Sustainability Scorecard Training How to Complete the Scorecard Audience: P&G Relationship Owners + P&G External Business Partners Content 2013 Updates Annual Sustainability Scorecard Process Scorecard Background Scorecard Use Scorecard Design Scorecard Structure The Purpose Tab The Instructions Tab The Scorecard Tab (complete by P&G External Business Partners) Common Scorecard Errors The Rating Criteria Tab (complete by P&G Relationship Owners) Note: To return to this page, click on the Return icon (only work in “slide show” mode.) 2013 Updates What changes have been made to the P&G Supply Chain Environmental Sustainability Scorecard for 2013? Additional submission details (i.e., Main Industry Group, Main Country of Production, and Past Submission Years) are requested to enable more robust trend analysis. Those who report Corporate (C) and Site (S) scope values are asked to enter a Factor % (to multiply times the C and S scope values) to approximate Product scope values. Reporting Factor % earns an improvement bonus point to help increase the overall scorecard rating. Click here for more information (These icons only work in “slide show” mode.) Note: As a result of these updates, only the 2013 version of the scorecard will be accepted. Annual Sustainability Scorecard Process Request P&G requests that all of the external business partners evaluated in our annual supplier performance management process complete a sustainability scorecard once a year. In an effort to streamline communications between our partners and P&G Relationship Owners (ROs), we have improved this year’s process by distributing and collecting the scorecard Excel files via our Supplier Performance Management System (SPMS)/Decideware. If an external business partner sells/provides services to multiple P&G ROs and have received more than one scorecard request, they must submit a separate scorecard excel file to each requesting P&G RO via SPMS to be scored appropriately. Partners may submit the same scorecard excel file (e.g., for corporate level or combined total of all sites supplying P&G) with identical data to each requesting P&G RO. Alternatively, partners may submit separate scorecard excel files on P&G product-specific materials/services to each requesting P&G RO. Partners should discuss the options with their ROs to determine the best approach. Each P&G RO will rate the scorecard he/she receives. (Note: To report on multiple corporate entities, submit separate scorecards for each different corporate entity to get rating credit. DO NOT add multiple scorecard tabs to one workbook.) P&G external business partners that are not part of our SPMS process but would like their sustainability efforts recognized are encouraged to download the 2013 scorecard from our company website and submit the completed scorecard to their P&G ROs outside of the SPMS process to identify opportunities to collaborate in our supply chain sustainability efforts. Completion Based on previous experience, we expect that those external business partners who already track their key sustainability measures will be able to complete the scorecard with less than one person-day of effort. For those who are not presently tracking key sustainability measures, the effort may require significantly more time. While we are sensitive to this time burden, especially for those who are just getting started, it is imperative that all of our key business partners measure and improve their key sustainability measures. Annual Sustainability Scorecard Process Rating and Feedback ROs will decide the sustainability rating of each external business partner based on their scorecard results, and provide feedback on the results as part of the annual supplier performance feedback process between September and October each year. Partners should contact their ROs at the end of October if they have not yet received feedback on their scorecard to help ensure the process takes place. Partner scorecard response data will be controlled by each RO and shared within P&G only among the P&G resources working with the materials/services from those respective partners. In addition, the P&G Scorecard Process team will also have access to scorecard responses to identify helpful changes in the scorecard design for future years. P&G will not share individual partner-specific scorecard data externally without the permission of the submitting partner, and only if there is a business need to do so. P&G may, however, share the general, combined results of its scorecard data without identifying any specific partner. P&G will recognize publically all of our external business partners who receive a 5 rating (i.e., far exceeds expectations) on the sustainability scorecard. A high sustainability rating will also raise the overall rating of those partners who are part of our annual supplier performance management process. On the other hand, consistent with the importance P&G places on environmental sustainability, external business partners who do not submit a scorecard to their ROs via SPMS by this year’s deadline (Jun 28, 2013) will receive a 1 rating (i.e., far below expectations) for the Sustainability Key Performance Indicator in our annual supplier performance management process. Scorecard Background Why did P&G launch the scorecard? For almost two decades, P&G has worked on improving the environmental sustainability of our products and operations. The growing expectation of our consumers, customers and stakeholders is a further catalyst to extend this practice throughout our supply chain. As a first step, P&G experts have collaborated with commercial and technical resources from over twenty leading global external business partners (suppliers, agencies, etc.) representing broad industries, regions, and P&G spend categories to develop a Supply Chain Environmental Sustainability