Procter & Gamble, the consumer products giant behind Tide, Crest toothpaste and Gillette, has told its suppliers to regularly report their energy consumption rates. The thinking is simple: if P&G can drive down its suppliers’ energy costs now, it could enjoy a price advantage over competitors later on if oil prices keep rising.
The program began last year with a survey to P&G’s raw material suppliers and even ad agencies, asking for information on energy consumption and greenhouse gas emissions, according to a story in Fast Company. More than 80 per cent responded, and of them, 94 per cent reported their electricity usage. This year, any company that doesn’t fill in the form won’t be able to do business with P&G.
The company has a big carrot to accompany its sizable stick. Suppliers who lower their energy consumption or offer useful energy efficiency advice get a higher rating, which will translate into a boost in business from P&G.