Designed to Innovate… Sustainably
2008 Sustainability Full ReportContents
CEO Statement
3
Leadership Statement
4
Sustainability Strategies and Goals for 2012 5
Sustainability Overview — Innovation
6
Deﬁning Innovation
7
Investing in Innovation
9
Managing Innovation
11
Delivering Innovation
13
Leading Innovation
15
Sustainable Development
17
Over 50 Years of Sustainability Progress
18
P&G Proﬁle20
Introduction
21
Billion-Dollar Brands
22
Financial Information
24
Purpose, Values and Principles
26
Structure & Governance28
Governance
34
Political Involvement
36
Strategies & Goals
37
Policies, Management Systems andPerformance
38
Strategy 1 — Products
39
Strategy 2 — Operations
48
Strategy 3 — Social Responsibility
59
Strategy 4 — Employees
73
Strategy 5 — Stakeholders
86
GRI Index
98

About this publication
At P&G, we view sustainability as a signiﬁcant
responsibility — and a continual source of opportunity.
So from our products to our operations, we embedsustainability into everything we do.
Now in its tenth year, this publication describes how
P&G innovates with a sustainability mindset, outlining
the systems and processes we employ to help deliver
sustainable outcomes. We provide an overview of ourresults from last year, along with progress against our2012 strategies and goals.
Our online report, prepared using the Global Reporting
Initiative’s (GRI) G3 Guidelines, is available atwww.pg.com/sustainability.

The Procter & Gamble Company

www.pg.com/sustainability

P&G REPORT CARD:
2012 SUSTAINABILITY GOALSThis is the ﬁrst year we have reported results for these goals.

CEO Statement
Sustainable development is a very simple idea. It’s about ensuring
a better quality of life for everyone, now and for generations tocome. This idea is at the heart of P&G’s Purpose, which — for
171 years — has been focused on improving people’s lives withbranded products and services they use every day.
We fulﬁll P&G’s Purpose by innovating. Innovation is P&G’s
lifeblood; we want to be the innovation leader in every
business, product category and country where P&G competes.
We bring tremendous innovation resources to every part of ourbusiness, and sustainability is no exception. Consumers havetold us, for example, that they want to make more sustainablechoices, but not at the risk of trading performance or value —especially in tough economic times. We see this as aninspiring business challenge and we believe P&G’s uniqueapproach to innovation enables us to meet consumer needs
and achieve the Company’s sustainability goals, year after year
and over the long term.
We leverage this integrated approach to innovation by taking
advantage of P&G’s global scale and scope, which is unrivaledin our industry. The result is a steady stream of product, operational and organizational innovations that enable P&G to win
with consumers and retail customers — while improving oursustainability proﬁle at the same time. And, we do so consistently, reliably, successfully, and responsibly.
In the pages that follow, you’ll see how P&G is on track toachieve our ﬁve-year sustainability goals introduced last year.
We’re encouraged by this performance, but we know it’s thelong term that matters most and we will continue to holdourselves accountable for business and sustainability resultsover the near, mid and long term. I’m conﬁdent we can meetor exceed our goals because P&G is designed to innovate — andto grow — sustainably … now, and for generations to come.

A.G. Laﬂey
Chairman of the Board
and Chief Executive Ofﬁcer

Strategy 1:
Products
GOAL Develop and market at least $20 billion in cumulative salesof “sustainable innovation products,” which are products with asigniﬁcantly reduced (>10%) environmental footprint versus
previous or alternative products.(1)PROGRESS(in billions of U.S. dollars)

Cumulative Sales
since July 2007

Cumulative sales of sustainable innovation products$2.05

Strategy 2:
Operations
GOAL Deliver an additional 10% reduction (per unit production)

in CO2 emissions, energy consumption, water consumption anddisposed waste from P&G plants, leading to a total reduction
over the decade of at least 40%.
PROGRESS(percent reduction per unit production)

Energy Usage
CO2 Emissions
Waste Disposal
Water Usage

Since
July 2007

Since
July 2002

-6%

-46%
-52%
-50%
-51%

-8%
-21%
-7%

Strategy 3:
Social Responsibility
GOAL Enable 250 million children to Live, Learn and Thrive.(2)Prevent 80 million days of disease and save 10,000 lives by
delivering 2 billion liters of clean water in our Children’s Safe
Drinking Water program.(3)PROGRESS

Since July 2007

LIVE, LEARN AND THRIVE

Number of Children Reached

60 million

CHILDREN’S SAFE DRINKING WATER

Liters of Clean Water Delivered
Days of Disease Prevented
Lives Saved

430 million
18 million
2,442(1) Sustainable Innovation Products are included if they have launched in market since
July 1, 2007, and have a signiﬁcant (>10%) reduction in environmental footprintthat is achieved through innovation impacting one or more of the following
indicators without negatively impacting the overall sustainability proﬁle of the
product: A. Energy, B. Water, C. Transportation, D. Amount of material used inpackaging or products, E. Substitution of non-renewable energy or materials
with renewable sources.
(2) Live, Learn and Thrive (LLT) is P&G’s global cause that focuses our social
investments on efforts that improve the lives of children in need ages 0 –13.
(3) Within Live, Learn and Thrive, our signature program is Children’s Safe Drinking
Water (CSDW). Methodology for calculating diarrheal days and mortality wasdeveloped with Population Services International and Aquaya Institute. Details
are provided at www.pg.com/sustainability.

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Innovating sustainably:
Where responsibility meets
opportunity

Leadership Statement
Last year, P&G established ﬁve strategies to improve the environmental proﬁle of the Company’s products and operations
and to expand our Live, Learn and Thrive social responsibility
program. A year into this renewed commitment, we’re on track
to meet or exceed our goals, and to integrate sustainability into
P&G’s day-to-day business.
1. Products. We want to delight consumers with sustainable

innovations that improve the environmental proﬁle of our products. Our goal is $20 billion in cumulative sales of these products
over ﬁve years. We generated more than $2 billion in sales in
our ﬁrst year by launching seven sustainable innovations in ﬁscal
2008, including the compaction of liquid laundry detergents —an innovation we rolled out across P&G’s line of North America
laundry brands. We are conﬁdent we can meet this 2012 goalbased on our current plans and pipeline.
2. Operations. We want to improve the environmental proﬁleof P&G’s operations worldwide. Our goal is to deliver an additional 10% reduction (per unit of production) in energy andwater use, CO2 emissions, and waste disposal by 2012, which
will complete a decade-long reduction of at least 40% in theseareas. We’re making signiﬁcant progress against this goal. For
example, we’re building sustainability-inspired manufacturing
sites in North America, Europe, and China. We’re also improving
existing facilities, such as our manufacturing plant in Mehoopany,
Pennsylvania, where a heat recovery system is now reclaiming
enough energy to power almost 12,000 U.S. households annually.
Company-wide, we’ve reduced energy by 6%, reduced CO2
emissions by 8%, reduced waste disposal by 21%, and reduced
water usage by 7% this past year.
3. Social Responsibility. We want to improve lives through P&G’s

global social responsibility program, Live, Learn and Thrive. This
year we opened our 140th P&G Hope School in China, helping
children in poverty-stricken rural areas gain access to elementary
education. We also delivered our one-billionth liter of clean drinking water through our Children’s Safe Drinking Water program,leveraging PŪR sachets. Additionally, Pampers partnered with
UNICEF to provide funds for more than 50 million doses ofvaccine to help prevent maternal and neonatal tetanus in thedeveloping world. Dozens of Live, Learn and Thrive programs
like these enabled P&G to reach more than 60 million children
globally this year.

4. Employees. We want to engage and equip every P&G
employee to build sustainability thinking and practices into theireveryday work. We’ve challenged one another to “Take the ‘R’(Responsibility) for Tomorrow,” a uniﬁed employee programthat is combining and expanding successful pilot projects fromaround the world. We celebrated Earth Day and World Water
Day at dozens of P&G locations globally. We launched a
Sustainability Ambassador Network for P&Gers who want to be
more active as sustainability leaders. We’ve helped reduce travel
by investing in state-of-the-art video collaboration studios.
5. Stakeholders. We want to help shape the future — now andfor generations to come — by collaborating with local, regional,
and global stakeholders. For example, we’re an active part of
the Clinton Global Initiative (CGI) and have stepped up oursocial responsibility commitments in each of the three years
we’ve partnered with CGI, to help millions of children globally
Live, Learn and Thrive. In the UK, we have worked with WRAP
(Waste & Resources Action Programme) to deliver innovationthat enables packaging reductions without compromisingpackaging integrity. And we’re working with the Energy Saving
Trust in Europe to encourage people to wash clothes in colder
temperatures. We ﬁrmly believe we can make a bigger difference
together with partners like these than any of us can make on
our own.
Throughout P&G’s history, we’ve focused on doing what’s
right and our approach to sustainability is fully consistent withthis basic Company principle. We are accountable for delivering
our goals year to year, and committed to improving P&G’s
sustainability results consistently and reliably over the long term.
To learn more, please see our online report, prepared using
the Global Reporting Initiative’s (GRI) G3 Guidelines, at
www.pg.com/sustainability.

Susan Arnold
President,
Global Business Units
Executive Sponsor,
Sustainability

Len Sauers
Vice President,
Global Sustainability

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Sustainability Strategies and Goals for 2012:

Strategy 1:
Products

Strategy 2:
Operations

Strategy 3:
Social Responsibility

Delight the consumer with sustainable
innovations that improve the environmental proﬁle of our products.

Improve the environmental proﬁleof P&G’s own operations.

Improve children’s lives through P&G’s
social responsibility programs.

GOAL: Deliver an additional 10% reduction(per unit of production) in CO2 emissions, energy
consumption, water consumption and disposed
waste from P&G plants, leading to a total reduction over the decade of at least 40%.

GOAL: Enable 250 million children to Live, Learn
and Thrive. Prevent 80 million days of disease
and save 10,000 lives by delivering 2 billion litersof clean water in our Children’s Safe Drinking
Water program.

PROGRESS: Reductions since July 2007:
Energy Usage -6%, CO2 Emissions -8%,
Waste Disposal -21%, Water Usage -7%.

PROGRESS: 60 million children reached;
430 million liters of clean water delivered;
18 million days of disease prevented;
2,442 lives saved.

GOAL: Develop and market at least $20 billion
in cumulative sales of “sustainable innovation
products,” which are products with a signiﬁcantly
reduced (>10%) environmental footprint versus
previous or alternative products.
PROGRESS: $2.05 billion

Reductions since July 2002:
Energy Usage -46%, CO2 Emissions -52%,
Waste Disposal -50%, Water Usage -51%.

Strategy 4:
Employees

Strategy 5:
Stakeholders

Engage and equip all P&Gers to build
sustainability thinking and practices
into their everyday work.

Shape the future by working transparently with our stakeholders to enable
continued freedom to innovate in a
responsible way.

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Sustainability Overview — Innovation

In order to improve the livesof the world’s consumers —now and for generations
to come — P&G is designed
to innovate sustainably.
We deﬁne innovation broadly, looking for sustainability
opportunities at every touch-point along the pathof our products.
We invest in innovation to reduce the environmental
footprint of our operations, affecting both our facilities
and our processes.
We manage innovation with discipline, using science-based
tools to identify sustainability opportunities for our products,from discovery through disposal to potential reuse.
We deliver innovation through a combination ofvisible product-based improvements and less visible
operations-based advancements.
We lead innovation by inspiring our employees to take personal
responsibility for delivering our sustainability goals and leading
positive change, both inside and outside the Company.

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7

DEFINING
INNOVATION

We deﬁne innovation broadly, looking
for sustainability opportunities at
every touch-point along the path of
our products.

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Two innovations, multiple beneﬁts
Laundry compaction
P&G seeks opportunities to innovate within every aspect of a product,from raw materials, manufacturing, customization and logistics tocustomers and consumers. Because of our integration and scale, innovations in one part of the cycle often spark innovations in other areas.
In 2007, we began to convert our North American liquid laundry
detergent portfolio to a “2X” concentrated formulation. The following
is an example of our multifaceted approach in action.

Product
Concentration

Through scientiﬁc innovation, wedeveloped a new formula thatdelivers more active ingredientsin every drop, allowing consumers
to use less.

Inventory
Efﬁciencies

Using new forecasting techniques,
we managed the product inventory
conversion at retail stores with a
new level of precision to reduce
waste.

Precise prediction

OLD CAPNEW CAP

New modeling tools allowed us
to better predict when retailcustomers would require newstock and manage the supply
chain accordingly.

One advance sparked
many beneﬁts.

LESS
WATER

LESS
EMISSIONS

The new formulas savemore than 500 million
liters a year.

The new products reduce
CO2 emissions by more than
100,000 metric tons a year.

LESS
PACKAGINGLESSSHIPPING

These smaller products
save more than
15,000 metric tons a year
in packaging materials.

The new size results inmore than 40,000 fewer
truck loads a year.

Remnant runout
This left very little old stock to
manage through remnant saleand donations; unsalable
product was managed down toan unprecedented low level.

Waste reduction
Accurate forecasting meantthat virtually all the productwe created was sold, resulting
in a substantial reduction in
unnecessary waste.

Today, we apply
these tools andtechniques to othersigniﬁcant productconversions.

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INVESTING
IN INNOVATION

We invest in innovation to reduce
the environmental footprint of
our operations, affecting both ourfacilities and our processes.
Innovating from the ground up
Building sustainable facilities
Our unique system for sustainably designing and building new
facilities — exempliﬁed by new facilities like the Beauty Careplant in Lodz, Poland, illustrated below — demonstrates multiple
areas of innovation in action.
Before building a new facility, we combine industry knowledge
with a proprietary 77-point process to evaluate key sustainability elements. Our analysis rates the facility’s potential impact on
CO2, energy, waste, water, and environmental quality. The
process covers the ﬁve areas shown below, as well as ongoing
operations once the facility is built.

FR O

N TA

GE

RO A

D

GARAGE

W

A

LK

W

AY

Site

Water

Materials

Systems

Lighting

In choosing a facility’s
location, we investigate
commuting options, local
ecosystems, and ways touse energy efﬁciently.

We make as few manmade changes as possible
to a site’s hydrologicalcycle, often building pondsthat collect storm waterand lessen discharge ﬂow
to local streams.

We select building materials that minimize environmental impact while
maximizing workplace
comfort and health.
Whenever possible, debris
from construction isrecycled rather than sent
to landﬁll.

Our facilities incorporate
passive systems when
feasible, helping maximize
natural elements forventilation and temperature
control. When active
systems are required,
we favor high-efﬁciency
equipment.

Along with designing ourfacilities to make use ofnatural light, we use
low-consumption lighting
equipment wheneverpossible.

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GVlBViZg^Vah!
EVX`V\^c\VcY:cZg\nManufacturing efﬁciently from the top down
Putting resources to good use

Finished Product
BVcj[VXijg^c\EgdXZhh

96.12

%

of all materials

P&G’s investment in innovation goes far beyond our facilities.
It also extends to our highly productive use of material resources.
Upfront, we ﬁnd ways to minimize our inputs, using less raw
material for packaging while consuming energy more efﬁciently.
But our output is dramatic as well, with 96% of all materials
being converted into ﬁnished product.
The waste that is produced — which is mostly non-hazardous —is low. And much of it can be repurposed in useful ways.

LVhiZ

Examples of recycled waste use:'#(%GZXnXaZY$GZjhZY

LViZg:b^hh^dch=VoVgYdjh
Hda^YLVhiZ&#*-Cdc"GZXnXaZY

Cdc"=VoVgYdjh
Hda^YLVhiZ

6^g:b^hh^dch

Perfume: the sweet
smell of re-use

Paper: a by-productraises the roof

Soap: a second
chance for suds

At our manufacturing site for
perfume in Avenel, New Jersey,
we developed a new process
for blending scrap material for
reprocessing as an ingredientfor potpourri. As a result,annual generation of scrap
waste at the site has dropped
from 50,000 kg to zero.

In some P&G tissue and towel
plants, the paper “ﬁnes”—
a wet by-product of thepaper making process — arereclaimed for energy to run
the plant. The ﬁnes are also
used to manufacture housing
and rooﬁng tiles.

Bubbly wastewater from ourshampoo and liquid soap
plants has found new life ina secondary market. Today,
instead of becoming waste,
the mixture is sold and repackaged for use in automatic carwashes.

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MANAGING
INNOVATION

We manage innovation withdiscipline, using science-based
tools to identify sustainability
opportunities for our products,from discovery through disposal
to potential reuse.

MATERIALSDISPOSALDISPOSALUSE IN THE HOME

DISTRIBUTION

USAGE

MANUFACTURING

PACKAGING

LIFE CYCLEASSESSMENTMANUFACTURING

DISTRIBUTION

MATERIALS

PACKAGING

ENERGY ANALYSIS

Assessing impact
Comprehensive tools

Finding opportunity
Laundry energy usage

Managing innovation sustainably begins with the use ofcomprehensive analysis tools. One such tool, Life Cycle
Assessment (LCA), generates a complete environmental
footprint, extending beyond carbon impact to measure
total energy and water use and waste production. Also
included are the impacts of consumer use of our products,
as well as all emissions into the air, water and land. Thisdetailed review lets us pinpoint areas where our innovation
efforts can be most effective.

Our life cycle assessment of laundry detergent revealed thatone step consumed far more energy than any other: theheating of wash water during its use in the home. As such,
this step clearly offered the biggest opportunity for energy
reduction.
Field tests predicted that a family of four in the UK could
reduce its overall household electricity consumption by 3%
by reducing its wash temperature from 43.5°C to 30°C.
So our Ariel Cool Clean technology — which offers strong
cleaning performance at lower temperatures — presented
a promising opportunity for energy savings.

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RESULTS

AWARENESS

Advertising

Web-basededucation

Third party organizations

Moving the market
Consumer campaign
Our “Turn to 30°” campaign in the UK began spreading
the word to consumers. Along with key product beneﬁts,
including energy savings and brilliant cleaning, the campaignemphasized another motivation: supporting the environment in a more sustainable way. P&G further managed thisinnovation through partnerships with celebrities, key NGOs,
region-speciﬁc climate and energy-focused third parties,
and a Web-based consumer education module.

58,00017%

metric tons
CO2 emissions
savedof households
now wash at
30°C

Making a difference
Results and recognition
Managing innovation has resulted in signiﬁcant behavior
change among consumers. In the UK, 17% of households
now wash at 30°C, up from 2% in a similar 2002 survey.
Further, 27% of all UK Ariel users washed at 30°C in 2007,
twice the average of other leading brands.
The shift toward lower washing temperatures has brought
substantial beneﬁts to the environment. According tostatistics calculated and validated by The Energy Saving
Trust, 58,000 metric tons of CO2 emissions have been
prevented, saving 403,200 GJ of energy — enough energy
to light 2,500 UK villages.
Results in the Netherlands have been even more impressive.
In just over six months since launch — and when leveraged
with the Dutch Ariel “Draai Naar 30°” campaign — for theﬁrst time, 30°C is the most frequently used washing temperature in the Netherlands … an impressive 52%!
Along with getting results, “Turn to 30°” has also garneredwidespread recognition for excellence in responsible
marketing and leading-edge thinking. The campaign has
been honored by such organizations as the Marketing
Society, Business in the Community, the Green Awards,
SABRE, and Marketing Communications Consultants
Association (MCCA).

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DELIVERINGINNOVATION

We deliver innovation through a
combination of visible productbased improvements and less visible
operations-based advancements.
We are inspired by consumers to deliver product upgrades that
improve their lives, maintain the value they want, and help
them to reduce their environmental impact. Charmin MegaRoll
and Bounty Select-a-Size are just two examples of many innovations these brands have made that make a difference in theseareas. But, other innovations take place beyond a consumer’sview, such as improvements in our manufacturing processes,
facilities, and logistics.

Visible improvements
Sustainable solutions
to consumer needs
Many innovations that are visible to consumers are also
inspired by them. Bounty consumers sought a paper towel
for small tasks that still required superior wet strength.
Our solution, Bounty Select-a-Size, features sheets that are
45% smaller than traditional Bounty — but still absorb spills
faster and are stronger when wet than other regular-sized
two-ply towels on the market. So thanks to Bounty Selecta-Size, consumers have an option for producing less waste.
When Charmin bath tissue consumers expressed a desire tochange the roll less often, we created Charmin MegaRoll,
which features four times as many sheets per roll than aregular roll of Charmin. Along with meeting consumer needs,
the product requires the use and disposal of fewer cardboard cores. In addition, the space-efﬁcient product allows
more tissue to ﬁt on a truck, saving on fuel consumption
and CO2 emissions associated with transportation.

1,000,000
consumers switching froma regular roll to Charmin
MegaRoll can save:

140

226,000

Million CoresPer Year

Kg of Plastic
Per Year

321,000
Liters of FuelPer Year

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14

In Family Care over the past
ﬁve years, our North American
plants have:

ReducedEnergyLowered
CO2 Emissions

28%

35%

Reduced
Waste

Reduced Water
Consumption

67%

15%

With
Bounty Select-a-Size,
consumers use
only what they need

Invisible advances
Energy and water efﬁciencies
for a smaller footprint
Looking forward, we are continuing our conservation
efforts within existing facilities. There are thousands ofprojects under way to identify innovative ways to conserve
energy and water, and reduce emissions.

Much of the energy used in papermaking is needed to dry
the paper. Heat in the form of steam and combustion gases
can be lost during this drying process. At our Mehoopany,
Pennsylvania facility, a proprietary process was developedthat enables the plant to recover this heat and save
422,000 GJ of energy and 13,600 metric tons of CO2
emissions per year. In comparison, the energy that will besaved by this project is greater than the site energy
consumption at 80% of our facilities around the world.

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LEADINGINNOVATIONWe lead innovation by inspiring
our employees to take personal
responsibility for delivering oursustainability goals and leading
positive change, both inside andoutside the Company.
Making workplace habits more sustainable
P&Gers take the “R” for tomorrow
P&G employees in 26 countries celebrated Earth Day in April, kicking off
additional efforts to reduce, reuse and recycle at our ofﬁces and technicalcenters. By building innovative, dramatic displays showing the trueamount of paper, cups and water bottles we use each month, employees
were motivated to make changes.
In just a few months following these events, P&G employees havebegun to “Take the ‘R’ (Responsibility) for Tomorrow” by adopting
smarter workplace habits. Some highlights from the Cincinnati
World Headquarters:

ReduceReuse

RecycleWe have installed
new cutting-edge
videoconferencing
equipment, helping
reduce air travel.

Employees areencouraged to use
personal mugs, andnow receive abeverage discount for
using them insteadof disposable cups.

We have signiﬁcantly
increased ourrecycling of ofﬁce
paper.

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Our social investments are focused on improving the lives ofchildren in need through Live, Learn and Thrive, our far-reaching
global cause. Leveraging the scale of our Company and thepassionate, skilled volunteerism of our employees, we are on
track to reach more than 250 million children by 2012.

A long-term commitment to education access
P&G Hope Schools
Thanks to P&G Hope Schools, a program in partnership with the China
Youth Development Foundation, children now have better access to
education in poverty-stricken rural areas of China. P&G China continued
its long-term commitment to the program this year, founding its 140th
P&G Hope School.

Answering a pressing need
P&G technology and a network of partners
More than one billion people in the developing world do not have accessto clean drinking water. As a result, thousands of children die every day.

To help drive this Live, Learn and Thrive initiative, P&G created innovative
partnerships with retail customers. This has enabled these retailers — alongwith more than 100 million shoppers annually — to participate in thecause and make signiﬁcant commitments to build Hope Schools with P&G.

Children’s Safe Drinking Water (CSDW) reaches these people through PŪR,a water purifying technology developed by P&G and the U.S. Centers for
Disease Control and Prevention (CDC). One small PŪR packet quickly turns
10 liters of dirty, potentially deadly water into clean, drinkable water.
The packets can be used anywhere in the world, including areas affectedby natural disaster.

P&G Hope Schools have beneﬁtted over 100,000 children across China
in the last 12 years, and over 1,000 P&G China employees are actively
enrolled to support program activities.

This Live, Learn and Thrive program provides PŪR packets on a not-forproﬁt basis. This year, with the help of our network of over 70 partners,
we delivered our one-billionth liter of clean drinking water.

Teaching healthy habits
Safeguard helps make hand washing
fun & effective

Protecting vulnerable babies
Pampers and UNICEF provide vaccines

Studies show that proper hand washing is one of the simplest and mostcost-effective ways to help keep children healthy. Safeguard and its healthpartners in the Philippines set out on a Live, Learn and Thrive effort known
as “Mission 5-5-5” — to teach 5 children every hour for the next 5 years
about hand washing with soap to protect against 5 common health threats:
diarrhea, cough, colds, pneumonia, and skin rashes. Similar programs arealso run in China, Pakistan and other developing nations, educating nearly
10 million primary school children each year on the necessity of handwashing and good hygiene practices.

Pampers has partnered with UNICEF on a Live, Learn and Thrive effort
with a goal to help eliminate maternal and neonatal tetanus, a preventable disease that claims the lives of 140,000 infants and 30,000 mothers
in developing countries each year — that’s one death every three minutes.
This international initiative began two years ago in Latin America and has
expanded to Western Europe, Japan and the U.S., providing funds formore than 50 million doses of vaccine.
Consumers are an integral part of the success of this program. For eachpurchase of specially marked packages of Pampers, P&G donated a
vaccine to UNICEF. Recently, Pampers committed to a three-year global
partnership between Pampers and UNICEF to help eliminate maternal
and neonatal tetanus in 46 remaining countries by 2012.

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Sustainable Development

Sustainable development is a simple
idea — ensuring a better qualityof life for everyone, now and forgenerations to come.
(1)

P&G embraces sustainable development as a potential business opportunity, as well as a corporate
responsibility. Through our activities we contribute to the economic and social well-being of a rangeof stakeholders, including employees, shareholders, communities in which we operate, and more
widely, to regional, national and international development. In summary, P&G contributes to sustainable development through both what we do and how we do it.
“What we do” is provide branded products and services of superior quality and value that improve
the lives of the world’s consumers via health, hygiene or convenience.
“How we do it” includes addressing any environmental and socioeconomic issues associated with
our products and services. Our Principles, Values and Statement of Purpose, which are central to
P&G’s organization, act as guidance for the development of our entire organizational structure, allover the world. They are the basis for an integrated set of management systems and policies applied
across the whole Company.
As a result, consumers will reward us with leadership sales, proﬁt and value creation, allowing ourpeople, our shareholders and the communities in which we live and work to prosper.
(1) Deﬁnition from UK government report from Department for the Environment, Transport and the Regions, 1998.

The Procter & Gamble Company

www.pg.com/sustainability

18Over 50 Years of Sustainability Progress:
P&G has been values-based since its founding in 1837. The timeline illustrated
below highlights sustainability progress over the last six decades.

