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

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

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

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

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

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

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

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

Environmental Management - an overall framework Goal: Environmentally and Economically Sustainable Management 1. Human and Environment al Safety 2. Regulatory Compliance 3. Efficient Resource use and waste management 4. Addressing societal concerns (i.e. understand & respond) 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) Tools: 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 Elements:

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

ENVIRONMENTAL RISK ASSESSMENT ENVIRONMENTAL RISK ASSESSMENT HUMAN RISK ASSESSMENT HUMAN RISK ASSESSMENT PRODUCT Performance (e.g. consumer/product Score/testing) PRODUCT Performance (e.g. consumer/product Score/testing) PRODUCT ACCEPTABILITY (e.g. LCA, Cost-Benefit) PRODUCT ACCEPTABILITY (e.g. LCA, Cost-Benefit) SUSTAINABILITYSUSTAINABILITY SOUND MANAGEMENT OF CHEMICALS SOUND MANAGEMENT OF PRODUCTS PRODUCTDEVELOPMENTPRODUCTDEVELOPMENT

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

RISK ASSESSMENT IS 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

A Hazard - Risk Continuum ( A Hazard - Risk Continuum ( Adapted from Swanson and Socha 1997) HazardRisk 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 Ranking and Scoring

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

RISK Management How 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, ….

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

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

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

Since it may not be actionable … Social Economic Environmental

RISK Management How 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….

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

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

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.

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

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

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

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

CONCLUSIONS BUSINESS REALITIES PLAY A ROLE IN SOUND CHEMICAL AND PRODUCT MANAGEMENT 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 Social Economic Environmental