North American Tissue News

Investors are concerned about P&G

Investor’s new shareholder resolution demonstrates concerns about P&G fueling deforestation and forest degradation

The pressure on consumer goods giant Procter & Gamble to stop fueling forest destruction just ratcheted up to a new level. On Friday, the company published its 2020 proxy statement, in which Green Century Equity Fund, a P&G shareholder, filed a resolution calling on the company to act quickly to eliminate deforestation and intact forest degradation from its supply chain.

This resolution indicates that investors are concerned about the negative attention P&G has received in the last few years for its unsustainable sourcing from Canada’s globally important boreal forest for its toilet paper and tissue products, and also about the company’s failure to live up to its palm oil commitments. P&G’s sourcing from the boreal has direct consequences for Indigenous Peoples’ rights and the global climate, which has only furthered the negative attention.

In the resolution’s preamble, Green Century points directly to the significant backlash P&G has received in the press and from NGOs because of the impacts of its lackluster sustainability policies. Green Century also notes P&G’s position as a laggard among its peers in the consumer goods and tissue industries, including Kimberly-Clark, when it comes to its climate and forest sourcing commitments.

Fundamentally, investors (particularly the largest investment firms) pay attention to how risky their investments are. Increasingly, deforestation, human rights violations, and damaging climate impacts are seen as risk factors investors wish to avoid. Unfortunately, P&G continues to engage in behavior that fuels all these problems, despite having been aware of these risks and negative impacts for years.

Here’s how P&G continues to drive disastrous consequences for forests and the communities that rely on them. P&G:

  • Makes its tissue products from 100% virgin forest fiber, including from Canada’s boreal forest. This fuels a devastating tree-to-toilet pipeline that exacerbates climate change and leads to habitat loss.
  • Does not require its suppliers secure free, prior, and informed consent (FPIC) when operating in lands of Indigenous and other traditional communities. FPIC is a process enshrined in the United Nations Declaration on the Rights of Indigenous Peoples and designed to ensure companies and governments respect Indigenous rights to dictate the future of their territories.
  • Has no specific plan to reduce upstream carbon emissions from sources like forest loss, even though its competitors like Kimberly-Clark and Unilever do. P&G also does not calculate the carbon emissions from land use changes in its upstream carbon emissions tracking.
  • Sources from threatened species habitat. P&G gets a significant amount of its pulp from critical habitat of the threatened boreal caribou in Canada. Although the Canadian federal government requires by law that provinces allowing operations in critical caribou habitat must create habitat management plans to ensure species protection, P&G’s suppliers continue to source from critical caribou habitat with neither provincial plans in place, nor voluntary plans that align with Canada’s safeguards.
  • Has failed to meet its commitment to zero deforestation in its palm oil supply chain by 2020, meaning that it still has links to deforesting operations. Furthermore, P&G has focused narrowly on links to deforestation in its palm oil supply chain, despite alarming evidence that deforestation is occurring from clearcutting in the boreal as well.
  • Has links to forced labor practices via its joint venture partner, FGV Holdings Berhad. Earlier this year, Rainforest Action Network, the International Labor Rights Forum, and SumofUs filed a complaint with U.S. Customs and Border Patrol because audits of FGV’s palm oil operations in Malaysia revealed evidence of forced labor. That complaint is awaiting resolution, but the evidence raised is nonetheless alarming.

P&G’s annual shareholder meeting will take place virtually on October 13th, and its shareholders will vote then on this resolution. One thing is already clear, though: by continuing their unsustainable sourcing practices in the boreal and elsewhere, the risk P&G imparts on our planet is far too high, and they need to adopt changes now to end these dangerous supply chains.

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