1950s

1973
Publication of
the “Sturm Test,”
the forerunnerof the Ready
Biodegradability
Test

1970
P&G implements its
ﬁrst manufacturing
plant environmental
audit

1960s

1981
P&G co-founds
the Society ofEnvironmental
Toxicology andChemistry

1970s

1987
P&G environmental
stream facility begins
operation

Continued on next page

1965
P&G publishes its
tenth environmental
safety paper tosupport new
biodegradability
test methods

1956
The ﬁrst environmental safety publicationis created at P&G
measuring surfactantsin rivers

1980s

HV[ZinVcYGZ\jaVidgn

1952
P&G establishes
the Procter &Gamble Fundfor the distribution of money
to U.S. charities

1964
The P&G
Environmental
Water Quality
Laboratory isestablished
1964
Switch tobiodegradable
anionic surfactant
LAS begins

1969
Instream biologicalmonitoring program
begins1971
P&G Safety andRegulatory isestablished as aseparate entity
from productdevelopment
1971
The P&G Corporate
Environmental Safety
Department is formed

1977
P&G Environmental
safety organization
formed in Europe(Brussels)

1983
P&G produces its
100th peer-reviewed
environmental
publication
1983
Debut of Triple
Concentrate Downy,
one of P&G’s ﬁrst
products to reducepackaging andwater use

1989
P&G commits$20 million
to assist thedevelopment of
U.S. compost
infrastructure

The Procter & Gamble Company

www.pg.com/sustainability

19

2006
P&G is National
Inventor of the Yearfor the design anddevelopment of PŪR
puriﬁcation sachets

1992
P&G moves toelemental chlorinefree pulp for all of
the Company’s
paper products

1993
The ﬁrst P&G Annual
Global Environmental
Report is produced

Continued from previous page

1992
United Nations
World Environment
Center Gold Medal
recipient

1993
P&G commits tosustainable forestry
for sourcing pulp

2001
FTSE4Goodlaunched; P&G
listed every year
since inception

1999
P&G’s 500th
peer-reviewed
environmental
publication is
produced
1999
P&G forms a
corporate sustainability department andpublishes an annual
sustainability report

2002
Science in-theBox Public Web
site launched

2004
P&G creates theChildren’s Safe
Drinking Water
program, using theunique PŪR puriﬁcation sachets

1990s

1990
P&G articulates its
Company-wide
environmental
quality policy

1995
P&G pioneers
use of Life Cycle
Assessment todesign Municipal
Solid Waste
Management

A86
1991
P&G helps deﬁne
new ﬁeld of Life
Cycle Assessment

2005
Tide Coldwater andAriel Cool Clean
are introduced,
promoting lowtemperature washing2005
Downy Single Rinse
introduced, offering
water savings incritical regions

2007
P&G launches its
new Sustainability
Strategy andﬁve-year goals
2007
2X compacted
liquid detergentsdebut in the U.S.

2008
EPA awards P&G’s
Cincinnati corporate
headquarters with
the Energy Star
Certiﬁcation
2008
P&G receives theEuropean BusinessAward honoring
commitment
to corporate
sustainability

2000s

1997
P&G develops
Japan’s ﬁrst
environmental
exposure model for
consumer products
1997
Developed the
Geo-referenced
Regional Exposure
Assessment toolfor European rivers

2003
Led the developmentof guidelines forﬂushable products
published by The
Water Environment
Research Foundation(WERF)

2000
P&G ranked as a
Sector Leader in Dow
Jones Sustainability
Indexes (DJSI)

2005
P&G awarded
Stockholm Industry
Water Prize forproviding safe
drinking water
2005
P&G introduces its
global corporate
cause — Live, Learn
and Thrive

2007
P&G recognized by
EPA for Children’s
Safe Drinking Water
program
2007
P&G awarded theRon Brown Award
for Corporate
Leadership

2008
OECD adopts P&G’s
laboratory biodegradation test series
2008
P&G delivers thebillionth liter of cleanwater in its Children’s
Safe Drinking Water
program

P&G Profile

Introduction
Billion-Dollar Brands
Financial Information
Purpose, Values and Principles
Structure & Governance

The Procter & Gamble Company
Introductionwww.pg.com/sustainability

21

Three billion times a day, P&G brands touch the lives of people
around the world. This happens because P&G provides branded
products of superior quality and value to improve the lives of theworld’s consumers. This results in leadership sales, proﬁt, and value
creation, allowing employees, shareholders and the communities
in which we operate to prosper.

P&G’s world headquarters is located in Cincinnati, Ohio, U.S.A.
The company has one of the strongest portfolios of trusted, quality,
leadership brands, including Pampers, Tide, Ariel, Always, Whisper,
Pantene, MACH3, Bounty, Dawn, Gain, Pringles, Folgers,
Charmin, Downy, Lenor, Iams, Crest, Oral-B, Actonel, Duracell,
Olay, Head & Shoulders, Wella, Gillette, Braun, and Fusion. The
P&G community includes approximately 138,000 employees working in over 80 countries worldwide.
®

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For more information on P&G’s investor relations, please visit
our website at: www.pg.com/investors/sectionmain.jhtml®

®

P&G is a publicly owned company. Its stock is listed and tradedon the New York and Paris exchanges.
This is the 10th Sustainability Report for P&G’s worldwide operations.
Data in this report covers the period from July 1, 2007, throughJune 30, 2008. Financial information is given in U.S. dollars.

P&G markets more than300
brands in more than180 countries.

Please visit www.pg.com for the latest news and in-depth
information about P&G and its brands.

The Procter & Gamble Company
Billion-Dollar Brands

www.pg.com/sustainability

Billion-Dollar Brands
P&G’s 44 largest brands — 24 that generate over $1 billion in annual sales and20 with sales between $500 million and $1 billion — are global platforms forinnovation. They enable us to commercialize innovation faster, more effectively
and more efﬁciently than would be possible on smaller, less successful brands.

Global Key Brands
Of more than 300 brands,
these 24 are the ones
we consider key and havesales of more than abillion dollars each.

Global Beauty & Grooming

Global Household Care

Global Health & Well-Being

Net Salesby GBU (1)(in billions)

GBU

Reportable Segment

Key Products

Billion Dollar Brands

BEAUTY

BeautyCosmetics, Deodorants, Hair Care, Personal
Cleansing, Prestige Fragrances, Skin Care
Blades and Razors, Electric Hair Removal Devices,
Face and Shave Products, Home Appliances

Head & Shoulders, Olay,
Pantene, Wella
Braun, Fusion, Gillette, MACH3$27.8

Feminine Care, Oral Care, Personal Health Care,
Pharmaceuticals
Coffee, Pet Food, Snacks

Actonel, Always, Crest, Oral-B$19.4

Grooming
HEALTH AND WELL-BEING

Health Care
Snacks, Coffee
and Pet Care

HOUSEHOLD CARE

Fabric Care andHome Care
Baby Care andFamily Care

Air Care, Batteries, Dish Care, Fabric Care,
Surface Care
Baby Wipes, Bath Tissue, Diapers, Facial Tissue,
Paper Towels(1) Partially offset by net sales in corporate to eliminate the sales of unconsolidated entities included in business unit results.

Folgers, Iams, Pringles
Ariel, Dawn, Downy, Duracell,Gain, Tide
Bounty, Charmin, Pampers

$37.7

22

The Procter & Gamble Company
Billion-Dollar Brands

www.pg.com/sustainability

23

Billion-Dollar Brands
P&G has 24 brands with annual sales of a billion dollars or more.

In alphabetical order:

ActonelDawn

Gillette MACH3 Razor

PanteneA prescription medication to treat
and prevent postmenopausal
osteoporosis.

No matter what your dishwashingneed, Dawn has a product that’s rightfor you.

Battery-powered shaving. Push the
button, feel the power.

Hair around the world shines becauseof Pantene hair care products.

Always/Whisper

Downy/Lenor

Head & Shoulders

PringlesOnce you “pop,” the fun doesn’t stop!

Women around the world counton Always and Whisper feminine
protection.

Laundry feels soft and smells freshbecause of Downy and Lenor.

Ariel

DuracellSmooth, beautiful, ﬂake-free hair. It’s
not what you’d expect in a dandruff
shampoo. Head & Shoulders has
12 customized formulas — one justfor you.

You can depend on powerful, longlasting Duracell batteries.

Iams

Wella

BountyFolgers

Nutrition for every life stage andlifestyle of your pet.

Hair care products used in salons andat home.

Spills happen. With the Quilted
Quicker Picker-Upper paper towel,
cleanup is easy.

Millions of Americans wake up with
Folgers coffee every day.

Olay

Braun Electric Razor

Gain

Designed for women of all ages
to “love the skin they’re in.”Laundry detergent that delights
scent-seekers.

Oral-B

Gillette

Dental hygiene products usedby dentists themselves.

Fabric cleaning and care at its best.

Keeping millions of men well-shaved
and well-groomed.

CharminAmerica’s favorite bathroom tissue.

Crest
Oral care products creating beautiful,healthy smiles every day.

The best a man can get.

Gillette Fusion Razor
First ﬁve-blade shaving system withunique trimmer blade, setting a new
standard for shaving closeness andcomfort.

Pampers
Millions of babies experience the
comfort and dryness of Pampers
diapers.

Tide
Tough cleaning power that gets out
laundry stains.

The Procter & Gamble Company
Financial Informationwww.pg.com/sustainability

24

Financial Information
P&G has grown sales from $39 billion to $83 billion in the past seven years.
We’ve more than doubled the number of brands that generate $1 billion
or more in annual sales and more than quadrupled the number of brands
that generate at least $500 million.

The Company reported net earnings of $12.1 billion for the ﬁscal
year ended June 30, 2008, an increase of 17 percent compared
to $10.3 billion in 2007.
Diluted net earnings per share were $3.64 in 2008, compared
to $3.04 in 2007.
Net sales were $83.5 billion in 2008, up 9 percent from last year.
Our ﬁrst discretionary use of cash is dividend payments. Commonshare dividends grew 13 percent to $1.45 per share in 2008,
representing the 52nd consecutive ﬁscal year of increased commonshare dividends. Total dividend payments, to both common andpreferred shareholders, were $4.7 billion, $4.2 billion and $3.7 billion
in ﬁscal 2008, 2007 and 2006, respectively.

Financial Highlights
Amounts in millions,
except per share amounts

Net Sales
Selling, General and
Administrative Expenses
Income Taxes
Net Earnings
Basic Net Earnings
Per Common Share
Diluted Net Earnings
Per Common ShareTotal Assets
Long-Term Debt
Shareholder’s Equity

2008

2007

2006

$ 83,503$ 76,476$ 68,222

25,725
12,07524,3404,370
10,34021,848
3,729
8,684

3.86

3.22

2.79

3.64

3.04
138,014
23,37566,7602.64
135,695
35,97662,9084,003

143,992
23,581
69,494For more ﬁnancial details, please see P&G’s 2008 Annual Report:
www.pg.com/investors/annualreports.jhtml

As part of P&G’s initiative to optimize resources to ﬁt a
growing global business and to accelerate innovation and growth,
the Company operates its business through Global Business Units(GBUs), as described under Organizational Structure.

GBU

Reportable
Segment% of
Net Sales*% of Net
Earnings*

BEAUTY

Beauty23%

22%

Grooming

10%

13%

Health Care

17%

20%

Snacks, Coffee
and Pet Care
Fabric Care andHome Care
Baby Care andFamily Care

6%

4%

28%

27%

16%

14%

HEALTH AND WELL-BEING

HOUSEHOLD CARE

This organizational structure accounts for why P&G does notprovide employee data, sales or proﬁts by individual countries.
Some countries may provide this data in reports other than
this one.

Key Products

Billion-Dollar Brands

Cosmetics, Deodorants, Hair Care, Personal
Cleansing, Prestige Fragrances, Skin Care
Blades and Razors, Electric Hair Removal
Devices, Face and Shave Products, Home
Appliances
Feminine Care, Oral Care, Personal HealthCare, Pharmaceuticals
Coffee, Pet Food, Snacks

Head & Shoulders,Olay, Pantene, Wella
Braun, Fusion,
Gillette, MACH3

Air Care, Batteries, Dish Care, Fabric Care,
Surface Care
Baby Wipes, Bath Tissue, Diapers, Facial
Tissue, Paper Towels* Percent of net sales and net earnings for the year ended June 30, 2008 (excluding results held in Corporate).

Actonel, Always,
Crest, Oral-B
Folgers, Iams,
PringlesAriel, Dawn, Downy,
Duracell, Gain, Tide
Bounty, Charmin,
Pampers

The Procter & Gamble Company
Financial Informationwww.pg.com/sustainability

25

Major Acquisitions and Divestitures

Shareholders

Acquisitions used $381 million of cash in 2008, primarily for theacquisition of Frederic Fekkai, a premium hair care brand, in Beauty.

As of June 30, 2008, there were approximately 2,231,000 common
stock shareowners, including shareholders of record, participantsin the Shareholder Investment Program, participants in P&G stock
ownership plans, and beneﬁcial owners with accounts at banks
and brokerage ﬁrms.

Proceeds from Asset Sales
Proceeds from asset sales were $928 million in 2008, primarily
behind the sale of our Western Europe family care business, as well
as several minor Beauty and Health Care divestitures.

Global Purchases
P&G is a global company. We produce brands in more than
140 plants in over 40 countries around the world. This year, P&G
purchased more than $43.5 billion in materials and services tomanufacture and market our products. We employ locally andpurchase the majority of our raw materials within those regions
where we manufacture our products. Our purchasing professionals
understand and participate in both global and local markets toacquire the materials and services to make our products.

Contact
Shareholder Services representatives are available
Monday – Friday, 9 – 4 EST at 1-800-742-6253(1-513-983-3034 outside the U.S.A. and Canada)
Write to:
The Procter & Gamble Company
Shareholder Services Department
P.O. Box 5572
Cincinnati, Ohio, U.S.A. 45201-5572
For more information:• Please visit www.pg.com/investors/sectionmain.jhtml• E-mail us at shareholders.im@pg.com• Call for ﬁnancial information at 1-800-764-7483(1-513-945-9990 outside the U.S.A. and Canada)

P&G produces
brands in more than140

plants in over 40 countries
around the world.

The Procter & Gamble Company
Purpose, Values and Principles

www.pg.com/sustainability

26

P&G’s Purpose, Values and Principles
Our Purpose, Values and Principles guide everything we do, all over the world.
Our people bring them to life. Our Success Drivers deﬁne what makes ourpeople succeed.

Our Purpose
We will provide branded products and services of superior quality
and value that improve the lives of the world’s consumers, now
and for generations to come.
As a result, consumers will reward us with leadership sales, proﬁt
and value creation, allowing our people, our shareholders, andthe communities in which we live and work to prosper.

Our Values
P&G is its people and the values by which we live. We attract andrecruit the ﬁnest people in the world. We build our organizationfrom within, promoting and rewarding people without regard toany difference unrelated to performance. We act on the convictionthat the men and women of Procter & Gamble will always be ourmost important asset.

Integrity• We always try to do the right thing.
• We are honest and straightforward with each other.
• We operate within the letter and spirit of the law.
• We uphold the values and principles of P&G in every action
and decision.
• We are data-based and intellectually honest in advocating
proposals, including recognizing risks.
Leadership• We are all leaders in our area of responsibility, with a deep
commitment to deliver leadership results.
• We have a clear vision of where we are going.
• We focus our resources to achieve leadership objectives andstrategies.
• We develop the capability to deliver our strategies and eliminate
organizational barriers.
Ownership• We accept personal accountability to meet the business needs,
improve our systems and help others improve their effectiveness.

CONSUMERS• We all act like owners, treating the Company’s assets as our own
and behaving with the Company’s long-term success in mind.

P&G VALUES

P&G BRANDS

Integrity
Leadership
Ownership
Passion for Winning
Trust

P&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 livesof the world’s consumers.

Passion for Winning• We are determined to be the best at doing what matters most.
• We have a healthy dissatisfaction with the status quo.
P&G PEOPLE• We have a compelling desire to improve and to win in themarketplace.
Trust• We respect our P&G colleagues, customers and consumers,
and treat them as we want to be treated.
• We have conﬁdence in each other’s capabilities and intentions.
• We believe that people work best when there is a foundationof trust.

The Procter & Gamble Company
Purpose, Values and Principles

www.pg.com/sustainability

Our Principles
These are the Principles and supporting behaviors, which ﬂow
from our Purpose and Values.
We Show Respect for All Individuals• We believe that all individuals can and want to contributeto their fullest potential.
• We value differences.

We Seek to be the Best• We strive to be the best in all areas of strategic importance to
the Company.
• We benchmark our performance rigorously versus the very bestinternally and externally.
• We learn from both our successes and our failures.

• We inspire and enable people to achieve high expectations,standards and challenging goals.

Mutual Interdependency is a Way of Life
• We work together with conﬁdence and trust across business
units, functions, categories and geographies.

• We are honest with people about their performance.

• We take pride in results from reapplying others’ ideas.

• We encourage stock ownership and ownership behavior.
We are Strategically Focused in Our Work• We operate against clearly articulated and aligned objectives
and strategies.

• We simplify, standardize and streamline our current work
whenever possible.
Innovation is the Cornerstone of Our Success• We place great value on big, new consumer innovations.

To read more on sustainable development guidelines forbusiness conduct based on P&G’s PVP, download this brochure:www.pg.com/company/who_we_are/ppv.shtml
SUCCESS DRIVERS

Th
eP
o

s
ind
M

PeopleP&G
oferw• We only do work and only ask for work that adds value tothe business.

• We build superior relationships with all the parties who contributeto fulﬁlling our Corporate Purpose, including our customers,
suppliers, universities and governments.

The Power ofP&GThe Interests of the Company and the Individual are
Inseparable• We believe that doing what is right for the business with integrity
will lead to mutual success for both the Company and theindividual. Our quest for mutual success ties us together.

PURPOSEVALUES
PRINCIPLES• We challenge convention and reinvent the way we do businessto better win in the marketplace.
We are Externally Focused• We develop superior understanding of consumers and theirneeds.
• We create and deliver products, packaging and concepts thatbuild winning brand equities.
• We develop close, mutually productive relationships with ourcustomers and our suppliers.
• We are good corporate citizens.
• We incorporate sustainability into our products, packaging
and operations.
We Value Personal Mastery• We believe it is the responsibility of all individuals to continuallydevelop themselves and others.
• We encourage and expect outstanding technical masteryand executional excellence.

27

Th

eP
o w er

of

g
P&G A

ili t

y

www.pg.com/sustainability

The Procter & Gamble Company
Structure and Governance

Structure and Governance
We have an organizational structure composed of three Global Business Units (GBUs)
and a Global Operations group. The Global Operations group consists of theMarket Development Organizations (MDOs) and Global Business Services (GBS).

Organizational Structure
Our organizational structure is comprised of three Global Business
Units (GBUs) and a Global Operations group. The Global Operationsgroup consists of the Market Development Organization (MDO)
and Global Business Services (GBS).
Global Business Units
Our three GBUs are Beauty, Health and Well-Being, and Household
Care. The primary responsibility of the GBUs is to develop theoverall strategy for our brands. They identify common consumer
needs, develop new product innovations and upgrades, and build
our brands through effective commercial innovations, marketingand sales.
Global Operations
Market Development Organization
Our MDO is responsible for developing go-to-market plans at the
local level. The MDO includes dedicated retail customer, tradechannel and country-speciﬁc teams. It is organized along sevengeographic regions: North America, Western Europe, Northeast
Asia, Central & Eastern Europe/Middle East/Africa, Latin America,
ASEAN/Australia/India and Greater China. We deﬁne developing
markets as the aggregate of Central & Eastern Europe/Middle East/
Africa, Latin America, ASEAN/Australia/India and Greater China.
Developed markets are comprised of North America, Western
Europe and Northeast Asia.
Global Business Services
GBS provides technology, processes and standard data tools toenable the GBUs and the MDO to better understand the businessand better serve consumers and customers. The GBS organizationis responsible for providing world-class solutions at a low cost andwith minimal capital investment.

28

The Procter & Gamble Company
Structure and Governancewww.pg.com/sustainability

The Three GBUs Operate in the Seven MDOs

Global Business Units (GBUs)• Business Strategy and Planning

Global Business Services
Key Business Practices• Brand Innovation and Design

Market Development Organizations(MDOs)• Market Strategy• New Business Development• Customer Development• Info and Technology Services• Full Proﬁt Responsibility• External Relations• Order Management• Beauty– Beauty– Grooming• Recruiting• Employee Beneﬁts & Payroll• Health and Well-Being– Health Care
– Snacks, Coffee and Pet Care
• Household Care
– Fabric Care and Home Care
– Baby Care and Family Care

•ASEAN, Australasia and India& Eastern Europe,•Central
Middle East and Africa•Greater China•Latin America•North America•Northeast Asia
•Western Europe

Corporate Functions• Cutting-Edge Knowledge• Transfer Best Practices• Function Work Supporting
P&G Corporation• Accounting

29

The Procter & Gamble Company
Structure and Governancewww.pg.com/sustainability

30

Plant Locations
CountryCity

Plant NameGBU Owner

Org Category Owner

Argentina
Argentina
Australia
Belgium
BelgiumBrazilBrazilBrazilCanadaCanada
Chile
China
China
China
China
China
China
China
China
China
Colombia
Czech Republic
Egypt
FranceFranceFranceFranceGermany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Germany
Guatemala
Hungary
India
India
India
India
Ireland
Ireland
Ireland
Italy
Italy
Italy
Italy
Japan
Japan
Japan
Japan
Korea
Malaysia

Pilar
Villa Mercedes
Somersby
AarschotMechelenLouveira
ManausSão Paulo
Belleville
Brockville
Santiago
BeijingChengduDong Guan
Guangzhou
MinhangShanghai
Tianjin
Tianjin
TianjinMedellin
Rakovnik
Cairo
Amiens
Blois
PoissySarreguemines
BerlinCologneCrailsheim
Euskirchen
Gross-Gerau
Hünfeld
Kronberg
Marktheidenfeld
Rothenkirchen
Walldürn
Weiterstadt
Worms
Escuintla
CsomorBhiwadiBhopalDistrict Solan
Goa
Carlow
NenaghNewbridge
Campochiaro
Gattatico
PescaraRome
Akashi
IbarakiShiga
TakasakiCh’onanKuantan

Pilar
Villa Mercedes
Somersby (Wella)
Aarschot (Gillette)
MechelenLouveira
Manaus (Gillette)
Anchieta
Belleville
Brockville
Santiago
BeijingChengduDong Guan (Gillette)
Huangpu
Minhang (Gillette)
Shanghai (Gillette)
Tianjin
Tianjin (Wella)
XiqingMedellin
RakonaCairo
Amiens
Blois
Poissy (Wella)
Sarreguemines (Wella)
Berlin (Gillette)
Cologne (Wella)
Crailsheim
Euskirchen
Gross-Gerau
Huenfeld (Wella)
Kronberg (Gillette)
Marktheidenfeld (Gillette)
Rothenkirchen (Wella)
Wallduern (Gillette)
Weiterstadt
Worms
Escuintla
Budapest
Bhiwadi (Gillette)
Mandideep
Baddi
Goa
Carlow (Gillette)
NenaghNewbridge (Gillette)
Campochiaro
Gattatico
PescaraPomezia
Akashi
Ibaraki (Wella)
Shiga
Takasaki
ChonanKuantanFabric & Home Care
Baby Care
Beauty Care
Gillette
Fabric & Home Care
Feminine Care
Gillette
Fabric & Home Care
Feminine Care
Fabric & Home Care
Baby Care
Fabric & Home Care
Fabric & Home Care
Gillette
Beauty Care
Gillette
Gillette
Beauty Care
Beauty Care
Beauty Care
Fabric & Home Care
Fabric & Home Care
Fabric & Home Care
Fabric & Home Care
Beauty Care
Beauty Care
Beauty Care
Gillette
Beauty Care
Feminine Care
Baby Care
Health Care
Beauty Care
Gillette
Gillette
Beauty Care
Gillette
Health Care
Fabric & Home Care
Fabric & Home Care
Feminine Care
Gillette
Fabric & Home Care
Fabric & Home Care
Feminine Care
Gillette
Beauty Care
Oral Care
Fabric & Home Care
Fabric & Home Care
Feminine Care
Fabric & Home Care
Baby Care
Beauty Care
Beauty Care
Fabric & Home Care
Feminine Care
Fabric & Home Care

Fabric Care
Baby Care
Hair Care
Duracell
Fabric Care
Feminine Care
Blades & Razors
Fabric Care
Feminine Care
Home Care
Baby Care
Fabric Care
Fabric Care
DuracellHair Care
Braun
Blades & Razors
Personal Beauty Care
Hair Care
Hair Care
Fabric Care
Fabric Care
Fabric Care
Fabric Care
Hair Care
Personal Beauty Care
Hair Care
Blades & Razors
Personal Beauty Care
Feminine Care
Baby Care
Oral Care
Hair Care
Braun
Oral Care
Hair Care
Braun
Pharmaceuticals
Home Care
Fabric Care
Feminine Care
Blades & Razors
Fabric Care
Fabric Care
Feminine Care
Braun
Personal Beauty Care
Oral Care
Fabric Care
Home Care
Feminine Care
Fabric Care
Baby Care
Hair Care
Personal Beauty Care
Fabric Care
Feminine Care
Fabric Care

The Procter & Gamble Company
Structure and Governancewww.pg.com/sustainability

31

Plant Locations (continued)
CountryCity

Plant NameGBU Owner

Org Category Owner

MexicoMexicoMexicoMexicoMexicoMexicoMexicoMexicoMoroccoMoroccoNetherlands
Nigeria
Pakistan
Peru
Philippines
PolandPolandPortugal
Puerto Rico
Puerto Rico
Romania
RussiaRussiaRussiaSaudi Arabia
Saudi Arabia
Singapore
South Africa
South Africa
Spain
Spain
Spain
Spain
ThailandThailandTurkeyUkraineUkraineUnited Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States

MariscalaApizacoTalisman
Vallejo
Naucalpan
Naucalli (Gillette)
Alce Blanco (Gillette)
TepejiCasablanca
Mohammedia
Coevorden
IbadanHubMateriales
Cabuyao
Lodz (Gillette)
Targowek
Porto
Cayey
Manati
Timisoara
Dzerzhinsk (Wella)
Novomoskovsk
St. Petersburg (Gillette)
Dammam
JeddahPioneer Perfume
Epping (Wella)
Johannesburg
JijonaMataroMequinenza
Montornes
Bangkok
Bangkok (Wella)
Gebze
BorispolOrdzhonikidze
LondonManchester
Reading (Gillette)
Seaton Delaval
Wrexham (Gillette)
AlbanyAndover (Gillette)
AuburnAugusta
AuroraAvenelBoston (Gillette)
Cape Girardeau
Cincinnati
Cleveland (Gillette)
Hunt Valley
Dover
Green Bay
Greensboro
Henderson

