1 92 90 90 1 S U
S US ST TAA II N
N AABBI LI L
I TTYY RRE EP P
OOR TR T

2

2001

SUSTAINABILITYREPORT

Statement of Purpose
We will provide products and services ofsuperior quality and value that improve
the lives of the world’s consumers.
As a result, consumers will reward us
with leadership sales, profit and value
creation, allowing our people, ourshareholders, and the communities in

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

which we live and work to prosper.

T

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

WWW Please visit P&G’s corporate Web

site for the latest P&G news andshareholder and career information:
http://www.pg.com

Table of Contents
CEO and Chairman’s Statement ...................3
Vision ........................................................4
Executive Summary.....................................5P&G Profile ................................................7
Policies, Organization &Management Systems ............................... 12
Performance ............................................ 30
Generally Applicable andRelevant Indicators ....................................... 31
Company-Specific Indicators .......................... 38

Sustainability In Action .............................. 44

FRONT COVER: Children gather outside a schoolsupported by the Dash Goodwill Mission – School for
Angola program. (see page 53)
References to trademarked products in this report are to trademarks owned by andregistered to The Procter & Gamble Company.

© 2001 The Procter & Gamble Company. All rights reserved.

3

CEO and Chairman’s StatementThe men and women of P&G share a deeply felt purpose:to improve the lives of consumers in every part of theworld. One important way in which we fulfill this purpose isthrough our commitment to the concept of sustainable
development, or sustainability, which we believe is integral
to both P&G’s future business success and to a truly better
quality of life for all the world’s consumers – now and forgenerations to come.
Sustainability is an important way for us to leverage thepower of innovation and global markets for the benefit ofeveryone – not just those in the developed world. We cannot
condemn developing countries to a life of poverty so thosein the developed world can maintain their lifestyles. But
neither do we have to presume that the only alternative is forthe developed world to reduce its quality of life. When weconcede to such a notion, we erect barriers to progress. We
pit the developed and developing worlds against one
another and create an adversarial environment in which
there are opposing sides, not common purpose. As aresult, progress stalls or moves only incrementally, andtwo-thirds of the world’s population continues to live on
the fringes of existence.
There is an alternative. It is based on the premise that we canmake markets work for everyone and ultimately make lives
better in every part of the world. In this report, you will findmany examples of P&G’s contributions to a better quality oflife through the creation of new products, new markets andaddressing new consumer needs. For example:• pregnancy education to reduce maternal mortality• Actonel for the treatment and prevention of
postmenopausal osteoporosis• dental hygiene education to improve oral health• a partnership with UNICEF to combat tuberculosis
Another important issue we would like to address is how the
global economic environment has impacted our business.
Fiscal 1999/00 was a difficult year for P&G and for its many
employees around the world. A strong plan was put in place
to re-establish the balance between top-line revenue growthand bottom-line earnings growth. However, over the pastfiscal year, we continued to face a challenging economic
environment, with a slowing U.S. economy and thepossibility of a recession. Key economies around the globe
were also slowing – Japan, some countries in Europe, someof the developing markets. In order to restore P&G’s ability
to compete more effectively and to grow more consistently,
the previous restructuring program was expanded to further
reduce overhead costs, resulting in staffing reductions acrossthe Company.

2 0 0 1

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

A. G. Lafley
President and Chief Executive

John E. Pepper
Chairman of the Board

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

R E P O R T

4VisionF

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

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

George D. Carpenter
Director, Corporate
Sustainable Development

5

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

Major Impacts Associatedwith Products and Services
Environmental Protection• Resource Use (Materials and Energy)• Water• Waste and Emissions
Social Responsibility• Health• Hygiene• Education

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

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

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

2000/01$39,244$12,406$1,694$2,922$2.15$34,387$9,792$12,0101999/00$39,951$12,483$1,994$3,542$2.61$34,366$9,012$12,287

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

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

2000/01$27,503,686

1999/00$28,292,768

1998/99$27,585,008

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

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

R E P O R T

6Diversity Data — Global Enrollment
P&G continues to focus on diversity as a global strategy and expects its work force to become increasingly morediverse. Global data on enrollment by gender are shown in the following table:
Global Enrollment % Female
2000/01
Management
34.5
All Other Employees*
38.0

1999/00
34.1
39.3* The category of “All Other Employees” continues to be an evolving global database as more of P&G’s plants areincluded. The database is expected to be complete by 2001/02. Changes in this category between 1999/00 and 2000/01
are reflective of the addition of more plant sites, which tend to have higher levels of male enrollment.

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

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

18.8

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

18.5

38.8

39.7

39.9

Manufacturing Resource & Waste Summary
All units are in thousands of metric tonnes unless otherwise noted. 1 tonne = 1,000 kg = 2,205 lbs.
2000/2001 Global Business Unit Details

MeasureTotal

Production

2000/01

1999/00

1998/99

BC

BFFC

FHC

FB

HC

Product Shipped
Raw Materials from
Recycled Sources

15,808208

13,936476

13,269
380

893
0

3,510
208

8,248
0

2,179
0

978
0

910(830)*
51%

879
55%

863
56%

57
34%

472
65%

140
62%

214(134)*
39%

27
54%

376(296)*
13
36
15

317
12
39
19

271
27
31
20

27
3.3
3.7
0.5

199
0.9
7.4
6.3

29
8.0
11.1
2.4

113(33)*
0.2
11.2
5.5

8.0
0.5
2.1
0.4

1,068
88.1
1.7

1,080
87.0
1.9

967
83.4
1.6

43
4.9
0.02

656
55.8
0.01

216
15.8
1.2

110
9.0
0.08

43
2.6
0.41

Waste
Generated Waste
Percent Recycled/Reused Waste

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

Other
Energy Consumption (105 GJ)
Water Consumption (MM cubic meters)
SARA Releases (1,000 tons)*** Waste from process sources decreased. Total wastes would be 80,000 metric tonnes less if demolition wastes were excluded.
** Releases defined in the U.S. Superfund Amendments and Reauthorization Act by the U.S. Environmental Protection Agency.

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

Occupational Health & Safety Data
Past three years’ global data on two key metrics forworker health and safety:
Total Incident Rate
(injury and illness per 100 employees)
2000/01
1999/00
1998/99
0.69
0.79
0.79
Total Lost Workday Case Rate(lost & restricted workday cases per 100 employees)
2000/01
1999/00
1998/99
0.24
0.35
0.37

Summary of Violations andInterventions
Past three years’ global data on environmental,transportation, and worker health and safety violations
and interventions:

NumberFines

2000/01
73$77,070

1999/00
48$13,400

1998/99
46$33,250

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

7

P&G Profile
markets approximately 250 brands of consumer products to nearly five billion consumers in more than
130 countries. The products include laundry detergents, toothpastes, shampoos, feminine hygiene products,
pharmaceuticals, snacks, diapers, cosmetics and cold remedies. P&G products are best known by their brandnames: Pampers, Tide, Ariel, Always, Whisper, Pantene, Bounty, Pringles, Folgers, Charmin, Downy, Lenor,
Iams, Olay, Crest, Vicks and Actonel.
P&G’s worldwide headquarters is located in Cincinnati, Ohio, U.S. The Company has on-the-ground operations
in more than 80 countries and employs nearly 106,000 people worldwide.
P&G is a publicly owned company. Its stock is listed and traded on the following exchanges: New York,
Cincinnati, Amsterdam, Paris, Basle, Geneva, Lausanne, Zurich, Frankfurt, Brussels and Tokyo.
As of July 31, 2001, there were 1,090,000 Common Stock shareholders of record, including participants in the
Shareholder Investment Program. Five billion shares of Common Stock have been authorized. About
1,295,738,000 shares were outstanding as of July 31, 2001.
This is the third Sustainability Report for P&G’s worldwide operations. Data in this report covers the period
from July 1, 2000, through June 30, 2001. Financial information is given in U.S. dollars.
For more information on P&G’s geographical operations, please visit our Web site at:
http://www.pg.com/about/news/world.htm
WWW For more information on P&G’s investor information, please visit our Web site at:
http://www.pg.com/investor
For more information on P&G’s products, please visit our Web site at:
http://www.pg.com/products/pg_products.jhtml?toolbar=/common/lbarmain.jhtml

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

LENOR
MR. CLEAN
TIDE
SWIFFERSUNNY DELIGHTSPIREECLIPSEFeminine Care
ALWAYSALLDAYSTAMPAX
WHISPER
Food & Beverage
CRISCOFOLGERSJIFMILLSTONE
OLEAN
PRINGLES

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

Baby CareBABYSANDODOTLUVS
PAMPERSPAMPERS & LUVSBABY WIPES
Beauty Care
COVER GIRLIVORYMAX FACTOR
OLAY
OLD SPICEPANTENE PRO-V
PERT PLUS
REJOICESAFEGUARD

SKII
SECRETVIDAL SASSOON
ZESTFamily Care
BOUNTYCHARMIN
PUFFS
TEMPO

Building for the Future$1 Million
Net Sales
1859

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

1837

1850

2 0 0 1

Regional U.S.
Markets1860

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

R E P O R T

1870

8

Financial Information
The Company reported net earnings of $2.92 billion, or $2.07 per common share, for the fiscal year ended
June 30, 2001. Results included a charge of $1.475 million after-tax related to its restructuring program.
Core net earnings for the fiscal year increased to $4.40 billion, excluding the restructuring costs. Core net
earnings per share were $3.12, an increase of six percent from the previous year. Fiscal year earnings grew due
to volume and sales progress partially offset by higher spending behind new initiatives. Net sales were $39.24
billion, down slightly from last year. Excluding a three percent exchange rate impact, net sales increased two
percent on flat unit volume.
Common share dividends were $1.40 per share in 2001. For the coming year, dividends will increase nine
percent to $1.52 per common share, marking the 46th consecutive year of increased common share
dividend payments.

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

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

2000/01$39,244$12,406$1,694$2,922$2.15$34,387$9,792$12,0101999/00$39,951$12,483$1,994$3,542$2.61$34,366$9,012$12,287

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

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

Net Sales by Global Business Units (Millions of dollars)
2000/01$11,991$11,660$7,257$4,353$4,139$(156)$39,244

Baby, Feminine, & Family Care
Fabric & Home Care
Beauty Care
Health Care
Food & Beverage
Corporate
Total

1999/00$12,044$12,157$7,389$3,909$4,634$(182)$39,951

1998/99$12,190$11,415$7,376$2,876$4,655$(387)$38,125

Building for the Future, continued...
P&G Brand
Advertising
1882

1880

ProfitSharing1887

Incorporated
Company
1890

1890

Beginningof P&G
Research &Development

Shortening &Oils Business

1900

1910

CanadaMarkets

P&G
Code of
Regulations

1920

9

Major Acquisitions
Acquisitions accounted for as purchases in 2000/2001 totaled $171 million. They include:

Dr. Johns SpinBrushMoist Mates

P&G purchased Dr. Johns Products, Ltd., makers of
the Dr. Johns SpinBrush – a high-performance batteryoperated toothbrush priced within a dollar or two of
manual brushes.

P&G purchased Moist Mates –a moist, flushable bath tissue
on a roll – from Moist Mates
LLC. The deal included brandinventories, patents andtrademarks.

Launched in late 1999, the SpinBrush
had done no consumer advertising until
the summer of 2001, instead driving
sales through positive word-of-mouth
from consumers, dentists and retailers.
Its success comes despite the fact that the
product is still not fully available throughall major retail chains.
The SpinBrush acquisition will double the sizeof P&G’s toothbrush business and fit well withCrest’s mission of providing consumers withmeaningful advances in oral health and hygiene.
SpinBrush’s patented design features both
stationary and high-speed oscillating bristles,
enabling people to use the manual brushing motion
they are used to while providing the enhanced
benefits a powered brush can deliver. The SpinBrushcomes in three versions – adult, youth and child.
To celebrate this announcement, Crest and Dr. Johns
donated 10,000 children’s SpinBrushes to charity. The
brushes went to needy children through the Toys forTots campaign and Crest’s Healthy Smiles program.

P&G relaunched Moist Mates
under the name Charmin Fresh
Mates and began distributing the product in July 2001
in a regional market covering the southeast and midAtlantic states.
Charmin’s research found that more than 60 percent of
adult consumers have tried some alternative form ofmoist cleaning including: sprinkling water on dry
toilet paper, using baby wipes or wetting a washcloth.
Charmin Fresh Mates gives consumers a soft, moist,
flushable bath tissue in a familiar, easy-to-use format– a roll.
Charmin Fresh Mates is the perfect companion toregular Charmin bath tissue. Together, these products
offer consumers a convenient way to choose dry,moist or both. The Charmin Fresh Mates starter kit
includes one roll of moist tissue with a dispenser thatis convenient and lightweight and hangs directly frommost existing dry-roll holders. Charmin Fresh Mates
refills are sold separately.

Major Divestitures
Divestitures accounted for as sales in 2000/2001 totaled $717 million. They include:• Biz• Clearasil / Biactol• Spic and Span / Cinch

External Recognition
Below is a list containing some of the key awards and recognition received by the Company over the
past year:

Corporate Awards• Dow Jones Sustainability Group Index, Market
Sector Leader-Consumer, Non-Cyclical (see page 11
for more details)• 1st on 100 Best Corporate Citizens rating, Business
Ethics Magazine, 2001 (see page 11 for more details)• P&G Thailand named first winner of Good Corporate
Governance and Internal Audit Award 2000

Building for the Future,
Beginning of
P&G Market
Research

1920

SafetyProgramStartedPhilippinesand U.K.
Markets

1930• 10th in second annual Reputation Quotient Study
conducted by Harris Interactive Inc. and The
Reputation Institute• P&G Singapore received Corporate Gold Award
2000 (see page 51 for more details)• National Osteoporosis Foundation Corporate
Leadership Award
continued on next page...

continued...
Tide
Introduced
1946

Synthetic
Detergents

Oral Care
Business

Overseas
Division
1948

1940

2 0 0 1S U S T A I N A B I L I T Y$1 Billion
Net Sales

1950

R E P O R T

FirstDisposable
Fluoride
Diapers
Toothpaste Business
1955

1960

1965
Affirmative
Action10
continued from previous page...

• 13th in World’s Most Respected Companies list
published by the Financial Times• 4th Most Admired Company in Spain publishedannually by the leading Spanish financial magazine,
Actualidad Económica
• Top 15 Responsible Corporate Citizens in India
reported in the Confederation of Indian Industry
quarterly publication, Green Business Opportunities• P&G received the Ohio 2001 Minority Business
Development Award (see page 43 for more details)• P&G named to Working Woman Magazine’s
Inaugural Supplier Diversity List in recognition of its
diversity initiatives, particularly in the area offurthering the growth and success of minority andwomen entrepreneurs• P&G awarded the 2000 Corporate Circle Award by
the U.S. National Medical Association for its role in
the national effort to facilitate the development,
dissemination and use of state-of-the-art biomedical
knowledge for improved therapeutics in AfricanAmerican patients• P&G named to the Forbes Magazine 40 List for its
efforts in developing strategic alliances andpartnerships that spur growth and innovation andserve customers better• P&G named Supplier of the Year and winner of theBest New Product Award for Swiffer by theAustralian grocery industry• For All Kids Foundation White Rose Award
presented by U.S. talk show host Rosie O’Donnell
honored P&G’s Chairman, John Pepper, and his wife,
Francie, for their leadership and dedication to helping
children and families in need over many years. Crest
sponsored this year’s event as part of the launch of
the new Crest Healthy Smiles 2010 Program (seepage 49 for more details)• P&G received the annual Hunger Hope Award 2000
from America’s Second Harvest, which recognizes
those who support their effort to end hunger in
America

Employee Awards• Fortune Magazine Best Companies for Asians,
Blacks and Hispanics 2001
• Hispanic Magazine Top 100 Corporations to WorkFor 2001 and Corporate Elite Award 2001
• The Vault Report, a popular career-help Web site that
reviews companies for best places to work, ranks P&G
among the Top Ten Places for Minorities to Work• The LATINA Style Magazine again selected P&G to
its Style 50 List, which recognizes the top 50 U.S.
companies providing the best professional
opportunities for Latinas• 11th on Top 35 Best Companies to Work For in
Canada, published annually by the Globe and Mail’s
Report on Business magazine• 2nd in Best Employers to Work For in India study
conducted by Business Today Magazine

