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    World Resources Institute: The Procter & Gamble Company

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    World Resources Institute: The Procter & Gamble Company

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    p&g -Arthur little

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    World Resources Institute: The Procter & Gamble Company

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    of 6

    World Resources Institute

    Sustainable Enterprise Program


    A program of the World Resources Institute

    For more than a decade, WRI's THE PROCTER & GAMBLE COMPANY:
    Sustainable Enterprise Program (SEP) Disposable and Reusable Diapers – A Life-Cycle Analysis
    has harnessed the power of business to
    create profitable solutions to
    environment and development When the Procter & Gamble (P&G) Company unveiled
    challenges. BELL, a project of SEP, is Pampers disposable diapers in the 1960s, consumer products
    focused on working with managers and manufacturers and parents considered it the product
    academics to make companies more breakthrough of the decade. By the early 1990s, P&G's
    competitive by approaching social and
    invention contributed over 18% to the company's annual
    environmental challenges as unmet
    market needs that provide business revenues of $24 billion. The product has also presented
    growth opportunities through consumers with a decision that has generated significant
    entrepreneurship, innovation, and attention in recent years: which type of diapers to use--
    organizational change. disposable or reusable? Used by environmental and
    Permission to reprint this case is
    consumer advocate groups as a symbol of the “throw away”
    available at the BELL case store. mentality, disposable diapers account for 1-3% of America's
    Additional information on the Case yearly trash output, or 3.6 million tons. In an effort to deflect
    Series, BELL, and WRI is available at: criticism, P&G decided to take matters into its own hands. In
    www.BELLinnovation.org. 1990, the company commissioned Arthur D. Little, Inc., an
    international management and technology consulting firm
    specializing in environmental issues, to analyze the full range
    of environmental impacts, or to conduct a “life-cycle
    analysis,” of both types of diaper to settle the debate

    This case was prepared by the Management Institute for Environment and Business (MEB) – now the Sustainable
    Enterprise Program - for educational purposes only. Copyright © 1994 by World Resources Institute.
    Life-Cycle Analysis
    Life-cycle analysis (LCA) is a tool to measure and inventory the full range of environmental impacts
    associated with the inputs and outputs of raw materials, energy and waste during the life of a
    product--from the acquisition of raw materials, material manufacture, final product fabrication,
    packaging and distribution, to consumer use and disposal. LCA is a total process and product
    mapping methodology. See Figure 1.

    LCA is often used to compare two similar products in order to assess which is environmentally
    favorable. However, such a comparison presents three major difficulties. First, LCA analyses rarely
    determine that one product is environmentally favorable in every category of environmental impact.
    Second, LCA studies typically measure different sorts of things, producing results which are largely
    inconclusive. And third, processing the information obtained from an LCA requires managers to
    weigh qualitative and quantitative data. Evaluations range from determining the health and
    environmental risks associated with a particular waste stream to choosing whether reducing air
    pollution is more important than reducing water pollution.

    Many environmentalists argue that LCA misses the point altogether. Such is the belief of Barry
    Commoner of New York University, who criticizes LCA and similar tools because they put "a badge
    of legitimacy on existing levels of pollution," rather than questioning whether that pollution is
    justifiable from society's perspective.

    The Diaper Life-Cycle Analysis


    Researchers at Arthur D. Little began their task by determining a prototypical weight and size of
    both a disposable and reusable diaper and gauging the weekly usage rates of each. They also
    mapped the life cycle of each, as illustrated in Figures 2 and 3.

    In constructing the life-cycle diagrams, Arthur D. Little staff made a number of simplifying
    assumptions concerning the ways in which diapers are used and disposed:

    1) The number of daily diaper changes is the same for both disposables and reusables: The
    researchers assumed the same frequency rate of changes for both types of diapers, although
    disposables, due to their greater absorbency, generally require fewer changes.

    2) 90% of all reusables are laundered at home: The researchers assumed that only 10% of
    consumers using reusable diapers subscribe to a diaper service. However, other estimates have
    placed this figure at a higher percentage.

    2 The Procter & Gamble Company: A Life-Cycle Analysis


    Arthur D. Little emerged with the following results:

    Life-Cycle Analysis of Disposable and Reusable Diapers


    (based on weekly diaper needs)

    Category Disposable Reusable


    Raw Materials Consumption (lbs) 25.30 3.60
    Energy Consumption (Btu) 23,290.00 78,890.00
    Water Consumption (gal) 23.60 144.00
    Atmospheric Emissions (lbs) 0.09 0.86
    Waste Water Effluents (lbs) 0.01 0.12
    Process Solid Waste (lbs) 2.02 3.13
    Post-Consumer Waste 22.18 0.24
    Total Costs ($/week) 10.31 7.47-16.92

    Questions:

    1. Put yourself in the position of the leader of the Arthur D. Little project team that must
    recommend one type of diaper over the other. Are all of your assumptions correct? Which diaper
    would you recommend, based on the data?

    2. In addition to the environmental information, the study also included an analysis of both the
    health and the economic implications of each diaper type.

    • Health: Disposables were found to cause, on average, less incidence of diaper rash (caused by
    contact between skin and urine) than reusables.

    • Economic: To calculate the cost to the consumer of using each type of diaper, the research team
    had to make some assumptions about the cost of washing reusable diapers. It found that when
    home labor was valued at the minimum wage or higher, disposable diapers were cheaper to use
    than reusables.

    Are the assumptions regarding diaper economics correct? Do the health and economic data change
    or influence your decision? Should they?

    3. Put yourself in the position of the vice president of the diaper division at P&G. P&G was recently
    rated the most “environmentally conscious” company in an Advertising Age survey and yet, the state
    of Vermont has proposed a ban on disposable diapers. What, if any, action should you take?
    References:

    Arthur D. Little, Inc., Disposable versus Reusable Diapers: Health, Environmental, and Economic Comparisons, report
    to Procter and Gamble, March 16, 1990.

    Society of Environmental Toxicology and Chemistry and SETAC Foundation for Environmental Education, A Technical
    Framework for Life-Cycle Assessment, Workshop Report, January 1991, p. xvii.

    David Stipp, “Life-Cycle Analysis Measures Greenness, But Results May Not Be Black and White,” Wall Street Journal,
    February 28, 1991.

    The Procter & Gamble Company: A Life-Cycle Analysis 3


    4 The Procter & Gamble Company: A Life-Cycle Analysis
    The Procter & Gamble Company: A Life-Cycle Analysis 5
    6 The Procter & Gamble Company: A Life-Cycle Analysis

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