Procter & Gamble launches a Walmart-like sustainability scorecard to rate their suppliers' environmental efforts and improvements year-over-year.

Taking a page from Walmart’s book, the Procter & Gamble Co. has launched its own Supplier Environmental Sustainability Scorecard and rating process to measure and improve the environmental performance of its key suppliers. The new scorecard will assess P&G suppliers' environmental footprint and will encourage continued improvement by measuring energy use, water use, waste disposal, and greenhouse gas emissions on a year-to-year basis.

According to P&G, it is hoped that this initiative will lay the foundation for an industry standard, and the scorecard will be "open code" for use by any organization to help promote a working discussion and determine common supply chain evaluation processes across all industries.

"The launch of the Supplier Environmental Sustainability Scorecard represents the next step in P&G's commitment to environmental sustainability and reflects the company's holistic, end-to-end supply chain strategy," says P&G chairman of the board, president and CEO Bob McDonald. "We will grow P&G's business by touching and improving more consumers' lives in more parts of the world... more completely. To accomplish this, we must continually innovate and grow responsibly and sustainably. Keeping sustainability at the core of our business fuels innovation and strengthens our results."

P&G's new supplier scorecard is the result of 18 months of work and close collaboration with the organization's Supplier Sustainability Board, which includes more than 20 leading supplier representatives from P&G's global supply chain. P&G says the scorecard relies on accepted worldwide measurement standards and sound science, including protocols from the World Resources Institute, the World Business Council for Sustainable Development, and the Carbon Disclosure Project, so as to minimize redundant efforts and build on existing best practices.

P&G's goal in deploying the scorecard is to enhance supply chain collaboration, measure and improve key environmental sustainability indicators, and encourage the sharing of ideas and capabilities to deliver more sustainable products and services for its consumers.

"We worked closely with a global team of P&G personnel, suppliers, and supply chain experts to determine the most effective way to measure the environmental performance of our diverse global supplier base," says Rick Hughes, P&G global purchasing officer. "Our suppliers wanted a tool that was flexible yet grounded in existing measurement standards and, by working together, we developed a framework that will help drive real improvement across all industries."

The scorecard is specifically designed to focus on, and encourage, year-on-year improvement—regardless of a supplier's total size or the current stage of its sustainability program. Roll-out beyond P&G's key suppliers will be determined once learnings from the first phase of deployment are incorporated, P&G says. Suppliers will have a full year to prepare to report their data before the rating can adversely impact their supplier rating with P&G. In the future, P&G will use the scorecard to determine each supplier's sustainability rating as part of P&G's annual supplier performance measurement process.

As part of its effort to create an initiative that can have far reaching cross-industry impact, P&G suppliers are also encouraged to use the scorecard within their own supply chains.