Brand Awards• Kazakhstan’s Choice of the Year 2000 Award for Best
Shampoo (Pantene Pro-V) and Best Detergent (Ariel)and Best Producer of Hygiene Products• Marketing Intelligence Service’s Annual Build a
Better Mousetrap report selected three P&G products– Impress Ultimate Sealing Wrap, Crest Whitestrips
Dental Whitening System and Swiffer WetJet Hard
Floor Cleaning System – among its Top 10
Innovative Products of 2000
• Swiffer named Product of the Year 2000 by German
consumers in the trade magazine, Lebensmittel
Praxis (Food Practice)• Pantene Essentials wins “T” Award from Telva
magazine and Prix d’Excellence from Marie Claire
magazine, two of the most prestigious awards in
Spain’s beauty world• Sunny Delight recognized as One of the 100 Best
Ideas of 2000 by the leading financial magazine in
Spain, Actualidad Económica
• Sunny Delight and Pringles recognized among the
10 Initiatives of the Year by the leading Spanish
distribution magazine, Distribución Actualidad• Downy Wrinkle Releaser’s “Wrinkle Free LaundryWeek” won the Silver Anvil for Excellence inMarketing Consumer Products Packaged Goods• The “Tampax Total You Tour – Cultivating a
Relationship” received its second Silver Anvil for
Excellence in Multicultural Business Relations• P&G received recognition by the Chilean Health
Ministry for deployment of the Pampers Institute andHospital Program• Brazil’s Ace Detergent received the Golden LionAward in the Stunts/Events (Media) Category at the
48th annual Cannes International Film Festival

Environmental Awards• 7th in the Index of Corporate Environmental
Engagement and Performance, organized by the
U.K.’s Business in the Environment• P&G Cosmetics received Businesses for the Bay
Significant Achievement Award for successful
modifications made to its Hunt Valley, Maryland,
U.S., production facility (see page 37 for moredetails)• P&G Paper won Wisconsin’s Manufacturer of the Yearaward for productivity improvements at the Green Bay
facility
WWW For more information on awards received

by P&G, please visit our Web site at:
http://www.pg.com/about_pg/overview_facts/
awards_recognition.jhtml

Building for the Future, continued...
Environmental
Audit
Program1970

Toll-freeConsumer $10 Billion
HotlineNet Sales

Feminine
Protection
Businesses

1980

Statementof
Purpose
1987

World
Environment
Center Award
1992

Opportunity
2000
Award
1994

1990
1993
1st Annual Global
Environment Report

FutureShares19982001

2000

Dow Jones
Sector Leader&
Business
EthicsRanked #1
2001

11

Dow Jones Rates P&G as Market Sector Leader
P&G was awarded the top rating for sustainability
in consumer, non-cyclical products in the 2000 Dow
Jones Sustainability Group Index (DJSGI). This
recognition, by an independent body, isMember ofan acknowledgement of the efforts andSustainabilityGroup strategies P&G implemented over the
Index
past year to drive sustainability within
2000
its business and assessing andcommunicate the economic, social andenvironmental impacts of its products and services.
P&G was the top rated company in the Consumer,
Non-Cyclical market sector.
Dow Jones

In awarding P&G the top rating, the Index madereference to the Company’s deliberate strategies andactions. In particular, the P&G focus on personal
health and hygiene and the reduction of water usage
and pollution were acknowledged. In its summary,the report notes that “the company’s approach is toincrease shareholder value by contributing solutions
to problems, needs and concerns associated withthese two areas.” It recognizes how P&G has
carefully defined its key stakeholders – consumers,
communities, employees, shareholders, suppliers,
retailers, etc. – and created a dialogue with themthrough regular information, educational programs,
meetings, etc.
The DJSGI is a product of Dow Jones and the SAM
Sustainability Group (Switzerland) and is currently
licensed to 17 financial firms in eight countries. The
index is created by starting with the 2000 largest
companies in the Dow Jones Group Index. Each ofthese is rated on a set of sustainability criteria, and the
top 10 percent are included in the DJSGI. As part ofeach year’s launch, the top companies are featured.
You can access the profile on P&G
in .pdf format at:
WWW http://www.pg.com/content/pdf/
01_about_pg/corporate_citizenship/sustainability/2000DJSGIPGBIO.pdf

Business Ethics Rates P&G
Best Corporate Citizen

2001 SUSTAINABILITYREPORTP&G was named No. 1 by Business Ethics
Magazine in its article “100 Best Corporate
Citizens for 2001; America’s Most Profitable andSocially Responsible Major Public Companies.” Inawarding the No.1 ranking to P&G, Business
Ethics noted the Company’s service tointernational stakeholders, especially its generosity
in international grants and gifts in several
communities. This includes earthquake relief inTurkey, community building projects in Japan,
plus contributions for schools in China, school
computers in Romania, special education in
Malaysia and shore protection in France.

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

Business Ethics first introduced a ranking of the
100 Best Corporate Citizens in 1996, using data
gathered by in-house researchers. The 2000/2001
list was compiled using a new methodology fromthe previous years’ lists. The new methodology
uses the database compiled by the leading social
research firm, Kinder, Lydenberg, Domini and Co.,
Inc., which collects and synthesizes data on a widearray of stakeholder topics for more than 650 top
public U.S. companies.
For the complete story, please visit:
WWW http://www.business-ethics.com/
100best.htm#Cover Story

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

Contact:
Keith Zook
Corporate Sustainable Development
2 Procter & Gamble Plaza
Cincinnati, Ohio 45202
Fax: (513) 983-5226
E-mail: sustainrep.im@pg.com
P&G’s 2000 Sustainability Report can be found
at: http://www.pg.com/content/pdf/
WWW 01_about_pg/corporate_citizenship/sustainability/reports/
sustainability_report_2000.pdf
WWW

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

P&G’s 2001 Sustainability Report can befound at: http://www.pg.com/sr

R E P O R T

12Policies, Organization &Management Systems
S

ustainable development is about
improving quality of life foreveryone, now and forgenerations to come. P&G
contributes to this directly byproviding products andservices that improve thelives of consumers,
whether in terms of health,hygiene or convenience.
Through our activities wealso contribute to theeconomic and social wellbeing of a range of otherstakeholders, including
employees, shareholders,local communities in which we
operate, and more widely toregional, national and international
development. So P&G contributes tosustainable development both through what
we do and how we do it.
How we do it includes ensuring we address any environmental andsocioeconomic issues associated with our products and services. Thisis achieved by ensuring that the whole Company works within anagreed set of management systems and policies. Central to P&G’sorganization are our Principles, Values and Statement of Purpose.
These act as guidance for the development of our entire organizational
structure, wherever we are in the world. This year we have madefurther improvements to a number of policies, including vendor
selection guidelines, child labor policy and our global Health, Safety
and Environment (HS&E) systems.

Statement of Purpose
We will provide 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 leadership sales, profit and value creation,
allowing our people, our shareholders, and the communities
in which we live and work to prosper.

13

Values

P&G is its people and the values by which they live.

P&G People

Integrity

We attract and recruit thefinest people in the world. We
Leadershipbuild our organization fromwithin, promoting andrewarding people without regard
to any difference unrelated toIntegrity
performance. We act on theconviction that the men andwomen of P&G will always be ourmost important asset.

PEOPLETrust

We always try to do the rightthing. We are honest andOwnership
straightforward with eachother. We operate within theletter and spirit of the law. We
uphold the values and principles
Passionforof P&G in every action andWinning
decision. We are data-based andintellectually honest in advocating
proposals, including recognizing risks.

Leadership

Passion for Winning

We are all leaders in our area of responsibility, with adeep commitment to deliver leadership results. We
have a clear vision of where we are going. We focus
our resources to achieve leadership objectives andstrategies. We develop the capability to deliver our
strategies and eliminate organizational barriers.

We are determined to be the best at doing whatmatters most. We have a healthy dissatisfaction withthe status quo. We have a compelling desire to
improve and to win in the marketplace.

Ownership
We accept personal accountability to meet thebusiness needs, improve our systems and help others
improve their effectiveness. We all act like owners,
treating the Company’s assets as our own andbehaving with the Company’s long-term successin mind.

J. Floyd Byrd (1922 – 2000)
On December 29, 2000, J. Floyd Byrd, founder ofEnvironmental Control at P&G, passed away ofheart failure after 78 short years. After World War II,
he returned to the University of Cincinnati,
graduating in 1948 as a chemical engineer. He thencame to P&G and began a 41-year tenure. He retiredin 1989 as Manager of Environmental Affairs. Eight
years of full-time consulting followed; full time for
Floyd consisted of 60 - 70 hours a week.
Floyd was a rare blend of conservationist andindustrialist. He brought pragmatism to both sides.
He truly was a devoted custodian of our environment.
Floyd was the recipient of many awards andimportant appointments. He was designated an
official observer to the first United Nations “Man &His Environment” conference, held in Stockholm,
Sweden, in 1972. He served on the National
Academy of Science & Engineering Committee of
Water Quality Management. He received a
University of Cincinnati distinguished Alumni
Award in 1973 and was selected Engineer of theYear by the Engineering Society of Cincinnati in

2 0 0 1Trust
We respect our P&G colleagues, customers andconsumers and treat them as we want to be treated.
We have confidence in each other’s capabilities andintentions. We believe that people work best when
there is a foundation of trust.

1974. These are
only a few of his
many accolades.
He was indeed
highly respected
in his work andas a person.
Floyd authored numerous articles on the environmentand responsible pollution control. Many were
published and award winning. In 1969, he received theF. H. Warring Award from the Ohio Water Pollution
Control Association for contributions in industrial
waste control, and in 1985 he received theEnvironmental Regeneration Award for Distinguished
Leadership in Environmental Protection given by theRene Dubois Center for the Human Environment.
Floyd was president of the Water Environment
Federation and was a co-founder of the Ohio sectionof the Sierra Club. Floyd was a teacher. Whether it
was Eskimo rolls in a kayak or the disciplines ofenvironmental engineering, he taught, coached,mentored, encouraged and gave people the freedom toachieve their highest potential.

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

R E P O R T

14Principles

These are the Principles and supporting behaviors which flowfrom our Purpose and Values.

We Show Respect for All Individuals

We are Externally Focused• We believe that all individuals can and want tocontribute to their fullest potential.
• We value differences.
• We inspire and enable people to achieve highexpectations, standards and challenging goals.
• We are honest with people about their performance.

• We develop superior understanding of consumers
and their needs.
• We create and deliver products, packaging andconcepts that build winning brand equities.
• We develop close, mutually productive
relationships with our customers and our suppliers.
• We are good corporate citizens.

The Interests of the Company and theIndividual are Inseparable• We believe that doing what is right for the businesswith integrity will lead to mutual success for both
the Company and the individual. Our quest formutual success ties us together.
• We encourage stock ownership and ownershipbehavior.

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 to the 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
do business to better win in the marketplace.

We Value Personal Mastery• We believe it is the responsibility of all individuals
to continually develop themselves and others.
• We encourage and expect outstanding technicalmastery and executional excellence.

We Seek to be the Best• We strive to be the best in all areas of strategic
importance to the Company.
• We benchmark our performance rigorously versus
the very 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 acrossfunctions, sectors, 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 our customers, suppliers, universities andgovernments.

P&G’s Newest Board Members
The P&G Board of Directors recently elected two new members, Ernesto Zedillo Ponce de Leon and
Domenico DeSole.
Dr. Zedillo was president of Mexico from 1994-2000. “We are delighted to welcome Ernesto
Zedillo to our board,” said John Pepper, Chairman of the Board. “He is a distinguished leader
and economist. He drove unprecedented growth during his six years as president of Mexico.
His vast experience in social, economic and trade issues will add great depth and insight toour board.”
Mr. DeSole is president and chief executive officer of Gucci Group N.V. and chairman of theGroup’s management board. “Domenico is a disciplined and dynamic business leader withstrong experience in building global brands,” said Mr. Pepper. “He brings to us a unique
combination of financial and marketing experience that has propelled Gucci to renewed record
growth during the past decade.”15

Policies

These are the policies that support our Purpose, Values and Principles.

Child Labor And Worker Exploitation Policy
P&G does not use child or forced labor in any of our global operations or facilities. We do not tolerateunacceptable worker treatment such as the exploitation of children, physical punishment or abuse, or
involuntary servitude. We expect our suppliers and contractors with whom we do business to uphold the same
standards. Should a pattern of violation of these principles become known to the Company and not be corrected,
we will discontinue the business relationship.
For more information,
LINK

please click for full details.

Project HopeP&G China is a strong supporter of Project Hope,a national organization that builds schools inrural Chinese communities, many of which haveno schools. P&G donated a total amount of
RMB12 million (approximately $1.45 million) to
Project Hope, building more than 70 “P&G Hope
Schools” around China and bringing thousands ofchildren in poor rural areas back to schools.

Our Values and Code of Conduct
As an important part of our Corporate Social Responsibility program,
we have released a publication, Our Values and Code of Conduct.
This booklet provides sustainable development guidelines for businessconduct that are based on P&G’s Purpose, Values and Principles.
These key elements are of utmost importance for the proper conduct
and respect for all individuals in the quest for common prosperity.
WWW

http://pg.com/about_pg/corporate/sustainability/
substain_catmain.jhtml<ClickHere

Guidelines for Vendor Selection
We have developed a publication, Sustainability Guidelines for
Vendor Relations.
This document shares what we expect from our vendors in terms ofbusiness conduct and what our vendors can expect from us. It explainsthat the foundation of our vendor selection guidelines is our Statementof Purpose, Values and Principles.
We operate within the spirit and letter of the law and maintain highethical standards wherever we conduct business. We will actively seekbusiness relationships with vendors who share our values and promote
the application of these high standards among those with whom they
do business.
WWW

http://pg.com/about_pg/corporate/sustainability/
substain_catmain.jhtml

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

R E P O R T<ClickHere

16

The Global Sullivan Principles
P&G supports the Global Sullivan Principles for corporate social responsibility
and is one of the founding members.
The objectives of the Global Sullivan Principles are to support economic, socialand political justice by companies where they do business; to support humanrights and to encourage equal opportunity at all levels of employment,
including racial and gender diversity on decision-making committees andboards; to train and advance disadvantaged workers for technical, supervisory
and management opportunities; and to assist with greater tolerance andunderstanding among peoples, thereby helping to improve the quality of life forcommunities, workers and children, with dignity and equality.
WWW

For more information on the Global Sullivan Principles, visit:
http://www.globalsullivanprinciples.org

Reverend Leon Sullivan (1922 - 2001)
On April 24, 2001, P&G lost a friend, and the world lost a tireless advocate “for the
little people” when the Reverend Leon Sullivan passed away from leukemia at the ageof 78. He will be remembered by more than three million people in 17 countries who
have received job training through his Opportunities Industrialization Centers, whichwere founded in 1964.
In 1971, he became the first African-American to serve on a major corporate board when he was elected
director of the General Motors Corporation, where he served for 20 years. In 1977, he created the Sullivan
Principles, a code of conduct for companies operating in South Africa, which are now acknowledged as oneof the most effective efforts leading to the elimination of apartheid. In 1983, he founded the International
Foundation for Education and Self Help which launched programs to train teachers and bankers in Africa,
build schools, establish micro-credit institutions for debt relief through the People’s Investment Fund for
Africa, and hold the ongoing series of African/African-American summits.
In the late 1990s, he brought together world and business leaders to create the Global Sullivan Principles
for corporate social responsibility, which were formally launched with Secretary General Kofi Annan at theUnited Nations in 1999. P&G is proud to have been part of the effort to create the Global Sullivan
Principles for corporate social responsibility and to be one of its charter supporters. We remain committed
to their success.

Executive Compensation
Compensation for executives is based on theprinciples that compensation must (a) becompetitive with other high-quality companies inorder to help attract, motivate and retain the talentneeded to lead and grow P&G’s business; (b)provide a strong incentive for key managers toachieve the Company’s goals; and (c) make prudent
use of the Company’s resources. P&G has an
excellent record of recruiting, retaining anddeveloping its executive talent from within, an
achievement few other corporations have matched.
Executive compensation is based on performanceagainst a combination of financial and non-financial

measures, including business results and developing
organizational capacity. In addition, executives are
expected to uphold the fundamental principles
embodied in the Company’s Statement of Purpose,
Values and Principles plus the Environmental Quality
Policy. These include a commitment to integrity, doing
the right thing, maximizing the development of eachindividual, developing a diverse organization, andcontinually improving the environmental quality ofour products and operations. In upholding theseobjectives, executives not only contribute to their own
success, but also help ensure the Company’s business,
employees, shareholders and the communities inwhich we live and work will prosper.

