Hamburg, June 14 th 2002 By Tom Feijtel , PhD Associate Director, Product Safety Procter & Gamble

1. Assessment Tools at Company Level Hamburg, June 14th 2002 By Tom Feijtel, PhD Associate Director, Product Safety Procter & Gamble

2. Outline • CONTEXT – P&G • R&D Business Decision-making • Environmental Management Framework • Sound Management of Chemicals/Products • Substitution ? Tools and Illustration • Conclusions

3. Procter & Gamble • Global consumer goods company • Sales of > $40 billion/yr • Operates in over 140 countries • More than 300 brands • Laundry and cleaning products • Personal care & beauty care products • Pampers, Tissue Towels • Pharmaceuticals • Food and petfood • Over 120 manufacturing sites worldwide

4. STATEMENT OF PURPOSE: “WE WILL PROVIDE PRODUCTS OF SUPERIOR QUALITY AND VALUE THAT IMPROVE THE LIVES OF THE WORLD’S CONSUMERS”

5. Economic Environmental Social Improving the Quality of Life…. In practical terms… The integration of : • Economic Development • Social Responsibility • Environmental Protection

6. Sustainability ……………An operational definition “Sustainable development is a very simple idea. It’s about ensuring a better quality of life for everyone, now and for generations to come.” Department of the Environment, Transport and the Regions, London, UK, February 1998

7. R&D Business Decision-making Customer - Consumers Consumer Test Organizations Addressing Societal Concerns Market Research Performance Consumer Tests R&D-Business Decision Cost LCI data Supply Human & Env RA Processing Efficient Resource and Waste Management Competition Bench Marking Performance/Value • Compliance and Risk Assessment : • - Production & manufacturing compliance • - Chemical classification/labeling • Chemical testing & registration • - Risk Assessment • - etc..

8. AN ENVIRONMENTAL MANAGEMENT FRAMEWORK Recognizes Four Key Elements: • Human and Environmental Safety • Regulatory Compliance • Efficient Resource Use and Waste Management • Consideration of Social Concerns

10. Environmental Management - an overall framework Goal: Environmentally and Economically Sustainable Management Elements: 4. Addressing societal concerns (i.e. understand & respond) 1. Human and Environmental Safety 2. Regulatory Compliance 3. Efficient Resource use and waste management Manufacturing site compliance auditing Manufacturing site waste reporting (e.g. TRI) Material consumption reporting New Chemical testing and registration Product and packaging classification and labeling Human health Risk Assessment (occupational and consumer exposure Environmental Risk Assessment at all ‘life’-stages of the chemical (i.e. production, formulation, use and disposal) Manufacturing site wastes and energy consumption, monitoring and reduction Material consumption monitoring and reduction Supplier auditing Product LCI/LCA Eco-design Economic Analysis Understand: -Opinion surveys -Consumer and market research -Networking Respond: -public presentations and publications -Scientific and industry working groups -Reporting -Co-operation with other stakeholders to find solutions Tools:

11. Air Emissions Solid Waste Aqueous Emissions Substitution ? What, why, How ?

12. SOUND MANAGEMENT OF CHEMICALS ENVIRONMENTAL RISK ASSESSMENT P R O D U C T D E V E L O P M E N T S U S T A I N A B I L I T Y PRODUCT ACCEPTABILITY (e.g. LCA, Cost-Benefit) PRODUCT Performance (e.g. consumer/product Score/testing) HUMAN RISK ASSESSMENT SOUND MANAGEMENT OF PRODUCTS

13. Economic Environmental Social Improving the Quality of Life…. TOOL BOX ? • Risk Assessment • Lifecycle Assessment • Risk Management • Risk Communication • Cost-benefit • …and many other ….