Beauty Care
Family Care
Beauty Care
Fabric & Home Care
Health Care
Gillette
Health Care
Baby Care
Fabric & Home Care
Fabric & Home Care
Health Care
Fabric & Home Care
Beauty Care
Fabric & Home Care
Fabric & Home Care
Gillette
Baby Care
Fabric & Home Care
Beauty Care
Health Care
Fabric & Home Care
Beauty Care
Fabric & Home Care
Gillette
Fabric & Home Care
Baby Care
Home Care
Beauty Care
Beauty Care
Baby Care
Fabric & Home Care
Baby Care
Feminine Care
Beauty Care
Beauty Care
Fabric & Home Care
Feminine Care
Fabric & Home Care
Fabric & Home Care
Family Care
Beauty Care
Beauty Care
Gillette
Family Care
Beauty Care
Feminine Care
Fabric & Home Care
Health Care
Fabric & Home Care
Gillette
Baby Care
Fabric & Home Care
Gillette
Beauty Care
Baby Care
Family Care
Health Care
Health Care

Hair Care
Family Care
Personal Beauty Care
Fabric Care
Personal Health Care
Blades & Razors
Oral Care
Baby Care
Fabric Care
Fabric Care
Pet Care
Fabric Care
Personal Beauty Care
Fabric Care
Fabric Care
Blades & Razors
Baby Care
Fabric Care
Personal Beauty Care
Pharmaceuticals
Fabric Care
Hair Care
Fabric Care
Blades & Razors
Fabric Care
Baby Care
Home Care
Hair Care
Personal Beauty Care
Baby Care
Fabric Care
Baby Care
Feminine Care
Hair Care
Hair Care
Fabric Care
Feminine Care
Fabric Care
Home Care
Family Care
Personal Beauty Care
Personal Beauty Care
Duracell
Family Care
Personal Beauty Care
Feminine Care
Fabric Care
Pet CareHome Care
Blades & Razors
Baby Care
Fabric Care
Duracell
Personal Beauty Care
Baby Care
Family Care
Oral Care
Pet CareApaseo El Grande
ApizacoMexico City
Mexico City
Mexico City
Naucalpan
Naucalpan
TepejiCasablanca
Mohammedia
Coevorden
IbadanHub
Lima
Cabuyao
Lodz
WarsawGuifões
Cayey
Manati
Timisoara
Dzerzhinsk
Novomoskovsk
St. Petersburg
Dammam
JeddahSingapore
EppingJohannesburg
JijonaMataró
Mequinenza
Montornès del Vallès
BangkokSamut Prakan
Gebze
BorispolOrdzhonikidze
LondonManchester
Reading
Whitley Bay
Wrexham
AlbanyAndover
AuburnAugusta
AuroraAvenelBostonCape Girardeau
Cincinnati
Cleveland
Cockeysville
Dover
Green Bay
Greensboro
Henderson

The Procter & Gamble Company
Structure and Governancewww.pg.com/sustainability

32

Plant Locations (continued)
CountryCity

Plant NameGBU Owner

Org Category Owner

United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
Venezuela
Venezuela
VietnamIowa City
Iowa City (Gillette)
JacksonKansas City F&HC
Kansas City Coffee
LaGrange (Gillette)
Lancaster (Gillette)
Leipsic
Lewisburg
Lima
Mehoopany
New Orleans
North Chicago (Gillette)
OxnardPhoenix
Alexandria
Russellville
Sacramento
Sherman
St. Louis
Stamford
Barquisimeto
GuatireBinh Duong

Beauty Care
Health Care
Snacks & Coffee
Fabric & Home Care
Snacks & Coffee
Gillette
Gillette
Health Care
Health Care
Fabric & Home Care
Family Care
Snacks & Coffee
Beauty Care
Family Care
Health Care
Fabric & Home Care
Health Care
Fabric & Home Care
Snacks & Coffee
Fabric & Home Care
Beauty Care
Fabric & Home Care
Baby Care
Fabric & Home Care

Hair Care
Oral Care
SnacksHome Care
CoffeeDuracellDuracellPet Care
Pet Care
Fabric Care
Family Care
CoffeePersonal Beauty Care
Family Care
Personal Health Care
Fabric Care
Pet Care
Fabric Care
CoffeeHome Care
Hair Care
Fabric Care
Baby Care
Fabric Care

Iowa City
Iowa City
JacksonKansas City
Kansas City
LaGrange
Lancaster
Leipsic
Lewisburg
Lima
Mehoopany
New Orleans
North Chicago
OxnardPhoenix
Pineville
Russellville
Sacramento
Sherman
St. Louis
Stamford
Barquisimeto
Guatire, Miranda
Binh Duongwww.pg.com/sustainability

Manufacturing Outsourcing
P&G has more than 140 manufacturing facilities in over 40 countries.
These facilities handle the majority of P&G’s production.
To ensure that our products are affordable, our manufacturing
facilities must provide the best value for the Company. We
conduct regular reviews to ensure that our facilities are highly
competitive, and this process includes benchmarking versus
third-party manufacturers.
When it makes sense for the business and is the most competitive
solution, we use contract manufacturers. For example, sometimes
we use them when entering a new market, before we determine

The Procter & Gamble Company
Structure and Governance33

whether we’ll invest in building our own facility there, or when weare introducing a new product, so we can determine productionneeds prior to investing in new capacity at a P&G facility. Sometimes
we use third-party manufacturers on a longer-term, ongoing basis
because it is the most cost-effective solution for the business.
The percentage of P&G production supplied by contract manufacturers varies according to the needs of the business and the ability of
P&G facilities to compete and win production based on providing thebest value. Currently, we rely on third-party manufacturers for about
10 to 15 percent of our total manufacturing volume.

www.pg.com/sustainability

The Procter & Gamble Company
Structure and Governance

34

Governance
The objective of our governance structure is to maintain corporate governanceprinciples, policies and practices that support management and Board of Directors
accountability. These are in the best interest of the Company and our shareholders,
and they are consistent with the Company’s Purpose, Values and Principles. We believethat good governance practices contribute to better results for shareholders. Everything
we do is done with our commitment to “doing the right thing” in mind.
Corporate Governance and Management’s Responsibility
P&G has a strong history of doing what’s right. Our employees
embrace our Purpose, Values and Principles. If you analyze what
has made our Company successful over the years, you may focus
on our brands, our marketing strategies, our organizational design,and our ability to innovate. But if you really want to get at what
drives our Company’s success, the place to look is at our people. Our
people are deeply committed to our Purpose, Values and Principles.
It is this commitment to doing what’s right that unites us.
This commitment to doing what’s right is embodied in our ﬁnancial
reporting. High-quality ﬁnancial reporting is our responsibility —one we execute with integrity and within both the letter and spiritof the law.
High-quality ﬁnancial reporting is characterized by accuracy, objectivity and transparency. Management is responsible for maintaining
an effective system of internal controls over ﬁnancial reporting
to deliver those characteristics in all material respects. The
Board of Directors, through its Audit Committee, provides oversight. They have engaged Deloitte & Touche LLP to audit ourconsolidated ﬁnancial statements, on which they have issued an
unqualiﬁed opinion.
Our commitment to providing timely, accurate and understandable
information to investors encompasses:

Communicating Expectations to Employees
Every employee — from senior management on down — is trainedon the Company’s Worldwide Business Conduct Manual, whichsets forth the Company’s commitment to conduct its businessaffairs with high ethical standards. Every employee is held personallyaccountable for compliance and is provided several means ofreporting any concerns about violations.
The Worldwide Business Conduct Manual is available
on our website at www.pg.com/company

Maintaining a Strong Internal
Control Environment
Our system of internal controls includes written policies andprocedures, segregation of duties, and the careful selection anddevelopment of employees. The system is designed to provide
reasonable assurance that transactions are executed as authorized
and appropriately recorded, that assets are safeguarded, and that
accounting records are sufﬁciently reliable to permit the preparationof ﬁnancial statements conforming in all material respects withaccounting principles generally accepted in the United States. We
monitor these internal controls through control self-assessments
by business unit management. In addition to performing ﬁnancial andcompliance audits around the world, including unannounced audits,
our Global Internal Audit organization provides training and continuously improves internal control processes. Appropriate actions aretaken by management to correct any identiﬁed control deﬁciencies.

Executing Financial Stewardship
We maintain speciﬁc programs and activities to ensure that employees understand their ﬁduciary responsibilities to shareholders. This
ongoing effort encompasses ﬁnancial discipline in our strategic anddaily business decisions, and brings particular focus to maintaining
accurate ﬁnancial reporting and effective controls through process
improvement, skill development and oversight.

Exerting Rigorous Oversight of the BusinessWe continuously review our business results and strategic choices.
Our Global Leadership Council is actively involved — from understanding strategies to reviewing key initiatives, ﬁnancial performanceand control assessments. The intent is to ensure that we remain
objective, identify potential issues, continuously challenge eachother and ensure that recognition and rewards are appropriatelyaligned with results.

The Procter & Gamble Company
Structure and Governancewww.pg.com/sustainability

Engaging Our Disclosure Committee
We maintain disclosure controls and procedures designed to ensurethat information required to be disclosed is recorded, processed,
summarized and reported accurately and in timely fashion. Our
Disclosure Committee is a group of senior-level executives responsible
for evaluating disclosure implications of signiﬁcant business activities
and events. The Committee reports its ﬁndings to the CEO
and CFO, providing an effective process to evaluate our external
disclosure obligations.

Encouraging Strong and Effective Corporate
Governance from Our Board of Directors
We have an active, capable and diligent Board that meets therequired standards for independence, and we welcome the Board’s
oversight. Our Audit Committee comprises independent ﬁnancial
directors with signiﬁcant knowledge and experience. We review
signiﬁcant accounting policies, ﬁnancial reporting and internal
control matters with them, and encourage their independent
discussions with external auditors.
Our corporate governance guidelines, independence
guidelines and charters for all Board committees are available
at our website at www.pg.com/company/our_commitment/
corp_gov
Governance Structure
We believe that good governance practices contribute to better
results for shareholders. Our objective is to maintain corporate
governance principles, policies and practices that support management and Board of Directors accountability. These are in thebest interest of the Company and our shareholders, and they are
consistent with the Company’s Purpose, Values and Principles.
Governance starts with the Board of Directors, which has general
oversight responsibility for the Company’s affairs pursuant to Ohio’s
General Corporation Law, the Company’s Amended Articles ofIncorporation and Code of Regulations, and the Board of Directors’
By Laws. In exercising its ﬁduciary duties, the Board of Directors
represents and acts on behalf of the Company’s shareholders.
Although the Board of Directors does not have responsibility for the
day-to-day management of the Company, it stays informed about
the Company’s business and provides guidance to Company management through periodic meetings, site visits and other interactions.
The Board is deeply involved in the Company’s strategic planning
process, leadership development and succession planning. Additional
details concerning the role and structure of the Board of Directors
are contained in the Board’s Corporate Governance Guidelines,
which can be found in the corporate governance section of theCompany’s website at www.pg.com/investors.

35

Additionally, the Board has adopted guidelines for determining theindependence of its members. As of June 30, 2008, approximately
83 percent of our directors qualiﬁed as being independent fromthe Company.
The Board has approved a code of conduct, outlined in ourWorldwide Business Conduct Manual. This code applies to all
directors, ofﬁcers and employees and is designed to help ensurecompliance with all applicable laws and Company policies,
including those related to sustainable development. Shareholders
may communicate with the Board of Directors and submit shareholder proposals as described in the Company’s proxy statement.
Executive Compensation
The Compensation & Leadership Development Committee has
established the following principles for compensating all Company
employees:• Support the business strategy• Pay for performance• Pay competitively
These overall principles have served the Company well andenabled us to deliver strong shareholder value over time — including
compound average shareholder returns above the Dow Jones
Industrial Average for the past one, three, ﬁve and ten year periods.
The Committee and the Board of Directors are charged with theconsistent and fair application of these principles. Over time, we
believe this has helped to develop and retain talented employees
who are committed to the Company’s success.
Additionally, we expect executives to uphold the fundamental
principles in the Company’s Statement of Purpose, Values andPrinciples, in addition to the Worldwide Business Conduct Manual,
the Sustainability Report, and the Environmental Quality Policy.
These principles include integrity, maximizing the development ofeach individual, developing a diverse organization, and continually
improving the environmental quality of the Company’s products
and operations. In upholding these principles, executives not only
contribute to their own success but also help ensure the prosperityof P&G’s business, employees, shareholders and the communities
in which the Company operates.

www.pg.com/sustainability

Political Involvement
P&G’s political involvement is an important means of building andprotecting our business.
Guided by our Purpose, Values & Principles, P&G participates in thepolitical process to help shape public policy and legislation that has
a direct impact on the Company. This engagement is an importantmeans of building and protecting our global business, and ensuresthat the interests of our employees, consumers and shareholders
are fairly represented at all levels of government around the world.
We are committed to being transparent about our political involvement globally and are providing additional detail in response torequests from external stakeholders.
P&G’s public policy and legislative priorities are reviewed annuallywith senior business leaders as well as with the Governance andPublic Responsibility Committee of the Board of Directors.
Lobbying Activity
P&G’s Global Government Relations team (P&G GGR) represents theCompany’s point of view in Washington, DC, in U.S. state capitols
and in key country capitols around the world. Working with thebusinesses, P&G GGR focuses on legislative and public policy issues
that impact the Company’s bottom line and long-term businessinterests. Where permitted by law, P&G GGR: engages and educatespolicy makers and key stakeholders on issues that impact ourbusiness; facilitates the exchange of information between key
decision-makers and public policy organizations in the U.S. andabroad; leads Company actions on policy matters both unilaterally
and in industry coalitions and associations.
P&G complies with all U.S. federal and state laws, including the
Lobbying Disclosure Act and Honest Leadership and Open
Government Act that require reporting on lobbying activities andcertiﬁcation of compliance with Congressional gift rules. P&G
reported U.S. lobbying expenditures of $1.97 million in the lobbying
disclosure reports ﬁled with the Clerk of the U.S. House ofRepresentatives and the Secretary of the U.S. Senate for the 2007
calendar year. Beginning in 2008, P&G will report lobbying activity
in the European Union under new voluntary guidelines issued
by the EU Commission.
In 2007, P&G spent over $9.9 million in dues to associations in the
U.S. with annual dues of $25,000 or more, of which $1.7 million,
roughly 17 percent, was identiﬁed by 42 associations as funds
spent on lobbying and political activities. A listing of P&G’s U.S.
associations and percentage of dues attributable to political activities
can be found at www.pg.com/political_activities.

The Procter & Gamble Company
Structure and Governance

36

U.S. Corporate Political Activity
P&G engages in the political process by providing ﬁnancial support
to state ballot initiatives and issue advocacy campaigns that havea direct impact on the business. P&G’s involvement in thesecampaigns is overseen by a multi-functional team comprised ofrepresentatives from Global Government Relations, Legal, Human
Resources, Corporate Communications and other functions related
to the speciﬁc issue under consideration. The team makes recommendations to the Global External Relations Ofﬁcer for approval,
or for further review and approval by the President, Chief Operating
Ofﬁcer, and Chairman & CEO as appropriate. As with all otheraspects of our political involvement, our participation in such efforts
is guided by our Purpose, Values and Principles and by our businessstrategies, and is fully reported in accordance with governing laws.
In 2007, P&G gave $101,500 in contributions to state ballot
initiatives and other issue advocacy campaigns that had a direct
impact on the business. A listing of these initiatives can be found atwww.pg.com/political_activities.
P&G Political Action Committee (P&G PAC)
The P&G PAC is a voluntary, nonpartisan political action committee.
Registered as the P&G Good Government Committee with the U.S.
Federal Election Commission (FEC) and appropriate state ofﬁces, the
PAC allows P&G employees to pool personal, voluntary ﬁnancial
contributions to support candidates at the federal, state and local
level, who support issues important to the business and the qualityof life in the communities in which we live and work.
P&G PAC operations are transparent and compliant with all applicablelaws. It is governed by a set of bylaws and supervised by a diverse
board of Company senior managers, U.S. Government Relations
personnel, and Legal counsel.
Support of candidates is based on their support of P&G issues andsustained constituent relationships. The PAC generally does notcontribute to Presidential candidates, national political parties, tradeand industry association or leadership PACs, or multiple candidates
running in the same race. In 2007, the P&G PAC contributed$238,105 to candidates running for ofﬁce. The average contribution
was $1,189.
Additionally, P&G operates a separate state PAC in Massachusetts.
In 2007, the P&G/Gillette state PAC contributed $2,050 to
Massachusetts state and local candidates. The average contribution
was $410.
P&G PAC activity is available on the FEC and state elections
websites. A listing of all 2007 PAC contributions is available atwww.pg.com/political_activities.

Designed toInnovate…
Sustainably

Strategies & Goals for 2012
Policies, Management Systems
and Performance
Strategy 1: Products
Strategy 2: Operations
Strategy 3: Social Responsibility
Strategy 4: Employees
Strategy 5: Stakeholders

The Procter & Gamble Company

www.pg.com/sustainability

38

Policies, Management Systems and Performance
Policies

Acquisitions

While P&G competes hard to achieve leadership and businesssuccess, the Company is concerned not only with results, butalso with how those results are achieved. We will never condone
or tolerate efforts or activities to achieve results through illegal
or unethical dealings, anywhere in the world.

Acquisitions, mainly Wella and Gillette, have been included in themetrics presented herein. The only thing that is different for acquisitions is the expectations of performance with respect to meeting
all of P&G standards. We allow a six-year glide path to meet theaudit performance score of 8.0 out of a ten-point scale. A mid-point
expectation is 6.5 within three years. Our experience has been thatthe acquisitions exceed those expectations

Management Systems
P&G’s Management Systems ensure that the Company’s policies
are implemented in a consistent manner throughout the world.
These Management Systems align with the Company’s policies andpromote a regular ﬂow of information that helps the Company
better manage its progress on elements of sustainable
development.

Performance
P&G measures operational performance in order to drive continuous
improvement. A Company-wide system of measuring performancehas been developed. This approach enables the Company to report
data on a wide range of operational categories.
Our actions are not just proﬁt-driven but also progress-driven, toensure a better quality of life for everybody, now and for generations
to come. Our extensive consumer research related to our brands
also helps us identify ways we can best address sustainability.

Process for Data Collection
P&G’s data collection systems have been in place for many years.
They are designed to be simple enough so that the people closest
to the work, regardless of location, can use the tools. This simplicity
enables the Company to collect data and update systems annuallyat a relatively low cost. Each business unit is responsible for theaccuracy and consistency of its data.
All data is reported on a global basis. In order to achieve consistency
and to ensure a common understanding throughout the organization, employees are trained in how to report and document data.
Our standard is to use metric units and English as our businesslanguage, backed where necessary with local translations.
To ensure the standard collection of data, the Company has thefollowing work process in place:• Key terms deﬁned.
• The data to be collected are identiﬁed.
• Flow sheets are agreed upon regarding who collects data andon what systems.
• Technically sound methods are used by facilities to estimate data
and validate year-to-year results.
• Personnel are trained on the work process, as appropriate.

Strategy 1:
Products
Strategy

Goal

Delight the consumer withsustainable innovations that
improve the environmental
proﬁle of our products.

Develop and market at least$20 billion in cumulative salesof “sustainable innovation
products,” which are productswith a signiﬁcantly reduced(>10%) environmental footprint
versus previous or alternative
products.

The Procter & Gamble Company
Strategy One

www.pg.com/sustainability

P&G is committed to using resources wisely, reducing or preventing wastes
and emissions whenever possible.
P&G’s philosophy is grounded in a belief that we should be a leader
in our industry in implementing our global environmental program.
To do this, we concentrate on environmental innovation andaccountability for results. We believe our accomplishments illustrate
this commitment. The goal is our commitment to transparency
in the process over the decade.

We recognize that environmental progress is a never-ending
journey of continuous effort and improvement. By focusing on
improving the lives of consumers through innovative technologies
that work better and more efﬁciently, we believe we can continue
to sustain both the growth of our business and the health ofthe environment.

Sustainable Innovation Products 2007 – 2008
Products with a signiﬁcantly reduced (>10%) environmental footprint versus previous or alternative products.
Product

RegionInnovation

Liquid Laundry Compaction(Tide, Gain, Cheer, Era, Dreft)
Powder Laundry Compaction(Daz, Mr. Proper, Ace, Ariel, Gama)
Ariel Cool Clean

North America

Formulation concentration delivered savings inwater, energy, transportation, packaging
Formulation concentration delivered savings inenergy, transportation, packaging
Formulation to clean in cooler temperatures,saving energy
Formulation change requires consumers to rinse
only once, reducing water usage

Western Europe

Braun Silk-épil Xpressive
Braun Series 7

Central & Eastern Europe, Middle East
and Africa
Latin America, ASEAN, Australasia
and India, Central & Eastern Europe,
Middle East and Africa
GlobalWestern Europe

Crest Whitestrips

North America

Downy Single Rinse

Redesigned with more energy efﬁcient “Smart Plug”
Packaging redesigned to better ﬁt on shipping
pallets, reducing transportation
Redesigned to reduce material waste

40

The Procter & Gamble Company
Strategy One

www.pg.com/sustainability

Environmental Quality Policy
We will provide products and services of superior quality and valuethat improve the lives of the world’s consumers. As part of thisprocess, P&G continually strives to improve the environmental qualityof its products, packaging and operations around the world.

41• Ensures every employee understands and is responsible andaccountable for incorporating environmental quality considerations
in daily business activities. We encourage, recognize and reward
individual and team leadership efforts to improve environmental
quality. We also encourage employees to reﬂect their commitment
to environmental quality outside of work.
• Has operating policies, programs and resources in place toimplement our Environmental Quality Policy.

Product Safety
Household consumer products use a variety of chemical ingredientsto provide beneﬁts to society, such as cleaner homes and improved
health and personal hygiene, thus enabling an overall better qualityof life. One expectation of consumer products is that they will
be safe: that their use will not adversely affect human health or
the environment.

To carry out its Environmental Quality Policy, P&G:
• Ensures that our products, packaging and operations are safe forour employees, consumers and the environment.
• Reduces or prevents the environmental impact of our products
and packaging in their design, manufacture, distribution, use anddisposal whenever possible. We take a leading role in developing
innovative, practical solutions to environmental issues related
to our products, packaging and processes. We support the sustainable use of resources and actively encourage reuse, recycling
and composting. We share experiences and expertise and offer
assistance to others who may contribute to progress in achieving
environmental goals.
• Meets or exceeds the requirements of all environmental laws
and regulations. We use environmentally sound practices, evenin the absence of governmental standards. We cooperate withgovernments in analyzing environmental issues and developing
cost-effective, scientiﬁcally based solutions and standards.

Throughout its history, P&G has believed that the safety of our
products is a prerequisite for responsible business. Our co-founder,
James Gamble, stated in the mid-1800s that “if you cannot makepure goods and full weight, go to something else that is honest,
even if it is breaking stone.” Today, this philosophy is reﬂected in
our Statement of Purpose: “We will provide branded products andservices of superior quality and value that improve the lives of theworld’s consumers, now and for generations to come.” Safety is an
intrinsic part of our products’ quality and value.
Our approach is based on the scientiﬁc assessment and management of risk — the likelihood that people or the environment will
be exposed to harmful amounts of a substance. Risk assessment
is based on two factors:
1. How “toxic” or “hazardous” a chemical is, and2. How it is used, speciﬁcally the extent of exposure to humans
or the environment.
In recent years, some stakeholders have expressed concern about
using risk as the basis for product safety. These concerns have been
driven by several issues, including:• Continually assesses our environmental technology and programs
and monitors progress toward environmental goals. We develop
and use state-of-the-art science and product life cycle assessment,from raw materials through disposal, to assess environmental
quality.

• Questions about whether the hazards of existing chemicals havebeen sufﬁciently studied and whether chemical exposures canbe adequately understood.

• Provides our consumers, customers, employees, communities,
public interest groups and others with relevant and appropriate
factual information about the environmental quality of P&G
products, packaging and operations. We seek to establish andnurture open, honest and timely communications and strive
to be responsive to concerns.

• New scientiﬁc ﬁndings that have not been previously known
or evaluated.

• Frustration with the slow pace of developing publicly available
risk assessments.

The Procter & Gamble Company
Strategy One

www.pg.com/sustainability

As a result, some believe that it might be better to base decisions
on a chemical’s hazards alone. This has been coupled with calls forthe far-reaching use of the “precautionary principle,” whereby
substances that are classiﬁed as “hazardous” would be broadly
restricted, with little further evaluation. We recognize the attractionof such a “black and white” approach. However, we believe thatit could cause chemicals that are being safely used to be unjustiﬁably removed from the market, potentially depriving society ofinnovative and beneﬁcial technologies. Furthermore, experiencehas shown that even chemicals that could be considered “nonhazardous” (even water) can cause harm under certain circumstances,while “hazardous” chemicals can be safely used (e.g., ethanol).

We recognize that continuing questions about the safety of chemicals mean that industry must take a more collaborative and open
approach. Thus, we have initiated a variety of industry partnerships,
including: the collaborative assessment of laundry and cleaningproduct ingredients in Europe (Human and Environmental Risk
Assessment — HERA (www.heraproject.com); evaluations of“High Production Volume Chemicals” in the United States andwith the Organization for Economic Cooperation and Development;
assessments of ﬂavors, fragrances and colorants by Europeanand U.S. cosmetics products associations; work in Canada to
implement renewed chemicals legislation; the promotion of risk
assessment via the U.S. Alliance for Chemical Awareness(www.chemicalawareness.com) and the American ChemistryCouncil; development of a targeted risk assessment approach inEurope, via the European Centre for Ecotoxicology and Toxicology
of Chemicals, an industry-sponsored research organization(www.ecetoc.org).

NEW SECTION OF “SCIENCE IN-THE-BOX” COVERS SUSTAINABILITY THEMESFor years, consumers have beneﬁted from the Science in-the-Box,a scientiﬁc information portal that tells consumers about thescience and innovation that make P&G’s products work. And thisyear, P&G introduced a new section to the Science in-the-Box
website. Sustainability in the Home, www.scienceinthebox.
com/en_UK/sustainablehome/index.html
Sustainability in the Home was created to meet the rapidly
growing information needs from consumers and stakeholders
around the sustainability of P&G’s Household Care products. It
is important for P&G to be transparent about its sustainable innovation approach and to offer consumers and stakeholders theopportunity to review the facts and listen to our perspective. Thisfacilitates informed decision-making and a two-way dialogue.
The new Sustainability in the Home module covers ﬁvesustainability themes:
1 Efﬁcient use of energy (e.g. energy savings fromwashing at low temperatures)
2 Efﬁcient use of water (e.g. water savings fromless prewashing, full wash loads)
3 Sustainable packaging (e.g. how we innovate
packaging, how to handle waste)
4 The consumer and environmental beneﬁts ofcompact detergents
5 Driving sustainable consumer behavior before,
during and after use of our products

42

Sustainability in the Home follows the Science in-the-Box
approach, offering facts and rich, objective content in an easily
accessible way, in different languages and tailored to different
target audiences. Science in-the-Box delivers information aroundthe safety, composition, sustainability and science of ourbrands and reaches more than 60 percent of the European
population in their native language. The product information
website www.info-pg.com is available in all EU languages
and gives detailed information on the marketed laundry andcleaning products such as their composition, safety data sheets
and other relevant information.

