2006 Global Sustainability& Philanthropy ReportMain Section Title
Sub-Section Title

1

P&G 2006 Global Sustainability and Philanthropy Report

Sustainable development is a simple idea – ensuring
a better quality of 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 ouractivities we contribute to the economic and social well-beingof a range of stakeholders, including employees, shareholders,
communities in which we operate, and more widely, toregional, national and international development. In summary,P&G contributes to sustainable development through bothwhat we do and how we do it.

“What we do” is provide branded products and servicesof superior quality and value that improve the lives of theworld’s consumers via health, hygiene or convenience.

“How we do it” includes addressing any

On the CoverFor this mother in the
Dominican Republic, PUR
Puriﬁer of Water has brought
an affordable, easy, reliable
way to provide safe drinking
water for her family.

environmental and socioeconomic issues associated with our
products and services. Our Principles, Values and Statementof Purpose, which are central to P&G’s organization, act as
guidance for the development of our entire organizational
structure, all over 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 our people, our shareholders andthe communities in which we live and work to prosper.
1

Visit www.pg.com/sr

Definition from UK government report from Department for the Environment,
Transport and the Regions, 1998.

Contents

CEO Statement
VisionP&G ProﬁleStructure and Governance
Performance Indicators
Economic Development
Environmental Protection
Social Responsibility
Index
Contact

2
3
4
17
26
32
39
51
82
87

P&G 2006 Global Sustainability and Philanthropy Report

2

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

P&G is 169 years old. For perspective, there are fewer than
50 U.N. member nations that have been around longer. Only
four of the 50 largest companies in the United States havebeen in business as long.
So I think a lot about what has enabled P&G to sustain growthover such a long period of time.
We take pride in serving more than 3 billion consumers every
day and creating value for shareholders. This is necessary but
not sufﬁcient. We must not only sustain growth. We mustalso contribute to the sustainability of the world we live
and work in today, for the beneﬁt of our children andgrandchildren tomorrow.
Companies like P&G are a force in our world. Of the world’s
100 largest economic entities, 42 are corporations.
The challenge is to ﬁgure out where and how a company likeP&G can make the most meaningful difference. We need toask ourselves how we can use our technologies, our humancapital and our global presence and experience to help ensurea sustainable future for the people who need help and hopethe most. These are important questions because the best way
to ensure P&G efforts are sustainable is to link them to ourcore capabilities and unique strengths.
Today, we are focused on helping children in need Live, Learn andThrive. Our signature program is Children’s Safe Drinking Water.

Our Purpose inspires us.
Our Values unite us.
And our strengths enable
us to make small but
meaningful differencesin people’s lives,
every day.

We work with a global network of partners, NGOs, governments
and other companies to provide our unique PUR Puriﬁer of Water
in places like Haiti, Uganda, Malawi, Kenya, Ethiopia and theDominican Republic. These are countries where drinking unsafe
water kills more than 4,000 babies and young children everyday. We also work with relief partners to provide safe water inemergency situations, such as the South Asia tsunami and the
Pakistan earthquake.
Quite frankly, PUR Puriﬁer of Water was not a commercial
success. The people who need it most are least able to afford
it. But we stuck with the program because we believed it
was the right thing to do and we knew we could make adifference. And we created an innovative, market-based
distribution model that makes it economically feasible to get
this product where it’s needed most. We’ve provided morethan 50 million packets, purifying more than 500 million litersof water, since the program began.
I’m particularly proud that Phil Souter and Colin Ure, whoinvented this life-saving technology, were recognized this past
year by the Intellectual Property Owners Education Foundation
as the 2006 Inventors of the Year. When all is said and done, it
is our people who make P&G the great organization it is.

P&G 2006 Global Sustainability and Philanthropy Report3

VisionPeter R. White
Director,
Global Sustainability

For P&G, the past year has been one of combination, transitions
and seeing the long-term beneﬁts of our commitment
to all three pillars of sustainable development: economic
development, environmental protection and social responsibility.
The “combination” occurred at our topmost level: In October
2005, two great, innovative companies – Gillette and P&G– became one. Both companies have individual histories ofembracing and leading industry change. This includes leadershipin sustainable development, and we will continue, together, tomake sustainability integral to our success.
The “transition” occurred this past spring and summer, when
our philanthropy and sustainability organizations merged.
The new organization is overseeing the totality of oursustainability commitment, from our responsibility to society
to ﬁnding business-building value and opportunity in our
approach to sustainability.
It was our work on safe drinking water – our delivery of a
total of 500 million liters of safe water in 10 countries – that
demonstrated the synergies available to us. Our work to provide
safe water in disaster relief situations has proven integral tocreating freestanding social markets, with our NGO partners,
which provide safe water on a sustainable basis to the poorest
areas on our planet.
With the combination of our philanthropy and sustainability
groups, we have combined our philanthropy/corporate

P&G’s commitment tosustainability brings
people a better qualityof life now and forgenerations to come.

contributions and sustainability reports. We hope you will ﬁnd
that this new report more comprehensively addresses yourquestions about and interest in our commitment to sustainable
development, and to society in general.
Our commitment to sustainability comes alive on our brands
as well. Our Pampers brand, which has been working towardsustainability for two decades, is a good place to see thebeneﬁts. Pampers shows how long-term commitment tosustainable development, across all three of its pillars, leads tolong-term growth in equity of P&G’s business and its brands.
And it shows how far we’ve come from the days when, too
often, we looked at sustainability as a series of one-time
initiatives and innovations. Elsewhere in this report, I urge you
to read in more detail about how Pampers is touching all threepillars of sustainability – shrinking its environmental footprint,delivering a better quality of life to both baby and caregiver, andgrowing the business of our largest brand.
Finally, I would like to take this opportunity to thank one of
P&G’s sustainability pioneers – George Carpenter, Directorof Global Sustainability – who retired this October. George
has deﬁned environmental quality and sustainability, bothwithin P&G and externally. For 34 years, he led and shaped
P&G’s strategies, programs and relationships in every aspectof environmental quality, workplace health and safety, andcorporate social responsibility. In 1999, he led the creationof P&G’s sustainability group. From the outset, George wasdetermined to make sustainability a business driver. Today
our business units embrace sustainability more strongly thanever, and we have robust systems to ensure we deliver on ourcommitments. Much credit for this goes to George. We thankhim and wish him the best.

P&G 2006 Global Sustainability and Philanthropy Report

P&G ProﬁleThree 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 livesof the world’s consumers. This results inleadership sales, proﬁt and value creation,
allowing employees, shareholders and thecommunities in which we operate to prosper.

4

P&G ProﬁleIntroduction

P&G 2006 Global Sustainability and Philanthropy Report

5

P&G products
are soldin more than180
countries

P&G hasoperations
in more than80
countries

Now in its 169th year, P&G has built
a strong foundation for consistent,
sustainable growth.

P&G’s world headquarters is located in Cincinnati, Ohio, U.S.A.
The Company markets 300 branded products in more than180 countries. We have on-the-ground operations in over 80
countries and employ nearly 140,000 people.
P&G is a publicly owned company. Its stock is listed and tradedon the New York and Paris exchanges.
As of July 3, 2006, there were approximately 2,086,000
common stock shareowners, including shareholders ofrecord, participants in the Shareholder Investment Program,participants in P&G stock ownership plans and beneﬁcial
owners with accounts at banks and brokerage ﬁrms.

This is the eighth Sustainability Report for P&G’s worldwide
operations. Data in this report covers the period from July 1,
2005, through June 30, 2006. Financial information is given in
U.S. dollars.

Web

For more information on P&G’s investor relations,please visit our website at:www.pg.com/investors/sectionmain.jhtml
Please visit www.pg.com for the latest news and indepth information about P&G and its brands.

P&G ProﬁleIntroduction

P&G 2006 Global Sustainability and Philanthropy Report

Global Key Brands
Of P&G’s 300 branded products around the world, these are the ones we consider our key brands.
Net Salesby GBU (1)(in billions)

GBU

Segment

Key Products

Key Brands

BEAUTY AND HEALTH

BeautyCosmetics, Deodorants, Feminine Care,
Fine Fragrances, Hair Care, Hair Colorants,
Personal Cleansing, Professional Hair Care,
Skin Care
Oral Care, Pharmaceuticals,
Personal Health Care

Always, Head & Shoulders, Olay, Pantene,$29.0
Wella, Cover Girl, Gillette Series,
Herbal Essences, Hugo Boss, Nice ’n Easy,
Old Spice, Safeguard, Secret, SK-II, Tampax
Actonel, Crest, Oral-B, Asacol, Fixodent,
Metamucil, Pepto-Bismol, Prilosec OTC, PUR,
Scope, ThermaCare, Vicks
Ariel, Dawn, Downy, Tide, Ace, Bold, Bounce, $33.5
Cascade, Cheer, Dash, Fairy, Febreze, Gain,
Mr. Clean, Swiffer
Bounty, Charmin, Pampers, Dodot, Kandoo,
Luvs, Puffs, Tempo
Folgers, Iams, Pringles, Eukanuba, Millstone

Health Care

HOUSEHOLD CARE

GILLETTE GBU

Fabric Care andHome Care

Fabric Care, Dish Care, Surface Care,
Air Care, Commercial Products GroupBaby Care andFamily CarePet Health, Snacks
and Coffee
Blades and Razors

Diapers, Baby Wipes, Bath Tissue,
Kitchen Towels, Facial Tissue
Coffee, Pet Health, Snacks
Men’s and Women’s Blades and Razors

MACH3, Venus, Fusion, Gillette Sensor, Gillette $ 6.4
Double Edge, Gillette Atra, Prestobarba
Duracell and Braun Batteries, Electric Razors, Small Appliances Duracell, Braun Activator, Braun 360 Complete,
Braun X’elle, Nanfu(1) Offset by $0.7 billion of net sales generated by companies for which P&G exerts signiﬁcant inﬂuence but does not consolidate, and other miscellaneous activities.

22
BillionDollar
Brands6

P&G ProﬁleIntroduction

P&G 2006 Global Sustainability and Philanthropy Report

Billion-Dollar Brands
P&G has 22 brands with annual sales of a billion dollars or more.

In alphabetical order:
ActonelA prescription medication to treat and prevent
postmenopausal osteoporosis.
Always/Whisper
Women around the world count on Always and Whisper
feminine protection.
Ariel
Fabric cleaning and care at its best.
BountySpills happen. With the Quilted Quicker Picker-Upper paper
towel, cleanup is easy.
Braun Electric Razor
Keeping millions of men well-shaved and well-groomed.
CharminAmerica’s favorite bathroom tissue.
Crest
Oral care products, creating beautiful, healthy smiles
every day.

Head & Shoulders
Smooth, beautiful, ﬂake-free hair. It’s not what you’d expect
in a dandruff shampoo. Head & Shoulders has 12 customized
formulas – one just for you.
Iams
Nutrition for every life stage and lifestyle of your pet.
Olay
Designed for women of all ages to “love the skin they’re in.”Dawn
No matter what your dishwashing need, Dawn has a productthat’s right for you.

Oral-B
Dental hygiene products used by dentists themselves.

Downy/Lenor
Laundry feels soft and smells fresh because of Downyand Lenor.

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

Duracell
You can depend on powerful, long-lasting Duracell batteries.

PanteneHair around the world shines because of Pantene haircare products.

Folgers
Millions of Americans wake up with Folgers coffee every day.
Gillette Gel
Get a close shave, with comfort.
Gillette MACH3 Razor
Battery-powered shaving. Push the button, feel the power.

PringlesPotato chips: Once you “pop,” the fun doesn’t stop!
Tide
Tough cleaning power that gets out laundry stains.
Wella
Hair care products used in salons and at home.

7

P&G ProﬁleP&G’s Equity

P&G 2006 Global Sustainability and Philanthropy Report

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P&G’s Equity

Our Purpose, Values and Principles guide everything we do, all over theworld. Our people bring them to life. Our Success Drivers deﬁne whatmakes our people succeed.

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

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.

Our Values
P&G is its people and the values by which we live. We attract
and recruit the finest people in the world. We build ourorganization from within, promoting and rewarding people
without regard to any difference unrelated to performance. We
act on the conviction that the men and women of Procter &Gamble will always be our most important asset.

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
and strategies.
• 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.
• We all act like owners, treating the Company’s assets as our own
and behaving with the Company’s long-term success in mind.
Passion for Winning• We are determined to be the best at doing what matters most.
• We have a healthy dissatisfaction with the status quo.
• We have a compelling desire to improve and to win in
the marketplace.
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.

P&G ProﬁleP&G’s Equity

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 contribute totheir fullest potential.
• We value differences.
• We inspire and enable people to achieve high expectations,standards and challenging goals.
• We are honest with people about their performance.
The Interests of the Company and the Individual
are Inseparable• We believe that doing what is right for the businesswith integrity will lead to mutual success for both theCompany and the individual. Our quest for mutual successties us together.
• 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 only do work and only ask for work that adds value tothe business.
• 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.
• We challenge convention and reinvent the way we dobusiness to better win in the marketplace.
We are Externally Focused• We develop superior understanding of consumers andtheir needs.
• We create and deliver products, packaging and concepts
that build winning brand equities.
• We develop close, mutually productive relationships with ourcustomers and our suppliers.
• We are good corporate citizens.
We Value Personal Mastery• We believe it is the responsibility of all individuals tocontinually develop themselves and others.
• We encourage and expect outstanding technical masteryand executional excellence.

P&G 2006 Global Sustainability and Philanthropy Report

9

We Seek to be the Best• We strive to be the best in all areas of strategic importanceto the Company.
• We benchmark our performance rigorously versus the very
best internally and externally.
• We learn from both our successes and our failures.
Mutual Interdependency is a Way of Life
• We work together with confidence and trust across business
units, functions, categories and geographies.
• We take pride in results from reapplying others’ ideas.
• We build superior relationships with all the parties who
contribute to fulfilling our Corporate Purpose, including ourcustomers, suppliers, universities and governments.

Web

To read more on sustainable development guidelines
for business conduct based on P&G’s PVP, download
the brochure:www.pg.com/content/pdf/01_about_pg/01_about_
pg_homepage/about_pg_toolbar/download_report/
values_and_policies.pdf

THINKSAND ACTSD E C I S I V E LY

LEADS

BU ILD S D IV ERS E ,COLL AB OR AT IVE
RE LATIONS HIP S

LEVERAGESMASTERYI N N O VAT E S
AND
REAPPLIESGROWSC A PA B I L I T Y

IN TOUCHEMBRACESCHANGEO P E R AT E S
WITHDISCIPLINE

Success Drivers
values that deﬁne how our
Success Drivers are the competencies• trust • ownership • leadership • passion for winning
integritysucceed
peoplein today’s business environment. They are thecharacteristics we look for in new employees, how we measureperformance in the Company, and the basis for our employeedevelopment and career systems.
P&G’s edge over competition – the advantage that’s hardest forcompetitors to duplicate – is P&G people.

P&G ProﬁleOrganizational Structure

P&G 2006 Global Sustainability and Philanthropy Report10

Organizational Structure

We have an organizational structure composed of three Global Business
Units (GBUs) and a Global Operations group. The Global Operations group consistsof the Market Development Organizations (MDOs) and Global Business Services (GBS). The
heads of the three GBUs and Global Operations each report to the Chief Executive Ofﬁcer.

Global Business Units
Our three GBUs are Beauty and Health, Household Care andGillette GBU.
The GBUs leverage their consumer understanding to develop
overall strategy for our brands. They identify common
consumer needs, develop new products and build our brands
through effective marketing innovations.
Global Operations
The MDOs develop go-to-market plans at the local level,
leveraging their understanding of the local consumer andcustomer. MDOs are organized along seven geographic
regions. (See next page for map.)
Global Business Services
GBS operates as the “back ofﬁce” for the GBU and MDO
organizations, providing world-class technology, processes
and standard data tools to better understand the businessand better serve consumers and customers. GBS personnel, or
highly efﬁcient and effective third-party partners, provide
these services.

The MDO is focused on winning the “ﬁrst moment of truth”– when a consumer stands in front of the shelf and chooses
a product from among many competitive offerings.

The GBU is focused on winning the “second momentof truth” – when the consumer uses the product andevaluates how well it meets his or her expectations.

P&G ProﬁleOrganizational Stucture

P&G 2006 Global Sustainability and Philanthropy Report

11

The Three GBUs Operate in the Seven MDOs
Global Business Units (GBUs)• Business Strategy and Planning• Brand Innovation and Design• New Business Development• Full Profit Responsibility

Market Development Organizations (MDOs)• Market Strategy• Customer Development• External Relations• Recruiting

Asean, Australasia and India
Central & Eastern Europe, Middle East and Africa
Greater China
Latin America
North America• Beauty and Health– Beauty– Health Care
• Household Care
– Fabric Care and Home Care
– Baby Care and Family Care
– Pet Health, Snacks and Coffee• Gillette GBU

Northeast Asia
Western Europe

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

Global Business Services
Key Business Processes• Accounting• Info and Technology Services• Order Management• Employee Benefits & Payroll>300
branded products
globally

Go-to-Market
Consumerunderstanding at
a local level

In
Touch
Identify consumer
needs

P&G ProﬁleOrganizational Structure

P&G 2006 Global Sustainability and Philanthropy Report

12

Plant Locations
Plant Name

City

Country

GBU Owner

Plant Name

City

Country

GBU Owner

Akashi
AlbanyAlexandria
AmiensAnchieta
ApizacoAuburnAugusta
AuroraAvenelBangkok
Bangkok (Wella)Barquisimeto
Beijing
Belleville
Binh Duong
Blois
BorispolBrockville
Budapest
Cabuyao
Cairo
Campochiaro
Cape Girardeau
Casablanca
Cayey
ChengduChonanCincinnati
Coevorden
Cologne (Wella)
Crailsheim
DammamDover
Dzerzhinsk (Wella)
Epping (Wella)
Escuintla
Euskirchen
Gattatico
Gebze
Gillette Aarschot
Gillette AndoverGillette Barcelona
Gillette Berlin
Gillette Bhiwadi
Gillette Boston
Gillette Carlow
Gillette Cleveland
Gillette Dong Guan
Gillette Iowa City
Gillette Kronberg
Gillette LaGrange
Gillette Lancaster
Gillette Lodz
Gillette Manaus
Gillette Marktheidenfeld
Gillette Mexico City
Gillette Minhang
Gillette Nanping
Gillette Naucalli
Gillette Newbridge
Gillette North Chicago
Gillette Reading
Gillette Shanghai
Gillette St. Petersburg
Gillette Wallduern
Gillette Wrexham
Goa
Green Bay
Greensboro
Gross-Gerau
GuatireHenderson
Huangpu
Hub

Akashi
AlbanyPineville
AmiensSão Paulo
ApizacoAuburnAugusta
AuroraAvenelBangkokSamut Prakan
Barquisimeto
Beijing
Belleville
Binh Duong
Blois
BorispolBrockville
CsomorCabuyao
Cairo
Campochiaro
Cape Girardeau
Casablanca
Cayey
ChengduCh’onanCincinnati
Coevorden
CologneCrailsheim
DammamDover
Dzerzhinsk
EppingEscuintla
Euskirchen
GattaticoGebze
AarschotAndover
Esplugues de Llobregat
BerlinBhiwadiBostonCarlow
Cleveland
Dong Guan
Iowa City
Kronberg
LaGrange
Lancaster
Lodz
ManausMarktheidenfeld
Naucalpan
Minhang
Nanping
Naucalpan
Newbridge
North Chicago
ReadingShanghai
St. Petersburg
Walldürn
Wrexham
Goa
Green Bay
Greensboro
Gross-Gerau
Guatire, Miranda
Henderson
Guangzhou
Hub

Japan
United States
United States
FranceBrazilMexicoUnited States
United States
United States
United States
ThailandThailandVenezuela
China
CanadaVietnam
FranceUkraineCanadaHungary
Philippines
Egypt
Italy
United States
MoroccoPuerto Rico
China
Korea
United States
Netherlands
Germany
Germany
Saudi Arabia
United States
RussiaSouth Africa
GuatemalaGermany
Italy
TurkeyBelgium
United States
Spain
Germany
India
United States
IrelandUnited States
China
United States
Germany
United States
United States
PolandBrazilGermany
MexicoChina
China
MexicoIrelandUnited States
United Kingdom
China
RussiaGermany
United Kingdom
India
United States
United States
Germany
Venezuela
United States
China
Pakistan

