of 41 /41
RUNNING HEAD: CSR - PROCTOR AND GAMBLE 1 University of Maryland University College Corporate Social Responsibility (CSR) Highlight: Proctor and Gamble For Dr. Barnard DMBA 610 Asad Zaman Submitted: April 26, 2015

Procter & Gamble CSR

Embed Size (px)

Citation preview

Page 1: Procter & Gamble CSR


University of Maryland University College

Corporate Social Responsibility (CSR) Highlight: Proctor and Gamble


Dr. Barnard

DMBA 610

Asad Zaman

Submitted: April 26, 2015

Table of Contents


Corporate Social Responsibility: Definition................................................................4-5

Proctor & Gamble: A Global Player................................................................................5

Page 2: Procter & Gamble CSR


Proctor and Gamble: Beginnings.................................................................................5-6

Proctor and Gamble: Brands........................................................................................6-7

Proctor and Gamble: Leadership and Business Units......................................................7

Purpose: Mission Statement............................................................................................7

Sustainability: CSR Beginnings...................................................................................7-8

Establishing CSR..........................................................................................................8-12



P&G Corporate Social Responsibility......................................................................16-17

Environment Issues..................................................................................................18-19

P&G Suite alleges discrimination..................................................................................19

Global law and regulations............................................................................................19

Global Outreach.............................................................................................................20



Page 3: Procter & Gamble CSR



Today’s global business enterprises are vastly different from the businesses formed prior to

the beginning of the 21st century. Compared to humankind’s beginnings of conducting trade and

business transactions previously, today’s methods of conducting business and the way that business

relationships are formed require strategies and that serve to satisfy many stakeholders. These

strategies include methods to lower costs and increase market share. Businesses have begun to

orchestrate cost effective means in order to buy, sell, or transfer goods and services in this global

realm with profitability as the primary goal.

The business climate of today includes many businesses spread across the globe.

Globalization, a word that has taken the business world by storm has caused a dramatic shift in

business strategies compared to the simplistic and humble beginnings of business trade many years

ago. Businesses are conducting more trade on a global scale that is helping to fuel extreme

competiveness in the business market (McConnell & Brue, 2008, p. 99).

With globalization, businesses are invoking a global and collaborative method of conducting

business, which includes “industry, commerce, communication, travel, and culture” with other

nations, and by virtue of globalizations’ competitive nature, has also created a panacea for itself

(McConnell & Brue, 2008, p. 99).

This globalization panacea has created a desire for global businesses to achieve profitability

while at the same time attempting to cut costs. Sometimes, the results of these competitive business

strategies can be disastrous. This new and modern marketplace, a product of globalization, has

caused some companies to outsource and manufacture products offshore to increase profits, despite

unsafe and poor work conditions of the employees working in the outsourced country. Some

companies fail to see or ignore the hazardous work conditions those employees are subjected to.

Page 4: Procter & Gamble CSR


This paper will evaluate how one company, Proctor and Gamble, created a Corporate Social

Responsibility (CSR) program in the midst of thriving and ever expanding globalization co-ops, and

evaluate its successes and failures related to its CSR attempts. Furthermore, an exploration of how

P&G applies ethical and moral reasoning behind its CSR policies. How they positively or negatively

affect stakeholders, including those employees in the outsourced locations. Additionally, this paper

will explore Proctor and Gamble beginnings, its CSR failures and successes, and where they stand in

today’s society today and where they appear to be heading in the future.

Corporate Social Responsibility: A Definition

Corporate Social Responsibility otherwise known as CSRis a common term, which embodies

the ethical and moral values and standards of an organization and how those aspects are applied by

the business in the context of executing their business operations. There are many factors which can

influence a business to adopt practical CSR standards for itself while at the same time demonstrating

an ethical appearance which could positively affect or influence its stakeholders; from customers to

the shareholders. However, how does that business deal with the co-ops; those other businesses that

are responsible for actually manufacturing its products or the assembly of components which support

the businesses in terms of employee working conditions, health care, employee rights, and a slew of

other factors which can add to or detract from an employee’s well-being? Due to globalization, the

answer to this question is mostly applicable to businesses in other countries that are providing a

product or service for the main business in another country.

According to Werther and Chandler (2006, p. 7) CSR can be defined as a “broad concept that

businesses are more than just profit-seeking entities and, therefore, also have an obligation to

benefit society” (Werther & Chandler, 2006, p. 7). When a business embraces CSR as an aspect of its

identity, it is also creating atmospherics in terms of how society perceives that business. The

Page 5: Procter & Gamble CSR


perception is weighted against the company’s values in terms of how it achieves profitability and


Further, according to Daft (2008, p. 150) CSR can also be defined as a means to determine

“right from wrong and doing right” in order to “contribute to the welfare and interests of society as

well as the organization” (Daft, 2008, p. 150). There are various levels of the interpretation of CSR;

however, when a business lacks CSR or does not adhere to societal norms concerning ethics and

values, then all stakeholders may be negatively affected.

