Corporate Social Responsibility

June 7

2010CSR and Leadership

This report focuses on the Corporate Social Responsibility activities conducted by P&G directly and/or indirectly through its operations, interaction with the society and through the organization’s ethical values. We have prepared this research report by conducting secondary research on the internet where the basic CSR activities carried out by P&G were searched upon and are quoted here

KARACHI UNIVIRSITY BUSINESS SCHOOL

Business Ethics

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ContentsExecutive Summary...................................................................................................................................3

Introduction..................................................................................................................................................4

Global Structure & Operations..............................................................................................4

Organizational Structure.........................................................................................................5

Global Business Units................................................................................................................5

Global Operations.......................................................................................................................6

Global Business Services.........................................................................................................6

Corporate Functions..................................................................................................................6

Vision............................................................................................................................................................... 7

Promise........................................................................................................................................................... 7

Foundation.................................................................................................................................................... 7

Purpose........................................................................................................................................................... 7

Their Values..................................................................................................................................................8

Their Principles...........................................................................................................................................9

Sustainability Strategies:......................................................................................................................11

Social Responsibility Commitment Matters.................................................................................12

Live Learn and Thrive Overview.......................................................................................12

CSR Activities.............................................................................................................................................14

Disaster Relief at P&G............................................................................................................16

Other Global Programs..........................................................................................................17

P&Gers Improving Lives.......................................................................................................17

Stakeholders...............................................................................................................................................19

Personal Information Privacy.............................................................................................................26

Suggestions.................................................................................................................................................26

Conclusion...................................................................................................................................................27

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Executive Summary

Corporate and Social Responsibility Reports (CSRs) provide an overview of the social, environmental, and economic impacts of a company’s operations and products. While not a required filing type, publicly traded companies increasingly produce these documents to provide transparency to customers and shareholders.

This report focuses on the Corporate Social Responsibility activities conducted by P&G directly and/or indirectly through its operations, interaction with the society and through the organization’s ethical values. We have prepared this research report by conducting secondary research on the internet where the basic CSR activities carried out by P&G were searched upon and are quoted here. This report also studies P&G’s operational strategies which have made it the leader in its fields of business. We have also studied the ethical values and standards that P&G follows and in light of that, we have linked their operations and interactions with their stakeholders accordingly.

Throughout this report, we have focused on how P&G makes sure that all its operations strictly follow their set ethical values in business and how this has helped them reach at the top of their respective business fields. This report also revolves around the ethical viewpoints in P&G’s operational decision making and also shows how religiously P&G lays stress on following ethical principles in their every aspect of the operations in order to become best at what it does.

Further this report focuses on HOW does P&G:-

- Enhance stakeholder relations and credibility.

- Increase access to capital

- Protect/enhance brand image

- Increase integration and alignment of CSR strategies

- Bolster internal communication

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Introduction

P&G commenced operations in Pakistan in 1991. Headquartered in Karachi, its goal was to become the finest global consumer goods company operating locally in Pakistan. To fulfill this goal, P&G is serving Pakistani consumers with premium quality brands that strive to make their everyday lives better.P&G believes in giving back to the communities it operates in. Corporate social responsibility is close to P&G’s core functions. P&G Pakistan has developed and runs several initiatives and programs in line with its global cause Live, Learn and Thrive, aimed at helping improve lives of children in need.

Global Structure & Operations

P&G’s unique organizational structure offers the global scale benefits of an international company and the local focus to be relevant for consumers in roughly 180 countries where its brands are sold. The corporate structure of P&G provides the framework that allows it to tap the benefits of a global organization with speed and efficiency. Its global operations allow it to keep in touch with the local communities it operates in. And its strong governance practices ensure that they conduct these operations with consistently high standards and integrity.The five core operational strategy P&G adopts is as follows:-

Consumer Understanding

P&G interacts with more than five million consumers each year in nearly 60 countries around the world and no other company has invested such heavily on such consumer based operations. P&G conducts over 15,000 research studies every year. It invests more than $350 million a year in consumer understanding. These results in insights tell P&G where the innovation opportunities are and how to serve and communicate with consumers.

InnovationP&G is the innovation leader in the industry. Virtually all the organic sales growth it has experienced in the past nine years has come from new brands and new or improved product innovation. P&G continually strengthens its innovation capability and pipeline by investing in innovation twice as more than its major competitors.

Brand-BuildingP&G is the brand-building leader in its industry. It has built the strongest portfolio of brands in the industry with 22 billion-dollar brands and 20 half-billion-dollar brands. Eleven of the billion-dollar brands are the #1 global market share leaders of their categories.

Go-to-Market CapabilitiesP&G is consistently ranked by leading retailers in industry surveys as a preferred supplier and as the industry leader in a wide range of capabilities including clearest company strategy, brands most important to retailers, strong business fundamentals and innovative marketing programs.

ScaleP&G’s scale advantage is driven as much by knowledge-sharing, common systems and processes, and best practices as it is by size and scope. These scale benefits enable it to deliver consistently superior consumer and shareholder value.

Organizational Structure

Their organizational structure is comprised of three Global Business Units (GBUs): Global Operations, Global Business Services (GBS), and Corporate Functions.

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Global Business Units

The primary responsibility of the GBUs is to develop the overall strategy for their brands. They identify common consumer needs, develop new product innovations and upgrades, and build their brands through effective commercial innovations and marketing plans.P&G’s brand portfolio ranges in about four categories namely:- Beauty and Grooming Health and Well Being Household CareBrands that fall under this category are:-

BEAUTY AND GROOMING:-

HEALTH AND WELL BEING:-

HOUSEHOLD CARE:-

BraunCamay

Christina Aguilera Perfumes

Dolce & GabbanaDunhill FragrancesEscada Fragrances

GilletteGucci FragrancesHead & ShouldersHerbal Essences

Hugo BossIvory

Lacoste FragrancesMACH3

OlayOld SpicePantene

PumaRejoice

SafeguardValentino

VenusWellaZestEtc.

AlignAlwaysCrest

Oral-BPUR

PringlesRapid Diagnostics

VicksEtc.

AceAriel

CometDashDawn

DownyDreft Laundry

DuracellEra

FebrezeGainJoy

LuvsMr. CleanPampers

PuffsSwiffer

TideEtc.