Baby Care
Family Care
Fabric & Home Care
Fabric & Home Care
Fabric & Home Care
Family Care
Feminine Care
Fabric & Home Care
Health Care
Fabric & Home Care
BeautyBeautyFabric & Home Care
Fabric & Home Care
Feminine Care
Fabric & Home Care
BeautyFeminine Care
Fabric & Home Care
Feminine Care
Fabric & Home Care
Fabric & Home Care
Fabric & Home Care
Baby Care
Fabric & Home Care
BeautyFabric & Home Care
Feminine Care
Fabric & Home Care
Health Care
BeautyFeminine Care
Fabric & Home Care
Baby Care
BeautyBeautyFabric & Home Care
Baby Care
Fabric & Home Care
Fabric & Home Care
Gillette
Gillette
Gillette
Gillette
Gillette
Gillette
Gillette
Gillette
Gillette
Health Care
Gillette
Gillette
Gillette
Gillette
Gillette
Gillette
Gillette
Gillette
Gillette
Gillette
Health Care
Gillette
Gillette
Gillette
Gillette
Gillette
Gillette
Feminine Care
Family Care
Health Care
Health Care
Baby Care
Health Care
BeautyBeautyHuenfeld (Wella)
Hunt Valley
IbadanIbaraki (Wella)
Iowa City
JacksonJeddahJijonaKansas City Coffee
Kansas City F&HC
Kuantan
Leipsic
Lewisburg
Lima
LondonLongjumeau
Louveira
Lucca
ManatiManchester
Mandideep
MariscalaMataró
Materiales
MechelenMedellin
Mehoopany
Mequinenza
Mohammedia
Montornès
Naucalpan
NenaghNeuss
New Orleans
Novomoskovsk
Ordzhonikidze
Orleans
OxnardPescaraPhoenix
Pilar
Poissy (Wella)Pomezia
Porto
RakonaRothenkirchen (Wella)
Russellville
Sacramento
Santiago
Sarreguemines (Wella)
Seaton Delaval
Sherman
Shiga
Somersby (Wella)Stamford
St. Louis
TakasakiTalisman
Targowek
Tepeji
Tianjin
Tianjin (Wella)
Timisoara
VallejoVilla Mercedes
Weiterstadt
Witzenhausen
Worms
XiqingHünfeld
Cockeysville
IbadanIbarakiIowa City
JacksonJeddahJijonaKansas City
Kansas City
Kuantan
Leipsic
Lewisburg
Lima
LondonLongjumeau
Louveira
Lucca
ManatiManchester
BhopalApaseo El Grande
Mataró
Lima
MechelenMedellin
Mehoopany
Mequinenza
Mohammedia
Montornès del Vallès
Mexico City
NenaghNeuss
New Orleans
Novomoskovsk
OrdzhonikidzeSaint Cyr En Val
OxnardPescaraPhoenix
Pilar
PoissyRomeGuifões
Rakovnik
Rothenkirchen
Russellville
Sacramento
Santiago
Sarreguemines
Whitley Bay
Sherman
Shiga
Somersby
Stamford
St. Louis
Takasaki
Mexico City
Warsaw
Tepeji
Tianjin
Tianjin
Timisoara
Mexico City
Villa Mercedes
Weiterstadt
Witzenhausen
Worms
TianjinGermany
United States
NigeriaJapan
United States
United States
Saudi Arabia
Spain
United States
United States
Malaysia
United States
United States
United States
United Kingdom
FranceBrazilItaly
Puerto Rico
United Kingdom
India
MexicoSpain
Peru
Belgium
Colombia
United States
Spain
MoroccoSpain
MexicoIrelandGermany
United States
RussiaUkraineFranceUnited States
Italy
United States
Argentina
France
Italy
Portugal
Czech Republic
Germany
United States
United States
Chile
FranceUnited Kingdom
United States
Japan
Australia
United States
United StatesJapan
MexicoPolandMexicoChina
China
Romania
MexicoArgentina
Germany
Germany
Germany
China

BeautyBeautyFabric & Home Care
BeautyBeautySnacks & Coffee
Baby Care
Baby Care
Snacks & Coffee
Fabric & Home Care
Fabric & Home Care
Health Care
Health Care
Fabric & Home Care
Fabric & Home Care
Health Care
Feminine Care
Family Care
Health Care
Family Care
Fabric & Home Care
BeautyFabric & Home Care
Fabric & Home Care
Fabric & Home Care
Fabric & Home Care
Family Care
Baby Care
Fabric & Home Care
Feminine Care
Health Care
BeautyFamily Care
Snacks & Coffee
Fabric & Home Care
Fabric & Home Care
Family Care
Family Care
Feminine Care
Health Care
Fabric & Home Care
BeautyFabric & Home Care
Fabric & Home Care
Fabric & Home Care
BeautyHealth Care
Fabric & Home Care
Baby Care
BeautyBeautySnacks & Coffee
BeautyBeautyBeautyFabric & Home Care
Fabric & Home Care
BeautyBaby Care
Baby Care
BeautyBeautyFabric & Home Care
Fabric & Home Care
Baby Care
Health Care
Family Care
Fabric & Home Care
BeautyNote: Data as of June 30, 2006

P&G ProﬁleOrganizational Structure

P&G 2006 Global Sustainability and Philanthropy Report

13

P&G’s External Stakeholders
Consumers,
Consumer Organizations

Consumers

Stockholders
News Media

NGOs

Governments

Stockholders

Business Partners

Industry Associations

Stakeholders
A stakeholder is anyone who has an interest in or interaction
with P&G. Stakeholders can be internal, such as theCompany’s almost 140,000 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 supplierswith whom we do business, our shareholders, and thecommunities in which P&G people live and work.

P&G manufactures
most products
at its own plants
in 40 countries.

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 Media

Manufacturing Outsourcing
P&G, including Gillette, has more than 140 manufacturing
facilities in 40 countries. These facilities handle the majority of
P&G’s production.
To ensure our products are affordable, our manufacturing
facilities must provide the best value for the Company. We
conduct regular reviews to ensure our facilities are highly
competitive, and this includes benchmarking versus third-party
manufacturers.
When it makes sense for the business and is the mostcompetitive solution, we use contract manufacturers. For
example, sometimes we use them when entering a newmarket, before we determine whether we’ll invest in building
our own facility there, or when we are introducing a new
product, so we can determine production needs prior toinvesting 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 percent of P&G production supplied by contract
manufacturers varies according to the needs of the businessand the ability of P&G facilities to compete and win production
based on providing the best value. Currently, we rely on thirdparty manufacturers for about 10 to 15 percent of our total
manufacturing volume.

P&G ProﬁleFinancial Information

14

P&G 2006 Global Sustainability and Philanthropy Report

Financial Information

P&G has met or exceeded its long-term sales growth goal for ﬁve
consecutive years and is now focused on delivering a full decade ofindustry-leading top-line and bottom-line growth.

The Company reported net earnings of $8.68 billion for theﬁscal year ended June 30, 2006, an increase of 25 percent
compared to $7.26 billion in 2005.
Diluted net earnings per share were $2.64 in 2006, compared
to $2.66 in 2005.
Net sales were $68.22 billion in 2006, up 20 percent fromlast year.
Our ﬁrst discretionary use of cash is dividend payments.
Common share dividends grew 12 percent to $1.15 per sharein 2006, representing the 50th consecutive ﬁscal year ofincreased common share dividends. Total dividend payments,
to both common and preferred shareholders, were $3.70
billion, $2.73 billion and $2.54 billion in ﬁscal 2006, 2005 and2004, 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
Shareholders’ Equity

Web

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 AND HEALTH

Beauty31%

33%

Health Care

11%

13%

Fabric Care and25%
Home Care
Baby Care and18%
Family CarePet Health, Snacks 6%
and Coffee
Blades and Razors 5%
Duracell and Braun 4%

HOUSEHOLD CARE

GILLETTE GBU

2006

2005

2004

$68,222$56,741$51,407

21,8483,729
8,684

18,400
3,058
6,923

16,882
2,749
6,156

2.79

2.70

2.34

2.64
135,695
35,97662,9082.53
61,527
12,887
18,4752.20
57,04812,554
18,190For more ﬁnancial details, please see P&G’s 2006
Annual Report:
www.pg.com/investors/annualreports.jhtml

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

Always, Head & Shoulders,Olay, Pantene, Wella
Actonel, Crest, Oral-B

25%

Cosmetics, Deodorants, Feminine Care,
Hair Care, Personal Cleansing, Skin Care
Oral Care, Pharmaceuticals,
Personal Health Care
Fabric Care, Air Care, Dish Care, Surface Care

14%

Diapers, Baby Wipes, Bath Tissue, Kitchen Towels Bounty, Charmin, Pampers

4%

Pet Health, Snacks, Coffee

Folgers, Iams, Pringles

8%3%

Men’s and Women’s Blades and Razors
Batteries, Electric Razors, Small Appliances

Gillette, MACH3
Braun, Duracell

Ariel, Dawn, Downy, Tide

* Percent of net sales and net earnings for the year ended June 30, 2006. Figures exclude results held in the Corporate segment and include Gillette results only for the nine months ended June 30, 2006.

P&G ProﬁleFinancial Information

P&G 2006 Global Sustainability and Philanthropy Report

15

P&G Tops Dow Jones
Sustainability Index
For the seventh consecutive year, P&G has been ranked as Super
Sector Leader (Personal & Household Goods) by the Dow Jones
Sustainability Index (DJSI).

Awards and Recognitions
P&G annually receives recognition for its work, its character, its
brands and its community contributions. We are highlighting a
few and listing some others.
P&G ranks on several Fortune magazine lists including:• Most Admired Companies• Global Most Admired• MBA’s Top Earners
P&G ranks among the top companies for Executive Women(National Association for Female Executives), Women of Color(Working Mother magazine), Working Mothers, (Working
Mother magazine), and Best Corporate Citizens (Business
Ethics magazine).

According to Dow Jones,”Procter & Gamble is strongly committed
to the concept of sustainable development, and continues to lead
its industry in that regard. The company views sustainability as
an opportunity to innovate in products that improve the lives of
the world’s consumers... P&G emphasizes innovation in productsthat serve basic needs of consumers in least developed countries.
The company’s high scores in the criteria of product impact andstrategies for emerging economies is a reflection of that fact. In
developed markets, P&G focuses on environmental excellence,
innovating in products such as cold-water cleaning technologies
that provide good performance as well as energy savings andeco-efficiency. The company’s best-of-class scores in environmental
performance and reporting illustrate its success in these areas.”
The Dow Jones Sustainability Indexes (DJSI), launched in 1999,
are the first global indexes to track the financial performance ofthe leading sustainability-driven companies worldwide. Only the
top 10 percent of the world’s 2,500 largest companies are
selected as components of the DJSI World based on theirsustainability performance.

Web

To view the P&G DJSI 2006 Sustainability Leader report,
please visit
http://www.sustainability-indexes.com/djsi_pdf/Bios07/
Procter_Gamble_07.pdf

P&G ProﬁleFinancial Information

Major Acquisitions
On October 1, 2005, we completed acquisition of the GilletteCompany for approximately $53.43 billion. Gillette isa leading consumer products company that had $10.48 billion
in sales in its most recent pre-acquisition year ended
December 31, 2004.
The acquisition of Gillette has added ﬁve billion-dollar brands
to P&G’s stable of 17 billion-dollar brands. It has more than70 percent global market share of razors and blades, 40 percent
global market share in alkaline batteries and 36 percent shareof the global toothbrush market.
Major Divestitures
Proceeds from asset sales in 2006 were $882 million, primarily
due to the divestitures of Spinbrush, Rembrandt and Right
Guard, all required by regulatory authorities in relation to theGillette acquisition, and our Korea paper businesses.

Shareholders
There were approximately 2,086,000 common stock
shareowners, including shareholders of record, participants in
the Shareholder Investment Program, participants in the P&G
stock ownership plans, and beneﬁcial owners with accounts atbanks and brokerage ﬁrms, as of July 3, 2006.
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 2006 Global Sustainability and Philanthropy Report

16

P&G 2006 Global Sustainability and Philanthropy Report

17

Structure and GovernanceP&G has an organizational structurethat leverages our knowledge andscale at the global level with a deep
understanding of the consumer
and customer at the local level.
P&G’s unique organizational structure of
Global Business Units (GBUs) andMarket Development Organizations (MDOs)
drives clear focus, accountability andgo-to-market capability.

Structure and GovernanceIntroduction

P&G 2006 Global Sustainability and Philanthropy Report

18

The objective of our governance structure is to maintain corporate governanceprinciples, policies and practices that support management and Boardof Directors accountability. These are in the best interest of the Company and ourshareholders, and they are consistent with the Company’s Purpose, Values and Principles. We
believe that 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 organization
design, our ability to innovate. But if you really want to get atwhat drives our Company’s success, the place to look is ourpeople. 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 ourﬁnancial reporting. High-quality ﬁnancial reporting is our
responsibility – one we execute with integrity and within boththe letter and spirit of the law.
High-quality ﬁnancial reporting is characterized by accuracy,
objectivity and transparency. Management is responsible
for maintaining an effective system of internal controls overﬁnancial 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 our consolidated ﬁnancial statements, on which they
have issued an unqualiﬁed opinion.
Our commitment to providing timely, accurate andunderstandable 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
personally accountable for compliance and is provided several
means of reporting any concerns about violations.

Web

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
and development of employees. The system is designed toprovide 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 preparation of ﬁnancial statements
conforming in all material respects with accounting principles
generally accepted in the United States. We monitor theseinternal 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 are taken by management to correct any
identiﬁed control deﬁciencies.
Executing Financial Stewardship
We maintain speciﬁc programs and activities to ensurethat employees understand their ﬁduciary responsibilities
to shareholders. This ongoing effort encompasses ﬁnancial
discipline in our strategic and daily business decisions andbrings 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 performance and control assessments. The intent
is to ensure we remain objective, identify potential issues,
continuously challenge each other and ensure recognition andrewards are appropriately aligned with results.
Engaging our Disclosure Committee
We maintain disclosure controls and procedures designed tocontinued on next pageStructure and GovernanceIntroduction

P&G 2006 Global Sustainability and Philanthropy Report

19

Corporate Governance and Management’s Responsibility
continued from previous pageensure that 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 implicationsof 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 Governancefrom Our Board of Directors
We have an active, capable and diligent Board that meets therequired standards for independence, and we welcome theBoard’s oversight. Our Audit Committee comprises independent
directors with signiﬁcant ﬁnancial knowledge and experience.
We review signiﬁcant accounting policies, ﬁnancial reportingand internal control matters with them and encourage their
independent discussions with external auditors.

Web

Our corporate governance guidelines, as well as
the charter of the Audit Committee and certain
other committees of our Board, are available on our
website atwww.pg.com/company/our_commitment/corp_gov

Governance Structure
We believe that good governance practices contribute tobetter results for shareholders. Our objective is to maintaincorporate governance principles, policies and practices that
support management and Board of Directors accountability.
These are in the best interest of the Company and ourshareholders, 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 and theCompany’s Code of Regulations and Bylaws. In exercising its
ﬁduciary duties, the Board of Directors represents and acts onbehalf of the shareholders. Although the Board of Directors
does not have responsibility for day-to-day management of theCompany, it stays informed about the business and provides
guidance to management through periodic meetings, site visits
and other interactions.
The Board is deeply involved in the Company’s strategicplanning process, leadership development and succession
planning. The Board has several committees to facilitate its
oversight of the Company. These include Audit, Compensation& Leadership Development, and Governance & Public

Responsibility. The responsibilities of the Governance & Public
Responsibility Committee include oversight of organization
diversity, sustainable development, community and government
relations, product quality assurance and corporate reputation.
The Board of Directors and its committees operate under our
Corporate Governance Guidelines and Charters. Additionally,
the Board has adopted guidelines for determining theindependence of its members. As of June 2006, approximately
72 percent of our directors qualiﬁed as being independent.
The Board has approved a code of conduct, outlined in ourWorldwide Business Conduct Manual. This code applies toall directors, ofﬁcers and employees and is designed to help
ensure compliance 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
Executive compensation is based on principles that have served
the Company well and enabled it to increase shareholder value:• Pay competitively.
• Pay for performance.
• Design compensation programs that support the business.
These principles have helped the Company develop andretain extraordinary executive talent. P&G develops executives
from within, an achievement few other major corporations
have matched.
A substantial portion of compensation is composed ofvariable, at-risk incentives, the majority based on the
Company’s long-term success. We benchmark the Company’s
pay structure annually and also review its business andﬁnancial performance.
Additionally, we expect executives to uphold the fundamental
principles in the Company’s Statement of Purpose, Values andPrinciples, plus the Worldwide Business Conduct Manual, theSustainability Report, and the Environmental Quality Policy.
These principles include integrity, maximizing the developmentof each individual, developing a diverse organization, andcontinually improving the environmental quality of theCompany’s products and operations. In upholding theseprinciples, executives not only contribute to their own
success but also help ensure the prosperity of P&G’s business,
employees, shareholders and the communities in which theCompany operates.

Structure and Governance
Stakeholder Engagement

P&G 2006 Global Sustainability and Philanthropy Report20

Stakeholder Engagement

P&G works hard to be a good corporate neighbor and to improve lives
in the communities where we live and work.

CaringCommitted, Involved,
Knowledgeable, Passion
for making a realdifference.
Communities
Each P&G production facility has site-speciﬁc activities tobuild 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 canrange from regular ofﬁcial meetings during which new
information is shared or questions 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 ensurescontinuity 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 the presence of a P&G site.
P&G recognizes the importance of improving the quality oflife in our local communities, and we support local initiatives
and encourage employee involvement. The most valuablecommunity 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 thanwe could alone. We look to our people in the area to workwith their local communities and government ofﬁcials to learn
where we can make the biggest difference.

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 legislationthat is relevant to the Company and work with authorities toensure that policies take the needs 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
the Company’s needs are understood and considered when
decisions are being made that can inﬂuence P&G’s business.

P&G Partners With Guangzhou
Government to Nab Counterfeiters
In Guangzhou, China, P&G began working this year withsenior government ofﬁcials and anti-counterfeit authorities on
a program to eliminate manufacture of counterfeit products
there. This collaboration between the Guangzhou government
and P&G is the ﬁrst local government-industry partnership of
its kind in China.
The highly industrialized Guangzhou area is one of the largest
sources of counterfeit products in China. Innovation is a toppriority for the Chinese government, and both national andGuangzhou ofﬁcials recognize that eliminating counterfeiting
is a precondition to innovation.
A number of manufacturers are under investigation, andsome production networks have already been shut down andringleaders arrested. P&G plans to expand this effort to otherareas in China with high levels of counterfeiting.

Structure and Governance
Stakeholder Engagement

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

Fighting Bird Flu in China
Safeguard has joined with the Red Cross Society of China to
educate the public about prevention and transmission of bird
ﬂu and to reduce bird ﬂu’s threat to communities.

P&G 2006 Global Sustainability and Philanthropy Report

21

P&G’s Commitment to Product Safety,
Chemicals Management and Sustainability
Household consumer products use a variety of chemical
ingredients to provide beneﬁts to society, such as cleaner
homes and improved health and personal hygiene, thus
enabling an overall better quality of life. One expectation of
consumer products is that they will be safe, that their use will
not adversely affect human health or the environment.
Throughout its history, P&G has believed that the safety ofour products is a prerequisite for responsible business. Our
co-founder, James Gamble, stated in the mid-1800s that “ifyou cannot make pure goods and full weight, go to somethingelse that is honest, even if it is breaking stone.” Today, thisphilosophy is reﬂected in our Statement of Purpose: “We will
provide branded products and services of superior quality andvalue that improve the lives of the world’s consumers.” Safety
is an intrinsic part of our products’ quality and value.
Our approach is based on the scientiﬁc assessment andmanagement of risk – the likelihood that people or theenvironment 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.
continued on next page

Safeguard has developed a TV public service announcement
explaining the importance of washing hands with soap.
Safeguard is also designing and producing a key visual for use
by the Red Cross in its bird ﬂu education materials.
Bird ﬂu originated in Asia. The ﬁrst human case in China
occurred in November 2005, despite the Chinese government’s
best efforts to prevent it by vaccinating poultry and culling
ﬂocks. Experts fear that China’s dense population increases the
chances of bird ﬂu’s spread.

Structure and Governance
Stakeholder Engagement

P&G 2006 Global Sustainability and Philanthropy Report

22

P&G’s Commitment to Product Safety,
Chemicals Management and Sustainability
continued from previous page

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:• Questions about whether the hazards of existing chemicals
have been sufﬁciently studied and whether chemical
exposures can be adequately understood.
• Frustration with the slow pace of developing publicly
available risk assessments.
• New scientiﬁc ﬁndings that have not been previously known
or evaluated.
As a result, some believe that it might be better to basedecisions on a chemical’s hazards alone. This has been coupledwith calls for the 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 attraction of such a “black
and white” approach. However, we believe that it could
cause chemicals that are being safely used to be unjustiﬁably
removed from the market, potentially depriving societyof innovative and beneﬁcial technologies. Furthermore,experience has shown that even chemicals that could beconsidered “non-hazardous” (e.g., soybean oil or evenwater) can cause harm under certain circumstances, while“hazardous” chemicals can be safely used (e.g., ethanol).
We recognize that continuing questions about the safety ofchemicals mean that industry must take a more collaborativeand open approach. Thus, we have initiated a variety ofindustry partnerships, including: the collaborative assessmentof laundry and cleaning product ingredients in Europe(Human and Environmental Risk Assessment – HERA
(www.heraproject.com); evaluations of “High Production
Volume Chemicals” in the United States, and Organization
for Economic Cooperation and Development; assessmentsof ﬂavors, fragrances, and colorants by European and
U.S. cosmetics products associations; work in Canada to
implement renewed chemicals legislation; the promotion ofrisk assessment via the U.S. Alliance for Chemical Awareness(www.chemicalawareness.com) and the American ChemistryCouncil; development of a targeted risk assessment approachin Europe, via the European Center for Ecotoxicology and
Toxicology of Chemicals, an industry-sponsored researchorganization (www.ecetoc.org).
In addition, we are actively promoting the responsible
production and use of chemical products, and better
information sharing with the public. For example, we areworking with the European soap and detergent industry

association (A.I.S.E.) on formulation improvements, as wellas providing consumer guidance on how to use detergentsproperly (www.washright.com). We launched and then
expanded a P&G Internet site (www.scienceinthebox.com) tohelp 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 andsafety of skin and hair care products (www.pgbeautyscience.com)
and another site covering P&G’s approaches to product safety
and views on a variety of chemical management and science
policy issues (www.pgperspectives.com). For more on thiswork, see Science in-the-box, page 49.
From a policy standpoint, we continue to believe thatchemicals management programs should be based on:
1. Efﬁcient risk-based priority-setting processes that use
hazard data and basic exposure information together to
identify issues of potential concern, followed by practicalrisk evaluations that analyze chemicals in a tiered fashion toresolve such issues.
2. Risk management decision making that combines
information on a chemical’s risks, beneﬁts and costs withan understanding of 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, such that they can makeknowledgeable decisions.
These policies are the foundation of what we do internally, as
well as what we encourage across government and industry.
Internally, they are enabled by collaboration between Research& Development, Product Safety and Regulatory Affairs,
Manufacturing, External Relations and management. Our efforts
go beyond safety and risk to include product lifecycle issues suchas energy and resources use and waste management.
Collectively, we believe these activities and policies enable
continued progress toward sustainability and enable us toprovide safe, effective products that improve lives.