According to Chernev and Blair (2015) “research” conducted on the subject of corporate

socially responsible businesses revealed “socially responsible firms are likely to deliver superior

financial performance” and indicates that there is a positive correlation between good corporate

social responsibility acts and the businesses profitability (Cherney & Blair, 2015).

Furthermore, Green and Peloza (2011) indicated in previous surveys “that a company’s reputation for

social responsibility tends to decrease consumers price sensitivity and increase their brand loyalty”

(Green and Peloza 2011; Marin, Ruiz, and Rubio 2009).

Proctor and Gamble: A Global Player

Proctor and Gamble: Beginnings

The story of how Proctor and Gamble began is an interesting one. According to the Proctor

and Gamble corporate history web site (2012) “Procter Meets Gamble In 1837, William Procter and

James Gamble signed a partnership agreement formalizing The Procter & Gamble Company, with

combined total assets of $7,192.24” (Proctor & Gamble, 2012).

The beginnings are actually more in depth compared to the history indicated on the Proctor

and Gamble website. William Bell was a soap manufacturer who mentored James Gamble, the son of

Irish immigrants who settled in America because of financial hardships in Ireland. After James

Page 6: Procter & Gamble CSR


became ill, the family stopped in Cincinnati, Ohio and made that their home after James’s recovery

and the great hospitality experienced by them from the town (Proctor and Gamble, 2015).

After eight years of mentoring by William Bell to James Gamble, James went into business

for himself in 1828 with Hiriam Knowlton. Thus, a formal soap manufacturing business was created

in Cincinnati; however, just down the road, another soap manufacturer, managed by William Proctor

was in direct competition with James Gamble business model (Proctor & Gamble, 2015).

Interestingly, James married Elizabeth Ann Norris and William Proctor married Olivia Norris,

Elizabeth’s sister, thus creating an indirect family competitive business model. Alexander Norris,

William Proctor and James Gamble’s father in-law, suggested that they both go into business together

and in 1837 the official partnership of Proctor and Gamble began (Proctor & Gamble, 2015).

Today, Proctor and Gamble is a multibillion-dollar global corporation with presence in many

countries. Proctor and Gamble is a publicly traded Fortune 500 company with approximately $83

billion dollars in fiscal year 2014 sales (Proctor & Gamble, 2015).

Proctor and Gamble: Brands

Proctor and Gamble has 23 $1 billion dollar brands with annual sales exceeding $1 billion to

$10 billion and above in several of those brands. Additionally, another 14 brands count for sales in

the $500 million to $1 billion range. According to Proctor and Gamble (2015), many of the 23 $1

billion dollar and above brands and nearly the entire $1 billion dollar and below brands are among

the top one or two spots within the brands segment area. Further, the top brands show evidence of

continued growth with increased valuation in terms of revenue opportunity (Proctor & Gamble,


Due to Proctor and Gambles vast branding in many market segments, the business provides

approximately “5 billion people” globally with opportunities to use its brands (Proctor & Gamble,

2015). These brands include; “Always, Ambi-Pur, Ariel, Bounty, Charmin, Crest, Dawn, Downy,

Page 7: Procter & Gamble CSR


Fairy, Febreze, Gain, Gillette, Head & Shoulders, Lenor, Olay, Oral-B, Pampers, Pantene, SK-II,

Tide, Vicks, Wella, and Whisper” (Proctor &Gamble, 2015).

Proctor and Gamble: Leadership and Business Units

P&G’s leadership consists of the Company’s Chairman of the board and Chief Executive

Officer (CE), Mr. A.G. Lafley and elected board members with one-year terms.

Proctor and Gamble’s business units combined to form four globally focused sectors in order

to improve its business efficiencies and attain better performance. The individual brands within each

businesses sector are focused on sharing technologies, improving consumer confidence, and

overcoming competition. Proctor and Gamble’s four global focus sectors include “global beauty”,

“global baby, feminine and family care”, “global fabric and home care”, and “global health and

grooming” (Proctor & Gamble, 2015).

Purpose: Mission Statement

P&G has combined its mission statement along with its purpose. The combination of these

two create a purpose statement that enables others to view how P&G services and products will

provided to others and as an enabling component to draw customers to P&G for other products. The

Proctor and Gamble (2015) purpose statement indicates:

“We will provide branded products and services of superior quality and value that improve

the lives of the world’s consumers, now and for generations to come. 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”

(Proctor & Gamble, 2015).