60

percent of the European
population is reached by
Science in-the-Box.

www.pg.com/sustainability

The Procter & Gamble Company
Strategy One

43

In addition, we are actively promoting the responsible production
and use of chemical products, and better information sharing withthe public. For example, we are working with the European soap
and detergent industry association (A.I.S.E.) on formulation
improvements, as well as providing consumer guidance on how to
use detergents properly (www.washright.com). We launched andthen expanded a P&G Internet site (www.scienceinthebox.com)
to help inform consumers and stakeholders about the science andsafety behind our European cleaning products. Very high public
interest in this site led to a similar site covering the science and safetyof skin and hair care products (www.pgbeautyscience.com) andanother site covering P&G’s approaches to product safety andviews on a variety of chemical management and science policy
issues (www.pgperspectives.com).

Human and Environmental Safetyof Our Products

From a policy standpoint, we continue to believe that chemicals
management programs should be based on:

Risk assessment is the process the Company uses to evaluate thesafety of its products and ingredients. In this process, chemicalhazard and exposure information are related in a way that describes
the likelihood that a chemical will adversely affect biological systems.
The PS&RA organizations in each business unit work closely withproduct development teams in the development, selection andformulation of product ingredients and mixtures with acceptablerisk proﬁles, as well as satisfying other important business andconsumer needs.

1. Efﬁcient risk-based priority setting processes that use hazard data
and basic exposure information together to identify issues ofpotential concern, followed by practical risk evaluations that analyze
chemicals in a tiered fashion to resolve such issues.
2. Risk management decision-making that combines information
on a chemical’s risks, beneﬁts and costs with an understandingof societal concerns; the risks, beneﬁts and costs of alternatives;
and the use of appropriate precautionary measures.
3. Communications that provide meaningful and relevant safety
information to stakeholders, so that they can make knowledgeable decisions.
These policies are the foundation of what we do internally, as wellas what we encourage across government and industry.
Internally, they are enabled by collaboration among Research &Development, Product Safety and Regulatory Affairs, Manufacturing,
External Relations and management. Our efforts go beyond safety
and risk to include product lifecycle issues such as energy andresources use, and waste management.

Product Safety & Regulatory Affairs (PS&RA) is responsible for
ensuring that products and packages are safe for consumers, safefor the environment and in compliance with laws and regulations
where they are sold.
PS&RA also addresses other environmental aspects of products andpackages, such as their compatibility with waste management
systems, natural resource use or issues of perceived safety. This
organization is also responsible for the development, validation andadoption of alternatives to animal testing and ensures that any
claims the Company makes about the safety or environmental proﬁleof its products are scientiﬁcally sound.

A key part of PS&RA is the Central Product Safety (CPS) organization.
CPS has direct responsibility for ensuring that our products are safe
for consumers and the environment. Its primary role is to advancethe science of understanding and evaluating the human and environmental safety and impact of our products. It is helped inthis process by an External Advisory Board consisting of several
distinguished academic scientists.
CPS’s work involves conducting basic studies in toxicology andbiodegradation, together with an understanding of exposures, toultimately complete human and environmental safety assessments
used to make business decisions for products going to market as wellas guide in the development of new technologies. CPS is also
involved in key national and international initiatives (e.g., United
Nations, Organization for Economic Cooperation and Development)
directed toward supporting the sound management of chemicals
around the world by sharing our toxicity information andestablishing principles for promoting the safe and responsible useof chemicals.
For further details on the science and safety of P&G products,
we encourage you to visit these websites:
Science in-the-Box: www.scienceinthebox.com
The Science of Beauty: www.pgbeautyscience.com
P&G Perspectives: www.pgperspectives.com

www.pg.com/sustainability

The Procter & Gamble Company
Strategy One

Approach to Animal Welfare and Alternatives

On this website you can also learn about:

P&G products are used in homes around the world 3 billion times
a day, and we are committed to safeguarding the health of ourmany consumers.

• Ongoing work to advance our animal welfare and animalalternatives programs (in our regular Forward Focus newsletter).

Sometimes, to ensure that materials are safe and effective, we must
conduct research involving animals. This is a last resort. We consider
such research only after every other reasonable option has been
exhausted. The vast majority of our tests do not use animals.
Wherever possible, we use computer models, synthetic materials,
published scientiﬁc studies and comments from consumers about
products they use. P&G is well known for leadership in developing
alternatives to animal tests, investing more than $265 million andhelping to develop more than 50 alternative methods.
We approach our work with respect, openness and responsibility
by using animals as a last resort, working with animal welfareorganizations and ensuring high standards of care. We have invested
more than $15 million since 2003 to help advance standards ofanimal care and welfare. We collaborate with governments andacademia to promote the acceptance of alternatives. We actively
share our discoveries so that others can beneﬁt from them.
News of our advances has been shared in more than 400 scientiﬁcpublications. We seek input from the world’s leading experts tocontinuously improve our approach.
For details of our policy and practices please go to:www.pg.com/science/animal_alt.jhtml

44• P&G’s participation in the 5th and 6th World Congresses on
Alternatives & Animal Use in the Life Sciences (2005, 2007),
a leading global scientiﬁc forum on reﬁning, reducing andreplacing the use of animals in research.
• The joint declaration by P&G and the Humane Society of theUnited States committing the two organizations to a strategic
partnership that aims at the elimination of animal use for
consumer product safety evaluation.
• P&G’s commitment to the European Partnership for Alternative
Approaches (EPAA), which aims to accelerate the rate at whichalternatives are agreed upon, validated and put into practice.
• P&G’s support of the European Animal Welfare and Alternatives
Awards offered by EUROTOX and the Humane SocietyInternational as well as the North American Awards offered by
The Humane Society of the United States.
For more technical articles regarding animal welfare,please go to: www.pgperspectives.com/en_UK/general/
research-with-animals_en.html

The Procter & Gamble Company
Strategy One

www.pg.com/sustainability

Forest Resources Policy• Continuous improvement in forestry practices.

Though P&G does not own or manage forests, we are a majorpurchaser of wood pulp and have a responsibility to ensuresustainability of the world’s forest resources. Consistent with thisview, P&G has had a long-term policy which applies to purchasing
and utilization of wood pulp. As the science, knowledge andveriﬁcation systems related to sustainable forest management evolve,
we will revise this policy accordingly.

• Compliance with legislation.

P&G purchases wood pulp from suppliers that:• Ensure the safety of forestry and manufacturing operations for
employees and the environment.

45• Support of universal human rights.
• Multi-stakeholder governance and transparency
in decision-making and reporting.
P&G is committed to reducing demand on the world’s forests andother resources and will continue to:• Focus on source reduction or use of less ﬁber through developmentof innovative technologies that provide maximum product performance using minimal ﬁber.

• Document that wood is legally harvested and that other legal
requirements are met.

• Evaluate the use of non-forest derived sources of ﬁber, recognizing that alternatives must also meet principles of sustainable
management.

• Practice principles of sustainable forest management in theirown operations and in sourcing of wood.

• Explore and implement energy and water conservation opportunities in our paper making operations.

• Do not obtain the ﬁber from sites designated for conservationor judged to have unique environmental or cultural value.

• Use recovered ﬁber when it has no negative impact on productperformance, manufacturing efﬁciency, resource and energy
usage, and waste generation.

• Reﬂect our social values and support of universal human rights
through work with local governments and communities toimprove the educational, cultural, economic and social well-beingof those communities.
We ensure compliance with this policy through site visits, comprehensive surveys and research, required documentation and independent
third-party certiﬁcation of sustainable forest management practices.
P&G requires pulp suppliers to independently certify their operations
for sustainable forest management. P&G also requires suppliers
to provide auditable assurance that ﬁber from sources not directly
owned and managed by them is obtained via legal means and thatharvest is conducted via sustainable practices. We give preference
to pulp from Forest Stewardship Council (FSC) certiﬁed forests when
it is available, meets product performance requirements andcompetitive market conditions. We will also work with pulp suppliers
to explore opportunities to progressively increase the amount ofpulp from credibly certiﬁed sources, such as FSC. Other certiﬁcation
systems that our suppliers select must be consistent with the following generally accepted criteria for sustainable forestry management:• A commitment to forest regeneration and reforestation.
• Protection of soil quality, riparian zones and water quality.
• Protection of ecologically and culturally unique forest areas.
• Maintenance and conservation of biological diversity.
• Stakeholder consultation and public reporting.

Procter & Gamble bought a total of 1.7 million ADMT (air dried
metric tons) of pulp in 2007 – 2008 for use in our tissue/towel
products, diapers and feminine hygiene products. The pulp was
sourced from the following regions:
United States
CanadaBrazilWestern Europe (Spain, France, Germany)
Scandinavia
Indonesia*
RussiaOther Baltic Countries

32%
31%
27%
3%
2%
2%
<1%
<1%

* From plantations; high conservation value assessments done to protect biodiversity

All of our pulp suppliers have certiﬁed their forestry operations
for sustainable forest management. The certiﬁcation systems used
are as follows:
Sustainable Forestry Initiative (SFI)
National Program of Forest Certiﬁcation (CERFLOR)
Forest Stewardship Council (FSC)
Programme for the Endorsementof Forest Certiﬁcation (PEFC)
Indonesian Ecolabelling Institute,or Lembaga Ekolabel Indonesia (LEI)
Canadian Standards Association (CSA)

54%
27%
2%
13%
2%
2%

The Procter & Gamble Company
Strategy One

www.pg.com/sustainability

Palm Oil Policy

Economic Development

P&G is committed to the sustainable sourcing of palm oil. By 2015,
we intend to purchase and use palm oil that we can conﬁrm tohave originated from responsible and sustainable sources. We willseek to accomplish this goal through the following key steps:

Innovation is a P&G cornerstone. More than $2 billion is invested
annually in research and development — the largest amountamong consumer product companies worldwide. We have morethan 34,000 patents worldwide, and we average more than one
new patent per day.

Supplier and Partner Coaching: We will continue to share andreinforce our expectations related to sustainability, and encourage
and reward “sustainable behavior” on behalf of our partners andsuppliers. This will include visits to our suppliers and audits of theiron-the-ground operations to ensure that their practices will meetor exceed our sustainability expectations, including their selection,purchase, and responsible use of land for the planting of palm
plantations. We will continue to partner with both known supplierswith whom we have long-standing relationships and trust, as wellas with emerging suppliers who embrace and support our
Corporate sustainability principles and expectations.
Stakeholder Partnerships: We will expand and strengthen relationships with trade associations, government agencies,
non-governmental organizations (NGOs), and other critical external
stakeholders to help inﬂuence positive changes and incremental
sustainability improvements in the palm oil supply chain andindustry. We will partner with third-party organizations to help
conﬁrm and validate our palm oil sourcing and use strategies.
Industry Inﬂuence: We will continue to support industry efforts
to eliminate irresponsible and/or illegal deforestation of land foruse in the planting and harvesting of palm plantations, as well as
efforts to help ensure the appropriate selection and designationof land for such uses.

P&G PARTNERS TO FIND FOREST HEALTH OPPORTUNITIESIn addition to ensuring that our pulp suppliers are practicing
sustainable forestry, we also work with leading NGOs to
identify additional opportunities to protect the health offorests around the world. The World Wildlife Fund (WWF) has
created the Global Forest & Trade Network to eliminate illegal
logging and improve the management of valuable and threatened forests. In April 2008, WWF announced that P&G joined
the North American arm of the Global Forest & Trade Network.

46

These intellectual assets are of tremendous value to P&G. But someare not being fully realized; we invent more than we can commercialize. Through our External Business Development group, we
continue to identify non-strategic proprietary technologies which,when developed to their full potential, can yield sustainable revenue sources and bring important technologies to the market.
P&G invites collaboration. Our External Business Developmentgroup manages over 800 active contracts with other companies
and institutions. This includes a wide variety of deal structures —licensing, sale, technology swap, joint ventures and more. P&G
remains the partner of choice in working with others to improve
the lives of the world’s consumers.

www.pg.com/sustainability

NEW CAMPAIGN ENCOURAGES CHILDREN TO SAVE WATER
Water consumption is a concern in Spain, especially in the summer heat. The third edition of Ariel’s ‘Every Drop Counts’campaign gives consumers tips on saving water at home.
The campaign also promotes a partnership with WWF/Adena
which contributes funds toward different water projects around
Spanish rivers.
Children are often great teachers for their parents, so they werethe campaign’s focus. In the Ariel “Patrols,” a fun educationalroad show in Spanish schools, students learned valuable watersaving tips, such as taking a shower instead of a bath, or using
the same water to wash fruits and water plants. Throughsimple tricks at home, families can save a signiﬁcant amount ofwater over the course of a year.

P&G HONG KONG LEADS EFFORT TO REDUCE SOLID WASTE IN PROMOTION
Since April 2008, P&G Hong Kong has partnered with key
customers and suppliers to pioneer a breakthrough sustainability
project aiming to make Hong Kong’s trade environment more
green. The program has taken a holistic approach to minimizing
the environmental impact of P&G’s trade promotion, making
improvements in displays from design and manufacture to use
and disposal.
The program has included innovative solutions framed aroundthe three R’s:
1 Recycle display material
2 Reuse display structures by altering the promotion
campaign message
3 Replace heavy wood structure with lightweight materials
such as paperboard
Solid waste is a serious environmental problem in Hong Kong,which could run out of landﬁll space in six to ten years. With
unprecedented support from customers and suppliers, P&G
Hong Kong was the ﬁrst company in the industry to introduce
such innovative trade sustainability solutions.

The Procter & Gamble Company
Strategy One

47

Strategy 2:
Operations
Strategy

Goal

Improve the environmental
proﬁle of P&G’s own
operations.

Deliver an additional 10 percent
reduction (per unit production)
in CO2 emissions, energy
consumption, water consumption and disposed waste fromP&G plants, leading to a total
reduction over the decadeof at least 40 percent.

The Procter & Gamble Company
Strategy Two

www.pg.com/sustainability

49

P&G is committed to maintaining operations that are safe for our employees, consumers
and the environment. We reduce or prevent the environmental impact of productmanufacturing whenever possible.
PROGRESS(percent reduction per unit production)

Since
July 2007

Since
July 2002

-6%

-46%
-52%
-50%
-51%

Energy Usage
CO2 Emissions
Waste Disposal
Water Usage

-8%
-21%
-7%

Resource & Waste Summary
The table below reports environmental statistics for Manufacturing Operations in the Global Business Units and Technical Centers.
Included are both Wella and Gillette sites. Table reﬂects divestiture of Western European Tissue Towel Business.
2008 Global Business Unit Detail (1) (absolute units x 1,000)

Totals (absolute units x 1,000)
2008

2007

2006

BeautyHealth &Well Being

Household
Care

Technical
Centers

23,187

21,742
79

20,660
65

5,239

3,404

14,544

0

139

90

468

0

983
53%

894
59%

375
48
22
17
77,681
2,876
89,688
1.73

PRODUCTION (metric tons)

Product Shipped
Raw Materials from Recycled Sources

697

WASTE ( metric tons )Generated Waste
Percent Recycled / Reused Waste

935
59%

139

175

602

19

52%

68%

63%

33%

305
21
27
16

81

48

171

11

4

1

24

1

5

5

12

1

1

2

13

0

78,0202,935
91,292
2.15

4,025

8,129

61,428

2,319

125

217

2,379

61

7,422

4,734

66,725

8,077

0.04

0.28

1.58

0.00

DISPOSED WASTE (metric tons)

Solid Waste — Non-Hazardous
Solid Waste — Hazardous
Efﬂuents (excluding water)
Air Emissions(2)

311
30
23
16

OTHER

Energy Consumption (gigajoules)
Greenhouse Gas Emissions (metric tons) (3)Water Consumption (cubic meters )SARA Releases (metric tons)(4)75,901
2,782
86,9581.90

1 metric ton = 1,000 kg = 2,205 lbs.
(1) Beauty includes segments Beauty and Grooming. Health and Well-Being includes segments Health Care and Snacks, Coffee and
Pet Care. Household Care includes segments Fabric Care and Home Care, Baby Care and Family Care. Technical Centers includes
each of the research centers that support the business units. 2008 numbers come from P&G manufacturing sites only, they do notinclude production from contract manufacturing operations.
(2) Air emissions include particulates, SO2, NOx, CO and VOC.
(3) Greenhouse gas emissions include CO2 from fuel combustion sources.
(4) Releases deﬁned in the U.S. Superfund Amendments and Reauthorization Act (SARA) by the U.S. Environmental Protection Agency.

The Procter & Gamble Company
Strategy Two

www.pg.com/sustainability

Manufacturing Materials Flows 2007 – 2008:
As the diagram illustrates, P&G’s use of material resources is highly
efﬁcient. The vast majority of materials are converted to products,
and the output of the manufacturing waste (which is largely
non-hazardous) is low.

ENERGY

75.9

million gigajoules

FINISHEDPRODUCT

96.12%RAW MATERIALS &PACKAGING

MATERIALS FORRECYCLING/REUSENON-HAZARDOUS
SOLID WASTE

HAZARDOUS SOLID
WASTE

AIR
EMISSIONSWATEREMISSIONS

2.30%

1.29%

0.13%

0.07%

0.09%

50

The Procter & Gamble Company
Strategy Two

www.pg.com/sustainability

Product Supply Overall Approach — Blending
Sustainability into our Lifeblood
We have a strong history of reducing the environmental footprints
and costs from our operations. Our production-adjusted footprints,
including Energy Usage, Direct CO2 Emissions, Waste Disposed,
and Water Usage, have been dramatically reduced during the ﬁrst
six years of the decade (2002 – 2012). During FY07/08, we continued
to have outstanding production-adjusted reductions that have positioned us to meet a 50 percent decade reduction. Importantly, thesesustainability reductions are also delivering signiﬁcant cost savings.
1-year Results FY 07/08

Base Target
Energy Usage
Direct CO2 Emissions
Waste Disposal
Energy Usage

Absolute

Production-Adjusted

-2%

n/a
-2%
-4%
-18%
-3%

n/a
-46%
-52%
-50%
-51%

-8%
-21%
-7%

(number of projects)
1,000sConservation/IWS Loss Analysis
MDO Footprint Reduction
Inﬂuencing New Designs

100s

Inﬂuencing New Designs
Transportation Miles
Supplier Sustainability
Major Product and Process Breakthrough10s

New Projects
Customization

Since July 2002

Production-Adjusted-6%

EXECUTION TIMELINETo deliver these outstanding results, our operating site personnel
along with staff resources from the GBUs, MDOs, Corporate
Engineering, GBS-Purchases, and Finance have combined forces
working against a common Product Supply sustainability approach.
This comprehensive approach will allow us to more systematically
reapply the successful current operations strategies used over the
past six years. It not only addresses efforts to exceed our current
operations goal, but is also looking at strategies to:• Expand our efforts to include the entire supply chain via
partnerships with MDOs and suppliers.
• Continue efforts on our future operations beyond 2012 via
partnerships with R&D to deliver breakthrough sustainable
innovation.

Waste Reduction
2006

2009

2012

2016

ōCurrent OperationsōEnd to End Product Supply SolutionsōDelivering the Future
Current Operations: These results have been driven by ourconservation efforts, use of economically smart and sustainable
new designs, and targeted projects.
End to End Solutions: MDO (footprint reductions, transportation reduction and elimination of waste from customization)and Suppliers.
Delivering the Future: Breakthrough product and processchanges. Partner PS, R&D and external experts to deliver thesebreakthroughs.

51

The Procter & Gamble Company
Strategy Two

www.pg.com/sustainability

Operations Innovates to Save Energy
This year, P&G operations pioneered breakthrough technologies toreduce energy consumption. Among the simple, low-cost steps
were the following:

Operations has made excellent progress toward delivering the
10 percent footprint reduction goal. Across businesses, teams
have embraced the targets and integrated sustainability into their
daily work.

• Using water spray instead of electric power to cool water.

A key element to delivering the goal is the conservation efforts.
The three strategies are:

• Recovering waste heat from washout and sanitization water.
• Using high-efﬁciency long-life lighting.

1. Eliminating losses and encouraging sustainability behavior
and culture;

Over the year, these changes helped to reduce mean output energy
by 6 –10 percent for each site. They are currently being reapplied
across other business units.

2. Executing speciﬁc footprint reduction projects; andIn addition, energy training and energy audits were conducted at
all sites this year, making each self-sufﬁcient in delivering sustainability opportunities.

EnergyEnergy Consumption
The Energy Consumption graph (in gigajoules, GJ) shows the addition of Technical Centers for all three years. Gillette was added forthe last two years. We have seen a decrease over the past three
years: 78 million GJ, 78 million GJ and 76 million GJ in 2006, 2007
and 2008, respectively.
ENERGY CONSUMPTION BY GBU(millions of gigajoules)

06

78

07

78
76

08

ōBeauty CareōHealth & Well BeingōHousehold CareōTechnical Centers
DECADE ENERGY CONSUMPTION(percentage of 2002 level, per unit of production)

74%

06
07
08

58%
54%

As part of our ongoing efforts to minimize losses, the Company
does a loss analysis at the plant level. Losses are deﬁned as anything not shipped out the door as product, including energy used.
When energy is identiﬁed as a major loss at a plant, it receives
intense focus for loss reduction.

52

3. Ensuring that new initiatives and capacity projects are developedin a smart, sustainable way.
Successes have been delivered in many areas:
Household Care has accelerated the “eliminating losses” strategy
by forming a Global Energy Reduction Network focused on a “Backto Base” program to return the energy systems to base condition.
Site Energy Owners, including Duracell, have joined the global
network. The network developed simple checklists focusing on the
top energy systems. The “Back to Base” program should reduce
the energy by 5 percent.
Family Care Across the Sites underwent extensive use of process
and equipment optimization. In addition, the new Sustainability
Template System was incorporated into the existing capital systemprocess to verify that we properly evaluate the sustainability impactof future projects and initiatives as they move forward for funding.
Beauty Care Asia continued to implement regional conservation
programs. These programs made signiﬁcant contributions in energy
reduction and CO2 emission reduction. The implemented technologies for this ﬁscal year include high-efﬁciency long-life lighting andevaporative cooling.

The Procter & Gamble Company
Strategy Two

www.pg.com/sustainability

53

Greenhouse Gas

Water Consumption

Every company in every sector of the economy has a role incontrolling greenhouse gas emissions. While P&G is not an energyintensive company, we are stepping up to do our part. P&G
is committed to energy-efﬁcient programs and we participate involuntary programs. Our focus has been on CO2 Scope 1 (Direct).
We have seen a decrease over the past three years in CO2
Scope 1 (Direct): 2.9 million metric tons, 2.9 million metric tons and2.8 million metric tons in 2006, 2007 and 2008, respectively. We
continue to monitor CO2 Scope 2 (Indirect). Total scope 2 (Indirect)
increased slightly due to growth of business, but decreased perunit of production.

We have seen a decrease over the past three years in water
consumption: 91 million m3, 90 million m3 and 87 million m3 in
2006, 2007 and 2008, respectively. The Household Care business
unit is our largest water user. In particular, the Family Care businesshas the highest need for water to make their products.
WATER CONSUMPTION BY GBU(million cubic meters)

91

06

90

07

87

08

SCOPE 1 (DIRECT) GREENHOUSE GAS EMISSIONS(thousand metric tons)

2,935

06

2,875

07

ōBeauty CareōHealth & Well BeingōHousehold CareōTechnical Centers

2,782

08

DECADE TOTAL WATER CONSUMPTION

ōBeauty CareōHealth & Well BeingōHousehold CareōTechnical Centers(percentage of 2002 level, per unit of production)

07
08

DECADE SCOPE 1 (DIRECT)
GREENHOUSE GAS EMISSIONS(percentage of 2002 level, per unit of production)

68%

06
07
08

70%

06

52%
48%

SCOPE 2 (INDIRECT) GREENHOUSE GAS EMISSIONS(thousand metric tons)

3,314

06

3,498

07

3,603

08

ōBeauty CareōHealth & Well BeingōHousehold CareōTechnical Centers
DECADE SCOPE 2 (INDIRECT)
GREENHOUSE GAS EMISSIONS(percentage of 2002 level, per unit of production)

85%

06
07

70%

08

69%

53%
49%

www.pg.com/sustainability

Climate Change Policy
Procter & Gamble believes that there is growing scientiﬁc evidence
linking greenhouse gas (GHG) emissions and global climate change.
As a global citizen, P&G is concerned about the potentially negative
consequences of climate change and believes that prudent
and cost-effective action by governments, industry and citizens to
reduce emissions to the atmosphere are justiﬁed.
We will focus our efforts in two main areas:• Reduce the intensity of greenhouse gas emissions from our own
operations through:– continued energy efﬁciency measures throughout our facilities.
– continuing to transition fuels sources toward cleaner
alternatives.
– setting goals to drive continued improvement in our GHG
emissions.
• Help consumers to reduce their own GHG emissions throughthe use of our products via:
– product and packaging innovations that enable more efﬁcientconsumer product use and energy consumption.
– consumer education.
We will continue to publicly disclose our greenhouse gas andenergy usage data through the Company’s Sustainability Report
and the Carbon Disclosure Project.

The Procter & Gamble Company
Strategy Two

UPDATE ON CLIMATE R.E.S.O.L.V.E.
P&G supports the goals of Climate R.E.S.O.L.V.E. (Responsible
Environmental Steps, Opportunities to Lead by Voluntary Efforts).
We have met the 2012 goal, but this will not stop our resolve
to continue reducing greenhouse gas emissions.
Our actual emissions in FY 07/08 are less than the emissions in
2002: 2,781,900 metric tons versus a base of 3,215,031 metrictons. This reduction occured during a time when global sales
increased from $40 billion to $83 billion. The most recent
acquisitions — Wella and Gillette — are in the most recent
years but not in the base year.

54

The Procter & Gamble Company
Strategy Two

www.pg.com/sustainability

Waste Disposed
Total Waste for Disposal
Total waste for disposal is our key management measure to keep
waste under control. Total waste disposed comprises the sumof non-hazardous and hazardous solid waste, plus the strength of
efﬂuent measured as Chemical Oxygen Demand (COD) and air
emissions. It excludes recycling or reused waste. It also excludes
CO2 emissions. This measurement has been in effect since 1990.
The past three years, results have been encouraging on a production
related basis and we have seen an absolute reduction over the
past year, with total waste disposed of 462 thousand metric tons
and 380 thousand metric tons in 2007 and 2008, respectively.