Structure and Governance
Stakeholder Engagement

Chemicals Move Uptown
Instead of to Disposal
With P&G’s recent decision to acquire pharmaceuticals
technology rather than “discover” it internally, a major
chemicals cleanout has been going on at the Cincinnati facility
that used to research the Company’s “discovery” drugs. During
this cleanout, the hope was to reuse the chemicals fromdecommissioned labs rather than throwing them away.
Health, Safety & Environment staff didn’t have to look far; anearby P&G facility was able to reuse almost 2 tons of laboratorychemicals. This kept the chemicals out of disposal sites andsaved money on the purchase of chemicals for lab research.

P&G 2006 Global Sustainability and Philanthropy Report

23

Principal Industry and Business Associations
P&G holds membership in many industry, business andenvironmental 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
Cosmetics Industry Associations: COLIPA – Cosmetics & Fragrances
Industry
Detergent Industry Associations: AISE – Association Internationale
de la Savonnerie de la Detergence et des Produites d’Entretien
Employer Associations: UNICE – Union of Industrial & Employers’
Confederation of Europe
Environmental Associations: ECETOC – European Center for
Ecotox and Toxicology of Chemicals; EUROPEN – The European
Organization for Packaging and the Environment
Euro/American Business Associations: AECA – American European
Community Associations; EU Committee of AmCham
Food Associations: CIAA – European Food Industry Association;
CIES – Food Business Forum
Grocery/Brand Associations: AIM – European Brands Association
Multi-Stakeholder Associations: EPE – European Partners for theEnvironment
Nordic Partnership: WWF and Industry Partnership in Nordic
Region to Target Sustainability to Rewarding Business
Paper Associations: EDANA – European Industry of Non-Woven
Products; HAPCO – European Industry of Hygiene Paper
Products
Pet Food Industry Association: PFMA – Pet Food Manufacturers
Association
Pharmaceutical Associations: AESGP / OTC Manufacturers
Association; FPIA – Pharmaceutical Industry Association
Waste Management Associations: ASSURRE – Association for
Sustainable Use and Recovery of Resources in Europe
North America
American Chemical Society
American Industrial Health Council
American Legislative Exchange Council
Association of National Advertisers
Business for Social Responsibility
Business Roundtable
Canada’s Research-Based Pharmaceutical Companies (Rx&D)
Canadian Chamber of Commerce
Canadian Chemical Producers Association
Canadian Manufacturers and Exporters
Canadian Consumer Specialty Products Association
Canadian Cosmetic, Toiletry and Fragrance Association
Consumer Specialty Products Association
Consumer Health Products Association
continued on next pageStructure and Governance
Stakeholder Engagement

Principal Industry and Business Associations
continued from previous page

Cosmetic, Toiletry and Fragrance Association
CSR Canada – Corporations Support Recycling
Food and Consumer Products Manufacturers of Canada
Global Environment Management Initiative
Grocery Manufacturers of America
Keep America Beautiful
National Conference of State Legislatures
National Environmental Development Association
National Food Processors Association
Non-Prescription Drug Manufacturers Association of Canada
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
Latin America
ABIPLA – Brazilian Association of Household Cleaning Products
ANALJA – Colombian Soaps and Detergent Manufacturers
Association
Argentinian National Industry Association
ASOQUIM – Venezuelan Association of the Chemical Industry
CANIPEC – Mexican Association of the Industry of Cosmetics
and Perfumes
Cámara Nacional de la Industria de Aceites, Grasas, Jabones y
Detergentes, Mexico
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 – Asociacion Mexicana de Estandares para el ComercioElectronico
Asociacion Mexicana de Fabricantes de Pañal Desechable y
Similares, A.C. (AMPADE)

P&G 2006 Global Sustainability and Philanthropy Report

24

CONAR – Consejo de Autorregulación y Etica Publicitaria, Mexico
COMCE – Consejo Mexicano de Comercio Exterior
CONMEXICO – Consejo Mexicano de la Industria de Productosde Consumo
CAVEME – Venezuelan Pharmaceutical Products Association
CEVEDES – Venezuelan Business Council for Sustainable
Development
ANDA – Venezuelan Association of Advertisers
CONINDUSTRIA – Industrial Confederation of Venezuela
CONAR – Chilean Advertising Self–Regulation and Ethics Council
SOFOFA – Manufacturers Industry Association
Chamber of the Cosmetic Industry of Chile
AmCham – Chilean American Chamber of Commerce
Chilean–Brazilian Chamber of Commerce
ANDA – National Advertisers Association Chile
Latin America Federation of Waste Management
Peru – Sociedad Nacional de Industrias
Asia
State Committee of Cosmetic Industry
Asia/Paciﬁc Economic Cooperation
Australian Consumer & Specialty Products Association
China – Amcham membership
China – CC of Foreign Invested Enterprises GZ
China – Academy of Environment Science
China – Association of Enterprises with Foreign Investment
China – Association of Fragrance, Flavor and Cosmetic Industry
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
China – National Household Paper Industry Association
China – Standardization Association
China – Standardize Technological Consulting Service Center
China – China Toothpaste Industry Association
China – GD Associated Net for Anti-Counterfeit & High-Quality
Protection
China – GD Fragrance Flavor Cosmetic Branch of GD Light Industry
Association
China – Guangdong Quality Magazine
China – Guangdong Quality Management Association
China – Guangzhou Municipal Foreign Trade Investment Law
Association
China – Guangzhou Municipal Lawyers’ Association
China – Guangzhou Quality Inspection Association
China – Guangzhou Trademark Association
China – GZ “Three” Associations of Economic & Technological
Development District
China – GZ Association of Enterprises with Foreign Investment
China – GZ Education Fund Association
continued on next pageStructure and Governance
Stakeholder Engagement

Principal Industry and Business Associations
continued from previous page

China – GZ Industry & Commerce Administration Management
Institute Branch of Foreign Investment
China – Living Use Paper Specialized Committee of China Paper
Making Institute
China – National Bar Code Association
China – National Environment Hygiene Standard Specialized
Committee (MOH)
China – Perfume / Fragrance Magazine
China – Quality Management Association
China – State Committee of Cosmetics Industry Standardization(SBQTS)
China – State Technical Committee of Paper Making Industry
Standardization
China – State Technology Committee of Food Industry
Standardization
China – Tianjin Association of Enterprises with Foreign Investment
Hong Kong – The Cosmetic and Perfumery Association of Hong
Kong
Hong Kong – The Hong Kong Association of the PharmaceuticalIndustry
India – Associated Chambers of Commerce and Industry of India
India – Confederation of Indian Industry
India – Federation of Indian Chambers of Commerce and Industry
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
Korea – American Chamber of Commerce
Korea – Association for Fair Trade of Tissue & Hygiene Products
Korea – EU Chamber of Commerce
Korea – Korea Chemical Management Association
Korea – Korea Cosmetics Industry Association
Korea – Korea Food Industry Association
Korea – Korea Food Traders Association
Korea – Korea Hygiene Paper Product Association
Korea – Korea Paper Manufacturers’ Association
Korea – Korea Pharmaceutical Trade Association
Malaysia – American Malaysian Chamber of Commerce(AMCHAM)
Malaysia – Federation of Malaysian Manufacturers – FMM Food
Manufacturer

P&G 2006 Global Sustainability and Philanthropy Report

Malaysia – Malaysian International Chamber of Commerce andIndustry – MICCIMalaysia – The Cosmetic, Toiletry & Fragrance Association of
Malaysia – CTFA
Philippines – Soap & Detergent Association of the Philippines
Philippines – Cosmetic, Toiletry & Fragrance Association of thePhilippines
Singapore – The Cosmetic, Toiletry & Fragrance Association of
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

P&G works withindustry andenvironmental
associations
around the world.

25

P&G 2006 Global Sustainability and Philanthropy Report

26

Performance Indicators
At P&G, we proactively bring together
innovative ideas and resources tocreate new products and services that
improve the quality of people’s daily
lives around the world, at all income
levels. P&G is particularly well-positioned to
do this because we are in touch daily with theneeds of the world’s consumers.

Economic Development
Investing in communities

Environmental Protection
Investing in the environment

Social Responsibility
Investing in peoplePerformance Indicators
Introduction

P&G 2006 Global Sustainability and Philanthropy Report27

Sustainability performance can rest on three pillars: economic
development, environmental protection and social responsibility.
These pillars provide the organizing principles for the indicators, though thesecategories are highly interrelated and other organizing schemes are possible.

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, andhow 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 makesure we are aligned with the Global Sullivan Principles.
We ensure our commitment to our employees through ourhuman resources system and proﬁt-sharing program. Ourhuman resources system trains, educates and develops ourpeople. It offers ﬂexible work arrangements, giving employees
the opportunity to meet both business and personal needs.
It instills our culture and policies to ensure that everyone istreated fairly and has the opportunity to contribute to our
vision and mission. The proﬁt-sharing program provides
employees with a stake in the Company’s future. Programs
such as these enable us to be a sustainable business and a
viable part of the communities in which we do business.

Key Sustainability Focus Areas
P&G remains committed to a future where you will measure
our sustainable development contribution in terms such as
disease elimination, lives saved, child development, and theway a woman’s life is better because of the products andservices of Procter & Gamble.
At P&G, we proactively bring together innovative ideas andresources to create new products and services that improve thequality of people’s daily lives around the world, at all income
levels. P&G is particularly well-positioned to do this because weare in touch daily with the needs of the world’s consumers.
To bring our sustainability efforts to life, we decided to focus
on areas in which we can most effectively make a positive
difference and which can involve all our businesses andregions. After much internal and external discussion, we
selected two areas:• Water• Health and Hygiene
P&G’s work in these areas entails developing new ideas
regarding our products, services, initiatives and markets. For
example, it includes:• Reaching consumers we have never reached, such as in therural villages and urban slums of the developing world.
• Creating new products responding to the needs, frustrations
and aspirations of those new consumers and selling those
products at an affordable price.
• Exploring new business models, often with new supply anddistribution systems to lower cost and extend reach.

Performance Indicators
Introduction

P&G 2006 Global Sustainability and Philanthropy Report

28

Pampers: An Example of Sustainability in Action

Pampers is bringing sustainability to life throughyears of investment in the three sustainability
pillars – economic development, environmental
protection and social responsibility.
This is a fundamental part of Pampers’ global business andinnovation plans. Continuous improvements in all threepillars are key contributors to Pampers’ global success.
Innovation that drives new technology has brought
consumers diapers that have dramatically improved thecondition of babies’ skin. Superabsorbent materials,
breathable outer covers and embedded protective lotions
help keep skin drier and healthier, leading to a signiﬁcantreduction in irritation and infections. Innovative designs forbetter containment play a major role in helping prevent the
spread of infectious diseases.
Pampers collaborates with health professionals to improve
the health of babies in developing countries such as China.
Through a partnership with the International Health Programat Cincinnati’s Children’s Hospital, Chinese maternity andbaby care doctors come to the United States for education
and research, and U.S. medical leaders go to China to sharethe latest medical developments.
Pampers brings value to consumers by continuously working
on cost innovation. Over the past three years, innovations
in diaper design and manufacture have helped offset large
increases in commodity costs.
Pampers has a long history of increasing diaper performance
while decreasing environmental impact. Source reduction
over 20 years has resulted in a 40-percent reduction inmaterial used. In North America, Pampers source reduction
initiatives this year involved a new topsheet on Swaddlers
and Cruisers and stretch material on Baby Dry. Theseadvances are eliminating thousands of tons of solid waste.

Performance Indicators
Introduction

P&G 2006 Global Sustainability and Philanthropy Report

29

Major Opportunities and Impacts
Associated with Products and Services
Economic Development• Customers• Suppliers• Employment• Taxes, Fees and Contributions

Why Water?
Water affects the lives of all of us, each day. P&G has chosen
to focus on water because we have a great deal of expertise inthis area and tremendous capability to improve life for people
with insufﬁcient access to clean water. In addition, water is
integral to the use and disposal of most P&G products; nearly
85 percent of them have some connection with householdwater use.
Worldwide, more than
• 1 billion people do not have access to safe drinking water.
• 3 to 4 billion people do not get enough water.
• 3 billion people do not have access to adequate sanitation
systems.
• 3 million people – mostly children – die from water-related
illnesses each year.

Why Health and Hygiene?
Health and hygiene affect all of us, in both the developed andthe developing worlds. P&G has chosen to focus on health andhygiene because we have many products that improve healthand well-being and that clean skin, clothing and homes.
Here are some current concerns:• Population growth is leading to overcrowding and disease in
major urban areas.
• Micronutrient deﬁciency or “hidden hunger” affects many
millions of people, causing blindness, inadequate childhood
growth and other developmental issues.
• Food-borne diseases impact greater numbers of people
every year.
• People’s increased mobility enables infection and disease to
move rapidly around the world.
P&G also devotes a great deal of attention to education
because an educated populace is necessary in order forsustainable development to work effectively and to lead toeconomic development.

Environmental Protection• Resource Use• Energy• Water• Emissions, Effluents and Waste• Impacts of Products/Services• Compliance
Social Responsibility• Labor Practices• Human Rights• Society• Product Responsibility

The very nature of producing and using products causes P&G
and consumers to use resources and to generate wastes andemissions. P&G is committed, through its Environmental Quality
Policy, to reducing or preventing this whenever possible.
With products that are effective and of good value, P&G aims
to provide social and economic benefits that improve the livesof the world’s consumers. We do this via:
• Introducing innovative technologies.
• Generating employment in the communities in which we
do business.
• Supporting local and national economies through taxes,
contributions and purchases.
• Increasing shareholder value.
• Improving the health and hygiene of consumers through our
products and information on their use.

Performance Indicators
Introduction

Policies, Management Systems and Performance
Policies
While P&G competes hard to achieve leadership and businesssuccess, the Company is concerned not only with results,
but also with how those results are achieved. We will nevercondone or tolerate efforts or activities to achieve results
through illegal or unethical dealings, anywhere in the world.
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 theCompany’s policies and promote a regular ﬂow of informationthat helps the Company better manage its progress onelements of sustainable development.
Performance
P&G measures operational performance in order to drive
continuous improvement. A comprehensive, Company-widesystem of measuring performance has been developed. Thisapproach enables the Company to report data on a wide range
of operational categories.
Our actions are not just proﬁt-driven but also progress-driven,to ensure a better quality of life for everyone, now and forgenerations to come.
Our extensive consumer research related to our brands also
helps us identify ways we can best address sustainability.

P&G 2006 Global Sustainability and Philanthropy Report

30

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 thepeople closest to the work, regardless of location, can use thetools. This simplicity enables the Company to collect data andupdate systems annually at a relatively low cost. Each business
unit is responsible for accuracy 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 toreport and document data. Metric units and English are usedas the business language, backed up with local translations,where needed.
To ensure the standard collection of data, the Company has
the following 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.

Performance Indicators
Introduction

P&G 2006 Global Sustainability and Philanthropy Report

Audit Programs
P&G’s internal standards go beyond legal compliance andapply to all its plants worldwide. The fundamental philosophy
is to have the same standards worldwide, implemented bytrained professionals at all plants and audited each year using
a consistent, comprehensive approach. The metrics used areconsistent 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 ensurecompliance with national, state and local regulatory
requirements as well as corporate environmental standards
and procedures. Audit ﬁndings are reported promptly to thebusiness management teams, who must address and correct
all issues in a timely manner.
The Company reviews its sites on a frequent basis. The graphshows percent of sites receiving an audit this year. The
percent of sites audited increased seven percentage points
to 78 percent this year.
PERCENT OF PLANTS CONDUCTING
ANNUAL AUDITS
72

71

Audits measure performance against a mandatory set ofstandards and standard operating procedures. The target
performance is 8 or better on a 10-point scale.
PERCENT OF PLANTS WITH
HS&E AUDIT SCORES > 8.0
76

05

74

44

04
05* 06**Includes Electrical Systems as Critical

PERCENT OF PLANTS WITH
FIRE PROTECTION AUDIT SCORES > 8.0
93
76

83

78

04

04

31

06

05

06

Two years ago we implemented a new standard for electricalsafety. The new standard caused the number of audit scores
above 8 to fall to 44 percent. This year, the results increased to72 percent – a major improvement. If we were to show auditscores above 8 without taking into account the new standard,
the percent scores above 8 would have been 87 percent.

Performance Indicators
Economic Development

P&G 2006 Global Sustainability and Philanthropy Report

32

Economic Development
Sustainable development is a driver of economic development. Withproducts that are effective and of good value, P&G aims to provide economic and social
beneﬁts that improve the lives of the world’s consumers.

We do this via:
• Introducing innovative technologies.
• Generating employment in thecommunities in which we do business.
• Supporting local and national economies
through taxes, contributions andpurchases.
• Increasing shareholder value.
• Improving the health and hygiene ofconsumers through our products andinformation on their use.
Conversely, economic development is an
integral part of sustainability. To support
economic development, the Company
upholds the following basic principles:• Conducting business with integrity and acore value of “doing the right thing”• A global free market, governed by therule of law• A climate of innovation• Decisions based on sound science• Freedom of consumer choicePerformance Indicators
Economic Development

P&G 2006 Global Sustainability and Philanthropy Report

33

P&G’s presence in a community makes a valuable economic contribution.
The Company and its employees pay taxes and purchase goods andservices. The sale of P&G products generates employment for retailers, distributors, rawmaterials suppliers, advertising agencies, etc. The Company and its employees are known
for their philanthropy.

Economic Development
Innovation is a P&G cornerstone. More than $1.8 billion isinvested annually in research and development – the largest
amount among consumer product companies worldwide. We
have more than 36,000 patents worldwide, and we average
more than one new patent per day.
These intellectual assets are of tremendous value to P&G. But
some are not being fully realized; we invent more than we cancommercialize. Through our External Business Developmentgroup, 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 othercompanies and institutions. This includes a wide variety of deal
structures – licensing, sale, technology swap, joint venturesand more. P&G remains the partner of choice in working withothers to improve the lives of the world’s consumers.

>$1.18billion invested
annually in research anddevelopment

36,000patents worldwide

Performance Indicators
Economic Development

P&G 2006 Global Sustainability and Philanthropy Report34

Sustainable Coffee at P&G
P&G Coffee is addressing social and economic issues affecting
the ability of coffee farmers to make a viable living. Several
years ago, their incomes suffered as global overproduction
created low prices for green coffee. Over the last few years,
market prices have signiﬁcantly increased, which is improving
farmers’ incomes considerably.
Nonetheless, social problems persist, and P&G is working withnongovernmental organizations to ﬁnd long-term, systemic
solutions. These are our four major focus areas related to
improving the sustainability of coffee farming:

1. Increasing consumer demand to help
avoid potential future oversupply
P&G does this by promoting consumer demand for quality
and innovation in the coffee aisle, such as with its Folgers
Coffeehouse Series, ﬂavored Folgers and Millstone varieties,
the new Folgers Gourmet Selections, the new stomach-friendly
Folgers Simply Smooth and the single-cup brewing system
Home Café.
P&G also participates in various coffee industry efforts toincrease coffee consumption. In the United States, the 2006
National Coffee Association (NCA) Coffee Drinking Trends
Survey indicates that these efforts have resulted in a signiﬁcant
increase in daily coffee consumption after more than 50 yearsof steady decline.

2. Addressing problems at the industry level
P&G Coffee is actively involved in NCA efforts with theobjective of an adequate, sustainable supply of coffee while
also addressing social and ecological needs. For example, theNCA participates in key industry dialogues with organizations
such as UNCTAD/IISD, which researches the feasibility andpotential of tools for implementing an integrated approachto sustainable development at the global level. The NCA
successfully advocated for the United States to rejoin theInternational Coffee Organization to work with coffeeproducing and other coffee-consuming countries to implement
systemic global programs for coffee producers.

3. Infrastructure, education andhealth care projects
P&G Coffee is helping to build and refurbish schools inrural areas of Latin America, which is key to improving
education and quality of life and, ultimately, assuring
better job and income opportunities for the childrenof coffee farmers. Over the past four years, Folgers
implemented this program in Guatemala, Nicaragua,
Honduras and Colombia.

P&G Coffee has signed a long-term alliance with TechnoServe,
an NGO that helps small coffee farmers become better
entrepreneurs. TechnoServe, for example, helps farmers form
cooperatives and “pool” resources in order to reduce costs.
TechnoServe also assists farmers in their development ofbusiness management and marketing skills with the objectiveof achieving higher selling prices.
P&G Coffee is supporting the child-maternity health careprogram of Project Hope in Jinotega, a rural coffee-farmingarea in northern Nicaragua. A contribution from Folgers
helps establish “situation rooms” in existing public healthfacilities. These facilities provide health education and healthcare services – key elements to signiﬁcantly decrease the highinfant and maternity mortality rates caused by acute respiratory
infections, diarrhea, chronic malnutrition and iodine deﬁciency.
continued on next pagePerformance Indicators
Economic Development

35

P&G 2006 Global Sustainability and Philanthropy Report

Sustainable Coffee at P&G
continued from previous page

4. Offering and marketing certiﬁed coffees
P&G’s Millstone brand is participating in certiﬁed green coffee
marketing programs that enable eligible farmers to become
specialty coffee producers and receive a premium price for
their coffee. By offering and marketing certiﬁed products,
we are building consumer awareness of these certiﬁcations,
including Organic, Fair Trade and Rainforest Alliance. In the lastﬁscal year, Millstone purchased about 2 percent of its green
coffee as Fair Trade Certiﬁed™ beans in Mexico, Nicaragua,
El Salvador and Peru. Millstone plans to increase that amountsigniﬁcantly over the next few years, as consumer demand forthese certiﬁed products grows.
Only a relatively small number of farmers are eligible tobecome certiﬁed suppliers, and they may not be able tocommand price premiums as supplies of certiﬁed specialty
coffees increase on a broader base. Looking for global systemic
solutions, P&G Coffee is working to help to prevent anotherround of massive overproduction, which could lead again tolower incomes for coffee farmers. This approach is nurtured
by several independent analyses, including the McKinsey andTechnoServe study “Business Solutions to the Coffee Crisis”
from 2003.

