Sustainability Faceoff: Procter & Gamble vs. Colgate-Palmolive

Which company should you trust to provide sustainable home products–Procter & Gamble or Colgate-Palmolive? Both companies manufacture a number of well-regarded brands, including Tom’s of Maine, Tide, and Palmolive. But there can only be one winner in this sustainability battle. In the new book The HIP Investor, author and investment adviser R. Paul Herman compares the two. We do the same below.

Procter & Gamble has set a number of green goals that it hopes to achieve by 2012, including $20 billion
in cumulative sales of products with low eco-impacts; a 20% reduction (per unit production) in total CO2 emissions, energy consumption, water consumption and disposed waste from P&G plants; and saving 20,000 lives by delivering
4 billion liters of clean water in the Children’s Safe Drinking Water
program. The company has already made some real changes in its business practices, too, with reduced packaging in brands like Pampers, Prilosec, and CoverGirl, cold water detergent (Coldwater Tide and Cool Clean Ariel) that cuts down on electricity production, and low-energy Braun razors.

It’s hard to find glaring sustainability issues with P&G, but there is still room for the company to make improvement. While a leader in diversity, P&G could seek to get
the women manager ratios to reflect today’s 50-50 balance in society and
the U.S.
workforce. It could also work on its HRC Corporate Equality Index score. But these are minor complaints.

Colgate-Palmolive has also made strides in sustainability, with LEED-certified manufacturing facilities and EPA Design for the Environment-approved products including Ultra Palmolive Pots & Pans, Palmolive Dishwashing Liquid,
Palmolive Ultra Green, Murphy Oil Soap Liquid, and Ajax Expert Glass. Palmolive Pure + Clear, introduced in 2008, is free of toxic phosphates, heavy fragrances, and unnecessary chemicals. And Palmolive eco+, an automatic dishwater detergent released the same year, is also completely phosphate-free.

Unfortunately, Colgate’s comprehensive sustainability Web site reflects data from 2008. This makes it difficult for us to judge the company’s recent environmental efforts. So we have to give this round to Procter & Gamble, which provides up-to-date info about its ever-improving practices. (Note: this reflects views of FastCompany.com).

Check out the full HIP Investor chart below.

	Procter & Gamble		Colgate-Palmolive
Overview	138,000 employees, $79.0 billion in annual revenue		36,600 employees, $15.3 billion in annual revenue
Product	Ariel detergent’s sustainability team designed large, seal-tight Polyethylene bags; they are 100% recyclable, require 80% less packaging than boxes and take up 20% less space in transport and storage		Tom’s of Maine, acquired by Colgate, who saw an opportunity to also promote oral health globally
Management Practices	15 of 25: By 2012, seek to generate at $20B+ in cumulative sales of products with less environmental impact. (CSR report)		10 of 25: Making dramatic strides in sustainability internally, and disclosing new metrics in multiple HIP categories
Health of 20%	Safety rating: 0.49% total incident rate	15%	Safety rating: 1.06% total incident rate	12%
Wealth of 20%	Encourage employee ownership	15%	Restricted Stock Awards and stock options granted to some employees	14%
Earth of 20%	Reduced actual worldwide CO2 emissions from 3,148,000 tons to 2,889,000 tons since 2002. In 2008, P&G produced 81 metric tons of GHG emissions per $1MM in revenue	12%	Total worldwide GHG emissions of 675,000 metric tons in 2008, or 44 metric tons per $1MM in revenue	11%
Equality of 20%	38.9% women management; HRC equality index score is 85%	17%	32.9% women management; HRC equality index score is 73%	15%
Trust of 20%	Sustainability information available on Web site; $4 million lobbying in 2008	10%	Several products approved by EPA with Design for the Environment Qualification; only $40,000 in lobbying; very comprehensive reporting	14%
Human Impact of 100%	TOTAL	70%	TOTAL	67%
Corporate Profit of 20%	+17.09% return on equity (2009) +0.9% annualized total return, including reinvested dividends (6/2004–6/2009) -0.5% annualized total return, including reinvested dividends (6/2006–6/2009)		+100.7% return on equity (2008) +6.2% annualized total return, including reinvested dividends (6/2004–6/2009) +8.1% annualized total return, including reinvested dividends (6/2006–6/2009)