Global Operations

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Global Operations is comprised of their Market Development Organization (MDO), which is responsible for developing go-to-market plans at the local level. The MDO includes dedicated retail customer, trade channel, and country specific teams. It is organized along five geographic units:• North America• Western Europe• Central & Eastern Europe / Middle East / Africa (CEEMEA)• Latin America• Asia

Asia is comprised of Japan, Greater China, and ASEAN / Australia / India / Korea (AAIK). They define developing markets as the aggregate of CEEMEA, Latin America, AAIK, and Greater China. Developed markets are comprised of North America, Western Europe, and Japan.

Global Business Services

GBS provides technology, processes, and standard data tools to enable the GBUs and the MDO to better understand the business and better serve consumers and customers. The GBS organization is responsible for providing world-class solutions at a low cost and with minimal capital investment.

Corporate Functions

Corporate Functions provides the Company level strategy and portfolio analysis, corporate accounting, treasury, external relations, governance, human resources, and legal, as well as other centralized functional support.

Vision

“Be, and be recognized as, the best consumer products and services company in the world.”

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Ethical Viewpoint

The vision of P&G is simple and specific which focuses on providing best products to its primary stakeholders are known for it throughout the globe.

Promise

Three billion times a day, P&G brands touch the lives of people around the world. And P&G people work to make sure those brands live up to their promise to make everyday life just a little bit better, now and for generations to come.

Foundation

Taken together, their Purpose, Values and Principles are the foundation for P&G’s unique culture. Throughout their history of over 170 years, their business has grown and changed while these elements have endured, and will continue to be passed down to generations of P&G people to come.

Their Purpose unifies them in a common cause and growth strategy of improving more consumers’ lives in small but meaningful ways each day. It inspires P&G people to make a positive contribution every day.

Their Values reflect the behaviors that shape the tone of how they work with each other and with their partners.

And Their Principles articulate P&G’s unique approach to conducting work every day.

Purpose

Companies like P&G are a force in the world. P&G’s market capitalization is greater than the GDP of many countries, and they serve consumers in more than 180 countries. With this stature comes both responsibility and opportunity. Their responsibility is to be an ethical corporate citizen—but their opportunity is something far greater, and is embodied in their Purpose.

P&G’s Purpose Statement articulates a common goal that inspires them daily:

“They 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”.

“Their Purpose works to unify them in a common cause and growth strategy. It is powerful because it promotes a simple idea to improve the lives of the world’s consumers every day. P&G grows by touching and improving more consumers’ lives in more parts of the world...more completely. While this statement defines their commercial opportunity, their culture reflects the broader opportunity of improving lives through and beyond their branded products and services”

Ethical Viewpoint

They can improve their lives in ways that enable them to thrive, to increase their quality of living and, over time, to join the population of consumers they serve with P&G brands. Through their overall Live, Learn &

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Thrive™ cause program, initiatives such as Children’s Safe Drinking Water and Pampers 1 Pack = 1 Vaccine are examples of how they are improving the lives of millions of people every day.

Their shared Purpose attracts and unites an extraordinary group of people, P&Gers, around the world—the most diverse workforce in P&G history. Together, they represent around 140 nationalities. Their recruiting and development philosophy to “build from within” fosters a strong culture of trust and shared experiences. Their diversity, their shared culture and their unified Purpose are the defining elements that enable P&G to touch lives and improve life every day.

Their ValuesP&G is its people and the values by which they live. They attract and recruit the finest people in the world. They build their organization from within, promoting and rewarding people without regard to any difference unrelated to performance. They act on the conviction that the men and women of Procter & Gamble will always be their most important asset.

Integrity

• They always try to do the right thing.• They are honest and straightforward with each other.• They operate within the letter and spirit of the law.• They uphold the values and principles of P&G in every action and decision.• They are data-based and intellectually honest in advocating proposals, including recognizing risks.

Ethical Viewpoint Integrity is the foremost value of the company and they claim to be truthful to their stakeholders either consumers or the society by making decisions through which everyone is benefited. Taking actions obliged by law to sustain the spirits and intellect of P&G.

Leadership

• They are all leaders in their area of responsibility, with a deep commitment to deliver leadership results.• They have a clear vision of where they are going.• They focus their resources to achieve leadership objectives and strategies.• They develop the capability to deliver their strategies and eliminate organizational barriers.

Ethical Viewpoint P&G gives all its employees a freedom to share the views and give them freedom to enhance skills. It also ethically behaves by making leaders of industry who know their duties and are aware of their responsibilities.

Ownership

• They accept personal accountability to meet the business needs, improve their systems and help others improve their effectiveness.• They all act like owners, treating the Company’s assets as their own and behaving with the Company’s long-term success in mind.

Ethical Viewpoint Employees are so much involved in the tasks so that the feel the possessions in the company and try their level best to put in the company, in this way employees behave ethically so that P&G image is not distorted.

Passion for Winning

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• They are determined to be the best at doing what matters most.• They have a healthy dissatisfaction with the status quo.• They have a compelling desire to improve and to win in the marketplace.

Ethical Viewpoint P&G claims in its values a passionate workforce which is always ready to serve people associated with them. Therefore they are against dividing people on the basis of status and inviting them to support the needy through its CSR activities. This builds the sense of care and devotion among people which maintains peace in society by giving everyone equal rights and also not distorting the feelings of anyone..

Trust

• They respect their P&G colleagues, customers and consumers, and treat them as they want to be treated.• They have confidence in each other’s capabilities and intentions.• They believe that people work best when there is a foundation of trust.

Ethical Viewpoint Trust is the building block in every kind of business specially developing Customer Relations; in this regard organizations now follow Customer Relationship Management (CRM). P&G strongly believe in building strong relations with its primary and secondary stakeholders by respecting them and giving value to their viewpoint and also allowing them to show their capabilities in the benefits of the firm.

Their PrinciplesThese are the Principles and supporting behaviors, which flow from their Purpose and Values.

They Show Respect for All Individuals

• They believe that all individuals can and want to contribute to their fullest potential.• They value differences.• They inspire and enable people to achieve high expectations, standards and challenging goals.• They are honest with people about their performance.

Ethical ViewpointWorkplace have diversified workforce, variety of people from variety of places, so there arise a lot of differences P&G strongly believe in equality

The Interests of the Company and the Individual Are Inseparable

• They believe that doing what is right for the business with integrity will lead to mutual success for both the company and the individual. Their quest for mutual success ties them together.• They encourage stock ownership and ownership behavior.