Global Purchases
P&G is a global company. We produce brands in more than
140 plants in 40 countries around the world. This year, P&G
purchased more than $25 billion in materials and services tomanufacture and market our products. We employ locallyand purchase the majority of our raw materials within thoseregions where we manufacture our products. Our purchasing
professionals understand and participate in both global andlocal markets to acquire the materials and services to makeour products.

Coffee cherries are ripening on the tree before they
can be harvested and processed into green coffee
beans. P&G buys green coffee beans and roasts them toproduce its Folgers and Millstone brands.

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
Shareholders’ Equity

Web

2006

2005

2004

$68,222$56,741$51,407

21,8483,729
8,684

18,400
3,058
6,923

16,882
2,749
6,156

2.79

2.70

2.34

2.64
135,695
35,97662,9082.53
61,527
12,887
18,4752.20
57,04812,554
18,190For more ﬁnancial details, please see P&G’s 2006
Annual Report:
www.pg.com/investors/annualreports.jhtml

Performance Indicators
Economic Development

P&G 2006 Global Sustainability and Philanthropy Report

36

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

Human Resources
Human Resources ensures that P&G has the employees,organizational design and work culture to deliver businessproductivity and to continually improve consumer, employee
and shareholder value. They provide recruiting, training,development, diversity, beneﬁts and compensation
coordination for the Company.

Minorities continue to become a more substantial part ofAmerica’s population, and women continue to be P&G’s key
consumer base. As such, P&G is committed to remain at aleadership level because it is good for our business and goodfor the health of the U.S. economy.

It is the Company’s intent to develop all employees to their fullpotential. To achieve this goal the following support systems
are in place:• Career discussions, performance appraisals, assignment
plans, transfer and promotion plans.
• Informal network support groups.
• Mentoring to provide informal support and guidance,in addition to coaching and training provided by each
employee’s direct manager.

In 2005-2006, spending with minority- and women-owned
suppliers exceeded $1.8 billion. This spending accounted forabout 8.5 percent of P&G’s total U.S. spending. This is thethird year in a row P&G has exceeded $1 billion in spending.
P&G achievements are recognized by its inclusion in the Billion
Dollar Roundtable, a forum of 14 top corporations that spend
more than $1 billion annually with diverse suppliers.

Employee Privacy
P&G respects employee privacy and dignity. We will only
collect and retain personal information from employees thatis required for the effective operation of the Company or as
required by law. We will keep that information conﬁdential andrelease it only to those who have a legitimate need to know.
Harassment 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
our diverse 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 inensuring that the work environment is free from harassment ofany kind. Managers of others are responsible for setting clear
expectations for acceptable behavior in the workplace.

P&G fosters
the potential of
employees andsuppliers.

Performance Indicators
Economic Development

Wages
P&G supports paying employees a competitive wage, as
benchmarked against other leading companies. Consistent
with our principle of valuing personal mastery, we reward
employees for improving their skills and capabilities.

P&G 2006 Global Sustainability and Philanthropy Report

37

Beneﬁts
P&G is a recognized leader in employee beneﬁts. The
Company’s beneﬁts have been developed to help protect
the ﬁnancial security of employees. These beneﬁts include
comprehensive coverage for health care, generous vacation andholiday time, and other work/family balance beneﬁts, including
ﬂextime, child care leave and less-than-full-time schedules.

Philanthropic Contributions

P&G and its employees have a long-standing commitment to being good neighbors inplaces where we do business around the world. We show our commitment throughboth ﬁnancial support and volunteerism.
This year alone, P&G and The P&G Fund contributed more than
$115 million to support our communities.
P&G is committed to improving life for children in need, frombirth to age 13, through our global corporate cause – P&G
Live, Learn and Thrive™. We do this by building on P&G’s rangeof competencies, products and existing programs to: help
children in need live by ensuring they have a healthy start;
provide access to educational facilities, tools and programs thatenhance their ability to learn; provide access to programs thatbuild self-esteem and life skills so they can thrive.

P&G Live, Learn and Thrive comes to life through a numberof programs beneﬁting children in need in local communities
around the world, including our global corporate signature
program, Children’s Safe Drinking Water.
For more information on P&G Live, Learn and Thrive and how
we bring it to life, please go to page 67 of this report.

Performance Indicators
Economic Development

P&G 2006 Global Sustainability and Philanthropy Report

38

Employee Enthusiasm Grows
for Children’s Safe Drinking Water
P&G employees coming to lunch at the Brussels Innovation
Center on World Water Day found jugs of dirty, brown wateron the cafeteria tables instead of the customary jugs of cleanwater. The jugs were labeled “More than 1 billion people have
only this to drink!”
Employee volunteers came around offering clean water,
soliciting “tips” to buy PUR for a Ugandan medical center.
The point of this event was to raise awareness of drinking
water issues in the developing world and P&G’s efforts to
help. African food was on the menu, and a Gambian musician
played Djembe music. Demonstrations showed employees how
PUR works.
The event raised about 2,500 euros (US$3,034) from
employees. The Brussels Innovation Center matched thatamount. Funds raised went to the Belgian NGO Kids for
Uganda, which bought PUR at cost for young children and
AIDS patients at its medical center in Nkozi.
In the UK/Ireland, employees are learning about water issues
in the developing world through the Water for Children
awareness program. The year-long program has included
educational and cultural events related to Africa. To build
a personal connection, the program has focused on one
orphanage and on three children there.

Ronald helps P&G’s UK/Ireland employees understandlife at an African orphanage.
The program also has a component that links business successto helping African children: The amount of product shipped
determines how much money goes to Population Services
International to buy PUR for schools that don’t have clean
drinking water. This effort has made possible a donationequivalent to providing a year’s worth of clean water to
40,000 children.

Performance Indicators
Environmental Protection

P&G 2006 Global Sustainability and Philanthropy Report

39

Environmental Protection
The very nature of producing and using products causes P&G andconsumers to use resources and to generate wastes and emissions.
P&G is committed to reducing or preventing this 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 and accountability
for results. We believe our accomplishments
illustrate this commitment.
For example, P&G was ﬁrst to bringinnovations such as concentrated products,
reﬁll packages and recycled plastic bottles toour industry. We have made great strides in
reducing overall packaging per case by anaverage of 27 percent since 1990. During
the same period, our focus on pollution
prevention has resulted in a 65-percent
reduction in waste and in air and water
emissions from our manufacturing plants.
We recognize that environmental progress isa never-ending journey of continuous effort
and improvement. By focusing on improving
the lives of consumers through innovativetechnologies that work better and more
efﬁciently, we believe we can continue tosustain both the growth of our business andthe health of the environment.

Performance Indicators
Environmental Protection

P&G 2006 Global Sustainability and Philanthropy Report

40

Environmental Quality Policy – We will provide products and servicesof superior quality and value that improve the lives of the world’s
consumers. As part of this, P&G continually strives to improve theenvironmental quality of its products, packaging and operations
around the world.

To carry out its Environmental Quality Policy, P&G:
• Ensures 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 and disposal whenever possible. We takea 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 toothers who may contribute to progress in achieving
environmental goals.
• Meets or exceeds the requirements of all environmental
laws and regulations. We use environmentally soundpractices, even in the absence of governmental standards.
We cooperate with governments in analyzing environmental
issues and developing cost-effective, scientiﬁcally based
solutions and standards.
• Continually assesses our environmental technology andprograms and monitors progress toward environmental
goals. We develop and use state-of-the-art science andproduct life cycle assessment, from raw materials throughdisposal, to assess environmental quality.
• 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 and nurture open, honest and timely
communications and strive to be responsive to concerns.
• Ensures every employee understands and is responsible
and accountable 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.

Italy’s Fater Plant
Celebrates Certiﬁcations
The joint venture Fater plant in Italy, which produces baby
diapers, feminine pads and incontinence products, has received
ISO 14001:2004 and EMAS certiﬁcation. The ISO 14001:2004
certiﬁcation recognizes that Fater has an effective, sustainable
environmental management system. The EMAS certiﬁcation
recognizes that Fater complies with the European Union’s EcoManagement and Audit Scheme.

Web

EMAS certiﬁcation requires an organization to reporton its environmental performance. You can see thisreport at www.fater.it

To celebrate these certiﬁcations, Fater has provided ﬁnancing
for two community projects in Pescara. The ﬁrst project funds
maintenance of a large, urban, wooded park. The second
project funds a bicycle bridge over the Pescara River, toencourage people to bike instead of driving their cars.

Performance Indicators
Environmental Protection

P&G 2006 Global Sustainability and Philanthropy Report

41

Manufacturing Material Flows
2005-2006
As the diagram illustrates, P&G’s use of material resources ishighly efﬁcient. The vast majority of materials are converted to
products, and the output of the manufacturing waste (which islargely non-hazardous) is low.

Energy 76.9 million gigajoules

96.19%
Finished Product

Raw Materials& Packaging

Non-Hazardous
Solid Waste 1.30%

Materials for Recycling/Reuse
2.37%

Hazardous
Solid Waste 0.09%

Water Emissions 0.11%

Air Emissions 0.07%

Manufacturing Resource & Waste Summary by Global Business Unit (GBU)
For the first time, we are including production and environmental statistics for Gillette. Eco-efficiency (production per waste unit) of
the merged companies has continued to improve. P&G’s shipments were up independent of the addition of Gillette.
TotalsAll waste units are in thousands ofmetric tonnes unless otherwise noted.†

2006

2005

2004

2006 Global Business Unit Detail*

BEAUTY AND HEALTH
B

Product Shipped
Raw Materials from Recycled Sources

21,134 19,580 18,471
65
71
102

HOUSEHOLD CARE
HC

FCHC

GILLETTE GBU
BCFC

PHSC

3,911 2,395 1,516
000

6,701 4,033 12,111
65
0
65

557
0

522
0

PRODUCTION

WASTE

Generated Waste
Percent Recycled / Reused Waste

873
60%

831
58%

817
56%

218
54%

173
56%

45
45%

622
62%

397
68%

188
51%

36
53%

34
73%

289
19
24
16

280
22
22
26

300
21
21
16

89.6
4.4
5.6
0.8

67.6
2.9
4.7
0.4

22.0
1.4
0.9
0.4

191.2 114.6
13.8
1.5
18.1
3.6
14.6
8.2

62.0
12.3
13.8
4.6

14.5
0.0
0.6
1.7

8.0
1.2
0.1
0.1

769
2,889
80
2,146

745
3,013
83
1,722

731
2,937
79
1,843

92
279
7.9
481

57
168
6.3
50

35
112
1.7
430

627 429 169
2,468 1,835 527
70.8 49.8 19.1
1,187
62 1,125

29
106
2.3
0

50
141
1.5
479

DISPOSED WASTE

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

Energy Consumption (105 gigajoules)
Greenhouse Gas Emissions**
Water Consumption (million cubic meters)
SARA Releases (metric tonnes)***1 metric tonne = 1,000 kg = 2,205 lbs.
Beauty and Health includes segments: Beauty (B) and Health Care (HC).
Household Care includes segments: Fabric Care and Home Care (FCHC), Baby Care and Family Care (BCFC), Pet Health, Snacks and Coffee (PHSC).
Gillette GBU includes segments: Blades and Razors, Duracell and Braun.
** Air emissions include particulates, SO2, NOx, CO and VOC, whereas greenhouse gas emissions include CO2 from fuel combustion sources.
*** Releases defined in the U.S. Superfund Amendments and Reauthorization Act (SARA) by the U.S. Environmental Protection Agency.
2005 energy usage was adjusted down due to a site’s overreporting. (Gillette data has not been added into 2005 or 2004 data.)†*

Performance Indicators
Environmental Protection

P&G 2006 Global Sustainability and Philanthropy Report

42

P&G Joins Campaign to Reduce
Detergent Impact in Europe
P&G continues to expand its sustainability achievements indetergents: The Company recently joined a two-year European
campaign to reduce the amount of detergent used, particularly
in Central and Eastern Europe, where consumers typicallyuse 50 percent more detergent per wash (150 grams) than inWestern European countries. It is expected that the campaign
will help reduce the amount of low-suds, heavy-duty granular
detergent used in Central and Eastern Europe by nearly
200,000 tonnes.
The international detergent association A.I.S.E. (the Association
Internationale de la Savonnerie, de la Détergence et desProduits d’Entretien) launched the initiative in January 2006,
and P&G has implemented it in 10 countries, with another ninecountries pending. This initiative includes:• Reducing the environmental impact of laundry detergents by
reducing chemicals, packaging and energy used in productmanufacturing, delivery and use. This includes reducing by
a minimum of 33 percent (in weight) the recommended
dosage for a standard washing machine load. Also, reducing
the dose for a standard washing machine load by a minimumof 25 percent (in volume).
• Encouraging consumers to modify the way they use
products, to reduce the amount of detergent and energy
used while maintaining cleanliness standards.
A noticeable beneﬁt for consumers is that detergent packages
are becoming smaller and lighter.
The current campaign builds on previous efforts by P&G and
the detergent industry to compact detergents over the past
decade. P&G has been working with A.I.S.E. in Western Europe
since the early ’90s to compact detergents, thereby using lessraw material and less packaging and putting less chemicalmaterial into the environment.
In the early ’90s, it was difﬁcult to convince consumers toaccept compact detergents that required only 75 grams per
wash instead of the traditional 150 grams. So in 1997 P&G
and the A.I.S.E. started compacting detergents in 18 European
countries from 150 grams down to 95 grams. This was a fourstep, progressive process over eight years. The new campaign
is scheduled to achieve its goals in one compaction step
instead of four.

The compacting of traditional detergents to 95 grams per wash
led to a 36-percent decrease in the weight of powder needed
per wash and a 23-percent drop in the amount of packaging
used, compared to 1997. Additionally, fully compacted
detergents (75 grams per wash) are available in several
European countries. Fully compacted detergents use 27 percent
less packaging than the compacted traditional detergents.

P&G continues to compact
powder detergents andreduce their packaging.

Performance Indicators
Environmental Protection

P&G 2006 Global Sustainability and Philanthropy Report

EnergyEnergy eco-efﬁciency* has increased 13 index points. Gillettesites were included in this reporting year. We have not included
them in the last two years or in the base year.

43

ENERGY ECO-EFFICIENCY(global production units / gigajoule,indexed vs. 1990)

171

193

206

Results are shown in absolute value by business unit and alsopresented in eco-efﬁciency format.
The increase in eco-efﬁciency would have been 14 index points
higher without the recent acquisitions added.
ENERGY CONSUMPTION(by GBU, 105 GJ)

745

731

769

GILLETTE

04

05

06

As part of our ongoing efforts to minimize losses, theCompany does a loss analysis at the plant level. Losses aredeﬁned 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.
*Eco-efﬁciency data used throughout this report is based on the framework
developed by the World Business Council for Sustainable Development.

04

05

06

BEAUTY AND HEALTH

BeautyHealth Care

HOUSEHOLD CARE

Baby Care and Family Care
Fabric Care and Home CarePet Health, Snacks and Coffee

New Duct Burner
Saves Natural Gas

GILLETTE GBU

ENERGY CONSUMPTION(by type, 105 GJ)
731

04

745

05

Fuel
Electricity
Purchased SteamFour plants in Europe upgraded their powder drying processby adopting the latest technology in duct burner systems. Thissigniﬁcantly reduced natural gas consumption and decreased
carbon dioxide emissions by 4,550 tons.

769

06

• Spain’s Mataró plant adopted this new technology ﬁrst,
achieving a 7-percent saving in gas consumption.
• Italy’s Pomezia plant improved energy efﬁciency by
30 percent, reaching 95-percent efﬁciency.
• Russia’s Novomoskovsk plant reduced gas consumption by
20 percent.
• The Czech Republic’s Rakona plant decreased carbon dioxide
emission by 1,630 tons.

Amiens Plant Saves Gasoline
The Amiens Fabric Care and Home Care plant in France is now“blowing” its own plastic bottles. Previously, the plant useda contractor to make the bottles, which had to be trucked along distance to the plant. By bringing in only plastic granules
instead of manufactured bottles, Amiens has eliminated nearly
half a million miles of truck travel, eliminating 5 tons of CO2
emissions. The plant also beneﬁts because it doesn’t need tostore empty bottles, and its production costs have gone down.

Performance Indicators
Environmental Protection

P&G 2006 Global Sustainability and Philanthropy Report

44

Water
Water eco-efﬁciency has increased by 30 index points while
the actual water use decreased slightly from 83 million cubic
meters to 80 million cubic meters.
WATER CONSUMPTION ECO-EFFICIENCY(global production units / cubic meters,
indexed vs. 1998-1999)

Saving One-Third Per Flush

183
147

154

04

05

At England’s St. Francis Catholic Primary School in South Ascot,
P&G was able to help when the staff realized that money was
being ﬂushed down the toilets. The solution is installation ofwater-saving devices on the school’s toilets, which should saveabout one-third of the school’s annual water bill.
06

P&G’s Egham site donated household products, which thestudents sold to raise money to purchase the devices.
St. Francis’ administration has an Eco Schools Action Team
monitoring the school’s environmental footprint and ﬁnding
ways to reduce it, and to reduce costs as well, if possible.
Teachers are working on a new program using the water-saving
devices to stimulate student interest in environmental concerns.

Gillette Leads Effort to Care for Wetlands
The Gillette Company is the founder and leader of the
Corporate Wetlands Restoration Project, for preserving andrestoring ecologically critical and economically important
wetlands and aquatic habitat. Representatives of governments,
academia and conservation organizations join with business inthis public/private collaboration.
The Corporate Wetlands Restoration Project and its 260
corporate partners have put millions of dollars into action for
165 projects in the United States. These projects have restored
approximately 20,000 acres of degraded wetlands and aquatic
habitat, opened 7,000 miles of waterways containing naturalﬁsh habitat and educated students on the importance ofaquatic habitat conservation.
Completed this year was the $1.5 million Bridge Creek Salt
Marsh Restoration Project. It restored approximately 50 acresof degraded salt marsh in Barnstable, Massachusetts, by
opening restrictions to tidal ﬂow. This allows more ocean waterto reach more upstream marsh area for extended periods oftime, resulting in:• Restored habitat that serves as important feeding, staging
and nursery areas for thousands of migratory shore birds,
ﬁsh, crab and other wildlife.
• Reduced areas invaded by non-native common reed.
• Enhanced ecological functioning of the Great Marshes andthe Sandy Neck/Barnstable Harbor.

The Massachusetts Corporate Wetlands Restoration Projectprovided seed money to qualify for federal grants and also
technical services, both of which were instrumental in making
the project possible. Corporate partners, led by Gillette,
worked with Coastal America and its partner agencies, suchas the U.S. Department of Agriculture’s Natural Resources
Conservation Service, the U.S. Department of the Interior, theU.S. Fish and Wildlife Service, and the U.S. Department ofCommerce/NOAA National Marine Fisheries Service, as well as
the Massachusetts Executive Ofﬁce of Environmental Affairs
and the Town of Barnstable.
This project won a Coastal America Partnership Award in2005, recognizing “outstanding team efforts to restore andprotect the coastal environment.” Pres. George Bush senta congratulatory note saying “Your service is making a realdifference and reﬂects the selﬂess spirit of our nation.”
Healthy wetlands are invaluable to the environment and theeconomy. They reduce ﬂood and storm hazards, nurture
biodiversity, purify water, support ﬁsheries and agriculture,control pests, provide recreational opportunities and contribute
more than $100 billion dollars annually to the U.S. economy.

Performance Indicators
Environmental Protection

P&G 2006 Global Sustainability and Philanthropy Report

45

Emissions, Efﬂuents and Wastes
Greenhouse Gas
Every company in every sector of the economy has a role incontrolling greenhouse gas emission. While P&G is not anenergy-intensive company, we are stepping up to do ourpart. P&G is committed to energy-efﬁcient programs, and weparticipate in voluntary programs.
P&G’s eco-efﬁciency of greenhouse gas increased more than
60 index points. Each point represents the amount of productleaving our plants per metric tonne of CO2 emissions. The main
reason for this year’s increase was multiple energy savings
projects in Household Care.
GREENHOUSE GAS EMISSIONS ECO-EFFICIENCY(global production units per metric tonne of CO2,
indexed vs. 1990)
312
242

251

04

05

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). This year we have met the 2012 goal, but this will notstop our resolve to continue reducing greenhouse gas emissions.

06

GREENHOUSE GAS EMISSIONS(by GBU, thousand metric tonnes)
2937 3013 2889
GILLETTE

04

05

06

BEAUTY AND HEALTH

BeautyHealth Care

HOUSEHOLD CARE

Baby Care and Family Care
Fabric Care and Home CarePet Health, Snacks and Coffee
GILLETTE GBU

In addition, absolute CO2 emissions went down from 3.01
million tonnes to 2.89 million tonnes, making the CO2
eco-efﬁciency more than 300 index points higher as compared
to 1990.

Since 2002, we have reduced our actual CO2 emissions,worldwide, from 3,148,000 tonnes to 2,889,000 tonnes.
Greenhouse gas intensity decreased 35 percent. Over the same
period, our sales went from $40 billion to $68 billion. The
recent acquisitions have been included in the latest year but notin the base year.