Sustainability: CSR Beginnings

P&G has implemented a business strategy, which takes into account the health of the

environment and the employees and population in those locations where P&G operates which are

Page 8: Procter & Gamble CSR


affected by environmental factors. P&G claims that it develops “sustainable products” and that it

operates “responsibility” within the “supply chain” and that P&G strives at “treating our employees

fairly” (P&G, 2015). Additionally, P&G also asserts it provides “health and hygiene education to

children around the world” and is able to respond “to natural disasters” (P&G, 2015). Furthermore,

P&G also asserts that they also “have both a responsibility and an opportunity to do the right thing

and create change” (P&G, 2015).

Establishing CSR at Proctor and Gamble

Proctor and Gamble devotes a company website to social responsibility and environmental

sustainability. The company’s social obligations are worldwide, beginning with its employees and

extending throughout their global industry and supply chain. It is Proctor and Gamble’s ambition to

achieve their 18 environmental sustainability goals by 2020 (P&G, environmental sustainability,

2015). In addition to environmental sustainment and the basic social responsibilities for safety an

economical enhancement, the company has activated policies to combat human rights violations and

conflict mineral violence.

According to Proctor and Gamble’s Executive Sponsor of Global Sustainability, Martin

Riant, the company educates consumers to engage in cold water washing that will in turn reduce

energy consumption and carbon emissions (Proctor & Gamble; Sustainability Report, 2014). While

encouraging ways for everyone to take part in global sustainment of the environment the company

also provides humanitarian assistance to populations in need. The Proctor and Gamble Safe Drinking

Water Program has delivered more over 72 billion gallons of water and saved as many as 42

thousand lives (Proctor & Gamble; Sustainability Report, 2014, p. 3). The company establishes

sustainment and humanitarian programs through collaborative efforts with industry partners and

experts, nongovernmental organizations (NGO), and the academic community (Proctor & Gamble;

Sustainability Report, 2014).

Page 9: Procter & Gamble CSR


Proctor and Gamble has acknowledged their role in preventing human rights violations such

as human trafficking, slavery, and conflict mineral violence. The supply chain is filled with

numerous vulnerabilities and opportunities for human rights violations to occur. Understanding that

a company in underprivileged regions may serve as a catalyst for human trafficking and slavery,

Proctor and Gamble has placed policies and controls ensuring their operations do not provoke nor

tolerate human rights violations (Proctor and Gamble; policies and practices, 2015). Proctor and

Gamble submit company support and compliance with the International Bill of Human Rights and

International Labor Organization (ILO) in a global effort to prevent human rights violations (P&G,

Human Rights Policy Statement, 2014). The company enforces respect for human rights throughout

its policies and controls and commits “Due Diligence” observation over its supply chain to prevent

violations (P&G, Human Rights Policy Statement, 2014). Furthermore, Proctor and Gamble hold

supply chain stakeholders accountable by routinely inspecting them with third party human rights

agencies (P&G, Human Rights Policy Statement, 2014).

Proctor and Gamble complies with the California Transparency in Supply Chains Act of 2010

where the company engages in supply chain verification and auditing for risks of human trafficking

and slavery in accordance with the U.S. Department of Labor’s Bureau of International Labor Affairs

(P&G, California Transparency Act, 2015). Additionally, P&G trains managers involved in the

supply chain for detection in human trafficking and slavery and in the mitigation of such risks within

the supply chain for which they are involved. It also requires third party audits of facilities and

supply chains; though it is notable the audits are pre-announced (P&G, California Transparency Act,


Proctor and Gamble works to ensure conflict minerals, such as those funding or exciting

illegal war groups in regions of Central Africa, are not included in the supply chain. The company

publishes an annual Conflict Minerals Report that is posted to their website for public review.

Page 10: Procter & Gamble CSR


Additionally, Proctor and Gamble strives to ensure suppliers are operating within international law

and internal company policy directives by installing controls to monitor and mitigate risk factors

contributing to conflict mineral adversities (Proctor & Gamble; Conflict Minerals Report, 2013).

According to the 2013 report there have been no grievances or occurrences reported. Proctor and

Gamble’s “Due Diligence Team” is a multidisciplinary collaboration of corporate members with a

specialized responsibility to observe supply chain activity at risk for mineral conflict vulnerabilities

(Proctor & Gamble; Conflict Minerals Report, 2013).