Ethical ViewpointP&G take in loop all its stakeholders, by keeping them informed about the various changes in the company and encourage stocks contribution of employees

They Are Strategically Focused in Their Work

• They operate against clearly articulated and aligned objectives and strategies.

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• They only do work and only ask for work that adds value to the business.• They simplify, standardize and streamline their current work whenever possible.

Ethical ViewpointThe ethical point followed in this principle is that there are no hidden objectives or motives of the company. Each and every task is done in a strategically set objectives through which company can be benefited later contribute it into society by enhancing life styles.

Innovation Is the Cornerstone of Their Success

• They place great value on big, new consumer innovations.• They challenge convention and reinvent the way they do business to better win in the marketplace.

Ethical ViewpointP&G is very much concerned about the people associated with them specially consumers. Consumer is King therefore consumer satisfaction is the key consideration which every company focuses. Similarly P&G give elevated significance to its consumers and find new pioneering ways to please consumers who also act as primary stakeholders.

They Are Externally Focused

• They develop superior understanding of consumers and their needs.• They create and deliver products, packaging and concepts that build winning brand equities.• They develop close, mutually productive relationships with their customers and their suppliers.• They are good corporate citizens.• They incorporate sustainability into their products, packaging and operations.

Ethical ViewpointP&G design its policies and strategies not only in accordance with its internal also focusing its external factors and forces. Consumers based policies and principles best serve them in order to provide maximum customer satisfaction and retain customer relationship. The company not only serve its consumers by improving their life styles every time through their innovative products and shaping the personalities according to the product but it also give out to community to prove itself a responsible citizen in various ways by helping the needy people, and also maintain healthy relations with its suppliers as well. P&G also follow ethics in its day to day operations which include waste management, production following highest safety standards and also packaging which is not at all injurious to health of its consumers neither society by dumping the waste in a different division of P&G where it is recycled.

They Value Personal Mastery

• They believe it is the responsibility of all individuals to continually develop themselves and others.• They encourage and expect outstanding technical mastery and executional excellence.

Ethical ViewpointP&G strongly believes in enhancing the skills of its employees by giving them tasks which allow them to show their technical and intellectual skills in order to come up with excellent resuls.

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They Seek to Be the Best

• They strive to be the best in all areas of strategic importance to the Company.• They benchmark their performance rigorously versus the very best internally and externally.• They learn from both their successes and their failures.

Ethical ViewpointTo be the best is the aim of P&G in ways which are beneficial for company and all the stakeholders by providing and sustaining consumers and suppliers, by serving society, giving back to community and raising the standard of living by its every time innovative and improved products.

Mutual Interdependency Is a Way of Life

• They work together with confidence and trust across business units, functions, categories and geographies. • They take pride in results from reapplying others’ ideas.• They build superior relationships with all the parties who contribute to fulfilling their Corporate Purpose, including their customers, suppliers, universities and governments.

Ethical ViewpointLife is all about give and take; therefore P&G is determined to fulfill the concerns of factors related to it. P&G trust in the interdependency among all the stakeholders to be a responsible citizen, so it follow all the ethical points which a genuine company should follow to become successful.

Sustainability Strategies:

At P&G, they focus their Sustainability efforts on improvements that matter, to make the most meaningful impact they can. Their commitment begins with P&G’s Purpose, Values and Principles, in which Sustainability is embedded, and manifests itself in a systemic and long-term approach. They strive to make their actions matter.

Their five Sustainability strategies:

Strategy 1: Products

Delight the consumer with sustainable innovations that improve the environmental profile of their products.

Strategy 2: OperationsImprove the environmental profile of P&G’s own operations.

Strategy 3: Social ResponsibilityImprove children’s lives through P&G’s social responsibility programs.

Strategy 4: EmployeesEngage and equip all P&Gers to build Sustainability thinking and practices into their everyday work.

Strategy 5: StakeholdersShape the future by working transparently with their stakeholders to enable continued freedom to innovate in a responsible way.

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Social Responsibility Commitment Matters

For more than 170 years, P&G brands and people have touched and improved consumers’ lives. This commitment extends to their social investments. Their people and their brands are their greatest assets, and together, they are a tremendous force that can make an impact that matters.

Through P&G’s Live, Learn and Thrive cause, they are helping children in need around the world:

Get off to a healthy startReceive access to educationBuild skills for life

Not only do thousands of P&Gers lend their time and talents to these Live, Learn and Thrive efforts, but they leverage the strength and reach of their brands to raise public awareness, engagement, and donations.

Live Learn and Thrive Overview

P&G’s Purpose is to improve the everyday lives of the world’s consumers, now and for generations to come. They fulfill this Purpose in many ways: through P&G brands, first and foremost, but also through their support of humanitarian, educational, and social cause efforts.

They are committed to focusing their social investments and employee engagement on a single cause: P&G Live, Learn and Thrive. Through their global cause, they are improving life for children in need. In fact, since 2007, P&G has already improved life for more than 135 million children in need around the world. There are several reasons to concentrate their resources in this area:

• Disadvantaged children are most vulnerable and least able to help themselves. • They have deep expertise in health and hygiene as well as many existing programs in children’s education and development, which are critical in addressing global needs for children. • Child development is a universal concern across all global stakeholders in both developed and developing countries.

By focusing their social investments on improving life for disadvantaged children and youth, P&G and their brands are able to focus their attention on an area that is critically important, now and for generations to come.

There is tremendous need in this critical area, as millions of children around the world live in heartbreaking conditions. By focusing their expertise, technologies, and resources to address these issues, they can help children get off to a healthy start, receive access to education, and build skills for life.

Live, Learn and Thrive is a truly global initiative, with more than 100 programs taking place in over 60 countries every day. From providing life-saving vaccinations and safe water in Africa, to safe homes across Europe, to educational opportunities in Asia, to essential nutrition in North America, to early childhood development in Latin America…P&G aims to improve life for children and youth around the world.

They believe companies can be a force for good in the world, and this is who they are as a global corporate citizen. Live, Learn and Thrive is woven into their philanthropy, cause marketing, product donations, disaster relief, and employee engagement. The cause is a reflection of their Purpose, and it embodies their

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goal of being closer to consumers from all walks of life and in touch with the needs of communities around the world.