Performance Indicators
Environmental Protection

P&G 2006 Global Sustainability and Philanthropy Report

Total Waste for Disposal
Total waste for disposal is our key management measure tokeep waste under control. Total waste disposed comprises
the sum of non-hazardous and hazardous solid waste, plus
efﬂuent measured as COD (chemical oxygen demand) andair emissions. It excludes recycling or reused waste. Thismeasurement has been in effect since 1990.
WASTE DISPOSED

Non-Hazardous Solid Waste Disposed
Overall, the non-hazardous solid waste disposed to landﬁll
has slightly increased this year, resulting in a nearly 30-point
increase in eco-efﬁciency. P&G continues to ﬁnd innovative
recycling methods.
NON-HAZARDOUS SOLID WASTE ECO-EFFICIENCY(global production units per metric tonne,
indexed vs. 1990)(by type of waste, thousands of metric tonnes)
358

350

348

247

05

06

Solid Waste Non-Hazardous
Solid Waste Hazardous
Effluents
Air Emissions

WASTE DISPOSED ECO-EFFICIENCY(global production units per metric tonne of waste,indexed vs. 1990)
294
226

06

The actual waste disposed stayed the same. The reduction
more than offset the increase from the addition of Gillette sites.
With the increase in production from P&G plus the Gillette
production, the eco-efﬁciency increased nearly 40 points.

Waste Returned to Process or Market
The percentage of waste recycled increased slightly to
60 percent, and revenue received increased to $23 million.
WASTE RECYCLED OR REUSED(percent of waste)
56

58

60

04

05

06

06

HAZARDOUS SOLID WASTE ECO-EFFICIENCY(global production units per metric tonne,
indexed vs. 1990)
703
523

05

05

Hazardous Solid Waste Disposed
Hazardous waste disposal has increased its eco-efﬁciency morethan 100 points. This was due to an ongoing reduction effort.

254

04

275

210

04
04

46

04

559

05

06

Hazardous wastes are deﬁned by regional policies and local
rules, so they vary from region to region. In the United States,
a strong focus on reduction, recycling and material substitution
has reduced the amount of hazardous waste requiring disposal
over the past three years. To further reduce our risks, thenumber of approved hazardous waste disposal sites that all
U.S. plants use is limited. Similar programs have been started inmany regions of the world.

Performance Indicators
Environmental Protection

P&G 2006 Global Sustainability and Philanthropy Report

Air Emissions
Each site monitors total suspended particulates, volatile organic
compounds (VOCs), carbon monoxide (CO), nitrogen oxides(NOx) and sulfur oxides (SOx). The total amount of air emissions
released has decreased, resulting in higher eco-efﬁciency. The
2005 eco-efﬁciency number was corrected in the graph (toproject a proper trend) but not in the table on page 41.

47

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 this documentation (referred to as section 313)
is to report publicly the releases and transfers of hazardous
chemicals as deﬁned by the agency.

AIR EMISSIONS ECO-EFFICIENCY(global production units per metric tonne,
indexed vs. 1990)
266
208

217

The amount of SARA 313 releases has increased over last year
due to the increase from Household Care.
SARA 313 RELEASES(global total metric tonnes released or transferred)
2146
1847
04

05

06

Efﬂuents to Water
Wastewater COD (chemical oxygen demand) has increasedslightly, resulting in higher eco-efﬁciency.
WASTEWATER COD ECO-EFFICIENCY(global production units per metric tonneof COD, indexed vs. 1990)

372

382

04

05

1722

415

06

Mataró’s Wastewater Efforts
Help Local Environment
Spain’s Mataró plant did a lot of work this year regarding
wastewater reduction and treatment and also water consumption.
The plant set up a new, activated carbon wastewater
treatment unit. This unit cleans wastewater so well that itcomplies with the very strict requirements for river discharge,
even though the wastewater gets discharged into a publicsewage system. The surfactants concentration decreased up to
50 fold – typically from 150 parts per million down to 3.
In addition, four of the plant’s seven departments are now“zero efﬂuent” departments.

04

05

06

Performance Indicators
Environmental Protection

P&G 2006 Global Sustainability and Philanthropy Report

Climate Change
P&G supports efforts to deal with climate change under the
U.N. Framework Convention on Climate Change. P&G is not
an energy-intensive business, though we understand thepotential impacts of greenhouse gases from our operations.
We take energy conservation and efﬁciency seriously. We
strongly support continued scientiﬁc efforts to understand thecauses and consequences of, and potential remedies for, thenegative effects of climate change.
It is critical that the international community take action toprovide the ﬂexibility essential to minimize negative economic
and social impacts of climate change on countries, individual
businesses, and ultimately, on the general public.

SupportP&G supports efforts
to deal with climatechange.

Forest Resources Policy
Though P&G does not own or manage forests, we are amajor purchaser of wood-derived ﬁber and believe we have a
responsibility to ensure the sustainability of the world’s forest
resources. Consistent with this view, P&G has had a long-term
policy which applies to how we manage our purchasing andutilization of ﬁber. As the science, knowledge and veriﬁcation
systems related to sustainable forest management evolve, wehave and will continue to revise this policy accordingly.
P&G purchases wood-derived ﬁber from suppliers that:• Ensure the safety of forestry and manufacturing operations
for employees and the environment.
• Document that the ﬁber is from legally harvested wood andthat other legal requirements are met.
• Practice principles of sustainable forest management in theirown operations and in sourcing of wood.
• Do not obtain the ﬁber from sites designated forconservation or judged to have unique environmental orcultural value.
• Reﬂect our social values and support of universal
human rights through work with local governments andcommunities to improve the educational, cultural, economic
and social well-being of those communities.

48

We ensure compliance with this policy through site visits,
comprehensive surveys and research, required documentationand independent third-party certiﬁcation of sustainable forest
management practices.
P&G requires all our ﬁber suppliers to independently certify
their forestry operations for sustainable forest management.
In addition, P&G requires suppliers to provide an auditableassurance that ﬁber from sources not directly owned andmanaged by them are obtained via legal means and thatharvest is conducted via sustainable practices. P&G believes
that independent certiﬁcation can be an effective means fora ﬁber supplier to verify its sustainable forest management
practices. To this end, the certiﬁcation systems 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.
• Continuous improvement in forestry practices.
• Compliance with legislation.
• Social development principles.
P&G is committed to strategies that reduce demand on theworld’s forest resources and will continue to:• Focus on source reduction or use of less ﬁber throughdevelopment of innovative technologies that provide
maximum product performance using minimal ﬁber.
• Evaluate the use of non-forest-derived sources of ﬁber,
recognizing that alternatives must also meet principles ofsustainable management.
• Use recovered ﬁber in our products when it can be done
without having a negative impact on product performance,
manufacturing efﬁciency, resource and energy usage andwaste generation.

P&G is committed to
strategies that reducedemand on the world’s
forest resources.

Performance Indicators
Environmental Protection

P&G 2006 Global Sustainability and Philanthropy Report49

Human and Environmental Safety of Our Products
Product Safety & Regulatory Affairs (PS&RA) is responsible for
ensuring that products and packages are safe for consumers,
safe for the environment and in compliance with laws andregulations where they are sold.
PS&RA also addresses other environmental aspects ofproducts and packages, such as their compatibility with
waste management systems, natural resource use or issues ofperceived safety. This organization is also responsible for thedevelopment, validation and adoption of alternatives to animal
testing and ensures that any claims the Company makes
about the safety or environmental proﬁle of its products are
scientiﬁcally sound.
Risk assessment is the process the Company uses to evaluate
the safety of its products and ingredients. In this process,chemical hazard 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 eachbusiness unit work closely with product development teamsin the development, selection and formulation of productingredients and mixtures with acceptable risk proﬁles, as well
as satisfying other important business and consumer needs.
A key part of PS&RA is the Central Product Safety (CPS)
organization. CPS has direct responsibility for ensuring thatour products are safe for consumers and the environment. Its
primary role is to advance the science of understanding andevaluating the human and environmental safety and impact ofour products. It is helped in this process by an External Advisory
Board consisting of several distinguished academic scientists.
CPS’ 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 well as 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 soundmanagement of chemicals around the world by sharing our
toxicity information and establishing principles for promoting
the safe and responsible use of chemicals.

Web

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)

Science in-the-box Brings
Added Value to Consumers
Science in-the-box is a scientiﬁc information portal that tells
consumers about the science and innovation that make P&G’s
fabric and home care products work, as well as about thesafety and sustainability of those products. It also provides
access to our library of scientiﬁc publications and productsafety data sheets. Since its introduction, some half a million
people have gotten information from www.scienceinthebox.
com. Their feedback indicates that consumers want to learn
more about the products they buy. On our side, we see that
presenting this information to consumers helps build their trustin our brands.

Web

Science in-the-box has been a tremendous successand has served as a model for two more websites:
Beauty started a website that helps consumers
understand the science behind the Beauty brands;
it’s www.pgbeautyscience.com. And the Company
created www.pgperspectives.com to present ourviews on public policy issues.

Performance Indicators
Environmental Protection

P&G 2006 Global Sustainability and Philanthropy ReportCompliance with Laws and Regulations
There are numerous health, safety and environmental
requirements worldwide. Plants are subject to emission limits
and operating requirements embodied in these statutes,
regulations, laws and permits. It is P&G’s intent to comply withboth the letter and the spirit of statutes, regulations, laws andpermit requirements. Identiﬁed compliance issues are treatedseriously, and all non-compliance matters are resolved as
expeditiously as possible.
Summary of Fines and Violations
The table lists global data on environmental, transportation andworker health and safety violations over the past three years.
Number
Fines

2006

2005

2004

48
$127,50080$147,400

64$28,320

The number of ﬁnes and violations decreased over last year.
Most of the “air based” ﬁnes and violations were due to a newprocess start-up where control efﬁciencies were not being met,
as well as other paperwork violations. New hardware and permitchanges are being implemented that will eliminate a recurrence.
Summary of Fines and Violations
A breakdown of 2006 Notices of Violation (NOVs) and U.S.
Occupational Safety & Health Act (OSHA) interventions follows:
Water-Based
Air-Based
Solid Waste-Based
Paperwork
Transportation-Based
Other
Worker Safety (for U.S. OSHA, the number is 3)
Total

Number

Fines

26
5
1
0
13
0
3
48

$77,700$31,000
0
0$11,000$500$7,000$127,500

50

Environmental Liabilities
P&G is subject to various lawsuits and claims with respect tomatters such as governmental regulations, income taxes andother actions arising out of the normal course of business. We
are also subject to contingencies pursuant to environmental
laws and regulations that in the future may require us totake action to correct the effects on the environment ofprior manufacturing and waste disposal practices. Accrued
environmental liabilities were not material.
While considerable uncertainty exists, in the opinion ofmanagement and our counsel, the ultimate resolution of
the various lawsuits and claims will not materially affect our
ﬁnancial condition, cash ﬂows or results of operations.

Business Continuity
P&G’s Global Business Continuity Program ensures that all
critical sites and work processes evaluate their risk mitigation
programs, exposure to catastrophic events at P&G sites andsites 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 thendevelop contingency plans to minimize business interruption
if a disabling event should occur. Crisis Management teamstructures are deﬁned to manage business recovery using the
pre-deﬁned contingency plans. Tests are conducted annually
to ensure 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.

Performance Indicators
Social Responsibility

P&G 2006 Global Sustainability and Philanthropy Report

51

Social Responsibility
P&G and its employees have a long-standing commitment to being goodneighbors in places where we do business around the world. We show ourcommitment through both ﬁnancial support and volunteerism.

This year alone, P&G and The P&G Fundcontributed more than $115 million to
support our communities.
P&G employees and retirees have a long
tradition of volunteer involvement. We lend
a hand to those in need. We pitch in whendisaster strikes. We support the arts andeducation. We invest our resources – andourselves, through tens of thousands ofvolunteer hours – in our neighborhoods
around the world.
Through our P&G Live, Learn and Thrive
program, we focus most of our social
responsibility efforts on children in need. This
program concentrates our resources on aconsistent cause where the need is great andwhere there is a clear ﬁt with P&G’s strengths
and brands. Within P&G Live, Learn andThrive, our focus areas are education, cleanwater and health and hygiene.

Performance Indicators
Social Responsibility

P&G 2006 Global Sustainability and Philanthropy Report

52

P&G’s most important asset is its people. P&G works with its employees
to protect and enhance their health and well-being.

Medical
P&G’s Global Medical organization advises and assists
management and employees to assure a safe, healthy
work environment. Global Medical delivers preventive
health services and clinical services to all employees, at allsites. It manages health issues that may affect employees,
technologies and brands.

• Prevention: P&G supports initiatives that promote
preventive health care and healthy lifestyles.
Examples of regional wellness programs supporting the P&G
Healthy Living initiative include:

As P&G is a principles-driven company, all medical system work
follows this order of priority:
1. Save a Life (Protect P&G People)
2. Obey the Law (Protect P&G’s Reputation)
3. Protect Key Technologies (Protect Brand Integrity)
4. Enhance Speed to Market (Protect Emerging Technologies)
5. Optimize Employee Productivity
All medical standards of performance and standard operatingprocedures ﬂow directly from speciﬁc P&G Principles, Values
and compelling business needs.

P&G Healthy Living Initiative
P&G Healthy Living is a Company-wide strategy to partner with
our employees and their families to preserve and improve thequality of their health. P&G Healthy Living focuses on three
primary elements:• Partnership: P&G works with employees and their family
members to improve/preserve their health and wellness.
Employees and their families want to make an effort toachieve the best health they can, using the assistance theCompany provides. When our employees and their family
members are healthy, that’s healthy for P&G’s business, too.
• Quality: P&G supports initiatives that improve the quality ofhealth and identify high-quality health care providers to serve
our employees and their families.

Wellness Balance for employees in Latin America (currently
deployed in Guatemala, Mexico, Peru and Venezuela).
This program is intended to promote healthy lifestyles tohelp employees to face a complex and demanding work
environment. This is done through a holistic approachthat integrates the Employee Assistance Program, physicalexamination program, health risk evaluation program,physical ﬁtness promotion, programs for providing healthierfoods in Company cafeterias and during breaks, wellness/
medical information, yoga/massage/other relaxation tools,
and personalized health advice from health professionals,
nutritionists and sports trainers.

P&G Wellbeing for employees in Western Europe (pilot tested
in Germany, Switzerland and Italy, and deploying this year in
the rest of Western Europe). This program is intended to help
employees achieve sustainable peak performance at work
continued on next pagePerformance Indicators
Social Responsibility

P&G Healthy Living Initiatives
continued from previous page

while being better able to balance the demands of work andprivate life. Participants beneﬁt from the following:• Concepts for both body and mind, which enable (and allow)
them to make their own choices.
• Opportunities for awareness and education on well-being
topics, such as health, sports and food.
• Simplicity and support in seeking information on healthrelated issues.

Blueprint for Healthy Living for U.S.-based employees andfamily, 18 and older. The program offers online tools andtelephone support to educate and empower employees andfamilies to make the best health care and lifestyle-related
choices. This program works in conjunction with:• P&G’s health care providers.
• Individual site wellness programs.
• Recent changes to our U.S. health beneﬁt plans designed
to encourage the use of preventive health services andinterventions.
Blueprint for Healthy Living offers a comprehensive set ofservices, which includes:• A Wellness Assessment tool to address physical, emotional
and lifestyle risks.
• Personal Wellness Advocacy programs, which offer
education, assistance with lifestyle improvement and 24/7
counsel from registered nurses.
• Condition Management programs with customized guidanceon conditions that cause decreased quality of life, lost work
time and increased health care costs.
Participation is voluntary, conﬁdential and free.
We protect the privacy of employee data. All our medical andmedical plan-based employee and dependent data is highly
secured to assure that it remains conﬁdential.

P&G 2006 Global Sustainability and Philanthropy Report

53

Six Minutes Protect a LifeIn Asia/Paciﬁc, P&G is alerting women to the importance ofcancer screenings.
In Hong Kong, the Six Minutes Protect a Life campaign
raises awareness of screening for cervical cancer. The goal ofthis program, operated in partnership with the Hong Kong
Cancer Fund, is to increase the number of women getting
Pap smears. The campaign, held in May and June every year,
includes advertising, a promotion offering free Pap smears
and community education programs. This year, celebrity
entertainer Karen Mok was added as campaign ambassador.
P&G Hong Kong also donates $39,000 to the Hong Kong
Cancer Fund annually.
The rate for Pap smears has gone up from 47 percent to over
60 percent since the Six Minutes campaign began in 2001.
P&G Taiwan, in partnership with the Taiwan Department of
Health, has been working for 12 years to raise awareness ofbreast cancer self-exams. It is estimated that the number ofwomen doing self-exams has risen signiﬁcantly over the past
10 years.
But awareness levels remain low in remote areas, where a2006 survey showed that 77 percent of women don’t know
about breast self-exams. P&G donated $31,000 this year to
the Foundation for Breast Cancer Prevention & Treatment tohelp women in remote areas learn about self-exams.

Performance Indicators
Social Responsibility

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 the communities surrounding its operations,as well as to protect its assets, ensure business continuity andengender public trust. 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 people are our mostimportant asset.
• Construct our facilities so as not to compromise the safety
and health features designed into them.
• Monitor progress toward our objective of preventing injuries,
illnesses and incidents. We will continually assess andimprove our safety and health technologies and programs.
• Have every employee understand and be responsible forincorporating safe behavior in daily business activities. Every
employee is trained to work in a safe and healthy manner.
• Have operating standards, practices, systems and resources inplace to implement this policy.

P&G 2006 Global Sustainability and Philanthropy Report

54

Worldwide Health, Safety & Environment Systems at
Manufacturing Operations
Health, Safety & Environment (HS&E) is a global communityof resources responsible for ensuring that all manufacturing
facilities worldwide are operated safely and legally; thatprocess hazards are minimized or eliminated; that healthrisks are identiﬁed, managed or eliminated; and that wastefrom 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 953 full-time equivalents,
up from 919 last year because of P&G’s acquisition of Gillette.
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 enable high-speed innovation.
P&G regularly veriﬁes that the Health, Safety & Environmental
program at all its manufacturing facilities meets the intent of
the global environmental management standard ISO 14001.
This year, we extended veriﬁcation to the global health andsafety management standard OHSAS 18001.
Veriﬁcation completed in September 2006 was conductedby ERM (Environmental Resources Management), a highly
respected international consulting ﬁrm in the ﬁelds ofenvironment, health, safety and sustainability.

P&G China Honored
for Employee Well-Being
China’s Ministry of Health has recognized P&G’s Huangpu
plant with a National Occupational Health Role ModelEnterprise award. This year is the ﬁrst in which the Chinese
government has presented awards for promoting occupational
health and safety.
P&G is the only U.S. company, and the only consumer products
company, to receive an award.

Performance Indicators
Social Responsibility

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 andregulatory ﬁnes, and HS&E personnel productivity. In addition,
we are routinely involved in studies led by GEMI (Global
Environmental Management Initiative, with a membership ofmore than 41 multinational companies) that survey several key
HS&E topics. As a result of this work, we have concluded thatcompared 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 dollar sales)– lowest 33 percent
Property loss (in dollars per billion dollar sales)– lowest 33 percent• “Best in class” HS&E operations costs (in dollars per
billion dollar sales) due to shift of more HS&E work to site
technicians than most other companies.
While P&G’s current situation is quite positive, our long-term
challenge is to continue delivering excellent benchmarking results.

Fire Protection Systems
P&G operates its ﬁre protection program on the basic principlethat each facility is unique and should have a program
designed to meet its 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 thefollowing key elements:• Protection Engineering• Maintenance and Inspections• Prevention Programs• Emergency Response• Qualiﬁed Personnel
Each facility has a ﬁre defense proﬁle that describes in detailthe program requirements.