The company also seeks to conserve environmental resources by using less water and

materials, incorporating renewable resources, and replacing waste at the end of life of a product with

a renewable resource (P&G, environmental sustainability, 2015). According to Proctor and Gamble’s

Worldwide Business Conduct Manual, “all products and packaging must be safe for the consumer

and the environment” (2010, p. 21). Proctor and Gamble has set a timeline for sustainability for the

year 2020. Sustainability goals include; powering plants with 100% renewable energy, using 100%

renewable packaging, no consumer or manufacturer waste to landfills, reduce carbon footprint by

20% per unit of production, reducing industrial related transportation, and several other pre-existing

sustainment goals (P&G, environmental sustainability, 2015).

Company policies are in place for climate change, environmental quality, wood pulp,

deforestation, palm oil, and water (Proctor and Gamble; policies and practices, 2015). Furthermore,

Proctor & Gamble discloses energy use and greenhouse gas emissions to the public through an

Annual Sustainability Report. However, sustainment and conservation efforts are also extended to

the public where a common use of energy sparing, sustainable, and renewables are key factors in

what Proctor & Gamble describes as “global citizenship” (Proctor and Gamble; policies and

practices, 2015).

Page 11: Procter & Gamble CSR


Animal Welfare and Alternatives is a program where Proctor and Gamble has invested over

$370 million and forty years of research in order to eliminate animal testing (Proctor & Gamble;

policies and practices, 2015).Accordingly, the company has developed over fifty alternative, non-

animal testing systems. These efforts began in the 1970’s when P&G reduced duplicate testing on

animals by utilizing databases to store scientific data. Later in the 1980’s, the company invested in

state-of-the art laboratories intent on programs focused on reducing animal testing-innovations

continued in the 1990’s, where P&G received awards from the Humane Society of the United States

(HSUS) and the John Hopkins Center for Alternatives to Animal Testing (Proctor & Gamble; policies

and practices, 2015). Furthermore, P&G testified scientific advancements in alternative testing to

congress in order to obtain federal funding while securing memberships with HSUS, National

Institute of Health, and Animal Rights International (Proctor & Gamble; policies and practices,

2015). In the 2000’s, P&G teamed with the European Centre for the Validation of Alternative

Methods (ECVAM) to eliminate toxicity testing on animals (Proctor & Gamble; policies and

practices, 2015).

In 2011 and 2014, P&G sponsored the 8th and 9th World Congress on Alternatives and Animal

use in Life Science (Proctor & Gamble, 2015). Finally, post 2010, P&G worked diligently to develop

a ground breaking non animal skin test system called Direct Peptide Reactivity Assay (DPRA), which

was finally adopted by the international Organization for Economic Cooperation and Development in

2015 (Proctor & Gamble; 2015). In addition to ECVAM and HSUS, P&G has membership with the

Interagency Coordinating Committee on the Validation of Alternative Methods (ICCVAM), a

consortium of fifteen U.S. regulatory and research agencies as well as several European Union

science organizations (Proctor & Gamble; policies and practices, 2015).

In 1980, Proctor and Gamble swiftly withdrew Rely tampons for potential association with

toxic shock syndrome suffered by women who used their product (Gatewood & Carroll, 1981).

Page 12: Procter & Gamble CSR


Considering a company investment of twenty years development and $74 million in product research

and marketing, some might stratify Proctor and Gamble as the standard for corporate response and

liability strategies in the 1980’s (Gatewood& Carroll, 1981).


In April of 2014 Proctor and Gamble declared a commitment to their global sustainability

goals by promising no further deforestation will occur within its palm oil supply chain by the year

2020 (P&G Sets New Sustainability Goal, 2014). Palm oil is an edible vegetable oil where 50

million tons harvested from Africa, Asia, and the Americas account for 30% of the world’s vegetable

oil production (www.saynotopalmoil.com, 2015). Proctor and Gamble are working to set long term

solutions towards sustainment of the palm oil industry while removing negative impacts on the

environment (P&G Sets New Sustainability Goal, 2014). Proctor and Gamble seeks to improve the

industry by tracing palm oil materials down to their supplier mills and plantations through the

Malaysia Institute for Supply Chain Innovation (MISI) which is part of the Massachusetts Institute of

Technology (MIT) (Proctor & Gamble; Sustainability Report, 2014).

According to Vice President of Global Sustainability, Len Sauers, Proctor and Gamble is

working to reduce production water use by 20% per unit, allowing for another 1 billion people access

to water efficient products (Proctor & Gamble; Sustainability Report, 2014). The company is also

working to reduce packaging by 20% per consumer, double the use of recycled resin in plastic

packaging, and ensure 90% of product packaging is recyclable or that a program is in place to do so

(Proctor & Gamble; Sustainability Report, 2014). As a global player Proctor and Gamble provides

robust assistance to countries around the world when disaster strikes. They’ve donated products,

cash and resources to more than twenty major disasters in recent years, the last according to this 2014

report, being more than $3 million of supplies and water purifiers to the Philippines (Proctor &

Gamble; Sustainability Report, 2014, p. 8). Currently, the Proctor and Gamble Children’s Safe

Page 13: Procter & Gamble CSR


Drinking Water program teams with 140 global partners, to include Wal-Mart and UK ASDA stores

in delivering safe drinking water to numerous developing countries around the world (Proctor &

Gamble; Sustainability Report, 2014).