This commitment goes well beyond the P&G facilities. Every year, thousands of P&G employees worldwide personally commit to helping children and youth live, learn and thrive in their communities and beyond. Many employees volunteer their time or work in groups on team-building projects such as building playgrounds for children, teaching the importance of safe hygiene, or mentoring tweens and teens. And millions of dollars have been donated by employees with the goal of improving life for children and youth.

They are humbled and honored to be recognized for the commitment they make through Live, Learn and Thrive. P&G was included in the prestigious 100 Best Corporate Citizens 2009, compiled by CRO (Corporate Responsibility Officer) Magazine. The Company won the Asia Silver Award at the Global CSR Summit Awards and was honored in back-to-back years by Feeding America as Donor of the Year. Finally, P&G was the only corporation invited to present its cause to President Obama’s administration.

While they have made progress, there is much work to be done. Millions of children are in need of a healthy start, access to education, and skills for life. Through P&G Live, Learn and Thrive, they believe they can make a meaningful difference.

Live, Learn and Thrive Locations

P&G Live, Learn and Thrive comes to life through more than 100 programs in over 50 countries around the world. This year alone,

P&G and the P&G Fund contributed more than 100 million dollars to support their communities —improving life for more than 75 million children around the world.

North America Latin America Western Europe Central & Eastern Europe, Middle East & Africa Asia

CSR Activities

Pampers and UNICEF: Working Together for Healthy Babies

Every year, 128,000 people die from maternal and neonatal tetanus — a completely preventable disease. So for the fourth year running, Pampers is teaming up with UNICEF to deliver the vaccines that vulnerable women and their children need. The effort gets their consumers involved. With the purchase of one pack of Pampers, one dose of the vaccine is donated. Their campaign has created the highest awareness ever for maternal and neonatal tetanus, helping put the disease back on the agenda of health authorities. Since the start of the campaign, a total of 45.5 million women and their babies have been protected against maternal and neonatal tetanus — but more work remains to meet their goal of eliminating the disease by

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2012. Pampers has committed to providing the vaccine to target and protect an additional 33 million women and their babies in at least 32 countries around the world.

This year, they’ve added a new form of employee involvement. P&G and UNICEF have teamed up to offer P&G employees in Western Europe the opportunity to take a three-month unpaid sabbatical and work with UNICEF. The program is aimed at employees who have always wanted to undertake humanitarianwork but have not had the chance before.UNICEF will benefit from the diverse backgrounds of P&G employees as they apply such skills as communications, promotion, leadership training, and supply chain management. Although resource requirements for UNICEF are ever-changing, three to four assignments are expected per year. The first volunteers will begin in the spring of 2010

Always and Tampax: Protecting the Futures of Girls

Today, more than 600 million girls live in the developing world. Many of these girls miss several days of school each month because they lack basic sanitary protection to manage their periods.

Protecting Futures works with partner organizations to provide puberty education, sanitary protection, and sanitary facilities to help vulnerable girls stay in school. In conjunction with its partners and other external thought-leading organizations, Protecting Futures supports research on the issue and the impact of the interventions the program enables.

Since 2006, Protecting Futures has worked with eight partners in 17 countries, reaching more than 80,000 girls in the developing world.

P&G and Hope Schools: A Long-Term Commitment to Education Success

Thanks to P&G Hope Schools, a program in partnership with the China Youth Development Foundation, children now have better access to education in poverty-stricken rural areas of China. P&G China continued its long-term commitment to the program this year, founding its 140th P&G Hope School.

To help drive this Live, Learn and Thrive initiative, P&G created innovative partnerships with retail customers. This has enabled these retailers—along with more than 100 million shoppers annually—to participate in the cause and make significant commitments to build Hope Schools with P&G.

P&G Hope Schools have benefited over 100,000 children across China in the last 12 years, and over 1,000 P&G China employees are actively enrolled to support program activities.

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P&G and Shiksha: Increasing Access to Education in India

India has the world’s largest population of uneducated children, with nearly half of all children there not attending school. The Shiksha program (Shiksha - Hindu for "Education") is dedicated to fighting that trend, helping to provide access to education for more children.

The program funds NGO efforts to address the underlying causes of poor access to education, such as poverty, health issues, and access to immunization. In cases where schools don’t exist, the program also funds their construction.

Each time a consumer bought a large pack of any P&G brand in India between April and June of 2009, part of the proceeds went toward leading children on the path to education.

Shiksha also benefits from the direct involvement of P&G employees. Each year, employees participate in a Shiksha Walk-a-thon, joining their families and others in raising awareness for the cause.

Safeguard: Building a Great Wall of Hygiene in China and Beyond

Establishing good hygiene habits early is essential to protecting children from disease. So Safeguard, in partnership with the Red Cross and China’s Ministry of Health, launched the Safeguard Health Great Wall campaign on October 15, 2008—Global Hand Washing Day.

Hand washing is one of the most effective and affordable health interventions, representing a cornerstone of public health. And water alone is not enough—using soap and water at critical times, such as after using the toilet and before handling food, can help reduce the incidence of diarrhea disease by almost half, cutting respiratory infections by nearly 25%. It is also recommended as a critical action to prevent the spread of influenza H1N1.

Despite its life-saving potential, however, hand washing with soap is seldom practiced in some parts of the world, and it can be difficult to promote. So the Safeguard Health Great Wall campaign, using the slogan “Clean hands save lives,” aims to engage schoolchildren as effective agents for change. The effort broadens health hygiene education in schools, as well as building sanitation facilities in rural China to encourage hand washing.

The program’s goal is to educate 10 million children in the next eight years. Consumer purchases of Safeguard help to fund the program, while volunteer opportunities allow individuals to experience directly the importance of good hygiene.

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Beyond China, similar outreach efforts have also been led by P&G in other countries. In Mexico, Safeguard will deliver hand hygiene education to over 144,000 children in Mexico City, and train approximately 1,000 children to be ambassadors of good hand hygiene in their schools and communities. In Pakistan, Safeguard will be establishing sinks in 3,500 schools and delivering hand hygiene education to approximately 600,000 school children. Another program will help build latrines and handwashing facilities in schools that reach over 40,000 children. And in the Philippines, Safeguard will help deliver hand hygiene education to one million school children, while a portion of Safeguard sales go toward building new sanitation facilities.

