 1 tonne = 1,000 kg = 2,205 lbs.

Measure1999/00$39,951$12,483$1,994$3,542$2.61$34,366$9,012$12,287

Philanthropic Contributions

Manufacturing Resource & Waste Summary• Global Health Care

LENOR
MR. CLEAN
TIDE
SWIFFER

Major Impacts Associatedwith Products and Services

Key Sustainability Focus Areas

markets approximately 250 brands of consumer products to nearly five billion consumers in more than
130 countries. The products include laundry detergents, toothpastes, shampoos, feminine hygiene products,
pharmaceuticals, snacks, diapers, cosmetics and cold remedies. P&G products are best known by their brandnames: Pampers, Tide, Ariel, Always, Whisper, Pantene, Bounty, Pringles, Folgers, Charmin, Downy, Lenor,
Iams, Olay, Crest, Vicks and Actonel.

2000/01$39,244$12,406$1,694$2,922$2.15$34,387$9,792$12,010Net Sales
Marketing, Research & Administrative Expenses
Income Taxes
Net Earnings
Basic Net Earnings Per Common ShareTotal Assets
Long-Term Debt
Shareholders’ Equity

Total Incident Rate
(injury and illness per 100 employees)
2000/01
1999/00
1998/99
0.69
0.79
0.79

43
2.6
0.41

* Waste from process sources decreased. Total wastes would be 80,000 metric tonnes less if demolition wastes were excluded.
** Releases defined in the U.S. Superfund Amendments and Reauthorization Act by the U.S. Environmental Protection Agency.

Total Lost Workday Case Rate(lost & restricted workday cases per 100 employees)
2000/01
1999/00
1998/99
0.24
0.35
0.37

NOTE: BC - Beauty Care; BFFC - Baby, Feminine, & Family Care; FHC - Fabric & Home Care; FB - Food & Beverage; HC - Health Care

18.8

This year, theprogram willreach thousandsof teen girls
throughsymposia andother events.
The Secret to
Self-Esteem
Program also sponsors a nationwide essay contest andscholarship program designed to recognize girls who
exemplify feminine strength.

% Female
2000/01 1999/00 1998/99
34.1
33.7
33.1

18.5

38.8

39.7

39.9

Summary of Violations andInterventions
Past three years’ global data on environmental,transportation, and worker health and safety violations
and interventions:
2000/01
73$77,070

NumberFines

1999/00
48$13,400

1998/99
46$33,250

For the first timein their lives,
people in thevillage of Dalocha,
Ethiopia, haveaccess to clean
drinking water.

Dash Missione Bontà
Dash, the leading laundry brand in Italy, has beendeveloping and supporting social initiatives foralmost 15 years. All Dash social plans are named
Missione Bontà (Goodwill Mission) and are targeted
to improve the quality of life of children.
In Africa, Dash has sponsored programs in Kenya(Mille Lire per un Mattone - 1,000 Lire for a Brick)to build a village for the education and care ofchildren, in Ethiopia (Mille Lire per un Aiuto – 1,000
Lire for a Helping Hand) to provide the residents of
Dalocha with access to clean drinking water, and in
Angola (Scuola per L’Angola - School for Angola) tohelp educate teachers and children.
Over the past two years, Dash has focused attention
towards Italian children (Ospedale Amico) and has
worked in hospitals to comfort children. A new Dashcampaign will be launched later this year.

The increases in fines and violations this year are
related to transportation of hazardous materials.

Building for the Future$1 Million
Net Sales
1859

Wm. Procter &James Gamble,
Founders, Candle& Soap Business

1837

1850

2 0 0 1S U S T A I N A B I L I T Y

1860

R E P O R T•

P&G Brand
Advertising
1882

Regional U.S.
Markets

E X E C U T I V E

1870

S U M M A R Y

1880ProfitSharing1887

Incorporated
Company
1890

1890

Beginningof P&G
Research &Development

Shortening &Oils Business

1900

1910

CanadaMarkets

P&G
Code of
Regulations

1920

Beginning of
P&G Market
Research

SafetyProgramStartedPhilippinesand U.K.
Markets

1930

Tide
Introduced
1946

Synthetic
Detergents

Oral Care
Business

2 0 0 1

Overseas
Division
1948

1940

S U S T A I N A B I L I T Y$1 Billion
Net Sales

First
Disposable
Fluoride
Diapers
Toothpaste Business
1955

1950

R E P O R T•

E X E C U T I V E

1960

S U M M A R Y

1965
Affirmative
ActionEnvironmental
Audit
Program1970

Toll-freeConsumer $10 Billion
HotlineNet Sales

Feminine
Protection
Businesses

1980

Statementof
Purpose
1987

World
Environment
Center Award
1992

Opportunity
2000
Award
1994

1990
1993
1st Annual Global
Environment Report

FutureShares19982001

2000

Dow Jones
Sector Leader&
Business
EthicsRanked #1
2001

Financial Highlights(Millions of dollars except per-share amounts)

P&G Profile

Key IndicatorsOur sustainability focus continues to be Waterand Health & Hygiene. We have chosen these
two major areas as they are applicable across all of theCompany’s global business units and the core drivers
for sustainability: environmental protection, social
responsibility and economic development. While P&G
continues to focus on Water and Health & Hygiene,
the Company will not forget its long tradition of:• Doing what is right for consumers, employees,
shareholders and communities where it operates• Building sales and profit growth in a socially andenvironmentally responsible manner• Increasing diversity within its work force• Contributing to a more educated population• Maintaining high standards of health, safety andenvironmental protection for its products andoperations throughout the world

P&G’s worldwide headquarters is located in Cincinnati, Ohio, U.S. The Company has on-the-ground operations
in more than 80 countries and employs nearly 106,000 people worldwide.
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 July 31, 2001, there were 1,090,000 Common Stock shareholders of record, including participants in the
Shareholder Investment Program. Five billion shares of Common Stock have been authorized. About
1,295,738,000 shares were outstanding as of July 31, 2001.
This is the third Sustainability Report for P&G’s worldwide operations. Data in this report covers the period
from July 1, 2000, through June 30, 2001. Financial information is given in U.S. dollars.