Proctor and Gamble brands have taken individual leader roles in providing valuable resources

in many countries. The product brand “Always” serves 300 thousand girls in Africa and the Middle

East with feminine hygiene products and education. Their “Pampers” Mobile Clinic Program has

reached 1.8 million families with basic health and wellness checks in Kenya, Uganda, and Pakistan

while also teaming with UNICEF to provide 300 million vaccines for preventable diseases to

children in fifteen countries (Proctor & Gamble; Sustainability Report, 2014). “Pantene” has

collected 550 thousand ponytail donations and distributed over 34 thousand real hair wigs to those in

need through partnerships with cancer associations in the U.S., Canada, Australia, and Israel (Proctor

& Gamble; Sustainability Report, 2014). The P&G sponsored “Safegaurds” Clean Hands Campaign

assists 4.5 million children annually with hand washing supplies and sanitation stations coupled with

hand hygiene education across China, the Philippines, Pakistan, and Mexico (Proctor & Gamble;

Sustainability Report, 2014).

In the article “Apocolypto” by Anya Kamentz (2011), she remarks how Proctor and Gamble

is working to increase use of renewable energy, transition packaging to 100% recyclable material,

and have reduced carbon emissions by 53%. Kamentz further comments that while Proctor and

Gamble’s goals are ambitious, even the smallest amount of progress is a long term value in

preserving our environment and setting the example for other corporations (2011). Proctor and

Gambles CSR initiatives total 18, and the progress of those goals is available for public viewing on

their website (Proctor & Gamble; Sustainability Report, 2014).


Ivanishchev (2012) describes CSR strategy based on five major components:

Page 14: Procter & Gamble CSR


Initiatives to demonstrate the company is acting honorably and ethically;

Efforts to improve living conditions in the community and make the world a better place;

Sound environmental actions;

Gather necessary conditions for employees empowerment at work;

Implement and encourage workforce diversity.

Proctor & Gamble through its different CSR related activities has harmoniously applied these

actions suggested by Ivanishchev (2012) in order to achieve a successful CSR strategy. By

implementing these actions in their operations, P&G has managed to show that financial gain and

supporting social outcomes to improve the lives of people can be achieved. P&G’s success stories

will be scrutinized based on these five components:

To emphasize on the first element related to ethics, a research developed by the

International Journal of Business Research and Management (IJBRM) (2012), highlights P&G

Pakistan. The research findings conclude that stakeholders are very regarding of ethics reporting.

P&G Pakistan has been working relentlessly in educating people and raising awareness in the society

by informing customers where the company stands regarding the importance of Business Ethics

(IJBRM, 2012). The more knowledge acquired by customers, the more influence they have on a

company to ensure the application of CSR actions. The research conducted by IJBRM (2012),

indicated the importance of P&G products’ quality and consumer satisfaction to manage and retain

loyal customers in Pakistan. It simply shows that through good business ethics and product quality,

P&G has established a great relationship with stakeholder groups around the world.

Secondly, P&G has in fact improved the living conditions within the community. For

example, current accomplishments indicate gains of $52 billion in sales of sustainable innovation

products; reducing the usage of water and energy by more than 25%, and progress in helping

Page 15: Procter & Gamble CSR


children. P&G also offered a $1 million check to the Cincinnati Parks Foundations to support the

creation of the P&G Vibrant Playscape in Smale Riverfront Park (Ivanishchev, 2012).

Procter & Gamble has been very active regarding the protection of the environment through

numerous actions they have implemented to mitigate their impact and society and the environment.

As clearly reported by Bob McDonald, previous President and CEO of P&G, “P&G’s commitment to

environmental and social sustainability is unwavering” (Ethical Corporation, November 2012). As an

illustration to his statement, he goes on to indicate:

“From our founding, we have invested in the communities where we sell our products, and

we have embraced the responsibility of ethical and sustainable operations. To grow and thrive

for another 175 years requires us to accelerate our sustainable innovation and resource

efficiency so that we have less environmental impact, and at the same time, continue to invest

in our communities to help create the conditions for future growth” (P&G Annual

Sustainability Report, 2012).

Among concrete actions taken by P&G to support such strong statements from their

chairperson, there was the launch of a pilot program in the Philippines for a sustainable initiative to

address the growing issue of waste. There is also the very ambitious initiative of “Zero Net

Deforestation by 2020” (Ethical Corporation, November 2012); the use of renewable energy and

recycled material in their everyday operations.