17

Diversity PolicyP

resident and Chief Executive A.G. Lafley has
accelerated the Company’s focus on theadvancement of diversity as a business strategy
platform and increased commitment to targeted multicultural marketing. In a letter to all P&G employees,
Mr. Lafley stated:“In the end, winning will come from taking
full advantage of our diversity. Let’s harness
the full power of our organization so we canout-think… out-innovate… and out-perform
our competitors. Every time.”
P&G executive leadership has also increased
emphasis on diversity accountability. A Corporate
Diversity Leadership Council will shortly beappointed to evaluate strategies and progress
toward achieving diversity goals. One-to-one
diversity reviews with the chief executive and each
top business leader will link diversity performance
to ratings, promotions and stock options.
Over the past five years, P&G has doubled thenumber of women and U.S. minorities at the vicepresident/general manager level. Recently, two
African-Americans, Pamela L. Page and Albert H.
St. Clair, were promoted to vice president. P&G
has also added Ernesto Zedillo Ponce de Leon,
former president of Mexico, to its board of
directors. Mr. Zedillo adds tremendous stature anda different cultural perspective.
Externally, P&G provides continuing leadership in theadvertising industry by partnering with its agencies torefer qualified applicants to them and help
disadvantaged minorities gain entry to commercial
production companies. Internally, P&G supports
corporate network teams and formal training programs
conducted by internal and external diversity experts.
P&G is committed to helping its minority suppliers
prosper. With one of the oldest minority supplier
programs, P&G U.S. has increased purchases fromminority suppliers from $44,000 in 1972 to $548
million in 2000. The P&G Fund, the Company’s
philanthropic fund, provides more than $15
million for educational programs, institutions
and materials each year, with $4.5 million in2000 to nonprofit organizations that primarily
benefit women and minorities. Many of those
programs are further enhanced by thecommitment of P&G volunteer support.
P&G’s Executives-on-Loan program supports suchnational initiatives as the U.S. National Underground2 0 0 1

Railroad Freedom Center, and senior management
currently provides leadership in a variety ofcommunity organizations such as the AfricanAmerican Chamber of Commerce and the Hispanic
Chamber of Commerce. Individually, P&G employees
support such initiatives as the United Negro College
Fund (UNCF) and is the No. 1 company nationally in
the UNCF employee campaign.
P&G believes that diversity is a matter of ethics.
Every individual in the Company – and every partnerwith whom we do business – deserves an equal
opportunity to grow, excel and succeed with P&G.
Our values begin with “Respect for the Individual.”
Our commitment to diversity is a very tangible way
we put that value into practice.
Putting Our Values into PracticeSenior executives conduct in-depth diversity reviews
annually with organization heads. The annual
corporate diversity reviews assess diversity progress
and leadership accountability across business units.
Each organization establishes diversity goals,
considered one of the key measures in achieving
overall business results.
A.G. Lafley and Al Collins, Manager-Global
Diversity, have communicated an aggressive diversity
strategy for 2001 that focuses on leadership andaccountability. This strategy focuses on representation
at all levels in the Company and building a work
culture that allows every employee to contribute to his
or her fullest. Support systems for this plan include:• Establishment of a Corporate Diversity LeadershipCouncil• One-to-one diversity reviews with each top
executive and the chief executive• Linking diversity performance to stock options forthe top 30 managers• Highest ratings and promotion of business unit
leaders are measured against strong performance inleading and supporting diversity.
The role of the Corporate Diversity LeadershipCouncil is to increase employee trust in leadershipcommitment to diversity. The Council’s
responsibilities include evaluating strategies andprogress toward achieving goals, recommending
global strategies/actions for leveraging diversity as acompetitive advantage and providing perspective on
emerging issues.
LINK For more information on diversity,
please click for last year’s report.

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

R E P O R T

18

Data Privacy Policy
Because P&G believes in protecting the privacy of
personal information, we treat information provided
by an individual as that individual’s, entrusted to
P&G. We inform people about the use and handling ofdata they provide us. Our privacy policy applies
globally, and we follow applicable local data privacy
laws and regulations. When other companies arehandling personal information on our behalf, we
require them to abide by our privacy practices in thehandling of that data.
Examples of our commitment to data privacy include:• Eighty P&G Web sites in North America have been
awarded the Better Business Bureau’s BBBOnLine
privacy seal.

• P&G has qualified for the Safe Harbor, whichallows for the transfer of personal informationfrom European countries to the United States
based on principles negotiated between the U.S.
Department of Commerce and the European
Commission.
For more information on Safe Harbor,
WWW visit http://www.export.gov/

safeharbor/• P&G provides leadership for industry privacy
initiatives such as BBBOnLine and the Privacy
Leadership Inititiative.
For more information on the Privacy
WWW Leadership Initiative, visit http://

WWW

www.understandingprivacy.org

For more information on BBBOnLine, visit
http://www.bbbonline.org
WWW

For more information on P&G’s Privacy Policy, visit:
http://www.pg.com/privacyprinciples.jhtml

Animal Welfare
Animal welfare is important to P&G. We arecommitted to the ultimate elimination of laboratory
testing using animals.
P&G no longer uses animals in evaluating the safetyof our non-food, non-drug consumer products, except
when required by law. Animal research may still benecessary to evaluate the safety of novel ingredientsand new-to-the-world product types for which novalidated non-animal tests are currently available.

We believe the development of alternatives to animal
research makes good scientific, ethical and businesssense. We have invested more than $120 million in thedevelopment of alternatives that are helping to reduce,
refine and replace the need for animal tests.
For more information on P&G’s product safety
testing, please visit our Web site at:
WWW
http://www.pg.com/animalalternatives.

P&G Scientist Awarded Animal Welfare Prize
Three scientists have been awarded Europe’s
premier laboratory animal welfare prize for 2000,
The SmithKline Beecham Laboratory Animal
Welfare Prize. Dr. Frank Gerberick of P&G, Dr.
Ian Kimber of Syngenta CTL and Dr. David
Basketter of Unilever Research worked together
to develop a test for the potential of chemicals tocause allergic skin reactions, or skin sensitization.
The new test provides an alternative to theestablished guinea pig tests and requires the useof far fewer animals. It also provides robust
objective and quantitative data, which are more
readily understood by other laboratories. The data
generated provides a much sounder basis for theultimate development of non-animal models, atarget scientists continue to strive for.

The SmithKline Beecham Laboratory Animal Welfare
Prize is awarded annually by the Research Defence
Society for significant contributions to improving thewelfare of animals in laboratories or techniques that
reduce the number of animals required. The prize
rewards achievements in the three Rs – reduction,refinement or replacement – which are the guiding
principles of modern laboratory animal science andwelfare. The SmithKline Beecham Laboratory Animal
Welfare Prize, sponsored by SmithKline Beecham
Pharmaceuticals, is the largest laboratory animal welfare
prize in Europe. It is awarded to an individual or group
working in Europe for “contributions to improvementsin the welfare of animals in laboratory procedures orrecommendations or techniques that reduce the numberof animals required for laboratory procedures.”

WWW For more information, go to: http://www.rds-online.org.uk

19Environmental Quality Policy
We will provide products and services of superior quality and value that improve thelives of the world’s consumers. As a part of this, P&G continually strives to improve theenvironmental quality of its products, packaging and operations around the world.
For more information on the
LINK Environmental Quality Policy, pleaseclick for last year’s report.

Climate Change Policy
P&G is concerned about the potentially negative
consequences of climate change and believes thatgrowing scientific evidence, substantiating links ofgreenhouse gases to global climate change, warrants
prudent and cost effective action. We support efforts
to deal with the issue under the U.N. Framework
Convention on Climate Change (UNFCCC) andencourage all nations involved to search for consensus
solutions under the UNFCCC.
Relative to other businesses, P&G is not an energy
intensive company. Thus, any voice we have in thepolicy debate will be minor. However, we accept
responsibility for understanding the potential
contributions of greenhouse gases from our businessand taking prudent and cost effective actions. The

Company will continue its implementation of energy
conservation and efficiency.
If current predictions are correct, the social andeconomic costs of addressing global climate change will
be high, with different countries affected to different
degrees. Therefore, we strongly support continued
scientific efforts to understand the causes, consequences
and potential remedies for the negative effects of climatechange. This understanding is critical to ensure theinternational community takes not only appropriate andpositive action, but action which provides the maximum
flexibility, in both international agreements and innational regulations. This flexibility is essential tominimize negative economic and social impacts on
countries, on individual businesses and ultimately on thegeneral public.

Family Care Energy Reductions
P&G’s manufacturing sites focus on energy
reductions through loss analysis. This past year in
the United States, the Green Bay, Wisconsin, sitemade great strides in reducing the energy required toheat incoming river water. During a loss analysis
meeting, the team identified an opportunity torecover the heat which is lost through water(effluent) discharged to the local publicly owned
treatment works (POTW) and the Fox River. The
site evaluated the potential savings by transferring
this heat to incoming river water used in thepapermaking process. To accomplish this task, theteam determined they would need to decrease theamount of solids in the wastewater discharged to the
POTW in order to route the effluent flow through aplate and frame heat exchanger. The water treatedon-site for direct discharge to the Fox River was
already suitable for heat recovery.
Project scope involved installing equipment torecover more solids from the POTW effluent stream,transferring the heat from both effluent streams to

2 0 0 1the incoming river water. The project has beenenormously successful. The amount of steam
required to heat the incoming river water decreased
by 18.1 metric tonnes per hour, and the energy
required to dry the paper was reduced slightly.
Capital costs for improved solids removal, pumps,
piping and the heat exchangers totaled $2.5 million.
Estimated annual savings equal $1.5 million. Thesefigures equate to a payback of less than two years
for the capital investment, which is a great deal forthe environment and the Company.
Green Bay’s successful project has potential
reapplication at other sites. All Family Care sites
continue to address energy reductions through theirloss analysis program. Examples of other energy
savings projects include optimizing airflow on paper
machines, adding steam traps to improve steam
condensate recovery, using alternative fuels such as
peanut hulls and waste paper fiber for energy
production, and using gas turbines for co-generationof electricity and energy for drying paper.

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

R E P O R T

20Coastal Cleanups

Foundation for Seashore Protection Oxnard Beach Cleanup

Through the Fondation d’Entreprise P&G France
pour la Protection du Littoral (Foundation for
Seashore Protection), the Conservatoire du Littoral andP&G have joined forces in a project to protect theenvironment of coastal areas over the long term. The
Conservatoire du Littoral, part of the French Ministryof Environment, is chartered to safeguard the Frenchcoastline by protecting its natural sites and maintaining
the ecological balance. It purchases plots of land andrestores them so they can be opened to the public.
Today, the Conservatoire is one of the largest landowners of coastal areas in France (10 percent of theFrench coastline).
The P&G Foundation provides the Conservatoire withadditional means to enhance its knowledge of thenatural maritime environment through:• Financing basic research• Amplifying and diversifying communication• Implementing pioneer projects
In 1992, P&G France pledged to provide FF 1 million(or $150,000) per year during an initial five-year
period, which was renewed for an additional five
years, until 2002.
The partnership has provided important research,
including:• A study of the forests of the Mediterranean
coastline, which aims at identifying the best
methods to protect Conservatoire lands andimplement restoration after the frequent fires in
the area• A scientific study listing botanical species on all
Conservatoire lands, resulting in a proposal of
appropriate management methods to protect andenhance the botanical heritage• Inventory of the fauna on the lands belonging to theConservatoire, the study leading to the proposal of
new ways of managing the fauna• A major sociological study, “The French and the
Coast,” which assessed the opinion of real andpotential users of the Conservatoire’s lands
The Foundation also provides effective
communication through publications, scientificsymposia and educational programs. Currently, anInternet site for the Conservatoire is being developed
to provide benefits to scientists, the general public,
students and children.

In the United States, the Oxnard, California, paper
plant formed a strong environmental partnershipwith the city of Oxnard about five years ago. The
city contacted the plant to help coordinate ahazardous waste collection event. The city was in
the process of constructing a waste collection/transfer station, and P&G’s large parking lot worked
as a perfect location for the event.
Following the success of several hazardous waste
collection events, the plant became involved in the“Adopt a Beach” program. Local community groups
and businesses agree to “own” a certain stretch of
public beach and make several trips per year to keep
the beach clean. The city of Oxnard provides adumpster, and the California Coastal Commission
provides the trash bags.
The Oxnard plant owns the Mandalay beach, andemployees visit the beach three times per year tocollect trash. This effort leads to a win for theenvironment and a win for the local community.

Argentina Coastal Cleanup
P&G Argentina has sponsored, for the third
consecutive year, a coastal clean-up drive led by alocal environmental nongovernmental organization(NGO) called RECREAR. This NGO links efforts
with the U.S. Center for Marine Conservation.
About 6,000 students under the supervision of theirteachers carried out the actual cleanup. In addition to
identifying and collecting the debris, the students
classified it by composition to understand its origin
and develop a prevention plan for the future. The
cleanup work was carried out on coasts, lakes andthe Rio de la Plata river in the Provinces of
Buenos Aires (Vicente Lopez, Quilmes, San
Isidro, Mar de la Plata), Chubut (Puerto
Piramide) and Rio Negro (Barriloche).

21

Organizational StructureO

ur organizational structure makes it easy for innovation to flow across the enterprise and around the world;
to learn directly from consumers as early as possible; and to profitably commercialize the best ideas andinnovations quickly.
Global Business Units (GBUs) transfer product innovations across categories and geographic markets. Market
Development Organizations (MDOs) get initiatives to local markets faster, more creatively, at less cost. And our
Global Business Services (GBS) and Corporate Functions organizations leverage our size to deliver better-quality
services internally at significantly lower cost to the Company.
We designed our organization to be global and local at the same time – a paradoxical challenge that we believe
is key to our future success.

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22Management Systems
P&G’s Management Systems ensure that the Company’s policies are implemented in a consistent manner
throughout the world. These Management Systems align with the Company’s policies and promote a regularflow of information that helps the Company better manage its progress on elements of sustainable
development. This section provides an overview of our Management Systems.

Human Resources
Human Resources ensures that P&G has theemployees, organizational design and work culture todeliver business productivity and to continually
improve consumer, employee and shareholder value.
LINK For more information on Human
Resources, please click for lastyear’s report.

Employee Self-Service
P&G’s Employee Self-Service program enables
employees to safely and securely manage theiremployee data directly online, 24 hours a day. The
information available to employees includes:• Pay statement• Federal tax exemptions or filing status – view andupdate• Home address• Bank information - including direct deposit• Stock Options/Future Share accounts• Benefits Enrollment

Employee Privacy

data and following all data privacy laws. Only dataneeded to conduct business and provide for theneeds of employees will be collected. This data
will be protected with appropriate security systems
and used only for intended purposes. Employees
will have reasonable access to data that theCompany maintains about them and will have theresponsibility to maintain the accuracy of the data
which they supply.

Harassment Policy
P&G is committed to providing a harassment-freework environment that enables employees tocontribute to their highest potential. This maximizes
the competitive advantage of our diverse work force.
We will not tolerate harassment of anyone by anyone– including employees, suppliers, customers,
contractors and agencies. Every employee is expected
to be proactive in ensuring that the work environmentis free from harassment of any kind. Managers ofothers are responsible for setting clear expectations for
acceptable behavior in the workplace.

P&G respects the privacy of every employee and iscommitted to protecting the privacy of employee

Employee Training and Development
At P&G, our future business success is dependent on the excellent performance of all our people. We
believe it is the responsibility of all individuals to continually develop themselves and others. We build ourorganization from within, promoting and rewarding people based on their contributions and performance.
P&G employees have access to a variety of training programs, from traditional classroom learning toE-learning, which includes Web-based training, computer-based training, live distance learning (virtual
classrooms) and digital collaboration. Training material is delivered via a variety of methods, including theWeb (Internet, intranet and extranet), audiotapes and videotapes, satellite and cable TV,
and CD-ROMs.
P&G uses E-learning in many ways – from corporate-wide CEO webcasts, to computer application
training at employees’ desks via a Web-based course, to live distance learning delivery of traditionalclassroom courses.

Insurance Systems
The goal of the Corporate Insurance Program is to optimize the financing of insurable risks to minimize costs
while providing protection from the effect of potential major loss.
For more information on Insurance
LINK Systems, please click for lastyear’s report.

23

Human and Environmental Safetyof our Products

Worldwide Health, Safety & Environment
Systems at Manufacturing Operations

Product Safety and Regulatory Affairs (PS&RA)
addresses issues related to products and packages.
PS&RA is responsible for ensuring that products aresafe for consumers, safe for the environment and incompliance with laws and regulations where they are
sold. PS&RA also addresses other environmental
questions or issues about products and packages, such as
their compatibility with waste management systems,
natural resource use or issues of “perceived safety.”