As part of P&G’s restructuring initiative to optimize
resources to fit a growing global business and to accelerateinnovation and growth, the Company began operating its businessthrough Global Business Units (GBUs).
• Global Baby, Feminine, & Family Care

Fabric & Home Care
ACE BLEACH AND
PREWASHARIEL
BOUNCECASCADE
CHEER
DASH
DAWN
DOWNY
DRYEL
ERA
FAIRY
FEBREZE
JOY

Feminine Care
ALWAYSALLDAYSTAMPAX
WHISPER

BC

BFFC

FHC

FB

HC

• Global Beauty Care

Product Shipped
Raw Materials from
Recycled Sources

15,808208

13,936476

13,269
380

893
0

3,510
208

8,248
0

2,179
0

978
0

Food & Beverage
CRISCOFOLGERSJIFMILLSTONE
OLEAN
PRINGLES

Beauty Care
COVER GIRLIVORYMAX FACTOR
OLAY
OLD SPICEPANTENE PRO-V
PERT PLUS
REJOICESAFEGUARD

910(830)*
51%

879
55%

863
56%

57
34%

472
65%

140
62%

214(134)*
39%

27
54%

376(296)*
13
36
15

317
12
39
19

271
27
31
20

27
3.3
3.7
0.5

199
0.9
7.4
6.3

29
8.0
11.1
2.4

113(33)*
0.2
11.2
5.5

8.0
0.5
2.1
0.4

1,068
88.1
1.7

1,080
87.0
1.9

967
83.4
1.6

43
4.9
0.02

656
55.8
0.01

216
15.8
1.2

110
9.0
0.08

Secret To Self-Esteem ProgramEnters Third Year
The mission of the Secret to Self-Esteem Program isto help young girls become strong women by building
self-esteem. In 1998, P&G’s Secret anti-perspirant
and The Partnership for Women’s Health at Columbia
University created the program with the objective ofproviding teen girls with the practical skills andsolutions to build healthy self-esteem.

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

Management
All Other Employees (Administrative, Technicaland Plant Technicians)% Minorities
2000/01 1999/00 1998/99
15.8
15.9
15.8
18.4

Occupational Health & Safety Data
Past three years’ global data on two key metrics forworker health and safety:

Other
Energy Consumption (10 GJ)
Water Consumption (MM cubic meters)
SARA Releases (1,000 tons)**

This initial program was extremely successful, and the DoH has asked the program be madeavailable to everyone. Pampers has led a fundraising campaign among industry to raise ZAR 1
million ($122,000) to provide 1,500 clinics and hospitals with the program. The rollout of thenational Hands-On program should be completed within two years.

* The category of “All Other Employees” continues to be an evolving global database as more of P&G’s plants areincluded. The database is expected to be complete by 2001/02. Changes in this category between 1999/00 and 2000/01
are reflective of the addition of more plant sites, which tend to have higher levels of male enrollment.

Disposed Waste

5

Last year Pampers and the South African Department of Health (DoH) jointly developed the HandsOn program to educate and empower couples about these issues. The program was rolled-out ateight test sites in both rural and urban public hospitals and clinics.

Global Enrollment % Female
2000/01
1999/00
Management
34.5
34.1
All Other Employees*
38.0
39.3

Waste

Family Care
BOUNTYCHARMIN
PUFFS
TEMPO

he maternal mortality rate in South Africa is exceptionally high resulting in 150 deaths per
100,000 live births. South Africa’s women are 12 times more likely to die from complications
during pregnancy than their European and U.S. counterparts. The five main causes of maternalmortality are non-pregnancy related sepsis, hypertension, obstetric hemorrhage, pregnancy related
sepsis, and pre-existing maternal disease.

P&G continues to focus on diversity as a global strategy and expects its work force to become increasingly morediverse. Global data on enrollment by gender are shown in the following table:

1998/99

Health CareACTONELASACOLBLEND-A-MED
CREST
DIDRONEL
IAMS
MACROBIDMETAMUCILNYQUIL/DAYQUILPEPTO-BISMOLSCOPEVICKS FORMULA 44
VICKS VAPORUB

T

1998/99$27,585,008

Diversity Data — Global Enrollment

1999/00

Solid Waste — Non-Hazardous
Solid Waste — Hazardous
Effluents (Excluding Water)
Air Emissions

1999/00$28,292,768• Employment• Taxes, Fees and Contributions

Economic Development

2000/01

SKII
SECRETVIDAL SASSOONZESTSouth Africa Hands-On Pregnancy Education Program• Shareholder Value

Production

Baby CareBABYSANDODOTLUVS
PAMPERSPAMPERS & LUVSBABY WIPES

Sustainability in Action

P&G’s contributions and community activities are an important part of achieving the Company’s purpose of
improving the lives of the world’s consumers. During the past year, P&G through The P&G Fund has provided
support to more than 1,500 organizations.

• Global Fabric & Home Care

SUNNY DELIGHTSPIREECLIPSE

2000/01$27,503,686

Total

Total

Generated Waste
Percent Recycled/Reused Waste

Key Brands

Social Responsibility• Health• Hygiene• Education

2000/2001 Global Business Unit Details• Global Food & Beverage

1998/99$38,125$10,845$2,075$3,763$2.75$32,192$6,265$12,058

P&G and its employees have a long-standing commitment to being good citizens and neighbors in all the places
where we do business around the world. We believe we have a responsibility to society to use our resources –money, people and energy – wisely. We show our financial commitment through support for a wide range ofeducational, health, social service, cultural, civic and environmental organizations. Worldwide, P&G has acorporate contributions system in place that coordinates contributions to local communities. Contributions madeby The P&G Fund and Corporate Contributions in North America for the past three years are provided in thefollowing table:

Environmental Protection• Resource Use (Materials and Energy)• Water• Waste and Emissions

All units are in thousands of metric tonnes unless otherwise noted. 1 tonne = 1,000 kg = 2,205 lbs.