Disaster Relief at P&G

Disaster relief is a major part of their corporate citizenship commitment. They focus their efforts on where P&G can uniquely add value. Depending on the needs and circumstances at hand, their efforts include providing safe drinking water through PUR sachets and partnerships, donating P&G products, and contributing their expertise.

Whenever possible, they lead disaster relief efforts locally. Whether their response includes a contribution of products or funds, a P&G business unit near the disaster steps up to lead and coordinate their efforts since they often know best what is needed.

At the corporate level, the P&G Fund makes generous “disaster preparedness” contributions each year, helping organizations get ready for emergency response before a disaster strikes. Donations go to agencies like the Red Cross, Feeding America, and AmeriCares.

Other Global Programs

P&G’s Response to the Chengdu Earthquake

In May 2008, the Chengdu earthquake struck central China, resulting in a major loss of life (87,000) and injuries (370,000). Nine P&G Hope Schools were damaged nearby, and 300 Hope School children were impacted (safe but in need of emotional and financial support). A P&G plant and distribution facility near the epicenter sustained minor damage, and a long-term need emerged for rebuilding schools and helping students and orphans.

Helping Kids Get to School in Rural Morocco

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This program contributes to fight against school abandonment in rural areas of Morocco through a partnership with a local NGO. Operation Velo donates bikes to children in villages far from the school, helping them continue to go to school and learn.

So far, 1,200 bikes have been provided to students in rural areas. Since then, a very low school abandonment rate has been reported, children have been educated about the rules of the road and safety equipment such as helmets and armbands have been provided.

Downy Touch of Comfort: Comforting Sick Children with Quilts

More than six million children are hospitalized each year in the United States, forced to confront the challenges of overcoming illness while being away from home in an unfamiliar environment. In order to bring a little comfort and security back to some of these children, Downy fabric softener, in partnership with Quilts for Kids, Inc., has launched the Downy Touch of Comfort program to provide quilts to these children while hospitalized.

Helping French Children Get Better Housing

“SOS Enfance Mal Logée” is a P&G multi-brand charity campaign that has been running since 2001 to support the housing program of the Foundation de France, one of the largest French NGOs. The campaign is aimed at raising funds to help families with children suffering from poor housing conditions. The objective is to create a decent home environment where children can stay with their parents and live, learn and thrive.

In parallel to the funds raised through the purchase of P&G brands, P&G French employees can get personally involved in the program. The employees’ effort is led by a team of volunteers who organize regular events at the P&G offices to increase the Company’s donation.

Since 2001, P&G France and its employees have been donating more than two million euros to the Foundation de France, benefiting more than 2,500 families.

P&Gers Improving Lives

Another component of their Sustainability involves bringing their efforts to life in the communities where they live and work. A number of programs give their employees the opportunity to touch lives directly within their own regions through P&G’s Live, Learn and Thrive cause.

Dreaming Together for the Future: Supporting Handicapped Children in Korea

P&G supports handicapped children in Korea through a program known as “Dreaming Together for the Future.” The program, funded in part by P&G product purchases, is centered on enabling children in their self-development.

These programs are intended to bring children and teenagers access to vocational education for an otherwise unavailable path to independence. For instance, P&G employees help develop participants’ skills in areas ranging from baking to journalism.

To expand the children’s exposure to new and interesting experiences, P&G employees also lead programs to help handicapped children discover their hidden talents in areas such as art, music, and sports.

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Since 2005, the program has touched the lives of over 2,000 handicapped children in Korea. Their growth and development is seen not only through demonstration of their new skills but also through the proud and confident smiles they wear on their faces.

Helping Children in Poland Get a Better Start

The “Seeds of Passion” program focuses on children from economically and socially unprivileged areas of Targówek, Poland. It provides opportunities for them to develop their skills and passions and get a better start in adult life. These activities take place after school. In the past, this was when these children were vulnerable to taking on habits of alcoholism and drug abuse.

The program now reaches 650 children per year. Annually, more than 600 hours of educational activities and workshops are led by P&G volunteers and partner organizations. In fact, one of P&G’s volunteers has helped lead a team of disadvantaged children to win recognition in the annual youth kite making and flying competition.

The program has been so successful, it is being expanded to reach 50,000 children over the next two years throughout Poland.

A Friend is Worth a Million Dollars: Bringing Confidence to Children in Eastern Europe

In Latvia, Estonia, and Lithuania, children in P&G-sponsored orphanages benefit from a program called “One Friend is Worth a Million Dollars.” As a platform for educational, cultural, and sport activities, 100% of P&G employees in the region participate to help prevent children from dropping out of school for a life on the streets. Building the children’s self-esteem and skills for life are essential for helping them achieve their goals.

This objective is achieved through common extracurricular education, sport, and cultural activities held with P&G employees. Activities range from planting pine trees to educational programs such as English lessons, sports lessons, and summer camp. The program reaches 145 children each year. In most cases, the interaction with P&G employees is one-on-one, fostering long-term productive relationships.

Success Camp: Helping Kids in Saudi Arabia Succeed

Success Camp, a P&G program in Saudi Arabia, helps build self-esteem and life skills among orphaned children by training them on such success factors as collaboration, knowledge, and discipline. In addition, P&G employees conduct science and technology training and workshops that open doors to never before considered career possibilities.

More than 1,500 children have benefited thus far. Not surprisingly, the success of the participants fosters pride among the many P&G employees who volunteer. This pride is contagious and helps attract more P&G volunteers who will benefit even more children and youth.

SOS Children’s Villages: Building Houses in Europe

The SOS Children’s Villages program provides safe housing for homeless children in Greece, Portugal, and Spain. P&G funding supports education and extracurricular activities, providing children a chance to grow academically, develop their talents, and build their future. P&G employees regularly visit the villages to serve as mentors to the children.

Stakeholders

External Partnerships Matter

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No single company has all the answers about Sustainability, but P&G is committed to being part of the solution. Meaningful progress requires the right partners, especially when taking on environmental challenges like solid waste, climate change, and water quality. Tackling consumer concerns like product safety also requires collaboration. Why do external partnerships matter? Because these important topics impact both their world and their business, today and in the future. So they take them seriously, dedicating internal resources while engaging externally. Only then can they be part of the conversation, helping find the answers that Sustainability demands.

A stakeholder is anyone who has an interest in or interaction with P&G. Stakeholders can be internal,such as the Company’s 135,000 employees and its Board of Directors, or external. External stakeholdersinclude the P&G consumers, their customers and suppliers with whom they do business, their shareholders, and the communities in which P&G people live and work.