P&G 2006 Global Sustainability and Philanthropy Report

55

Plant HS&E Leadership Training
A key indicator of Health, Safety & Environment (HS&E) systemcapability is the percentage of plants with trained and qualiﬁed
leaders. Leadership candidates train on-site for an extended
period after attending a week-long “distance learning” event
where their knowledge and ability to handle speciﬁc situations
are assessed. For full qualiﬁcation, the candidates mustcomplete a qualiﬁcation project at their own plant. Currently,
more than 89 percent of plants worldwide have leaders
qualiﬁed by Corporate/GBU staffs.
PERCENT OF PLANTS
WITH QUALIFIED LEADERS

76

04

82

89

05 06
HS&E

76

83

84

04 05 06
Fire Protection

HS&E Program Costs
There are two aspects of HS&E program costs:
1. Capital costs for new HS&E equipment.
2. People and operating costs for existing facilities.
HS&E capital costs for 2005-2006 were $39 million(approximately three times as high as last year) to ensurecompliance in our facilities. This included the purchaseand construction of pollution control equipment such aswastewater pretreatment systems and air emission controls.
HS&E total costs for operating existing sites in 2005-2006
decreased to $172 million. (This does not include the $28
million in revenue gained from recycling activities.)Performance Indicators
Social Responsibility

P&G 2006 Global Sustainability and Philanthropy ReportIndustrial Hygiene and Safety
The health and safety of Procter & Gamble employees areparamount in the principles of the Company.
Nothing we do is worth getting hurt.
Safety can be managed.
Every illness and injury could and shouldhave been prevented.
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 caserate (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 fromwork or days of 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, egonomics andconﬁned space entry have been implemented. No target has
been set for LWDC. Instead, incidents that potentially could
lead to lost workdays are managed.
The following data is based on criteria established by P&G for
use at all worldwide plants and technical centers. This year’s
total incident rate stayed nearly the same, at .42 versus .46
incidents per 100 employees, while the lost workday case rate
also stayed the same, at .16 versus .17 cases per 100 employees.
TOTAL INCIDENT RATE

(injury and illness per 100 employees)

.55

04

.46

.42

05

06

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

.21

.17

.16

04

05

06

56

40

million people are
infected with
HIV/AIDS

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
percent of the population. AIDS has become the leading causeof death in 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 with
AIDS, are treated consistently with the Company’s Purpose,
Values and Principles by the Company, their managers and coworkers. Among other things, that means that each individualis treated with dignity and respect, and that we do notdiscriminate against any individual based on any difference notrelated to performance. We treat employees with HIV/AIDS thesame as we treat those with other serious illnesses.
Speciﬁcally, an employee who is HIV-infected or with AIDS:• has the same employment rights and responsibilities asother employees.
• has the same eligibility for employee beneﬁts and programs,
including medical care and disability coverage, as noninfected employees.
• is afforded privacy and conﬁdentiality protection consistent
with the Company’s handling of conﬁdential, medical orother sensitive information.
• is provided management support to remain productive.
With HIV/AIDS impacting sub-Saharan Africa more than any
other area in the world, P&G’s sub-Saharan organization isleading the Company’s HIV/AIDS effort. P&G’s effort, whichbegan in 1998, was revised in 2004 to coordinate with thelatest national and international developments and standards.
The effort’s objectives are to:continued on next pagePerformance Indicators
Social Responsibility

HIV/AIDS
continued from previous page

• Use employee and family awareness and prevention
programs at our African locations to help prevent the spreadof HIV/AIDS.
• Offer medical plans that assist employees with HIV/AIDS
to get life-prolonging medication, and in some cases
supplement these plans with additional Company support.
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 awarenesstraining, voluntary counseling and testing for HIV/AIDS andsexually transmitted 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

P&G 2006 Global Sustainability and Philanthropy Report

57

Almost three-quarters of our employees participated. The
majority acknowledged the existence of HIV/AIDS and had
accurate perceptions of their personal risks. The majority knewof our workplace policy and were interested in our VoluntaryCounseling & Testing program. The next survey of this type will
be conducted during the ﬁrst quarter of 2007.
We used information from the prevalence 2005 survey to help
us provide adequate resources (e.g., beneﬁts, recruitment,
training) and focus them effectively. More than two-thirds of
our employees participated. Nearly all in the high-risk category(i.e., younger employees) participated, and their infection rate
was far lower than national averages.
Using results from this prevalence survey, we completed
an impact assessment. It conﬁrmed that we have the rightprogram in place to reduce/mitigate the effect of HIV/AIDS on
the business.

Web

For more information on P&G’s anti-HIV/AIDS work in
South Africa, please visit:www.pg.com/content/pdf/01_about_pg/corporate_
citizenship/sustainability/reports/pg_south_africa_
2004_hiv_aids_report.pdf.

Speciﬁc P&G activities to ﬁght HIV/AIDS in Africa include:
Awareness Training
Awareness training was launched in October 2004 andcontinued during 2005. We are using a Web-based portal,
weekly e-mailed curricula and special campaigns to educate
employees. The campaigns focus on special events (e.g.,
World AIDS Day, the Christmas season, Valentine’s Day,
Women’s Day and World TB Day), and the portal provides all
employees with access to more than 1,300 pages of
HIV/AIDS information.
Surveys
We have surveyed employees twice. In 2004 we assessed our
employees’ HIV vulnerability by exploring their knowledge,
attitude and practices (KAP). In 2005 we conducted ananonymous prevalence survey to determine the number of
employees who are HIV-positive.
The 2004 KAP survey enabled us to• Collect information to guide the development of acomprehensive HIV/AIDS strategy.
• Obtain baseline information against which to measure andmonitor efﬁcacy and impact of the program over time.

P&G treats employees with HIV/AIDS the same as those with otherserious illnesses.

continued on next pagePerformance Indicators
Social Responsibility

P&G 2006 Global Sustainability and Philanthropy Report

58

HIV/AIDS
continued from previous page

PUR Puriﬁer of Water and HIV/AIDS
People who have HIV/AIDS are more susceptible to waterborne diseases, including parasites, viruses and pathogenic
bacteria. Therefore, the global response to HIV/AIDS needs
to include provision of safe drinking water. In Haiti, Kenya,
Uganda, the Dominican Republic and an increasing number ofother countries, we are seeing that safe drinking water helps
improve the lives of people with HIV/AIDS.
Healthy Living Kits that include PUR are being provided inseveral countries by our partner organizations. Community
support groups are educating people living with HIV/AIDS
about the importance of safe drinking water in helping themfeel and function better. P&G has also made it possible forpeople with HIV/AIDS to sell PUR in their communities toearn income.
For more information on PUR, please go to page 68.

P&G participates in HIV/AIDS programs in Latin America andAsia as well. For example:
P&G Mexico joined with other large corporations in 2004
to form a business coalition called CONAES (National
Entrepreneurial Council on AIDS). The objective of CONAES isto “eradicate HIV/AIDS discrimination in workplaces.” P&G is
now a member of the Executive Committee of CONAES, which
has started designing a Latin American regional labor policy
on HIV/AIDS. To encourage more HIV/AIDS discriminationfree workplaces, CONAES plans to conduct a broad company
survey and follow up by presenting awards to companies thathave developed anti-discrimination programs and polices.
P&G China educates its employees about HIV/AIDS usinge-mail, websites, brochures and poster campaigns on WorldAIDS day. Medical staff provide prevention information to all
new employees.

Diversity Position
Diversity is a fundamental component of P&G’s culture andintegral to our “How to Win” business strategy for success.
P&G has a strong legacy of ownership, commitment andaccountability regarding diversity because we recognize thedirect link between the Company’s success, short-term and longterm, and engaging the full power of all our employees. We
believe a fully utilized and diverse work force creates competitive
advantage and fulﬁlls P&G’s Purpose, Values and Principles.
P&G is committed to being a leader. We want our brands
to lead in their categories and our Company to be a leader
in our industry and our communities. Our mission is to be,
and be seen as, the best consumer products company in theworld. In order to achieve our mission, we must be among
the best places to work and leverage diversity as a competitive
advantage. Our corporate challenge is to become the most intouch company in the world. To be in touch is to practice – andbelieve passionately in – diversity and inclusion.
To ensure we are “in touch” with our global markets,
customers and business partners, our business leaders
continued on next pagePerformance Indicators
Social Responsibility

P&G 2006 Global Sustainability and Philanthropy Report59

Diversity Position
continued from previous page

relentlessly pursue valuing, trusting, respecting and leveraging
individual differences and inclusion. Thus, we are more creativeand innovative in developing products and services that
improve the lives of the world’s consumers.
Leadership Focus and Accountability
A.G. Laﬂey, Chairman of the Board, President and Chief
Executive, holds himself accountable for leading diversity
and monitoring progress in every part of our Company. He
expects top leadership to hardwire diversity into their businessstrategies, establish clear expectations and demonstrate personalaccountability. This requires top management to show strong,
visible leadership, commitment and constant focus in order toachieve diverse leadership and work teams and robust systems
for ongoing measuring and tracking 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 30 ofﬁcers in the Company have diversity results tied
to their stock options awards, and strong diversity performanceinﬂuences top ratings. Diversity action plans are developed ineach region of the world to reﬂect the greatest opportunity foradvancement of local diversity strategies.
Talent Support and Development
P&G strives to build a diverse and fully engaged organization
by attracting the best talent from around the globe, leveraging
the full talent of each individual through effective assignment
and promotion planning processes, and executing withexcellence the critical systems that affect and support retentionof each employee.
We focus on establishing long-term relationships witheducational institutions that have diverse populations of highly
qualiﬁed students. To broaden our candidate base worldwide,
we have launched Recruitsoft, our ﬁrst fully global, web-based
candidate management system. We supplement our baserecruiting efforts by utilizing intern programs and participatingin recruiting conferences and by outreach to high school
students. We execute special programs such as INROADS
and P&G Marketing and Finance Summer/Winter Camps tointroduce students to P&G. Additional teams are available
to help with efforts to recruit women around the globe andHispanic, African-American, military and disabled candidates in
the United States.
Our foundation systems for ensuring employee retention include
effective ﬁrst-year orientation/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), andsupportive work/life policies and practices. Employee support
groups and network teams exist throughout the organizationand contribute strongly to effective recruiting, join-up anddevelopment efforts. These groups include women globallyand Hispanic, African-American, Asian/Paciﬁc-American, gay/bisexual/lesbian and disabled employees in the United States.
Inclusive Culture
P&G leaders are expected to build an inclusive work
environment that welcomes and embraces diversity – anenvironment where people feel comfortable being whothey are, regardless of their individual differences, talentsor personal characteristics. This is an environment that
continued on next pageP&G Seeks Local Womenin Saudi Arabia and Japan“Working at P&G is one of the greatest opportunities I havebeen offered in my life, especially when a working woman in
Saudi Arabia has limited choices,” a P&G Arabian Peninsula
employee says.P&G Arabian Peninsula hopes to attract more
local women and then to train and retain them. The Female
Talent Development Network helps them develop skills such aspresenting and debating ideas and leading teams.
P&G Arabian Peninsula is also ethnically diverse, with morethan 20 nationalities represented in its 850-person staff atthree manufacturing sites and two ofﬁces.
Equal opportunity for women is also an issue in Japan, where
advancement opportunities for women is distinctly lessencouraging than in other developed nations. P&G Japan
has gotten good results on its diversity program, with senior
management that is 25 percent women, compared to an
average 3.4 percent at other companies in Japan.
P&G Japan works with local governments and thought leaders
to promote diversity. This year, activities included collaboratingwith Hyogo Prefecture to improve education materials usedby local companies implementing diversity programs. P&G
also contributed speakers to universities and business andgovernment events on how to leverage diversity.
P&G Japan held its third Diversity Forum in spring 2006, inviting
local government leaders and thought leaders to attend.

Performance Indicators
Social Responsibility

60

P&G 2006 Global Sustainability and Philanthropy Report

Diversity Position
continued from previous page

provides everyone equal access to information, opportunities
and involvement so each person learns, grows, excels andmaximizes his or her personal contribution.
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 andnurture differences in management experiences, styles ofleadership, and problem-solving/decision-making approaches.
All employees have access to supportive and enabling policies
and practices in the areas of ﬂexible work arrangements,
family care, resource/referral services and personal wellness
management to improve work/life balance and productivity.
Employee surveys and culture sensing, as well as the diverse
leadership networks, provide advisory data and learnings to
top leadership about how to be more effective at leveraging
local customer/employee practices and beliefs.
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 to a focus on building effective
business and community partnerships in areas where we canmake 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 and mentoring/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 effectiveness of our contributions. Throughvolunteerism, P&G provides ongoing support, sponsorship andleadership for many civic, cultural and nonproﬁt organizations
across all geographies in which we operate. In 2003-2004, theP&G Fund, the Company’s philanthropic foundation, provided
more than $25.3 million for educational programs, $13.6
million for health and human services, and over $8.4 million
to civic, cultural and public service organizations that primarily
beneﬁt youth, women and minorities.
P&G is committed to the economic development of minorityand women-owned businesses and suppliers around theglobe. P&G has one of the oldest supplier diversity programsin the United States, spending more than $1.145 billion

across nearly 1,300 minority- and women-owned suppliers.
Additionally, P&G provides continuing leadership in theadvertising industry by partnering with our agencies to referapplicants to each other and help minorities gain entry into
commercial production companies.

Diversity Data
P&G continues to focus on diversity as a global strategy andexpects its work force to become increasingly diverse. Global
data on enrollment by gender is shown in the following table:
GLOBAL ENROLLMENT % FEMALEManagement
All Other Employees1

2006

2005

2004

39.0
39.0

38.0
38.4

36.7
36.9

The percentages of minority and female employees in the
United States are shown in the following table:
U.S. ENROLLMENT% Minorities
Management
All Other Employees1% FemaleManagement
All Other Employees1
1

2006

2005

2004

21.0
19.0

19.6
18.7

18.8
19.5

37.0
40.0

36.3
39.6

35.4
38.9

Administrative, Technical and Plant Technicians

Summary
In 2005, P&G’s solid progress in diversity was recognized inmany national surveys: Fortune’s America’s Most Admired
Companies (#1 in our industry category), one of Fortune’s
100 Best Companies to Work For, DiversityInc’s Top 50
Companies for Diversity (#27 from #30 last year), recognizedby the National Association for Female Executives as one of
the top 30 Companies for Executive Women.

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P&G 2006 Global Sustainability and Philanthropy Report61

collective bargaining where allowed by law. The Company
expects suppliers to uphold the same standards. Speciﬁcally:

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 maintainhigh ethical standards wherever we conduct business. We will
actively seek business relationships with suppliers who share
our values and promote the application of these high standards
among those with whom they do business. The Sustainability
Guidelines for Suppliers can be downloaded at:Webwww.pg.com/content/pdf/01_about_pg/ 01_about_
pg_homepage/about_pg_toolbar/ download_report/
guidelines_for_supplier_relations.pdf

Summary of our supplier guidelines:
1. We expect our suppliers to comply with all applicable lawsof their country, including laws relating to employment,
discrimination, environment, and health and safety.
Suppliers who knowingly violate laws or have repeatedproblems conforming to them will not receive our business.
2. Commercial bribery is illegal and subject to criminal
penalties in many 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 is strictly prohibited. Even inlocations where such activity may not, technically speaking,be illegal, it is absolutely prohibited by Company policy.
3. P&G supports universal human rights, particularly those of
our employees; the communities within which we operate;
and the parties with whom we do business. In our businessaward decisions, we will continue to place substantial value
upon incumbent and potential suppliers who consistently
respect basic human rights.
4. P&G utilizes fair employment practices, as well as strives toprovide a safe, healthful and productive work environment
for its employees. The Company respects employees’ rightto freedom of association, third-party consultation and• We will not conduct business with suppliers employing
child, prison, indentured or bonded labor, or using
corporal punishment or other forms of mental and physicalcoercion 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 otherforms of abuse.
• At a minimum, we expect our suppliers to comply with allapplicable 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 theenvironment. At a minimum, suppliers must meet all
current, applicable environmental rules, regulations andlaws in their countries.
The management system is owned by the Global Vice President– Purchasing and has three components:
1. Communicate – All purchasing personnel who interface
with suppliers are trained on the supplier guidelines andhow 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 theguidelines a condition of business and therefore grounds fordisqualiﬁcation for all new and ongoing supply agreements.
2. Check – Ongoing periodic performance assessments aredone as part of regular commercial and technical suppliervisits. Emphasis is placed on suppliers that are high-risk
because of country of operation or potential hazard. In
addition to these internal assessments, we have third-party
assessments to identify areas for improvement.
3. Correct non-compliance – When potential non-complianceissues are identiﬁed, they are communicated to the supplieras part of the closing meeting. Corrective actions including
formal notiﬁcation and a remediation action plan are thenimplemented. In some cases we require immediate action
to achieve compliance, or we halt business. These include
child or forced labor and egregious health and safety
violations presenting immediate danger to human health.
If a compliance issue is not resolved in a timely manner, thebusiness relationship is terminated.

Performance Indicators
Social Responsibility

Consumers
At P&G, “The Consumer is Boss.” We are committed tomeeting the needs of our consumers and providing productsthat improve their lives. We embrace and promote this mindset
throughout the development and marketing of our products.
We set out to delight consumers by bringing to market only
new products and product improvements that genuinely meettheir needs better than ever. Before establishing a project for
a new product or line extension, P&G technologists research
consumer needs in-depth to identify and understand thoseneeds that are not adequately met.
Following thorough screening of these products to ensure
safety and compliance with all relevant legal requirements,
P&G market researchers appoint panels of consumers to try out
the products and answer the key question: Do these products
better meet consumer needs in practice? Based on what
consumers tell us in these early trials, the test product may berejected or adapted and improved.
Our commitment to our consumers does not stop there.
When our products reach the market, we want to hear about
consumers’ experiences with them. They can easily reach our
Consumer Relations organization via toll-free numbers listed
on our packages, and websites . We learn a great deal fromthe more than 7 million consumers worldwide who contact us
every year.
Our skilled Consumer Relations advisors are expert in
responding quickly and effectively to occasional requests forurgent help (such as following a child’s accidental ingestionof a detergent), answering general questions and listening tocomments. Consumers call to ask for information or to tell
us about their experiences with a product – a delight or, lessfortunately, a disappointment. Listening to consumers enables
us to retain the features of our products that consumers like,make improvements where necessary, and address speciﬁc
issues such as difﬁculties with packaging or product availability
in their local stores. Consumer calls give us critical early
indications about acceptance of our new initiatives as well as
valued feedback about established products. These comments
have inﬂuenced product development, packaging, the way
we manage direct marketing and promotions, the way wecommunicate with consumers to enable them to get the very
best from our products – and more.
This consumer learning is so valuable to us that we have
implemented leading-edge tools to bring the voice of theconsumer to those who can make a difference within P&G.
In the United States and Western Europe, we have created

P&G 2006 Global Sustainability and Philanthropy Report

62“Listening to The Boss.” Via this internal website, P&G
managers responsible for product development, marketingand manufacturing listen to consumers describing theirdelights and disappointments with our brands. The website
is a library of selected and edited consumer calls, letters ande-mails. (Privacy guidelines are strictly adhered to.) A new
Consumer Relations system will provide even faster accessto worldwide consumers’ comments. This has already beenlaunched in Asia and will continue to roll out to all Consumer
Relations teams worldwide.
We listen carefully to consumers’ views on important topics
such as animal testing, waste management and others.
More details about our efforts in these areas are elsewherein this report.

At P&G, theconsumer is boss!

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63

Approach to Animal Welfare and Alternatives
P&G products are used in homes around the world 3 billion
times a day, and we are committed to safeguarding the healthof our many consumers.
Sometimes, to ensure materials are safe and effective, wemust conduct research involving animals. This is a last resort.
We consider such research only after every other reasonableoption 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 commentsfrom consumers about products they use. P&G is well-known
for leadership in developing alternatives to animal tests,
investing more than $200 million and helping to develop morethan 50 alternative methods.
We approach our work with respect, openness andresponsibility by using animals as a last resort, working withanimal welfare organizations and ensuring high standardsof care. We collaborate with governments and academia topromote the acceptance of alternatives. We actively shareour discoveries so that others can beneﬁt from them. Newsof our advances has been shared in more than 300 scientiﬁcpublications. We seek input from the world’s leading experts tocontinuously improve our approach.

Web

For details of our policy and practices please go to:
http://www.pg.com/science/animal_alt.jhtml

On this website you can also learn about:• Ongoing work to advance our animal welfare and animalalternatives programs in our regular Forward Focus
newsletter;• P&G’s participation in the 5th World Congress on Alternatives& Animal Use in the Life Sciences (2005), a leading global
scientiﬁc forum on reﬁning, reducing and replacing the useof animals in research.

Investing> $200 million
and developing

50
alternative
methods• The joint declaration by P&G and the Humane Society of
the United 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 therate at which alternatives are agreed upon, validated and put
into practice.
• P&G’s support of the European Animal Welfare andAlternatives Awards offered by EUROTOX and the Humane
Society International.

Web

For more technical articles regarding animal welfare,please go to:
http://www.pgperspectives.com/en_UK/general/
research-with-animals_en.html

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64

Iams Brings Health to Pets and Smiles to People
In Europe and North America, the Iams brand uses its
technologies and expertise to improve the health of consumers’
pets. Beyond that, Iams looks for opportunities to help dogs
and cats that don’t have owners and also to link pets withpeople they can help.
Here are some ways Iams is helping animals:
Royal Dutch Guide Dog Foundation
In the Netherlands, Iams’ Eukanuba brand is partnering with
the KNGF (the Royal Dutch Guide Dog Foundation) to
support the well-being of guide dogs used by people withsight disorders.
Eukanuba is donating puppy food for the guide dogs’
training program. The food’s high level of docosahexaenoic
acid enhances the dogs’ intelligence and makes them moretrainable. Guide dogs have high performance demands placedon them, and Eukanuba’s premium nutrition helps themmaximize their performance.
KNGF is the largest organization in the Netherlands training
guide dogs.
Friends for Life
To help the thousands of pets left homeless by hurricanes in
2005, Iams established the Iams Friends for Life Fund at theGreater Cincinnati Foundation. The fund raised nearly $60,000
for nonproﬁt organizations that cared for the pets, reuniting
them with their families where possible, or ﬁnding them new
homes. In addition, Iams donated more than 200,000 poundsof dog and cat food to shelters in the affected areas.
Iams will continue the Friends for Life Fund permanently,
with the mission of “bringing together people and pets for a
lifetime of health, happiness and love.”
Iams is also continuing its other efforts to ﬁnd homes fororphan pets. The annual Iams Home 4 the Holidays adoption
drive set a program record during the 2005 Christmas season
by securing homes for more than 328,000 pets. This wasachieved through a worldwide partnership with more than
1,900 shelters.
Working closely with the American Society for the Preventionof Cruelty to Animals, Iams introduced more than 400 U.S.
shelter organizations to the Meet Your Match Canine-ality
Adoption Program. This program makes better matches
between potential adopters and the available shelter dogs byassessing and color-coding pets and adopters. During a pilot

program at the Kansas Humane Society of Wichita, using MeetYour Match reduced pet returns by more than 50 percent.
Reducing Strays
In its efforts to control the population of stray dogs, Iams
granted two awards this year for mass neutering programs.
Turkey’s Fethiye Friends of Animals Association received 15,000
euros (US $18,425), and Romania’s ROLDA (Romanian League
in Defense of Animals) received 10,000 euros (US $12,283).
Mass neutering programs have reduced the number of strays,
improved the health of neutered strays and changed theattitudes of municipal authorities toward the managementof strays.