55

Reducing Waste Disposal effort focuses on increasing the amountof waste being recycled.
The Snacks Site in Jackson made a step change in reducing theirsolid waste generation and disposal. Jackson is a waste “lead site”
for NA. Since sustainability execution efforts began, site-wide
recycled material recovery has increased by approximately 50 percent
and the site has reduced operational generated wastes by 50 percent.
Prior to beginning their zero landﬁll waste initiative, the site did
not recycle plastics. Currently, they are recovering approximately
8 tons of plastics per month and the waste disposal costs havedecreased by 60 percent.

462

The F&HC Gattatico Plant instituted a “War on Waste” program in
January 2008 to reduce the trend in liquid waste due to increasingchange-over sanitizations as production lines “produced to demand.”Gattatico is a waste “lead site” for EMEA. At the end of FY 07/08
the site avoided 3,000 tons of disposed liquid waste. By the endof FY 08/09 they plan to reduce by another 2,200 tons. This plan
will have over a 50 percent reduction impact on the waste footprint by FY11/12. The key interventions include: recycling washwater back into the process; improved washout procedures; andadding wastewater treatment to reduce the COD levels prior to
sewer discharge.

06

65%

07

64%

Bangkok: With the tie-in of skin care wastewater to the on-site
treatment plant, and the start-up of centrifuge to dewater
wastewater sludge, the site has eliminated off-site wastewater
treatment and reduced the weight of waste (drier sludge versus
wet sludge) being disposed of off-site, resulting in waste reductionof 60 percent.

TOTAL WASTE DISPOSED(thousand tons)

06

369

07
08

380

ōAir Emissions
ōEfﬂuentsōSolid Waste HazardousōSolid Waste Non-Hazardous
DECADE TOTAL WASTE DISPOSED(percentage of 2002 level, per unit of production)

08

50%

The Procter & Gamble Company
Strategy Two

www.pg.com/sustainability

56

Waste Recycled

Air Emissions

Waste Returned to Process or Market
The total percentage of waste recycled increased to 59 percent.
This was driven by excellent work in the Feminine Care, Baby Careand Duracell categories.

Each site monitors total suspended particulates, volatile organic
compounds (VOCs), carbon monoxide (CO), nitrogen oxides (NOx)and sulfur oxides (SOx ). Overall, the total air emissions decreased
from last year to 15.9 thousand metric tons. P&G continues
to ﬁnd innovative recycling methods to change the trend to be
more efﬁcient.

WASTE RECYCLED(percentage)

59%

06

AIR EMISSIONS(thousand metric tons)

53%

07

59%

08

15.9

06

16.7

07

15.9

08

Non-Hazardous Solid Waste Disposed
Overall, the non-hazardous solid waste disposed decreased fromlast year to 311 thousand metric tons. P&G continues to ﬁnd innovative recycling methods to change the trend to be more efﬁcient.
NON-HAZARDOUS SOLID WASTE DISPOSED

Efﬂuents to Water
Wastewater COD Disposed is down over the past three years.
WASTEWATER COD DISPOSED(thousand metric tons)(thousand metric tons COD)

305

06

375

07

07

311

08

08

Hazardous Solid Waste Disposed
Hazardous wastes are deﬁned by regional policies and local rules,
so they vary from region to region. To further reduce our risks,
the number of approved hazardous waste disposal sites that all
U.S. plants use has remained limited. Similar programs have been
started in many regions of the world.
HAZARDOUS SOLID WASTE DISPOSED(thousand metric tons)

06

21
48

07
08

30

27

06

22
23

The Procter & Gamble Company
Strategy Two

www.pg.com/sustainability

SARA 313 Releases (United States only)
U.S. P&G plants report annually on the release of toxic chemicals
to the air, water and land. These releases are deﬁned in the U.S.
Superfund Amendments and Reauthorization Act (SARA) by
the U.S. Environmental Protection Agency. The purpose of thisdocumentation (referred to as section 313) is to report publicly
the releases and transfers of hazardous chemicals as deﬁned by
the agency.
The amount of SARA 313 releases have been steady over the
past three years.
SARA 313 U.S.
(total metric tons released or transferred)

2,146

06
07
08

Compliance with Laws and Regulations
There are numerous health, safety and environmental requirements
worldwide. Plants are subject to safety rules and emission limits
with operating requirements that may be embodied in sources suchas statutes, regulations, laws and permits. It is P&G’s intent tocomply with both the letter and the spirit of statutes, regulations,laws and permit requirements. Identiﬁed compliance issues aretreated seriously, and all non-compliance matters are resolved as
expeditiously as possible.

Notice of Violations (NOVs)
Summary of Penalties and Violations
The table lists global data on environmental, transportation andworker health and safety violations over the past three years.

1,726
1,902

Environmental Liabilities
We are also subject to contingencies pursuant to environmental laws
and regulations that in the future may require us to take action tocorrect the effects on the environment of prior manufacturing andwaste disposal practices. Based on currently available information,
we do not believe that the ultimate resolution of environmental
remediation will have a materially adverse effect on our ﬁnancial
position, results of operations, or cash ﬂows.
Business Continuity
P&G’s Global Business Continuity Program ensures that all criticalsites and work processes evaluate their risk mitigation programs,
exposure to catastrophic events at P&G sites and sites of our
key suppliers and service providers that could signiﬁcantly interrupt
business operations, and the business impact of such events.
Site and business unit leaders then develop contingency plans tominimize business interruption if a disabling event should occur.
Crisis Management team structures are deﬁned to manage business recovery using the pre-deﬁned contingency plans. Tests
are conducted annually to ensure that the contingency plans are
sufﬁcient and up-to-date.
Business Continuity Plans are audited regularly, and a report ofthe Business Continuity Program’s status is made each January to
the Audit Committee.

57

NumberPenalties

2008

2007

2006

82

37
$106,257

48$127,500$305,328

A breakdown of Notices of Violations (NOVs) and U.S. Occupational
Safety & Health Administration (OSHA) interventions follow:
NumberPenalties

Water-Based
Air-Based
Solid Waste-Based
Paperwork
Transportation-Based
Other
Worker Safety (for U.S. OSHA, the number is 0)

27
5
14
0
27
1
8

$ 26,130$186,520$
0$0$ 79,740$ 7,275$ 5,663

TOTAL

82$305,328

The Procter & Gamble Company
Strategy Two

www.pg.com/sustainability

ENGINEERING MEETS SUSTAINABILITY GOALSAHEAD OF SCHEDULEFABRIC & HOME CARE INNOVATION CENTER BUILDING#
164 & #179 DEMOLITION

In July 2006, P&G chartered a team to develop and implement
an Energy Conservation program in Asia Beauty in response
to both Corporate Sustainability requirements and rising costs.
In our FY 07/08, the actual results provided a total savingsof $1.5 million, 12,700 metric tons of CO2 reduction (basedon actual local emission factors), and water avoidance of
125,000 m3. This resulted in a cumulative two-year savingsof $2.9 million.

Cost Savings
Target (millions)
Actual (millions)
CO2 Reduction (metric tons)
Water Reduction (m3)

FY 06 – 07

FY 07 – 08

$1.2
$1.4
9,000
not tracked

$1.0
$1.5
12,700125,000

Two facilities, formerly used in the production of dry laundry andautomatic dishwashing products, were demolished in late 2007.
The project, which had an overall scope of 45,000 square feet,
was undertaken with sustainability in mind.
Ultimately, 94 percent of the resulting materials were recycled.
As a result, 392 tons of metal, 3,585 tons of concrete, and
236 tons of building material (like ceiling tile and drywall) were
kept out of a landﬁll. These practices also resulted in a savingsof $235,000.

58

Strategy 3:
Social Responsibility
Strategy

Goal

Improve lives through P&G’s
social responsibility programs.

Enable 250 million children to
Live, Learn and Thrive.(1) Prevent
80 million days of disease andsave 10,000 lives by delivering
2 billion liters of clean waterin our Children’s Safe Drinking
Water program.(2)(1) Live, Learn and Thrive (LLT) is P&G’s global cause that focuses our social investments on efforts that improve the lives of children in need ages 0 –13.
(2) Within Live, Learn and Thrive, our corporate signature program is Children’s Safe
Drinking Water (CSDW). Methodology for calculating diarrheal days andmortality was developed with Population Services International and Aquaya
Institute. Details are provided at www.pg.com/sustainability.

The Procter & Gamble Company
Strategy Threewww.pg.com/sustainability

60

P&G’s Purpose is to improve the lives of the world’s consumers, now and forgenerations to come. We do this through the causes we support as well as throughour products. We maximize our impact by focusing on a corporate cause where theneed is great and there is a clear ﬁt with P&G’s strengths.
PROGRESS

Since July, 2007

LIVE, LEARN AND THRIVE (LLT)

Number of Children Reached

60 million

LLT CHILDREN’S SAFE DRINKING WATER

Liters of Clean Water Delivered
Days of Disease Prevented
Lives Saved

P&G’s Purpose is to improve the everyday lives of the world’s
consumers. We fulﬁll this Purpose in many ways: throughP&G brands, ﬁrst and foremost, but also through our supportof humanitarian, educational and social cause efforts.

430 million
18 million
2,442

We are committed to focusing our social investments and employee
engagement on a single cause: P&G Live, Learn and Thrive. Throughour global cause, we are improving life for children in need. In fact,
because of this focus, P&G has already improved life for more than
150 million children in need around the world.
There are several reasons to concentrate our resources in this area:• Disadvantaged children are most vulnerable and least able tohelp themselves.
• We have deep expertise in health and hygiene as well as many
existing programs in children’s education and development,
which are critical in addressing global needs for children.
• Child development is a universal concern across all global
stakeholders in both developed and developing countries.

Live
Helping children
get off to ahealthy start.

Learn

ThriveProviding accessto education.

Building skills
for life.

www.pg.com/sustainability

By strengthening current programs, introducing new ones andfocusing our expertise and technologies on this critical need,
we can help improve the future for children around the world.
P&G Live, Learn and Thrive comes to life through more than
100 programs in over 50 countries around the world.

The Procter & Gamble Company
Strategy Three

61

P&G has been honored for local and global Live, Learn and Thrive
programs:• United Nations Association's Global Leadership Award
for P&G Live, Learn and Thrive's efforts to provide safe drinking
water and health and hygiene programs.

P&G is improving life for more than 50 million children every year
through Live, Learn and Thrive:• 2008 Pioneer Company to Improve Chinese People’s Lifefor our Hope Schools program that provides access to education
for children around the country.

Live: Safe drinking water, nutrition, and hygiene programs are
helping children get off to a healthy start.

• Business Civic Leadership Center’s Corporate Citizenship Awardin Pakistan for our support of education initiatives.

Learn: Schools are being built and supplies provided to children
lacking access to education.

• Korea Prime Minister’s Citation for Social Contributions
for our work to improve life for disabled children and youth.

Thrive: Skills for life are being nurtured, including self-esteem
and independent-living skills for disabled children.

• Donor of the Year for two years in a row by Feeding America,
where two-thirds of our product donations reach children in need.

This year alone, P&G and
the P&G Fund contributed
more than100

million dollars to support
our communities —
improving life for more than
60 million children aroundthe world.

The Procter & Gamble Company
Strategy Threewww.pg.com/sustainability

Every day, more than
100 Live, Learn andThrive programs are
beneﬁting children in
more than 50 countries
around the world.

Live, Learn and Thrive Locations
North America• Canada• Puerto Rico
• United States
Latin America• Argentina• Brazil• Chile• Colombia• Costa Rica
• Dominican Republic• Mexico• Peru• Venezuela

Learn and•Live,
Thrive locations

Western Europe• Belgium• France• Germany• Greece• Ireland• Italy• Netherlands• Portugal• Spain• Sweden• Switzerland• United Kingdom

Central & Eastern
Europe, Middle East
& Africa• Democratic Republicof the Congo• Republic of the Congo• Cote d'Ivoire• Egypt• Estonia• Hungary• Kenya• Latvia• Lebanon• Lithuania• Malawi• Nigeria• Pakistan• Poland• Russia• Saudi Arabia• South Africa• Turkey• Uganda

Asia• Australia• China• Hong Kong
• India• Indonesia• Japan• Korea• Malaysia• New Zealand• Philippines• Singapore• Vietnam

62

www.pg.com/sustainability

Live, Learn and Thrive has generated dozens of success stories
around the world. Below is a sampling of our Cause’s recent
global achievements, presented by region.

Asia
Hope Schools (China)
Over the past 12 years, P&G has built over 140 schools across rural
China, helping tens of thousands of children access better education
facilities and an improved learning environment. Through thisprogram, P&G builds and maintains facilities, trains teachers, andprovides health and hygiene education programs. P&G Hope
Schools engage employees on multiple levels, even encouraging
participation from employees’ families. And thanks to cause-related
marketing efforts, more than 320,000 retail outlets and 100 million
consumers have also supported P&G Hope Schools.
Shiksha (India)
India has the world’s largest number of children who lack accessto education. In the midst of this alarming situation, this program ismaking a substantial difference. Through Shiksha, which means“education,” P&G is providing children in 15 cities and 75 villages
across India with access to education. This program commits a
portion from the sale of P&G brands toward the education ofchildren in need in India. P&G India has also launched the Shiksha
Ambassador Program, allowing employees to lead a word-of-mouth
campaign to raise awareness of the issue.
Dreaming Together for the Future (Korea)
This Live, Learn and Thrive initiative supports disabled children withscholarships and vocational education and training, helping themachieve independence. This program has very strong P&G supportand involves several brands, including Pantene, Whisper, Febreze,
Crest, Pringles, and Wella. P&G employees also make donationsand volunteer to personally improve life for disabled children in
their community.

The Procter & Gamble Company
Strategy Three63

www.pg.com/sustainability

The Procter & Gamble Company
Strategy Three64

Central Eastern Europe, Middle East
And Africa (CEEMEA)Children’s Safe Drinking Water
This initiative provides safe drinking water for children in need aroundthe world, with an emphasis in Africa. It provides emergency relief
and establishes not-for-proﬁt markets to provide our safe drinking
water technology to children and their families. This program ison the ground in developing nations such as Uganda, Kenya andMalawi. P&G continues to expand its reach. Thus far, our technology has provided more than a billion liters of clean drinking water.
Our goal is to provide up to 2 billion liters of water by 2012.
Pampers/1 Pack = 1 Vaccine
This campaign helps babies in underdeveloped regions, especially
Africa, get off to a healthy start. Each time a consumer purchasesa package of Pampers, a vaccination is provided via UNICEF to achild in need. So far, more than 50 million vaccinations have been
funded. P&G ultimately hopes to eradicate maternal and neonatal
tetanus through this effort, saving tens of millions of lives.

Protecting Futures
By educating girls on the menstrual cycle and providing products
to meet their needs, this Always and Tampax program helps keep
girls in school. In many parts of rural Africa, the norm for girls during
their monthly periods is to stay home and miss school, keeping
them out of classes for nearly 25 percent of the year. This createsa tremendous disadvantage for them versus their male counterparts,
leading to signiﬁcantly higher dropout rates and lower academic
scores. P&G’s support has allowed thousands of girls to receive
the education and materials they need to stay in school throughout the year.
Seeds of Passion (Poland)Children in need can stay safe and healthy as a result of this initiative.
P&G volunteers serve as mentors, providing opportunities for
at-risk children to build self-esteem and skills for life. Children ages
4 –18 attend school near the P&G plant in Targowek, Poland, thepoorest section of Warsaw. Roughly half of the community’s adults
are unemployed, and alcoholism is rampant. Our program provides
after-school activities that offer children an alternative to life on
the street and hope for the future.

www.pg.com/sustainability

Latin America
Capitan Escudo (Mexico)
This Live, Learn and Thrive program helps keep children healthy
by promoting improved hygiene habits. In widespread television
broadcasts, Capitan Escudo/Safeguard cartoons teach children theimportance of washing hands frequently, explaining how this will
help improve their health. P&G also provides one-on-one contacts
at schools using Capitan Escudo/Safeguard as a role model and hero.
This effort has led to Escudo/Safeguard being seen as “the brandthat cares for children’s well being.”
Eliminating Barriers (Costa Rica)
This effort in Costa Rica eliminates barriers that keep physicallychallenged children from receiving a proper education. P&G has
funded the creation of productive learning environments forthousands of disabled children by refurbishing schools and facilitating access to classrooms and washrooms for these students. The
program enables those children to go to school and build bothacademic and social skills. To enhance the school environment,
P&G employees volunteer by painting, gardening, decorating withmurals, and making other improvements.
Manchay Vive (Peru)
In partnership with United Way International (UWI), this program
brings preventive medical treatment and education to children
attending schools in the deprived Lima area. P&G reaches childrenof all ages, from birth to age 18, providing scholarships that allow
suffering children to receive preventive medical care, essential daily
nutrition, and access to an education. Employees make donations
through the United Way campaign, along with volunteering time
to advise the local UWI organization on critical community development programs.

The Procter & Gamble Company
Strategy Three

65

The Procter & Gamble Company
Strategy Threewww.pg.com/sustainability

66

North America
Braeburn Neighborhood Place (Canada)
Braeburn Neighborhood Place is an after-school program for high-risk
students ages 7 –13 living in public housing. This program helps
children develop their academic skills while providing enrichment
programs — including arts and athletics — that help build selfesteem. This model has demonstrated success — in some cases, thenumber of children passing standardized tests for reading, writing
and math jumped 300 percent – 500 percent. P&G employees in
Canada support this program via the United Way campaign, while
many volunteer as part of Canada’s Corporate Days of Caring,which features Braeburn as a Live, Learn and Thrive opportunity.
Eliminating Barriers (U.S.)
While many Live, Learn and Thrive programs beneﬁt thousandsand even millions of children, this initiative has a limited but powerful
impact. Children with disabilities such as cerebral palsy and autism
can not interact the way most children do. For some, their disabilities
keep them from communicating; for others, physical limitations
hinder their ability to write. But technology is a powerful enabler
for these children today. With the right technological support,
they can attend regular schools and interact with peers. P&G
supports the Perlman Center in Cincinnati, bringing scale andtechnical support and training that empowers children to thrive
through technology.
Give a Meal (U.S.)
This nationwide program provides meals for hungry children acrossthe U.S. Beyond the million meals that were provided last November
and December, this campaign has helped build awareness of theepidemic of child hunger across the country. The program provides
an opportunity for our partner, Feeding America, to raise additional
funds needed to purchase and distribute nutritious meals for the
10 million U.S. children who go hungry every day.

www.pg.com/sustainability

Western Europe
SOS Enfance Mal-Logee (France)
This program supports families with children living in sub-standard
housing. A recent survey showed 95 percent of the French population believes housing is an important social issue that gets worse
every day. This Live, Learn and Thrive program helps move families
from sub-standard living conditions to safe, accessible housing,allowing children to stay with their families rather than being
placed in orphanages.
T.O.U.C.H. (Switzerland, Germany)
Since launching in P&G’s Geneva ofﬁce, T.O.U.C.H. (Together for
Our Community Here) has resulted in thousands of hours ofvoluntary work to help disabled, sick, and underprivileged childrenin Geneva. In fact, the program has been so successful it is being
expanded to Germany.
SOS Children’s Villages (Greece, Portugal, Spain)
This partnership provides homes and development programs fororphaned and abandoned children. Through P&G’s support, thesechildren get proper nutrition while being raised in family-stylevillages, where they are assimilated into the schools, participate intypical youth activities, and build their skills for life along the way.
The children’s villages help change children’s lives for the better,and P&G is proud to play a role in their success.

The Procter & Gamble Company
Strategy Three67

www.pg.com/sustainability

The Procter & Gamble Company
Strategy Three

68

Relief and Social Market Countries
Children’s Safe Drinking Water
P&G Live, Learn and Thrive™ corporate signature program
P&G’s Cause — Live, Learn and Thrive — comes to life throughdozens of programs around the world, including its signature
program, Children’s Safe Drinking Water. More than 4,000 children
die every day from diseases caused by drinking unsafe water.
P&G, in collaboration with the U.S. Centers for Disease Control andPrevention, has developed a low-cost technology called PŪR
Puriﬁer of Water to purify even heavily contaminated drinking water
so that it meets World Health Organization standards for safe
drinking water. Studies show that the PŪR sachets can reduce
diarrheal illness in children by more than 50 percent.
Impact of Children’s Safe Drinking Water Program
Since the start of Children’s Safe Drinking Water, we’ve delivered
more than a billion liters of clean drinking water. This has resulted
in an estimated reduction of 52 million days of diarrhea and 6,903
lives saved.

Objectives and Strategies
The program consists of not-for-proﬁt social and emergency relief
work to provide safe drinking water to the people who need it
most. Our goal is to reduce the sickness and death in children that
results from drinking contaminated water. Because 1.2 billion
people do not have access to safe drinking water, P&G would not
be able to sustain donations of the product. Instead, our partners
have endorsed an approach by which P&G will provide the PŪRsachets at cost and not-for-proﬁt to help meet these ongoingneeds around the world.
Program Components
The key to the program is strong partnerships with groups aroundthe world. In our social execution, our partners are using social
marketing techniques to build and sustain introduction of the PŪRtechnology. This includes education on the local level about theimportance of clean drinking water and how to use the PŪR sachets.
For emergency relief, PŪR has been provided for disasters aroundthe world, and follow up work has been done to show that theuse of PŪR is effective and practical in emergency situations.

During this ﬁscal year we delivered

430

million liters of safe drinking water,
preventing 18 million days of
disease and saving 2,442 lives.

The Procter & Gamble Company
Strategy Threewww.pg.com/sustainability

Results
During the last three years, our Children’s Safe Drinking Water
program has provided more than 100 million sachets, enoughto treat 1 billion liters of safe drinking water. We have worked
with UNICEF, Samaritan’s Purse, Red Cross, AmeriCares, PSI,USAID, CARE, and others to respond to some of the most criticalemergency relief situations including the Southeast Asia tsunami,
hurricanes in the Caribbean, ﬂoods in the Philippines andBangladesh, and earthquakes in Pakistan and Indonesia. Most
recently, PŪR has been provided to victims of ﬂooding in
Myanmar, the earthquake in China, hurricanes in Haiti, and cholera
outbreaks in much of Africa.
Using PŪR sachets, safe drinking water has been provided in morethan 30 countries to date. Social markets are currently in Kenya,
Pakistan, Uganda, Malawi, Ethiopia, the Democratic Republic of
the Congo, the Republic of the Congo, Botswana, Indonesia, Haiti,
and the Dominican Republic.
The United Nations has declared 2005 to 2015 to be the“International Decade for Action, Water for Life” for creating
public awareness and solutions for water-related issues. P&G
is committed to making a difference on both fronts — raisingawareness and saving lives.
Our Children’s Safe Drinking Water Program continues to be widely
recognized. Awards received in 2007 and 2008 include:• Grainger Challenge Bronze Award, National Academy ofEngineering and The Grainger Foundation — for being an innovative, sustainable solution for arsenic removal from drinking water.
• Laureate of the Tech Museum Awards from the Tech Museumof Innovation — for providing safe drinking water to families indeveloping countries.
• Strategic Vision Award, Center for Strategic and International
Studies, Global Strategy Institute — for formulating creative andinnovative approaches to one of the most strategically important
issues of our time, safe drinking water.
• International Health Communication Gold Medallion Award,
Johns Hopkins University Bloomberg School of Public Health —for building market-based relationships that sustain and deliversafe drinking water.
• Children’s Environmental Health Excellence Award, U.S.
Environmental Protection Agency — for outstanding leadershipin protecting children from environmental risk.
• Global Leadership Award, United Nations Association of the
USA — in part, for providing clean water for millions around theworld through the Children’s Safe Drinking Water program.
• Ron Brown Corporate Leadership Award, U.S. Presidential
Award — for providing safe drinking water and the ongoingcommitment to the Children’s Safe Drinking Water program.

HONORED AT WHITE HOUSEIn December of 2007, P&G was honored with the highly prestigious Presidential Ron Brown Award for Corporate Leadership.
In a special ceremony at the White House, P&G Chairman of
the Board and Chief Executive Ofﬁcer A.G. Laﬂey accepted theaward from U.S. Secretary of Commerce Carlos M. Gutierrez,
on behalf of the Company and all employees.
“P&G’s Purpose as a Company is to improve consumers’ lives
now, and for generations to come,” said Laﬂey in accepting theaward. “Through efforts such as our Children’s Safe Drinking
Water program, we’re helping to save lives in places where ourhelp is needed most.”
The Ron Brown Award, established by President Clinton in honorof the late U.S. Secretary of Commerce, is the only presidential
award recognizing companies for outstanding achievement in
employee and community relations.

69

For a company to be eligible:• Top management must demonstrate commitment to corporate
citizenship.
• Corporate citizenship must be a shared value of the company,
visible at all levels.
• Corporate citizenship must be integrated into a successful
business strategy.
“We are inspired by the vision of the Ron Brown Award — a visionthat Secretary Brown embraced and that we share: businesscan do well by doing good,” said Laﬂey. “Our employees andmany Children’s Safe Drinking Water partners take this recognition
as a challenge to serve even more people in need in the years tocome … and we will.”

The Procter & Gamble Company
Strategy Threewww.pg.com/sustainability

Relief and Social Market Countries
Americas• Dominican Republic• Guatemala• Haiti• Mexico• Nicaragua• Venezuela

and Social Market•Relief
Countries

Africa• Angola• Botswana• Burkina Faso
• Chad• Democratic Republicof the Congo• Republic of the Congo• Ethiopia• Kenya• Liberia• Malawi• Morocco• Mozambique• Sudan• Uganda• Zimbabwe

Asia/Europe• Bangladesh• India• Indonesia• Iran• Iraq• Maldives• Pakistan• Philippines• Romania• Sri Lanka• Vietnam

70

The Procter & Gamble Company
Strategy Threewww.pg.com/sustainabilityChildren’s Safe Drinking Water
Program Methodology

The speciﬁc assumptions are:Working with Population Services International and Aquaya Institute,we have developed the following methodology to estimate thedays of disease and lives saved as a direct result of PŪR usage.

• An average of 1.5 liters of drinking water is used per childper day and 2 liters of drinking water per adult per day.

• Each PŪR sachet treats 10 liters of water.