14. RISK ASSESSMENTIS AN ESSENTIAL BUSINESS TOOL IN: • The Development of New Technologies, Product Ingredients and Manufacturing Processes • Industrial Site and Emissions Evaluations • Registrations and Discharge Permits • Natural Resource Damage Assessments • Precautionary and Environmental Labeling

15. A Hazard - Risk Continuum(Adapted from Swanson and Socha 1997) Ranking and Scoring Hazard Risk Toxicity + Physical- Chemical Properties Toxicity + Physical- Chemical Properties + Production/ Release Toxicity + Fate and Transport Model Generic Risk Assessment Endpoint-specific Site-specific Risk Assessment Amount and Specificity of Data Required

16. Illustration of where the tools may fit ChemicalUse/ Avoidance Priority list (e.g. WFD) CMRs COMMPS Prioritization/ Screening for Further Assessment POPs EURAM Hazard Classification & Labelling Risk Assessment MSDS Safe/Unsafe Handling, Production & Use Labels Hazard Communication Tools Chemical Ranking & Scoring Tools Risk Assessment

17. RISK ManagementHow to think about substitution ? • Several basic ways to do this: • Reduce the Hazards • Reduce the Exposure by the way a product is designed (e.g., less of the same substance, managing availability, or fate/biodegradability • or a combination of both • or innovate, substitute, ….

18. Ingredient x : Safety success criteria Safety programme: • Fate profile significantly better than substitute • Effect profile not significantly different than substitute • RQ in all compartments < 1 Safety cleared & success criteria met

19. R&D and Business Realities …. Performance/cost/…. • Specs • Reference • Sub-1 • Sub-2 • Sub-3 • Sub-4 • Performance • Relative cost • $$ • $$$$ • $$$ • $$ • $ • Env Safety

20. Economic Environmental Social Need to account for all legs of the stool

21. Environmental Social Economic Since it may not be actionable …

22. RISK ManagementHow to think about substitution ? • Other example: mass efficiency • use a 10X better performing chemical • twice as toxic as the one it replaces •  risk profile would be 5X better • It also (probably) has a significant lifecycle benefit, as much less materials/energy will be used to make it, per unit of performance • Maybe cheaper as well….

23. THE HAZARDS OF“HAZARD-BASED” substitution • Detaches “Dose” from “Risk” • Is Easily Misperceived by the Public as Synonymous with “Risk” – based action • Does not encompass holistic human and environmental risks • Does not include entire life-cycle and other ‘potential’ impacts

24. Life Cycle Analysis of product/service = Accounting of all energy and raw material consumption (inputs) and associated environmental emissions (outputs) for the whole life cycle of a product or service

25. LCA is a process that (ISO) 1/ Evaluates the environmental burdens associated with a product, process, or activity by identifying and quantifying energy and materials used and wastes released to the environment. 2/ Assesses the potential impact of the energy and material flows on the environment, 3/ Identifies and evaluates opportunities for environmental improvements.

26. What does LCA look at ? Resource use efficiency: - Energy - Water - Land Impact categories: - CO2 emission/Global warming - Smog/Ozone formation - Ozone depletion - Acidification - Eutrophication (N/P) - Human health - Ecotoxicity

27. Risk Assessment vs LCA Life cycle assessment (LCA) Env. Risk assessment (ERA) LCA ERA Environment Clearance LCA profile, report Comparative Voluntary Absolute Compulsory

28. Evolution within the regular powder category since 1988 excluding the use stage

29. LCA vs Risk Assessment ? • RA and LCA are complementary tools, not mutually exclusive • Decision for environmental improvement and sustainable development must be based on the outcome of variety of tools • There is not such thing as a simple answer

30. CONCLUSIONS BUSINESS REALITIES PLAY A ROLE IN SOUND CHEMICAL AND PRODUCT MANAGEMENT Economic Environmental Social 1. All Social Activities Carry Environmental Pressures and Efforts are Needed to Identify the Extent and Severity of this potential Impact 2. Technological Innovation is Essential to Human and Environmental Quality Improvement and Business Success 3. Only Products/Services Offering Competitive Performance and Value Survive to Deliver Environmental Benefits