Executive Summary
11999 99 9S US SUT SA TI NAAI BN I AL IBT IYL TR EY P RO ER PT O R T

EMBRACING THE FUTURE
Using the powerof innovation to improve
lives, the environmentand shareholder value.

Visit http://www.pg.com/99sr for the full report.

EXECUTIVE

SUMMARY • 1999

SUSTAINABILITYREPORT

CEO Statement
This is taken from a letter that Durk I. Jager, P&G President and Chief Executive, sent to the Company’s Global Business
Leadership Council and to employees on sustainable development on July 1, 1999.

S

ustainable development, or sustainability, integrates
economic progress, social development and environmental concerns with the objective of ensuring a quality of life
for future generations at least as good as today’s. It is becoming an increasingly important public policy issue, andalso a significant business opportunity.

to consider new cleaning methods that use less water, cold
water, non-potable water and even salt water. These newcleaning methods not only help meet the sustainability needsof developing countries, but also can be leveraged for breakthroughs in developed countries.

Consistent with the Company’s new business structure, Organization 2005, we are looking to the
new Global Business Units (GBUs) for leadershipon how sustainability will be reflected in their business plans. Concurrently, we have reorganized theCompany’s Corporate Environmental Quality
group to encompass all aspects of sustainability, Durk I. Jager,
and to focus its leadership on activities best done President andChief Executive
at a corporate level.
George Carpenter has been appointed Director-Corporate Sustainable Development to lead this group. This
reorganization is designed to shift accountability forsustainable development to our GBUs, and better alignour efforts with the new organization design. Thesemoves will build on, and strengthen, our Company’s longstanding commitment to the environment, while taking
a more holistic view that also incorporates the socialand economic concerns of our consumers, shareholders
and communities.
Over the past several years, academics, governments andnon-governmental organizations have been evolving theirviews of environmental quality to the broader, more holistic concept of sustainable development. While some see thisas inevitably leading to restraining consumption, I view it
as an opportunity and stimulus to innovate, to improve
consumers’ lives, while also making positive contributions
to environmental quality and society, particularly in developing countries.

In Food & Beverage, the need for better nutrition
for the world’s growing population, particularly
in developing countries, has led to our development of a new nutrient drink that has been clinically proven, in a Tanzanian study, to improve
the growth and development of children. These
innovations respond to important consumer needs,
and bring substantial sustainability benefits.

We need to make further progress. Each GBU must
understand how sustainability impacts its business, and identify the implications for innovation and geographic expansion programs. As part of this, I have asked
Fabric & Home Care to develop a sustainability plan for its
GBU which can also serve as a model for other GBUs. Paul
Polman, President-Global Fabric Care, will lead this workand collaborate with George Carpenter to define resourcesthat will be useful to the GBUs as they develop these plans.
Sustainability also will be one of the areas we explore in
our upcoming strategy reviews.
George Carpenter and the new Corporate Sustainable Development group will focus on defining the Company’s overall sustainability policy, identifying emerging sustainability
issues, managing corporate reporting and building relations with external stakeholders. George’s group also will
work closely with other internal resources involved in thesustainability issue.

Durk I. Jager
We already have made progress in this area. For example,
the global water supply issue has led Fabric & Home Care

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EXECUTIVE

SUMMARY • 1999

SUSTAINABILITYREPORT

Sustainability OverviewT

he year 1999 marks two important sustainability
milestones for P&G. The first is the creation of the
Corporate Sustainable Development organization that
Durk Jager outlined. The second is our move froman annual Environmental Progress Report, to thisSustainability Report, including participation in the Global Reporting Initiative’s (GRI’s) pilot of a standardized reporting format.

to bear on issues of health, hygiene, environment, nutrition, education and the overall quality of life of bothtoday’s and future consumers.
The decision to move from an annual Environmental
Progress Report to a Sustainability Report is, of course,
closely related to our decision to strategically embrace
the concept of sustainability. We have been
publishing an Environmental Report since1993. With each report we used market research tools to understand the informationneeds of our target audience, and to sharpen
the content.