Through their outstanding efforts in implementing good environmental practices, P&G has

been included on the Dow Jones Sustainability Index; they are among the Global 100 Most

Sustainable Corporations in the world.

P&G is always striving to gather necessary conditions for the empowerment of their

employees. They understand that the success of a company goes hand to hand with a consequent

investment in their workforce. They manage to do that by always trying to hire the right employees

Page 16: Procter & Gamble CSR


who become a kind of reflection of their consumers. As stated by their CEO, their consumers are

their main priorities and to serve them accordingly, they have to recruit the right employees who can

bring in the skills and knowledge needed to meet their customers’ expectations. Through a program

launched in 2007 “Me and my Mentor”, P&G aimed to contribute to the growth of their employees

by creating a framework of guidance from trusted, experienced and skilled mentors. The program

was later institutionalized through “Speed Mentoring” (IJBRM, 2012).

P&G encourages workforce diversity and provides benefits to their employees and

employment opportunities to ethnic minorities. Understanding women’s rights and implementing

ethnic, educational, and gender diversity within the company has always been an urging

preoccupation for P&G (IJBRM, 2012). P&G launched a diversity network program in Pakistan to

encourage skilled women (IJBRM, 2012). At P&G, “Diversity is a matter of ethics. Every individual

in the company, and every partner with whom they have a business relationship, deserves an equal

opportunity to grow, excel and succeed” (IJBRM, 2012).

P&G Corporate Social Responsibility

P&G Corporate Social Responsibility issues and challenges

Based on comprehensive research, we can say that P&G is a socially responsible organization

and it is working for the betterment of the society. However, there is another side, where the

company violates the social responsibility in some cases explained below.

P&G always claim that they have not used hazardous and harmful materials in the products.

They said that they are very much careful about the use of materials in the production of products.

Recently, the Pampers, the P&G product was claimed to be the reason of rashes and burns on the

babies who used them. The mothers of babies have become very much concerned about the fact that

the product have put the babies on ease of dryness, but at the same time, the babies are getting rashes

and they are getting open sores.

Page 17: Procter & Gamble CSR


P&G claimed that they used and tested the product on nearly 20,000 babies before

introducing it in the market. They have stated that nearly 70% of people have preferred to use the

product in the market. When Pampers, the P&G product were tested in Germany, they found that the

company violated the product safety claim and it was detected that the product had poisonous

substance used in their product manufacturing. Greenpeace discovered that tributyltin (TBT) a

dangerous substance was used in Pampers Baby Dry Mini. The Pampers contained 38.4 mg of TBT

in the section of the pamper belt and also in other layers of pampers (Dudovskiy, 2012). The tests

were conducted and came out founded. TBT has been the most dangerous substance that can

contaminate the environment and it can also enter the skin too. It can also damage the immune

system of a person as well as hormones.

According to Nickson, Gelinas, Payea, and O’Bryane, (2012) “Greenpeace alleged that P&G

failed to protect the company supply chain from being tainted by suppliers linked to its products and

the palm oil plantations involved in forest fires and clearing of peat lands” (Nickson, H., Gelinas, A.,

Payea, A. & O’Bryane, T (2012.

It was discovered in 2009 that bacteria contaminated Vicks Nasal Spray, a product of P&G.

The discovery of B. Cepacia bacteria was found in nearly 12,000 Vicks Nasal Spray bottles. All the

dispatched products were recalled. The detected bacteria was said to have a risk of causing serious

infections to those who had weak immune systems. However, there were no reported illnesses or

contamination from its use. The bacteria did not carry much risk; however, it can lead to chronic lung

cancer to people who have weak immune system.

In 2003, the company violated the consumer privacy through the RFID. This issue reveals

how the company has irresponsibly behaved and how they intruded the personal lives of the

consumers. According to Consumers Against Supermarket Privacy Invasion and Numbering

(CASPIAN) “Wal-Mart was also involved along with P&G in the scam. The activity took place in

Page 18: Procter & Gamble CSR


Tulsa, where consumers were used by company as guinea pigs for the research purposes of Wal-Mart

and P&G. The company had placed the RFID antenna chips the lipstick packets named Max Factor

Lipfinity, and the P&G researchers would know when lipsticks have been removed from the shelves.

Even though the company says that they did not want to invade the consumer’s privacy, they still

violated the rule” ( “Scandal: Wal-Mart, P&G Involved” , 2013).