Web

To learn more about the Fethiye Friends of Animals
Association, please go to:
http://www.straydogsturkey.org
To learn more about ROLDA, please go to:
http://www.rolda.org
continued on next pagePerformance Indicators
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P&G 2006 Global Sustainability and Philanthropy Report

65

Iams Brings Health to Pets and Smiles to People
continued from previous pageAnd here are some ways Iams is helping pets to help people:
Handicapped in France Beneﬁt from MIRA Dogs
Iams France works with MIRA toward its mission to provide
dogs to handicapped people, at no cost. The dogs are trainedin Canada to help recipients become more autonomous and toadapt to everyday life and work toward rehabilitation. MIRA is
one of only a few associations providing dogs to children.
Iams’ role is to donate food for the MIRA dogs during training
and after they go to their new homes.

Web

To learn more about MIRA, please visit:www.mira.ca

Advertising Policy and Sustainable Development
If sustainable development is about ensuring a better qualityof life for everyone, now and for generations to come,then advertising plays a key role. Advertising helps informconsumers about products and services and facilitates
consumer choice. After all, it is consumers themselves who are
best placed to choose how best to improve their own qualityof life.
We believe advertising contributes to sustainable development
in a variety of general and speciﬁc ways. Achieving
sustainability in the marketplace requires effective competition
to drive innovation and increased efﬁciency. Competition
thrives on advertising, and advertising thrives on competition.
Innovation leads to better products and services, and morevariety and choice for consumers.
There are also many speciﬁc business-building opportunities inwhich advertising contributes to sustainable development byimproving lives around the world. Advertising:• Often involves health education and awareness raising indeveloping countries, such as in P&G’s Healthy Smiles dental
health campaign in China.
• Provides social or environmental messages as part of public
service or corporate campaigns. P&G’s Open Minds campaign
in India, for example, raised public awareness of the plight ofIndia’s working street children while collecting money to fundtheir education.
• Promotes innovative products that have environmental orsocial beneﬁts.

Two Efforts in Geneva, Switzerland,
Help Pets Help Adults and Children
A Swiss association that runs a shelter for the needy didn’t
want to turn away people with dogs. People coming to
Le C.A.R.E.’s shelter are lonely and in need of warmth andcompanionship, so welcoming their pets makes sense. Iams
makes this possible by supplying some 600 kg (more than
1,320 pounds) of Eukanuba food annually.
The ClairBois Lancy nursing institution, which takes care of
42 physically and mentally handicapped children, receives
biweekly visits from therapy dog Cleo. Cleo is a Bernese
Mountain Dog who belongs to a P&G employee andparticipates in the Pets as Therapy program. Staff at ClairBois
Lancy report positive physical and psychological responses fromchildren who interact with Cleo.

• Promotes more sustainable use of existing products tomaximize environmental or social beneﬁts. For example,
the WashRight campaign, run in Europe by P&G and othermembers of the European Detergents Association, promotes
correct usage of laundry products and efﬁcient use of waterand energy.
• Communicates the sustainability attributes and performanceof companies and other organizations offering products
and services as the public increasingly wants to know more
about them.
Despite contributions to sustainable development, advertising’srole and effects have been questioned. Advertising has been
blamed for spreading Western lifestyles around the world andfor promoting excessive consumption in developed countries.
Spreading awareness of how other people live is one of theinevitable consequences of the global media revolution. We
do not accept that people in developing countries should bedenied a better quality of life. The ﬁrst priority of sustainableconsumption must be to provide access to adequate
consumption opportunities for everyone. Nearly half theworld’s population lives on less than $2 per day. They needaccess to adequate products and services that can improvetheir daily lives.
In developed countries, the idea that advertising fuels overcontinued on next pagePerformance Indicators
Social Responsibility

Advertising Policy and Sustainable Development
continued from previous page

consumption overplays the importance of advertising, since
it cannot make people buy things they do not want or need.
Advertising can inform and inﬂuence and help consumers
make more informed decisions, but it is consumers whochoose how best to improve the quality of their own lives.
Advertisers alone are unable to regulate the overall demand forgoods and services.
However, there are clear responsibilities, as well as
opportunities, for advertisers such as P&G. There is a
responsibility to ensure truth in advertising and to ensure thatmessages are legal, decent and honest. We also assume our
responsibility to ensure the sensitive portrayal of all groups insociety, including women, children, the elderly and minorities.
For this reason, P&G actively supports truth-in-advertisingmechanisms and conforms to relevant national codes andguidelines wherever we operate.
The contribution of advertising to sustainable development is
discussed in more detail in the report “Industry as a Partner for
Sustainable Development – Advertising.” It was written by theadvertising industry in collaboration with the United Nations
Environment Program. P&G helped the World Federation ofAdvertisers and the European Association of Communication
Agencies write this report, which was presented at the World
Summit on Sustainable Development in 2002.

P&G 2006 Global Sustainability and Philanthropy Report

66

Personal Information Privacy
Advances in computer technology have made it possible fordetailed information to be compiled and shared more easily
and cheaply than ever, around the globe. That can be goodnews for society as a whole and for individual consumers.
At the same time, as personal information becomes moreaccessible, each of us – companies, associations, government
agencies, consumers – must take precautions against
misuse of that information. Several countries already havelaws protecting consumers from misuse of their personal
information, and many others are following 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 trustof consumers and all others who do business with us,
including employees, shareholders, retail customers andrecruitment candidates.
P&G’s robust privacy program is managed by a Global Privacy
Council. Our ﬁrst objective is to protect an individual’s
personally identiﬁable information as if it were our own. All
outside companies handling data on our behalf are required toabide by our privacy principles.
Externally, P&G has been a strong advocate of work within
the industry to protect the privacy of consumers. For example,
P&G has been a leader in the effort to make privacy notices
more consumer friendly, and have recently made our online
marketing statement available in 39 languages. We are also
active in the industry effort to create privacy and security
guidelines for Secure Vendor relationships.

Web

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 OnLine (BBBOnLine)
Privacy Seal Program. For more information about
BBBOnLine, visit:www.bbbonline.org/

Performance Indicators
Social Responsibility –Live, Learn and Thrive In Action

P&G 2006 Global Sustainability and Philanthropy Report

67

Live, Learn and Thrive In Action

P&G’s Purpose is to improve the everyday lives of the world’s consumers.
We have long made a difference in the causes we support, but we recognize we can makean even greater, more enduring impact by focusing on a consistent cause where the needis great and there is a clear ﬁt with P&G strengths, brands and current programs.

With that in mind, P&G has committed to focus on thedevelopment of children in need, ages 0-13, through ourglobal cause, P&G Live, Learn and Thrive™. P&G Live, Learn
and Thrive™ enables us to meet the needs of children in our
diverse communities around the world.

Live
Help children inneed live byensuring they
have a healthy
start.

Learn

Provide children
in need withplaces, tools andprograms thatenhance theirability to learn.

ThriveGive children inneed access toprograms thatdevelop the life
skills they needto thrive.

P&G Live, Learn and Thrive™ comes to life through programsaround the world and through our global signature program,Children’s Safe Drinking Water. It addresses the more than
4,000 children who die every day from diseases caused bydrinking unsafe water. While hundreds of country-speciﬁc
Live, Learn and Thrive™ programs beneﬁt children in P&G
communities around the world, the Children’s Safe Drinking
Water program brings P&G’s Cause to life on a global basis.

Following is a glimpse of some of these
programs, including Children’s Safe
Drinking Water.

Performance Indicators
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68

The global corporate signature program for P&G Live ,Learn and Thrive isChildren’s Safe Drinking Water. It addresses the more than 4,000 children who dieevery day from diseases caused by drinking unsafe water.

Live
Learn
Thrive• Providing safe, drinkable water

PUR and the Children’s Safe
Drinking Water Program
P&G’s PUR Puriﬁer of Water presents astounding opportunities
to improve and even save lives in the developing world, wheremore than a billion people lack access to clean drinking water.
Millions of them die, including about 2 million children.
PUR offers a quick, easy and affordable way to clean
contaminated water. It kills viruses and bacteria that cause
typhoid and cholera. It effectively reduces parasites, pesticides
such as DDT, heavy metals such as arsenic, and otherdangerous contaminants.
P&G’s main challenges regarding PUR are providing it where
it’s needed and ensuring its long-term use. To meet thesechallenges, P&G collaborates with public health organizationsin the poorest parts of the world to make PUR available andteach people how to use it. A major partner, for example, isPopulation Services International (PSI), which markets healthcare products in developing countries on a nonproﬁt basis.
P&G sells PUR at cost for everyday consumer use and for use
by global relief agencies. These agencies donate it to survivorsof emergencies such as the recent southeast Asia tsunami
and Pakistan earthquake. In sustained efforts, PUR provides
income-producing opportunities for local entrepreneurs, who
can buy it at cost and sell it to their neighbors at a small proﬁt.
Together, P&G and its partners develop and execute plans toreach people who desperately need PUR. These plans include
building awareness and acceptance of PUR as well as getting
community leaders and retailers to support its use. P&G offers
not only its PUR product but also its expertise in distribution,marketing and working with communities.
There are many ways P&G is tackling the enormous, urgent
task of reaching people around the world who need PUR. Hereare some of the past year’s activities.

PUR is like a mini water treatment plant. One
PUR packet transforms dirty water into 10 litersof clean, safe drinking water in 20 minutes.

More than a billion
people in the developingworld lack access toclean drinking water.

Performance Indicators
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P&G 2006 Global Sustainability and Philanthropy Report

P&G has provided 50 million packets of
PUR Puriﬁer of Water, enough to make
500 million liters of safe drinking water,in communities that are likely decades
away from public water treatment facilities.
We are working with a diverse group ofpartners to distribute the product in notfor-proﬁt social marketing and emergency
relief situations.
Social Markets• Haiti• Uganda• Dominican Republic• Pakistan• Kenya• Malawi• Ethiopia• Botswana• Democratic Republicof the Congo• Republic of the Congo• Indonesia

69

Global Focus Areas Speciﬁc to Children’s Safe Drinking Water

Central America

Disaster Relief• Indonesia – tsunami• Sri Lanka – tsunami• Maldives – tsunami• Bangladesh – ﬂoods• Haiti – ﬂoods• India – ﬂoods• Pakistan – earthquake• Iran – earthquake• Ethiopia• Botswana• Angola• Venezuela• Nicaragua• Chad• Sudan• Zimbabwe• Burkina Faso
• Liberia• Philippines• Romania• Guatemala• Haiti• Nicaragua• Dominican Republic

AfricaAsia• Chad• Botswana• Uganda• Sudan• Mozambique• Kenya• Liberia• Malawi• Zimbabwe• Ethiopia• Nigeria• Iran• Bangladesh• Pakistan• Vietnam• Sri Lanka• Indonesia• Maldives• IndiaWeb

For more information on safe drinking water,
please visit:www.pghsi.com/safewater/Performance Indicators
Social Responsibility –Live, Learn and Thrive In Action

AfricaEthiopian villagers had
no trouble understanding
how to use a ﬁltering
cloth to make clean water.
They live near a lake
which serves not only as asource of drinking water
but also as a bathing lake
for people and livestock.

A good place to introduce
PUR is the waiting roomsof clinics, where mothersof babies are alreadyfocused on child health.
Nurses show the mothers
how to use PUR and tellthem where they can
buy it.

P&G 2006 Global Sustainability and Philanthropy Report70

Ethiopia
The P&G Fund made it possible for PSI to bring the Children’s
Safe Drinking Water program to Ethiopia, one of the 10
poorest countries in the world. An estimated 250,000 children
die there every year from preventable diarrhea.
During a visit to a lakeside village, people from P&G and PSI
checked that PUR’s preparation instructions were clear in thelocal language. What about waiting 20 minutes for PUR towork, when the villagers don’t have watches? No problem:
They said they’d wait the amount of time it takes to cook“wat,” the local stew.
In another village, one mother introduced to PUR immediately
realized that the money she spends monthly to get clinic
treatment for her son’s diarrhea will buy PUR for an entire year.

Kenya
Children’s Safe Drinking Water expanded throughout all of
Kenya, following two years’ work to begin introduction of PUR
and to line up partners to help distribute it.
In addition to main partner PSI, an important partner is theChild, Family, and Wellness Shops, which has 67 retail outlets,
many times in remote, rural areas. Nurses work in many ofthese shops and also conduct health education in schools,
clinics and churches.

Jemima Odo (left), who has HIV and was featured inlast year’s Sustainability Report, wants readers to knowthat PUR is still keeping gastrointestinal distress awayfrom her and her AIDS-orphaned grandchildren. Jemima
maintains her weight of 110 pounds, compared to under
70 pounds before PUR. PUR also helps Jemima support
herself and the orphans; she buys PUR at cost and sells it
to her neighbors at a proﬁt.
This year, P&G employees touched by the story ofJemima and her grandchildren decided to show that“someone far away cares about them.” To help thefamily get better nutrition, they privately send money soJemima can buy beans and maize. A separate donation
has bought her a cow! Now, Jemima’s grandchildren
drink milk, and she reports this has greatly improved
their growth and health.
This campaign has inspired others to donate to Jemima’s
community. “I am reminded of the ripples that form
when a pebble is dropped into a lake,” one employee
says. “My help has been a pebble, and watching theripples has been deeply satisfying to me.”

Performance
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Section Indicators
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Sub-Section
SocialResponsibility
Title–
Live, Learn and Thrive In Action

Africa continued

More than 700 children
in Malawi’s orphanages
are drinking cleanwater because of PUR’s
donation.

PUR prevented
thousands of cases ofdiarrhea in Ugandanorphanages.

P&G 2006 Global Sustainability and Philanthropy Report

71

MalawiP&G brought Children’s Safe Drinking Water to Malawi. People
there commonly get their drinking water from crocodile- andhippo-infested rivers. Cholera outbreaks are common.
P&G is working with the Malawi Nurses Association to identify
four orphanages that could use contributions of PUR. A year’s
worth of PUR was sent home with 500 nurses. This donation
will help improve the nurses’ health and allow them to provide
better health care to others.
To start a PUR business that will be sustainable over the longterm, P&G also provided the nurses with an initial allotment of
PUR to sell through clinics and to use for generating income.
The income buys more PUR for them to sell. They make $5
proﬁt for every 240 PUR packets they sell – good money in acountry where the average income is less than a dollar a day.

UgandaP&G is continuing its Water for Africa program, funded by
the Company’s UK/Ireland Market Development Organization.
Water for Africa distributes free PUR to schools in high-needareas. For schools in refugee camps, the Samaritan’s Purse
organization donates buckets and cloths.
P&G is also continuing distribution of free PUR to the three
Ugandan orphanages “adopted” in 2004. Local nurses
estimate that PUR has prevented thousands of cases ofdiarrhea among children in these orphanages.
One of the three orphanages opened a new site, and PUR now
goes to that site as well.

Performance Indicators
Social Responsibility –Live, Learn and Thrive In Action

The Caribbean

P&G 2006 Global Sustainability and Philanthropy Report

72

Dominican Republic
P&G is teaming up with PSI to bring PUR into the Dominican
Republic. To accomplish this, PSI is working with P&G’s
traditional commercial distributors, Corripio and the pharmacy
chain Daniel Espinal, to provide PUR at low cost.
Impressed with PUR’s humanitarian service, Corripio is also
donating free advertising to PUR, and Daniel Espinal isconducting a campaign in which Dominicans purchase PUR todonate to the less fortunate.

Haiti
Eighty percent of disease in Haiti is attributable tocontaminated water. Even if the economy and unstable
political situation improve dramatically, it’s unlikely thateveryone in Haiti would have clean water piped into theirhomes by the midpoint of this century.
But PUR is making a big difference right now: In its two
years in Haiti, PUR has made possible 17 million liters of safe
drinking water.
During the past year, the U.S. government has provided
funding so PUR can be included in Healthy Living Kits forpeople with HIV/AIDS. The kits’ recipients report that it ishighly valued in helping them maintain their health.

Asia

Pakistan
Safe drinking water was one of the top needs for survivors ofPakistan’s October 2005 earthquake, in which more than amillion people lost their homes. Many people who had cleanwater in their homes before the quake needed PUR afterward.
Donations from P&G and from its employees as individuals
provided enough PUR to make 100 million liters of clean waterfor earthquake survivors. Greenstar, Catholic Relief Services
and UNICEF helped P&G get PUR where it was needed. USAID
provided buckets and cloths.
Coincidentally, PUR is produced in Pakistan, but not in the area
affected by the quake.
Separately, in Pakistan, P&G donated more than $1 million
to PSI, in order to set up “social marketing” of PUR. “Social
marketing” means that P&G sells PUR at cost to local vendors,
who sell it for proﬁt. PUR’s social marketing program provides
employment and stimulates local economies.

Performance Indicators
Social Responsibility –Live, Learn and Thrive In Action

P&G 2006 Global Sustainability and Philanthropy Report

73

Asia continued

A health study in Karachi’s slums was conducted by
Project Hope and the U.S. Centers for Disease Control.
The largest study ever conducted on the impact ofhousehold water treatment, it showed a 64-percent
reduction in diarrhea when households treated theirwater with PUR.

In India, three relief agencies began distributing PUR
and training community volunteers to demonstrate its
use. This teacher in Bombay toured slum neighborhoods
during monsoon season to demonstrate PUR.

Though these households have piped-in water, the pipes
leak, and sewage gets mixed in with the drinking water.

More PUR highlights for 2005-2006
PUR joined ninemillion.org with a donation of more than
1 million PUR packets. The group builds awareness of the
9 million children in refugee camps. Others in the group are
the U.N. High Commission on Refugees, Nike, Microsoft,
Manpower and Merck.
PUR also joined the Global Water Council, to address the needfor safe drinking water in schools. Current work focuses onproviding safe drinking water in Kenya. It includes a CARE
study in three Kenyan schools to determine the best approachfor enabling a sustained intervention in rural communities.
PUR is working with UNICEF to determine the best way toincrease provision of PUR in emergency relief situations andin schools. Efforts last year focused on providing safe drinking
water during the Pakistan earthquake. This year, efforts arefocusing on emergency relief work in Bangladesh, Vietnam,
Ethiopia and Mozambique, as well as providing more PUR in
Ugandan and Kenyan schools.
P&G scientists Phil Souter and Colin Ure won the National
Inventor of the Year award from the Intellectual Property
Owners Education Foundation. The award recognizes “thehumanitarian efforts that led to the design and developmentof PUR Puriﬁer of Water Sachets.”

How to Help
Service organizations and church mission groups are asking
how they can help get PUR to people who need it. If yourgroup is traveling to Haiti, the Dominican Republic, Uganda,
Kenya, Pakistan or Malawi, you can purchase PUR from
Population Services International and bring it yourself to
local people.
PSI
1120 19th Street, NW, Suite 600
Washington, DC 20036
Phone 202-785-0072

Webor visit:www.psi.org

Performance Indicators
Social Responsibility –Live, Learn and Thrive In Action

Live
Learn
Thrive• Keeping young girls in school• Lifting self-esteem and conﬁdence

P&G 2006 Global Sustainability and Philanthropy Report

Live
Learn
Thrive74• Providing a safe place to live
• Part of society• Reuniting children with their families

Always Keep the Girl in School

A Safe Place for Street Children

Always has completed the ﬁrst year of its Always Keep the Girlin School program in Kenya, helping 10,000 needy girls thisyear with their education. The program provides feminine pads
to schoolgirls and urges consumers to buy pads to donate,with Always matching their donations. An organization called
Girl Child Network is distributing the pads in rural areas andurban slums.

In Northwest Africa, P&G’s Ramadan des Coeurs (Ramadan ofHearts) program is helping homeless children get off the streets.

In Kenya, some 600,000 girls stay home from school several
days a month because they can’t afford sanitary protection. Or,
they use unclean cloth and even leaves, which often leads todiscomfort and infection.
Local media and activities such as youth concerts are helping
Always spread the word about why this problem deservesattention and how consumers can donate.
So far, the campaign has resulted in distribution of about 30,000
packages of Always to schoolgirls. Always also arranged forregistered nurses to visit schools to talk to girls about feminine
hygiene as well as childhood marriages and pregnancies.

This year, the P&G Fund granted money to an organization
called Bayti, whose mission is to reintegrate street children into
society and if possible, to reunite them with their families. The
money was used to purchase apartments to house 20 children.
P&G Northwest Africa is also sponsoring a media campaign topublicize the plight of the street children.
P&G Northwest Africa employees got involved personally by
volunteering for a day of painting at the apartments. Somebright colors transformed the apartments into more welcoming
places for lucky kids who ﬁnd safe haven there.

Performance Indicators
Social Responsibility –Live, Learn and Thrive In Action

Live
Learn
Thrive• Helping children stay healthy• Providing access to education

Manchay Vive Gets Children
to School
P&G Peru’s Market Development Organization is making
education possible for deprived children through its Manchay
Vive (Manchay Lives) program.
About 80,000 people live in Manchay, a desert area outside
Lima. The settlement sprang up when peasants were ﬂeeing
terrorist threats in their area in the 1980s and 1990s. Today,
the number of children exceeds the local public school’s
capacity, and their families can’t afford the $15-a-month fee tosend children to the Catholic school.
P&G Peru has committed $20,000 a year so that 60 children
can attend the parish school and receive two full meals eachday. The donation also covers a nursery for 40 pre-schoolers
whose mothers couldn’t take jobs for lack of child care. The
pre-schoolers also receive two meals each day.
Additional P&G funding goes to stafﬁng and supplying
the parish medical center. This enables preventive care andtreatment for 900 mothers and their children – about 3,000
people in all.

P&G Peru hascommitted to$20,000 a year to
improve lives.

