Catching up with P&G’s sustainability optimist

Two Steps Forward

Catching up with P&G’s sustainability optimist

Len Sauers is among the most optimistic people I know in the world of corporate sustainability executives. For years, I’ve watched him enthusiastically and relentlessly extol the commitments and achievements of his company, Procter & Gamble, where he is Vice President for Global Sustainability. I know a few other eternal optimists in the field — McDonald’s Bob Langert comes to mind — but Sauers is right up there.

One might easily write him off as a corporate mouthpiece, someone paid to sing pitch-perfectly from the company’s hymnal. But as I’ve watched and talked with Sauers over the past decade or so, I’m fairly certain that’s not the case. Sauers not only believes deeply in his company and its sustainability mission, he cares deeply about it, too. He is part of a small corps of committed souls not often heralded in the world of corporate sustainability.

His unbridled optimism came through during two recent conversations — the first when I ran into Sauers at Fortune’s Brainstorm Green conference in May, the second during a follow-up phone call last month.

First, some background: In 2010, P&G, the largest consumer packaged goods company in the world, announced a set of 2020 sustainability goals, an update to the goals the company set in 2007. The 2010 goals made four broad commitments: to power P&G plants with 100 percent renewable energy, use 100 percent renewable or recycled materials in all products and packaging, have zero consumer and manufacturing waste go to landfills, and design and sell products "that delight consumers while maximizing the conservation of resources."

As part of P&G’s first sustainability goals, in 2007, was the goal of achieving at least $50 billion in sales of “Sustainable Innovation Products” — those that have an improved environmental profile. To meet that threshold, products must

have a >10% reduction in one or more of the following indicators without negatively impacting the overall Sustainability profile of the product: a) energy, b) water, c) transportation, d) amount of material used in packaging or products, e) substitution of nonrenewable energy or materials with renewable sources.

In its 2012 sustainability report (PDF), the company said it had exceeded that goal, with cumulative sales of $52 billion.

The third leg of P&G’s sustainability stool is decidedly social. In 2007, it committed over five years to “prevent 160 million days of disease from unclean water and save 20,000 lives by delivering 4 billion liters of clean water through our P&G Children’s Safe Drinking Water program.” Last year, P&G upped the ante, pledging by 2020 to “save one life every hour by delivering 2 billion liters of clean water every year.”

Sauers’ role in all this was enhanced recently during a company reorganization that led to him having accountability for global product stewardship, not “just” global sustainability. Sauers, a nearly 25-year veteran at P&G, says the move was intended to simplify the company’s management structure by putting various parts of the sustainability value chain within a single organization. That means everything from materials science for products and packaging, to sustainable sourcing of raw materials, to increased use of renewable energy for facilities, to less-wasteful plant operation, to the dozens of social marketing programs tied to specific P&G products — all live within Sauers’ domain.

“As with all types of internal mergings like this, it eliminates a lot of transactions costs and allows us to bring scale to some of these programs,” Sauers told me.

But Sauers has discovered that even a company of his size — sales in 2012 were $84 billion, and the company boasts 25 billion-dollar brands — can affect only so much. “I think we’re beginning to realize now that there’s just so much a single company can do,” he says. “I’ve got 700 people, including 200 PhDs, at our disposal to work on this stuff, so we have huge amounts of resources, yet the issues that we’re facing are really big to the point that in order to make meaningful advances going forward, we’re going to have to do it with partnerships.”

To that end, P&G, like many other consumer-goods companies, is engaging in dozens of partnerships around the world, with environmental groups, trade associations, government entities, universities and others. For example, earlier this year the company joined forces with Coca-Cola, Ford, Heinz and Nike on a new Plant PET Technology Collaborative to accelerate the development and deployment of sustainable plant-based plastics. The new plastic will be used to completely replace a common packaging plastic made from fossil fuels. In another example, Sauers said he’d just returned from China, where he formalized a partnership with the Chinese Research Academy of Environmental Sciences to collaborate on a host of challenges.

“I think the biggest challenge is this realization that there’s just so much a single company can do, that we really do have to come together as partners to make meaningful change,” he says.

That’s a remarkable admission from a company as big as P&G, but it’s one I’ve been hearing a lot lately from large companies: to move the needle at the rate and speed sufficient to address the world’s most pressing environmental and social problems requires that companies join forces. P&G, for example, is active in The Sustainability Consortium, the Consumer Goods Forum, and other consortia of companies working to accelerate positive environmental change.

One potential wrinkle in P&G’s sustainability plans is the recent departure of its chief executive; in May, it was announced that CEO Robert McDonald would be replaced by his immediate predecessor, A.G. Lafley. I asked Sauers what impact that move — a reflection of P&G’s losing ground to key rivals — might have on the company’s sustainability commitment.

“To be honest with you, none,” he replied. “I had the opportunity to work a lot with A.G. Lafley when we set out our 2007 goals, and he was CEO for nine years, so he actually presided over nine of our 14 sustainability reports. He’s very much attuned to sustainability. I don’t see us missing a beat.”

Sauers was equally sanguine about Unilever, P&G’s largest competitor, whose Sustainable Living Plan has received high praise, and whose CEO, Paul Polman, has been widely praised for his sustainability vision and leadership. (When I interviewed people last year about who might be seen as the “next Ray Anderson,” Polman’s name came up most often.) I asked Sauers whether there was any professional jealousy or competition between the two consumer packaged goods giants.

Again, Sauers seemed his preternaturally positive self. “Unilever has a robust sustainability program,” he responded. “I knew Paul Polman when he was here at Procter & Gamble and he had a passion then for it. So I applaud the efforts that they have in this area, and since we do work on the same things, it gives us the opportunity work together. So, at the Consumer Goods Forum, we’re able to come together and really take this stuff to a new level. The work that CGF has come out with recently around using our industry as a vehicle to mitigate deforestation is an example of that where you have very thoughtful companies all seeing this stuff as important coming together using their scale to really make a meaningful change. I see it more as collaboration than competition.”

Sauer seemed less than positive when it came to the role of P&G’s 4.6 billion global consumers as partners in change: P&G, like other companies, is finding it challenging to engage consumers in making simple changes that will reduce their, and P&G’s, environmental impacts. For example, he says, “We like to advance cold-water clothes washing. We do all this work to create detergents that work well in cold water, but at the end of the day the consumer still has to turn the temperature to cold. We have a zero-waste goal and do a lot to drive recycling, but the consumer still has to put that bottle in the recycling stream. So the role of the consumer becomes very, very important in all of this.”

I asked Sauers how he would grade consumers on a scale of A to F, in terms of their willingness to pitch in or engage. He demurred at grading, preferring to speak in percentages. “There’s only a small percentage — 10 or 15 percent — that are willing to accept a tradeoff in order to purchase or use a product that claims to be sustainable. The vast majority — 75 or 80 percent — will not accept tradeoffs, and those data are as true today as they were five years ago. So that’s a challenge we have as a company: if we want to make meaningful advances here we have to design and develop and market products that enable consumers to be sustainable but we can’t ask them for tradeoffs. And then teach them how to use them.”

That is to say, Sauers believes the company could have an even greater impact, if only consumers would cooperate.

It was the first time I’d heard him sound wistful.

Photocollage by GreenBiz Group