The number of PŪR sachets that are provided are tracked on amonthly basis by country.
From this, we calculate the liters of safe drinking water provided
and estimate the impact on reduction in days of diarrhea andestimated lives saved. The illness and fatality rates by region are
derived from the World Health Organization Global Burden of
Disease 2002 estimates. Sub-Saharan estimates are used for productprovided for emergency relief efforts since diarrhea rates are
typically high during these situations.
The reduction in diarrheal illness from the use of the PŪR sachetsis based on the average reduction measured in ﬁve randomized,
controlled health intervention studies involving more than 25,000
subjects. These independently conducted studies are published in
the peer-reviewed literature.
Health Intervention Trials
The U.S. Centers for Disease Control and Johns Hopkins University
have conducted ﬁve clinical trials of PŪR and proven that it signiﬁcantly reduces diarrheal illness in children and the total population.
Location/Setting

Rural Guatemala
Rural Guatemala
Rural Kenya — turbid water
Pakistan — urban setting
Liberia — refugee camp

Study Design

Diarrhea Reduction

2,982 people
52 weeks
3,401 people
13 weeks
6,615 people
20 weeks
12,090 people
39 weeks
2,191 people
12 weeks

24 –29%40 –72%
17– 42%59 – 64%
87– 95%

Diarrhea• 60 percent of PŪR is consumed by children.
• The number of episodes of diarrhea per child per year is– 5 episodes in sub-Saharan Africa.
– 2.2 episodes in Latin America.
• 40 percent of PŪR is used by adults.
• The number of episodes of diarrhea per adult per year is– 0.98 episodes in sub-Saharan Africa.
– 0.21 episodes in Latin America.
• PŪR use averts 50 percent of the diarrhea episodes.
• A diarrhea episode lasts an average of 7.3 days.
Lives Saved• The fatality rate per case of childhood diarrhea is– 0.001 in sub-Saharan Africa.
– 0.0002 in Latin America.
• The fatality rate per case of adult diarrhea is– 0.0004 for sub-Saharan Africa.
– 0.00005 in Latin America.

71www.pg.com/sustainability

The Procter & Gamble Company
Strategy Three

1 BILLION LITERS
The Children’s Safe Drinking Water Program celebrated thecreation of its one-billionth liter of clean drinking water on
April 8 at a rural clinic near Ibadan, Nigeria. Using a packet ofwater clariﬁcation and disinfectant developed by P&G, former
P&G Chief Executive Ofﬁcer, President and Chairman, John Pepper,
helped transform cloudy contaminated water into clear, clean
drinking water in a matter of minutes before a crowd of local
residents and Nigerian ofﬁcials.
“This milestone event marks both a humanitarian triumph and atechnological achievement,” said Pepper. “But what really mattersis that we are helping to save lives. The Children’s Safe Drinking
Water Program has provided one billion liters of clean drinking
water through a variety of strong partnerships and emergency
relief efforts in Africa and around the world. P&G is committed towork with our partners to provide billions more liters of clean
drinking water and help address the crisis of children dying needlessly from cholera, typhoid fever, and dysentery.”Mr. Pepper was joined by the First lady of Oyo State, Nigeria,
Mrs. Kemi Alao-Akala, who strongly endorsed the efforts to help
more than 66 million Nigerians in need of safe drinking water.
Ofﬁcials from Population Services International and their local
afﬁliate, the Society for Family Health, as well as local governmentofﬁcials and NGOs also were in attendance. A local woman
who accesses her drinking water from a heavily contaminatedwell, Mrs. Taiwo Faruna, accepted a year’s supply of PŪR
packets for her family including her twelve-month-old son,Oluwasegun Faruna, who accompanied her to the ceremony.

P&G’s lifesaving technology uses small packets or sachets todisinfect water. Each sachet works like a mini-water treatment
plant removing dirt, cysts and pollutants while killing bacteria
and viruses in contaminated water in less than 30 minutes,
ten liters at a time.
“While we’re pausing to celebrate this milestone, we know thatit’s a drop in the ocean compared to the need. We can’t rest
while more children are dying from waterborne illness than die
from HIV/AIDS and malaria,” said Greg Allgood, Ph.D., Director,
Children’s Safe Drinking Water Program at P&G.

72

Strategy 4:
Employees
Strategy
Engage and equip all P&Gers
to build sustainability thinking
and practices into theireveryday work.

www.pg.com/sustainability

The Procter & Gamble Company
Strategy Four74

P&G’s deep commitment to sustainable development is evident in the values
and actions of our people.
Values and Policies
As an important part of our Corporate Social Responsibility program,
we have released a publication entitled Our Values and Policies.
This booklet provides sustainable development guidelines for businessconduct that are based on P&G’s Purpose, Values and Principles.
These key elements are of utmost importance for proper conduct andrespect for all individuals in the quest for common prosperity.
Our Values and Policies can be downloaded at:www.pg.com/company/who_we_are/ppv.shtml

The Global Sullivan Principles
P&G was one of the founding members of the Global Sullivan
Principles. In accordance with the Global Sullivan Principles, we
support economic growth, social justice, human rights, politicaljustice and equal opportunity wherever we do business in theworld. The products we deliver, the consumers we serve and how
we serve them are in line with these expectations. We consider
ourselves a global company and a global citizen.

At P&G, everything we do begins with our Purpose, Values andPrinciples. We have reviewed and revised our policies to make sure
we are aligned with the Global Sullivan Principles.
We ensure our commitment to our employees through our humanresources system and proﬁt-sharing program. Our human resources
system trains, educates and develops our people. It offers ﬂexible
work arrangements, giving employees the opportunity to meet bothbusiness and personal needs. It instills our culture and policies toensure that everyone is treated fairly and has the opportunity
to contribute to our vision and mission. The proﬁt-sharing programprovides employees with a stake in the Company’s future.
Programs such as these enable us to be a sustainable business anda viable part of the communities in which we do business.
www.thesullivanfoundation.org/gsp/

www.pg.com/sustainability

Human Resources
Human Resources ensures that P&G has the employees, organizational design and work culture to deliver business productivity andto continually improve consumer, employee and shareholder value.
They provide recruiting, training, development, diversity, beneﬁts
and compensation coordination for the Company.
It is the Company’s intent to develop all employees to their fullpotential. To achieve this goal the following support systems arein place:• Career discussions, performance appraisals, assignment plans,transfer and promotion plans.
• Informal network support groups.
• Mentoring to provide informal support and guidance, in addition tocoaching and training provided by each employee’s direct manager.
Employee Privacy
P&G respects employee privacy and dignity. We will only collectand retain personal information from employees that is required
for the effective operation of the Company or as required by law.
We will keep that information conﬁdential and release it only tothose who have a legitimate need to know.

The Procter & Gamble Company
Strategy FourHarassment Policy
P&G is committed to providing a harassment-free work environment. This is the right thing to do not only from a social
perspective, but also from a business perspective. It enables ourdiverse work force to contribute to their highest potential.
We will not tolerate harassment of anyone by anyone — including
employees, suppliers, customers, contractors and agencies. Every
employee is expected to be proactive in ensuring that the work
environment is free from harassment of any kind. Managers ofothers are responsible for setting clear expectations for acceptablebehavior in the workplace.
Wages
P&G supports paying employees a competitive wage, as benchmarked against other leading companies. Consistent with ourprinciple of valuing personal mastery, we reward employees for
improving their skills and capabilities.
Beneﬁts
P&G is a recognized leader in employee beneﬁts. The Company’s
beneﬁts have been developed to help protect the ﬁnancial securityof employees. These beneﬁts include comprehensive coverage forhealth care, generous vacation and holiday time, and other work /family balance beneﬁts, including ﬂextime, child care leave andless-than-full-time schedules.

P&G CELEBRATES EARTH DAY 2008
Earth Day was celebrated by P&G employees around the world
this year, featuring planned activities at 35 sites. With the goalof stimulating sustainability of the planet through research andinitiatives, Earth Day 2008 coincided with the Year of Planet
Earth, as declared by the United Nations Educational, Scientiﬁcand Cultural Organization (UNESCO).
Originally created in 1970 as a U.S.-based environmental protest
movement, Earth Day has evolved into a global celebration of
the environment and commitment to its protection. The historyof Earth Day mirrors the growth of environmental awarenessover the last three decades, and the legacy of Earth Day is thecertain knowledge that the environment is a universal concern.

75

Within P&G, activities included tree-planting and clean-up
activities in the homes and schools of children, training sessions
on sustainability, eco-driving workshops, and booths worldwide
displaying how P&G conducts sustainability activities in creative
ways. Earth Day posters were a common site among P&G
locations worldwide, and a number of teams kicked off new
sustainability initiatives.
Some sites used the occasion to organize fundraising efforts, whileothers asked employees to leave their car at home in favor ofalternative transportation. Whatever the mode of celebration, theday succeeded in advancing awareness and engagement among
employees around the globe.

The Procter & Gamble Company
Strategy Four

www.pg.com/sustainability

76

MedicalThe simple four-word Vision of P&G’s Global Medical organization is“Healthy People, Healthy Business”. Our company’s most important
asset is our people. P&G works with its employees to protect andenhance their health and wellbeing. The Global Medical organization advises and assists management and employees to assure asafe, healthy work environment. Global Medical delivers preventive
health services to all employees, at all sites. It manages healthissues that may affect our people, technologies, and brands.
Since P&G is a principles-driven company, the following Global
Medical Priorities drive all of our health systems worldwide:
1. Save a Life (Protect our People)
2. Obey the Law (Protect Company Reputation)
3. Protect Key Technologies (Protect Brand Integrity)
4. Enhance Speed to Market (Support Emerging Technologies
and New Business Development)

In 2006, we launched our global Healthy Living strategy topartner with our employees and their families to preserve andimprove the quality of their health and wellness. This represents
a major breakthrough in our work on Global Medical’s ﬁfth
Priority (Optimize Employee Performance). Healthy Living focuseson three primary elements:• Partnership: P&G is committed to working with our people topreserve and improve their health and wellness. When our people
are healthy, that’s healthy for our business too.
• Quality: P&G works to improve the quality of the health caredelivered to our people through the identiﬁcation of high quality
health care providers and other means.

5. Optimize Employee Performance• Prevention: P&G encourages and facilitates the use of preventive
health care by our people. The aphorism that an ounce of prevention equals a pound of cure still very much applies.

All medical standards of performance and standard operatingprocedures ﬂow directly from speciﬁc P&G Principles, Values,
compelling business needs, and the Global Medical Priorities.

We continue to expand and improve our regional Healthy Living
initiatives as follows:

The percent capability from each area is shown below.
SITES AND TECHNICAL CENTERS CONDUCTING
MEDICAL SYSTEMS AUDITS(percentage)

06

82%

07

83%

08

84%

OTHER FACILITIES CONDUCTING
MEDICAL SYSTEMS AUDITS(percentage)

83%

06

81%

07
08

72%

Fitness Idol for ASEAN, India, and Australasia helps our
employees to perform at their peak though a holistic program that
supports emotional, mental, physical, and spiritual wellbeing.
It provides this support though health risk assessments, healtheducation, and support in improving physical ﬁtness and eating
habits. New features for this year include access to personaltrainers, nutritional counseling, and physiotherapy support. We’ve
deployed this initiative into Malaysia, the Philippines, Singapore,
Thailand, and many sites in India.

The Procter & Gamble Company
Strategy Four

www.pg.com/sustainability

Our China Wellness initiative, including its recent Fitness Champion
challenge, focuses on promoting a high performing organization
and work-life effectiveness. It provides our China-based employeeswith physical ﬁtness events, team competitions, nutritionalcounseling, emotional health support, and outreach to families on
health and wellness issues. Our China Wellness initiative has also
been externally recognized. P&G China was recently given the ﬁrst
International Health & Productivity Award by the Institute for
Health & Productivity Management.

77

The USA’s Blueprint for Healthy Living initiative offers online
tools and telephone support for our employees and family members,
age 18 and older, in order to educate and empower our people to
make the best health care and lifestyle choices. This initiative works
in conjunction with:• P&G’s health care providers,• Individual site health and wellness programs, and,• Changes to our USA health beneﬁt plans designed to encourage
the use of preventive health services and interventions.
Blueprint for Healthy Living offers a comprehensive set of services,
including:• A Wellness Assessment tool to address physical, emotional,
and lifestyle risk,• Personal Wellness Advocacy programs, which offer education,
assistance with lifestyle improvement, and 24/7 counselingfrom Registered Nurses, and,Our Korea Wellness initiative helps our employees to ensure
emotional, mental, physical, and spiritual wellbeing in orderto drive peak performance at work and in personal life.

Latin America’s Wellness Balance promotes healthy lifestyles tohelp our employees to better manage a complex and demanding
work environment. This is done through a holistic program integrating the Employee Assistance Program, health risk assessments,
physical examinations, physical ﬁtness promotion, programsfor providing healthier food choices in our cafeterias and during
meeting breaks, wellness and other health education, yoga/massage/other relaxation tools, and personalized wellness advice from healthprofessionals, nutritionists, and sports trainers.

• Conditional Management programs with customized guidanceon health conditions that cause decreased quality of life, lostwork time, and increased health care costs. These programs
target important health conditions such as Asthma, Coronary
Artery Disease, Congestive Heart Failure, Chronic Obstructive
Pulmonary Disease, Depression, and Diabetes.

www.pg.com/sustainability

The Procter & Gamble Company
Strategy Four78

Recent improvements to Blueprint for Healthy Living include:• The Low Back Pain Condition Management program has been
replaced with a much more comprehensive Musculoskeletal Pain
Condition Management program. This expanded program provides
personalized assistance from a Registered Nurse not only forlow back pain but also for back pain of any type, migraines,
rheumatoid arthritis, recurrent tension headaches, osteoarthritis,ﬁbromyalgia, and regional musculoskeletal disorders (e.g., repetitive stress injury or cumulative trauma disorder). The Registered
Nurse works not only with the employee or family member but
also, if needed, the treating physician, to assure that the treatment
plan meets all appropriate standards of quality care.
• The Healthy Heart Wellness Advocacy Program, Cancer-Fighting
Wellness Advocacy Program, and Stress Relief Wellness Advocacy
Program have also been launched.

Diversity Strategy
Diversity is an intentional choice that creates sustainable competitive
advantage. It is implicit in the Company’s Purpose and Values,and explicit in the Company business strategy for success. We simply
cannot create brands and products to improve the lives of the world’s
consumers now, and for generations to come, unless we deeply
understand and value the diversity of their needs and aspirations.
We believe the best way to do this is to have a workforce thatreﬂects the markets and consumers we serve and to fully value andleverage all their experiences, insights and talents. That’s why
P&G’s Corporate Diversity strategy is:

Participation in Blueprint for Healthy Living is voluntary, conﬁdential,
and free.

Everyone valued, Everyone included, Everyone performing attheir peak™

We protect the privacy of employee data. All of our medical andmedical plan-based employee and family data is highly secured
to assure that it remains conﬁdential.

The good news is that P&G has abundant diversity to leverage asa global organization with on-the-ground operations in nearly
90 countries and employees representing more than 140 nationalities
worldwide. The Company’s leadership team is very diverse withmore than 40 percent of the business-unit presidents from outside
the U.S representing 14 different countries. Almost all have managed businesses in at least two major Global regions and most have
handled both a developing region and a developed region.

Western Europe’s Wellbeing helps our employees to reach sustainable peak performance at work while being better able to balance
the demands of work and private life. Wellbeing focuses on boththe mind and body, and its programs include education in mind/
body/soul balance, sports, healthy diet, and healthy sleeping habits.
This initiative focuses on providing our people with simplicity andsupport in seeking information on health and wellness.

www.pg.com/sustainability

Leadership Focus and Accountability
A.G. Laﬂey, Chairman of the Board and Chief Executive Ofﬁcer,
holds himself accountable for leading diversity and monitoring
progress in every part of our Company. He expects top leadershipto hardwire diversity into their business strategies, establish clear
expectations and demonstrate personal accountability. This requires
top management to show strong, visible leadership, commitment
and constant focus in order to achieve diverse leadership and work
teams, along with robust systems for ongoing tracking for accountability of diversity progress.
Top executives conduct in-depth diversity reviews annually withorganization heads across the business units, to assess progressand reinforce leadership accountability for corrective actions. The
top 40 ofﬁcers in the Company have diversity results tied to theirstock options awards, and strong diversity performance inﬂuences
top ratings. Diversity action plans are developed in each regionof the world to reﬂect the greatest opportunity for advancement oflocal diversity strategies.
A.G. Laﬂey expects P&G to be a global leader in diversity andinclusion. Peak diversity performance requires goals and strategies
that demand it, an inclusive culture that values it, a tracking systemthat measures it, and leadership behaviors that inspire it. He expects
every employee’s engagement and daily support to ensure thatdiversity and inclusion delivers our intentional outcome, “Everyone
valued, Everyone included, Everyone performing at their peak™”
in every part of our business.
Talent Support and Development
P&G strives to be the Employer of Choice by building a diverseand fully engaged organization. We attract the best talent fromaround the globe, leveraging each individual through effective
assignment and promotion planning processes, and executing
with excellence the critical systems that affect, as well as support,
retention of each employee.
We focus on establishing long-term relationships with educational
institutions that have diverse populations of highly qualiﬁed students.
To broaden our candidate base worldwide, we utilize Taleo,
our fully global, web-based candidate management system. We
supplement our base recruiting efforts by utilizing intern programs
such as INROADS, participating in recruiting conferences and byoutreach to high school students. We execute special programs
such as our Careers in Business Initiative (CIBI) and P&G Marketing,
R&D, IDS & Finance Summer/Winter Camps to introduce students
to P&G’s success competencies. Additional teams are available tohelp with efforts to recruit women around the globe and minority,
military and disabled candidates among others in the United States.

The Procter & Gamble Company
Strategy Four79

Our foundation systems for ensuring employee retention include
effective ﬁrst-year on-boarding/join-up programs, providing a good
match with the ﬁrst manager, developing coaching / mentoring /advocacy relationships, high-quality challenging work/career plans,
training (virtual, classroom and external), and supportive work / life
policies and practices. Employee support groups and network
teams exist throughout the organization and contribute strongly toeffective recruiting, join-up and development efforts. These groups
include Women globally and Hispanic, African-American, Asian /Paciﬁc-American, Native American, Gay / Bisexual / Lesbian andDisabled employees in the United States.
Inclusive Culture
P&G leverages all of the special differences in our employees:
experience, gender, nationality, ethnicity, age, sexual orientation,differing abilities, religion, leadership and thinking styles. It’s essential that we are inclusive of the various aspects of diversity: internallyin our work plans, in our partners, and externally with diverse
consumers. It is often easier to understand, connect with and value
someone similar to us than it is to do the same with people whoare different from us. The greater the differences, the harder it canbe to behave inclusively — so we strive to be intentional about it,
and we strive to make it part of everything we do.
Training, policy and sensing systems are utilized to reinforce development of an inclusive culture. Focused diversity training / learning
processes are utilized to equip leaders to value and nurture
differences in experiences, styles of leadership and problem-solving /decision-making approaches. All employees have access to supportiveand enabling policies and practices in the areas of ﬂexible work
arrangements, family care, resource / referral services and wellness
management to improve work / life integration and personal
productivity. Employee surveys and culture sensing, as well as thediversity leadership networks, provide advisory data and learnings
to top leadership about how to be more effective at leveraging
local customer / employee practices and perspectives.

The Procter & Gamble Company
Strategy Four

www.pg.com/sustainability

Business and Community Partnerships
Improving lives in the countries and communities in which we
operate is a long-standing P&G value. We are committed to making
a difference in all our communities — from India to Kenya, from
Canada to Brazil, from France to Australia. Around the world, P&G
and its employees strive to improve lives every day. This has led toa focus on building effective business and community partnerships
in areas where we can make a meaningful difference: education,
volunteerism to improve the quality of life in our communities, andeconomic development.
Education is a means of improving quality of life and a pathway to
fulﬁll personal aspirations. P&G supports educational programs,
from preschool through college, through ﬁnancial contributions andmentoring/tutoring programs. The volunteer leadership of P&G
employees, who can be counted on to help with virtually every
signiﬁcant community project, greatly enhances the effectivenessof our contributions. Through volunteerism, P&G provides ongoingsupport, sponsorship and leadership for many civic, cultural andnonproﬁt organizations across all geographies in which we operate.
P&G is committed to the economic development of minority- andwomen-owned businesses and suppliers. P&G has one of theoldest supplier diversity programs in the United States, spending
more than $2 billion across approximately 2,000 minority- andwomen-owned suppliers. We also ask our major suppliers to help
us meet our long-term objectives by signiﬁcantly increasing theirSupplier Diversity efforts on the business they do with P&G.

80

Diversity Metrics
P&G continues to focus on diversity as a global strategy and expects
its work force to become increasingly diverse. Global data onenrollment by gender is shown in the following table:
GLOBAL ENROLLMENT

2008

2007 (2)

2006

2005

40.4

38.9
39.1

39.3
39.0

38.0
38.4

% FEMALE

Management
All Other Employees (1)38.8

The percentages of minority and female employees in the UnitedStates are shown in the following table:
U.S. ENROLLMENT

2008

2007 (2)

2006

2005

21.1

21.1
21.8

21.0
18.6

19.6
18.7

37.9
38.1

37.3
39.5

36.3
39.6

% MINORITIESManagement
All Other Employees (1)19.3% FEMALE

Management
All Other Employees (1)

39.6
38.0

(1) Administrative, Technical and Plant Technicians(2) Includes ﬁrst-time integration of all Gillette employees

www.pg.com/sustainability

P&G Recognition
In 2008, P&G’s solid progress in diversity was recognized in many
Global and U.S. surveys:• FORTUNE’s World’s Most Admired Companies (#5 overall;#
1 in our industry)• FORTUNE’s America’s Most Admired Companies (#8 overall,#
1 in our industry)• DiversityInc’s Top 50 Companies for Diversity (#5 in U.S.,
Top 5 Among Global Companies)• Working Mother Magazine “100 Best Companies for
Working Mothers”• National Association for Female Executives as one of the
Top Companies for Executive Women• Working Mother Magazine as one of the Best Companies
for Multicultural Women• Careers & the disABLED Magazine — “Private-Sector Employerof the Year,”• Human Rights Campaign — Corporate Equality Index Rating of 85• Latina Style Magazine “Top 12 Companies for Latinas toWork For in the U.S.”• Black Enterprise “40 Best Companies for Diversity,”• Great Place to Work surveys in Austria, Finland, Greece,
Mexico, India and Spain.
Health and Safety Policy
P&G is committed to having safe and healthy operations aroundthe world. The goals are to protect the lives and health of its
employees and communities surrounding its operations, as well as
to protect its assets, ensure business continuity and engender publictrust. To accomplish this, P&G will:• Operate facilities safely and ensure processes are safe andhealthy for our employees and residents of the surrounding
communities. We will accomplish this by following uniform
corporate safety standards around the world. Safe operations
have been a long-standing part of Company culture, reﬂecting
the belief that our employees are our most important asset.
• Construct our facilities so as not to compromise the safety andhealth features designed into them.
• Monitor progress toward our objective of preventing injuries,
illnesses and incidents. We will continually assess and improve
our safety and health technologies and programs.
• Have every employee understand and be responsible for incorporating safe behavior in daily business activities. Every employee istrained to work in a safe and healthy manner.
• Have operating standards, practices, systems and resources inplace to implement this policy.

The Procter & Gamble Company
Strategy Four

81

Worldwide Health, Safety & Environment Systems
Health, Safety & Environment (HS&E) is a global community ofresources responsible for ensuring that all sites — including
Technical Centers and acquisitions — worldwide are operated safely
and legally; that process hazards are minimized or eliminated;that health risks are identiﬁed, managed or eliminated; and thatwaste from sites is reduced as much as possible. Several thousand
employees spend all or a portion of their time on HS&E management. This totals more than 1,154 full-time equivalents, up from
1,120 last year.
Both years of data include Technical Centers. There are three major
components to a site’s HS&E organization: the base component,
which includes Environmental, Technical Safety and Industrial Hygiene& Safety, Fire Protection Systems and Medical Systems.
P&G uses a phased, detailed Risk Assessment process to evaluate
the safety of processes and initiatives being introduced at its own
manufacturing operations as well as at contractor manufacturing
operations. The Risk Assessment process is designed to enablehigh-speed innovation.
P&G regularly veriﬁes that the Health, Safety & Environment
program at all its manufacturing facilities meets the intent of theenvironmental management standard ISO 14001. In 2006,
we extended verification to the Global Health and Safety
Management standard OSHAS 18001.
Veriﬁcation completed in September 2006 was conducted byEnvironmental Resources Management (ERM), a highly respectedinternational consulting ﬁrm in the ﬁeld of environment, health,safety and sustainability.

The Procter & Gamble Company
Strategy Four

www.pg.com/sustainability

82

UPDATE ON HS&E DATA SYSTEMS
After 10 years of operating our current global HS&E data systems,
we have gained a great deal of understanding and experienceon what has been successful, and sometimes not so successful,in our databases. We have started to consolidate all the thoughts,
processes and improvements in a major rewrite of the system.
One of the key parts of the system is the incident tracking.
P&G ﬁrst started tracking “safety” incidents in the 1930s. Since
then we have expanded this system to include not only safety,
but also environmental, transportation, process safety, electrical,
etc. We feel that incident tracking is critical for a proactive
HS&E management system.

region. One of the strengths is that the worldwide community
can see the incidents as soon as they are entered, speeding theknowledge to the sites that can reapply the learning. Customers
can also subscribe to receive alerts via e-mail of any type ofincidents of their choosing. This allows sites and TechnicalNetworks to identify any trends within their site or technology
so it can be addressed swiftly.
Ultimately, the goal of the modiﬁcation to the HS&E data systems
is to streamline the ﬂow of information and to allow thisinformation to be used more effectively to help promote a safer
work environment.

The new system allows custom reporting depending on various
ﬁelds such as class severity or the type of incident. A built-in
analysis tool has been added and can be done at any time. The
analysis tools have been expanded to ﬁnd “root” cause, trends,
follow-up steps and the capability to group sites in different
categories depending on your selection, such as by country or

Industrial Health and Safety
The health and safety of Procter & Gamble employees are paramount in the principles of the Company:• Nothing we do is worth getting hurt.
• Safety can be managed.
• Every illness and injury could and should have been prevented.

The following data is based on criteria established by P&G for use
at all sites including acquisitions, plants and technical centers.
This year’s total incident rate was lower, at .47 versus .49 incidents
per 100 employees, while the lost workday case rate also was alittle lower, at .24 versus .26 cases per 100 employees.
TOTAL INCIDENT RATE
(injury and illness per 100 employees)• Safety and health are everyone’s responsibility.
The Company tracks and reports two metrics for worker safety —total incident rate (TIR) and total lost workday case rate (LWDC).
TIR includes all cases that result in loss of consciousness, lost workdays, restriction of work or motion, medical transfer to another job
or medical treatment beyond ﬁrst aid.
LWDC includes all cases that involve days away from work or daysof restricted activity beyond the day of injury or onset of illness.
The TIR target for sites is to be below 1.5 cases per year, per 100
employees. To achieve such rates, programs to address employee
safety, such as safe behaviors, ergonomics and conﬁned space entry,
have been implemented. No target has been set for LWDC. Instead,incidents that potentially could lead to lost workdays are managed.