ConsumersConsumer Organizations

Shareholders Business PartnersRetailers, Wholesalers, Distributors, Vendors, Contractors, Suppliers, Advertisers, Trade Unions

Industry AssociationsProfessional Organizations, Scientific/Medical Communities

GovernmentsLocal, Regional, National; Agencies (such as Health Ministries, Regulatory Boards); Pan-National Commissions (such as EU); Embassies, Diplomatic Missions

NGOsHealth, Social Service,Education, Environment News Media

Solid WasteGrowing responsibly compels them to constantly seek improvements in the design, manufacture, and delivery of their products. So P&G has established a Global Integrated Solid Waste Management Team made up of its experts around the world.

A Partner in the Journey: In 1995, P&G scientists first published Integrated Solid Waste Management: A Life Cycle Inventory, a book based on their experience working with governmental agencies, academia, environmental and consumer organizations, and other industry partners in this area. It voiced support for practical solutions, such as the benefits of recycling and energy recovery, ways to implement curbside collection for recovering recyclables, and ways to compost biodegradable materials.

Packaging Progress

They continually look for opportunities to reduce packaging while maintaining consumer needs and product integrity — an effort that forms the cornerstone of their solid waste efforts. They are also shifting some materials to renewable sources, with several efforts underway.

Solutions for the Developing World

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In Thailand, Brazil, Mexico, and China, they have been founding members of industry coalitions to promote Integrated Solid Waste Management solutions. One such example is P&G’s cooperation in Thailand with TIPMSE — Thailand Institute of Packaging Management for Sustainable Environment — and the Ministry of Natural Resources and Environment to introduce recyclable work banks in more than 200 communities countrywide. The program allows citizens to exchange recyclable materials for money that is deposited intoa personal account. These funds can be withdrawn as needed. The results are not only good for the environment, but these programs provide a needed source of income for participants

“TIPMSE has set an important milestone towards environmental protection and social responsibility in Thailand. TIPMSE has established strong partnerships with government, academia, industries and communities. The concept of Integrated Waste Management is efficient for managing packaging.”Yuthtapong WattanalapaDirector General

Climate Change

Climate change is a serious issue facing the world today. P&G is not an energy-intensive business, but as a global citizen they are concerned about the negative consequences of climate change. They believe that industry, government, and consumers all have a role to play in addressing climate change and that prudent and cost-effective actions to reduce greenhouse gas emissions are necessary. They have endorsed the Copenhagen Communiqué on Climate Change calling for an effective and equitable international framework to address climate change, and internally they are focusing their efforts in two areas: reducing their own emissions and innovating and educating to impact consumer behavior. The challenges posed by climate change are significant, but P&G is committed to making progress. They will continue to disclose data on their absolute CO2 emissions and energy use, reporting achievements against their goals on an ongoing basis.

Reducing Greenhouse Gas Emissions from Their Own Operations

The most significant greenhouse gas associated with manufacturing their products is the CO2 created from on-site fuel combustion and externally purchased electricity. Even though their business has more than doubled in size since 2002, they have managed to reduce direct CO2 emissions from their facilities by over 10% in that time. Their goal is to achieve a 20% reduction of both CO2 emissions and energy consumption per unit of production by 2012, compared to a 2007 baseline.

“P&G is committed to improving energy efficiency and reducing greenhouse gas emissions. They are happy to be a key partner in their efforts.”Doug WoodwardPresident

Innovating to Enable More Efficient Consumer Product Use and Energy Consumption

As the lifeblood of their Company, innovation plays a critical role in helping consumers reduce their own greenhouse gas emissions, whether through product innovations or education programs. After examining the life cycles of their biggest product categories, they found that the energy used to heat water during laundering had the most potential for positive impact. In fact, if every U.S. household used cold water for laundry, the energy savings would amount to roughly 3% of the nation’s total household energy consumption. This insight led to the development of laundry detergents specifically formulated to deliver great cleaning performance in cold water. Of course, realizing the benefits of cold water washing requires consumers to change their behavior. A key partner for P&G in these efforts has been the Energy Saving Trust, an independent not-for-profit organization based in the U.K.

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In partnership with their Ariel brand, they developed and executed the Ariel Cool Clean campaign, which has helped consumers reduce their environmental impact by enabling them to get their clothes brilliantly clean at lower washing temperatures

“The leading role they were able to play in the ‘Cool Clean’ campaign has successfully persuaded consumers to reduce washing temperatures and help the environment — a win-win for them, P&G, and consumers.”Philip SellwoodChief Executive Officer

Water

Availability of adequate quality water is essential to life. It is also hard to imagine any economic activity where water does not play a prominent role. For P&G, water is of crucial importance to both the production and use of their products, so their approach to water aims at responsible use by both their Company and their consumers. And because a lack of safe drinking water is a leading cause of debilitating disease and death in developing countries, especially for young children, they also want to help provide safe water to children in need.

Sustainable Water Management

P&G has formed a multidisciplinary Water Council internally. The group examines risks and opportunities related to their products and plants, and are renewing their corporate water strategy. Product Innovation Water efficiency is an important element in their product innovation. They are working on technologies that require less water when the consumer uses their products.

Operational Improvement: Within their plants and other sites, they continue to work on increasing their water efficiency and savings. They also focus on continually improving the quality of the water leaving their plants.

“The vision of Japan Water Forum is to make a substantial contribution to the solution of global water issues by engaging people and societies through dynamic movement, innovative ideas, and resolute actions. P&G Japan has been a great partner in helping reach children in schools. P&G’s water education program in elementary schools promotes children’s understanding about the meaning of water for life, international water issues, and how Japan depends on water from other countries through its imports. They continue to work together with P&G to drive water education in schools training the next generations to take action in solving water-related issue and building a sustainable society.”Kotaro TakemuraSecretary GeneralSocial Commitment: P&G’s Children’s Safe Drinking Water program helps address the critical need for safe drinking water. P&G is committed to long-term, not-for-profit provision of their PŪR Purifier of Water technology in the developing world in an effort to reduce illness and death, particularly in children. Through June 30, 2009, they have provided more than 1.6 billion liters of safe drinking water since inception of this program in 2004.