Measure1999/00$39,951$12,483$1,994$3,542$2.61$34,366$9,012$12,287

Philanthropic Contributions

Manufacturing Resource & Waste Summary• Global Health Care

LENOR
MR. CLEAN
TIDE
SWIFFER

Major Impacts Associatedwith Products and Services

Key Sustainability Focus Areas

markets approximately 250 brands of consumer products to nearly five billion consumers in more than
130 countries. The products include laundry detergents, toothpastes, shampoos, feminine hygiene products,
pharmaceuticals, snacks, diapers, cosmetics and cold remedies. P&G products are best known by their brandnames: Pampers, Tide, Ariel, Always, Whisper, Pantene, Bounty, Pringles, Folgers, Charmin, Downy, Lenor,
Iams, Olay, Crest, Vicks and Actonel.

2000/01$39,244$12,406$1,694$2,922$2.15$34,387$9,792$12,010Net Sales
Marketing, Research & Administrative Expenses
Income Taxes
Net Earnings
Basic Net Earnings Per Common ShareTotal Assets
Long-Term Debt
Shareholders’ Equity

Total Incident Rate
(injury and illness per 100 employees)
2000/01
1999/00
1998/99
0.69
0.79
0.79

43
2.6
0.41

* Waste from process sources decreased. Total wastes would be 80,000 metric tonnes less if demolition wastes were excluded.
** Releases defined in the U.S. Superfund Amendments and Reauthorization Act by the U.S. Environmental Protection Agency.

Total Lost Workday Case Rate(lost & restricted workday cases per 100 employees)
2000/01
1999/00
1998/99
0.24
0.35
0.37

NOTE: BC - Beauty Care; BFFC - Baby, Feminine, & Family Care; FHC - Fabric & Home Care; FB - Food & Beverage; HC - Health Care

18.8

This year, theprogram willreach thousandsof teen girls
throughsymposia andother events.
The Secret to
Self-Esteem
Program also sponsors a nationwide essay contest andscholarship program designed to recognize girls who
exemplify feminine strength.

% Female
2000/01 1999/00 1998/99
34.1
33.7
33.1

18.5

38.8

39.7

39.9

Summary of Violations andInterventions
Past three years’ global data on environmental,transportation, and worker health and safety violations
and interventions:
2000/01
73$77,070

NumberFines

1999/00
48$13,400

1998/99
46$33,250

For the first timein their lives,
people in thevillage of Dalocha,
Ethiopia, haveaccess to clean
drinking water.

Dash Missione Bontà
Dash, the leading laundry brand in Italy, has beendeveloping and supporting social initiatives foralmost 15 years. All Dash social plans are named
Missione Bontà (Goodwill Mission) and are targeted
to improve the quality of life of children.
In Africa, Dash has sponsored programs in Kenya(Mille Lire per un Mattone - 1,000 Lire for a Brick)to build a village for the education and care ofchildren, in Ethiopia (Mille Lire per un Aiuto – 1,000
Lire for a Helping Hand) to provide the residents of
Dalocha with access to clean drinking water, and in
Angola (Scuola per L’Angola - School for Angola) tohelp educate teachers and children.
Over the past two years, Dash has focused attention
towards Italian children (Ospedale Amico) and has
worked in hospitals to comfort children. A new Dashcampaign will be launched later this year.

The increases in fines and violations this year are
related to transportation of hazardous materials.

Building for the Future$1 Million
Net Sales
1859

Wm. Procter &James Gamble,
Founders, Candle& Soap Business

1837

1850

2 0 0 1S U S T A I N A B I L I T Y

1860

R E P O R T•

P&G Brand
Advertising
1882

Regional U.S.
Markets

E X E C U T I V E

1870

S U M M A R Y

1880ProfitSharing1887

Incorporated
Company
1890

1890

Beginningof P&G
Research &Development

Shortening &Oils Business

1900

1910

CanadaMarkets

P&G
Code of
Regulations

1920

Beginning of
P&G Market
Research

SafetyProgramStartedPhilippinesand U.K.
Markets

1930

Tide
Introduced
1946

Synthetic
Detergents

Oral Care
Business

2 0 0 1

Overseas
Division
1948

1940

S U S T A I N A B I L I T Y$1 Billion
Net Sales

First
Disposable
Fluoride
Diapers
Toothpaste Business
1955

1950

R E P O R T•

E X E C U T I V E

1960

S U M M A R Y

1965
Affirmative
ActionEnvironmental
Audit
Program1970

Toll-freeConsumer $10 Billion
HotlineNet Sales

Feminine
Protection
Businesses

1980

Statementof
Purpose
1987

World
Environment
Center Award
1992

Opportunity
2000
Award
1994

1990
1993
1st Annual Global
Environment Report

FutureShares19982001

2000

Dow Jones
Sector Leader&
Business
EthicsRanked #1
2001

Financial Highlights(Millions of dollars except per-share amounts)

P&G Profile

Key IndicatorsOur sustainability focus continues to be Waterand Health & Hygiene. We have chosen these
two major areas as they are applicable across all of theCompany’s global business units and the core drivers
for sustainability: environmental protection, social
responsibility and economic development. While P&G
continues to focus on Water and Health & Hygiene,
the Company will not forget its long tradition of:• Doing what is right for consumers, employees,
shareholders and communities where it operates.
• Building sales and profit growth in a socially andenvironmentally responsible manner.
• Increasing diversity within its work force.
• Contributing to a more educated population.
• Maintaining high standards of health, safety andenvironmental protection for its products andoperations throughout the world.

P&G’s worldwide headquarters is located in Cincinnati, Ohio, U.S. The Company has on-the-ground operations
in more than 80 countries and employs nearly 106,000 people worldwide.
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 July 31, 2001, there were 1,090,000 Common Stock shareholders of record, including participants in the
Shareholder Investment Program. Five billion shares of Common Stock have been authorized. About
1,295,738,000 shares were outstanding as of July 31, 2001.
This is the third Sustainability Report for P&G’s worldwide operations. Data in this report covers the period
from July 1, 2000, through June 30, 2001. Financial information is given in U.S. dollars.