For the past two years, we have had a worldwide
team of P&G people analyzing how sustainable
development could and should relate to our business. We realized that P&G, to date, could be described as a sustainable corporation. Over the past
As we again reviewed our target audience for this162 years, P&G has changed and reinvented itSustainability Report, we chose external thought
self many times. Today, it is a $38 billion global George D.
leaders, non-governmental organizations, academcompany with on the ground operations in over Carpenter,
ics, social investors and governments as our pri70 countries, products sold in over 140 countries, Director ofmary focus. This is a smaller audience than weand over 110,000 employees. But, the challenge Corporate
have traditionally tried to satisfy.
for us as a sustainable corporation is how will we Sustainablechange and evolve to improve the lives of the Development
world’s consumers, such that we continue to exist and thrive Ha ving settled on this audience, it then became
important to format our report in a way that best met
into the future.
their needs. This is where participation in the pilot
The creation of P&G’s Corporate Sustainable Development project of the GRI became opportune, since the GRI was
department marks a strategic decision to more closely align made up of a global cross section of our chosen target
our business with the more holistic concept of sustainability, audience. Furthermore, participation in the GRI pilot
taking advantage of the broader “umbrella” which encom- provided us both an easy means of obtaining customer
passes economic development, social equity and environ- feedback on this year’s report, and an opportunity tohave an impact on the format of the report itself, frommental protection.
a supplier’s viewpoint.
Sustainability aligns very well with our Company’s Statement of Purpose which describes the synergy among meet- This year’s report continues our evolution towards
ing the needs of our consumers, building our sales and profit paperless reporting. Therefore, this year’s report isand contributing to the prosperity of our employees, share- available in its entirety on our corporate web site,
holders and communities. This is not to say that we are http://www.pg.com/99sr. In addition, for those that dodefining sustainability as “business as usual.” Instead, we not have Internet access, we have published this abridged
see sustainability as an opportunity to address needs that Executive Summary which includes key sustainability data
are today unmet. Needs that are driven by the six billion and charts. I hope that our attempt to address your needs,
people on this planet, which may grow to eight to ten bil- as the consumers of this report, meets with your approval.
I encourage you to contact us if you have any questions
lion in the next century.
or comments.
Malnutrition affects 50% of the world’s population.
Water borne diseases, lack of sanitation, lack of hygieneand health care, and other problems affect populations
in areas without adequate infrastructures. For P&G, sustainable development will come to life, and bring value George D. Carpenter
where it intersects with our ability to bring innovation Director, Corporate Sustainable Development

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EXECUTIVE

SUMMARY • 1999

SUSTAINABILITYREPORT

Profile of P&G
markets approximately 300 brands of consumer
products to nearly 5 billion consumers in over 140 countries. The products include laundry detergents, toothpastes,
shampoos, feminine hygiene products, pharmaceuticals,snacks, diapers, cosmetics, and cold remedies. These products are best known by their brand names: Tide, Ariel, Crest,
Pantene Pro-V, Always, Whisper, Didronel, Pringles, Pampers, Oil of Olay and Vicks.

KEY BRANDS
Fabric & Home Care
ACE BLEACHARIEL
BOUNCECASCADE
CHEER
DAWN
DOWNY
FAIRY
JOY
LENOR
MR. CLEAN
TIDE

P&G’s worldwide headquarters is located in Cincinnati,
Ohio, USA. The Company has on the ground operations
in over 70 countries and employs more than 110,000
people worldwide.
P&G is a publicly owned company. Its stock is listed and istraded on the following exchanges: New York, Cincinnati,
Amsterdam, Paris, Basle, Geneva, Lausanne, Zurich, Frankfurt, Brussels and Tokyo.

Feminine Protection
ALWAYSALWAYS ALLDAYSLINES FEM PROTAMPAX
WHISPERAs of July 23, 1999, there were 278,245 Common Stockshareholders of record, including participants in the Shareholder Investment Program. Five billion shares of Common
Stock have been authorized. About 1.32 billion shares were
outstanding as of June 30, 1999.

