Case study: How P&G reduces its manufacturing waste and pilots ways to find worth in manufacturing and consumer waste

What are the material issues the company has identified?

In its 2015 Sustainability Report P&G identified a range of material issues, such as climate change, renewable materials in products and packaging, conservation of resources, social responsibility programs, policies and practices. Among these, with approximately 130 manufacturing sites in over 35 countries and products sold in more than 180 countries and territories around the world, reducing its manufacturing waste and piloting ways to find worth in manufacturing and consumer waste stands out as a key material issue for P&G.

Stakeholder engagement in accordance with the GRI Standards

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The organization should identify its stakeholders, and explain how it has responded to their reasonable expectations.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups P&G engages with:

How stakeholder engagement was made to identify material issues

Each P&G production facility has site-specific activities to build constructive relationships with local authorities, industry associations, residential and business neighbors, action groups, thought leaders and news media. Depending on the cultures and interests of individual communities, this can range from regular official meetings, during which new information is shared or questions are answered, to more informal meetings. These could include, for example, a reception for immediate neighbors, where information about the past year and plans for the new year are discussed.

P&G frequently enters into dialogue with NGOs to understand their concerns and cares. In order to work constructively with stakeholders, P&G feels it is essential to have their confidence and be seen as a reliable and open discussion partner. By building an open relationship, P&G can approach its NGO partners when issues arise.

Each year, P&G hears from millions of consumers who want to ask something about its products or the company. P&G proactively offers “traditional” contact channels – phone, letter, e-mail – to consumers, but it is also very aware that consumers’ lives are changing. As a result, P&G has invested to enable its consumers to engage with it through social media, in addition to its established Carelines. Many of the people in P&G’s Global Consumer Relations team are now responsible for establishing online communities in which consumers can ask questions about the company and its products.

What actions were taken by P&G to reduce its manufacturing waste and pilot ways to find worth in manufacturing and consumer waste?

In its 2015 Sustainability Report P&G set the following targets for reducing its manufacturing waste and piloting ways to find worth in manufacturing and consumer waste, based on the company’s approach to materiality – on taking action on what matters, where it matters:

• Achieving Zero Manufacturing Waste to Landfill (ZMWTL) at both manufacturing and nonmanufacturing facilities

Over the past three years, P&G has increased the number of ZMWTL sites from 10% to nearly 50% of its manufacturing sites globally. Considering over 95% of P&G’s waste comes from its manufacturing sites, P&G is proud to have 63 of its 130 production facilities at ZMWTL. To drive consistent behaviors, P&G also tracks ZMWTL at its offices, technical centers and distribution facilities. These non-manufacturing facilities are at approximately 14% ZMWTL but are finding innovative recycling streams to quickly catch up to their manufacturing counterparts. In total, 68 sites across P&G including both manufacturing and nonmanufacturing have achieved ZMWTL status. P&G has also reached several country/regional milestones, with all facilities in Germany, Poland and Vietnam and all manufacturing sites in Japan reaching ZMWTL. The teams in these countries are driving breakthrough solutions and setting a high bar for their peer sites to follow.

• Driving innovative solutions

One example of innovative thinking to drive progress is reuse of non-recyclable plastic laminate materials from P&G’s plants in Mandideep and Baddi, India. When the manufacturing site found that there was no locally available recycling stream for these types of multi-wall plastic sachets, they worked with a company that creates low-cost housing partitions to use P&G’s waste as a beneficial feedstock. This prevented over 640,000 metric tons of waste per year from going to the landfill while providing a unique and beneficial raw material that ultimately helps the local community, proving once again that what was considered waste truly can have worth.

• Initiating a number of waste-reduction pilots

P&G is initiating a number of waste-reduction pilots in both developed and developing regions. One of P&G’s key pilot programs is its Waste to Worth project in the Philippines. Waste to Worth is an effort focused on developing an integrated, profitable and replicable waste management business model that extracts value from waste. To date, feasibility studies sponsored by P&G and the Asian Development Bank have been completed and formed the basis for two proposed pilot projects to convert over 1,000 tons per day of solid waste to value. The pilots are currently entering into the execution phase, with groundbreaking on the first pilot site expected to take place by the end of FY 15/16.

• Joining coalitions, recycling partnerships and social impact investment funds

While P&G looks forward to the groundbreaking for the first pilot site, it is equally excited about a growing multi-stakeholder coalition called the Trash Free Seas Alliance (TFSA), which P&G joined in 2015. The goal of TFSA is to bring together thought leaders from industry, conservation and academia to create a forum for pragmatic, real-world collaboration focused on the measurable reduction of ocean trash. One focus area for TFSA is to explore how land-based sources of trash in developing regions of the Asia Pacific rim are contributing to ocean debris and what kind of pragmatic efforts could be brought forth to improve solid-waste management and reduce the amount of trash entering the ocean. P&G sees many parallels between its Waste to Worth effort and TFSA’s focus on waste management in the developing world and looks forward to contributing to the dialogue going forward. In 2015, P&G joined TRP. TRP is a national recycling non-profit organization with a goal to improve residential recycling in the U.S. With a focus on public-private partnerships that improve recycling at the local level, TRP’s efforts serve to increase the supply of recycled materials and reduce the amount of consumer waste going to landfill. In 2014, P&G joined forces with several other large, multi-national companies to form the Closed Loop Fund (CLF), a social impact investment fund that provides U.S. cities access to the capital required to build comprehensive recycling programs. CLF aims to invest $100 million by 2020 with the goal to create economic value for U.S cities by increasing recycling rates. In 2015, CLF announced its first three investments totaling $7.8 million in capital, which in turn unlocked an additional $17 million from other public and private co-investors.

Which GRI indicators/Standards have been addressed?

The GRI indicators/Standards addressed in this case are:

1) G4-EN23: Total weight of waste by type and disposal method – the updated GRI Standard is: Disclosure 306-2 Waste by type and disposal method

2) G4-EN25: Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention (2) Annex I, II, III, and VIII, and percentage of transported waste shipped internationally – the updated GRI Standard is: Disclosure 306-4 Transport of hazardous waste

3) G4-EN28: Percentage of products sold and their packaging materials that are reclaimed by category – the updated GRI Standard is: Disclosure 301-3 Reclaimed products and their packaging materials

References:

1) This case study is based on published information by P&G, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) http://www.fbrh.co.uk/en/global-reporting-initiative-gri-g4-guidelines-download-page

3) https://g4.globalreporting.org/Pages/default.aspx

4) https://www.globalreporting.org/standards/gri-standards-download-center/

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