As part of P&G’s restructuring initiative to optimize
resources to fit a growing global business and to accelerateinnovation and growth, the Company began operating its businessthrough Global Business Units (GBUs).
• Global Baby, Feminine, & Family Care

Fabric & Home Care
ACE BLEACH AND
PREWASHARIEL
BOUNCECASCADE
CHEER
DASH
DAWN
DOWNY
DRYEL
ERA
FAIRY
FEBREZE
JOY

Feminine Care
ALWAYSALLDAYSTAMPAX
WHISPER

BC

BFFC

FHC

FB

HC

• Global Beauty Care

Product Shipped
Raw Materials from
Recycled Sources

15,808208

13,936476

13,269
380

893
0

3,510
208

8,248
0

2,179
0

978
0

Food & Beverage
CRISCOFOLGERSJIFMILLSTONE
OLEAN
PRINGLES

Global Enrollment % Female
2000/01
Management
34.5
All Other Employees*
38.0

Beauty Care
COVER GIRLIVORYMAX FACTOR
OLAY
OLD SPICEPANTENE PRO-V
PERT PLUS
REJOICESAFEGUARD

910(830)*
51%

879
55%

863
56%

57
34%

472
65%

140
62%

214(134)*
39%

27
54%

376(296)*
13
36
15

317
12
39
19

271
27
31
20

27
3.3
3.7
0.5

199
0.9
7.4
6.3

29
8.0
11.1
2.4

113(33)*
0.2
11.2
5.5

8.0
0.5
2.1
0.4

1,068
88.1
1.7

1,080
87.0
1.9

967
83.4
1.6

43
4.9
0.02

656
55.8
0.01

216
15.8
1.2

110
9.0
0.08

Secret To Self-Esteem ProgramEnters Third Year
The mission of the Secret to Self-Esteem Program isto help young girls become strong women by building
self-esteem. In 1998, P&G’s Secret anti-perspirant
and The Partnership for Women’s Health at Columbia
University created the program with the objective ofproviding teen girls with the practical skills andsolutions to build healthy self-esteem.

1999/00
34.1
39.3

Management
All Other Employees (Administrative, Technicaland Plant Technicians)% Minorities
2000/01 1999/00 1998/99
15.8
15.9
15.8
18.4

Occupational Health & Safety Data
Past three years’ global data on two key metrics forworker health and safety:

Other
Energy Consumption (10 GJ)
Water Consumption (MM cubic meters)
SARA Releases (1,000 tons)**

This initial program was extremely successful, and the DoH has asked the program be madeavailable to everyone. Pampers has led a fundraising campaign among industry to raise ZAR 1
million ($122,000) to provide 1,500 clinics and hospitals with the program. The rollout of thenational Hands-On program should be completed within two years.

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

Disposed Waste

5

Last year Pampers and the South African Department of Health (DoH) jointly developed the HandsOn program to educate and empower couples about these issues. The program was rolled-out ateight test sites in both rural and urban public hospitals and clinics.

* The category of “All Other Employees” continues to be an evolving global database as more of P&G’s plants areincluded. The database is expected to be complete by 2001/02. Changes in this category between 1999/00 and 2000/01
are reflective of the addition of more plant sites, which tend to have higher levels of male enrollment.

Waste

Family Care
BOUNTYCHARMIN
PUFFS
TEMPO

he maternal mortality rate in South Africa is exceptionally high resulting in 150 deaths per
100,000 live births. South Africa’s women are 12 times more likely to die from complications
during pregnancy than their European and U.S. counterparts. The five main causes of maternalmortality are non-pregnancy related sepsis, hypertension, obstetric hemorrhage, pregnancy related
sepsis, and pre-existing maternal disease.

P&G continues to focus on diversity as a global strategy and expects its work force to become increasingly morediverse. Global data on enrollment by gender are shown in the following table:

1998/99

Health CareACTONELASACOLBLEND-A-MED
CREST
DIDRONEL
IAMS
MACROBIDMETAMUCILNYQUIL/DAYQUILPEPTO-BISMOLSCOPEVICKS FORMULA 44
VICKS VAPORUB

T

1998/99$27,585,008

Diversity Data — Global Enrollment

1999/00

Solid Waste — Non-Hazardous
Solid Waste — Hazardous
Effluents (Excluding Water)
Air Emissions

1999/00$28,292,768• Employment• Taxes, Fees and Contributions

Economic Development

2000/01

SKII
SECRETVIDAL SASSOONZESTSouth Africa Hands-On Pregnancy Education Program• Shareholder Value

Production

Baby CareBABYSANDODOTLUVS
PAMPERSPAMPERS & LUVSBABY WIPES

Sustainability in Action

P&G’s contributions and community activities are an important part of achieving the Company’s purpose of
improving the lives of the world’s consumers. During the past year, P&G through The P&G Fund has provided
support to more than 1,500 organizations.

• Global Fabric & Home Care

SUNNY DELIGHTSPIREECLIPSE

2000/01$27,503,686

Total

Total

Generated Waste
Percent Recycled/Reused Waste

Key Brands

Social Responsibility• Health• Hygiene• Education

2000/2001 Global Business Unit Details• Global Food & Beverage

1998/99$38,125$10,845$2,075$3,763$2.75$32,192$6,265$12,058

P&G and its employees have a long-standing commitment to being good citizens and neighbors in all the places
where we do business around the world. We believe we have a responsibility to society to use our resources –money, people and energy – wisely. We show our financial commitment through support for a wide range ofeducational, health, social service, cultural, civic and environmental organizations. Worldwide, P&G has acorporate contributions system in place that coordinates contributions to local communities. Contributions madeby The P&G Fund and Corporate Contributions in North America for the past three years are provided in thefollowing table:

Environmental Protection• Resource Use (Materials and Energy)• Water• Waste and Emissions

All units are in thousands of metric tonnes unless otherwise noted. 1 tonne = 1,000 kg = 2,205 lbs.

Measure1999/00$39,951$12,483$1,994$3,542$2.61$34,366$9,012$12,287

Philanthropic Contributions

Manufacturing Resource & Waste Summary• Global Health Care

LENOR
MR. CLEAN
TIDE
SWIFFER

Major Impacts Associatedwith Products and Services

Key Sustainability Focus Areas

markets approximately 250 brands of consumer products to nearly five billion consumers in more than
130 countries. The products include laundry detergents, toothpastes, shampoos, feminine hygiene products,
pharmaceuticals, snacks, diapers, cosmetics and cold remedies. P&G products are best known by their brandnames: Pampers, Tide, Ariel, Always, Whisper, Pantene, Bounty, Pringles, Folgers, Charmin, Downy, Lenor,
Iams, Olay, Crest, Vicks and Actonel.