Health, Safety and Environment (HS&E) is a global
community of resources responsible for ensuring thatthe approximately 130 manufacturing facilities
worldwide are operated safely and legally; thatprocess hazards are minimized or eliminated; that
health risks are identified, managed or eliminated; andthat all waste from sites is reduced as much as
possible. Several thousand employees spend all or a
portion of their time on HS&E management, which
totals more than 1,350 full-time equivalents.

For more information on Human and
LINK Environmental Safety, please click
for last year’s report.

LINK For more information on HS&E Systems,
please click for last year’s report.

Medical Systems
The Global Medical community of practice advises
and assists management and employees in assuring asafe, healthy work environment through the deliveryof preventive health and clinical services which
optimize business contributions. Medical systems
apply not only to people in manufacturing operations
but also to people in all Company operations (e.g.,
Research & Development, Sales).
Global Medical manages health issues which may
impact employees, technologies and brands. As P&G
is a principles-driven company, all medical system
work is undertaken in the following order of priority:
1. Save a Life (Protect our People).
2. Obey the Law (Protect Company Reputation).
3. Protect Key Technologies (Protect Brand Integrity).
4. Enhance Speed to Market (Protect Emerging
Technologies).
5. Optimize Employee Productivity.

All medical standards of performance and standard
operating procedures directly flow from specific P&G
Principles, Values and other compelling business needs.

Beijing Red Cross
P&G medical systems are helping to improve lives
as local communities learn about our science-based
practices. A prominent example of this was thecoverage last year that the Beijing Red Cross
provided on our emergency medical care systems intheir newspaper. The Beijing Red Cross also
arranged for one of China’s national television
stations, Beijing TV1 (BTV1) to broadcast a featureon the emergency care operations of our Beijing
Plant. China Central TV2 (CCTV2) invited one of
our Medical First Responders to share his
experiences on one of its broadcasts. In addition,
our First Responders participated in training otherFirst Responders in the local Beijing community.

Fire Protection Systems
P&G operates its fire protection program on thebasic principle that each facility is unique andshould have a program designed to meet its specificrequirements. The Insurance Division, working
with GBU fire protection leaders and local
management, determines the appropriate level offire protection for each P&G location.

Each facility’s program is organized and built aroundthe following Key Elements:• Protection Engineering• Maintenance and Inspections• Prevention Programs• Emergency Response• Qualified Personnel
Each facility has a fire defense profile that describes indetail the program requirements.

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Principal Industry & Business Associations
P&G holds membership in many industry, business and environmental associations whose activities are related to the Company’s. Below are recent changes.

Europe, Middle East and Africa

Latin America

In 2001, P&G joined CSR-Europe. For more
information on the organization, please see box below.

In 2001, there were no changes since last year.

LINK For a complete list,
please click here.

LINK For a complete list,
please click here.

CSR - EUROPE

First Latin American Conference on
Business Social Responsibility

CSR-Europe is a business-driven network with themission to help companies achieve profitability,
sustainable growth and human progress by placing
Corporate Social Responsibility (CSR) in themainstream of business practice. It seeks to develop
tools and capacity-building programs of bestpractice. It undertakes projects on specific issues,
such as diversity, CSR education, measuring humanrights performance, etc. It works in partnership withits member companies and with the European Union(EU) institutions. Examples include in-company
training, stakeholder events and a European roadshow, with the support of the European
Commission, to advocate the business case for CSR.
P&G is among more than 40 member companies at
the European level, and several P&G nationalorganizations belong to the National Partner
Organisations (NPOs) in the member states. With
the strong list of members and the 15 NPOs, CSREurope is a capable partner for dialogue with the EU
institutions on CSR matters, especially the
Directorates of Employment and Social Affairs, butalso the Directorates of Trade and Enterprise, andwith the rotating EU Presidencies.

The Venezuelan State Oil Company, together withkey business organizations such as the Venezuelan
Business Council for Sustainable Development(CEVEDES), carried out the first Latin American
Conference on Business Social Responsibility inJune 2001. P&G led creation of the Venezuelan
Chapter of the Business Council for Sustainable
Development in late 1999. P&G currently holds
the vice presidency of this organization. Thisconference was especially relevant because
Venezuela is at the dawn of a new stage in its
democratic life. This requires a greater effort tosuccessfully insert the country in the world
economy to accelerate economic growth andovercome the poverty and ignorance that afflict its
population. During the plenary session, P&G
shared its vision for how globalization helps
accelerate development of the country. P&G also
participated in a panel discussion of the bottomline benefits of adopting sound business
responsibility practices and exemplifying how
P&G Venezuela leads United Fund activities andhas carried out environmental education programs
among grammar school children in Caracas.

North America

In 2001, there were no changes since last year.

LINK For a complete list,
please click here.

Global Environmental Management Initiative
The Global Environmental Management Initiative (GEMI) is a nonprofit organization ofleading companies dedicated to fostering environmental, health and safety and sustainable
development excellence worldwide through the sharing of tools and information in order forbusiness to help business. Through the collaborative efforts of its members, GEMI promotes
a worldwide business ethic through example and leadership. P&G is a founding member andparticipates in several of the GEMI work groups.
GEMI’s Sustainable Development Work Group is creating a detailed and comprehensive sustainable development
planning tool that can be used by a company to establish baseline performance, assess opportunities, set goals andevaluate progress against objectives. This tool should address all three aspects of sustainable development:
environment, economic development and social equity.
As companies attempt to integrate sustainable development concepts into their business processes, it is critical to
articulate what the desired outcome should be and how it adds value. Through use of the planning tool,companies can help identify and shape the critical issues that are important to their particular business activities.
WWW For more inormation about GEMI go to: http://www.gemi.org

25

Asia

Worldwide

In 2001, there were no changes since last year.

In 2001, there were no changes since last year.

LINK For a complete list,
please click here.

LINK For a complete list,
please click here.

P&G Leads Technical Training
P&G Philippines Inc. (P&GPI) is leading theindustry association Chemical Industry Group(CIG) by sponsoring a technical training course forgovernment decision makers of the Environmental
Management Bureau (EMB). Through this training,government delegates were provided with a broad
range of technical tools to help them evaluate PreManufacture Pre-Import Notifications (PMPINs).
Speakers from CIG member companies shared
their expertise in toxicology and hazard
identification. P&G discussed environmental risk
assessment and chemical control regulations in the
United States and Canada.
One of the major achievements of the training course
has been the mutual understanding between the EMB
and CIG, which streamlines the PMPIN review
process by minimizing data requirements. The EMB
agreed to simplify the review criteria for notified
chemicals in the Philippines that have already been
approved for usage without restriction in the UnitedStates, Canada, EU, Australia and Japan.
This example shows how effective collaboration
between government decision makers and CIG
member companies can address the needs of bothgovernment and industry.

EMB participants, industry organizers andresource speakers

Leveraging Innovation andMarkets for Everyone
During a luncheon at the U.N. Headquarters in New
York City this past spring, the World BusinessCouncil for Sustainable Development (WBCSD)
released a report entitled Sustainability Through theMarket: Seven Keys to Success. The report, coauthored by Chad Holliday, CEO and Chairman of
DuPont, and John Pepper, Chairman of P&G, shows
how open, transparent markets can drive
sustainability and makes the business case for
implementing sustainable practices. It also outlines
seven keys to successful implementation andillustrates the economic advantages of doing so withreal-world case studies involving some of theworld’s most successful companies.
Speaking at the event, John Pepper outlined theimportance of making the market work foreveryone. “P&G products are sold in well over
130 countries around the world, in remarkably
different cultures and economic environments. But
we know that still only a minority of consumers indeveloping markets can afford our kinds ofproducts. Typically, 70 percent of the world’s
population is left out of the market when it comesto the latest technology and innovation. We knowthat entirely new business models must be
developed if we’re to make our products accessible
to the entire world – if we’re to truly improve thelives of the world’s consumers.”
Mr. Pepper provided examples of how P&G has
contributed to improved health care by providing
tuberculosis vaccinations in Africa through a
UNICEF partnership and to education in China bybuilding schools through a partnership called Project
Hope, with local governments (see page 15 for moredetails). He also challenged the people present tounderstand what a better quality of life would look
like for all people in the future, and he asked them toconsider how they could leverage innovation andmarkets for the benefit of everyone.
For the full report, go to:
http://www.wbcsd.org/
WWW newscenter/reports/2001/
stm.pdf

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Stakeholder Interaction
Communities
Each P&G production facility has site-specific activities to build constructive relationships with local
authorities, local industry associations, neighbors, local action groups, thought leaders and news media.
Depending on the culture of the community in which the plant is located, this can range from regular official
meetings during which new information is shared or questions are answered, to more formal meetings. This
could be, for example, a reception for the immediate neighbors, where information on the past year and plans forthe new year are discussed. P&G ensures continuity in community interaction by meeting regularly with local
authorities to update them on plant news. In the neighborhoods 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 of life in our local communities, and we support local
initiatives and encourage employee involvement. The most valuable community support we provide usually
involves not only writing a check but 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 tofocus heavily on education and health, with special emphasis on youth. It also leads us to build alliances withstrategic partners to achieve a better result than we could alone. We look to our people on the ground to workwith their local communities and government officials to learn where we can make the biggest difference.
In addition, P&G employees and retirees have a long tradition of volunteer involvement in the communities
where we live. We lend a hand to those in need. We pitch in when disaster strikes. We support the arts. We
support education. We invest our resources – and ourselves, through tens of thousands of volunteer hours –in our neighborhoods around the world.

Building A Great Wall of Health in the New Century
When the Chinese Ministry of Health (MOH)
launched a nationwide community health education
program, the Safeguard brand, known for its antibacterial benefits, responded by sponsoring the
program “Building A Great Wall of Health in the
New Century.”
Through this program, Safeguard provided two million
yuan ($240,000) to the Ministry of Health fordevelopment and distribution of educational pamphlets
that included information on the Safeguard brand.
During the program kickoff at the symbolic Great Wall in Beijing, MOH Vice Minister Peng Yu
expressed China’s appreciation of Safeguard’s effort to help China’s community health education and
P&G’s generous sponsorship of China’s education and health causes. P&G Chairman John Pepper
reaffirmed P&G’s commitment to improving Chinese people’s lives through superior products andcontributions to worthy causes.

Always School Program

P&G Pitches In to Help Feed Children

In the year 2000, P&G re-launched its Always
Schools Program in Egyptian schools. As part of
the $1 million project, Always is building 50 oneclassroom schools in rural areas over a period often years to help children, especially girls, pursue
basic education. These girls usually drop out ofschools because their families either cannot
finance their education or because there are no“girls schools” in the neighborhood. The schools
consist of one classroom, where girls of different
ages can pursue their education under thesupervision of the Ministry of Education.

P&G Peru pitched in to help feed approximately
1,000 children in the city of Lima. Critical cuts in
the government budget forced the City of Lima to
reduce the food supply in its largest child carecenter. P&G Peru joined forces with privatecompanies (Coca-Cola, Duke Energy) to upgrade
the food supply and maintain the quality of foodfor the children at an acceptable level.

27

Authorities: Local - Regional - Global
P&G communicates with local, regional andglobal authorities directly, as an individual company,
as well as through industry associations. Scientists andlegal experts in the P&G External Relationsorganization review existing and upcoming legislationthat is relevant to the Company and work withauthorities to ensure that policies take the needs andexperience of business into account. This is done via
direct meetings with the authorities and comments on
authorities’ position papers and industry position

papers. Activities like these can be very important toensure the Company’s needs are understood and taken
into account whenever decisions are being made that
can influence any aspect of P&G’s business.
P&G also works closely with authorities to provide
assistance for a variety of programs around the globe.
P&G provides business and scientific expertise, funding(either financial or donations of product) and employees’
time to a wide variety of projects.

Ace and Cholera Campaign
In mid-August 2000, an outbreak of cholera wasreported in Kwa-Zulu Natal, South Africa. The
epidemic spread rapidly, and to date on a national
basis, a total of 105,955 cases have been reported with
226 fatalities. Worst hit were the provinces
characterized by a high percentage of migratory
workers, poor sanitation facilities (in some instancesless than 20 percent latrine coverage), and a lack ofavailable drinking water. Environmental surveys
undertaken during the epidemic indicated that amajority of rivers in the affected areas were infectedwith V. cholera (01 type Eltor). This was important, as
this strain is resistant to the usual antibiotics used astreatment. Furthermore, most of the occupants of thesurrounding rural areas were reliant on use of thesestreams and rivers as their only source of water.
In response to this epidemic, a multiple-pronged
approach was adopted by health officials in an attempt
to combat the spread of cholera. One of the strategies
adopted involved educating people in these areas on
good hygiene and the risks associated with drinking
contaminated river water. This is where the Ace team
was of immediate help. A few years prior to theoutbreak, Ace had developed a water treatment
program that it had run in conjunction with the
Department of Water Affairs and Department of
Health. The program consisted of several posters
developed in English, Afrikaans, Zulu and Xhosa.
Two sets of posters had been developed: one set
identifying the four steps to purifying water, and thesecond listing the do’s and don’ts of good hygiene
practice. Having an existing template and program,Ace was able to immediately step in and offer help.

NGOs: Local - Regional - Global

First stop for the Ace team was to visit the Provincial
Hospital at Port Shepstone, one of the worst-hit areas in
Kwa-Zulu Natal province. Here both Ace posters andproduct were donated to the hospital staff to use and also
to give to patients returning to their villages after
treatment. The staff of the hospital were trained on thefour steps of purifying water and how to explain thisinformation to patients.
As the epidemic spread farther north, the Ace teamworked with local health authorities to donate productthat could be distributed in affected areas. A total of
5,280 liters of Ace were donated to the Gauteng
provincial health authorities to use during the
campaign, with emphasis on the need for educating
people about the risks of using contaminated waterand how to keep their drinking water clean.
Subsequent to the cholera epidemic, health authorities
have accelerated their drive to educate people
regarding clean drinking water, and there is hope thata recurrence can be prevented.

Scientific Community

For more information,
LINK please click for last year’s
report.

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

For more information,
LINK please click for last year’s
report.

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28Consumers
The consumer is boss at P&G. Consumers are
consulted at the beginning of every product’s
development. In fact, even before a project isestablished, P&G technologists conduct extensive
consumer interviews to find out what are the realconsumer needs, what are viewed as shortcomings incurrent products and where needs today are unmet.
Based on this consumer understanding, new test
products will be developed. After screening the
new test product to ensure there are no possible
safety concerns with the formula, P&G exposes thetest product to panels of consumers for theirevaluation. The test product will be adapted andfine-tuned to meet consumer expectations. The
adapted product will again go through safety andlegal screening to ensure it is safe and complies
with all relevant legal requirements.
Once the product is on the market, consumers willcontact us with their comments on day-to-day use of the
product. All over the world, P&G has Consumer
Relations organizations where consumers can get a
response to any questions or comments they may have.
These comments can range from product performance toaesthetics to requests for help with accidents with the
product (e.g., small children drinking liquid detergent).
P&G Consumer Relations people are trained to give
advice and background information and, where needed,
to channel questions to other professionals to ensure theconsumer is helped rapidly and effectively.

P&G receives more than five million consumer contacts
worldwide each year through 800-line phone calls,
E-mails and written correspondence. Comments – both
positive and negative – help us retain product features
consumers like and make further improvements. We’ve
made great progress in establishing one set ofstandards around the world to track comments, giving
us a consistent means of understanding consumer
needs, both globally and regionally.
For example, Safeguard introduced a bow-tie shaped bar
soap in North America based on the bar’s successful
reception in Asia. North American consumers let us
know they disliked it,
preferring the original
pillow shaped bar.
Acting on thisfeedback, we
reintroduced
the original.
Comments also give us insights into how
consumers perceive our products. Downyconsumers told us the name “Premium Care” madethem think this version carried a premium price. Bychanging the name to “Downy
Enhancer,” we helped
consumers understand they’regetting additional performance
benefits at a better value.

Combined Stakeholder Dialogues
P&G convenes workshops, inviting scientists, regulators and NGOs to come together to discuss specific issues
and to attempt to reach a common understanding. P&G gains invaluable experience from these types ofinteractions. These dialogues also hold great promise for frank discussions in the future.