Scorecard and rating process. Together, we have created what is becoming an industry standard tool to encourage our external business partners to build capability, measure in a common way, and improve on key environmental sustainability measures. Why doesn’t P&G use a third-party like Carbon Disclosure Project (CDP) to collect this information? We recognize and support the CDP as an important asset in encouraging the reporting of carbon-related measures. However, the CDP report does not address all P&G scorecard areas, nor does it provide a yearon-year progress report or detail initiative support. P&G will continue to participate in CDP surveys and encourage our external business partners to do the same. Accordingly, we matched scorecard definitions and measures, wherever possible, with the same measures in CDP and Global Reporting Initiative (GRI), so external business partners will not have redundant work to track and calculate the data. What is the scorecard analysis tool? The scorecard analysis tool is an excel-based tool P&G developed internally to consolidate and analyze the scorecard data we collected from our external business partners. It enables us to measure and interpret key environmental sustainability metrics across our supply chains and identify progress as well as opportunities for improvement. By making this tool publicly available, P&G hopes to enable other companies to more purposefully focus on improving their environmental footprint without investing in the development of analysis software. The scorecard analysis tool can be downloaded at http://www.pgsupplier.com/en/currentsuppliers/environmental-sustainability-scorecard.shtml. Scorecard Use 1. Annual External Business Partner Sustainability Performance Ratings (Primary Use) The scorecard is primarily intended to be used to determine each external business partner’s sustainability rating in P&G’s annual performance management process. Key partners are asked to complete the scorecard annually so they can be appropriately evaluated and rewarded for their environmental sustainability improvements and support of P&G initiatives. 2. Business Award Decisions Separate to the annual rating process, ROs/Buyers may also use applicable parts of the scorecard to gather comparable sustainability measures for use in best total value business award decisions. 3. Foundation for non-measured partners to develop their sustainability program P&G encourages all external business partners to develop an environmental sustainability program by using the scorecard system—even those who are not formally evaluated in our program. Notes: The scorecard may also be used for other ad hoc activities like: tracking partner progress against specific goals set by P&G, gathering data for studies/activities to improve the sustainability of P&G products and processes, or calculating the environmental impact of a particular supply chain at P&G. External business partners are also encouraged to use the scorecard throughout their supply chain to further improve total supply chain environmental sustainability. The Scorecard is considered “open source” for everyone in industry to use in their supply chains. In this training, we will focus our discussion on the scorecard’s primary use, i.e., annual external business partner sustainability performance ratings. Scorecard Design The scorecard is a concise tool for tracking our external business partner’s improvement on key environmental sustainability measures P&G believes are important to its supply chain. It contains the following key characteristics: The scorecard separates “Core” (required) and “Optional” (test) data so that the measures can be tailored to suit P&G’s business needs over time. The definitions of the measures are aligned with worldwide standards (e.g., The Greenhouse Gas Protocol developed by the WRI and WBCSD), where applicable. Flexibilities have also been built into the scorecard to account for differences in external business partner’s reporting capabilities, experience in environmental sustainability, size and geography. Partners self-assess/describe their support of P&G initiatives and idea sharing to enable a collaborative improvement discussion with their Relationship Owner (RO). Instant auto-scoring has been included to build transparency into the quantitative portion of the annual rating process. The scorecard provides the option to automatically exclude measures that are not applicable in certain industries by eliminating them from the rating process. The scorecard automatically compares and credits year-on-year improvement for absolute OR intensity values; whichever are reported. It also offers credit for improvement of alternate comparisons (converting absolute to intensity or intensity to absolute) if annual output/volume data are provided. The scorecard converts Factor % for non-product scope to allow customers of the data to approximate Product scope values. To encourage Factor % reporting, an improvement bonus point is also given. Structure and validity checks have been built into most input cells, and drop-down menus are available for most non-numerical cells, to minimize data inconsistencies and ensure data can be rolled up. Internal formulas are also built into the scorecard to enable synchronization with the corresponding Analysis Tool for robust data analysis. The scorecard can be instantly rebranded to another company’s name for easy reapplication. Scorecard Structure The scorecard workbook contains 4 tabs. 1. Purpose Provides an overview of the scorecard and explains its primary and potential uses. 2. Instructions Contains general instructions on how to complete the scorecard as well as the name, unit and definition for each measure requested. 3. Scorecard Contains the scorecard template to be completed by each requested partner. 