0.54

06

0.49

07
08

0.47

TOTAL LOST WORKDAY CASE RATE
(lost and restricted workday cases per 100 employees)

0.29

06

0.26

07
08

0.24

The Procter & Gamble Company
Strategy Four

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Audit Programs
P&G’s audit programs apply to all its plants and technical centersworldwide, including Wella and Gillette. The fundamental philosophy
is to have the same standards worldwide, implemented by trained
professionals at all plants and technical centers and audited eachyear using a consistent, comprehensive approach. The metrics used
are consistent with that philosophy. Charts show the performanceof Health, Safety & Environment (HS&E) and Fire Protection.
P&G’s HS&E audit programs are designed to ensure compliancewith national, state and local regulatory requirements as well as
corporate environmental standards and procedures. Audit ﬁndings
are reported promptly to the business management teams, whomust address and correct all issues in a timely manner.
The Company reviews its sites on a frequent basis. The graph shows
the percentage of sites receiving an audit this year. The percentage
of sites audited increased from 89 percent to 94 percent this year.
SITES CONDUCTING ANNUAL AUDITS(percentage)

06

82%
89%

07

94%

08

Audits measure performance against a mandatory set of standards
and standard operating procedures. The target performance is
8 or better on a 10-point scale. We experienced a small decrease
from 2007.
SITES WITH HS&E AUDIT SCORES > 8.0(percentage)

06

72%

07

87%

08

86%

SITES WITH FIRE PROTECTION AUDIT SCORES > 8.0

07
08

HS&E Benchmarking
Benchmarking continues to be an important tool used by P&G
to assess and maintain the health of its global HS&E program.
It provides Corporate HS&E with important external data to verify
the robustness of our performance and to identify improved
management and technology approaches.
To that end, P&G works with many multi-national as well as European
companies to understand their performance in areas such as injury/
illness, workers’ compensation, property loss and regulatory ﬁnes,and HS&E personnel productivity. In addition, we are routinely
involved in studies led by GEMI (Global Environmental Management
Initiative), with a membership of more than 41 multi-national companies that survey several key HS&E topics. As a result of this work,
we have concluded that, compared to other leading companies,
P&G has:• Strong HS&E performance results– Injury/illness rate for employees — lowest 25 percent– Lost workday rate for employees — lowest 25 percent– Penalties paid (in dollars per billion dollars of sales) — lowest
33 percent– Property loss (in dollars per billion dollars of sales) — lowest
33 percent• “Best in class” HS&E operations costs (in dollars per billion dollarsof sales) due to shift of more HS&E work to site technicians thanmost other companies.
While P&G’s HS&E situation is quite positive, our long-term challenge
is to continue excellent benchmarking results.
Fire Protection
P&G operates its ﬁre protection program on the basic principle thateach facility is unique and should have a program designed to meetits speciﬁc requirements. The Insurance Division, working with
Global Business Unit ﬁre protection leaders and local management,
determines the appropriate level of ﬁre protection for each P&G
location.
Each facility’s program is organized and built around the following
key elements:(percentage)

06

83

93%
96%
92%

• Protection Engineering• Maintenance and Inspections• Prevention Programs• Emergency Response• Qualiﬁed Personnel
Each facility has a ﬁre defense proﬁle that describes in detail the
program requirements.

The Procter & Gamble Company
Strategy Four

www.pg.com/sustainability

Site HS&E Leadership Training
A key indicator of Health, Safety & Environment (HS&E) systems
capability is the percentage of sites with trained and qualiﬁed
leaders. Leadership candidates train on-site for an extended period
after attending a week-long seminar where their knowledge andability to handle speciﬁc situations are assessed. For full qualiﬁcation, the candidates must complete a qualiﬁcation project at theirown plant. Currently, more than 78 percent of sites worldwide
have HS&E leaders qualiﬁed by Corporate/GBU staffs, and morethan 64 percent have qualiﬁed ﬁre protection leaders. This training
and qualiﬁcation program applies to all sites, including TechnicalCenters and acquisitions.
SITES WITH HS&E QUALIFIED LEADERS(percentage)

89%

06

81%

07

87%

08

SITES WITH FIRE PROTECTION QUALIFIED LEADERS(percentage)

HIV/AIDSWorldwide, 40 million people are infected with HIV/AIDS. Statistics
are frightening; it is estimated that someone becomes infected
every six seconds.
Infection rates in some African countries run as high as 40 percentof the population. AIDS has become the leading cause of deathin sub-Saharan Africa, with more than 28 million people infected.
In addition to the many, many lives lost, there are an estimated
14 million children orphaned by AIDS.
HIV/AIDS Policy
All employees, including those who are HIV-infected or have AIDS,
are treated consistently with the Company’s Purpose, Values andPrinciples by the Company, their managers and co-workers.
Among other things, that means that each individual is treatedwith dignity and respect, and that we do not discriminate against
any individual based on any difference not related to performance.
We treat employees with HIV/AIDS the same as we treat thosewith other serious illnesses.
Speciﬁcally, an employee who is HIV-infected or with AIDS:

83%

06
07

84

69%

08

85%

HS&E Program Costs
There are two aspects of HS&E program costs:• Has the same employment rights and responsibilities as other
employees.
• Has the same eligibility for employee beneﬁts and programs,
including medical care and disability coverage, as non-infected
employees.

1. Capital costs for new HS&E equipment.

• Is afforded privacy and conﬁdentiality protection consistent with
the Company’s handling of conﬁdential, medical or other sensitive information.

2. People and operating costs for existing facilities.

• Is provided management support to remain productive.

HS&E capital costs for 2007 – 2008 were $43 million, ﬂat as compared
to last year to ensure compliance in our facilities. This included thepurchase and construction of pollution control equipment such aswastewater pre-treatment and air emission controls.

With HIV/AIDS impacting sub-Saharan Africa more than any otherarea in the world, P&G’s sub-Saharan organization is leading theCompany’s HIV/AIDS effort. P&G’s effort, which began in 1998,
was revised in 2004 to coordinate with the latest national andinternational developments and standards.

HS&E total costs for existing sites in 2007 – 2008 increased to$165 million. (This does not include the $47 million in revenue
gained from recycling activities.)

The effort’s objectives are to:• Use employee and family awareness and prevention programs at
our African locations to help prevent the spread of HIV/AIDS.
• Offer medical plans that assist employees with HIV/AIDS to getlife-prolonging medication, and in some cases supplement theseplans with additional Company support.

www.pg.com/sustainability

The workplace portion of the effort consists of the following
elements:• Establishing baseline measurements, such as for knowledge,
attitude, perception and disease prevalence.
• Conducting risk analysis and impact assessment, considering
issues such as costs to P&G and impact on customers, suppliers,
health care facilities.
• Implementing prevention strategies, such as awareness training,
voluntary counseling and testing for HIV/AIDS and sexuallytransmitted disease.
• Implementing wellness programs to keep infected employees as
healthy as possible and providing post-exposure prophylactics,
anti-retroviral treatment, Nevirapine, vitamins and nutritional
supplements and home-based care.
• Evaluating and monitoring the effectiveness of theseinterventions.
• Assessing and improving Company beneﬁts.
Speciﬁc P&G Activities to Fight HIV/AIDS in South Africa
As part of our drive in educating employees about the HIV/AIDS
pandemic, we launched a P&G e-care website, where employees
can log onto the website and read various topics related to HIV/AIDS
Policy. Employees continue to receive news bytes from HealthInsite,which is one of our Health Service providers, on a weekly basis.
As we have done since the inception of the program, there are also
educational posters that are placed in ofﬁces to inform and educate
employees about HIV/AIDS.
The company held a Wellness Day during March 2008 with theobjective of improving the quality of life and productivity of ouremployees by not only concentrating on their physical well-being,
but also on their psyche.
As part of the Wellness Day and due to the merger with Gillette,
we had a Voluntary Counseling and Testing session. Overall,
22.5 percent of our employees were tested. Of the employees tested
only a few were positive for HIV/AIDS, which reconﬁrms our previous
data that our infection rate is far lower than national averages.
This also conﬁrms that we have adequate resources (e.g., beneﬁts,
recruitment and training) to address the impact of the disease.

The Procter & Gamble Company
Strategy Four85PŪR and HIV/AIDS
The global response to HIV/AIDS needs to include providing of safe
drinking water, and P&G is helping to build awareness of this needas well as providing safe drinking water to people with HIV/AIDS.
In sub-Saharan Africa, where HIV/AIDS rates are very high, we areworking with a number of partners to provide safe drinking water tohelp people live positively with HIV/AIDS. People who have HIV/AIDS
are more susceptible to water-borne diseases, including parasites,
viruses and pathogenic bacteria. P&G’s PŪR Puriﬁer of Water effectively removes all of these elements from contaminated water andhas become a critical health tool for many people with HIV/AIDS.
Last year at the Clinton Global Initiative, P&G committed to providing
a minimum of $1 million in additional funds to provide safe drinking
water to people living with AIDS, and plans were implemented
to meet that commitment. We are working with Family HealthInternational and PSI in Ethiopia, Christian Children’s Fund in
Uganda, AMPATH in Kenya and the UNC Med School in Malawi andCongo to provide safe drinking water to people living with AIDS.
We also piloted healthy living kits in Haiti and Safe Water and Aids
Project (SWAP), Village AIDS Clinics, and Living Missions in Kenya
and found a high level of acceptance; focus groups revealed thedesire to reduce intake of viruses. Through the Kenyan Red Cross
we have leveraged by their home-based care and have found wide
acceptance by the community.
P&G participates in HIV/AIDS programs in other parts of the world
as well. For example:• P&G Mexico joined with other large corporations to form abusiness coalition called Consejo Nacional Empresarial sobre
SIDA (National Business Council on AIDS). This coalition was
launched on World AIDS Day 2004, with members committed
to “eradicate HIV/AIDS discrimination in their workplaces.”• P&G China provides HIV/AIDS awareness and health education
by broad e-mail communication, a website and brochures
distributed to all employees. We have implemented an awarenessprogram on the annual HIV/AIDS day at our General Ofﬁce andour plants. HIV/AIDS education is now part of the on-boarding
effort for all new employees.

Strategy 5:
Stakeholders
Strategy
Shape the future by working
transparently with our stakeholders to enable continued
freedom to innovate in a
responsible way.

The Procter & Gamble Company
Strategy Fivewww.pg.com/sustainability

P&G contributes to the economic and social well-being of a wide range ofstakeholders extending beyond our employees. These stakeholders also include
our shareholders, the communities where we operate, and a broader assortmentof regional, national and international concerns.

Stakeholders
CONSUMERSNEWS MEDIASHAREHOLDERS

A stakeholder is anyone who has an interest in or interaction with
P&G. Stakeholders can be internal, such as the Company’s
138,000 employees and its Board of Directors, or external. External
stakeholders include P&G’s consumers who use our products
3 billion times a day, our customers and suppliers with whom
we do business, our shareholders, and the communities in which
P&G people live and work.
Consumers
Consumer Organizations

BUSINESSPARTNERS

NGOs

GOVERNMENTS

INDUSTRYASSOCIATIONS

Shareholders
Business Partners
Retailers, Wholesalers,
Distributors, Vendors,
Contractors, Suppliers,
Advertisers, Trade Unions
Industry Associations
Professional Organizations,
Scientiﬁc/Medical Communities

Governments
Local, Regional, National;
Agencies (such as Health
Ministries, Regulatory Boards);
Pan-National Commissions(such as EU); Embassies,
Diplomatic Missions
NGOs
Health, Social Service,
Education, Environment
News Media87

www.pg.com/sustainability

Stakeholder Engagement
P&G works hard to be a good corporate neighbor and to improve
lives in the communities where we live and work.
Communities
Each P&G production facility has site-speciﬁc activities to build
constructive relationships with local authorities, local industry
associations, residential and business neighbors, local action groups,
thought leaders and news media. Depending on individual
communities’ cultures and interests, this can range from regularofﬁcial meetings during which new information is shared orquestions are answered, to more informal meetings. This could be,for example, a reception for the immediate neighbors, where
information on the past year and plans for the new year are discussed. P&G ensures continuity in community interaction by meeting
regularly with local authorities to update them on plant news. In theneighborhoods of many P&G operations, the Company cooperates
with and sponsors local events, so the whole area beneﬁts from thepresence of a P&G site.
P&G recognizes the importance of improving the quality of life in
our local communities, and we support local initiatives and encourage employee involvement. The most valuable community support
we provide usually involves not only writing a check but also taking
advantage of the intellectual capabilities and energy of P&G people.
We look for areas where we can make a signiﬁcant long-term,
systemic difference. This leads us to focus heavily on education andhealth, with special emphasis on youth. It also leads us to build
alliances with strategic partners to achieve a better result than we
could alone. We look to our people in the area to work with theirlocal communities and government ofﬁcials to learn where we canmake the biggest difference.

The Procter & Gamble Company
Strategy FiveEMPLOYEE STORY — LIVE, LEARN AND THRIVE
My name is Marjanne Morre, and I am a member of the
management of Stichting Rusland Kinderhulp Rotterdam,
P&G's Dutch organization. We provide humanitarian help,
mostly to children, in Belarus, a country which was hit hardby the Chernobyl disaster some 20 years ago. A lot of theradioactive radiation came down in Belarus and had a signiﬁcant effect on the economic situation. As a result, there area lot of poor families, single-parent families and widespread
alcoholism. Our foundation invites groups of 30 children to
Rotterdam, Holland, for a period of eight weeks. The children
are accompanied by two schoolteachers and stay with hostfamilies. On weekdays they visit school and follow theirnormal school program.
By being in another environment and eating more nutritious
food, the children experience an enormous positive effecton their health. They have an opportunity “to be a child,”
something which is nearly impossible in their homecountry, since they have to help every day near the houseor on the farm.
Our working group has more or less adopted the school in
Chernavchitsy, the village where “our children” come from.
Every year a group of 10 – 12 adults travel to Chernavchitsy
to work in the school and improve the lives of all the schoolchildren. We have helped build restroom facilities, a playing
ground, a sports area for children with disabilities, and acanteen, we have installed many computers to help the children
with their English lessons, and are replacing the windows.
And we also run an agri-project near school to provide thechildren with fresh vegetables.
I believe that children are the future, and they have an opportunity to make the world a better place. For me, it is very
important to use my organizational skills for children who have
far less of a life than my own children. I am very happy
that P&G supports our initiative as part of the Company's
Live, Learn and Thrive Cause.

88

The Procter & Gamble Company
Strategy Fivewww.pg.com/sustainability

Authorities: Local — Regional — Global
P&G communicates with local, regional and global authorities directly,
as an individual company, as well as through industry associations.
Scientists and legal experts in the P&G External Relations organization
review existing and proposed legislation that is relevant to theCompany and work with authorities to ensure that policies take theneeds and experience of business into account. This is done via
meetings with the authorities and comments on their position papers
and industry position papers. Activities like these can be very
important to ensure that the Company’s needs are understood andconsidered when decisions are being made that can inﬂuence
P&G’s business.

NGOs: Local — Regional — Global
P&G frequently enters into dialogue with nongovernmental organizations (NGOs) to understand their concerns and cares. In order towork constructively with stakeholders, it is essential to have theirconﬁdence and to be seen as a reliable and open discussion partner.
By building an open relationship we can approach our NGO partners
when issues arise. There is a wide range of NGOs varying by area ofinterest (environmental, consumer, animal welfare, etc.), by attitude(from extreme to moderate) and by their geographic links (from local
to global). Depending on their characteristics, a number of NGOs
can be seen as the vocal spokespeople for the general public.
Consumer organizations exist in many countries. These organizations
contact companies to compare products and voice comments theyreceive from their members. P&G continuously provides consumer
organizations with information on new initiatives and cooperates
with them in answering consumer questions.

P&G JOINS PARTNERSHIP TO MAKE FREIGHT TRANSPORT CLEANER
In an effort to make freight transport operations cleaner andmore efﬁcient, P&G has joined the SmartWay Transport
Partnership. In collaboration with leading organizations and the
U.S. Environmental Protection Agency (EPA), P&G hopes theeffort will contribute to better air quality and a healthier working
environment for employees, customers and business partners.

In 2008 alone, the partners are on track to reduce greenhousegas and pollutant emissions by:• 6 million tons of CO2 (carbon dioxide)• 800 tons of PM (particulate matter)• 30,000 tons of NOx (oxides of nitrogen)

P&G’s contribution to these improvements involves incorporating
a number of cost-effective practices and technologies into its
distribution center operations. These include the following steps:

The improvements in place are also on track to save over
540 million gallons of diesel fuel, saving the freight industry
over $2 billion in annual fuel and maintenance costs.

• Implementing more efﬁcient designs of distribution centers

Ultimately, the partnership is expected to help shape the approachof both industry and government, yielding a mutually beneﬁcial
collaborative relationship.

• Increasing the use of inter-modal and railroad transport• Reducing inter-plant truck shipments• Encouraging all existing carriers to join the SmartWay initiative• Developing and implementing a sourcing strategy that includes
more efﬁcient and environmentally friendlier transportation
By 2012, the SmartWay Transport Partnership expects to eliminate 33 to 66 million metric tons of CO2 emissions, along withup to 200,000 tons of NOx emissions. This represents savingsof as much as 150 million barrels of fuel per year — equivalent
to taking about 12 million cars off the road.

89

SM

The SmartWay Transport
Partnership expects
to eliminate
33 to 66 million metric tonsof CO2 emissions
by 2012.

www.pg.com/sustainability

EVENT SHARES SUSTAINABILITY PROGRESSAND OPPORTUNITIESIn January 2008, P&G’s Baby Care division in Western Europe
held an expert advisory panel on sustainability, consultingwith leading sustainability inﬂuencers, NGOs, and experts.
The event aimed to dive deep into key strengths and opportunities on Baby Care’s approach to sustainability, share progress,
gain input on the division’s strategy, determine how toaddress carbon footprinting, and identify support to help
communicate meaningfully with consumers, customers, andother stakeholders.
The panel yielded insightful consultation that inﬂuenced Baby
Care’s strategy and communications, and future direction.
The group received support for its Sustainability Strategy,
gained traction on its emerging communication plans, andachieved strong agreement on how to address carbon footprint
and labeling. Baby Care will continue to further nurture andbuild on its relationship with participating panelists.

The Procter & Gamble Company
Strategy Five

90

Consumers
At P&G, we are dedicated to meeting the needs of our consumers
by providing products and services that can help improve theirlives. The concept of “Consumer is Boss” is fundamental throughout the development and marketing of our products. We set out
to delight consumers by launching only new products and productimprovements that genuinely meet their needs. Before establishinga project for a new product or product improvement, P&G technologists research consumer needs in depth to identify and understandthose needs that are not adequately met today.
Once a product is launched, our commitment to our consumers does
not stop there. For P&G, every consumer’s experience in choosing,buying or using one of our products can provide vital insights to
help us further improve our products and services. So we encourage
consumers to contact our Global Consumer Relations team.
We want to hear about our consumers’ experiences with our
products — good and bad!
Last year we heard from over 8 million consumers who wanted to
ask us something about our products or our Company. We proactively offer “traditional” contact channels — phone, letter, e-mail —to consumers, but we are also very aware that consumers’ lives arechanging (we are consumers too!). Life is getting busier, and wewant to be able to access the right information on our terms, which
may be very early in the morning, or in the middle of the night. So
we have invested in technology, which has already been deployed
for some of our major brands, where consumers can access key
information on a 24/7 basis, i.e., on their terms. Of course, we
continue to offer the well-established Careline Services where
consumers can talk to or communicate with an experienced advisor,
but we also enable consumers to ﬁnd vital information on ourbrands using e-mail and telephony technology “out of hours.” Thishas been a huge success, and has actually enabled us to interact
with even more of P&G’s consumers in the last ﬁscal year, which
provides more insights for our Product Development and Marketing
teams to help further improve our products and services.

The Procter & Gamble Company
Strategy Fivewww.pg.com/sustainability

We are also innovating in how we ensure that these important
insights from our consumers get to our business teams. Consumers
who take the time to contact a company for advice or ask forhelp to resolve a problem provide valuable insights into our products,
which can really help us develop our business by improving ourbrands. So we need to make sure that our consumer’s voice isheard in P&G. We do this by using a range of different tools andtechnologies — whatever best meets the business team’s need,and therefore gives our consumer the best chance to be heard.
We use reports and data, but we also use carefully edited sectionsof some actual consumer calls, e-mails and letters — edited toensure that none of the consumer’s personal information is disclosed — so we feel the power of a “real” consumer’s voice.

Advertising and Promoting
to Consumers Appropriately

In Global Consumer Relations, we recognize that the world ischanging and we are investing in innovative technology to better
serve our consumers. We are privileged that consumers careenough about our products to contact us.

What are P&G’s Worldwide Business Conduct Standards for
Advertising?

91

The Company does not permit its advertising or promotions for its
products to be false or misleading. What are some situations thatraise concerns?
• Exaggerated or unsupported advertising claims are made tocompete with a competitor that is doing the same.
• Incomplete, inadequate or misleading disclosures in Company
advertising leading consumers to infer an incorrect, unsupported
conclusion.
• Advertising is distributed to the public before testing supportingthe claims made in the advertising has been completed.

• Do tell the truth in Company advertising and promotions.
• Don’t make a substantive claim about a Company product, or acompetitor’s product, or a comparison with a competitor’s
product, that has not been substantiated through objective producttesting based on sound statistical and scientiﬁc principles.
• Don’t run any advertisement or promotion that has not beenreviewed by appropriate Company Legal personnel.

Once a productis launched, ourcommitment toour consumers does
not stop there.

www.pg.com/sustainability

Principles for Developing Environmental
Sustainability Claims
These principles are intended to provide guidance for the development of environmental sustainability claims.
1. Claims must be truthful, data based, and defensible. Claims
must be supported by sound and transparent assumptions, goodscience, and have sufﬁcient data to substantiate the claim.
2. Claims should be a speciﬁc statement of facts and should not
exaggerate attributes or beneﬁts. Avoid the use of broad, unqualiﬁed,
and hard to deﬁne claims.
3. Claims should reﬂect lifecycle thinking. The claimed beneﬁt
should not be outweighed by other environmental burdens or
negative attributes of the product/packaging elsewhere in its
lifecycle.
4. Any environmental beneﬁt claimed on a product must be ameaningful beneﬁt for consumers, customers, or external
stakeholders.
5. Claims should not misleadingly exploit environmental requirements
needed for regulatory or legal compliance.
6. Claims should be supported by data on both recommended andactual usage if these are known to differ.
7. Environmental beneﬁts may be translated into other indicators
which are more telling for consumers, as long as the translation isbased on factual equivalents and does not exaggerate the beneﬁt
the product actually provides.
8. The claim must not be worded in a way that denigrates products
not carrying the claim (including other P&G brands).
9. Presence/absence of speciﬁc ingredients may be used only whenclaims do not denigrate products carrying the ingredients and only
when presented in a neutral and informative way.
10. The product carrying an environmental claim must not belabeled as dangerous for the environment.
11. Claims must avoid sensitive External Relations issues.
12. All claims must comply with relevant local regulatory / legal
requirements.
13. All environmental sustainability claims must pass through thenormal claim approval systems.

The Procter & Gamble Company
Strategy Five92

www.pg.com/sustainability

Sustainability Guidelines for Supplier Relations
The foundation of our Sustainability Guidelines for Supplier Relations
is our Statement of Purpose, Values and Principles. We operate
within the spirit and letter of the law and maintain high ethicalstandards wherever we conduct business. We will actively seekbusiness relationships with suppliers who share our values andpromote the application of these high standards among those withwhom they do business.
The Sustainability Guidelines for Suppliers can be downloaded
at: www.pgsupplier.com/PURCH_Supplier_Guidelines.htm
Summary of our supplier guidelines:
1. We expect our suppliers to comply with all applicable laws of
their country, including laws relating to employment, discrimination,
environment, and health and safety. Suppliers who knowingly
violate laws or have repeated problems conforming to them will
not receive our business.
2. Commercial bribery is illegal and subject to criminal penalties inmany countries, including the United States. Any personal payment
or bribe to individuals employed by P&G’s customers or suppliers,
or receipt of a bribe or personal payment by P&G employees isstrictly prohibited. Even in locations where such activity may not,technically speaking, be illegal, it is absolutely prohibited byCompany policy.
3. P&G supports universal human rights, particularly those of ouremployees; the communities within which we operate; and theparties with whom we do business. In our business award decisions,
we will continue to place substantial value upon incumbent andpotential suppliers who consistently respect basic human rights.
4. P&G utilizes fair employment practices, as well as strives toprovide a safe, healthy and productive work environment for its
employees. The Company respects employees’ right to freedomof association, third-party consultation and collective bargaining
where allowed by law. The Company expects suppliers to upholdthe same standards. Speciﬁcally:• We will not conduct business with suppliers employing child,prison, indentured or bonded labor, or using corporal punishment
or other forms of mental and physical coercion as a form of
discipline.
• We expect suppliers to conduct their business without unacceptable worker treatment such as harassment, discrimination,
physical or mental punishment, or other forms of abuse.

The Procter & Gamble Company
Strategy Five93

• At a minimum, we expect our suppliers to comply with all applicable wage and hour laws, and rules and regulations, including
minimum wage, overtime and maximum hours.
• We expect suppliers to provide a safe work environment, to prevent
accidents and injury, and to minimize exposure to health risks.
• We seek to do business with suppliers who share our concerns
for and commitment to preserving the environment. At a minimum,
suppliers must meet all current, applicable environmental rules,
regulations and laws in their countries.
The management system is owned by the Global Vice President —Purchasing and has three components:
Communicate: All purchasing personnel who interface with
suppliers are trained on the supplier guidelines and how to conduct supplier assessments. We communicate the guidelines to our
suppliers once a year and reinforce our expectations in our contracts.
This makes compliance with the guidelines a condition of businessand therefore grounds for disqualiﬁcation for all new and ongoingsupply agreements.
Check: Ongoing periodic performance assessments are done aspart of regular commercial and technical supplier visits. Emphasis
is placed on suppliers that are high-risk because of countryof operation or potential hazard. In addition to these internal
assessments, we have third-party assessments to identify areas for
improvements. Last year we completed a set of third-party assessments in Asia, Eastern Europe and Latin America, and this year we
conducted some additional third-party assessments in China.
We also upgraded our training material with better examples ofpotential outages as part of our ongoing training of internalpurchasing personnel.
Correct non-compliance: When potential non-compliance issues
are identiﬁed, they are communicated to the supplier as part ofthe closing meeting. Corrective actions including formal notiﬁcation
and a remediation action plan are then implemented. In some cases
we require immediate action to achieve compliance, or we haltbusiness. These include child labor or forced labor, and egregious
health and safety violations presenting immediate danger to humanhealth. If a compliance issue is not resolved in a timely manner, thebusiness relationship is terminated.

www.pg.com/sustainability

The Procter & Gamble Company
Strategy Five94

Supplier Diversity Program

Personal Information Privacy

In 1972, P&G established a program to identify and work withminority-owned businesses in the United States. Today, the Supplier
Diversity Initiative is a fundamental business strategy which identiﬁes and works with minority- and women-owned businesses. The
Global Vice President — Purchasing serves as Executive Sponsor.

