Proctor and Gamble turn to Energy Efficient Suppliers

CORPORATE wisdom is clicking into place as far as energy efficiency is concerned, illustrated by consumer products giant Procter & Gamble (P&G) telling its suppliers to report their energy consumption.

Procter & Gamble, who produce many household named products such as Tide, Crest toothpaste and Gillette, now require the regular energy reports from suppliers with a firm financial strategy behind their thinking. If P&G can reduce suppliers’ energy costs now, it will be able to benefit from a price advantage over competitors in the future if oil prices keep rising.

Last year P&G conducted a survey of suppliers, from raw material suppliers through to advertising agencies, in which it asked for energy consumption and greenhouse gas emissions information, so report Fast Company.

Over 80 percent of their suppliers responded, with 94 percent of replies reporting their electricity usage. Now in 2011 any company wishing to supply P&G need to fill in a form regarding their energy consumption and greenhouse gas emissions, otherwise they will not be able to do business with the Fortune 500 company.

P&G do not want it all their own way, as they offer an incentive to those suppliers that react. Suppliers who lower their energy use and emissions, or even offer useful energy efficiency advice, will get a higher rating from the company, which will result in a boost in the amount of business they can expect from P&G.

P&G’s decision over the energy efficiency within its supply chain is sure to be copied by other large corporations worldwide, driving other enterprise, large and small, to improve their energy efficiency and use systems that allow clear and easy reporting of energy use.

Picture of Cincinnati from the U.S. National Archives and Records Administration

Wednesday 27th April 2011

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