Strategic Alliance to Combat Child Malnutrition
UNICEF and the P&G Nutrition Science Institute, along with other institutions that work actively in healthand nutrition in Venezuela, including the National Institute of Nutrition, the Center for Research in Nutritionof the University of Carabobo, the Bengoa Foundation, and the Society of Venezuelan Pediatrics, formed astrategic alliance to combat child malnutrition. The alliance incorporates: 1) research to better understandthe nutritional status of the Venezuelan population; 2) education and communication to raise awareness ofthe causes, consequences, and ways to prevent malnutrition; 3) sponsorship of annual scientific symposia toraise the awareness of health professionals of the nutritional status of the Venezuelan population; and
4) recognition of exceptional contributions of professionals with an annual award. The initial efforts of thealliance will focus on essential micronutrients, including iron, vitamin A, iodine and zinc.

Life Cycle Assessment
Life Cycle Assessment (LCA) is a tool that can be used to assess environmental improvements, over time, ofa product or service. P&G has a dedicated LCA team that supports the various business units by performing
LCAs on products and processes. In addition, P&G participates in industry LCA task forces and external
research projects. For example, P&G has joined OMNIITOX (Operational Models and Information Tools for
Industrial Applications of Eco/Toxicological Impact Assessments), a European Union research project under theCompetitive and Sustainable Growth Program. In order to identify research needs and fine-tune our OMNIITOX
detergent case study, P&G invited representatives from the academic community, the chemical industry (bothsuppliers and competitors), authorities and NGOs to a stakeholder workshop in June 2001. P&G has opened its
OMNIITOX work program for review by a wide range of outside experts and stakeholders.

29

Shareholders
Shareholders are important stakeholders at P&G.
P&G has 1.3 billion shares of stock outstanding.
These shares are owned by large institutions andmutual funds, retirement programs, individual
investors and employees throughout the world.
Approximately 50 percent of our shares are held byindividuals, with nearly 20 percent held by employees
and retirees. We work to increase the value of P&G
stock for all our shareholders in a variety of ways,
including growing the Company’s sales and earnings
each year.

Our measure for tracking our success for shareholders
is Total Shareholder Return (TSR). TSR measures
how much value our investors receive as a result ofowning P&G stock. We track TSR against 29
companies in similar industries, such as consumer,
health care and beauty products. P&G tracks
performance to compensate key managers based on
how well they increase shareholder value. Our
Shareholder Relations team is available every day toanswer questions, listen to shareholder feedback andprovide perspective on Company decisions.

Disaster Relief

Floods in Chile
Early this year, several regions of Chile suffered devastating floods that left thousands of people without
homes. P&G Chile helped in the relief efforts by providing 200,000 disposable diapers, 11,000 feminine pads
and other products such as toilet soaps, toothpastes, shampoos and even Pringles potato chips to alleviate thesuffering of the affected people. Part of the donation was delivered via a social assistance institution called“Hogar” and part was delivered directly to the city of Carol Urzua de Puente Alto, one of the cities hardest hit
by the floods.

El Salvador Earthquake
In January 2001, El Salvador suffered its worst tragedy ever as a major earthquake rocked the entire country
and totally devastated several small towns. Immediately after the disaster, P&G El Salvador confirmed thatall direct employees and their families were safe. However, six indirect employees suffered serious damage
to their homes, forcing them to move to shelters. We located these people and their families and helped themmove to homes out of the high-risk areas by paying them two months’ rent.
In the meantime, P&G Guatemala arranged the quick transport of two container trucks carrying 2,440 casesof Magia Blanca liquid bleach and several cases of Pepto-Bismol, Vicks VapoRub and Vicks Formula 44.
P&G Mexico and P&G Venezuela also delivered important product donations, such as diapers, soaps,
detergents, sanitary napkins, etc. To handle the donations, P&G worked closely with the Rotary Club of San
Salvador to assure effective delivery of the products to the most affected people, hospitals and shelters.

Rebuilding Communities In India:
A Partnership Project between SSP and P&G
In January 2001, the Kutch district (Gujarat, west India) was devastated by India’s worst-ever earthquake.
Damage was immense, and the loss of life and livelihood was catastrophic. The death toll exceeded 30,000
people, and more than 500,000 people were left
homeless. Rebuilding lives and livelihoods along withlife-support systems such as shelter, health care,schools, ration shops, water supply and sanitation, may
take years.
P&G collected approximately Rs. 42 lakhs (about$90,000) from employee and Company contributions.
These funds are being productively deployed inconjunction with a prominent Mumbai-based NGO,
Swayam Shikshan Prayog (SSP), which has priorexperience in earthquake rehabilitation work and also has an ongoing relationship with the United Nations
Development Program. The project with SSP is based on developing women’s groups for long-termsustainable growth of the affected villages through capacity building, rebuilding of community infrastructure
and provision of services.
As of July 2001, the project has spent Rs. 11.7 lakhs (about $25,000) for the construction of community
centers and the operational costs of running the rehabilitation program, benefiting 25 villages (3,750 families,
22,500 people) in the Kutch district.
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Performance
P&G has developed a comprehensive system of measuring performance throughout the Company.
The Company measures operational performance in order to drive continuous improvement.
This approach enables the Company to report data on a wide range of operational categories.

Process for Data CollectionAll data are reported on a global basis unlessspecifically noted. In order to achieve
consistency and to ensure a common understanding
throughout the organization, employees are trained in
how to report and document data. Metric units andEnglish are used as the business language, backed up
with local translations, where needed.

P&G’s data collection systems are designed to be
simple enough so that the people closest to the work,
regardless of location, can use the tools. This
simplicity enables the Company to collect data andupdate systems annually at a relatively low cost. Eachbusiness unit is responsible for accuracy andconsistency of the data.

To ensure the standard collection of data, theCompany has the following work processes in place:• Key terms are defined• The data to be collected are identified• Flow sheets are agreed upon regarding who collects
data and on what systems• Technically sound methods are used byfacilities to estimate data and validate year-to-year
results• Personnel are trained on the work processes, as
appropriate

Acquisitions and Divestitures
All facilities that operate during the fiscal year
reporting period, including recent acquisitions Dr.
Johns SpinBrush and Moist Mates, reported data.
The recent acquisition of Dr. Johns SpinBrush andMoist Mates didn’t materially change any of ourperformance data. For divestitures, wastes andemissions are estimated for the last year in which
they operated.

Major Impacts Associated with Products and Services
Environmental Protection• Resource Use (Materials and Energy)• Water• Waste and Emissions

Social Responsibility• Health• Hygiene• Education

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

P&G’s products and services use resources and generate wastes and emissions. P&G is committed, through its
Environmental Quality Policy, to reduce or prevent this whenever possible.
The social and economic benefits associated with P&G’s business aim to improve the lives of the world’s
consumers. We do this by providing innovative technologies that represent value to our customers. We canprovide employment in our communities, support the local and national economy through taxes, contributions
and purchases, and increase shareholder value. By providing products and information on their appropriate use,
we improve the health and hygiene of consumers through more effective and better-valued products.

31

Generally Applicable and Relevant Indicators
Environmental Protection
As the diagram on the next page illustrates, P&G’s use of material resources is highly efficient. The vast
majority of materials are converted to products, and the output of manufacturing waste (which is largely nonhazardous) is low. To give a more comprehensive understanding of materials used, data for packaging andmanufacturing operations are provided below.
The waste summary is presented in two ways: The table below presents the data in metric tonnes by
Global Business Unit (GBU). The following sections present the data graphically in an eco-efficient
format; in other words, the graphs show production per resource consumed or waste generated. Graphs
indicating an increasing trend show that there is an increase in efficiency of the process, i.e., less burden
per unit of production.
The environmental data presented in this report (unless otherwise stated) are based
WWW on the World Business Council for Sustainable Development’s eco-efficiency project.

http://www.wbcsd.org/newscenter/reports/2000/MeasuringEE.pdf

Manufacturing Resource & Waste Summary
All units are in thousands of metric tonnes unless otherwise noted. 1 tonne = 1,000 kg = 2,205 lbs.
2000/2001 Global Business Unit Details

MeasureTotal

Production

2000/01

1999/00

1998/99

BC

BFFC

FHC

FB

HC

Product Shipped
Raw Materials from
Recycled Sources

15,808208

13,936476

13,269
380

893
0

3,510
208

8,248
0

2,179
0

978
0

910(830)*
51%

879
55%

863
56%

57
34%

472
65%

140
62%

214(134)*
39%

27
54%

376(296)*
13
36
15

317
12
39
19

271
27
31
20

27
3.3
3.7
0.5

199
0.9
7.4
6.3

29
8.0
11.1
2.4

113(33)*
0.2
11.2
5.5

8.0
0.5
2.1
0.4

1,068
88.1
1.7

1,080
87.0
1.9

967
83.4
1.6

43
4.9
0.02

656
55.8
0.01

216
15.8
1.2

110
9.0
0.08

43
2.6
0.41

Waste
Generated Waste
Percent Recycled/Reused Waste

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

Other
Energy Consumption (105 GJ)
Water Consumption (MM cubic meters)
SARA Releases (1,000 tons)*** Waste from process sources decreased. Total wastes would be 80,000 metric tonnes less if demolition wastes were excluded.
** Releases defined in the U.S. Superfund Amendments and Reauthorization Act by the U.S. Environmental Protection Agency.

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

Packaging Data
Worldwide, P&G has reduced the use of packaging materials by 25 percent compared to the base lineof 1989/90. For the past four years, the amount of packaging materials used has consistently been
below 10 percent of the total weight of product shipped. These achievements have been made possibleby the use of innovative packaging technologies. We have reduced, redesigned or completely removed
many different types of packages over the years.
As a result, we will not be reporting on packaging material usage this year. We will continue to monitor our
packaging usage and fulfill our obligations to report our packaging material usage through many different
local organizations. If the packaging material usage trend alters and weights begin to dramatically increase,
we will reassess our reporting practices.

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32Energy Eco-Efficiency
Energy efficiency has remained flat over the past three years even though P&G is more than nine times more
efficient (nine times production for each gigajoule used) since 1985 due to product mix and energy reduction efforts.
Over the past three years, there have been slight, but not significant, changes in the mix of fuel use and electricity.

Total Energy (Production Units / gigajoule)Indexed vs. 1984/85

1000
800
Electricity

600

Fuel
400
200

0
Base
Year = 100

98/99

99/00

00/01

To manage energy efficiency of new projects, theCompany uses life cycle cost analysis before theprojects reach the site. This analysis compares upfront capital costs to the ongoing expenses. For
example, spending money up front to fully insulate abuilding is compared to the ongoing expense ofheating or cooling the same building.
The Company also does a loss analysis at the site
level. Losses are defined as anything not shipped out
the door as product, including energy use. Whenenergy is identified as a major loss at a site, it receives
intense focus for reduction.

Greenhouse Gas Eco-Efficiency

In addition, the absolute CO2 emissions are still much
lower than the 1990 baseline. The decrease from 1990
resulted from the sale of pulp mills in the UnitedStates and Canada and the conversion of coal tonatural gas in the United Kingdom and China.

Greenhouse Gas (CO2) Emissions
Indexed vs. 1990

Eco-efficiency of greenhouse gas has declined slightly
this year. Still, the eco-efficiency indices for fiscal
year 2000/01 demonstrate three times more production
per tonne of CO2 emissions since 1990. There has
been a shift from fuel combustion to electricalgeneration and also a shift away from fuel oil tonatural gas.

400
350
300
250
200
150
100
50
0

Base
Year = 100(Production
Units per Tonne
of CO2)

98/99

99/00

00/01

Global33

Water Eco-Efficiency
Production per unit of COD (Chemical Oxygen Demand) went up ten percent while production per wastewater
consumption went down slightly. Since 1990, water eco-efficiency, or production per unit of COD, has
increased 70 percent. Sites began tracking the consumption of water three years ago. Water eco-efficiency
has remained steady this year. Overall, water use is up slightly even though P&G’s largest user of water,
the Baby, Feminine, & Family Care Business Unit, has remained flat. Efforts are underway to develop
further plans to reduce water consumed by the Family Care business.

Wastewater COD Disposed(Production
Units per Tonnesof COD)

150
100
50

0
Base
Year = 100

98/99

99/00

00/01

GlobalWater Consumption
100
Indexed vs. 1998/99

Indexed vs. 1990

200

(Production
Units per 10,000
Cubic Meters)

80
60
40
20

0
Base
Year = 100

98/99

99/00

00/01

GlobalWitzenhausen Family Care Plant Water Improvements
After reducing waste cost by 83 percent in fiscal year 1999/00, the Witzenhausen plant in Germany reduced fresh water
consumption in fiscal year 2000/01 by 37 percent and wastewater discharge by 64 percent. This resulted in a total
annual saving of $180,000 and the lowest water consumption of all P&G tissue plants. The site focus in fiscal year
2000/01 was to cut fresh water consumption and resulting wastewater discharge significantly. To take fulladvantage of reduced flow, the plant negotiated a contract with the local publicly owned treatment works(POTW). Since fees are based on freight weight, continued reductions would result in costs savings.
The first step was to analyze which excess chemicals were still in the wastewater. A process change wasnecessary to systematically reduce the identified chemicals without any impact on the finished product. To
assess the potential impact, we benchmarked other 100 percent closed-loop mills. To deal with the reduced
freight and volume and the resulting higher wastewater concentration, a test plan was established andagreed upon with the authorities and a neighbor company. By reducing the water consumption step-by-stepand evaluating in parallel the impacts on product quality, processing ability and wastewater, parameters
decreased to 0.8 - 1.0 m3 of wastewater per tonne of produced tissue. For comparison, the current average
wastewater consumption per tonne in the European tissue industry is 10.6 m3 per tonne, and the lowest
known consumption is 5.5 m3 per tonne. Witzenhausen is now the benchmark in P&G and the tissueindustry. Experiments are ongoing to evaluate further wastewater reductions.

New Wastewater System
Last year, the Shortening and Oil business at the Ivorydale Plant in Cincinnati, Ohio, U.S., upgraded its
wastewater pre-treatment system. These improvements have significantly reduced waste, treatment costs, timeand labor, and improved the quality of the wastewater. Previously, process wastewater from the Crisco
Shortening and Oil business was treated in a series of fat traps and then discharged to the local publicly owned
treatment works (POTW) for further treatment. The old fat trap system was very inefficient in removing
vegetable oil and grease, and pH neutralization was unreliable, requiring continual manual intervention. The oldsystem resulted in high biological oxygen demand (BOD) sewer charges ($1.5 million per year), and theplant experienced several pH exceedances. The old fat traps were also unsightly, difficult to maintain, andsometimes the source of offensive odors.
The initial focus of the improvement project was to reduce the worker effort required to operate and maintainthe fat traps. As the project progressed, additional issues were addressed. In 2000, the four fat traps were
eliminated and replaced by an oil-water coalescer and automatic pH neutralization system. This equipment isvery efficient in removing oil and grease from the wastewater. The Plant’s sewer charges have been reduced
due to better quality wastewater discharged to the POTW. The oil and grease removed from the wastewater issold as a by-product, generating an income that offsets coalescer operating costs. The pH neutralization
system has eliminated the pH exceedances while reducing the cost of neutralization chemicals. The new
system requires less operator attention and has improved appearance and odor in the plant. The overall
project savings are approximately $1 million annually.

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34

Waste Disposed Eco-Efficiency
Total Waste Disposed
Indexed vs. 1990

200

(Production
Units per Tonneof Waste)

150
100

More
Eco-Efficiency
If One-Time
Demolition
Waste Excluded

50

0
Base
Year = 100

98/99

99/00

00/01

GlobalTotal waste disposed is our key management measure
to keep waste under control. Total waste comprises thesum of non-hazardous and hazardous solid waste, plus
effluent measured as COD and air emissions. Thismeasurement has been in effect since 1990.
Production per unit of waste (disposed) would haveincreased nine percent without the one-time disposal(>80,000 tonnes) of construction debris. With all
waste included, productivity declined 11 percent.
P&G’s pollution prevention and Design
Manufacturing Waste Out programs have saved morethan $500 million cumulatively in the past six years,
while reducing waste production by one-third.

True Civic Spirit
In Ireland, the action of P&G’s Nenagh plant to savea recycling depot has been lauded as “an example oftrue civic spirit” by a local newspaper.
The Nenagh Household Waste Recycling Depot wasforced to close in 2000 due to lack of funds. This
frustrated many local residents, including employees
at P&G’s factory in Nenagh.
But rather than just complain about the closing of thedepot, the P&G Community Relations Team in

Nenagh decided to take action. P&G agreed to makeup the funding shortfall in the amount of £75,000($87,000) over the next three years. This has allowed
the recycling depot to re-open for waste collection.
Additionally, the funding has enabled the depot tobegin a curb-side collection scheme for recyclable
wastes in Nenagh which will further increase thequantity of waste recycled. Now P&G employees arebeing urged to make full use of the re-opened depot
for the recycling of glass, plastic, paper, cardboard,
old clothes and metal cans.