2000/01$39,244$12,406$1,694$2,922$2.15$34,387$9,792$12,010Net Sales
Marketing, Research & Administrative Expenses
Income Taxes
Net Earnings
Basic Net Earnings Per Common ShareTotal Assets
Long-Term Debt
Shareholders’ Equity

Total Incident Rate
(injury and illness per 100 employees)
2000/01
1999/00
1998/99
0.69
0.79
0.79

43
2.6
0.41

* Waste from process sources decreased. Total wastes would be 80,000 metric tonnes less if demolition wastes were excluded.
** Releases defined in the U.S. Superfund Amendments and Reauthorization Act by the U.S. Environmental Protection Agency.

Total Lost Workday Case Rate(lost & restricted workday cases per 100 employees)
2000/01
1999/00
1998/99
0.24
0.35
0.37

NOTE: BC - Beauty Care; BFFC - Baby, Feminine, & Family Care; FHC - Fabric & Home Care; FB - Food & Beverage; HC - Health Care

18.8

This year, theprogram willreach thousandsof teen girls
throughsymposia andother events.
The Secret to
Self-Esteem
Program also sponsors a nationwide essay contest andscholarship program designed to recognize girls who
exemplify feminine strength.

% Female
2000/01 1999/00 1998/99
34.1
33.7
33.1

18.5

38.8

39.7

39.9

Summary of Violations andInterventions
Past three years’ global data on environmental,transportation, and worker health and safety violations
and interventions:
2000/01
73$77,070

NumberFines

1999/00
48$13,400

1998/99
46$33,250

For the first timein their lives,
people in thevillage of Dalocha,
Ethiopia, haveaccess to clean
drinking water.

Dash Missione Bontà
Dash, the leading laundry brand in Italy, has beendeveloping and supporting social initiatives foralmost 15 years. All Dash social plans are named
Missione Bontà (Goodwill Mission) and are targeted
to improve the quality of life of children.
In Africa, Dash has sponsored programs in Kenya(Mille Lire per un Mattone - 1,000 Lire for a Brick)to build a village for the education and care ofchildren, in Ethiopia (Mille Lire per un Aiuto – 1,000
Lire for a Helping Hand) to provide the residents of
Dalocha with access to clean drinking water, and in
Angola (Scuola per L’Angola - School for Angola) tohelp educate teachers and children.
Over the past two years, Dash has focused attention
towards Italian children (Ospedale Amico) and has
worked in hospitals to comfort children. A new Dashcampaign will be launched later this year.

The increases in fines and violations this year are
related to transportation of hazardous materials.

Building for the Future$1 Million
Net Sales
1859

Wm. Procter &James Gamble,
Founders, Candle& Soap Business

1837

1850

2 0 0 1S U S T A I N A B I L I T Y

1860

R E P O R T•

P&G Brand
Advertising
1882

Regional U.S.
Markets

E X E C U T I V E

1870

S U M M A R Y

1880ProfitSharing1887

Incorporated
Company
1890

1890

Beginningof P&G
Research &Development

Shortening &Oils Business

1900

1910

CanadaMarkets

P&G
Code of
Regulations

1920

Beginning of
P&G Market
Research

SafetyProgramStartedPhilippinesand U.K.
Markets

1930

Tide
Introduced
1946

Synthetic
Detergents

Oral Care
Business

2 0 0 1

Overseas
Division
1948

1940

S U S T A I N A B I L I T Y$1 Billion
Net Sales

First
Disposable
Fluoride
Diapers
Toothpaste Business
1955

1950

R E P O R T•

E X E C U T I V E

1960

S U M M A R Y

1965
Affirmative
ActionEnvironmental
Audit
Program1970

Toll-freeConsumer $10 Billion
HotlineNet Sales

Feminine
Protection
Businesses

1980

Statementof
Purpose
1987

World
Environment
Center Award
1992

Opportunity
2000
Award
1994

1990
1993
1st Annual Global
Environment Report

FutureShares19982001

2000

Dow Jones
Sector Leader&
Business
EthicsRanked #1
2001

Financial Highlights(Millions of dollars except per-share amounts)

P&G Profile

Key IndicatorsOur sustainability focus continues to be Waterand Health & Hygiene. We have chosen these
two major areas as they are applicable across all of theCompany’s global business units and the core drivers
for sustainability: environmental protection, social
responsibility and economic development. While P&G
continues to focus on Water and Health & Hygiene,
the Company will not forget its long tradition of:• Doing what is right for consumers, employees,
shareholders and communities where it operates.
• Building sales and profit growth in a socially andenvironmentally responsible manner.
• Increasing diversity within its work force.
• Contributing to a more educated population.
• Maintaining high standards of health, safety andenvironmental protection for its products andoperations throughout the world.

P&G’s worldwide headquarters is located in Cincinnati, Ohio, U.S. The Company has on-the-ground operations
in more than 80 countries and employs nearly 106,000 people worldwide.
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 July 31, 2001, there were 1,090,000 Common Stock shareholders of record, including participants in the
Shareholder Investment Program. Five billion shares of Common Stock have been authorized. About
1,295,738,000 shares were outstanding as of July 31, 2001.
This is the third Sustainability Report for P&G’s worldwide operations. Data in this report covers the period
from July 1, 2000, through June 30, 2001. Financial information is given in U.S. dollars.