4. Rating Criteria Describes the rating criteria for the Sustainability Key Performance Indicator (KPI) of P&G’s annual external business partner rating and feedback process. Next, we will discuss each scorecard tab in the context of annual external business partner sustainability performance ratings. The Purpose Tab The Purpose tab provides an overview of the scorecard and explains its primary and potential uses. It also outlines the measures and comments related to each use of the scorecard. In addition, any company may enter their name in Cell A1 to instantly rebrand the scorecard for reapplication in their supply chains. Replacing “P&G” with their company name (<8 character short name preferred) automatically repopulates all company references throughout the scorecard workbook. (Note: names >7 characters are automatically truncated from the left to varying degrees in some cells to maintain scorecard formatting.) The Instructions Tab The Instructions tab contains general instructions on how to complete the scorecard as well as the name, unit and definition for each measure requested. The Instructions tab is divided into 3 sections: General Instructions, Core Measures and Optional Measures. General Instructions: The General Instructions section contains important information on how the scorecard should be completed. Please read these carefully! The instructions have been updated to reflect the changes made to the 2013 scorecard. The Instructions Tab Core Measures: The Core Measures section shows a list of required measures. These environmental sustainability measures were chosen because: 1) they cover key aspects of environmental sustainability that P&G believes are important, 2) they are commonly tracked by companies with environmental sustainability programs in place, and 3) their definitions are relatively well-defined by practitioners. Special Core measures (i.e., Annual Volume/ Output, P&G Sustainability Ideas & Initiatives Supported and Data Protocol) are also included here. Annual Volume/Output and Data Protocol provide important information that help P&G better interpret or assess the data submitted, but they are not directly rated in our annual rating process. The Instructions Tab Special Core Measures (continued): P&G Sustainability Ideas & Initiatives Supported provides each external business partner the opportunity to describe their contribution to P&G’s sustainability initiatives. Optional Measures: The Optional Measures section contains a list of “test” measures. These are measures we consider important but they are less commonly tracked. Partners who track these measures should report them. As we learn more about these measures over time, we may consider moving them to the Core Measures section or eliminating them. This section may also include additional measures critically important to a Spend Category. Partners in the industry specified should report the additional measures as requested and defined by the Spend Category/RO. Note: The Optional Measures are not autoscored. They may be taken into account as part of the RO-scored rating criterion “support of additional feasible sustainability measures requested by P&G”. The Instructions Tab In both the Core and Optional Measures sections, the expected unit(s) and definition of each measure are defined. Partners should report data in the unit(s) requested—absolute values preferred, intensity values accepted (e.g., metric tons of hazardous waste disposed or metric tons hazardous waste disposed per unit of production). (We will go into more details on this topic later.) The definitions of the measures were extensively reviewed by P&G experts and Supplier Sustainability Board technical resources to ensure they are aligned with worldwide standards (e.g., The Greenhouse Gas Protocol developed by the WRI and WBCSD), wherever applicable. They are also fully consistent with the current P&G Product Supply measures. Note: The scorecard should be circulated to all applicable commercial and technical staff within each partner to ensure all core measures are completed and ideas offered. The Scorecard Tab The Scorecard tab contains the scorecard template to be completed by each external business partner. Key elements include: Submission Details, Measures (Core and Optional), Unit of Measure, Scope Code, Annual Data, Factor %, Comments, Improvement Status (I Status) and Interim/Final Rating. Partners should fill in all applicable light green shaded cells/boxes; others cells are optional (unless specified by RO). Note that input cells have structure and validity checks. Most non-numerical cells have drop down menus to minimize data inconsistencies. Also, data cells require numerical entries. Submission Details: Partners should enter basic submission information including Submit Date, Company or Unit Name, Main Industry Group (select from dropdown menu), and Main Country of Production. Also, select (from dropdown menu) the Past Submit Years. These submission details will help us conduct more robust data analysis, and better identify progress as well as opportunities for improvement…and perhaps enhance the ability to share helpful generic summaries for specific industry or geographic groups. The Scorecard Tab Measures (Core and Optional): The measures on the Scorecard tab are the same as those on the Instructions tab. Again, they are divided into core (required) and optional (test). Hover the cursor over any measure name to see its detailed definition (from Instructions tab). The Scorecard Tab Unit of Measure: Partners should report data in the unit selected from the dropdown menu for each measure. In the dropdown menus, two types of units are listed—absolute and intensity. Absolute value is the quantity of usage (emissions) in the unit specified; e.g., 100 GigaJoules (GJ) of electricity used. Intensity value is the quantity