Environment issues

P&G has received external recognition for its approach to sustainable development. For the

second year running P&G holds first place within the Dow Jones Sustainability Index ‘non-durable

household products’ group and reports its work annually under the Global Reporting Initiative (GRI)

guidelines. “ The GRI promotes international harmonization in reporting of environmental, social and

economic performance statistics, in order to promote a more open environment for responsible

decision-making (Boulter, J., & Goodchild, L., (2011)”

A. Resource use (materials and energy)

B. Water quality and availability

C. Waste and emissions.

P&G supplies used in manufacturing goods and services produce wastes and emissions. For

example, making a household product demands raw ingredients, packaging and energy as inputs.

Besides the tangible packed product, other significant outputs will be materials for recycling, for

reuse or for treatment on site, non-hazardous solid waste, hazardous solid waste, air emissions, and

water emissions. Each of these has an environmental effect.

According to a case study by a UK research firm, “P&G’s systematic approach towards

decreasing conservational impact has improved its manufacturing efficiency. For example, the

company’s use of energy is nine times more efficient than in 1985. Today, P&G is able to produce

50% more product output per unit of wastewater than in 1990” (Promoting Sustainable Development

Page 19: Procter & Gamble CSR


P&G, 2012).

Moreover, the shift away from coal to cleaner fuel has helped P&G to reduce CO2 production

by three and a half fold per ton of production. The ‘more from less’ principle can be illustrated by

looking at the development of Ariel, P&G’s laundry detergent. Innovations in detergents have

allowed the wash temperature across Europe to be lowered by around 15°C, leading to a reduction in

household energy use. Reducing the average wash temperature has been equivalent to saving 1.5

Megawatt hours of energy per year in the UK alone. That represents enough energy to heat around

200,000 homes by gas central heating for one year” (Promoting Sustainable Development P&G,


P&G Suit Alleges Age Discrimination

Proctor & Gamble has had to deal with lawsuits involving its own internal practices. For

example, a Procter & Gamble attorney previously filed a federal lawsuit accusing the company of

trying to cut costs by forcing out older employees. Gary Hagopian, a P&G employee for 26 years,

alleges in a suit filed in U.S. District Court that Hagopian was demoted from his job as vice president

and general counsel because the company wanted to replace him with a younger, cheaper employee.

Hagopian, 51, asked for damages of more than $12 million (Highbeam, 2001).

Global Law and Regulations

P&G’s global presence—the company sells products in a number of markets to consumers in

more than 180 countries around the world—its law department faces unique challenges from both a

regulatory as well as a management perspective especially in corporation social responsibility

alleviation. The greatest challenge for our global legal department is to keep our arms wrapped

around both our varying businesses and the myriad laws and regulations that apply to each


Global Outreach

Page 20: Procter & Gamble CSR


As indicated previously, Proctor and Gamble (P&G) is among the world’s largest household

consumer goods company with numerous products in personal care, home, beauty, health, baby and

family categories. P&G has a presence in more than 180 countries in Europe, Middle East, North and

South America, African and Asia. According to a Global Household Goods Industry Profile report

(2014) P&G achieved revenues of $83.062 million dollars. While the company is a global

powerhouse today, its start up in 1836 was rather modest under arduous circumstances to say the


In 2013, Proctor and Gamble secured 14% of the Global household market share, ahead of

Unilever at 7.4%, S.C. Johnson & Son, Inc., at 5.5%, Reckitt Benckiser Group plc at 5.3%, and

others at 67.7% (Global Household Goods Industry Profile, 2014). Strong brand names and high

volume production facilities among powerful companies indicates a low threat of new entry

household companies into the market (Global Household Goods Industry Profile, 2014). The larger

competitors are dominating 32.3% of the global market value with Proctor and Gamble leading at

14%, which is considerable and likely sustainable due to their geographical and product

diversification (Global Household Goods Industry Profile, 2014).

Page 21: Procter & Gamble CSR



In an attempt to expose the success stories and the failures of CSR at P&G, we have

concluded that the successes seem to outweigh the limitations caused by the implementation of CSR

at P&G. Through our findings, the company is working relentlessly to always improve their CSR

initiatives through several projects undertaken to improve CSR actions.

P&G is a worldwide organization that deals with many stakeholders including their

employees, their customers, and the 180 countries they work in. With such reality, they are

accountable for a social responsibility vis-à-vis to the society, their own employees and they always

have to make sure their operations are not hurting the environment but providing innovative

technology and initiatives to protect and preserve the environment. As we know, P&G is already

doing an awesome job as far as the impact of their products and operations on the environment: they

have so far 4% waste reduction efforts on their products, which is a very satisfactory standard. They

need to keep that up and progressively reduce their footprint on the environment.

