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P&G - Renewable Energy Makes For Responsible Consumption In Consumer Packaged Goods

Updated: Apr 18

The Procter & Gamble Company (P&G) is focused on providing branded consumer packaged goods to consumers across the world. Founded in 1837, the Company’s segments include Beauty, Grooming, Health Care, Fabric & Home Care and Baby, Feminine & Family Care. The Company’s products are sold in approximately 180 countries and territories primarily through mass merchandisers, e-commerce, including social commerce channels, grocery stores, membership club stores, drug stores, department stores, distributors, wholesalers, specialty beauty stores, (including airport duty-free stores), high-frequency stores, pharmacies, electronics stores and professional channels. It also sells direct to individual consumers. It has operations in approximately 70 countries with a reported $83.26 billion in revenue for the 3rd quarter of 2023. It offers products under 65 brands, such as Head & Shoulders, Herbal Essences, Pantene, Rejoice, Olay, Old Spice, Safeguard, Secret, SK-II, Braun, Gillette, Venus, Crest, Oral-B, Ariel, Downy, Gain, Tide, Always, Always Discreet, Tampax and many, many others that are household names across the globe.

Setting Ambitious Sustainability Targets

David Taylor, Chairman, President and CEO - P&G

In 2018 the company announced that it was resetting its sustainability goals after meeting its original 2020 goals. “We believe P&G can be a force for good and a force for growth, and we are taking a more deliberate approach to delighting consumers while enabling responsible consumption,” said David Taylor, P&G’s Chairman, President and Chief Executive Officer. “Consumers expect the brands they trust to deliver superior performance and to also help solve some of the most complex challenges facing our world. Our global reach, our understanding of the five billion consumers we serve, and our innovation capabilities give us a unique ability to make a positive difference.” These new goals are the foundation of the company's Ambition 2030 plan.  Included in the plan is a desire for P&G manufacturing sites to cut greenhouse gas emissions in half, and purchase enough renewable electricity to power 100% of its plants.  “Building on our progress to date, our 2030 goals seek to address two of the world’s most pressing environmental challenges: finite resources and growing consumption,” said Virginie Helias, P&G Chief Sustainability Officer. “We know P&G alone does not have all the answers. It will take partnerships and collaboration to make meaningful progress and our brands will develop innovations to take responsible consumption to the next level.” 

The Path to 100% Renewable Electricity

P&G's primary strategy to meet their 100% renewable electricity target is to help finance new renewable energy projects, explained Jack McAneny, P&G's VP of Global Sustainability. "Investing in and partnering to build new renewable power projects that bring long-term, zero emissions renewable energy online is vital to help us advance our goal of purchasing 100% renewable electricity globally by 2030," he said.

Virginie Helias, Chief Sustainability Officer - P&G

In 2019, P&G achieved a major milestone on this renewable energy journey when they reached their goal of purchasing 100% renewable electricity in the U.S., Canada, and Western Europe - representing over 70% of their total electricity consumption at the time. "We are proud of our efforts to reduce our environmental footprint and leave the world a better place for future generations," said Helias.

In September 2021, P&G announced an ambition to achieve net zero greenhouse gas (GHG) emissions across its supply chain and operations by 2040, from raw material to retailer. As a result they achieved a 57% reduction in Scope 1 and 2 GHG emissions since 2010, exceeding their Science Based Targets Initiative (SBTi) validated 2030 target of a 50% reduction. This included purchasing 99% renewable electricity globally toward a 100% goal by 2030. This progress helped P&G reach its Scope 1 and 2 GHG emissions reduction goal and increased the amount of renewable electricity available for everyone through Power Purchase Agreements, which have helped enable new wind and solar energy arrays in Spain and North America to be built

Major U.S. Investments To Subsidize New Renewable Energy

The journey to support new renewable energy goes back almost a decade for P&G.  As early as 2015, they signed a 20 year agreement to purchase steam from a biomass project in Albany, GA to power its Bounty and Charmin paper manufacturing facility.  They followed this in October of the same year with an investment in the Tyler Bluff wind project.  For that project P&G purchased 80% of the estimated 126 MW generation in order to power all of its North American Fabric & Homecare plants.  