of usage (emissions) in the unit specified divided by unit of output; e.g., 100 Giga-Joules (GJ) of electricity used per metric ton of item production. Intensity values account for increases and decreases in production over time, using unit of output as the normalizing factor. While unit of output varies by industry, please use: Metric Ton for most production Square Meter, Full-Time Equivalent (Person), Revenue (USD), or Other for services (if Other is used, please explain the unit in the Comments cell) We prefer scorecard data to be reported in absolute values but will accept intensity values. Note: Use any appropriate on-line calculator to convert to the requested units; do not select "Other Unit of Output" to avoid conversion. The Scorecard Tab Unit of Measure (continued): We also request the annual volume/output under-lying the environmental measures in rows 10-17. Partners should select an annual volume/output unit in column C from the dropdown menu. Then, for each scope reported in rows 10-17, provide annual volume/output data in columns E and H. For those measures reported in an absolute unit of measure (i.e., if an absolute unit of measure is selected in column C), annual volume/output data is used to convert to intensity values for alternate improvement comparisons. For those measures reported in an intensity unit of measure, annual volume/output data is used to convert to absolute values for alternate improvement comparisons—as well as for potential scope 3 projections. However, alternate improvement comparisons will only be made for those intensity measures where the denominator of the Unit of Measure matches the Volume/Output Unit (e.g., both are MTs, USDs etc.) The Scorecard Tab Scope Code: The scorecard is designed to track improvement on key partner-related environmental sustainability measures in P&G's supply chain. While P&G is often not the only customer at our partners’ production sites/operations, we are most interested in our partners’ sustainability results relating directly to the creation of P&G Product-specific materials and services (Scope P)—because that is part of P&G’s supply chain. However, we recognize that many partners have not yet developed the capability or methodology to report data for a specific customer. Until that reporting capability or methodology is developed, we will accept Scope S (Sites supplying P&G) or Scope C (Corporate data) for the purpose of the annual external business partner sustainability performance ratings. The Scorecard Tab Scope Code (continued): In other words, please enter one of the following scopes , for each year reported, based on your capability to measure: P = P&G Product-specific materials and services (our 1st choice) S = Site(s) (combined total) that create for P&G (our 2nd choice) C = Corporate level (our last choice) NA = Measure is Not Applicable to the industry/service In addition, enter Factor % in rows 18 & 20 for Scope C & S respectively to approximate Scope P values where you cannot yet report Scope P. For example, if you report 10,000 metric tons for C scope but only 1,000 metric tons applies to this customer, enter a Factor % of 10% in row 18. Likewise, if you report 2,500 metric tons for S scope but only 500 metric tons applies to this customer, enter a Factor % of 20% in row 20 (Factor % entry earns one Improvement (I) Status bonus point). Note: For Fines & Sanctions and Environmental Management System, report only corporate level information (Scope C already pre-populated). If either of those measures are not applicable to the specific industry/service, replace “C” with “NA”. The Scorecard Tab Scope Code (continued): Scope NA Scope NA (Not Applicable) should only be used when a measure does not apply to a specific industry (e.g., hazardous waste is usually not applicable for an Advertising agency). If you believe a measure should be Scope NA for your materials or services, please select “NA” from the dropdown menu and explain in the Comments cell why the measure is not applicable. Scope NA measures are not counted in core measures reported/improved, to ensure all partners are rated only on applicable measures. If you are unsure whether a measure is Scope NA, you may contact your RO for further guidance. You may also refer to guidelines in the "Corporate Value Chain (Scope 3) Accounting and Reporting Standard" and "Product Life Cycle Accounting and Reporting Standard“ released by the WRI and WBCSD. The final decision about whether a measure is considered Scope NA resides with the P&G RO. Note: Scope NA should not be used for measures where you do not want to disclose the data or do not track the data, when others in the industry do. If a measure is applicable; but you do not have data or choose not to report it, you should leave the applicable Scope and Data cells blank and list your reasons for not reporting in the Comments cell (e.g., proprietary information, not available, etc.). The Scorecard Tab Scope Code (continued): A scope code should be selected from the drop-down menu for each year where data is reported. Leaving scope code blank will result in missed credit for reporting and improving! Scope code can change from measure to measure on the same scorecard (e.g., Energy Usage = Scope P but Hazardous waste = Scope C), but should be the same year-toyear to compare progress in each measure (i.e., ok to vary scope vertically, but not horizontally). However, if a partner improves to a more narrow scope (e.g., from reporting Scope C to Scope S or from Scope S to Scope P), it will be automatically counted as a year-onyear improvement because it achieves or gets closer to P&G’s long-term desired scope of P. The “Overall comments/exclusions regarding data scope” cell can be used to clarify the scope of data (e.g., “Scope S data does not include our plant in LA because a tracking