P&G 2006 Global Sustainability and Philanthropy Report
EXECUTIVE SUMMARY

2006 Global Sustainability& Philanthropy Report
EXECUTIVE SUMMARY

P&G 2006 Global Sustainability and Philanthropy Report
EXECUTIVE SUMMARYCEO StatementA.G. Laﬂey
Chairman of the Board,
President and Chief Executive

P&G is 169 years old. I’ve thought a lot about why P&G has
grown and prospered for so long. It comes down to fourthings: we are driven by P&G’s Purpose of improving lives;
we have a long record of leading change and innovation;
we’ve created brands built to last; and we have a heritage ofdeveloping leaders.
These factors enable P&G to serve consumers and deliver
superior, reliable shareholder value. They also enable us tomake a difference beyond business and ﬁnancial growth.
The challenge is to ﬁgure out where and how we can makethe most meaningful difference. We continually ask ourselves
how we can use P&G technologies, human capital and global

presence to help ensure a sustainable future for the people
who need help and hope the most.
P&G focuses on helping children in need Live, Learn andThrive, our global cause. Our signature cause program is P&G’s
Children’s Safe Drinking Water initiative. We are collaboratingwith NGOs, governments and other companies to provide
P&G’s unique PUR Puriﬁer of Water in countries where drinking
unsafe water kills more than 4,000 babies and children everyday. We also work with relief partners to provide safe water inemergency situations, such as the South Asia tsunami and thePakistan earthquake.
The people who need this product most are those who canafford it least, but we created a market-based distribution
model that makes it economically feasible to get this productwhere it’s needed. We’ve provided more than 50 million
packets and puriﬁed over 500 million liters of water since theprogram began.
It is this spirit of entrepreneurship and collaboration thatguides P&G’s sustainability efforts, and we are pleased toprovide this year’s report of the Company’s progress towardsustainability goals.

Improving quality of life, now and for generations to comeVisionPeter R. WhiteDirector,
Global Sustainability

The past year has been one of combination, transitions andseeing long-term beneﬁts of our commitment to all threepillars of sustainability – economic development, environmental
protection and social responsibility.
“Combination” occurred at our topmost level: Two great,innovative companies – Gillette and P&G – became one. Bothhave individual histories of embracing and leading industry
change, including leadership in sustainable development. We
will continue to make sustainability integral to our success.
“Transition” occurred when our philanthropy and sustainability
organizations merged. The new organization oversees
the totality of our sustainability commitment, from ourresponsibility to society to ﬁnding business-building value andopportunity in our approach to sustainability.

It was our work on safe drinking water – delivering a total of
500 million liters in 10 countries – that demonstrated synergies
available to us. Our work to provide safe water in disaster relief
situations has proven integral to creating freestanding social
markets, with our NGO partners, which provide safe water ona sustainable basis to the poorest areas on our planet.
Our commitment to sustainability comes alive on our brandsas well. Over two decades, Pampers shows how long-term
commitment to sustainable development leads to long-term
equity growth. Not as a series of one-time initiatives andinnovations, but touching all three pillars of sustainability.
Pampers is shrinking its environmental footprint, delivering
better quality of life to baby and caregiver, and growing ourlargest brand.
Finally, I would like to thank one of P&G’s sustainability
pioneers – George Carpenter, Director of Global Sustainability– who has retired. George has deﬁned environmental qualityand sustainability, within P&G and externally. In 1999, he led
creation of P&G’s sustainability group. George was determined
to make sustainability a business driver. Today our business
units embrace sustainability more strongly than ever, and wehave robust systems to ensure we deliver on our commitments.
Much credit for this goes to George. We thank him and wish
him the best.