As part of P&G’s restructuring initiative to optimize
resources to fit a growing global business and to accelerateinnovation and growth, the Company began operating its businessthrough Global Business Units (GBUs).
• Global Baby, Feminine, & Family Care

Fabric & Home Care
ACE BLEACH AND
PREWASHARIEL
BOUNCECASCADE
CHEER
DASH
DAWN
DOWNY
DRYEL
ERA
FAIRY
FEBREZE
JOY

Feminine Care
ALWAYSALLDAYSTAMPAX
WHISPER

BC

BFFC

FHC

FB

HC

• Global Beauty Care

Product Shipped
Raw Materials from
Recycled Sources

15,808208

13,936476

13,269
380

893
0

3,510
208

8,248
0

2,179
0

978
0

Food & Beverage
CRISCOFOLGERSJIFMILLSTONE
OLEAN
PRINGLES

Beauty Care
COVER GIRLIVORYMAX FACTOR
OLAY
OLD SPICEPANTENE PRO-V
PERT PLUS
REJOICESAFEGUARD

910(830)*
51%

879
55%

863
56%

57
34%

472
65%

140
62%

214(134)*
39%

27
54%

376(296)*
13
36
15

317
12
39
19

271
27
31
20

27
3.3
3.7
0.5

199
0.9
7.4
6.3

29
8.0
11.1
2.4

113(33)*
0.2
11.2
5.5

8.0
0.5
2.1
0.4

1,068
88.1
1.7

1,080
87.0
1.9

967
83.4
1.6

43
4.9
0.02

656
55.8
0.01

216
15.8
1.2

110
9.0
0.08

Secret To Self-Esteem ProgramEnters Third Year
The mission of the Secret to Self-Esteem Program isto help young girls become strong women by building
self-esteem. In 1998, P&G’s Secret anti-perspirant
and The Partnership for Women’s Health at Columbia
University created the program with the objective ofproviding teen girls with the practical skills andsolutions to build healthy self-esteem.

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

Management
All Other Employees (Administrative, Technicaland Plant Technicians)% Minorities
2000/01 1999/00 1998/99
15.8
15.9
15.8
18.4

Occupational Health & Safety Data
Past three years’ global data on two key metrics forworker health and safety:

Other
Energy Consumption (10 GJ)
Water Consumption (MM cubic meters)
SARA Releases (1,000 tons)**

This initial program was extremely successful, and the DoH has asked the program be madeavailable to everyone. Pampers has led a fundraising campaign among industry to raise ZAR 1
million ($122,000) to provide 1,500 clinics and hospitals with the program. The rollout of thenational Hands-On program should be completed within two years.

* The category of “All Other Employees” continues to be an evolving global database as more of P&G’s plants areincluded. The database is expected to be complete by 2001/02. Changes in this category between 1999/00 and 2000/01
are reflective of the addition of more plant sites, which tend to have higher levels of male enrollment.

Disposed Waste

5

Last year Pampers and the South African Department of Health (DoH) jointly developed the HandsOn program to educate and empower couples about these issues. The program was rolled-out ateight test sites in both rural and urban public hospitals and clinics.

Global Enrollment % Female
2000/01
1999/00
Management
34.5
34.1
All Other Employees*
38.0
39.3

Waste

Family Care
BOUNTYCHARMIN
PUFFS
TEMPO

he maternal mortality rate in South Africa is exceptionally high resulting in 150 deaths per
100,000 live births. South Africa’s women are 12 times more likely to die from complications
during pregnancy than their European and U.S. counterparts. The five main causes of maternalmortality are non-pregnancy related sepsis, hypertension, obstetric hemorrhage, pregnancy related
sepsis, and pre-existing maternal disease.

P&G continues to focus on diversity as a global strategy and expects its work force to become increasingly morediverse. Global data on enrollment by gender are shown in the following table:

1998/99

Health CareACTONELASACOLBLEND-A-MED
CREST
DIDRONEL
IAMS
MACROBIDMETAMUCILNYQUIL/DAYQUILPEPTO-BISMOLSCOPEVICKS FORMULA 44
VICKS VAPORUB

T

1998/99$27,585,008

Diversity Data — Global Enrollment

1999/00

Solid Waste — Non-Hazardous
Solid Waste — Hazardous
Effluents (Excluding Water)
Air Emissions

1999/00$28,292,768• Employment• Taxes, Fees and Contributions

Economic Development

2000/01

SKII
SECRETVIDAL SASSOONZESTSouth Africa Hands-On Pregnancy Education Program• Shareholder Value

Production

Baby CareBABYSANDODOTLUVS
PAMPERSPAMPERS & LUVSBABY WIPES

Sustainability in Action

P&G’s contributions and community activities are an important part of achieving the Company’s purpose of
improving the lives of the world’s consumers. During the past year, P&G through The P&G Fund has provided
support to more than 1,500 organizations.

• Global Fabric & Home Care

SUNNY DELIGHTSPIREECLIPSE

2000/01$27,503,686

Total

Total

Generated Waste
Percent Recycled/Reused Waste

Key Brands

Social Responsibility• Health• Hygiene• Education

2000/2001 Global Business Unit Details• Global Food & Beverage

1998/99$38,125$10,845$2,075$3,763$2.75$32,192$6,265$12,058

P&G and its employees have a long-standing commitment to being good citizens and neighbors in all the places
where we do business around the world. We believe we have a responsibility to society to use our resources –money, people and energy – wisely. We show our financial commitment through support for a wide range ofeducational, health, social service, cultural, civic and environmental organizations. Worldwide, P&G has acorporate contributions system in place that coordinates contributions to local communities. Contributions madeby The P&G Fund and Corporate Contributions in North America for the past three years are provided in thefollowing table:

Environmental Protection• Resource Use (Materials and Energy)• Water• Waste and Emissions

All units are in thousands of metric tonnes unless otherwise noted. 1 tonne = 1,000 kg = 2,205 lbs.

Measure1999/00$39,951$12,483$1,994$3,542$2.61$34,366$9,012$12,287

Philanthropic Contributions

Manufacturing Resource & Waste Summary• Global Health Care

LENOR
MR. CLEAN
TIDE
SWIFFER

Major Impacts Associatedwith Products and Services

Key Sustainability Focus Areas

markets approximately 250 brands of consumer products to nearly five billion consumers in more than
130 countries. The products include laundry detergents, toothpastes, shampoos, feminine hygiene products,
pharmaceuticals, snacks, diapers, cosmetics and cold remedies. P&G products are best known by their brandnames: Pampers, Tide, Ariel, Always, Whisper, Pantene, Bounty, Pringles, Folgers, Charmin, Downy, Lenor,
Iams, Olay, Crest, Vicks and Actonel.