system is not yet in place”). The Scorecard Tab Annual Data: Partners report environmental data (in the unit and scope offered for each measure) for the current year and past year unless otherwise directed. The scorecard also provides the option to report environmental data from a historical reference year of choice. This optional historical reference year serves to let the RO know a partner’s “starting point” or “baseline”—we recognize that partners who started their sustainability journey many years ago will likely show a smaller year-on-year improvement than partners who started their journey recently. The historical reference year gives the RO additional background information as they try to understand the data provided. Note: Data from the optional historical reference year will NOT be used to determine year-on-year improvement for annual external business partner sustainability performance ratings. The Scorecard Tab Annual Data (continued): We strongly prefer reporting by calendar year. However, if calendar year is not used, specify the beginning and ending months of the reporting period for each year requested. The same data calculation methodology, scope and unit should be used for the current year and past year within each measure in order to assess improvement. If a change is made in the current year, the previous year data should be adjusted to match if at all possible—unless improving to a narrower scope as previously discussed. If the Scope of the measure is not applicable (NA) or data is not available, leave the data cell blank and list the reasons for no report in the comments cell. Do not enter 0 in the data cell. P&G Sustainability Ideas & Initiatives Supported: Partners should describe all important efforts to bring sustainability ideas to P&G and support P&G sustainability initiatives in the current year. This is a very important input for the RO’s Final Rating! The Scorecard Tab Comments: Use Comments cells to explain helpful background points about the data, particularly exceptions related to scope and definition. As previously mentioned, if data cannot be provided for a specific measure, leave the Scope Code and Data cells blank and list the reasons in the Comments cell (e.g., proprietary information, not available). Also, please explain in the Comments cell if any measures were intentionally made worse in order to improve the overall sustainability of the P&G product/service. In these rare cases, ROs should consult with the Scorecard Process Owner to override the rating in Rating Criteria tab Cell H7. The Scorecard Tab Improvement Status (I Status): As data is entered, the I Status column visually displays the improvement status of each quantitative measure in the annual rating process. The I Status switch (located in cell O5) must be “ON” for the I Status indicators to work. (To disable the I Status indicators, delete “ON” in cell O5. Reenter “ON” to turn the I Status indicators back on. Once you "toggle" this switch, refresh I Status by clicking Page Down & UP.) Note that the following special measures in the Core Measures section are permanently “Not Applicable” (NA) in the I Status column: Annual Volume/Output is a special core measure which is not counted as an independent measure in the annual rating process. It is used to convert absolute values reported into intensity values and vice versa (we will cover this in more detail later). Data Protocol gives important insight into the partner’s data collection method and verification process. This is a special core measure which is not directly counted in the annual rating process. P&G Sustainability Ideas & Initiatives Supported is a qualitative measure and is not rated automatically (but is rated manually by ROs). Optional Measures (at the bottom section of the scorecard) are not counted in our annual rating process, therefore their I Status is preset to NA. The Scorecard Tab I Status (continued): What does each I Status color represent? For each quantitative measure counted in our annual rating process, once the unit of measure, current year scope and data, and past year scope and data are ALL entered, the measure is automatically scored and its I Status appears: If any of the above data are missing, I Status will be Blank. (Blanks will NOT be counted as year-on-year improvement.) If a measure improved year-on-year, I Status will turn Green. If a measure did not improve year-on-year, I Status will turn Red. For Fines & Sanctions, if only one of two measures improved, I Status will turn Yellow. For core measures where current year or past year scope is NA (i.e., not applicable to the partner’s industry/service), I Status will be NA (and not counted in the rating). Note: To prevent scoring errors on non-applicable measures; if Current Year and Past Year data = 0, the scorecard presumes status should be "NA"—except Fines & Sanctions, where an outstanding sustainability effort should deliver 0. If a partner feels one of their core measures should actually be reported as 0 for both current and past year, they should explain in the Comments cell so the RO can rate accordingly. The Scorecard Tab I Status (continued): Each quantitative measure counted in our annual rating process is considered improved if: (Current Year Scope = Past Year Scope) AND (Current Year Absolute Value < Past Year Absolute Value); or (Current Year Scope = Past Year Scope) AND (Current Year Intensity Value < Past Year Intensity Value); or The Partner has changed to a narrower scope (i.e., C->S or S->P) If Current Year and Past Year Annual Volume/Output unit and data are provided for each scope reported: Measures reported in an absolute unit of measure will be converted to intensity values and compared for improvement. Measures reported in an intensity unit of measure will be converted to absolute values and compared for