P&G 2006 Global Sustainability and Philanthropy Report
EXECUTIVE SUMMARY

Pampers: An Example of Sustainability in Action

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

P&G 2006 Global Sustainability and Philanthropy Report
EXECUTIVE SUMMARYP&G ProﬁleThree billion times a day, P&G brands touch the lives of people aroundthe world. This happens because P&G provides branded products of superior quality
and value to improve the lives of the world’s consumers. This results in leadership sales,
proﬁts and value creation, allowing employees, shareholders and the communities inwhich we operate to prosper.
The Company markets more than 300 branded products
in more than 180 countries. We have on-the-ground
operations in more than 80 countries and employ nearly
140,000 people. P&G’s world headquarters is located inCincinnati, Ohio, U.S.A.
To optimize resources to ﬁt a growing global business andto accelerate innovation and growth, the Company operates
through Global Business Units (GBUs):• Beauty and Health• Household Care
• Gillette GBU

22

P&G is a publicly owned company. Its stock is listed andtraded on the New York and Paris exchanges.
As of July 3, 2006, there were approximately 2,086,000
common stock shareholders, including shareholders ofrecord, participants in the Shareholder Investment Program,participants in P&G stock ownership plans and beneﬁcialowners with accounts at banks and brokerage ﬁrms.
This is the eighth Sustainability Report for P&G’s worldwide
operations. Data covers July 1, 2005, through June 30,
2006. Financial information is given in U.S. dollars.

BillionDollarBrands

Global Key Brands
Of more than 300 brands, these are the ones we consider key. Of these, 22 have sales of more than a billion dollars.

Net Salesby GBU (1)(in billions)

GBU

Segment

Key Products

Key Brands

BEAUTY AND HEALTH

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

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

Health Care

HOUSEHOLD CARE

GILLETTE GBU

Fabric Care andHome Care

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

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

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

Performance Indicators
At P&G, we proactively bring together innovative ideas and resources tocreate new products and services that improve the quality of people’s daily
lives around the world, at all income levels. P&G is particularly well-positioned todo this because we are in touch daily with the needs of the world’s consumers.
Key Sustainability Focus Areas
To bring our sustainability efforts to life, we decided to focus
on areas in which we can most effectively make a positive
difference and which can involve all our businesses andregions. After much internal and external discussion, we
selected two areas:• Water• Health and Hygiene
P&G’s work in these areas entails• Reaching consumers we have never reached, such as in therural villages and urban slums of the developing world.
• Creating new products responding to the needs, frustrations
and aspirations of those new consumers and selling those
products at an affordable price.
• Exploring new business models, often with new supply anddistribution systems to lower cost and extend reach.

Economic Development• Shareholder Value• Employment• Taxes, Fees and Contributions
Environmental Protection• Resource Use• Water• Waste Reduction
Social Responsibility• Health• Hygiene• Education

Diversity Data – Global Enrollment

Financial Highlights
Amounts in millions
except per-share amounts

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

Major Opportunities and Impacts
Associated with Products and Services

2006

2005

2004

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

21,8483,729
8,684

18,400
3,058
6,923

16,882
2,749
6,156

2.79

2.70

2.34

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

Occupational Health & Safety Data

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

2004

36.7
36.9

U.S. ENROLLMENT% Minorities
Management
All Other Employees1% Female
Management
All Other Employees1

2006

2005

2004

21.0
19.0

19.6
18.7

18.8
19.5

37.0
40.0

36.3
39.6

35.4
38.9

Administrative, Technical and Plant Technicians

Summary of Fines and Violations

TOTAL INCIDENT RATE
Injury and illness per 100 employees

2006

2005

2004

Total

0.42

0.460.55

Lost and restricted workday cases per 100 employees 2006

2005

2004

0.160.17

0.21

The table lists global data on environmental, transportation, andworker health and safety violations over the past three years.

TOTAL LOST WORKDAY CASE RATE

Total

2005

38.0
38.4

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

1

Past three years’ global data on two key metrics for worker
health and safety:

