THE PROCTER & GAMBLE COMPANY: PLASTIC WASTE AND THE
SACHET ECONOMY IN THE PHILIPPINES CASE STUDY
SOLUTION
e
pl
m
Sa
SYNOPSIS
For-profit companies face complex challenges in attempting to balance the desire to earn profit and market
share with environmental, social, and governance initiatives. Sometimes, solving one societal issue while
n
generating benefits for the firm can lead to other unintended consequences. This was the case with
multinational corporations producing sachet products for developing nations. In particular, The Procter &
tio
Gamble Company (P&G) was named a top ten plastic polluter by Break Free from Plastics in 2019. P&G
faced backlash over their production of plastic waste associated with packaging products in single-use
sachets. While sachets provided access to necessities to low-income individuals, they also created negative
lu
environmental externalities. P&G had to decide how to tackle the problem of waste they were responsible
for and combat claims of greenwashing. How could they solve this environmental issue without creating
So
barriers for low-income individuals? What did P&G’s key stakeholders expect? How could P&G achieve
a “triple bottom line” by caring for profits, people, and the planet?
OBJECTIVES
• identify market failures that exist in a setting and draw implications of their impact;
• analyze the challenges that corporations face in solving humanitarian issues by evaluating trade-offs; and
• leverage important frameworks and concepts, such as stakeholder analysis and systems thinking, to
form strong recommendations for environmental and social issues.
The Case Solution Starts From page 4
, e
pl
m
Sa
n
tio
ASSIGNMENT QUESTIONS
1. Identify and define the existing market failures. What impact does P&G have on the Philippines?
lu
2. Identify the various stakeholders and their priorities.
3. What evidence of systems thinking applies to the core problem and options? Is one recommendation
more appealing from a sustainability lens?
So
4. What do you recommend that P&G do?
The Case Solution Starts From page 4
, ANALYSIS
1. Identify and define the existing market failures. What impact does P&G have on the Philippines?
The objective of this question is for students to identify the market failures presented in the case. Students
should identify plastic pollution as a negative externality. Externalities result in an over-provision of a good
relative to what an efficient market would provide. A negative externality is caused by an action that affects
a third party negatively. Students must recognize that P&G made decisions based on the direct cost and
profit opportunity related to producing sachets, and that the company did not consider the indirect costs to
the Philippines. These may include:
• Environmental Costs—Degradation of Natural Systems: Plastic pollution contaminates and accumulates
in food chains through agricultural soils, terrestrial and aquatic food chains, and the water supply.
• Social Costs—Poor Quality of Life: Plastic production and consumption coupled with insufficient waste
management infrastructure create unsustainable living conditions for residents. Vulnerable communities
e
are disproportionately affected by the environmental degradation caused by plastic pollution.
• Economic Costs—Fishing, Tourism, and Cleanup: The livelihoods of the Philippines’ coastal communities
pl
and the fishing, shipping, and tourism industries are vulnerable to the impacts of marine debris.
m
Second, students should identify the information asymmetry between P&G and Filipino consumers.
Sa
n
tio
lu
So
The Case Solution Starts From page 4
SACHET ECONOMY IN THE PHILIPPINES CASE STUDY
SOLUTION
e
pl
m
Sa
SYNOPSIS
For-profit companies face complex challenges in attempting to balance the desire to earn profit and market
share with environmental, social, and governance initiatives. Sometimes, solving one societal issue while
n
generating benefits for the firm can lead to other unintended consequences. This was the case with
multinational corporations producing sachet products for developing nations. In particular, The Procter &
tio
Gamble Company (P&G) was named a top ten plastic polluter by Break Free from Plastics in 2019. P&G
faced backlash over their production of plastic waste associated with packaging products in single-use
sachets. While sachets provided access to necessities to low-income individuals, they also created negative
lu
environmental externalities. P&G had to decide how to tackle the problem of waste they were responsible
for and combat claims of greenwashing. How could they solve this environmental issue without creating
So
barriers for low-income individuals? What did P&G’s key stakeholders expect? How could P&G achieve
a “triple bottom line” by caring for profits, people, and the planet?
OBJECTIVES
• identify market failures that exist in a setting and draw implications of their impact;
• analyze the challenges that corporations face in solving humanitarian issues by evaluating trade-offs; and
• leverage important frameworks and concepts, such as stakeholder analysis and systems thinking, to
form strong recommendations for environmental and social issues.
The Case Solution Starts From page 4
, e
pl
m
Sa
n
tio
ASSIGNMENT QUESTIONS
1. Identify and define the existing market failures. What impact does P&G have on the Philippines?
lu
2. Identify the various stakeholders and their priorities.
3. What evidence of systems thinking applies to the core problem and options? Is one recommendation
more appealing from a sustainability lens?
So
4. What do you recommend that P&G do?
The Case Solution Starts From page 4
, ANALYSIS
1. Identify and define the existing market failures. What impact does P&G have on the Philippines?
The objective of this question is for students to identify the market failures presented in the case. Students
should identify plastic pollution as a negative externality. Externalities result in an over-provision of a good
relative to what an efficient market would provide. A negative externality is caused by an action that affects
a third party negatively. Students must recognize that P&G made decisions based on the direct cost and
profit opportunity related to producing sachets, and that the company did not consider the indirect costs to
the Philippines. These may include:
• Environmental Costs—Degradation of Natural Systems: Plastic pollution contaminates and accumulates
in food chains through agricultural soils, terrestrial and aquatic food chains, and the water supply.
• Social Costs—Poor Quality of Life: Plastic production and consumption coupled with insufficient waste
management infrastructure create unsustainable living conditions for residents. Vulnerable communities
e
are disproportionately affected by the environmental degradation caused by plastic pollution.
• Economic Costs—Fishing, Tourism, and Cleanup: The livelihoods of the Philippines’ coastal communities
pl
and the fishing, shipping, and tourism industries are vulnerable to the impacts of marine debris.
m
Second, students should identify the information asymmetry between P&G and Filipino consumers.
Sa
n
tio
lu
So
The Case Solution Starts From page 4