improvement. (Note: Alternate improvement comparisons will only be made for those intensity measures where the denominator of the Unit of Measure matches the Volume/Output Unit, e.g., both are MTs.) Year-on-year improvement credit is given to partners whether achieved through the absolute or intensity values they reported, or the converted values automatically calculated. This dual credit comparison is done to increase partner reporting options AND to enable P&G to convert more reported data into absolute values for use in supply chain footprint estimates. The Scorecard Tab I Status Bonus Point: Factor % entry (in rows 18 and 20 for Corporate and Site scope values respectively) earns one bonus point if at least 3 of the first 8 measures (rows 10-17) are reported (Unit+Scope+Data) and any I Status bonus criteria, below, is true (for Intensity data, Annual Volume/Output and matching Unit of Volume/Output must also be reported): 1. A simple majority (>=50% of fully reported measures) of current year (CY) scope is reported as P. 2. A simple majority of CY scope is reported as C or S, and a Factor % to approximate scope P is entered for CY S scope in cell F20 and CY C scope in cell F18. 3. A plurality (scope reported most) of CY scope is reported as S, and a Factor % to approximate scope P is entered for CY S scope in cell F20. 4. A plurality (scope reported most) of CY scope is reported as C, and a Factor % to approximate scope P is entered for CY C scope in cell F18. If you have achieved this bonus point, the I Status Bonus Flag in Cell O8 will turn Green and the word “Bonus” will appear. The Scorecard Tab Regardless of use, the normal desired trend for each measure, in isolation, is listed below: Measure Unit Desired Trend (from previous year to current year) (Electric) Energy Usage Giga-Joules or GJ / Unit of Output Down (Fuel) Energy Usage Giga-Joules or GJ / Unit of Output Down (Input / Withdrawal) Water Usage Cubic Meters or M3 / Unit of Output Down* (Output / Discharge) Water Usage Cubic Meters or M3/ Unit of Output Down* Hazardous Waste Disposal Metric Tons or MT / Unit of Output Down Non-Hazardous Waste Disposal Metric Tons or MT / Unit of Output Down Kyoto Greenhouse Gas Emissions Direct (Scope 1) Metric Tons of CO2 Equivalent or MT of CO2e / Unit of Output Down Kyoto Greenhouse Gas Emissions Indirect (Scope 2) Metric Tons of CO2 Equivalent or MT of CO2e / Unit of Output Down Fines & Sanctions USD and # Down Environmental Mgt. System Yes, Partial or No No –> Partial –> Yes Renewable Energy Giga-Joules or GJ / Unit of Output Up or Down ** Kyoto Greenhouse Gas Emissions Indirect (Scope 3) Metric Tons of CO2 Equivalent or MT of CO2e / Unit of Output Down Potential Waste Material Recycled, Reused, Recovered Metric Tons or MT / Unit of Output Up or Down ** Transportation Fuel Efficiency Grams of CO2 / ton-km Down * In some locations water use may not be critical for sustainability. ** Improvement in this measure could be up or down depending on the situation; further analysis is required. The Scorecard Tab The following diagram illustrates how a partner should complete the scorecard for annual external business partner sustainability performance ratings: Fill in ALL applicable shaded cells; non-shaded are optional Enter all submission details requested List any overall scope comments/exclusions (e.g., Corporate level data does not include our operations in Brazil) Enter beginning and ending months of reporting period if calendar year is not used (e.g., Jul – Jun) Select the appropriate unit of measure and scope code (from dropdown menu), enter values and comments for all core measures in current and past years. Report optional measures if you can Report in the units of measure specified--absolute (preferred) or intensity values (accepted). Unit of Output = Metric Ton for most production; sqm, FTE, revenue or Other for services-explain "Other" units in Comments cell Report P&G specific scope if possible; Site or Corporate if necessary--Corporate scope is mandatory for "Environmental Mgt. System" and "Fines & Sanctions“ • If a core measure is non-applicable to your business, enter Scope Code "NA" and explain in Comments. They are not counted in core measures reported/improved • If a core measure is applicable to your business but you are unable to report it, leave the applicable Scope and Data cells blank and explain in the Comments The same data methodology/scope should be used both years unless you are changing to a narrower scope (i.e., C->S or S->P) Enter Factor % for Scope C & S respectively to approximate Scope P values where you cannot yet report Scope P. Note: Circulate the scorecard to all applicable commercial and technical staff to ensure all core measures are completed and ideas shared. The Optional Measure section may include additional measures critically important to a Spend Category. Partners in the industry specified should report the additional measures as requested and defined by the Spend Category. Provide annual volume/output unit in column C. Then, for each scope reported above, provide data in columns E & H List reasons in the Comments cell for measures you cannot provide; e.g., proprietary information, not available, etc. Also explain (in Comments) any measures that are worsening in order to improve overall sustainability for the product/service, so ROs rate appropriately. Common Scorecard Errors While the quantitative core measures on the scorecard are auto-scored, external business partner’s data entry errors on the Scorecard tab can result in missed credits for reporting and improving. Therefore, it is important for external business partners to enter their data according to scorecard instructions. Here are a number of common scorecard errors that should be avoided: 1. Incomplete data A core measure is considered “reported” only when the unit