The ultimate goal expected by P&G through their CSR initiatives, is to better the lives and

living conditions for all their stakeholders around the world. What is considered a luxury under a

different sky should be made accessible to people who are in need of these things. P&G has

contributed to improve the life of nearly 135 million children in the world in 2007 (Dudovskiy,

2012). If we consider children are the foundation of future generations, P&G is investing in future

leaders around the world and making the world a better place.

Page 22: Procter & Gamble CSR



Boulter, J., & Goodchild, L. (2011). Promoting sustainable development. Case Study. Retrieved

on April 24, 2015. From. http://businesscasestudies.co.uk/procter-gamble/promoting-


Business case studies. (n.d.). Procter & Gamble: Promoting sustainable development. Retrieved

on April 18, 2015 from http://businesscasestudies.co.uk/procter-gamble/promoting-


Chernev, A., & Blair, S. (2015). Doing well by doing good: The benevolent halo of corporate

social responsibility. Journal of Consumer Research, 41(6), 1412-1425.


Daft, R. (2008). New era of management. Mason, Ohio: Thomson Hire Education

Dudoskvy, J. (2012). Corporate social responsibility at Proctor and Gamble (P&G). Retrieved

from http://research-methodology.net/corporate-social-responsibility-at-proctor-and-


Ethical Corporation. (2012). P&G Annual Sustainability Report. Press Release. Retrieved from


Garrette, B., & Karnani, A. (2010). Challenges in Marketing Socially Useful Goods to the Poor.

California Management Review, 52(4), 29-47. Retrieved from



Green, T, & Peloza, J. (2011). How does corporate social responsibility create value for

consumers Journal of Consumer Marketing, 28 (1), 48–56.

Page 23: Procter & Gamble CSR


Gupta, D. (2006). P&G steps up CSR events in India. Media: Asia's Media & Marketing

Newspaper, 15. Retrieved from


direct=true&db=bth&AN=20635572&site=eds-live&scope=site .

Hyder, H., Khurshid, I., Ali, F., & Srivastav, N. (2012). Value creation through corporate social

responsibility in developing countries: A case study of Proctor & Gamble Pakistan.

International Journal of Business Research and Management (IJBRM), Volume (3): Issue

(6): 2012. Retrieved from

http://www.cscjournals.org/manuscript/Journals/IJBRM/volume3/Issue6/IJBRM-125.pdf .

IJBRM. (2012). Value Creation through Corporate Social Responsibility in Developing

Countries: A Case Study of Procter & Gamble Pakistan. Volume (3). Issue (6).

Ivanishchev, V. (2012). Procter & Gamble’s Corporate Social Responsibility Strategy.

Retrieved from https://storify.com/Vadim/proctor-and-gamble .

Ladd, S. (2010). Corporate Greening (cover story). Financial Executive, 26(2), 36-41.

Retrieved from


direct=true&db=bth&AN=48961962&site=eds-live&scope=site .

McConnell, C. & Brue, S. (2008). Microeconomics. (17th ed.). New York, New York: The

McGraw Hill Companies, Inc.

Nickson, H., Gelinas, A., Payea, A. & O’Bryane, T. (2012). Corporate global social

responsibility. Retrieved on April 24, 2015. From

https://sites.google.com/site/pandgmgt/home/corporate-social-responsibility .

Page 24: Procter & Gamble CSR


Okpara, J., & Odowu, S. (2013). Corporate social responsibility, challenges, opportunities and

strategies. Google e-book. Retrieved on April 18, 2015 from

https://books.google.com/books?id=6wu7BAAAQBAJ .

Procter & Gamble Announces Billion Dollar Commitment Toward Sustainable Products and

Safer Drinking Water. (2009). Environmental Progress & Sustainable Energy, 28(4), 478-

479. Retrieved from


direct=true&db=eih&AN=45566697&site=eds-live&scope=site .

Proctor & Gamble. (2014). Social responsibility: Improving lives of 50 million people every year.

Proctor & Gamble. Retrieved 29 March, 2015 from


Proctor & Gamble. (2015). P&G corporate newsroom: Proctor meets Gamble. Retrieved from

http://news.pg.com/blog/procter-meets-gamble#sthash.31Ayyhed.dpuf .

Proctor & Gamble. (2015). James Gamble’s Journey from Ireland to Ivorydale. Proctor and

Gamble. Retrieved from http://news.pg.com/blog/james-gambles-journey-ireland-


Spychips. (2003). Scandal: Wal-Mart, P&G involved in secret RFID testing: American

consumers used as guinea pigs for controversial technology. Retrieved on April 18, 2015

from http://www.spychips.com/press-releases/broken-arrow.html

Werther, W. & Chandler, D. (2006). Strategic corporate social responsibility: Stakeholders in a

global environment. Thousand Oaks, California: Sage publications, Inc.