P&G 2006 Global Sustainability and Philanthropy Report

Live
Learn
Thrive75• Sponsoring children’s education• Building self-esteem and life skills

Colors of Hope
P&G’s Market Development Organization in Israel is helping
a nonproﬁt organization named Tzeva to raise funds andawareness. The funding will build new “enrichment centers” inelementary schools around the country, and the awareness will
attract new volunteers to mentor children at the centers.
The objective of this Colors of Hope effort is to help children
8 through 12 who suffer from low self-esteem and unrealized
potential. Most of the children in Colors of Hope comefrom low-income families and have limited opportunities for
personal growth. Close relationships with adults empower
these children and enable them to fulﬁll their potential.
This year, P&G Israel’s Market Development Organization ran
a fundraising promotion, using media and campaigns in retailchains. The $63,000 raised will open a new Tzeva center. In
addition, P&G Israel is urging employees to volunteer as
Tzeva mentors.

Performance Indicators
Social Responsibility –Live, Learn and Thrive In Action

Live
Learn
Thrive• Success behaviors, succeed through knowledge• Building conﬁdence and skills for life

P&G 2006 Global Sustainability and Philanthropy Report

Live
Learn
Thrive76• Keeping families together

Let’s Succeed

Putting Kids Under a Decent RoofIn Dubai, orphans 8 through 13 can now have a three-day
summer camp experience hosted by P&G volunteers. The
camp focuses on self-esteem and success behaviors – setting
a goal, working toward a vision and succeeding throughknowledge, collaboration and discipline – in a fun and exciting
environment. The P&G volunteers mentor the children during
the camp day and even beyond.

With half a million French children living in poor conditions, P&G
and Fondation de France are getting kids into better housing.

Dubai’s camp, accommodating 36 boys and girls per session,
was started following the startup of similar camps in Jeddah
and Dammam in 2005, and plans are to expand further. The
camps invite not only orphans but also disabled children andchildren of prisoners.

The program is called SOS Enfance Mal-Logée (SOS Childhood
With No Decent Roof), and it has raised $2.2 million throughstore promotions since its establishment in 2000. The money
has gone to 134 projects at organizations that renovate
housing, ﬁx or donate furniture and help families get into
apartments with low rents.
Children who live in substandard conditions sometimes gettaken away from their families. Putting the families in better
housing keeps them together and gives the kids a better startin life.

The NGO Bait Alkhair is P&G’s partner in Let’s Succeed in
Dubai. In Saudi Arabia, partners include government agencies
and the Al Bir Association.

SOS Enfance MalLogée gets kids out of
inadequate housing.

Performance Indicators
Social Responsibility –Live, Learn and Thrive In Action

Live
Learn
Thrive• Providing health care for challenged children

P&G 2006 Global Sustainability and Philanthropy Report

Live
Learn
Thrive77• Enhancing special needs children’s lives

Healthy LifeStyle and Healthy
Generation

Barney Helps Children
Overcome Disabilities

Through P&G Russia’s Healthy LifeStyle program, more than
28,000 underprivileged children are beneﬁting from sports.
Healthy LifeStyle subsidizes access to sports facilities andprovides sports equipment to social organizations working withchildren. The program covers children from preschool throughhigh school in several regions.

Special-needs children in Greece are enjoying horseback riding,courtesy of Barney and P&G’s Therapeutic Riding program.

An innovative feature started in 2005 is the Healthy Generation
Project, offered to children at schools and nursery schools
in Novomoskovsk, where P&G has a plant. This program
uses state-of-the-art medical technology, such as computerequipment and biofeedback, to help children with healthand psychological problems. They receive computer-based
training for general health and for respiratory, musculoskeletal,
psychoemotional and cardiac health as well.

Learning to ride directly helps physical symptoms of certain
conditions, and for some children is the only time they canenjoy the sensation of walking and being independent. Thus,
Barney helps both the children’s health and their quality of life.

Healthy Generation is a joint project with P&G, the city of
Novomoskovsk, and local health and education agencies.

P&G Greece adopted Barney and ﬁnances his expenses so he
can help 30 children with their rehabilitation. The children aretrying to overcome physical, mental and emotional disabilities.

Performance Indicators
Social Responsibility –Live, Learn and Thrive In Action

Live
Learn
Thrive• Providing safe water sources

P&G 2006 Global Sustainability and Philanthropy Report

Live
Learn
Thrive• Children making a difference for lessfortunate children

Better Hygiene for VietnameseStudents

A Chinese New Year Gift
for Orphans

P&G Vietnam has partnered with the Binh Duong Labor Union
to develop a clean-water program for local schools. Under the
program, P&G donates funds so the labor union can construct
new water sources and replace rundown bathrooms.

As a treat for orphans for Chinese New Year 2006, China’s
Safeguard brand conducted a national campaign to bringcomfort and caring into their lives.

This year, clean water and new bathrooms came to four
schools in Binh Duong province’s rural Phu Giao district,
serving 1,700 students. The schools got new sanitary wells,
deep enough to provide water even during the dry season.
Work is underway to bring similar wells and bathrooms to six
additional schools in Binh Duong province.

78

Partnering with the China Children & Teenager’s Foundation,
Safeguard donated soap worth RMB 600,000 (nearly $80,000)
to orphanages around the country and encouraged consumer
donations of books, toys and stationery.
Safeguard spread the word via China’s most inﬂuential parenting
website (www.yaolan.com) and China’s 350 top stores.
Safeguard also brought a van to six big cities to collect donations.
Speciﬁcally for elementary school children, Safeguard sentout a “call to action” to the half-million children in its school
network. The children donated books, toys and stationery andalso made personal visits to orphanages.
The campaign yielded more than 4,000 donations. In time for
the New Year, Safeguard delivered the donations to more than
30 orphanages, reaching more than 50,000 orphans.

Safeguard delivered
donations to morethan 50,000 orphans.

Performance Indicators
Social Responsibility –Live, Learn and Thrive In Action

Live
Learn
Thrive• Access to education• Equipping at-risk youth with skills for life

Toronto Kids Get Skills to Succeed
Many children in a low-income suburb of Toronto need extra
assistance in order to do well in school. It’s a high-turnoversuburb with high-density living. Many residents are justlearning English, and single-mother households and violence
are common. A disproportionately high number of children areorphans and foster children. Schoolchildren tend to score low
on tests.
Because of a gift from P&G, students in grades 1 through8 can now attend the Homework Club at the Braeburn
Neighborhood Place. There they receive tutoring and help withhomework, and they enjoy activities that build learning skills inreading, writing, math and technology.
P&G also ﬁnanced expansion of a Kindergarten Readiness
Program, bringing it to two new neighborhoods. Pre-schoolers
in the target neighborhoods tend to show signiﬁcantdifﬁculty in establishing appropriate relationships and delays
in language, cognitive and motor skill development. The
Kindergarten Readiness Program offers activities such as
storytelling, music and crafts, to develop learning, language,
problem-solving and social skills as well as skills in following
directions and establishing healthy relationships.
Parents and teachers of children in these programs arereporting signiﬁcant improvements in learning and behavior.

Students receive
tutoring and enjoy
activities to build skills

P&G 2006 Global Sustainability and Philanthropy Report

Live
Learn
Thrive79• Provide an opportunity to improve skills• Fostering memories and forming dreams

Project Connect Turns Summer
into Learning TimeChildren who live in homeless shelters in P&G’s headquarters
city get a valuable treat in summer; through Project Connect,
P&G makes it possible for them to attend an activity andfood-ﬁlled summer camp. Between 200 and 250 children in
Cincinnati, Ohio, beneﬁt from this camp experience each year.
Project Connect gives children the basics for living, the time tolearn and the tools to thrive. The summer program includes
classroom learning, expeditions to libraries and museums, crafts
and physical activities such as swimming. P&G funds staff, ﬁeld
trips and supplies. All materials – even swimsuits and towels– are provided, as well as two meals and a snack daily.
The objective of Project Connect is for the homeless children
to improve their reading skills, learn new life skills, build
memories and form dreams.

Performance Indicators
Social Responsibility –Live, Learn and Thrive In Action

Live
Learn
Thrive• Helping children stay healthy

Dantrium IV Donation Saves a Life
A donation by P&G, plus quick response by medical students,
saved a little girl’s life in Ecuador this year.
She was undergoing a hospital procedure when she developed
a severe allergic reaction to the anesthesia. This happens
occasionally, and unless the patient receives P&G’s Dantrium IVdrug, there’s only a 10-percent chance of survival.
The hospital didn’t have Dantrium IV. But a doctor there
remembered that a team from the humanitarian organization
Interplast was in Ecuador on a two-week mission involving freereconstructive surgery for children. Interplast doctors always
carry Dantrium IV, donated by P&G.
Interplast doctors put the Dantrium IV into the hands of
medical students they were training. The students drove several
hours to deliver the drug to the hospital, where it pulled thegirl through her ordeal.
Interplast doctors travel to developing countries to operateon children with deformities. P&G Pharmaceuticals donates
Dantrium IV to them on an ongoing basis as part of its Live,
Learn and Thrive program. Reconstructive surgery made safer
by Dantrium IV helps children regain mobility and improvephysical appearance, both of which give them a better chance
to succeed in school and in social interactions.

Web

For more information on Dantrium IV, please visit:www.pgpharma.com.
For more information on Interplast, please visit:www.interplast.org.

P&G 2006 Global Sustainability and Philanthropy Report

Live
Learn
Thrive80• Providing nutrition and health care
• Mothers learn about baby careArgentina’s Babies Attend
Celebration of Life
Argentina’s Pampers brand continues its Mamás del Corazon(Mothers of the Heart) program, in partnership with UNICEF.
More than 100 Customer Business Development employees inArgentina worked on fundraising and publicity this year for a
UNICEF project called Redinfa. Redinfa works with low-income
families to improve the health, development and education ofyoung children.
With Pampers’ help, Redinfa sponsors Celebration of Life
events in communities around Argentina. At Celebration ofLife, babies get weighed and measured, to check their overall
health and nutrition. The goal is for at least 10,000 babies in
15 provinces to be monitored. So far, more than 2,200 babies
have been enrolled.
Redinfa is building a large network of volunteers in Argentina,
consisting of community leaders in the ﬁelds of nutrition, earlychildhood development, health care, etc. Each volunteer works
weekly with 10 local mothers to teach them about baby care.
In Argentina, about 85 percent of children under 2 live inpoverty, and 25 percent do not receive sufﬁcient nutrition.

Performance Indicators
Social Responsibility –Live, Learn and Thrive In Action

Live
Learn
Thrive• Improve reading while learning respect
for living things

Teaching Kids to Care
About Animals
Iams is partnering with Operation Outreach-USA, a nonproﬁtorganization that improves children’s literacy skills while
teaching respect for living things. Iams donates books about
interactions between people and animals. Each child receives
two books to use in the classroom and then take home.
This program reaches third-graders and their teachers in
61 schools. Over nine years, the program has reached nearly
52,000 schoolchildren. It operates in ﬁve states where Iams has
facilities as well as in New York City. This year, the program will
add involvement by Iams employees and local animal shelters.
“Students and teachers have all learned what it is to truly
give care and protection to our animal friends,” says one
teacher. “An additional beneﬁt to this program is the increased
sensitivity our children now have to the importance of being
kind to animals and each other as well.”
Operation Outreach-USA focuses on literacy, academic
achievement and the building blocks of strong character.

P&G 2006 Global Sustainability and Philanthropy Report81

P&G 2006 Global Sustainability and Philanthropy Report

Index
This is the eighth Sustainability Report for P&G’s worldwide
operations. Data in this report covers the period from July 1,
2005, through June 30, 2006. Financial information is given in
U.S. dollars.
This report was prepared using the Global Reporting Initiative’s(GRI) July 2002 Sustainability Reporting Guidelines. The
mission of the GRI is to promote international harmonizationin the reporting of relevant and credible corporate economic,
environmental, and social performance information to enhance
responsible decision making. The GRI has not veriﬁed thecontents of this report, nor does it take a position on thereliability of information reported herein.

Web

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

82IndexP&G 2006 Global Sustainability and Philanthropy Report

GRI#

Index Listing

Profile
1.1
1.2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9

Statement of vision and strategy
Statement from CEO
Name of organization
Major products and/or services, including brands, if appropriate
Operational structure
Description of major divisions, operating companies, subsidiaries, and joint ventures
Countries where operations are locatedNature of ownership
Nature of markets served
Scale of reporting organization
List of stakeholders

83

Page(s)

3
2
5
7, 13
10, 11, 13
11, 13
12
5
5, 11
5, 14
16

Report Scope
2.10
Contact person
87
2.11
Reporting period
5
2.12
Date of most recent report6
2.13
Boundaries of report (countries/regions, products/services, divisions/facilities/joint ventures/subsidiaries) and specific limitationsof scope
6, 10, 14
2.14
Significant changes in size, structure, ownership, or products/services that have occurred since the previous report16
2.15
Basis for reporting on joint ventures, partially owned subsidiaries, leased facilities, outsourced operations, and other situations
that can significantly affect comparability from period to period
N/A
2.16
Explanation of the nature and effect of any restatements of information provided in earlier reports
N/A
2.17
Decisions not to apply GRI
N/A
2.18
Criteria/definitions used in any accounting for economic, environmental, and social costs and benefits
30, 37, 51
2.19
Significant changes from previous years in the measurement methods applied to key economic, environmental,
and social information
N/A
2.20
Policies and internal practices to enhance and provide assurance about the accuracy, completeness, and reliability thatcan be placed on the sustainability report30
2.21
Policy for independent assurance
N/A
2.22
Means to get additional information and reports about economic, environmental, and social aspects of theorganization’s activities
14, 61
Structure & Governance
3.1
Governance structure of the organization, including major committees under the board of directors that are responsible
for setting strategy and oversight of the organization.
10, 183.2
Percentage of impendent board directors
19
3.3
Process for determining board expertise19
3.4
Board-level process for overseeing sustainable management19
3.5
Linkage between executive compensation and achievement of the organization’s financial and non-financial goals
18, 58, 59, 60
3.6
Organizational structure and key individuals responsible for oversight, implementation, and audit of economic,
environmental, social, and related policies
10, 31
3.7
Mission and value statements
8, 9
Shareholder mechanisms to provide information to Board
19
Stakeholder Engagement
3.9
Basis for identification and selection of major stakeholders
3.10
Approaches to stakeholder consultation
3.11
Type of information generated by stakeholder consultations
3.12
Use of information generated by stakeholder engagements
3.13
Explanation of whether and how the precautionary approach or principle is addressed by the organization
3.14
External developed, voluntary economic, environmental, and social charters, sets of principles, or other initiatives
to which the organization subscribes or which it endorses.
3.15
Principal memberships in industry associations
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.

19, 2020
N/A
N/A
21, 2227
23

IndexGRI#

P&G 2006 Global Sustainability and Philanthropy Report

Index Listing84

Page(s)Stakeholder Engagement (continued)
3.16
Policies and/or systems for managing upstream and downstream impacts
34, 36, 40, 48, 49, 59, 61
3.17
Approach to managing indirect economic, environmental, and social impacts resulting from its activities
9, 29, 33, 35, 40, 48, 49,
54, 55, 56, 58, 59, 60, 63, 75, 76
3.18
Major decisions during the reporting period regarding the location of, or changes in, operations
N/A
3.19
Programs and procedure pertaining to economic, environmental, and social performance18, 31, 52, 53, 55
3.20
Status of certification pertaining to economic, environmental, and social management systems.
N/A
GRI Content Index
4.1
Table Identifying Location of Indicators

82

Performance Indicators
Integrated Indicators
Economic Indicators
Direct Economic Impact – Customers
EC1
Net Sales
EC2
Geographic breakdown of markets

14, 33
P&G reports data by global business units.

Direct Economic Impact – Suppliers
EC3
Costs of good, materials, and services purchased
EC4
Percentage of contracts that were paid in accordance with agreed terms, excluding agreed penalty arrangements
Direct Economic Impact – Employees
EC5
Total payroll and benefits broken down by country or region

35
N/A

37, 55

Providers of Capital
EC6
Distributions to providers of capital broken down by interest on debt and borrowings, and dividends on all classesof shares
See Our Annual Report
EC7
Increase/Decrease in retained earnings at end of period
See Our Annual Report
Public Sector
EC8Total sum of taxes of all types broken down by country
N/A
EC9
Subsidies received broken down by country or region
See Our Annual Report
EC10
Donations to community, civil society, and other groups broken down in terms of cash and in-kind donations per typeof group37, 67
Environmental Indicators
Materials
EN1
Total materials use other than water, by type
EN2
Percent of materials used that are wastes

41
41

EnergyEN3
EN4

Direct energy use
Indirect energy use

43
43

Water
EN5

Total water use

44

Biodiversity
EN6
Location and size of land owned, leased, or managed in biodiversity-rich habitats
EN7

Major impacts on biodiversity

P&G does not track biodiversity land use
as in general we do not operate in these areas.
P&G does not track biodiversity land use
as in general we do not operate in these areas.

IndexGRI#

P&G 2006 Global Sustainability and Philanthropy Report

Index Listing

Environmental Indicators (continued)
Emissions, Effluents, and Waste
EN8
Greenhouse gas emissions
EN9
Use and emissions of ozone-depleting substances
EN10
EN11
EN12
EN13

NOx, SOx, and other significant air emissions by type
Total amount of waste by type and destination
Significant discharges to water by type
Significant spills of chemicals, oils, and fuels in terms of total number and total volume85

Page(s)45
We do not use ozone depleting substancesin our manufacturing operations.
47
46, 4747
N/A

Environmental Impacts of Products/Services
EN14
Significant environmental impacts of principal products and services
40, 48, 49 – Please visit www.scienceinthebox.com
EN15
Percentage of weight of products sold that is reclaimable at the end of the products’ useful lifeand percentage that is actually reclaimed
P&G is a consumer goods company.
End use of products generally means
product is disposed of.
Compliance
EN16
Incidents of and fines for non-compliance with all applicable international declarations/conventions/treaties,
and national, subnational, regional, and local regulations associated with environmental issues
50
Social Performance Indicators – Labor Practices/Decent Work
Employment
LA1
Breakdown of work force by region/country/type
LA2
Net employment creation and average turnover segmented by region/country

N/A
N/A. We do not track this data.

Labor/Management Relations
LA3
Percent of employees represented by independent trade unions
LA4

While employees are free to join a union,
the Company does not track this data.
Policy and procedures involving information, consultation, and negotiations with employees over changes in thereporting organization’s operations (e.g. restructuring)
N/A

Health & Safety
LA5Practices on recording/notification of occupational accidents/diseases
50
LA6
Description of formal joint health and safety committees comprising management and worker representatives andproportion of work force covered by any such committees
54
LA7Standard injury, lost day, and absentee rates and number of work-related fatalities
50
LA8
Description of policies/programs (for the workplace and beyond) on HIV/AIDS56, 57 – Please visit www.pg.com/srTraining/Education
LA9
Average hours of training per year per employee by category of employee

We do not track this information.

Diversity/Opportunity
LA10
Description of equal opportunity policies or programs, as well as monitoring systems to ensure compliance andresults of monitoring
36, 58, 59, 60
LA11Composition of senior management and corporate governance bodies, including female/male ratio and otherindicators of diversity as culturally appropriate
19 – Please see our Annual Report
LA17

Specific policies and programs for skills management or for lifelong learning

56

Social Performance Indicators – Human Rights
Strategy/Management
HR1
Description of policies, guidelines, corporate structure, and procedures to deal with all aspects of human rights
relevant to operations, including monitoring mechanisms and results.
61 – Please view our
Values and Policies, 8 & 9IndexGRI#

P&G 2006 Global Sustainability and Philanthropy Report

Index Listing86

Page(s)Strategy/Management (continued)
HR2
Evidence of consideration of human rights as part of decisions, including selection of suppliers/contractors.
HR3

61 – Please view our
Values and Policies, 8 & 9
Description of policies and procedures to evaluate and address human rights performance within the supply chain
and contractors, including monitoring systems and results of monitoring.
61 – Please view our
Values and Policies, 8 & 9

Non-Discrimination
HR4
Description of global policy and procedures/programs preventing all forms of discrimination in operations

Freedom of Association
HR5
Description of freedom of association policy

Child Labor
HR6
Description of policy excluding child labor as defined by ILO Convention 138

Forced/Compulsory Labor
HR7
Description of policy to prevent forced labor

61 – Please view our
Values and Policies, 8 & 9

61 – Please view our
Values and Policies, 8 & 9

61 – Please view our
Values and Policies, 8 & 9

61 – Please view our
Values and Policies, 8 & 9Social Performance Indicators – Society
Community
S01
Description of policies to manage community impact
Bribery & Corruption
S02
Description of policy, procedures/management systems, and compliance mechanisms for organizations andemployees addressing bribery and corruption

20, 34

61

Political Contributions
S03
Description of policy, procedures/management systems, and compliance mechanisms for managing political lobbying
and contributions
61 – Please view our
Values and Policies, 8 & 9
S04
Awards received relevant to social, ethical, and environmental performance
15
Social Performance Indicators – Product Responsibility
Consumer Health & Safety
PR1
Policy for policy for preserving customer health and safety during use of products and services, and extend to which
this policy is visibly stated and applied, as well as description of procedures/programs to address this issue, including
monitoring systems and results of monitoring.

49, 62

Products & Services
PR2
Description of policy, procedures/management systems, and compliance mechanisms related to product informationand labeling.

49

Respect for Privacy
PR3
Description of policy, procedures/management systems, and compliance mechanisms for consumer privacy.
PR9
Description of policies, procedures/management systems, and compliance mechanisms for adherence to standards
and voluntary codes related to advertising.

66
65, 66

P&G 2006 Global Sustainability and Philanthropy Report87

Contact

Copy Editor: Jan Sherbin

Contact
E-mail sustainrep.im@pg.com
Visit www.pg.com/sr© 2006 Procter & Gamble

Web

Design: RDG

Thanks to all the individuals around the world who
contributed information and data to this report. Special
thanks to Greg Allgood, P&G USA, for his photography,
used on the cover and throughout this report