of measure and current year scope and data are entered. The scorecard will not count the measure as “reported” if any one of the three elements is missing! The scorecard automatically calculates whether a core measure is “improved” only when the unit of measure, current year scope and data, and past year scope and data are ALL entered. The scorecard will not make an improvement comparison for the measure if any one of the five elements is missing! Common Scorecard Errors 1. Incomplete data (continued) Alternate improvement comparisons will only be made if annual volume/output data for the scopes and years reported are entered along with the volume/output unit…AND, the volume/output unit must be the same as the denominator of intensity measure unit. The scorecard will not make an alternate improvement comparison if these requirements are not met! Common Scorecard Errors 2. Incorrect use of “NAs” and “blanks” The scorecard counts “blank” cells as not reported! Scope, Data and/or Unit of Measure Cells should only be left blank if a measure is applicable but the external business partner does not have data, or chooses not to report it. Scope NA (Not Applicable) should only be used when a measure does not apply to a specific industry (e.g., hazardous waste is usually not applicable for an Advertising agency). Scope NA measures are not counted in core measures reported or improved, to ensure all partners are rated only on applicable measures. Note: The final decision about whether a measure is considered Scope NA resides with the RO. ROs should seek consensus with their external business partners regarding Scope NA measures. Where consensus is not achievable, consult with the Scorecard Process Owner. Common Scorecard Errors 3. Inconsistent data methodology/scope for current year and past year within a measure The same data calculation methodology, scope and unit should be used for the current year and past year within each measure in order to assess improvement. If a change is made in the current year, the previous year data should be adjusted to match if at all possible—unless improving to a narrower scope (e.g., from reporting Scope C to Scope S or from Scope S to Scope P). Scope improvement will be automatically counted as a year-on-year improvement because it achieves or gets closer to P&G’s long-term desired scope of P. Common Scorecard Errors Simple data entry errors can significantly impact the auto-scored portion of the scorecard. (In the example provided, the external business partner’s INTERIM RATING increased from 2 to 5 after the errors are corrected.) To avoid making these errors, external business partners should pay attention to the following before they submit a scorecard to their ROs: • • • Light green shaded cells that are left blank Core Measures with I Status = no color+blank Core Measures with Scope NA The Rating Criteria Tab The Rating Criteria tab describes the rating criteria for the Sustainability Key Performance Indicator (KPI) of our annual external business partner rating and feedback process. Sustainability is not a new KPI. It has been one of the performance metrics under the Commercial category since the KPI framework was developed in 2008. With this scorecard, we made the rating criteria of the Sustainability KPI more data-based, with emphasis on tracking and improving core environmental sustainability measures, and supporting P&G’s sustainability initiatives. See scorecard question/rating criteria (including calculation methodology/comments) on the right. A Partner’s Sustainability Rating is determined through a 2-step process: Step 1. Auto-scoring of reported quantitative measures leads to the INTERIM RATING Step 2. The RO’s manual scoring of qualitative measures leads to the FINAL RATING The auto-scoring capability builds transparency into the quantitative portion of the annual rating process and fosters feedback discussions between external business partners and their P&G ROs. In addition this enables P&G to encourage all of their partners to use the scorecard to help guide development of their sustainability program even if they are not currently being measured by P&G. RO’s manual scoring of qualitative measures ensures that partner’s efforts to bring sustainability ideas to P&G and support of P&G’s sustainability initiatives/requests are appropriately reflected in the annual rating. The Rating Criteria Tab Step 1. Auto-scoring of Quantitative Measures: Core Measures (except Annual Volume/Output, P&G Sustainability Ideas & Initiatives Supported, Data Protocol, and Measures that do not apply to the partner’s industry/service) are automatically scored based on the first two rating criteria: 1. Scorecard Core Measures Reported 2. Scorecard Core Measures Improved The average results of these two quantitative measures will automatically appear as the INTERIM RATING at top right corner of the Scorecard tab and the bottom right of the Rating Criteria tab as data is entered. The Rating Criteria Tab 1. Scorecard Core Measures Reported (auto-scored): A core measure is considered “reported” when the unit of measure, and current year scope and data are ALL entered. This rating criterion counts all core measures except Annual Output, P&G Sustainability Ideas & Initiatives Supported, Data Protocol, and Measures that do not apply to the partner’s industry/service (NA). 