35

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

2000/01$27,503,686

1999/00$28,292,768

1998/99$27,585,008

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

Diversity Data — Global Enrollment
P&G continues to focus on diversity as a global strategy and expects its work force to become increasingly morediverse. Global data on enrollment by gender are shown in the following table:
Global Enrollment % Female
2000/01
Management
34.5
All Other Employees*
38.0

1999/00
34.1
39.3* The category of “All Other Employees” continues to be an evolving global database as more of P&G’s plants areincluded. The database is expected to be complete by 2001/02. Changes in this category between 1999/00 and 2000/01
are reflective of the addition of more plant sites, which tend to have higher levels of male enrollment.

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

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

18.8

18.5

% Female
2000/01 1999/00 1998/99
34.1
33.7
33.1
38.8

39.7

39.9

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

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

Restructuring
Fiscal 1999/2000 was a difficult year for P&G and for its many employees around the world. A strong plan was
put in place to re-establish the balance between top-line revenue growth and bottom-line earnings growth.
However, over the past fiscal year, we continued to face a challenging economic environment, with a slowing
U.S. economy and the possibility of a recession. Key economies around the globe were also slowing – Japan,
some countries in Europe, some of the developing markets. In order to restore P&G’s ability to compete more
effectively and to grow more consistently, the previous restructuring program was expanded to further reduce
overhead costs, resulting in staffing reductions across the Company.
When downsizing becomes necessary, as it did this past fiscal year, we manage employee separations in waysthat are consistent with our values and principles. We maintain focus and priority on our strong commitment to
the diversity of our organization. P&G uses a voluntary separation program to maximize voluntary attrition. The
program includes severance pay based on years of service, continuation of health care benefits for the severance
period, outplacement support services and a retraining allowance. This program is intended to provide a bridge
for separating employees to retirement or employment elsewhere.
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36

Industrial Hygiene & Safety
The health and safety of P&G employees areparamount to the principles of the Company.
Nothing we do is worth getting hurt.
Safety and health can be managed.
Every illness and injury could and should havebeen prevented.
Safety and health is everyone’s responsibility.
The Company tracks and reports two metrics forworker safety: total incident rate (TIR) and total lost
workday case rate (LWDC). TIR includes all casesthat result in loss of consciousness, lost workdays,
restriction of work or motion, medical transfer toanother job or medical treatment beyond first aid.
LWDC includes all cases that involve days away fromTotal Incident Rate
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
99/00

00/01

The TIR target for sites is to be below 1.5 cases per
100 employees worldwide. To achieve such rates,
programs to address employee safety such as safe
behaviors, ergonomics and confined space entry havebeen implemented. No target has been set for LWDC
as P&G believes it must manage incidents that
potentially could lead to lost workdays.
The following data are based on criteria established by
P&G for use at all worldwide facilities. The data
represent all our worldwide manufacturing facilities.

Lost Workday Case Rate

(Injury andIllness per 100
Employees)

98/99

work or days of restricted activity beyond the day of
injury or onset of illness.

Global

0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00

(Lost andRestricted
Workday Cases
per 100
Employees)

98/99

99/00

00/01

Global2000 OSHA Results
The P&G U.S. manufacturing sites and technical centers have accomplished a remarkable inspection
record with the U.S. Occupational Safety and Health Administration (OSHA). In the five-year period
1996-2000, across approximately 75 U.S. sites, P&G has had only one serious citation, and total fines
over the period amounted to $1,300.

37

Economic Development
Global Purchases
P&G is a global company. We produce our brands inapproximately 130 plants in 46 countries around theworld. This year, P&G purchased more than $25
billion in materials and services to manufacture andmarket our products. We employ locally and purchasethe majority of our raw materials within those regions
where we manufacture our products. Our purchasing
professionals understand and participate in both global
and local markets for the materials and services
required to make our products.

HS&E Benchmarking
Benchmarking is an important tool to assess andmaintain the health of P&G’s global Health, Safety &Environment (HS&E) program. It provides Corporate
HS&E staff with data to verify the robustness of ourperformance and to identify improved management
and technology approaches.
During the past year, P&G completed a major HS&E
benchmarking study with seven other multinational
companies. This study, led by Pilko & Associates,
included BASF, Celanese Ltd., Dow Chemical
Company, DuPont, Eastman Kodak, Shell Chemicals,and Solutia Inc. It involved a detailed review of
HS&E manufacturing and management systems/
performance.

The top-line conclusions from this study indicated thatP&G is in the upper part of this eight-company peergroup for HS&E costs and resourcing, and in the
middle part of the group for HS&E performance.
Specific conclusions on our performance are:• Fifth-lowest Injury/Illness Rate for employees• Fourth-lowest Lost Workday Rate for employees• Second-lowest penalties paid (in dollars per year
per $ billion sales)• Fifth-lowest property loss (in dollars per year per$ billion sales)• The lowest HS&E operating costs (in dollars per
year per $ billion sales)
P&G shifted more HS&E work to site technicians thanany other company. This is the main reason for our
lower costs and need for simplified training systems.
We have similar HS&E management systems, though
our approach to information and training systems issomewhat simpler than the norm.
Our HS&E performance goals are focused on
improvement as compared to breakthrough.
P&G’s current HS&E situation is quite positive whencompared to peer companies. The long-term challenge
is to continue delivering benchmark results.

P&G Cosmetics – Recipients of the Significant Achievement Award
P&G Cosmetics in Hunt Valley, Maryland, U.S., is asecond-time Businesses for the Bay award winner.
P&G Cosmetics won the Significant Achievement
Award last year for successful modifications made toits production process and is being honored again
this year for sustaining and expanding upon these
improvements. P&G Cosmetics employs
approximately 1,200 individuals at this facility anduses teams of employees to identify and implement
pollution prevention projects.
The team responsible for identifying source
reduction opportunities in the nail polish production
line has developed a four-tiered approach that issignificantly reducing the use of acetone as acleaning agent between color changes. The team has
continued to sequence the Nailslick shades from lightto dark according to shade families, reducing acetone
use by 16.9 metric tonnes per year and has been

2 0 0 1

focusing on reducing product waste by 2.3 metrictonnes per year when product needs to be reworked.
The facility is also exploring acetone recycling,which would reduce purchases of new acetone by
63.9 metric tonnes per year, and the potential
replacement of acetone as a cleaning agent. This past
year, the facility instituted energy efficiency
measures, reduced the amount of product packaging
by 83.5 metric tonnes per year, and began recycling
18.1 metric tonnes per year of shrink wrap. In
addition, it reduced the amount of fiber drum use by
36.7 metric tonnes per year.
P&G conducts annual waste, energy and cost
analyses, provides pollution prevention training for
all Product Supply employees and maintains anenvironmental management system that meetsISO 14001 criteria. P&G has been a member ofBusinesses for the Bay since 1999.

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38Company-Specific Indicators
Environmental Protection
Overall, the non-hazardous waste disposed to landfill has
increased this year, resulting in a 23 index point reduction in
eco-efficiency (see graph). Much of the impact (80,000
tonnes) is from construction and demolition activities from asingle site. Even though there has been an increase inwaste generation, P&G has been cost efficient in
disposing waste, saving more than $3 million in site
treatment costs.

Non-Hazardous Solid Waste Disposed
200
Indexed vs. 1990

Non-Hazardous Solid Waste Disposed(Production
Units per Tonne)

150
100

More
Eco-Efficiency
If One-Time
Demolition
Waste Excluded

50

0
Base
Year = 100

98/99

99/00

00/01

GlobalWIN-WIN-WIN Solution to Paper Wastes
P&G Philippines Inc. (P&GPI) signed a
Recycling Service Agreement with Union Cement
Corporation (UCC). This project will allow
P&GPI’s paper wastes to be recycled asalternative fuel by UCC. P&GPI’s manufacturing
plant in Cabuyao, Laguna, produces about 60
metric tonnes per month of paper waste, resulting
from normal production line scrappings, e.g.,
start-up and splice rejects and quality purge.
Instead of disposing of its paper wastes in thelandfill, P&GPI will now transport thesematerials to UCC’s cement plant in
Norzagaray, Bulacan.
Both companies are projected to realize huge costsavings from the joint project. P&GPI can now

Indexed vs. 1990

Hazardous Solid Waste Disposed
800
700
600
500
400
300
200
100
0

Base
Year = 100(Production
Units per Tonne)

98/99

99/00

00/01

Globaleliminate several unit processes in its plant
operations, such as shredding, transport, andlandfilling, which incur huge service fees. On theother hand, UCC can now reduce its fuelrequirements for expensive coal by complementing
it with cheaper paper wastes. UCC is also studying
the feasibility of recycling P&GPI’s other wastematerials with promisingly high heating values.
But the ultimate beneficiary of this joint project is theenvironment itself. Solid waste can be converted into
cheap alternative fuel. Ecosystems are likewisepreserved, as the need to open up new areas forlandfills is minimized. Another benefit is that thesetypes of alternative fuels offer relatively cleaner
emissions compared to traditional fuels like coal.

Hazardous Solid Waste Disposed
Globally, reported hazardous waste has increased(shown as lower eco-efficiency) due to many
international jurisdictions’ expanding their definitionsof hazardous waste. Hazardous wastes are defined byregional policies and local rules and thus vary among
regions.
In the United States, a strong focus on reduction,
recycling and material substitution has reduced theamount of hazardous waste requiring disposal over the
past three years. To further reduce risks, the number ofapproved hazardous waste disposal sites that all U.S.
plants use is limited. Similar programs have been
started in many regions of the world.

39

Non-Hazardous Waste Recycled

Waste Recycled
120(Production
Units per Tonne)

100

Indexed vs. 1990

Recycling has been a significant effort within the
Company to minimize impacts on the environment.
The waste recycled eco-efficiency has improved byeight index points over last year. This equates to a
recycling rate that has ranged from 51 to 55 percent
over the past three years and has contributed $15-20
million in revenue annually.

80
60
40
20

0
Base
Year = 100

98/99

99/00

00/01

GlobalPlastic Bag and Stretch Film Recycling Program
Last year, P&G’s Iowa City, Iowa, U.S., plant identified a customer for plastic film and has set up a program
to process plastic bags and stretch film from the distribution center.
P&G purchased a baler and received $100 per tonne for this recycled plastic. Last year, we recycled 50 tonnes
for $5,000 and saved hauling and landfill fees of $2,500.
To increase savings in 2001/02, we will be expanding the program to the main plant and should have double
the volume. As the main plant operation will not store the bales on site, there will be no warehouse costs andlower handling costs.

Air Eco-Efficiency

Air Emissions
200
Indexed vs. 1990

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 28 percent, resulting in ahigher eco-efficiency.

150
100
50

0
Base
Year = 100

SARA 313 Releases(United States only)(Production
Units per Tonne)

98/99

99/00

00/01

GlobalSARA 313 U.S.

P&G facilities in the United States report annuallyon the release of toxic chemicals to the air, waterand land. These releases are defined in the U.S.
Superfund Amendments and Reauthorization Act(SARA) by the U.S. Environmental Protection
Agency. The tonnes of SARA 313 releases havedecreased this year, even though the number ofchemicals being reported has increased.

2 0 0 1

Indexed vs. 1990

2000

(TotalMetric Tonnes
Released orTransferred)

1500
1000
500

0
Base
Year = 100

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

98/99

R E P O R T

99/00

00/01

U.S.

40

Compliance with Laws and Regulations
There are numerous health, safety and environmental
requirements worldwide. Facilities are subject toemission limits and operating requirements embodied
in these statutes, regulations, laws and permits. It is
P&G’s intent to comply with both the letter and thespirit of statutes, regulations, laws and permit
requirements. Identified compliance issues are treatedseriously and all non-compliance matters are resolved
as expeditiously as possible.
The past three years’ data on environmental,transportation and worker health and safety violations
and interventions follow:

NumberFines

2000/01
73$77,070

1999/00
48$13,400

1998/99
46$33,250

A breakdown of 2000/2001 Notice of Violations(NOVs) and Occupational Safety & HealthAdministration (OSHA) interventions follow:
Water based
Air based
Solid Waste based
Paperwork
Transportation based
Worker Safety(OSHA U.S. Only)
Total

Number
19
8
2
7
25
12

Fines
$120
$0
$1,000$5,250$70,000$700

73$77,070

The increases in fines and NOVs this year are related
to transportation of hazardous materials. Plans toimprove performance have been developed and arebeing implemented.
Most water-based NOVs were related to flow rate,pH, oil and grease, involving eight different sites,
all of which discharge to municipal treatment systems.
OSHA interventions included any employee,
contractor or incident that required OSHA
follow-up. Last year’s interventions also included
three routine visits or scheduled inspections. In
2000, P&G received one serious citation –the first in four years.

Contractor and Visitor Safety
Contractor and visitor safety is an important
program at P&G. P&G invests resources to ensure
contractor and visitor safety at P&G sites.
The Huang-Pu plant in China is focusing oncontractor and visitor safety because there are,on average, more than 500 contractors (1,600
during peak periods) working in the plant. A
solid safety program for contractors and visitors
is critical. Huang-Pu has developed a safety
manual, scorecard system and registration
system to ensure safety. As a result, the plant
has the leading contractor and visitor safety
program in P&G Asia Beauty Care. Huang-Pu’sexperience will be shared with other sites. This
will also help to develop a global program on
contractor and visitor safety.

P&G Construction Safety
P&G contract construction operations provided asafe working environment during fiscal year 2000/
01. Reporting sites expended more than 16 million
construction effort hours. A Total Incident Rate
(TIR) of 1.06 was reported. This incident rate is
calculated as injuries per 200,000 effort hours (100full-time employees). The corresponding Lost
Time Incident Rate (LTIR) was 0.14. These resultscompare favorably to an OSHA Recordable
Incident Rate of 8.21 and LTIR of 3.67 for the U.S.
construction industry during calendar year 1999.
These excellent results allow P&G to pool sites
with major workload and self insure Workers
Compensation and General Liability insurance.
This has saved more than $27 million versus
comparable commercial insurance rates since
inception of the program in 1993.
The P&G Construction Safety Network champions
safe construction operations. The network includes
professional safety managers from construction
contractors active on P&G sites. The network
establishes and documents best work practices,delivers construction safety training, provides aconstruction safety audit team, analyzes incident
information and monitors system results. The
Construction Safety Network is dedicated to an
overall objective of zero incidents and has enabledcontinued improvement at all sites which areactively involved.

41

Social Responsibility
Performance Against Internal Standards
P&G’s internal standards go beyond legal complianceand apply to all its facilities worldwide. The
fundamental philosophy is to have the same standards
worldwide, implemented by trained professionals at all sites
and audited each year using a consistent, comprehensive
approach. The metrics used are consistent with thatphilosophy. Graphs on this page describe the Health,
Safety & Environment (HS&E) performance.

Audit Programs
The P&G HS&E audit programs are designed toensure compliance with federal, state and local
regulatory requirements as well as corporate
environmental standards and procedures. Audit
findings are reported promptly to business

Audits measure performance against a mandatory setof standards and standard operating procedures. The
target performance is eight or better on a 10-point
scale. The results have improved slightly from lastyear even though the number of sites receiving audits
this year has decreased.
The Company takes great pride in making sure thesites are reviewed on a frequent basis. The graphbelow shows percent of sites receiving an audit thisyear. The lower percentage of audited sites is
attributed to the large number of new sites joining
the Company.

Sites Conducting Annual Audits

100

100

80

80

60

Percent

Percent

Sites with Audit Scores Greater than 8.0

management teams, which must address and correct
all issues in a timely manner.

40

60
40

20
0

20
0

98/99 99/00 00/01

98/99 99/00 00/01

HS&E

Fire Protection

98/99

Site Leadership Training

00/01

AuditsCompleted

Sites with Qualified Leaders
100
80

Percent

Another key indicator of system capability is thepercentage of sites with trained and qualified leaders.
Leadership candidates train on site for an extended
period prior to attending a week-long internal school
where their knowledge and ability to handle special
situations are assessed. Only then are candidates
considered qualified. Currently, more than 70 percent
of sites worldwide have leaders qualified by corporate/
GBU staffs. This has continued to improve as more of
the acquisition sites are qualified.