External Engagement

As a member of the Working Group WATER of the World Business Council for Sustainable Development (WBCSD), they support external efforts to better understand key water-related issues. WBCSD is a founding member of the Water Foot printing Network, which is working on developing cross-sector

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relevant water footprint methodologies. Also, through WBCSD, P&G is involved in the recently started development of an ISO standard looking at harmonizing terminology and parameters for water foot printing initiatives.

Product Safety

In today’s media environment, concerns have heightened around the safety of consumer products and their ingredients. So it’s not surprising that many of their consumers look for reassurance that P&G treats their concerns seriously. Every day, over four billion consumers use their products, so there is nothing more important to them than assuring the safety of their products for their consumers and the environment. Their commitment to safety is reflected in the more than 700 in-house experts devoted globally to ensuring the environmental and human safety of all their ingredients and products before they go to market.

P&G also consistently promotes research that enhances understanding of product safety. Their scientists have helped to develop numerous new methods and approaches to advance the science of safety assessment, and they are currently leading new research in the application of genomics to that field. Safety doesn’t stop once a product is in the marketplace. They also conduct extensive studies to understand real consumer use of their products. Through consumer e-mail and telephone hotlines, they are available to help address any consumer questions or concerns that arise.

Safety doesn’t stop once a product is in the marketplace. They also conduct extensive studies to understand real consumer use of their products. Through consumer e-mail and telephone hotlines, they are available to help address any consumer questions or concerns that arise.

Animal Research

Many of their consumers also want to know their position on animal research. P&G firmly believes that ending animal research is beneficial for consumers, animal welfare, and industry. P&G has invested more than $250 million in helping to develop more than 50 non-animal alternative methods. Today, more than99% of their safety assessments are done with alternatives. By continuing to innovate, they are able to assess acute effects of most new ingredients with alternatives only. P&G is working with many partners andLawmakers globally (e.g., CAATs (The Johns Hopkins Center for Alternatives to Animal Testing), EPAA (The European Partnership for Animal Alternatives), etc.) to continue to advance science and technology in this area.

For example, in the U.S., the EPA is working with P&G and other companies to pilot a new program to evaluate the usefulness of non-animal alternative testing approaches for the labeling of antimicrobial cleaning products. If the program is successful, the EPA will update its product registration requirements to allow manufacturers to use non-animal alternative tests in assessing the eye irritation potential of these products. They are committed to continuing their leadership in developing non-animal alternatives, which they believe will ultimately result in the elimination of all animal research.

“The Humane Society of the United States has collaborated with P&G for nearly twenty years to successfully press for national and international changes in animal testing regulations and practices. Working together, animal protection groups and committed corporations can make eliminating animal testing a reality.”Andrew RowanExecutive Vice President of Operations

Stakeholder Engagement

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P&G works hard to be a good corporate neighbor and to improve lives in the communities where they live and work.

Communities

Each P&G production facility has site-specific activities to build constructive relationships with local authorities, local industry associations, residential and business neighbors, local 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. This could be, for example, a reception for immediate neighbors, where information on the past year and plans for the New Year are discussed.

P&G ensures continuity in community interaction by meeting regularly with local authorities to update them on plant news. In the neighborhoods of many P&G operations, the Company cooperates with and sponsors local events, so the whole area benefits from the presence of a P&G site.

P&G recognizes the importance of improving the quality of life in their local communities, and they support local initiatives and encourage employee involvement. The most valuable community support they provide usually involves not only writing a check but also taking advantage of the intellectual capabilities and energy of P&G people. They look for areas where they can make a significant, long-term, systemic difference. This leads them to focus heavily on education and health, with special emphasis on youth. It also allows them to build alliances with strategic partners to achieve a better result than they could alone. They look to their people in the area to work with their local communities and government officials to learn where they can make the biggest difference.

Authorities: Local — Regional — Global

P&G communicates with local, regional, and global authorities directly, both as an individual company and through industry associations. Scientists and legal experts in the P&G External Relations organization review existing and proposed legislation that is relevant to the Company and work with authorities to ensure that policies take the needs and experience of business into account. This is done via meetings with the authorities and comments on their position papers and industry position papers. Activities like these can be very important to ensure that the Company’s needs are understood and considered when decisions are beingmade that can influence P&G’s business.

NGOs: Local — Regional — Global

P&G frequently enters into dialogue with nongovernmental organizations (NGOs) to understand their concerns and cares. In order to work constructively with stakeholders, it is essential to have their confidence and be seen as a reliable and open discussion partner. By building an open relationship, they can approach their NGO partners when issues arise. There is a wide range of NGOs that vary by area of interest (environmental, consumer, animal welfare, etc.), by attitude (from extreme to moderate), and by their geographic links (from local to global). Depending on their characteristics, a number of NGOs can be seen as the vocal spokespeople for the general public. Consumer organizations exist in many countries. These organizations contact companies to compare products and voice comments they receive from their members. P&G continuously provides consumer organizations with information on new initiatives and cooperates with them in answering consumer questions.

Consumers

At P&G, they are dedicated to meeting the needs of their consumers by providing products and services that can help improve their lives. The concept of “Consumer is Boss” is fundamental throughout the

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development and marketing of their products. They set out to delight consumers by launching only new products and product improvements that genuinely meet their needs. Before establishing a project for a new product or product improvement, P&G technologists research consumer needs in depth to identify and understand those needs that are not adequately met today. Once a product is launched, their commitmentto their consumers does not stop there. For P&G, every consumer’s experience in choosing, buying, or using one of their products can provide vital insights to help them further improve their products and services. So they encourage consumers to contact their Global Consumer Relations team. They want to hear about their consumers’ experiences with their products — good and bad. They proactively offer “traditional” contact channels — phone, letter, e-mail — to consumers, but they are also very aware that consumers’ lives are changing (they are consumers too!).

Life is getting busier, and they want to be able to access the right information on their terms, which may be very early in the morning, or in the middle of the night. So they have invested in technology, which has already been deployed for some of their major brands, where consumers can access key information on a 24/7 basis, i.e., on their terms. Of course, they continue to offer the well-established Care line Services where consumers can talk to or communicate with an experienced advisor, but they also enable consumers to find vital information on their brands using e-mail and Telephony technology “out of hours.”

This has been a huge success, and has actually enabled them to interact with even more of P&G’s consumers in the last fiscal year, which provided more insights for their Product Development and Marketing teams to help further improve their products and services.