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

In September, 1998, P&G announced
far-reaching changes to its structure, work
processes and culture to accelerate
growth. In June, 1999, the Company
reported on progress toward thisinitiative called Organization
2005. The new organization structure, including the move from four
geographic business units to seven
Global Business Units (GBUs) basedon product lines, became ef fective
July 1, 1999. The GBUs are responsible forall strategic, manufacturing and sourcing activities. Each of the new GBUs is expected tointegrate sustainability in its business plans.
Accountability for sustainable development resides with the GBUs.

Food & Beverage
CRISCOFOLGERSJIFMILLSTONE
OLEAN
PRINGLES
PUNICASUNNY DELIGHT
Beauty Care
CLEARASIL
COVER GIRL
HEAD & SHOULDERSIVORYMAX FACTOROIL OF OLAY
OLD SPICEPANTENE PRO-V
PERT PLUS
REJOICESAFEGUARD
SECRETSK-II
VIDAL SASSOON
ZEST
Tissue/Towel
BOUNTYCHARMIN
PUFFS
TEMPO
Baby CareBABYSANLUVS
PAMPERSPAMPERS WIPES

Building for the Future$1 Million
Net Sales
1859

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

1837

1850

Northern U.S.
Markets

1860

1870

EMBRACING THE FUTURE

Key Indicators
Key Sustainability Focus Areas

Major Stakeholder Groups

P&G intends to focus its sustainability efforts on Water and Health &Hygiene. These two areas are applicable across both the Company’s global
business units and the interlocking drivers of sustainability; economic
development, social equity and environmental protection. The Company’s
approach is to increase shareholder value by contributing solutions toproblems, needs and concerns associated with these two areas.

• Consumers• Communities

While P&G intends to focus on Water and Health & Hygiene, theCompany will continue its long tradition of:• doing what is right for consumers, employees, shareholders andcommunities where it operates.
• building sales and profit growth in a socially and environmentally
responsible manner.
• increasing diversity within its workforce.
• contributing to a more educated population.
• maintaining high standards of health, safety and environmental
protection for its products and operations throughout the world.

• Employees• Shareholders

Major Impacts Associatedwith Products
Economic• Shareholder Value• Employment• Taxes, Fees and Contributions
Social• Health• Hygiene• Education
Environmental• Resource Use (Materials and Energy)• Water• Waste and Emissions

Production, Waste and Energy Data (Thousands of Metric Tons)
Total

1998/99 By Region
Europe,Latin
Middle East, America
Africa
5,040
1,280
n/a
296

North
America

Production

1998/99 1997/98

1996/97

Asia

Packaged Product Shipped
Raw Materials from
Recycled Sources
Packaging Used
Packaging Material from
Recycled Sources

14,644 14,436 14,019
380
400
n/a

1038
84

1,375
490

1,367
455

1,330
480

101
24

440
171

105
52

729
243

864
56%

895
56%

730
67%

67
58%

209
70%

146
14%

443
64%

Solid Waste — Non-Hazardous 271
Solid Waste — Hazardous
27
Effluents (Excluding Water)
31
Air Emissions
20

324
12
37
20

175
7
34
21

18
5
1
1

36
19
4
2

115
2
3
1

102
2
23
16

947
1.9

853
1.6

58
n/a

219
n/a

57
n/a

633
1.6

7,286
n/a

Waste
Generated Waste
Recycled/Reused Waste

Disposed Waste

Other
Energy Use (10 5 GJ)
SARA Releases*

967
1.6

* Releases defined in the U.S. Superfund Amendments and Reauthorization Act by the U.S. Environmental Protection Agency.