99/00

60
40
20
0

98/99 99/00 00/01

98/99 99/00 00/01

HS&E

Fire Protection

Web-Based Training
Following A.G. Lafley’s challenge to “become afully Web enabled company,” the Corporate
Health, Safety and Environment department is in
the process of developing basic training for its
employees and delivering this training via theWeb. The first training course, “Isolation ofHazardous Energy,” has received very positive
feedback from customers. By following soundinstructional design principles, conducting peer
reviews of the material and incorporating
customer feedback, HS&E has been able toreduce training time by as much as 50 percent.
This allows better retention of the material, in
addition to freeing up valuable time.
2 0 0 1

HS&E plans to develop several more courses in
the future. It is also pioneering the use of LongDistance Learning techniques to allow learners toaccess training materials and instructors via computer(versus traveling to a class). This will amount tosignificant savings in travel costs.

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

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42Economic Development

At P&G, innovation is our cornerstone. Each year, we invest more than $1.7 billion in researchand development – the largest amount among consumer-products companies worldwide. As a result, we
now have more than 27,000 patents, and we’re granted 3,000 more each year. That’s about ten every day. That’s
terrific output and represents a powerful technical portfolio.
Through our Global Licensing group, we’re identifying non-strategic technologies and donating them to universities
and research institutions which can more fully develop their potential. Of the 25,000 patents we currently own, we
commercialize fewer than ten percent of them. Said another way, we have assets of tremendous value that the worldis not fully realizing. We simply invent more than we can commercialize by ourselves.
It’s exciting to think that these donations allow all our technologies to reach their full potential, even if no longer
in P&G hands. Further, each of these technology donations will foster development work at universities andresearch institutions, deliver whole new revenue streams to the universities and develop important newtechnologies that may never be commercialized otherwise. Also, the donations will give next-generation
scientists and researchers real-world experience. Finally, there are tax benefits for our shareholders.
This is another example of how P&G’s talent reaches into the community. Through technology donations,
we have found a new way to contribute P&G’s money, people and energies for the long-term benefit ofsociety and education.

Technology Donations, Fiscal Year 2000 – 2001
Through the Technology Donations Program, P&G provides patented technologies to U.S. universities andresearch institutions. Donated technologies no longer fit into P&G’s strategic plans but have significant
commercial potential when developed. Universities and research institutions can continue the research efforts,
providing a venue for development of potential new products and technologies. This way, everyone benefits. A
synopsis of the past year’s donated technologies, along with their sustainability implications, follows:
Technology

Recipient

Sustainability Implications

Apollo Photobleaching Technology

Case Western Reserve
University• Developed to offer improved stain
removal from fabrics utilizing sunlight• Offers potential use in cancer therapy,
utilizing the compound’s light-absorbing
properties

Super Aspirin COX-2 Inhibitor
Technology

Vanderbilt University• Improve the safety of medications
commonly taken for pain, inflammationand fever reduction• Potential for the prevention and treatmentof cancer• Potential for the prevention and treatmentof Alzheimer’s disease

Fiber Fabrication Technology

North Carolina State University • Improved process for sorting pulp fibers
during processing• Reduced need for wood pulp
• Significant cost savings• Improved recycled paper products

Hair Re-Growth Technology

The University of Texas
Southwest Medical Center• Stimulates hair re-growth

Volatile Organic Compound (VOC)
Prediction Technology

Midwest Research Institute• Low-cost, simple method to predict VOCemissions from stacks

43

Supplier Diversity Program

Millions $In 1972, P&G established a minority supplier program in the United States to identify and work with minorityowned businesses. At that time, P&G spent $44,000 with six minority suppliers. In 1981, the Company assigned
its first full-time manager to lead and develop this effort. Today, the Supplier Diversity Program is staffed by six
full-time employees who provide minority suppliers with the following assistance:• An equal opportunity to do business with P&G.
• Coaching and feedback.
• Financial support, where it is needed.
Supplier Diversity Spending• Matches between P&G buyers and qualified
800
suppliers.
700• Timely payment.
600• Realistic and understandable specifications.
500• Development of additional opportunities with400
other P&G vendors, including both300
supplier and strategic alliance opportunities.
P&G’s purchases from minority businesses in the UnitedStates have grown from $76 million in fiscal year
1988/89 to $578 million in fiscal 2000/01. The target
for 2001/02 is $650 million, which would account for
approximately six percent of P&G’s U.S. spending.

200
100
0

96/
97

97/
98

98/
99

99/
00

00/ 01/02
01 Target

Final year-end Supplier Diversity spending is $578
million, a five percent increase vs. 1999/00.

P&G Receives Ohio 2001 Minority Business Development Award
Ohio Governor Bob Taft presented The State of Ohio
2001 Minority Business Development award to
P&G. The award honors corporations that advanceminority business development through investing,mentoring and breaking down barriers to success. P&G
has spent $3 billion in the past ten years withminority-owned suppliers.

Most recently, this program facilitated the merger of
two minority-owned firms, Film Fabricators Inc. andJohnson-Bryce Corporation, to create the largest
minority-owned flexible packaging company in the
United States. P&G then awarded a $100 million
contract to the new entity, the Hall-Bryce Alliance,
for its Pampers diaper business.

“We are delighted to be recognized for ourcommitment to a diverse supplier base,” said Rob A.
Steele, president of P&G’s North America Market
Development Organization. “Our programs create
jobs, provide new opportunities and mostimportantly, enable economic self-sufficiency among
multicultural communities.”

P&G’s investment in minority business enterprises
has resulted in ever-increasing expenditures over the
past ten years. Purchases from minority suppliers
have risen from $85 million in fiscal year 1989/90 to$548 million in fiscal year 1999/00. P&G is also a
corporate member of the National Minority Supplier
Development Council.

HS&E Program Costs
There are two aspects of Health, Safety & Environment (HS&E) program costs:
1) Capital costs for new HS&E equipment
2) People and operating costs for existing facilities.
Capital costs for 2000/01 were $36 million to ensure compliance in P&G facilities, down from $68 million
last year. This included the purchase and construction of pollution control equipment such as wastewater
pretreatment systems and air emission controls.
HS&E total costs for operating existing sites in 2000/01 were $185 million (This does not include the$15 million in revenue gained from recycling activities.)

Environmental Liabilities
P&G is also subject to contingencies pursuant to environmental laws and regulations that in the future may
require the Company to take action to correct the effects on the environment of prior manufacturing and waste
disposal practices. Accrued environmental liabilities for remediation and closure costs were $43 and $47 million
on June 30, 2001, and 2000, respectively. In Management’s opinion, such accruals are appropriate based on
existing facts and circumstances. Current year expenditures were not material.

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44

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

South Africa Hands-On Pregnancy Education ProgramM

aternal mortality rate in South Africa is
150 deaths per 100,000 live births. For the level of
economic development in the country, this figure is
exceptionally high (22 times higher than somedeveloped countries). South Africa’s women are 12 times
more likely to die from complications during pregnancy
than their European/U.S. counterparts. The five maincauses of maternal mortality are non-pregnancy related
sepsis, hypertension, obstetric hemorrhage, pregnancy
related sepsis, and pre-existing maternal disease.
The Hands-On program was developed to educate andempower couples to make the right decisions forthemselves and their unborn babies, and to contributetowards reducing the maternal mortality rate.
Education is essential in reducing some of the factors
responsible for the high maternal/pre-natal morbidity
and mortality rates in the country. The Hands-On
program consists of six training files (Teaching Adult
Education; Keeping Women Healthy During
Pregnancy; Warning Signs in Pregnancy; Childbirth& Labor; Breastfeeding; Baby Care ), teaching aidsand posters.
Last year Pampers and the South African Department of
Health (DoH) jointly developed the Hands-On program.
This program was rolled out at eight test sites in bothrural and urban public hospitals and clinics.
This year saw completion of the pilot study. Midwives
reported that patients who experienced this program not
only understood the correct time to go to the hospital, butalso understood and listened during the labor process. Also,
they did not hide symptoms for fear they had done
something wrong, and they were extremely cooperative.

Based on the success ofthe Hands-On program,the DoH has asked thatthe program be madeavailable to everyone.
The rollout of a national
Hands-On program has
now begun.
• Phase 1: Roll-out andevaluation of the
program at Provincial
Test sites [2001]• Phase 2: Expansion to1,500 strategic
hospitals throughout
the country [2002]• Phase 3: Target theremaining publicclinics and hospitals
via mobile clinics or on-site implementation [2003]• Phase 4: Update program content [2002 andongoing]
Pampers has led a fundraising campaign amongindustry to raise ZAR 1 million ($122,000) to provide
1,500 clinics and hospitals with the program. Pampers
has also established a nonprofit organization to ensure
appropriate management of these funds. The World
Health Organization (WHO) is supporting the
program and has already provided funding thatenables the program to be rolled out at the provincial
test sites. WHO has also committed to support andprovide additional long-term funding for national rollout of the program.

45

Women’s Health
The P&G Alliance for Women’s
Well-Being Provides Information
and Inspiration
P&G has always been committed toaddressing the health andpersonal care needs of women.
As part of this commitment,
The P&G Alliance for
Women’s Well-Being*
continues to support the
Speaking of Women’s
Health Foundation, anonprofit organization
dedicated to educating women to make informed
decisions about their health, well-being and safety.
Speaking of Women’s Health began as a one-day
conference in Cincinnati in 1996 and has now grown
to more than 35 conferences nationwide, reaching
more than 20,000 women this year. Conferences areone- to five-day events featuring seminars, exhibits,
workshops and social activities. The goal is toprovide women a friendly, sociable and nonintimidating atmosphere where they can enjoy
speakers, workshops and exhibits about important
health topics, including osteoporosis. New this year,
in celebration of Black History Month, Speaking of
Women’s Health and The P&G Fund presented a
special conference for minority women, “Universal
Sisters – Inspiration for Your Health & Soul,” toinspire and empower attendees with a fun-filled anduplifting event. In addition to these educational
objectives, Speaking of Women’s Health conferences
raise funds to promote women’s health and honor
individuals who are committed to women’s healthand well-being.
The Speaking of Women’s Health Foundation also
awards scholarships and grants to organizations thatenhance the quality of life and well-being of women,
as well as support women’s health research andeducation through Community Investment Programs.

Landmark Study In The New England
Journal of Medicine Showed Actonel
Reduced the Risk of Hip Fracture In
Elderly Women With Osteoporosis
This study, published February 1, 2001, showed thatthe osteoporosis medication risedronate, marketedby P&G as Actonel, significantly reduced the risk of
hip fracture in elderly women with osteoporosis.
Importantly, risedronate reduced hip fracture risk by
up to 60 percent in women with more severe
osteoporosis.
Dr. Michael McClung, M.D., Director, Oregon
Osteoporosis Center, lead author of the study, said,“For these elderly women with osteoporosis, thisstudy showed that risedronate was a highly effective
medication that helped prevent hip fractures.”This landmark study,
known as the Hip
Intervention Program(HIP), was the firstprospective clinical trial
to evaluate, as a primary
endpoint, a drug’s ability
to reduce hip fracture risk. Hip fractures can be
extremely debilitating. According to the National
Institutes of Health, one in five osteoporosis patientsdies within a year of a hip fracture. Even those who
survive a hip fracture can suffer serious consequences.
One-third of patients require placement in a nursing
home after suffering a fracture.
The HIP study involved more than 9,300 elderly
women from 183 clinical sites worldwide. Patientswere enrolled into two groups: (1) women age 70 to
79 who had low bone-mineral density at the hip,which classified them as having confirmed
osteoporosis and (2) women age 80 and older having
one or more non-skeletal risk factors such as an
unsteady gait or difficulty rising from a chair.

WWW Speaking of Women’s HealthIn the first group, the incidence of hip fracture wasonly 2.3 percent among women taking risedronate,compared with 5.7 percent among women taking
placebo. The risk of hip fracture was not reduced in
the second group of women who did not haveconfirmed osteoporosis.

Foundation is available at:
http//www.speakingofwomenshealth.com

WWW* The P&G Alliance includes: Actonel, Asacol, CoverGirl, Crest, Metamucil, Olay, Pantene, Secret andThermaCare.

Additional information about the

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

Additional information about Actonel isavailable at: http//www.actonel.com

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46

Women’s Health (continued...)Secret To Self-Esteem ProgramEnters Third Year

Feminine Care School Program
Provides Global Health Education

The mission of the Secret to Self-Esteem Program isto help young girls become strong women bybuilding self-esteem. In 1998, P&G’s Secret antiperspirant and The Partnership for Women’s Healthat Columbia University created the program with theobjective of providing teen girls with the practicalskills and solutions to build healthy self-esteem.
This year, theprogram will reachthousands of teen
girls. The Secret to
Self-Esteem
Symposium
kicked off thisyear’s program in Austin, Texas. Dr. Ann
Kearney-Cooke, a leading authority on adolescentissues, provided information to seventh- andeighth-grade girls and their parents and mentors
about the importance of healthy self-esteem inyoung women and how to achieve it. In addition,
break-out sessions were held where female rolemodels shared practical skills and tools girls canemploy to develop healthy self-esteem. This
year’s presenters included the Director of the
National Aeronautics and Space Administration’s
Equal Opportunity Office, Estella Hernandez
Gillette; L. A. Sparks center Lisa Leslie, amember of the gold medal-winning 2000 Olympic
women’s basketball team; diver and 2000
Olympic gold medal winner Laura Wilkinson;
Houston Comets basketball forward Tina
Thompson; 2000 Olympic gold medal winner insoftball Michelle Smith; and 1992 Olympic silver
medal track star Sandra Farmer-Patrick.
The Secret to Self-Esteem Program also sponsors anationwide essay contest and scholarship program
designed to recognize girls who exemplify femininestrength. The Grand Prize winner and her essay werefeatured in the June issues of both Seventeen
magazine and Ladies Home Journal.
For additional information about the Secret to
Self-Esteem Program, including “10WWW Tips for Healthy Self-Esteem,” access
http://www.secretstrength.com

P&G’s Feminine Care businesses sponsor healtheducation school programs in more than 55
countries around the world. Each year, these
programs educate and provide product samples toapproximately 13 million girls. Developed fromglobal research with input from consultants,
qualified professionals present age-appropriate
information about growth and development. A
variety of material is available to match the needs ofthe audience, including student worksheets, video
presentations, interactive games, posters, student
workshops and low-literacy materials, which
communicate key messages via illustrations. The
program is provided to schools without cost.
For additional information about P&G’s
WWW program for teenage girls, see:

http://www.beinggirl.com

47

P&G Helps Save the Water VoleIn the northeast United
Kingdom, P&G sites aresponsoring a three-year
program to help save an
endangered species, thewater vole.
Support in Year One has
funded a project manager
to assess the presence ofwater voles around theregion. In Years Two andThree, there will be many opportunities for P&G
people to get involved in educating land owners andbusinesses on how to create wildlife corridors tomaintain the type of habitat crucial to survival of thewater vole.
Here is an extract from the survey results by the watervole project manager:“There are literally hundreds of water courses here
in the North of England, and it was not possible tostudy them all. There is always the possibility thatwater voles were on the next stream down, justoutside the set survey length, or that bad weather
had removed signs. The lack of signs places doubt
in your mind whether they have colonized the area.
Ten to 15 years ago, water voles were a common
sight, but they have disappeared.
Guidance cards have been produced regarding current
legislation and management regimes for waterside
work, as well as identification cards showing thedifferences between water voles and brown rats. It is
hoped machinery operators carrying out waterside
management will use these in future. Urban
development plans used to show future development
in regions will have areas marked where water voles
were found to be present. Planning departments will
be given these so they can consider developments thatwill have minimum impact on colonies. Water voles
are still under threat, and work still needs to continue.
Colonies are still isolated, and it is essential to linkthese populations to prevent inbreeding and risk ofextinction and increase territorial space.”

Integrated Waste Management:
A Life-Cycle Inventory
A new edition of the book“Integrated Solid Waste
Management: A Life-Cycle
Inventory” by Drs. Forbes
McDougall, Peter White,
Marina Franke and Peter Hindleof P&G was launched in
Brussels during the European
Commission’s Green Week in
April. The first edition, referenced in the latest
U.K. Waste Strategy, outlined the concept ofIntegrated Solid Waste Management and proposed
the use of Life-Cycle Assessment (LCA) tools toassess the sustainability of municipal solid waste
management systems. The new edition provides
case studies from India, the United States andEurope of municipalities that have taken an
integrated approach to solid waste management.
Other case studies from Europe, Latin America andthe United States demonstrate where LCA tools
have been used to assess integrated solid waste
management systems and highlight key learnings
from the use of such tools, including the U.K.
Environment Agency’s WISARD software and the
U.S. Environmental Protection Agency’s Decision
Support Tool. The book also provides a newcomputer LCA program (IWM-2) for waste
managers and decision makers.
“This book tackles the complex subject ofachieving more sustainable waste management andexplains it clearly and in a way that holds theinterest throughout. The software that comes withthis book is easy to use and is a must for anyone
interested in integrated waste management systems.
Talking about sustainable waste management is allvery well, but unless we put the information andlife-cycle thinking in the hands of waste managers
with tools like IWM-2, the strategies we develop
are in danger of being less sustainable than thosethey replace. IWM-2 will help to turn the concept of
integrated waste management into reality.”— Terry Coleman, U.K. Environment Agency.
For the book, go to:
WWW http://www.blackwell-science.com/~cgilib/bookpage.bin?File=10013342

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48

Go, Give & Grow

Sharing Leadership Skills With Schools

In a groundbreaking development, P&G has joined
forces with the World Health Organization (WHO) tooffer a limited number of P&G new hires theopportunity of a lifetime – to participate in apioneering pilot program to take responsibility andgive something back to society.