They are also innovating in how they ensure that these important insights from their consumers get to their business teams. Consumers who take the time to contact a company for advice or ask for help to resolve a problem provide valuable insights into their products, which can really help them, develop their business by improving their brands. So they need to make sure that their consumer’s voice is heard in P&G. They do his by using a range of different tools and technologies — whatever best meets the Business team’s need, and therefore gives their consumer the best chance to be heard. They use reports and data, but they also use carefully edited sections of some actual consumer calls, e-mails and letters — edited to ensure that none of the consumer’s personal information is disclosed — so they feel the power of a “real” consumer’s voice. In Global Consumer Relations, they recognize that the world is changing and they are investing in innovative technology to better serve their consumers. They are privileged that consumers care enough about their products to contact them.

Advertising and Promoting to Consumers AppropriatelyThe Company does not permit its advertising or promotions for its products to be false or misleading. What are some situations that raise concerns?• Exaggerated or unsupported advertising claims are made to compete with a competitor that is doing the same.

• Incomplete, inadequate or misleading disclosures in Company advertising leading consumers to infer an incorrect, unsupported conclusion.

• Advertising is distributed to the public before testing supporting the claims made in the advertising has been completed. What are P&G’s Worldwide Business Conduct Standards for Advertising?

• Do tell the truth in Company advertising and promotions.

• Don’t make a substantive claim about a Company product, or a competitor’s product, or a comparison with a competitor’s product that has not been substantiated through objective product testing based on sound statistical and scientific principles.

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• Don’t run any advertisement or promotion that has not been reviewed by appropriate Company Legal personnel.

Sustainability Guidelines for Supplier Relations

The foundation of their Sustainability Guidelines for Supplier Relations is their Statement of Purpose, Values and Principles. They operate within the spirit and letter of the law and maintain high ethical standards wherever they conduct business. They will actively seek business relationships with suppliers who share their values and promote the application of these high standards among those with whom they do business.

Summary of Their Supplier Guidelines:

1. They expect their suppliers to comply with all applicable laws of their country, including laws relating to employment, discrimination, environment, and health and safety. Suppliers who knowingly violate laws or have repeated problems conforming to them will not receive their business.

2. Commercial bribery is illegal and subject to criminal penalties in many countries, including the United States. Any personal payment or bribe to individuals employed by P&G’s customers or suppliers — or receipt of a bribe or personal payment by P&G employees — is strictly prohibited. Even in locations where such activity may not, technically speaking, be illegal, it is absolutely prohibited by Company policy.

3. P&G support universal human rights, particularly those of their employees, the communities within which they operate, and the parties with whom they do business. In their business award decisions, they will continue to place substantial value upon incumbent and potential suppliers who consistently respect basic human rights.

4. P&G utilize fair employment practices, striving to provide a safe, healthy, and productive work environment for its employees. The Company respects employees’ right to freedom of association, third-party consultation, and collective bargaining where allowed by law. The Company expects suppliers to uphold the same standards. Specifically:

• They will not conduct business with suppliers employing child, prison, indentured, or bonded labor, or using corporal punishment or other forms of mental and physical coercion as a form of discipline.

• They expect suppliers to conduct their business without unacceptable worker treatment such as harassment, discrimination, physical or mental punishment, or other forms of abuse.

• At a minimum, they expect their suppliers to comply with all applicable wage and hour laws, and rules and regulations, including minimum wage, overtime, and maximum hours.

• They expect suppliers to provide a safe work environment, to prevent accidents and injury, and to minimize exposure to health risks.

• They seek to do business with suppliers who share their concerns for and commitment to preserving the environment. At a minimum, suppliers must meet all current applicable environmental rules, regulations, and laws in their countries. The management system is owned by the Global Vice President – Purchasing and has three components:

Communicate: All purchasing personnel who interface with suppliers are trained on the supplier guidelines and how to conduct supplier assessments. They communicate the guidelines to their suppliers once a year and reinforce their expectations in their contracts. This makes compliance with

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the guidelines a condition of business and therefore makes noncompliance grounds for disqualification for all new and ongoing supply agreements.

Check: Ongoing periodic performance assessments are done as part of regular commercial and technical supplier visits. Emphasis is placed on suppliers that are high-risk because of country of operation or potential hazard. During 2008 they participated in a benchmarking assessment of their program with other multinational companies. There were several areas of improvement which they are taking steps to address. Some of the changes they are implementing will be a transition to third-party auditors as well as subscribing to a database where audit results and corrective action plans are shared with other companies.

Correct noncompliance: When potential noncompliance issues are identified, they are communicated to the supplier as part of the closing meeting. Corrective actions, including formal notification and a remediation action plan, are then implemented. In some cases, they require immediate action to achieve compliance, or they halt business. These include child labor or forced labor, and egregious health and safety violations presenting immediate danger to human health. If a compliance issue is not resolved in a timely manner, the business relationship is terminated.

Personal Information Privacy

Advances in computer technology have made it possible for detailed information to be compiled and shared more easily and cheaply than ever around the globe. That can be good news for society as a whole and for individual consumers. At the same time, as personal information becomes more accessible, each of the company — companies, associations, government agencies, consumers — must take precautions against misuse of that information. Several countries already have laws protecting consumers from misuse of their personal information, and many others are following suit. P&G places a high priority on safeguarding people’s personal information. Even in countries without privacy legislation, they still adhere to their privacy policy. They want to have the trust of consumers and all others who do business with them, including employees, shareholders, retail customers, and recruitment candidates.

P&G’s robust privacy program is managed by a Global Privacy Council. Their first objective is to protect an individual’s personally identifiable information as if it were their own. All outside companies handling data on their behalf are required to abide by their privacy principles. Externally, P&G has been a strong advocate of work within the industry to protect the privacy of consumers. For example, P&G has been a leader in the effort to make privacy notices more consumer-friendly and has recently made their online marketing statement available in 39 languages.

Suggestions

P&G is operating world wide and also fulfilling commitments of its stakeholders and performing Corporate Social Responsibility activities to be a conscientious and ethical corporate citizen. P&G should carry on with such programs in future more and more in developing countries like Pakistan.

Conclusion

P&G defines its commitment to sustainable development as "ensuring a better quality of life for everyone, now and for generations to come." They have a long heritage as a sustainability leader and remain committed to improving consumers' lives through P&G brands and by contributing to the sustainability of our planet and the communities in which we live and work.

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