2006

39.0
39.0

NumberFines

2006

2005

2004

48
$127,50080$147,400

64$28,320

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

2006 Global Business Unit Detail*

2006

2005

2004

BEAUTY AND HEALTH

HOUSEHOLD CARE

GILLETTE GBU

21,13465

19,58071

18,471
102

3,911
0

16,701
65

522
0873
60%

831
58%

817
56%

218
54%

622
62%

3473%

289
192416280
222226300
21
21
16

89.6
4.4
5.6
0.8

191.2
13.8
18.1
14.6

8.0
1.2
0.1
0.1

769
2,889
80
2,146

745
3,013
83
1,722

731
2,937
79
1,843

92
279
7.9
481

627
2,468
70.8
1,187

50
141
1.5
479

PRODUCTION

Product Shipped
Raw Materials from Recycled Sources
WASTE

Generated Waste
Percent Recycled / Reused Waste
DISPOSED WASTE

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

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

Philanthropic Contributions

P&G and its employees have a long-standing commitment to being good neighbors inplaces where we do business around the world. We show our commitment throughboth ﬁnancial support and volunteerism.
This year alone, P&G and The P&G Fund contributed morethan $115 million to support our communities.
P&G is committed to improving life for children in need,from birth to age 13, through our global corporate cause– P&G Live, Learn and Thrive™. We do this by buildingon P&G’s range of competencies, products and existing
programs to: help children in need live by ensuring they
have a healthy start; provide access to educational facilities,

tools and programs that enhance their ability to learn;
provide access to programs that build self-esteem and life
skills so they can thrive.
P&G Live, Learn and Thrive comes to life through a numberof programs beneﬁting children in need in local communities
around the world, including our global corporate signature
program, Children’s Safe Drinking Water.

P&G 2006 Global Sustainability and Philanthropy Report
EXECUTIVE SUMMARY

Sustainability In Action
Live:Children’s Safe Drinking Water
More than a billion people in the developing world lack accessto clean drinking water. The global corporate signature program for P&G Live,
Learn and Thrive is Children’s Safe Drinking Water. It addresses the more than 5,000 children
who die every day from diseases caused by drinking unsafe water. P&G has provided 50
million packets of PUR Puriﬁer of Water, enough to make 500 million liters of safe drinking
water, in communities that are likely decades away from public water treatment facilities. We
are working with a diverse group of partners to distribute the product in not-for-proﬁt social
marketing and emergency relief situations.

Learn:
P&G Hope Schools
P&G China furthered its commitment to providing schools forchildren in need. P&G provided ﬁnancial and employee volunteer contributions toenhance the learning environment in 100 established P&G Hope Schools. In addition, ﬁve
new Hope Schools were constructed this year in a collaborative effort between P&G and its
business partners. These efforts beneﬁt more than 60,000 children who would otherwise nothave access to an education.
P&G China continues to expand participation in the P&G Hope Schools project. More than
40 million Chinese consumers purchase P&G products that trigger contributions. Three key
retailers now partner with P&G in that effort as well as supply nearly 50 employee volunteers.

Thrive:Let’s Succeed
In Dubai, orphans ages 8 through 13 can now have a three-day
summer camp experience hosted by P&G volunteers. The campfocuses on self-esteem and success behaviors – setting a goal, working toward a visionand succeeding through knowledge, collaboration and discipline – in a fun and exciting
environment. The P&G volunteers mentor the children during the camp day and even beyond.
Dubai’s camp, accommodating 36 boys and girls per session, was started following thestartup of similar camps in Jeddah and Dammam in 2005, and plans are to expand further.
The camps invite not only orphans but also disabled children and children of prisoners.

P&G 2006 Global Sustainability and Philanthropy Report
EXECUTIVE SUMMARY

P&G’s Equity
Sustainable development is a very simple idea. It is
about ensuring a better quality of life for everyone,
now and for generations to come.1
Sustainability and Philanthropy are fundamental
components to living the P&G Purpose of improving
lives, day in and day out.
Our Purpose

Our Values

We will provide branded products and services ofsuperior quality and value that improve the lives of theworld’s consumers.
As a result, consumers will reward us with leadershipsales, proﬁts and value creation, allowing our people, ourshareholders and the communities in which we live andwork to prosper.

Our Principles

1Definition from UK government report from Department for the Environment,
Transport and the Regions, 1998.

© 2006 Procter & Gamble

Contact
E-mail sustainrep.im@pg.com
Visit www.pg.com/sr for the full report.

Printed on recycled paper

Design: RDG

0013-6470• We show respect for all individuals.
• The interests of the Company and the individual
are inseparable.
• We are strategically focused on our work.
• Innovation is the cornerstone of our success.
• We are externally focused.
• We value personal mastery.
• We seek to be the best.
• Mutual interdependency is a way of life.