P&G
Advertising
1882

1880

ProfitSharing1887

Incorporated
Company
1890

1890

Beginningof P&G
Research &Development

Shortening &Oils Business

1900

1910

P&G
CanadaCode ofMarkets Regulations

1920

EXECUTIVE

SUMMARY • 1999

SUSTAINABILITYREPORT

Economic and Social Data
Financial Highlights (Millions of dollars except per share amounts)
1998/99
Net Sales$38,125Net Earnings$ 3,763
Basic Net Earnings Per Common Share$2.75
Total Assets$32,113Long-Term Debt
$6,231
Shareholders’ Equity$12,058
Income Taxes$2,075Marketing, Research & Administrative Expenses$10,666

1997/98$37,154$ 3,780$2.74$30,966$ 5,765$12,236$ 1,928$10,035

1996/97$35,764$ 3,415$2.43$27,544$ 4,143$12,046$ 1,834$ 9,766

Diversity – U.S. Enrollment

P&G expects its workforce to become even more diverse in the future. This is a global policy and programs
are in place for continuous improvement in all regions. The percentages of minority and women employees in the U.S. are shown in the following table:

Management
Technicians, Laborers, Service Workers
Total% Minorities
1998/99 1997/98 1996/97
15.0
15.6
15.5
18.1
18.6
18.6
16.9
17.4
17.4

% Women
1998/99 1997/98 1996/97
38.4
38.0
37.5
41.7
41.1
40.8
40.4
39.9
39.5

Worldwide P&G Philanthropic Contributions
1998/99$73,245,604

Total

Summary of Violations andInterventions

1998/99
46$33,250

1997/9854$73,100

1996/9756$14,900

1920

Philippinesand U.K.
Markets

1930

Total Incident Rate
(injury and illness per 100 employees)
1998/99
1997/98
1996/97
0.7
0.8
0.9

continued...
Tide
Overseas
Introduced Division
1946
1948

Synthetic
Detergents
Oral Care
Business

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

Total Lost Workday Case Rate(lost and restricted workday cases per 100 employees)
1998/99
1997/98
1996/97
0.3
0.4
0.4

Building for the Future,
SafetyProgramStarted1996/97$60,616,378

Occupational Health & Safety Data

Past three years’ data on environmental, transportation, and worker health and safety violations andinterventions follow:

NumberFines

1997/98$66,859,204

1940$1 Billion
Net Sales

1950

First
Disposable
Fluoride
Diapers
Toothpaste Business
1955

1960

Affirmative
Action1965

Recent Product News
Laundry Sanitizing
In the U.S., Tide with Bleach sanitizes
laundr y, killing at least 99.9% ofbacteria, and is registered with the U.S.
Environmental Protection Agency.

Crest Schools Program
Improves Dental Hygiene®

Preventing Diaper Rash
Pampers Rash Guard is the firstdiaper specifically designed to protect against diaper rash.

For thirty years, P&G’s Crest
Schools Program has provided
dental health education to elementary students in the UnitedStates. Today, children aroundthe world have the opportunity
to learn about good dental hygiene through global school programs sponsored by Crest and Blend-a-Med toothpastes.

Global Shampoo Packaging
A newly designed bottle is replacing the bottle
previously used by many of P&G’s leading
shampoo brands. Designed to reduce material use and improve handling, the newbottle saves 2,000 metric tons of plastic,enough plastic to fill an Olympic-sizedswimming pool, each year.

Dental Care Education Brightens
Smiles in Zimbabwe
P&G is a sustaining member of Health Volunteers Overseas, a group dedicated to improving the availability ofhealth care in developing countries through training andeducation. In Zimbabwe, health care workers trained by
the program use Crest toothpaste educational materials to improve dental hygiene in remote villages.

Dawn Saves the Day – Again!
Greasy messes are no challenge
for Dawn dishwashing liquid.
Not only does Dawn cut grease
on dishes, but highway officials credit Dawn for theclean-up of two greasy spills
on Cincinnati, Ohio, USA highways last year. Fromanimal fat to biscuit dough, Dawn cut the grease
and the highways reopened in record time.

