P&G CEO CHALLENGE 2021: THE CASE STUDY 3

DRIVERS BEHIND THE NEEDED CHANGE

RESPONSIBILITY OF MANUFACTURING Today consumers not only require more are inclined to pay higher-than-average prices for
COMPANIES comprehensive product information, they are also products that they consider more sustainable, with
ready to pay extra for more sustainable products. 38 % being ready to pay extra for products made
We live in a time when sustainability is no longer According the Global Consumer Confidence from sustainable materials and 30 % looking for
an additional consideration, but a must that actively Survey5, nearly half of the global respondents (49 %) products that deliver on socially responsible claims.
shapes the development of businesses and whole
industries. The transition to greener technologies is
of increasing importance when it is needed to build
a long-term and efficient business in a world where
some key raw resources are finite. Companies shift 58% 61% 55% 46%
their strategy to one of sustainability, formulate
relevant developmental goals and actively search
for solutions to become sustainable faster than
their competitors. What, however, does not make
Gen Z Millennials Gen X Baby Boomers
it a simple-solution task is the understanding (16-21) (22-35) (36-54) (55-64)
that sustainability is an umbrella term that Source: GlobalWebIndex Q2 2018. Base: 111,899 Internet Users aged 16-64
includes environmental, social as well as economic
considerations (also known as a Planet, People, FIGURE 1 SHARE OF GLOBAL RESPONDENTS WILLING TO PAY MORE FOR ECO-FRIENDLY
and Profit or 3 pillars of sustainability). The equal PRODUCTS, BY AGE GROUP, %6
importance of those is the reason why companies
are searching for solutions that will provide real
change without compromising any of those 3 pillars.
#1 #2 #3 #4 #5
At the same time, the more sustainable companies
become, the more they change the product
and retail landscapes. Consumers are becoming
increasingly aware of the sustainability-associated 73% 59% 57% 55% 47%
impacts of their purchase decisions. They are now G ea W

Cl

st
Pl lo e Ai at
ste in or r po l l ut i o n e r po l l ut i o

n
rin

g
paying closer attention than ever before to how as t ba l g r ai nf
i c wa w ar m
any product they buy was sourced, manufactured,
transported and whether it was fairly traded. Every Source: GfK Consumer Panels & Services 2019
year Gen Z and Millennials are acquiring more
buying power and are therefore further driving this FIGURE 2 TOP-5 CONSUMER CONCERNS IN EUROPE, WITH % OF CONSUMERS
evolving consumer demand4. THAT MENTION THAT ISSUE

4
2020 FMCG environmental sustainability trends
5
Nielsen: Unpacking the sustainability landscape
6
The Rise of Green Consumerism: What do Brands Need to Know?
P&G CEO CHALLENGE 2021: THE CASE STUDY 4

DRIVERS BEHIND THE NEEDED CHANGE

Household cleaning products 73% than 70 % of global consumers are most likely to
research cleaning and personal care products,
Personal care products 73% which are the FMCG product categories.

Food 61% In line with those forces, FMCG companies are

formulating strategies to not only reduce non-
Electronic devices 49% recycled plastic but are also ready to fundamentally
rethink their packaging systems and value chains.
Clothes/shoes/bags 48% It is apparent that an inability to find impactful
solutions could threaten viability in this high-
Cars 48% competition industry10, particularly because
consumers believe that manufacturing companies
Tea/cofee/other hot drinks 46% should be the primary actors in combating the
problem of plastic waste.
FIGURE 3 SHARE OF ECO-CONSCIOUS CONSUMERS WHO RESEARCH THESE CATEGORIES TO ENSURE 260
THEY ARE ENVIRONMENTALLY-FRIENDLY, %
215
184 195 193
184
171 173
154 159
While all industries are investing in combating
110 153 119
common sustainability issues such as climate 119
104 95 124 138 92 107
114
change, water scarcity and others7, the reduction of 106 102 106
93 60 83
plastic pollution remains one of the most important 68 84
65 68 26
79
67
69
56
trends, particularly, for the fast-moving consumer 41
28 33 28 26 30
goods (FMCG) industry, as half of the global plastic 26 18 18 18
4
waste produced annually comes from single-use
packaging8. Further, consumer demand is only
strengthening the importance of finding solutions
Czech
to the plastic waste problem, as this issue is the key Austria Belgium Denmark Germany Hungary Netherlands Poland Russia Slowakia Sweden Italy
Republic
consumer concern (being mentioned by over half
Retailer Shopper Politics/government Manufacturers
of the respondents in all countries surveyed by GfK,
a leading market research company)9. According Source: GfK Consumer Panels & Services, Plastic Waste Report 2019
to the GlobalWebIndex, when determining the
“greenness” of different product categories, more FIGURE 4 CONSUMER PERCEPTION OF THE ALLOCATION OF RESPONSIBILITY FOR THE ‘PLASTIC
WASTE’ PROBLEM, RESPONSIBILITY INDEX BY ACTOR AND COUNTRY

7
The UN has formulated 17 most important global sustainability development goals, which can be found in Appendix 1.
8
FMCG - The driving force behind the plastic pollution crisis
9
Growth from Knowledge: Understanding today’s green shopper dilemma
10
Nielsen: Sustainable shoppers buy the change they wish to see in the world