Advances in computer technology have made it possible for detailed
information to be compiled and shared more easily and cheaply
than ever, around the globe. That can be good news for society as
a whole and for individual consumers.

Minorities continue to become a more substantial part of America’s
population, and women continue to be P&G’s key consumer base.
As such, P&G is committed to remain at a leadership level because
it is good for our business and good for the health of the U.S.
economy. In 2007 – 2008, spending was more than $2 billion acrossapproximately 2,000 minority- and women-owned suppliers.
This is the fourth year in a row that P&G has exceeded $1 billionin spending.

Awards and Recognition
P&G is recognized as a leading global company:• #5 ranking on FORTUNE’s “Global Most Admired Companies”• #8 ranking on FORTUNE’s “America’s Most Admired Companies”• #2 ranking on FORTUNE’s “Top Companies for Leaders” survey• #2 ranking on Barron’s “World’s Most Respected List”• #8 ranking on Business Week’s list of “World’s Most Innovative
Companies”• Listed on the Dow Jones Sustainability Index through 2008
• Listed on the FTSE 4 Good Index• 2008 recipient of the European Business Award for
Corporate Sustainability• “Advertiser of the Year” award at the 2008 Cannes International
Advertising Festival• Consistent #1 ranking within our industry on FORTUNE’s Most
Admired list for 23 of 24 total years and for 11 years in a row.
P&G ranks among the top companies for Executive Women(National Association for Female Executives), African Americans(Working Mother and Black Enterprise magazines), and Diversity(Diversity Inc. magazine).
Supplier diversity is a fundamental business strategy at P&G. In 2008,
P&G again spent over $1.9 billion with minority- and womenowned businesses. Since 2005, P&G has been a member of theBillion Dollar Roundtable, a forum of 14 corporations that spend
more than $1 billion annually with diverse suppliers.

FTSE4GoodAt the same time, as personal information becomes more accessible, each of us — companies, associations, government agencies,
consumers — must take precautions against misuse of that information. Several countries already have laws protecting consumers
from misuse of their personal information, and many others arefollowing suit.
P&G places high priority on safeguarding people’s personal information. Even in countries without privacy legislation, we still adhere to
our privacy policy. We want to have the trust of consumers and allothers who do business with us, including employees, shareholders,retail customers and recruitment candidates.
P&G’s robust privacy program is managed by a Global Privacy
Council. Our ﬁrst objective is to protect an individual’s personallyidentiﬁable information as if it were our own. All outside companies
handling data on our behalf are required to abide by our privacy
principles. Third-party companies can access our privacy andsecurity guidelines on www.pgsupplier.com.
Externally, P&G has been a strong advocate of work within theindustry to protect the privacy of consumers. For example, P&G has
been a leader in the effort to make privacy notices more consumerfriendly and has recently made our online marketing statement
available in 39 languages.
For more information on P&G’s global privacy principles,
please visit: www.pg.com/company/our_commitment/
privacy_policy/privacy_policy.jhtml
P&G adheres to U.S./European Union Safe Harbor principles.
For more information, visit: www.export.gov/safeharbor/
In the United States, P&G is an active participant in the Better
Business Bureau Reliability and Privacy Seal Program.

The Procter & Gamble Company
Strategy Fivewww.pg.com/sustainability

Principal Industry and Business Associations
P&G holds membership in many industry, business and environmental associations whose activities are related to the Company’s.
Europe, Middle East and Africa• Advertising Associations: WFA — World Federation of Advertising• Chemical Industry Associations: CEFIC — European Chemicals
Industry Association; DUCC — Coalition of Downstream Users

North America• American Chemical Society• American Legislative Exchange Council• Association of National Advertisers• Business for Social Responsibility• Business Roundtable• Canada’s Research-Based Pharmaceutical Companies• Cosmetics Industry Associations: COLIPA — Cosmetics &Fragrances Industry• Canadian Chamber of Commerce• Detergent Industry Associations: AISE — Association
Internationale de la Savonnerie de la Detergence et desProduites d’Entretien• Canadian Manufacturers and Exporters• Employer Associations: Business-Europe• Environmental Associations: ECETOC — European Center for
Ecotox and Toxicology of Chemicals; EUROPEN — The European
Organization for Packaging and the Environment• Canadian Chemical Producers Association• Canadian Consumer Specialty Products Association• Canadian Cosmetic, Toiletry and Fragrance Association• Consumer Specialty Products Association• Consumer Health Products Association• CSR Canada — Corporations Support Recycling• Euro/American Business Associations: AECA — American
European Community Associations; EU Committee of AmCham• Food and Consumer Products Manufacturers of Canada• Food Associations: CIAA — European Food Industry Association;
CIES — Food Business Forum• Grocery Manufacturers of America• Grocery/Brand Associations: AIM — European Brands Association• National Conference of State Legislatures• Multistakeholder Associations: EPE — European Partners for
the Environment• National Environmental Development Association• Paper Associations: EDANA — European Industry of Non-Woven
Products; HAPCO — European Industry of Hygiene Paper Products• Non-Prescription Drug Manufacturers Association of Canada• Pet Food Industry Associations: PFMA — Pet Food Manufacturers
Association• Pharmaceutical Associations: AESGP/OTC Manufacturers
Association; FPIA — Pharmaceutical Industry Association• Global Environment Management Initiative• Keep America Beautiful• National Food Processors Association• Personal Care Products Council• Pharmaceutical Researchers and Manufacturers of America• Soap & Detergent Association• Soap & Detergent Association of Canada• The Council of State Governments• U.S. Council for International Business• Water Environment Research Foundation

95

The Procter & Gamble Company
Strategy Fivewww.pg.com/sustainability

96

Latin America• ABIPLA — Brazilian Association of Household Cleaning Products

Asia• State Committee of Cosmetic Industry• ANALJA — Colombian Soaps and Detergent Manufacturers
Association• Asia/Paciﬁc Economic Cooperation• Argentinian National Industry Association• China — AmCham• ASOQUIM — Venezuelan Association of the Chemical Industry• China — CC of Foreign Invested Enterprises GZ• CANIPEC — Mexican Association of the Cosmetics and Perfumes
Industry• China — Academy of Environment Science• Cámara Nacional de la Industria de Aceites, Grasas, Jabones y
Detergentes, Mexico• China — Association of Fragrance, Flavor and Cosmetic Industry• Cámara Nacional de las Industrias de la Celulosa y del Papel• Confederación Patronal de la República Mexicana• CONCAMIN — Confederación de Cámaras Industriales• Asociación Nacional de la Industria Química, Mexico• AMECE — Asociación Mexicana de Estandares para el ComercioElectronico• Australian Consumer & Specialty Products Association• China — Association of Enterprises with Foreign Investment• China — Daily Use Groceries Association• China — Detergent Products Industry Association• China — Environmental Health Safety Roundtable• China — Association of Surfactant, Soap and Detergent Industries• China — Hygiene Supervision Magazine• China — Hygienic Material & Technology Association• Asociación Mexicana de Fabricantes de Pañal Desechable y
Similares, A.C. (AMPADE)• China — National Household Paper Industry Association• CONAR — Consejo de Autorregulación y Etica Publicitaria,
Mexico• China — Standardize Technological Consulting Service Center• COMCE — Consejo Mexicano de Comercio Exterior• China — GD Associated Net for Anti-Counterfeit & High-Quality
Protection• CONMEXICO — Consejo Mexicano de la Industria de Productosde Consumo• CAVEME — Venezuelan Pharmaceutical Products Association• China — Standardization Association• China — China Toothpaste Industry Association• China — GD Fragrance Flavor Cosmetic Branch of GD Light
Industry Association• CEVEDES — Venezuelan Business Council for Sustainable
Development• China — Guangdong Quality Magazine• ANDA — Venezuelan Association of Advertisers• CONINDUSTRIA — Industrial Confederation of Venezuela• China — Guangzhou Municipal Foreign Trade Investment Law
Association• CONAR — Chilean Advertising Self-Regulation and Ethics Council• China — Guangzhou Municipal Lawyers’ Association• SOFOFA — Manufacturers Industry Association• China — Guangzhou Quality Inspection Association• Chamber of the Cosmetic Industry of Chile• China — Guangzhou Trademark Association• AmCham — Chilean American Chamber of Commerce• Chilean — Brazilian Chamber of Commerce• China — GZ “Three” Associations of Economic & Technological
Development District• ANDA — National Advertisers Association Chile• China — GZ Association of Enterprises with Foreign Investment• Latin America Federation of Waste Management• China — GZ Education Fund Association• Peru — Sociedad Nacional de Industrias• China — GZ Industry & Commerce Administration Management
Institute Branch of Foreign Investment• China — Guangdong Quality Management Association• China — Living Use Paper Specialized Committee of China Paper
Making InstituteThe Procter & Gamble Company
Strategy Fivewww.pg.com/sustainability

97• China — National Bar Code Association• Korea — American Chamber of Commerce• China — National Environment Hygiene Standard Specialized
Committee (MOH)• Korea — Association for Fair Trade of Tissue & Hygiene Products• China — Perfume / Fragrance Magazine• Korea — Korea Chemical Management Association• China — Quality Management Association• Korea — Korea Cosmetics Industry Association• China — State Committee of Cosmetics Industry Standardization(SBQTS)• Korea — Korea Food Industry Association• China — State Technical Committee of Paper Making Industry
Standardization• Korea — Korea Hygiene Paper Product Association• China — State Technology Committee of Food Industry
Standardization• Korea — EU Chamber of Commerce• Korea — Korea Food Traders Association• Korea — Korea Paper Manufacturers’ Association• Korea — Korea Pharmaceutical Trade Association• China — Tianjin Association of Enterprises with Foreign
Investment• Malaysia — American Malaysian Chamber of Commerce(AmCham)• Hong Kong — The Cosmetic and Perfumery Association ofHong Kong• Malaysia — Federation of Malaysian Manufacturers — FMM Food
Manufacturer• Hong Kong — The Hong Kong Association of thePharmaceutical Industry• Malaysia — Malaysian International Chamber of Commerce andIndustry — MICCI• India — Associated Chambers of Commerce and Industry of India• Malaysia — The Cosmetic, Toiletry & Fragrance Association of
Malaysia — CTFA

• India — Confederation of Indian Industry• India — Federation of Indian Chambers of Commerce andIndustry• India — Feminine & Infant Hygiene Association• India — Indian Soap & Toiletries Makers’ Association• Indonesia — Indonesian Cosmetics Association• Indonesia — Indonesian Food & Beverage Industry Association• Indonesia — Indonesian Moslem Scholar Association• Indonesia — Indonesian Pulp & Paper Association• Indonesia — Indonesian Tissue Paper Association• Indonesia — National Standardization Body
• Indonesia — Pharmaceutical Industry Association• Japan — Japan Cosmetic Industry Association• Japan — Japan Health and Nutrition Food Association• Japan — Japan Hygiene Product Industry Association• Japan — Japan Soap and Detergent Association• Japan — Pharmaceutical Association of Japan• Philippines — Soap & Detergent Association of the Philippines• Philippines — Cosmetic, Toiletry & Fragrance Association of
the Philippines• Singapore — The Cosmetic, Toiletry & Fragrance Associationof SIngapore — CTFAS• Taiwan — Taiwan Cosmetic Industry Association• Taiwan — Taiwan Paper Industry Association• Taiwan — Taiwan Soap & Detergent Industry Association• Thailand — Federation of Thai Industries• Thailand — Thailand Soap & Detergent Association
Worldwide• Conference Board• International Chamber of Commerce• Society of Environmental Toxicology and Chemistry• World Business Council for Sustainable Development

IndexThis is the tenth Sustainability Report for P&G’s worldwide
operations. Data in this report covers the period from July 1, 2007,
through June 30, 2008. Financial information is given in U.S. dollars.
This report was prepared using the Global Reporting Initiative’s (GRI)
G3 Reporting Guidelines. The mission of the GRI is to promoteinternational harmonization in the reporting of relevant and credible
corporate economic, environmental and social performance
information to enhance responsible decision making. The GRI has
not veriﬁed the contents of this report, nor does it take a positionon the reliability of information reported herein.
For further information about the GRI,
www.globalreporting.org
For the latest P&G news, in-depth information on P&G’s
brands, and for shareholder and career information,please visit www.pg.com

www.pg.com/sustainability

The Procter & Gamble Company

99

Standard Disclosures G3 Index
GRI Indicator

Description

Page(s)1. Strategy and Analysis

1.1
1.2

Statement from the most senior decision-maker of the organization.
Description of key impacts, risks, and opportunities.

3
4, 20 – 94

2. Organizational Profile

2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10

Name of the organization.
Primary brands, products, and/or services.
Operational structure of the organization.
Location of organization’s headquarters.
Number of countries where the organization operates, and names of countries with either major operationsor that are specifically relevant to the sustainability issues covered in the report.
Nature of ownership and legal form.
Markets served.
Scale of the reporting organization.
Significant changes during the reporting period regarding size, structure, or ownership.
Awards received in the reporting period.

21
22 – 33
28 – 33
21
30 – 32
21
21
21 – 24
25
94

3. Report Parameters
Report Profile

3.1
3.2
3.3
3.4

Reporting period.
Date of most recent previous report (if any).
Reporting cycle (annual, biennial, etc.).
Contact point for questions regarding the report or its contents.

21
Financial Year 2006 / 2007
Annualsustainrep.im@pg.com

Report Scope and Boundary

3.5
3.6
3.7
3.8
3.9
3.10
3.11

Process for defining report content.
Boundary of the report.
State any specific limitations on the scope or boundary of the report.
Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities
that can significantly affect comparability from period to period and/or between organizations.
Data measurement techniques and the bases of calculations.
Explanation of the effect of any re-statements of information provided in earlier reports.
Significant changes from previous reporting periods in the scope, boundary, or measurement methods
applied in the report.

4
38, 4938, 4949
38
38, 4925, 38, 49

GRI Content Index

3.12

Table identifying the location of the Standard Disclosures in the report.

99 –104

Assurance

3.13

Policy and current practice with regard to seeking external assurance for the report.

98

4. Governance, Commitments and Engagement
Governance

4.1
4.2

Governance structure of the organization.
Indicate whether the Chair of the highest governance body is also an executive officer.

N/A = Not applicable. P&G only reports on data that is relevant to the business. It does not collect data that is used solely for the sustainability report.

34 – 363

www.pg.com/sustainability

The Procter & Gamble Company
Standard Disclosures G3 Index

GRI Indicator

Description

4.3

For organizations that have a unitary board structure, state the number of members of the highest
governance body that are independent and/or non-executive members. State how the organization defines‘independent’ and ‘non-executive.’
Mechanisms for shareholders and employees to provide recommendations or direction to the highest
governance body.
Linkage between compensation for members of the highest governance body, senior managers, andexecutives (including departure arrangements), and the organization’s performance.
Processes in place for the highest governance body to ensure conflicts of interest are avoided.
Process for determining the qualifications and expertise of the members of the highest governance bodyfor guiding the organization’s strategy on economic, environmental, and social topics.
Internally developed statements of mission or values, codes of conduct, and principles relevant to economic,
environmental, and social performance and the status of their implementation.
Procedures of the highest governance body for overseeing the organization’s identification and managementof economic, environmental, and social performance.
Processes for evaluating the highest governance body’s own performance.

4.4
4.5
4.6
4.7
4.8
4.9
4.10

100

Page(s)

35
35
35
35
35
3, 4, 26 – 27
35
35

Commitments to External Initiatives

4.11
4.12
4.13

Explanation of whether and how the precautionary approach or principle is addressed by the organization.
Externally developed economic, environmental, and social charters, principles, or other initiatives to which
the organization subscribes or endorses.
Memberships in associations.

41 – 4354, 7495 – 97

Stakeholder Engagement

4.14
4.15
4.16
4.17

List of stakeholder groups engaged by the organization.
Basis for identification and selection of stakeholders with whom to engage.
Approaches to stakeholder engagement.
Key topics and concerns that have been raised through stakeholder engagement.

86 – 97
86 – 94
86 – 94
86 – 94

5. Economic performance indicators
Economic Performance

EC1
EC2
EC3
EC4

Direct economic value generated and distributed, including revenues, operating costs, employeecompensation, donations and other community investments, retained earnings, and payments to capitalproviders and governments. (Core)
Financial implications and other risks and opportunities for the organization’s activities due to climatechange. (Core)
Coverage of the organization’s defined benefit plan obligations. (Core)
Also see financial report www.pg.com/investors/annualreports.jhtml
Significant financial assistance received from government. (Core)See financial report www.pg.com/investors/annualreports.jhtml

24, 6142, 5475
N/A

Market Presence

EC5
EC6
EC7

Range of ratios of standard entry-level wage compared to local minimum wage at significant locationsof operation. (Additional)
Policy, practices, and proportion of spending on locally-based suppliers at significant locations ofoperation. (Core)
Procedures for local hiring and proportion of senior management hired from the local community at
significant locations of operation. (Core)75
25
78 – 79

Indirect Economic Impacts

EC8
EC9

Development and impact of infrastructure investments and services provided primarily for public benefit
through commercial, in-kind, or pro bono engagement. (Core)
Understanding and describing significant indirect economic impacts, including the extent of impacts. (Additional)

N/A = Not applicable. P&G only reports on data that is relevant to the business. It does not collect data that is used solely for the sustainability report.

59 – 72
60 – 61

www.pg.com/sustainability

GRI Indicator

The Procter & Gamble Company
Standard Disclosures G3 Index

Description

101

Page(s)

6. Environmental
Materials

EN1
EN2

Materials used by weight or volume. (Core)
Percentage of materials used that are recycled input materials. (Core)

49
49

Energy

EN3
EN4
EN5
EN6
EN7

Direct energy consumption by primary energy source. (Core)
Indirect energy consumption by primary source. (Core)
Energy saved due to conservation and efficiency improvements. (Additional)
Initiatives to provide energy-efficient or renewable energy based products and services, and reductions inenergy requirements as a result of these initiatives. (Additional)
Initiatives to reduce indirect energy consumption and reductions achieved. (Additional)

49, 5249, 52
51 – 52
12, 14, 39, 42
12, 42

Water

EN8
EN9
EN10

Total water withdrawal by source. (Core)
Water sources significantly affected by withdrawal of water. (Additional)
Percentage and total volume of water recycled and reused. (Additional)

49, 53
N/A
49, 53

Biodiversity

EN11
EN12
EN13
EN14
EN15

Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of highbiodiversity value outside protected areas. (Core)
Description of significant impacts of activities, products, and services on biodiversity in protected areas andareas of high biodiversity value outside protected areas. (Core)
Habitats protected or restored. (Additional)
Strategies, current actions, and future plans for managing impacts on biodiversity. (Additional)
Number of IUCN Red List species and national conservation list species with habitats in areas affected byoperations by level of extinction risk. (Additional)

N/A
41 – 43, 45 – 46
N/A
41 – 43, 45 – 46
N/A

Emissions, Effluents and Waste

EN16
EN17
EN18
EN19
EN20
EN21
EN22
EN23
EN24
EN25
EN26
EN27
EN28
EN29
EN30

Total direct and indirect greenhouse gas emissions by weight. (Core)
49 – 54
Other relevant indirect greenhouse gas emissions by weight. (Core)
49 – 54
Initiatives to reduce greenhouse gas emissions and reductions achieved. (Additional)
4 – 5, 8– 14, 40, 42, 49 – 52, 54, 56, 58
Emissions of ozone-depleting substances by weight. (Core)49, 53, 56
49, 53, 56
NOx, SOx, and other significant air emissions by type and weight. (Core)
Total water discharge by quality and destination. (Core)49, 56
Total weight of waste by type and disposal method. (Core)
49 – 51, 55 – 56
Total number and volume of significant spills. (Core)
57
Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel
Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally. (Additional)
49 – 50, 56 – 57
Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly
affected by the reporting organization’s discharges of water and runoff. (Additional)
N/A
Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. (Core)
8 – 15, 40 – 46
Percentage of products sold and their packaging materials that are reclaimed by category. (Core)49, 56
Monetary value of significant fines and total number of non-monetary sanctions for non-compliance withenvironmental laws and regulations. (Core)
57
Significant environmental impacts of transporting products and other goods and materials used for the
11, 88organization’s operations, and transporting members of the workforce. (Additional)
Total environmental protection expenditures and investments by type. (Additional)
58, 83 – 84

N/A = Not applicable. P&G only reports on data that is relevant to the business. It does not collect data that is used solely for the sustainability report.

www.pg.com/sustainability

GRI Indicator

The Procter & Gamble Company
Standard Disclosures G3 Index

Description

102

Page(s)7. Labor practices and decent work
Employment

LA1
LA2
LA3

Total workforce by employment type, employment contract, and region. (Core)
Total number and rate of employee turnover by age group, gender, and region. (Core)
Note: We do not track this information globally
Benefits provided to full-time employees that are not provided to temporary or part-time employees,
by major operations. (Additional)

21
N/A
N/A

Labor / Management Relations

LA4
LA5

Percentage of employees covered by collective bargaining agreements. (Core)
Also see http://www.pg.com/company/who_we_are/ppv.shtml
Minimum notice period(s) regarding significant operational changes, including whether it is specified incollective agreements. (Core)
Note: We abide by local legislation and our PVPs.

74
N/A

Occupational Health and Safety

LA6
LA7
LA8
LA9

Percentage of total workforce represented in formal joint management-worker health and safety committees
that help monitor and advise on occupational health and safety programs. (Additional)
Rates of injury, occupational diseases, lost day’s, absenteeism and total number of work-related fatalities,
by region. (Core)
Education, training, counseling, prevention and risk-control programs in place to assist workforce members,
their families, or community members regarding serious diseases. (Core)
Health and safety topics covered in formal agreements with trade unions. (Additional)
Also see http://www.pg.com/company/who_we_are/ppv.shtml

81 – 82
81 – 82
76 – 78, 84 – 85
81 – 82

Training and Education

LA10
LA11
LA12

Average hours of training per year per employee-by-employee category. (Core)
Programs for skills management and lifelong learning that support the continued employability of employees
and assist them in managing career endings. (Additional)
Percentage of employees receiving regular performance and career development reviews. (Additional)

75, 7975, 7975, 79Diversity and Equal Opportunity

LA13
LA14

Composition of governance bodies and breakdown of employees per category according to gender, agegroup, minority group membership, and other indicators of diversity. (Core)
Also see Proxy Statement www.pg.com/investors/annualreports.jhtml
Ratio of basic salary of men to women by employee category. (Core)80
26, 75

8. Human Rights	
Investment and Procurement Practices

HR1
HR2
HR3

Percentage and total number of significant investment agreements that include human rights clauses orthat underwent human rights screening. (Core)
Percentage of significant suppliers and contractors that have undergone screening on human rights andactions taken. (Core)
Total hours of employee training on policies and procedures concerning aspects of human rights that are
relevant to operations, including the percentage of employees trained. (Additional)

93
93
N/A

Non-discrimination

HR4

Total number of incidents of discrimination and actions taken. (Core)

N/A = Not applicable. P&G only reports on data that is relevant to the business. It does not collect data that is used solely for the sustainability report.

75

www.pg.com/sustainability

GRI Indicator

The Procter & Gamble Company
Standard Disclosures G3 Index

Description

103

Page(s)Freedom of Association and Collective Bargaining

HR5

Operations identified in which the right to exercise freedom of association or collective bargaining may beat significant risk, and actions taken to support these rights. (Core)
Also see http://www.pg.com/company/who_we_are/ppv.shtml

74 – 75, 93

Operations identified as having significant risk for incidents of child labor, and measures taken to contributeto the elimination of child labor. (Core)

74 – 75, 93

Child Labor

HR6

Forced and Compulsory Labor

HR7

Operations identified as having significant risk for incidents of forced or compulsory labor, and measurestaken to contribute to the elimination of forced or compulsory labor. (Core)

74 – 75, 93

Security Practices

HR8

Percentage of security personnel trained in the organization’s polices or procedures concerning aspects ofhuman rights that are relevant to operations. (Additional)

N/A

Indigenous Rights

HR9

Total number of incidents of violations involving rights of indigenous people and actions taken. (Additional)

N/A

9. Society
Community

SO1

Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts ofoperations on communities, including entering, operating, and exiting. (Core)57, 81 – 84

Corruption

SO2
SO3
SO4

Percentage and total number of business units analyzed for risks related to corruption. (Core)
Also see Worldwide Business Conduct Manual www.pg.com/company/our_commitment/corp_gov
Percentage of employees trained in organization’s anti-corruption policies and procedures. (Core)
Also see Worldwide Business Conduct Manual www.pg.com/company/our_commitment/corp_gov
Actions taken in response to incidents of corruption. (Core)
Also see Worldwide Business Conduct Manual www.pg.com/company/our_commitment/corp_gov

34
34
34

Public Policy

SO5
SO6

Public policy positions and participation in public policy development and lobbying. (Core)
Total value of financial and in-kind contributions to political parties, politicians, and related institutions
by country. (Additional)

36
36

Anti-Competitive Behavior

SO7

Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and theiroutcomes. (Additional)

N/A

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance withlaws and regulations. (Core)

57

Compliance

SO8

N/A = Not applicable. P&G only reports on data that is relevant to the business. It does not collect data that is used solely for the sustainability report.

www.pg.com/sustainability

GRI Indicator

The Procter & Gamble Company
Standard Disclosures G3 Index

Description

104

Page(s)10. Product responsibility
Consumer Health and Safety

PR1
PR2

Life cycle stages in which health and safety impacts of products and services are assessed for improvement,
and percentage of significant products and services categories subject to such procedures. (Core)
Total number of incidents of non-compliance with regulations and voluntary codes concerning health andsafety impacts of products and services, by type of outcomes. (Additional)

41 – 43
N/A

Product and Service Labeling

PR3
PR4
PR5

Type of product and service information required by procedures, and percentage of significant products
and services subject to such information requirements. (Core)
Total number of incidents of non-compliance with regulations and voluntary codes concerning productand service information and labeling, by type of outcomes. (Additional)
Practices related to customer satisfaction, including results of surveys measuring customer satisfaction. (Additional)

22
N/A
90 – 92

Marketing Communications

PR6
PR7

Programs for adherence to laws, standards, and voluntary codes related to marketing communications,
including advertising, promotion, and sponsorship. (Core)
Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing
communications, including advertising, promotion, and sponsorship, by type of outcomes. (Additional)

91 – 92
N/A

Customer Privacy

PR8

Total number of substantiated complaints regarding breaches of customer privacy and losses ofcustomer data. (Additional)

N/A

Compliance

PR9

Monetary value of significant fines for non-compliance with laws and regulations concerning the provisionand use of products and services. (Core)
Note: We do not track this information Globally

N/A = Not applicable. P&G only reports on data that is relevant to the business. It does not collect data that is used solely for the sustainability report.

N/AContact:• E-mail us at sustainrep.im@pg.com• Visit www.pg.com/sr for the full report© 2008 Procter & Gamble