1 = % of scorecard core measures reported is 0 2 = % of scorecard core measures reported is greater than 0 but less than or equal to 50% 3 = % of scorecard core measures reported is greater than 50% but less then 100% 4 = % of scorecard core measures reported is 100% Details on how the percentage is derived (i.e., % Achieved / Applicable) can be seen on the right hand side of the Rating Criteria worksheet. The Rating Criteria Tab 2. Scorecard Core Measures Improved (auto-scored): The scorecard automatically calculates whether a core measure is “improved” when the unit of measure, current year scope and data, and past year scope and data are ALL entered. The scorecard also makes an alternate improvement comparison if annual output/volume data for the scopes and years reported are entered. If a core measure is “improved”, its “I Status” will automatically turn green. In addition, one I Status bonus point is given when Factor % is entered for applicable Corporate and Site scope values (because it provides P&G with approximate Product scope values). The Rating Criteria Tab 2. Scorecard Core Measures Improved (auto-scored) (continued): This rating criterion counts all core measures except Annual Output, P&G Sustainability Ideas & Initiatives Supported, Data Protocol, and Measures that do not apply to the partner’s industry/service (NA). 2 = % of scorecard core measures improved is 0 3 = % of scorecard core measures improved is greater than 0 but less than or equal to 50% 4 = % of scorecard core measures improved is greater than 50% but less then 100% 5 = % of scorecard core measures improved is equal to or greater than 100% Details on how the percentage is derived (i.e., % Achieved / Applicable) can be seen on the right hand side of the Rating Criteria worksheet. Note that when the scorecard is submitted to the RO, the INTERIM RATING (at the bottom of the worksheet) only reflects the average score of the first two criteria; the remaining three criteria should be blank. The Rating Criteria Tab Step 2. RO scoring of qualitative measures: After the partner submits their scorecard to their RO, the RO will assess the remaining three rating criteria (as applicable) based on the qualitative information provided by the partner on the scorecard, his/her experience with them in the area of sustainability and the feedback from others as determined by the annual P&G external business partner performance feedback survey: 3. Support of P&G’s sustainability initiatives; 4. Sustainability ideas brought to and adopted by P&G; and 5. Support of additional feasible sustainability measures (optional or new ‘non-core’ measures) specifically requested by P&G. The Rating Criteria Tab 3. Support of P&G’s sustainability initiatives (RO scored): RO MUST rate this row (unless a blank scorecard is received.) RO enters a 1, 2, 3, 4 or 5 rating based on both the external business partner’s documentation on P&G Sustainability Ideas & Initiatives Supported (Scorecard Cell D21), other achievements known to the RO, and for external business partners that are part of our annual SPM process, the sustainability rating in SPMS (i.e., the average rating from all Commercial raters for the Sustainability KPI). The question in the survey is designed to provide specific feedback to help the RO choose a rating: 1 = Did not support any initiatives 2 = Supported some requested initiatives 3 = Supported all requested initiatives 4 = Supported all requested initiatives plus extra initiatives 5 = Proactively led all requested initiatives plus extra initiatives When the RO enters the score for support of P&G’s sustainability initiatives in Rating Criteria Cell H8, the rating title automatically changes from "INTERIM RATING" to “FINAL RATING”. The Rating Criteria Tab 4. Sustainability ideas brought to and adopted for use by P&G (RO scored): RO rates this row ONLY if the partner has reported some core measures (i.e., Rating Criteria Cell H6 >= 2); or, if the partner has declared all core measures Scope NA (i.e., Rating Criteria Cell K6 = 0). RO enters a 4 or 5 rating (or leaves blank if no ideas adopted) based on adopted ideas documented in P&G Sustainability Ideas & Initiatives Supported (Scorecard Cell D21) and other adopted ideas known to the RO: 4 = Brought at least one idea that was adopted for use by P&G 5 = Jointly developed several ideas adopted for use by P&G’ Note: Since we want to reward ideas AND reporting, this rating is only averaged into the Final Rating (Rating Criteria Cell H14) after the RO enters a rating in Rating Criteria Cell H8 and if the submitting partner has reported some core measures; or, if the partner (e.g., service) has declared all core measures Scope NA—to ensure we recognize the non-quantifiable sustainability contributions from nonmanufacturers. Else, it will not count. The Rating Criteria Tab 5. Support of additional feasible sustainability measures requested by P&G (RO scored): RO rates this row ONLY if the partner's final rating (Rating Criteria Cell H14) is 4 or 5 before this row is rated, and if additional measures were requested. The RO enters a 4 or 5 rating (or leaves blank if additional feasible measures were not requested or reported) based on their experience/feedback. Note that additional feasible measures can be optional or new (non-core) measures specially requested by P&G (e.g., RO or other cross-functional business partners): 4 = Reported most additional feasible measures as requested 5 = Reported all additional feasible measures as requested Since this last criteria is intended as a final test for a 5 rating, it is only averaged into the Final Rating if the submitting external business partner's average rating for Rating Criteria Cells H6-H9 is already 4 or 5. Else, it will not count. The Rating Criteria Tab FINAL RATING (auto-scored): As mentioned earlier, entering the score for “Support of P&G’s sustainability initiatives” changes the rating title from "INTERIM RATING" to “FINAL RATING". The FINAL RATING will be updated automatically as the scores for the last 2 criteria are entered (if applicable). The FINAL RATING on the scorecard incorporates the Evaluators’ Sustainability KPI rating inputs in P&G’s SPMS. If the external business partner does not submit a scorecard; the final sustainability KPI rating will be 1 (i.e., far below expectations).