As the years progressed P&G clearly stepped up their efforts.  During Climate Week 2022, P&G announced its newest and largest solar energy Power Purchase Agreement. The 200 MW Sun Valley project located in Hill County, Texas, helps progress P&G's ambition to achieve Net Zero greenhouse gas (GHG) emissions across its operations and supply chain by 2040, while supporting the local agricultural ecosystem. The project is expected to remove harmful carbon dioxide (CO2) emissions from the electricity grid each year producing more than 530,000 MWh of renewable power annually.  This is enough renewable electricity to power 1 in every 3 residences in P&G’s headquarters city of Cincinnati, Ohio.

"Partnering on new renewable power projects brings long-term, zero emissions renewable electricity on-line and is an important strategy to help us achieve our goal of purchasing 100% renewable electricity." said Jack McAneny, P&G Vice President Global Sustainability.

In addition to its major solar and wind projects, P&G also utilizes a diverse portfolio of solutions to green its operations, including on-site solar, geothermal, hydroelectric, and renewable steam at its manufacturing facilities. They also continue to purchase renewable energy certificates (RECs) to address remaining non-renewable electricity consumption as they progress towards their 2030 target.  As a member of the EPA’s Green Power Partnership P&G’s 2023 reporting states that they purchased 1,844,008 RECs in addition to their above-described virtual and physical power purchase agreements (VPPAs/PPAs).  In terms of the rationale, the company stated on its website that as they progress these partnerships, they'll also buy RECs. RECs support current clean energy projects, as PPAs help expand more clean energy for everyone. Both are important to make progress in greening the power grid.  By using this combined approach of purchasing renewable electricity through power purchase agreements (PPAs) and RECs, P&G has already exceeded its 2020 goal for renewable energy and is on track to surpass its 2030 science-based target for reducing greenhouse gas emissions. 

Including Additionality RECs in the P&G Diversity Approach

P&G also continues to explore next-generation solutions, like advanced geothermal technology, to eliminate remaining emissions from natural gas usage in its operations. They recognize fully achieving net-zero emissions requires innovation across heat and steam generation, an area where renewable options remain cost-prohibitive for many companies.  Through ambitious goal-setting, multi-faceted implementation strategies, transparent tracking of progress, and openness to creative partnerships, P&G provides a model for how major corporations can lead the business world's transition toward renewable electricity and decarbonization. Their journey over the past decade shows that with the right commitment and collaboration, 100% renewable energy at a global scale is possible.

However, the journey towards sustainability is not without its challenges. As P&G aims to purchase 100% renewable electricity globally by 2030, the company acknowledges the hurdles in reducing emissions from natural gas and the need for more innovation in renewable thermal energy. These challenges highlight the importance of continuous improvement and innovation in P&G's sustainability efforts.

P&G's current use of RECs without additionality, while beneficial in the short term, may not provide the same long-term benefits as RECs with additionality. Additionality ensures that the purchase of RECs directly contributes to the development of new renewable energy projects, thereby accelerating the transition of the grid to renewable sources.  Incorporating RECs with additionality into P&G's renewable electricity procurement strategy could enhance the company's sustainability narrative and allow for more impactful marketing claims. In particular, this would allow P&G to bring that 1,844,000 MWh covered by RECs up to par with the attributes they receive from the VPPA/PPA projects that they subsidize. RECs with additionality not only certify that electricity was generated from new renewable sources but also ensure that new renewable energy projects are financed and built. This approach would accelerate the transition of the grid to renewable energy, mitigate long-term costs associated with renewable energy procurement, and provide a more impactful marketing claim for sustainability purposes. Moreover, RECs with additionality offer scalability to emission reduction strategies, which is crucial as P&G continues to grow and increase its electricity consumption.

Lastly, RECs with additionality would help P&G mitigate costs over time, as continued investment in renewable energy projects with additionality can lead to economies of scale and potentially lower energy prices. As P&G's business grows and electricity consumption increases, RECs with additionality provide the necessary scale to cover this increased demand, ensuring that emission reduction strategies remain effective.

In summary, P&G's Ambition 2030 is a comprehensive plan that aims to enable and inspire positive impact on the planet and society, with the procurement of 100% renewable electricity being a crucial component. P&G's commitment to procuring 100% renewable electricity and its broader sustainability goals reflect the company's dedication to environmental stewardship and corporate responsibility.  By continuing to focus on renewable energy procurement, particularly through projects with additionality, P&G can further solidify its position as a leader in sustainability, driving positive change within the industry and beyond.  Including RECs with additionality, would only strengthen its position and commitment, further demonstrating that they’re one to follow in the consumer packaged goods industry.


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