More than 300 head teachers and senior staff in
Surrey, southern England, have taken up P&G’s
offer of free leadership seminars. The aim is toshare and reapply business leadership skills to theeducation sector.

The European P&G new hires have been offered fully
funded placements with the WHO as part of P&G’s
Go, Give & Grow program. These individuals, whohave already accepted employment with P&G for
September 2002, will be placed on key initiatives,
such as the Stop Tuberculosis (TB)
program in Africa, Roll Back Malaria in
Egypt and Polio Eradication in
Ethiopia. The new hires will be working
on the programs in a number of areas.
This will help them develop expertise inareas such as research, marketing andmanagement.

The seminars define and measure leadership andprovide practical coaching. The idea for theseminars originally came from a meeting with P&G
and the local Education Business Partnership. The
P&G sessions have been greatly appreciated by all
who have attended – not just the teachers but also
the trainers.
For the future, P&G will continue to offer
leadership seminars three or four times a year, andperhaps extend the training to all interested
teachers in the region.

Green Fund Campaign in Japan
In an increasingly competitive
recruitment environment, the unique opportunities
represented by Go, Give & Grow will ensure thatP&G continues to attract the best and brightest
candidates. This project allows P&G to offer top
individuals a unique chance while being consistent
with P&G’s Statement of Purpose, Values andPrinciples. Next year, P&G plans to expand theprogram to more recruits around the world. There
have been suggestions that P&G also expand theprogram to current employees.
For further information, see:
WWW http://www.pgcareers.com/ourculture/

ggg.htm

In collaboration with key customers, P&G Japan
donated 0.5 percent of its aggregate sales (up to
JPY 20 million, approximately $160,000) to theGreen Fund, managed by the National Land
Afforestation Promotion Organization, the national
implementing body nominated by the Ministry for
Agriculture, Forestry and Fisheries.
The Green Fund is committed to the following
activities:• Forest improvement, such as conservation andimprovement for private headwater forests,
including brush cutting and thinning• Greening promotion activities, such as voluntary
greening initiatives by local communities andyouth groups, and public relations efforts• International greening cooperation activities, such as
by NGOs for restoring tropical forests, combating
desertification and providing necessary training

49

Crest Healthy Smiles
China’s Crest Healthy Smiles
Since 1995, Crest has sponsored the Ministry of
Education-led nationwide Oral Health School
Education program. Every year, Crest provides
training to teachers and supplies all the educational
pamphlets, brochures, videos and other teachingmaterials free of charge to help promote healthy oral
care habits among students in kindergartens, primaryschools, middle schools and even universities.
Over the past five years, the program has
benefited 30 provinces, more than 70 million
students in more than 600 cities and one-third of
the rural schools in the country.

Better Start for Australia’s Most
Vulnerable Children
P&G Australia has formed a partnership with Save theChildren Australia, part of the International Save theChildren Alliance, the oldest nongovernment childrights organization in the world. The partnership isknown as Better Start, and it is designed to address theneeds of Australia’s most vulnerable children.
Indigenous children, urban poor children and children
in rural and remote areas of Australia face serious
disadvantages in infant mortality, poverty, housing,health standards and educational attainment.
To date, P&G Australia has raised Aust $240,000(approximately $127,000) in funds and material
support. These proceeds are directed towards a schoolage screening program within a disadvantaged
aboriginal community in remote Central Australia anda computer training center for disadvantaged children
in an inner Sydney area. P&G motivated the media tosupport the partnership. In addition, P&G employees
voluntarily raised funds through a variety of means,such as donations through salary deductions that werematched dollar-for-dollar by the Company.

Crest Healthy Smiles 2010
Crest Healthy Smiles 2010 is designed to help
improve the state of oral health in America by
providing education, oral care tools and increased
access to dental professionals to underprivilegedchildren and families across the country.
Prompted by U.S. Surgeon General David
Satcher’s 2000 report addressing disparity in oral
health in urban America, Healthy Smiles 2010
combines the passionate vision of Crest withnational and local nonprofit partners and leading
dental professionals to help provide healthy
smiles to children nationwide.
Driven by the principle that oral health is integral tooverall health, Healthy Smiles 2010 will empower
local communities with programs that will improve
the oral health of inner-city children and families.
For further
WWW information,

visit:
http://www.crest.com

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50

UNICEF and P&G
P&G Spain Elected Honorary
Member by UNICEF

P&G Supports Child-Friendly Schools
for Filipino Children

The United Nations Children’s Fund (UNICEF) has
recognized P&G’s contributions to the development
and welfare of children by nominating P&G Spain
as UNICEF Honorary Member.

P&G Philippines Inc. and UNICEF join hands increating child-friendly learning conditions for
120,000 Filipino schoolchildren.
A child-friendly school is one that is effective,
healthy, inclusive and protective, gender sensitive,
community based and family focused. It extends into
the children’s homes and communities. It tracks andbrings all school-aged children in the community toschool, as well as ensures they stay and learn inschool. It is a school that will enable the child todevelop to his or her full potential and be able todevelop adaptive and positive skills to face thechallenges of life.
Through P&G’s assistance, children from 34 pilot
schools, their parents and their teachers began toexperience the innovations of Child-Friendly School
Systems (CFSS).

Princess Margarita awarded P&G General Manager
José Luis Navarro the diploma in recognition for
P&G’s humanitarian efforts for the world’s children.

The collaboration with UNICEF started in 1999,
when Fairy Liquid Antibac sponsored a vaccination
campaign against tuberculosis (TB). The idea wassimple but powerful: Fairy Antibac donates to
UNICEF one vaccine for each bottle sold.
The July-September 1999 vaccination campaign
was enthusiastically supported, not only by
consumers but also by retailers, leading to an
unprecedented success. More than 3.5 million
vaccines were given to UNICEF for its efforts in
Senegal. This opened the door for a second
campaign in November-December 2000 that has
again been an enormous success, beating lastyear’s results. P&G Spain has provided 4.5
million vaccines to UNICEF’s programs toeradicate TB in developing countries.
TB is an infectious disease spreading rapidly inmany parts of the world. Up to one percent of theworld’s population is infected with TB each year.
The World Health Organization estimates that morethan 100,000 children and about three million people
die from TB each year. Most of these lives could besaved with one single dose of BCG (Bacillus
Camille Guerin) vaccine which costs about ten cents.

The experience began with extensive training for thepilot school’s 3,100 faculty. Teachers andadministrators were introduced to effective teaching
and learning processes that encourage active,
experimental and participatory learning inclassrooms. School health personnel were also
trained to initiate the transformation of schools into
healthy places for children.
CFSS also brings together schools and communities
for the master listing of school-age children in thecommunity, identification of out-of-school children
and tracking of potential dropouts. Remedial classes
and supplementary feeding are undertaken to reduce
dropout rates.
The use of information technology, both in teacher
training and student learning, is another innovation
with CFSS. P&G provided computer hardware,complemented by joint computer and Internet
literacy training for select teachers and students. This
proved to be one of the most strategic interventionsin improving learning conditions and opportunities
for students. Many city schools are challenged byadverse learning conditions, such as cramped, hot
and noisy classrooms, limited contract hours andinadequate numbers of teachers. Information
technology can be used as an alternative form ofclassroom instruction.
The Child-Friendly School System is a breakthroughapproach to education and promises to give Filipino
children a better chance to succeed in the future.

51

UNICEF and P&G (continued...)P&G Malaysia/Singapore Gives Backto Community in a Big Way

P&G Singapore Receives
Corporate Gold Award

P&G Malaysia/Singapore initiated a successfulcommunity project through the Open Minds program– a fundraising activity for the educational benefit ofchildren with mental and physical disabilities.

P&G Singapore was honored last year by the
National Council of Social Services and Community
Chest for its Open Minds program.

Open Minds – Educating All of Our Children is athree-year community development program
targeted at the education of children with special
needs in Asia. The project was conceived by P&G as
part of a worldwide community relations effort tomark the new millennium and P&G’s
ongoing commitment to society.
Through the Open Minds program, P&G
receives strong support fromgovernment, retailers and distributors,
media, public relations and advertising
agencies, as well as internally from
employees. The program is supported
and endorsed by the Ministries of
Education of both Malaysia and Singapore, UNICEF
and the Ministry of National Unity & Social
Development, Malaysia. Open Minds is also
supported by Malaysia’s First Lady, Dr. Siti Hasmah
Hj. Mohd. Ali, and Singapore’s Senior Minister ofState for Education, Dr. Aline Wong.
Open Minds is funded through a percentage of P&G
sales during a two-month period. In addition, Open
Minds also receives contributions from employees andretailers. Since its launch in 1999, Open Minds has
contributed a total of $756,000 to the local communityand has made lives better for children with disabilities
in Malaysia and Singapore. The money raised benefits
children with Down syndrome, autistic spectrum
disorders and cerebral palsy. The program has helped
special children obtain their own school premises,transportation through the purchase of minibuses, andmaterials such as computers, physical therapy
equipment and music therapy equipment. The 2001
effort pledges to raise another $135,000.

2 0 0 1“This is a meaningful recognition for us. The
Open Minds program in Malaysia/Singapore is
our first social development program executed ona grand scale. Open Minds has energized our
employees,” says K. Munusamy, Malaysia/
Singapore’s country manager.
The Open Minds program in Singapore
adopted the Rainbow Center, a special
education school for children with mental
and physical disabilities, such as Down
syndrome, cerebral palsy, and autistic
disorders. Since 1999, Open Minds has
donated a total of $332,000 to the
Rainbow Center. Part of this donation
will help the Rainbow Center acquire a
new school building for children with special needs.
The Community Chest Awards were created in1984 by the National Council of Social Services,
Singapore, to give public recognition tocorporations, community organizations andfoundations which have demonstrated greatcommitment and consistent support for its cause.
The Corporate Gold Award recognizes P&G for
the $210,000 cash donation to the Rainbow
Center in 1999. The money was used to pay for
operational expenses of the Center. In addition,these funds were used to purchase two temporaryclassrooms, which minimizes the wait list,
allowing 32 more children access to education.

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UNICEF and P&G (continued...)UNICEF and P&G Tackle Malnutrition
With 40 percent of the world's malnourished children living in India, P&G joined hands with UNICEF tocommit a minimum of $111,000 by contributing one rupee from the sale of every large pack of Ariel,
Pantene, Head & Shoulders and Whisper. These funds are targeted for use in the following cities:• Mumbai – to educate underprivileged adolescent girls on health problems and to help them with tablets
for anemia prevention• Jaipur – for day-care projects focusing on increased food intake and micronutrients for children• Chennai – for a women's parenting network to provide information on prenatal care

Women to Mount Everest
For the second time since 1999, P&G Chile has sponsored an expedition of Chilean women climbers to the
Himalayan Mountains through one of its key detergent brands, Ariel. Last time, climbers Vivianne Cuq and
Cristina Prieto reached the peak of the Cho Oyo Mountain. This year, P&G Chile supported an expedition called“Women to Mount Everest” to demonstrate that Chilean women can achieve whatever they put their minds to.
After fighting adverse climatic conditions, three out of the four women explorers were able to reach the summit,
marking an unprecedented achievement in the annals of mountain climbing. Ariel supported this project to help
those brave women reach levels of excellence comparable to the excellence behind research incorporated into
Chile’s detergent brands. The climbers took Ariel detergent to wash their clothes during the expedition.
WWW You can see details of the climb and a video at:

http://www.himalaya.cl/videos/cumbre.mpg

Ariel Supports Children’s Education
During last year’s observance of Ramadan, P&G Pakistan launched the first phase of a program to reach out tounderprivileged children living in remote parts of the country. Ariel directed a portion of its profits towards
educating the less privileged. In about one year, the initiative has led to regular schooling for 150 children in 35
cities who had no hopes of ever attending a school. The second phase of the program will be launched in the
coming Ramadan and will continue until all 105 districts of the country are covered.
In consultation with Anwar Maqsood, a well-known Pakistani writer, the Ariel team visited various rural andsemi-rural areas during the month before Ramadan to identify less privileged children. With the advent ofRamadan, Maqsood and the Ariel team started the campaign by visiting the selected areas. For each packet of
Ariel detergent purchased during Ramadan, a portion of the sale was directed to funding a child’s education.
Once selected, the child is provided with books and a school uniform. In addition, each child’s first five years ofschool fees are paid in advance.
The first beneficiary of the education drive was a boy named Imran from Korangi. He told the Ariel team that if
his family had the money, he would be studying to become a pilot. Today, Imran is in a school in Korangi
working his way towards his dream.

The Guardians of the Planet
Convinced of the importance of protecting the environment and the great challenge this represents, P&G
Mexico has developed an environmental education program, The Guardians of the Planet. This program,
implemented jointly with the Mexican Ministry of Education and Ministry of Environment, is focused on thegrammar school children of Mexico City. The program has three parts covering the following areas:• Air Quality• Water Quality• Solid Waste Management, including reduce and recycle
Since the program began, the educational program on air quality has been taught in the fifth grade, reaching
more than 250,000 children in Mexico City. Through P&G’s commitment to the Ministry of Education last year,
new water quality education was developed and approved by the Basic Education Directorate, and taught in thethird grade for the school year 2000-2001. Both parts of the program, on air quality and water quality, are again
part of the current school year curriculum. This includes a Teachers’ Guide with information, suggested
activities, experiments and games for the classroom.

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Dash Goodwill Mission Projects

For the first timein their lives,
people in thevillage of Dalocha,
Ethiopia, haveaccess to clean
drinking water.
The money for the
project was raised
by Dash Missione
Bontà – 1,000
Lire for a Helping
Hand.

Dash Missione BontàDash, the leading laundry brand in Italy, hasbeen developing and supporting social
initiatives for almost 15 years. All Dash social
plans are named Missione Bontà (Goodwill
Mission) and are targeted to improve the qualityof life of children.
Dash Missione Bontà – Mille Lire Per Un Mattone(Dash Goodwill Mission – 1,000 Lire for a Brick)took place in Kenya. The main problem in the areaof Kiongwani (150 km southeast of Nairobi) was thelack of infrastructure to provide children with proper
education. The project was supported by Padri
Comboniani, a missionary in Kenya, and aimed atbuilding a village with schools and houses. The
village included a clinic for basic medical assistance,a church and a supply of water and electric power.
In a few years, the village was entirely built,
consisting of about 51 buildings. Today, almost
1,300 students receive education at Kiongwani, andthe infrastructure built with this project supplies
water to the entire region around Kiongwani.
Dash Missione Bontà – Mille Lire Per Un Aiuto(Dash Goodwill Mission – 1,000 Lire for a HelpingHand) took place in Dalocha, Ethiopia. Dalocha is avery poor and densely populated area 180 km southof Addis Ababa. Only nine percent of the total
population has access to drinkable water. Fifteen
percent of newborns do not survive after the first2 0 0 1

year, and 23 percent die by age five. The project was
supported by Action Aid, a nonprofit organization
specializing in fighting poverty and helping poor
children and families improve the quality of theirlives. This project focused on providing the
population with water and health assistance bybuilding a hospital, 15 clinics, a water reservoir,
three water collectors and 16 wells.
Thanks to Dash and Action Aid supporters, theproject now offers clean, drinkable water andsanitary assistance to everyone in Dalocha,
especially children and pregnant women.
Dash Missione Bontà - Scuola per L’Angola(Dash Goodwill Mission - School for Angola)
took place in Angola’s Luanda and Benguela
regions. The project was supported by UNICEF
and aimed at providing children with basic
education. After many years of war in these areas,
25 percent of schools have been destroyed, and58 percent of adults are illiterate. The projectprovided people and materials for education:school kits for 250,000 children and training for
5,000 new teachers.
Over the past two years, Dash Missione Bontà
projects moved their attention towards Italianchildren, namely with Dash Missione Bontà –Ospedale Amico. A brand new Dash campaign
will be launched later this year.

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