2000/01$39,244$12,406$1,694$2,922$2.15$34,387$9,792$12,010Net Sales
Marketing, Research & Administrative Expenses
Income Taxes
Net Earnings
Basic Net Earnings Per Common ShareTotal Assets
Long-Term Debt
Shareholders’ Equity

Total Incident Rate
(injury and illness per 100 employees)
2000/01
1999/00
1998/99
0.69
0.79
0.79

43
2.6
0.41

* Waste from process sources decreased. Total wastes would be 80,000 metric tonnes less if demolition wastes were excluded.
** Releases defined in the U.S. Superfund Amendments and Reauthorization Act by the U.S. Environmental Protection Agency.

Total Lost Workday Case Rate(lost & restricted workday cases per 100 employees)
2000/01
1999/00
1998/99
0.24
0.35
0.37

NOTE: BC - Beauty Care; BFFC - Baby, Feminine, & Family Care; FHC - Fabric & Home Care; FB - Food & Beverage; HC - Health Care

18.8

This year, theprogram willreach thousandsof teen girls
throughsymposia andother events.
The Secret to
Self-Esteem
Program also sponsors a nationwide essay contest andscholarship program designed to recognize girls who
exemplify feminine strength.

% Female
2000/01 1999/00 1998/99
34.1
33.7
33.1

18.5

38.8

39.7

39.9

Summary of Violations andInterventions
Past three years’ global data on environmental,transportation, and worker health and safety violations
and interventions:
2000/01
73$77,070

NumberFines

1999/00
48$13,400

1998/99
46$33,250

For the first timein their lives,
people in thevillage of Dalocha,
Ethiopia, haveaccess to clean
drinking water.

Dash Missione Bontà
Dash, the leading laundry brand in Italy, has beendeveloping and supporting social initiatives foralmost 15 years. All Dash social plans are named
Missione Bontà (Goodwill Mission) and are targeted
to improve the quality of life of children.
In Africa, Dash has sponsored programs in Kenya(Mille Lire per un Mattone - 1,000 Lire for a Brick)to build a village for the education and care ofchildren, in Ethiopia (Mille Lire per un Aiuto – 1,000
Lire for a Helping Hand) to provide the residents of
Dalocha with access to clean drinking water, and in
Angola (Scuola per L’Angola - School for Angola) tohelp educate teachers and children.
Over the past two years, Dash has focused attention
towards Italian children (Ospedale Amico) and has
worked in hospitals to comfort children. A new Dashcampaign will be launched later this year.

The increases in fines and violations this year are
related to transportation of hazardous materials.

Building for the Future$1 Million
Net Sales
1859

Wm. Procter &James Gamble,
Founders, Candle& Soap Business

1837

1850

2 0 0 1S U S T A I N A B I L I T Y

1860

R E P O R T•

P&G Brand
Advertising
1882

Regional U.S.
Markets

E X E C U T I V E

1870

S U M M A R Y

1880ProfitSharing1887

Incorporated
Company
1890

1890

Beginningof P&G
Research &Development

Shortening &Oils Business

1900

1910

CanadaMarkets

P&G
Code of
Regulations

1920

Beginning of
P&G Market
Research

SafetyProgramStartedPhilippinesand U.K.
Markets

1930

Tide
Introduced
1946

Synthetic
Detergents

Oral Care
Business

2 0 0 1

Overseas
Division
1948

1940

S U S T A I N A B I L I T Y$1 Billion
Net Sales

First
Disposable
Fluoride
Diapers
Toothpaste Business
1955

1950

R E P O R T•

E X E C U T I V E

1960

S U M M A R Y

1965
Affirmative
ActionEnvironmental
Audit
Program1970

Toll-freeConsumer $10 Billion
HotlineNet Sales

Feminine
Protection
Businesses

1980

Statementof
Purpose
1987

World
Environment
Center Award
1992

Opportunity
2000
Award
1994

1990
1993
1st Annual Global
Environment Report

FutureShares19982001

2000

Dow Jones
Sector Leader&
Business
EthicsRanked #1
2001

2 0 0 1

S U S T A I N A B I L I T Y

R E P O R T•

E X E C U T I V E

S U M M A R Y

Statement of Purpose
Executive Summary

We will provide products and services of

VisionF

rom the beginning, P&G’s embrace of Sustainable
Development has been based on our vision that
we can grow the business, shareholder and stakeholder
value of P&G by bringing to the marketplaceinnovations and technologies that address thefrustrations and aspirations of consumers at all levelsof the economic pyramid. Since then, we have been ona steep learning curve in our attempt to bringsustainability to life for our business managers as wellas our external stakeholders. I want to share some of
our learnings with you.
Our first, and most important, learning came in ourefforts to define the concept of sustainability as a way
to ensure better quality of life for everyone, now andfor generations to come. This is an effort on which wehave been focused for two years, and we areencouraged by how many people – in business,government and non-governmental organizations – arenot only embracing this concept, but also seizing upon
it to pursue common solutions, and not just common
problems. People relate to the idea of a “better qualityof life” at an emotional level. They have their own
ideas about what a better quality of life means forthem and their children and for those less fortunate
than themselves. At P&G, we now use thisdefinition exclusively.
Our second learning was the importance of talking
about sustainability as an opportunity, not an issue tobe managed. We recognized this difference anddeveloped our approach to sustainability accordingly.
When meeting with our business leaders to discuss
how sustainable development relates to theirbusinesses, we stress the opportunity that flows from“ensuring a better quality of life.” When talking withexternal stakeholders, we share ideas on how to
improve lives. We find people begin talking about
creative solutions, new partnerships and new
business opportunities that come from addressing
the aspirations and problems of consumers all over
the world.

superior quality and value that improve
the lives of the world’s consumers.
As a result, consumers will reward us

However, as we focus on building new top-line value
for P&G, we have maintained our historical attention
to how we run our business – our health, safety andenvironmental management, product safety programs
and community relations efforts. In this year’s report,
you will see:
• P&G’s environmental compliance and employee
safety performance are at historical best levels.
• P&G was rated the No. 1 company in the noncyclical consumer products sector by the Dow
Jones Sustainability Group Index.
• Business Ethics magazine rated P&G first in its
annual list of 100 Best Corporate Citizens.
Our approach to sustainability is a simple but
enormously motivating way to think about our
responsibility as a company. It is fully consistent with
our Purpose, Values and Principles; thus, a perfectly
natural way for us to behave. Living up to such achallenge can be difficult, but it is a challenge weembrace. And we are pleased to share our progresswith you.