Improved Dishwashing Detergent Cleans
Best in Low Temperatures

P&G Promotes Self-Esteem for
Teenagers in Mexico

VOCs Reduced in Hairsprays

In Latin America, studies haveshown that many women have
low self-esteem. To address
this, P&G’s Always feminine
hygiene products introduced aprogram to improve women’s
self-esteem by reminding themthat they can aspire to live a
fulfilling life through increased
education, personal hygiene
and the reinforcement of theirfamily values. The education program targets teenagers
and is based on a series of lectures in school classrooms
and a colorful magazine.

New Fairy Tab-in-Tab automatic dishwashing detergent
provides tough food cleaning in
low temperature wash cycles. The
innovative use of enzymes delivers two to three times more cleaning while saving consumers water and electricity.

P&G has taken an innovative approach to reducing VOCs
(volatile organic compounds) in hairsprays. A concentrated formula and new package deliver hairspray
more efficiently, using
25% less packaging
and with lower VOC
emissions than conventional hairsprays. Consumers in California,
USA are the first to try
this new hairspray.

Toll-free Environmental
Juice & Feminine Statement
World
Opportunity
Consumer
Audit$10 Billion
ProtectionofEnvironment
2000
HotlineProgramNet Sales
Businesses
Purpose Center Award
Award
1987
1992
1994

1970

1980

1990

FutureShares1998

2000

Organization
2005

EMBRACING THE FUTURE

TStatement of Purpose
We will provide products of superior
quality and value that improve the livesof the world’s consumers. As a result,consumers will reward us with leadership sales and profit growth, allowing
our people, our shareholders, and thecommunities in which we live and work

his is an Executive Summary of a report prepared inaccordance with the Global Reporting Initiative’s(GRI’s) Sustainability Reporting Guidelines: Exposure Draft
for Public Comment and Testing, March 1999. The missionof the GRI is to promote international harmonization in
the reporting of relevant and credible corporate environmental, social and economic performance information toenhance responsible decision-making. GRI pursues thismission through a multi-stakeholder process of open
dialogue and collaboration in the design and implementation of widely applicable sustainability reporting guidelines. GRI has not verified the contents of this Executive
Summary, nor does it take a position on the reliability of
information reported herein. For further information
about GRI, please visit: http://www.globalreporting.org.

to prosper.

Core Values
LEADERSHIPPEOPLE

This is an Executive Summary of the first
Sustainability Report for P&G’s worldwide operations. Data in the report cover the period from
July 1, 1998 through June 30, 1999.

OWNERSHIP

PASSIONFOR
WINNINGTRUST

INTEGRITY

The full report is available on P&G’s World Wide
Web site: http://www.pg.com/99sr

Principles

Please visit P&G’s Corporate Web site:
http://www.pg.com for the latest P&G news,
shareholder and career information.

We show respect for all individuals
The interests of the Company andthe individual are inseparable
We are strategically focused in our work
Innovation is the cornerstone of our success
We are externally focused
We value personal masteryWe seek to be the best
Mutual interdependency is a way of life

FRONT COVER: In Zimbabwe, health care workers
trained by the Health Volunteers Overseas program
use Crest toothpaste educational materials toimprove dental hygiene in remote villages.

Editor: Keith Zook, P&G, Cincinnati, Ohio, USA.
Core Report Team: Margaret Gerber, P&G,
Cincinnati, Ohio, USA; Chris Smith, P&G, Newcastle
Upon Tyne, UK; Robin Tollett, P&G, Cincinnati,
Ohio, USA.
Writing: John Swartzbaugh, Environmental
Technologies and Communications, Inc., Cincinnati,
Ohio, USA.
Design: Andy Ruttle, Ruttle Design Group, Inc., Cincinnati,
Ohio, USA.

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

Corporate Sustainable Development
Two P&G Plaza
TN-02 MS-28
Cincinnati, Ohio 45202 USA
Fax: (513) 983-5226

0013-6462

E-mail: sustainrep-im@pg.com