creation, allowing our people, ourhis report was prepared in accordance with the
Global Reporting Initiative’s (GRI’s) Sustainability
Reporting Guidelines on Economic, Environmental andSocial Performance, June 2000. The mission of the
GRI is to promote international harmonization in thereporting of relevant and credible corporate
environmental, social and economic performance
information to enhance responsible decision making.
GRI pursues this mission through a multi-stakeholder
process of open dialogue and collaboration in thedesign and implementation of widely applicablesustainability reporting guidelines. GRI has notverified the contents of this report, nor does it take aposition on the reliability of information reported
herein. For further information about the GRI, please
visit: http://www.globalreporting.org

The full report is available on
P&G’s web site:
http://www.pg.com/sr

Please visit P&G’s corporate web site forthe latest P&G news and shareholder andcareer information: http://www.pg.com•

E X E C U T I V E

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

Ownership

Passionfor
Winning

Integrity

Sustainability is an important way for us to leverage thepower of innovation and global markets for the benefit ofeveryone – not just those in the developed world. We cannot
condemn developing countries to a life of poverty so thosein the developed world can maintain their lifestyles. But
neither do we have to presume that the only alternative is forthe developed world to reduce its quality of life. When weconcede to such a notion, we erect barriers to progress. We
pit the developed and developing worlds against one
another and create an adversarial environment in which
there are opposing sides, not common purpose. As aresult, progress stalls or moves only incrementally, andtwo-thirds of the world’s population continues to live on
the fringes of existence.

Principles
We Show Respect for All Individuals
The Interests of the Company and theIndividual 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

There is an alternative. It is based on the premise that we canmake markets work for everyone and ultimately make lives
better in every part of the world. In this report, you will findmany examples of P&G’s contributions to a better quality oflife through the creation of new products, new markets andaddressing new consumer needs. For example:• pregnancy education to reduce maternal mortality• Actonel for the treatment and prevention of
postmenopausal osteoporosis• dental hygiene education to improve oral health• a partnership with UNICEF to combat tuberculosis

Mutual Interdependency is a Way of Life

2001 SUSTAINABILITYREPORT
Editor: Corey Snyder, Cincinnati, Ohio, USACore Report Team: Chris Smith, Newcastle
upon Tyne, U.K.; Debbie White,
Cincinnati, Ohio, USA; Courtney Dressler,
Cincinnati, Ohio, USA; Mary Kay Morris,
Cincinnati, Ohio, USA; Bea Buyle,
Brussels, Belgium; Paul van der
Mensbrugghe, Brussels, Belgium; Taki
Arakaki, Kobe, Japan; Joaquin Zepeda,
Caracas, Venezuela.
Design: Andy Ruttle, Ruttle Design Group, Inc.,
Cincinnati, Ohio, USA.

Another important issue we would like to address is how the
global economic environment has impacted our business.
Fiscal 1999/00 was a difficult year for P&G and for its many
employees around the world. A strong plan was put in place
to re-establish the balance between top-line revenue growthand bottom-line earnings growth. However, over the pastfiscal year, we continued to face a challenging economic
environment, with a slowing U.S. economy and thepossibility of a recession. Key economies around the globe
were also slowing – Japan, some countries in Europe, someof the developing markets. In order to restore P&G’s ability
to compete more effectively and to grow more consistently,
the previous restructuring program was expanded to further
reduce overhead costs, resulting in staffing reductions acrossthe Company.

The report team wishes to thank all the individuals
throughout the Company who contributed information, stories and data to this report.

FRONT COVER: Children gather
outside a school supported by the
Dash Goodwill Mission – School for
Angola program.

Corporate Sustainable Development
Two Procter & Gamble Plaza
TN-02, MS-28
Cincinnati, Ohio 45202 USA
E-mail: sustainrep-im@pg.com

S U M M A R Y
0013-6465

CEO and Chairman’s Statement
he men and women of P&G share a deeply felt purpose:to improve the lives of consumers in every part of theworld. One important way in which we fulfill this purpose isthrough our commitment to the concept of sustainable
development, or sustainability, which we believe is integral
to both P&G’s future business success and to a truly better
quality of life for all the world’s consumers – now and forgenerations to come.

Trust

T

REPORTTPEOPLE

which we live and work to prosper.

WWW

R E P O R TCore Values
Leadership

Fax: (513) 983-5226
S U S T A I N A B I L I T Y

SUSTAINABILITY

shareholders, and the communities inReferences to trademarked products in this report are
to trademarks owned by and registered to
The Procter & Gamble Company.

2 0 0 1

2001

with leadership sales, profit and value

This is the Executive Summary of thethird Sustainability Report for P&G’s
worldwide operations. Data in the reportcovers the period from July 1, 2000,
through June 30, 2001.

George D. Carpenter
Director, Corporate
Sustainable Development

Sustainable development is a very
simple idea. It is about ensuring abetter quality of life for everyone, now
and for generations to come.

This report was printed on 50% recycled paper, 10% post-consumer.
© 2001 The Procter & Gamble Company. All rights reserved.

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

2 0 0 1S U S T A I N A B I L I T YWhen downsizing becomes necessary, as it did this pastfiscal year, we manage employee separations in ways thatare consistent with our values and principles. We maintainfocus and priority on our strong commitment to the diversityof our organization. P&G uses a voluntary separation
program to maximize voluntary attrition. The program,which includes severance pay based on years of service,continuation of health care benefits for the severance period,
outplacement support services and a retraining allowance,
provides a bridge for separating employees to retirement or
employment elsewhere.
These efforts have translated into improved competitivenessby controlling costs and managing cash more effectively,
and resulted in getting P&G’s business back on track andgrowing again. We’ve refocused on our biggest brands, inour biggest markets, with our biggest customers. We’ve
strengthened the value of our brands for consumers. We’ve
made strategic choices about which businesses P&G should
be in and which it should not.
We have only just started down our road to sustainable
development, but already we can see how P&G benefits
when we improve the lives of the world’s consumers, now
and for generations to come.

A. G. Lafley
President and Chief Executive

John E. Pepper
Chairman of the Board

R E P O R T•

E X E C U T I V E

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

S U M M A R Y